Since its founding, we at the National Public Pension Coalition (NPPC) have worked in states nationwide to defend and better the retirement benefits of hard-working public employees. Far too often, our state coalitions, and our organization nationally, encounter mysterious, billionaire-backed, independent groups. These organizations are funded, mostly in secret, by wealthy, profit-driven, far-right megadonors to further their ideological agenda. And unlike labor unions, they represent the interests of just a handful of tycoons, not millions of organized working people.
This year we’ve encountered a wide array of these organizations nationwide. In North Dakota, NPPC and our state coalition faced off against the Reason Foundation, which walked hand-in-hand with TIAA to end defined-benefit pensions for future state employees. They did this through HB1040, the state’s most expensive bill ever passed, with a price tag of $5 billion. The Reason Foundation is a libertarian-leaning billionaire-backed organization that does not disclose its donors and is notorious for creating “sky-is-falling” projections, convincing lawmakers to adjust their pension plans in ways that are harmful to public employees and employers.
HB 1040 was crafted with direct assistance from the Reason Foundation, in direct partnership with TIAA – a provider of defined-contribution or annuity retirement plans. The Reason Foundation Pension Integrity Project is overseen by a Senior Fellow with North Dakota roots, who served as a Managing Director for TIAA for fifteen years immediately before joining the Reason Foundation as a so-called pension expert. The revolving door between TIAA and Reason symbolizes their close working relationship. Their shared goal is simple: money.
According to the North Dakota Public Employee Retirement System (NDPERS), the legislation closing the defined-benefit system to future state employees was crafted in such a way that only TIAA would stand to benefit as they are the only vendor positioned to offer a replacement defined contribution retirement product. All-in-all, HB1040 is an extraordinarily expensive piece of legislation written only to benefit TIAA.
Attentive followers of pension issues may remember that back in 2013, the research arm of TIAA published a report funded in part by billionaire John Arnold. The report amplified the “sky-is-falling” pension myth. Before the report, TIAA hosted a 2012 event in conjunction with the Nelson A. Rockefeller Institute. One speaker explicitly said the event was framed as a forum for thought leaders “to talk about how [public employees’] benefits can be eliminated or reduced.”
This is happening in other states as well. This year billionaire-backed groups in Alaska – Americans for Prosperity, the Alaska Policy Forum, and the Reason Foundation – have been pushing back hard against the passage of SB 88– a bill that will provide a defined-benefit pension component to public employees through the Public Employees Retirement System (PERS) and Teachers’ Retirement System (TRS). Since 2005, public employees hired in Alaska have only been able to participate in a defined-contribution 401(k) plan, and the state has faced a massive recruitment and retention problem since then. Most public employees in Alaska do not participate in Social Security–making the defined contribution plan their only source of income in retirement.
Americans for Prosperity (AFP) has been linked to big money interests since its founding. Backed initially by the Koch Brothers, this group has spent excessive time trying to topple SB 88 this year. They’ve distributed leaflets, held rallies and lobby days, and met with lawmakers. Mostly, they’ve touted the Reason Foundation working paper that wrongly states that Alaska’s teacher retention rates have been unchanged since a defined-benefit pension was not offered. Interestingly, Americans for Prosperity recently fired their Alaska State Director after AFP activists harassed legislators in Juneau.
Worse, the information distributed by these shady groups has also been proven to be inaccurate. The National Institute on Retirement Security found that the percentage of workers leaving TRS and PERS has been significantly higher in the defined-contribution plan than in the defined-benefit plan. While AFP and the Reason Foundation are spreading misinformation and harassing legislators, the Alaska Policy Forum, another billionaire-backed group, is running ads against the legislation. These groups that don’t disclose their donors are fighting against pensions for public employees.
As we finish legislative sessions and head into the summer, watching for organizations that don’t have the state’s best interest at heart is essential. These billionaire-backed and profit-oriented groups have ulterior motives and are clearly working against public employees and their secure retirement.