STUMP » Articles » Around the Pension-o-Sphere: Let's Divest from Guns, New Interpretation of Pension Spiking, and More » 23 February 2018, 15:14

Where Stu & MP spout off about everything.

Around the Pension-o-Sphere: Let's Divest from Guns, New Interpretation of Pension Spiking, and More  


23 February 2018, 15:14

I was in NYC yesterday, enjoying myself at the Governing roundtable at the NYU Wagner School of Public Service, which had a case of some of the following things beneath a portrait of Robert F. Wagner, after which the school is named:

A few more pics can be found here.

If you’re one of the many people I ran into yesterday, and this is the first time reading my blog — howdy! It’s a grab bag of sorts, and I will be a little more “jovial” than usual… with a lot fewer graphs. I especially appreciate the folks at Governing Magazine (and Liz Farmer in particular) for providing me so much to blog about!


Before I start, I will note that I’m a Lifetime member of the NRA. So that should give you an inkling of what I think of the following:

Teachers in 12 states have pension funds invested in gun stocks

Teachers across Florida and at a high school where 17 people were shot dead Feb. 14 pay into a retirement fund that invests in gun companies, it was revealed earlier this week.

It turns out they’re not alone.

Pension funds managed for public school teachers in at least a dozen states, including New York and California, own stocks issued by the makers of firearms, including American Outdoor Brands Corp., the company previously known as Smith & Wesson that manufactured the semiautomatic AR-15 used in the attack at the Marjory Stoneman Douglas High School. The type of assault rifle has been the weapon of choice in America’s mass shootings.

The financial stakes held by teacher pension funds in gun companies, like those of other equities, each represent only a sliver of the multibillion dollar state retirement systems’ investments, according to a Bloomberg analysis. But the holdings have already become a hot-button issue in Florida, where last week’s massacre prompted teachers and students to pressure public officials to prevent similar attacks.

The Florida Education Association, which represents educators but doesn’t control the pension fund, urged the state body that does to sell its more than half-million dollars worth of American Outdoor stock, as well as that of other gun companies.

“I am sure that most of Florida’s public school employees are as sickened as I am to learn that the state has invested some of our pension fund holdings in the maker of the AR-15,” said Joanne McCall, president of the FEA, an affiliate of the National Education Association. “Surely there are better places for the state to invest its public employee retirement money than in companies that make products that harm our children.”

Actually, I’m going to be nice. I think I have a deal for the various public pension participants out there who want to make sure their pension investments are as pure as whatever their current purity test indicates.

They can go whole hog on their divestment campaigns… and the states don’t guarantee a damn thing re: retirement income.

I’ll go even better: the states will get to fund the pensions as if the 7.5% – 8% assumed return on assets are actually a sure thing, and if the investment results fall short because of shenanigans like this, oh well. The participants get to make up for the unfunded liability.

Sound like a deal?

Well, think about it.

A lot of the divestment campaigns get purchase not only because the people involved want to preen over their oh-so-moral stances, but also because they think they won’t have to pay at all for said stances.

We’ll see how long that holds.

More on the current gun divestment drive:

Older posts linking to (or commenting on) gun stock divestment by public pensions:

Anyway, if you want to start tinkering in asset selection on the basis of what makes you feel good, then you need to absorb some of the investment risk. I think it only fair.


You are warned that the following bit is in poor taste. Got that?

You only have yourself to blame if you read further.

A new sort of pension spiking:

Bodyguard who had affair with mayor will get $80K annual pension

The police bodyguard who had an affair with Mayor Megan Barry will get a $6,691 monthly pension, an amount which increased substantially because of the overtime he was paid.

In retirement, Sgt. Rob Forrest would get $80,302.56 a year. That amount could fluctuate if he takes an upfront partial lump-sum payment, according to human resources records.

Forrest, who retired Jan. 31 after 31 years and 3 months with the department, has applied for his pension, according to Metro Human Resources. The Employee Benefits Board still needs to give its approval.

One longtime employee benefits board member said under Nashville law, if any of the ongoing investigations reveal he collected overtime illegally, then Forrest’s pension may be reduced.

You see, Forrest worked a lot more overtime than other bodyguards, if you know what I mean and I think you do:

Megan Barry’s lover Sgt Rob Forrest paid $53K more than other bodyguards combined

Nashville Mayor Megan Barry admitted an affair with her longtime bodyguard Sgt Rob Forrest earlier this year. The admission, which had been forced by the discovery of the relationship by their respective partners, was an excruciating moment for the married rising-star in the Democratic Party. Nearly three weeks on, however, and the story is still in the headlines as the revelations continue to trickle out to the media. How long can Barry hold on?

Three days ago Nashville’s main newspaper, the Tenneseean, reported that Rob Forrest earned substantially more overtime than other bodyguards on Barry’s detail. In fact, the $173,843.13 Forrest earned between July 2015 and January 2017 is nearly $53,000 more than the other four bodyguards received combined.

That’s a lot of overtime.

I sure he really earned it.

