The Real Reason the Investor Class Hates Pensions<br />We let ourselves be charged high fees that we do not understand, we accept poor returns quarter after quarter, we never sue to enforce our rights, we never vote as shareholders<br />and we never tell our investment managers how we think they ought to vote.<br />And yet states and cities are busy converting traditional pensions into these failing<br />401(k)s or equivalents, to the great benefit of money managers and the finance class.<br />Entities like the Koch brothers’ Americans for Prosperity, the Laura<br />and John Arnold Foundation (John Arnold made billions at Enron), the American Legislative Exchange Council and their allies are engaged in a multifaceted, multistate campaign to gut traditional pensions like Calpers<br />Substantial empirical evidence shows that America’s favored retirement vehicle — the 401(k), recently renounced by its own inventors — is grossly inadequate<br />and will leave tens of millions of Americans with insufficient retirement assets.<br />When it calls up an investment manager to complain about performance, or to dump<br />that manager, or when it calls a lawyer to sue for fraud, that catches the attention of corporate managers, of hedge funds, of private equity funds.<br />They don’t want to challenge the compensation, reelection or legal judgment of the same corporate<br />managers from whom they hope to win the right to manage our 401(k) money in the first place.<br />How many of us call up our fund managers after a quarter, a year or a decade in which<br />we underperformed the Standard & Poor’s 500-stock index to renegotiate our fees?
