Welcome to the latest edition of This Week in Pensions! From a COLA proposal in New Mexico to a billionaire desperate for more capital and an SEC move to eliminate pay-to-play restrictions, here’s what happened in pensions this week.
State News
New Mexico Weighs Retiree COLA
With rising inflation, the New Mexico Public Employees Retirement Association (PERA) proposed a $25m appropriation for a short-term retiree COLA this week.
New Mexico PERA’s proposal would increase retirees’ cost-of-living adjustments to account for inflation. The Consumer Price Index Report, released by the Bureau of Labor Statistics on Wednesday, said inflation grew to 3.7% in September, up from 3.4% in August. This was largely driven by rising oil and gas prices.
PERA Executive Director Greg Trujillo presented the plan to legislators on the interim Investments and Pensions Oversight Committee. Trujillo’s proposal would raise PERA retirees’ cost-of-living adjustments to 1.5% over the next seven years, instead of the base COLA of 0.5%.
Some lawmakers asked for more details, and the proposal received no final action.
Wall Street Again Wants Workers’ Money. But Where Did It Go?
BlackRock CEO Larry Fink warned in a Wall Street Journal editorial this week that America faces the “biggest competition for capital” he has seen in 50 years. He aims to encourage more working Americans to invest in hyperscale AI infrastructure buildouts. The stakes are quite high, as he predicts a recession if the data center buildout is interrupted. It almost sounds like a threat: give us more money, or we will give you a recession.
But before asking Americans to invest more of their shrinking paychecks in data centers for AI that may eliminate our own jobs, perhaps we should ask: How did we get here?
In part, the lack of available investment capital stems from Wall Street killing defined-benefit pensions and replacing them with inadequate defined-contribution plans, eliminating a large pooled source of institutional capital for firms like BlackRock.
In 1990, pension funds held nearly a quarter of the American stock market. They also invested heavily in corporate bonds, helping finance American businesses while providing workers with retirement benefits. Over the following decades, employers, now desperate for investment capital, eliminated this asset pool, replaced traditional pensions with high-fee individual retirement accounts, and shifted investment strategy and longevity risk onto workers. Now Wall Street is asking those same workers to supply additional investment capital.
It’s like a thief coming back to sell you what they stole.
Instead of the pages of the WSJ, Fink should direct his ire at his fellow North Salem, New York neighbors on “Billionaires Dirt Road,” who killed off their employees’ pensions. Fink can afford to spend $1 million to fix up his swimming pool and cabana, but now he warns of a looming recession unless Wall Street gets more money from everyday wage earners who can barely afford daily life.
Why is Fink, with an estimated net worth of $1.3b, so thirsty for more of workers’ hard-earned wages? Many theorize it’s because many firms are far overextended in their AI buildouts.
Defined-contribution plans shift responsibility for retirement security to employees, who must save and decide how long those savings will last. Fink himself described the transition as: “a shift from financial certainty to financial uncertainty.” Fink should understand then that yesterday’s intentional move to financial uncertainty for workers has undermined American workers’ capacity to invest today.
Fink’s whining about a lack of investment capital comes across as ungrateful to a government worker. U.S. public employees have never stopped investing. Public sector workers’ pension plans hold over $7 trillion in assets. Moreover, DB portfolios hold far more risky equities than generations ago, when pension investments were dominated by low-risk bonds.
BlackRock itself makes millions providing investment advice for the DB pension plans and touts managing assets for “roughly half of U.S. public school teachers.” But that’s not enough for CEO Larry Fink. Perhaps he needs a second pool house.
BlackRock’s new angle is a “LifePath Paycheck,” which lets participants use accumulated retirement savings to purchase lifetime-income annuities. BlackRock is even pitching these annuities as “pension-like,” but they forgot the core element of a pension: an employer guaranteeing the benefit.
BlackRock knows what workers lost when employers moved away from pensions. Fink noted in his 2024 chairman’s letter that traditional pensions helped his own family, as his mother received a CALPERS pension as an employee of the state university system. Now his company offers a way to turn retirement savings back into a monthly paycheck.
That paycheck can be valuable. But it’s not the same bargain. A traditional pension establishes a benefit under the plan’s formula and the boss guarantees it. LifePath Paycheck helps workers purchase whatever lifetime income their accumulated savings can support. Those are not the same. The insurer guarantees the purchased payment; the employer no longer has to deliver a defined retirement benefit. With this approach, Fink hopes to tap into more workers’ capital, while providing a far less secure benefit. Less participation in a less stellar retirement should be expected.
Workers lack the resources to invest because employers today pay too little in core wages and have systematically eliminated guaranteed pension benefits. The flaw in Fink’s approach, and in many similar initiatives today, is that opening another retirement account does not magically create the money to fund it. In March 2026, only 45% of workers in the lowest-paid quarter with access to a workplace defined-contribution plan participated, compared with 81% in the highest-paid quarter. The access problem is real.
And more Americans are tapping into their retirement savings long before retirement. According to CNBC, in 2025, “6% of Vanguard customers with retirement funds initiated a 401(k) hardship withdrawal, up from 5% in 2024 and a pre-pandemic average of 2%.”
With inflation and borrowing costs increasing, and devastating health care cuts on the way, it is unclear where the money Fink is so desperate for would come from. If the economy needs more long-term investment capital, the conversation should include higher wages and stronger, real pensions. Workers deserve more than another opportunity to invest. They deserve a retirement they can count on.
Policy decisions on retirement should be measured by the value of workers’ retirement savings and the security they provide, not by how desperate billionaire asset managers are to finance the next phase of the AI boom.
The SEC Wants to Scrap a Pension Anti-Corruption Safeguard
This week, Natalia Renta of Americans for Financial Reform wrote an opinion piece on the SEC’s proposal to scrap its pay-to-play restrictions.
Renta notes the SEC’s current “pay-to-play” generally bars investment advisers from collecting fees from government clients—including public pensions—for two years after the firm or certain employees make campaign contributions to officials who can influence their hiring. Repeal would remove an important barrier between campaign checks and lucrative pension contracts. Fraud and bribery would remain illegal, but this preventive safeguard would disappear.
The SEC adopted the rule in 2010 following pension influence-peddling scandals. Its rationale was straightforward: selecting investment managers based on political connections rather than qualifications can leave pension funds paying higher fees for inferior service. Workers, retirees, and taxpayers bear the risk.
At CalPERS, former board member Alfred Villalobos collected more than $40 million in placement commissions connected to pension investments; his clients included Apollo. Former CEO Fred Buenrostro later admitted he accepted about $250,000, plus gifts, travel, and other benefits, in exchange for using his position to favor the placement agent and his clients. Buenrostro received a 54-month prison sentence.
In New York, Carlyle agreed to a $20 million settlement in 2009 after paying nearly $13 million to a brokerage associated with the state comptroller’s political adviser, helping secure $730 million in pension investment commitments. Carlyle said it was unaware of the misconduct and had been deceived by the intermediaries.
Workers’ pensions are not a reward for campaign donors or well-connected middlemen. Investment firms should win pension business on merit—not on whose campaign they bankroll. The SEC should strengthen that principle, not dismantle a rule designed to enforce it.
Be sure to check back next Friday for the latest news in the fight for a secure retirement! For now, sign up for NPPC News Clips to receive daily pension news from across the country directly to your inbox.