Public pension funds got a chance to target critics for a change at Investment Management Networks 17th Annual Public Funds Summit held at San Diegos Park Hyatt Avaria. Ruth Ryerson, executive director and cio for the Fort Worth Employees Retirement System, complained that plan sponsors, particularly in the wake of the financial crisis, spend more time conducting damage control from pension reform groups such as Houston-based Texans For Pension Reform than in previous years.
Many heads in the audience nodded as Ryerson told of how the idea public pensions are broken has gained traction with policymakers and grass-roots--largely right-wing--organizations. In her presentation she pointed out that 41 states have made changes to their pension systems in the last 10 years, some of which include increasing the age at which workers can retire, cutting the Cost Of Living Adjustment or COLA or increasing contributions.
Han Kim, executive director for the National Conference on Public Employee Retirement Systems, kept the session from turning into a gloom-and-doom fest, however, by putting forth the idea of expanding pension fund coverage to all workers. Kim unveiled what NCPERS calls a Secure Choice Pension fund, a public-private partnership designed to complement Social Security and income from 401(k) investments, as an alternative to scuttling broken pensions.
The plan, which would have the same infrastructure as many state pension systems, would specifically allow small businesses to extend pensions to all employees. The SCP fund would also free up a whole new world of mandates for money managers in much the same way 529 plans did when they debuted.
Han mentioned the expansion of pension plan benefits through the SCP may require changes to the Employment Retirement Income Security Act. Ryerson said she was confident moves to redefine pension funds would be supported, not just by employees but by large pension systems as well.