- David H. Webber is a Boston University School of Law professor. The opinions expressed here are his own -
Like a well-armed, well-trained army standing idly by while the citizens it is supposed to protect get crushed, public pension funds have done little to protect public employees from the well-financed corporate attack on their rights. It’s time they join the fight.
Public pension funds invest the retirement savings of public workers, with total assets of around $2.7 trillion. One out of 10 U.S. corporate securities is owned by public pension funds — in other words, owned by public employees. Skillful use of this shareholder power could swiftly and decisively push back the power of corporate lobbies and help fend off attacks on workers.
Consider an example. Last year, a senior adviser of Blackstone Group, one of the world’s largest financial advisers with $111 billion in assets, publicly touted the standard line about how public employees are purportedly overcompensated. But last month, the company released an extraordinary public statement: “Blackstone’s view on public employee pensions is clear and unambiguous … We oppose scapegoating public employees by blaming them for the structural budget deficits that cities and states face.”
What prompted this paean to public workers from one of Wall Street’s most elite institutions? Answer: 37% of Blackstone’s assets belong to state and local public pension funds. Unhappy with what it perceived to be Blackstone’s wavering commitment to these workers, New York City’s public-pension fund recently cancelled a meeting with the company. The Blackstone flip-flop took place right afterwards.