The Reason Foundation is a prominent, national libertarian advocacy organization. Their advocacy covers a wide range of public policy issues, but one area where they are particularly focused is public pensions. For their work campaigning against public pensions, they have received millions of dollars from John Arnold. In fact, Arnold just recently granted them another $4 million to continue their work. Just like their funder, the Reason Foundation is stridently anti-pension and their efforts, if successful, would gut retirement security for millions of public employees.
As part of their campaign to gut pensions, the Reason Foundation has created a “Pension Reform Handbook.” Originally released in 2014, it lays out their vision for how to eliminate public pensions. The handbook is shocking in both its length and the detail of its recommendations. Free of charge, the Reason Foundation offers a number of services to state and local governments looking to dismantle pensions, including:
- Pension reform policy design;
- Independent actuarial analysis;
- Consultation on collective bargaining negotiations;
- Opinion editorials, policy analysis and summary materials.
Throughout the handbook, the Reason Foundation consistently misrepresents the facts about public pensions. As early as page 2, they display a map from the Tax Foundation that dramatically understates the funded ratio of public pension plans. The map depicts the Wisconsin Retirement System as only 57 percent funded, when it is well-known that the WRS is fully funded. They similarly understate the funded ratios of well-funded plans in New York, North Carolina, and South Dakota. Starting off with such a dangerous misrepresentation of the facts should raise red flags for anyone serious about protecting retirement security for public employees.
The Reason Foundation explicitly calls for conversion from defined benefit (DB) pensions to 401(k)-style defined contribution (DC) plans. They repeat a lot of tired, old talking points from the Laura and John Arnold Foundation about the differences between DB plans and DC plans. They also celebrate pension-gutting efforts in Rhode Island, Michigan, and San Jose as “successes” despite the fact that San Jose was a noted failure and state employees in Michigan have been struggling to save for retirement for two decades. Not only did closing the pension plan harm retirement security for Michigan state employees, but it also increased the unfunded liability in the plan and increased costs for taxpayers. As we’ve written before, closing a pension plan does not eliminate any unfunded liability in that plan.
To push back against the Reason Foundation and expose their true agenda, we created the following video. When Kentucky Governor Matt Bevin was promoting his radical anti-pension legislation in October 2017, his office was sending out press releases with the Reason Foundation’s logo on them. It’s important for citizens to know who is influencing their elected officials. Please watch our video and don’t fall for the lies of the Reason Foundation.