So, the really funny thing that came out of this (the pension spiking and the cheating-on-spouses thing isn’t actually funny) was a NYT person who decided this was the perfect opportunity to admit to a really old office affair. I’ll link to Ann Althouse’s post on it, because let me tell you — I can definitely cast a stone on this one. Because I wasn’t having taxpayers fund any hypothetical affair… and this really is something after all the #MeToo crap over minor slights in social situations as opposed to gross harassment and assault in the workplace.

She linked to Instapundit’s comments:

#METOO, NASHVILLE EDITION: Megan Barry’s lover Sgt Rob Forrest paid $53K more than other bodyguards combined. To be fair, he was providing more services.

The nice thing is, when you’re a female Democrat you can have an affair like this — at taxpayer expense — and a female columnist in the New York Times will womansplain how you’re the real victim here.

I think these people consider shame something involved with not wearing the right shoes or something, as opposed to substantive behavior.

That’s me all right. A bad bad girl… who will cast stones for getting extra pension for extra… non-standard duty.

Okay, I’m done.


Brazilian leaders have been going on and on about how they need to make their retirement system less rich (think more like Social Security than public pensions, though public pensions are involved.)

After failing last year… they’re trying again!

Oh wait, they stopped trying.

Yeah, let the next guy handle it…

….which is how all these public finance disasters got this way.


West Virginia bill criminalizes late pension fund payments

CHARLESTON — A bill making it a crime for employers failing to make required, timely payments to the West Virginia Consolidated Public Retirement Fund on behalf of its employees has moved in the House of Delegates.

House Bill 4449 passed through the Judiciary Committee at the state Capitol on Wednesday. It now heads to the House Finance Committee for approval before possible action on the House floor.

“We are attempting to receive the contributions that are due employees, in a timely manner,” Jeff Fleck, executive director of the West Virginia Consolidated Public Retirement Fund, explained to the committee. “We’ve had situations in the past where employers have not paid the contributions, both the employee and the employer contributions, for months on end.”

Employers have accumulated debts of as much as $500,000 in the past, Fleck said.

I suppose a criminal charge may put a little fire under the butts of West Virginia municipal employers.


John Bury has been all over this topic, following a New Jersey state bill turning over governance of a state pension fund to the participants.

Here’s the basic concept:

N.J. lawmakers try again to spin off management of pension fund for police, firefighters

Lawmakers have relaunched an effort to spin off management of the pension fund for police and firefighters from New Jersey’s larger $78 billion pension system, a move that former Gov. Chris Christie blocked last year over concerns that it gave labor unions a “blank check” to enhance their benefits at taxpayers’ expense.

The bipartisan measure, which is supported by the four unions representing police officers and firefighters but opposed by representatives of municipal and county associations, was approved unanimously by the Senate state government committee on Thursday.

New Jersey currently manages the pension funds for several groups of employees together, pooling the assets and making investment decisions for all the funds through the State Investment Council, whose members are chosen by unions and the administration.

The new bill, S-5, however, would transfer management of the Police and Fire Retirement System, which has more than 88,000 participants and $27 billion in assets, from the state to a new 12-member board of trustees, which would hire its own executive director, actuary, chief investment officer and ombudsman.

The panel would be able to change contribution rates, adjust benefits and approve cost of living adjustments for retirees despite pension reforms Christie signed into law in 2011 restricting such changes. Seven of 12 trustees would be union representatives with the rest appointed by the governor to represent government employers.

This is a very bad idea. I didn’t much like Chris Christie, but he was right on this score. This would not fix a damn thing, and would actually make things much worse.

For example, the pensions’ next step would be to look to West Virginia’s criminalization bill as municipalities fall behind in making contributions, as they become less and less able to pay them.

Here are John Bury’s posts tracking the progress of this destructive bill:

As Bury notes, there has been pushback from Republicans, but they’re a non-entity in New Jersey government right now. And what they’ve proposed is minimal:

Assembly Republican leaders have introduced a bill that if passed would require the state’s Police and Firefighter Retirement System to appoint three non-union board members, with super-majority approval needed for any increase to employees’ pension and health benefits.

Assembly Republican leaders have introduced a bill that if passed would require the state’s Police and Firefighter Retirement System to appoint three non-union board members, with super-majority approval needed for any increase to employees’ pension and health benefits.

The bill, designated A3414, is sponsored by state Assemblymen Jon Bramnick, R – 21st District, and Ned Thomson, R – 30th District.

It’s pretty easy to get non-union board members who will vote lockstep with the union. This is not much of a speed bump.

But some of the Democrat-run municipalities may be going “hey, wait a minute…” when they see the results if this goes through.

And check this bit:

The measure was introduced as a way to curb future pension costs amid concerns about underfunding of the state pension plan. The bill also would forbid the plan to be less than 80 percent funded at any time.

So where does this fund stand right now, fundedness-wise? 70 percent.

Ah, so you want to make up 10 percentage points of funding in one year? You know about how much that would take?

$3.4 billion.

I’m sure they’d just say “Just issue a $4 billion POB” and think it was all fixed. Ha.

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