Welcome to the latest edition of This Week in Pensions! This week, we’ve gathered stories on the SEC, the upcoming midterm elections, and alternative investments in public pensions. This is the news you need to know in the fight for a secure retirement.s.
NPPC News: Back to School Brings Tight Budgets and Longer School Bus Rides
September marks the start of a new school year for students and educators across the country—but instead of excitement, possibility, and growth, many schools face tight budgets and school bus driver shortages. This week, we explore back-to-school amid funding cutbacks.
State News
Pennsylvania: A Big COLA Win After a Long, Long Fight
Roughly 60,000 retired Pennsylvania public employees received their first cost-of-living (COLA) pension increase in decades, ranging from 15% to 24.5%. This week’s AFSCME retiree convention celebrated the victory and recognized the members who spent years organizing for it, including some who passed away before seeing the long-sought-after increase. This is the first cost-of-living increase some of these folks have received in over 20 years, despite ongoing inflation.
During the Retired Public Employees of Pennsylvania Chapter 13’s 45th annual convention in Harrisburg, AFSCME President Patrick Moran and International Executive Board Retiree Representative Jeanne Weaver hosted Governor Shapiro.
Shapiro signed the law on July 12, and this week, the first marginally larger deposits hit members’ accounts. The Governor joined retirees for their Harrisburg celebration and took a selfie with organizers.
Oklahoma: Mazzei Promises Regular COLA’s and No DB Changes
This week, Oklahoma gubernatorial candidate Mike Mazzei went on record in the Lawton Constitution, saying retirees covered by the Oklahoma Public Employees Retirement System (OPERS) deserve regular COLA adjustments. Additionally, Mazzei committed to opposing any changes to the state’s defined benefit system as governor.
“COLAS (cost of living adjustments) should (happen) every other year; getting our pension systems to 90% funded makes that possible,” he said. “We need to have regular cost of living adjustments.”
While Mazzei’s comments on COLAs and state pensions are welcome news, his campaign website still proposes a measure to “shift large urban counties [to] a more sustainable retirement model through 401(k) plans for county employees.” In a newer edit, the site also notes in parentheses: “This will not change any of the state retirement systems for Teachers, Police, Firefighters or Law Enforcement.”
But let’s not forget, Mazzei spent over a decade in the state Senate pushing the precise shift he’s now promising not to make. If elected, Oklahoma public employees will watch closely to see which Mazzei shows up. Will it be the person now pledging his support for pensions, or the one who spent years railing against the retirement security of firefighters and teachers?
Pension Funds Could Lose SEC Tools to Combat Corruption and Hold Corporations Accountable
Last month, the NPPC previewed a potential SEC rule change that would roll back pay-to-play rules. On September 10th, the SEC formally released its proposal, beginning a 60-day comment period that ends November 9th. Chairman Paul S. Atkins argues the rule change is needed because, “People should not have to choose between their political speech rights and a job in a particular industry.”
The thing is, they don’t.
Atkins means asset managers and others who profit from managing public pensions should have the same right as every other wealthy American to have a disproportionate voice in the American political process. That logic is faulty in two ways:
First, these are not normal wealthy American political contributors. Atkins completely ignores the rank-and-file workers whose savings these asset managers want a cut of. Pension profiteering firms in this sense are like parasites, feeding off the trillions in deferred compensation of civil servants. In other words, their profits depend entirely – like a flea on a dog – on swaying government agencies’ decisions and leaching off public coffers through influence peddling, just like a registered lobbyist. No, they are not entitled to separate political lives if they want to keep earning a fat paycheck by taking a cut of elderly teachers’ pensions.
Every union lobbyist in the nation is registered. Wall Street deserves the same scrutiny.
Second, folks who profit off pensions can contribute whatever is legally allowed; no specific SEC regulation bars that. Government-reliant associates must follow the same type of transparency rules as thousands of American lobbyists. Firms can either comply or forgo business with public agencies for a period of time. That’s their choice. These rules make such donations more transparent and limit excessive contributions, just as states regulate lobbyist dollars. And while some firms may rein in employee contributions internally, those are internal processes outside the SEC’s purview. Firms can change their own rules.
Also this week, the SEC proposed rescinding Rule 14a-8, which provides the federal framework for including qualifying shareholder proposals in companies’ proxy materials. The SEC argues the rule exceeds its substantial inherent authority. Meanwhile, pension advocates warn that removing it would weaken investors’ ability to hold corporate boards accountable. The SEC seems intent on finding reasons not to do its job.
Both the SEC and many firms who manage these dollars seem to have forgotten one key fact: Public employees own a share of these companies. That is the combined power of public pensions and the labor movement that fought and won them. Defined benefit pensions are a foundational element of union employment. Our combined assets deserve meaningful voice, just like any other major investor or institution. In fact, active management requires active shareholder participation, or it risks negligence. Investing millions while forgoing the rights everyday shareholders are entitled to would needlessly increase the risk that public employee pensions absorb. This change aims to profit off union members’ money while neutering our democratic influence over the equities we own.
AFT: Investigate AI Risks Before Workers Pay the Price
A 1.875-million-member union is calling for swift action to address the existential threat hyperscale AI investments may pose to members’ retirement security and the entire U.S. economy. This week, the American Federation of Teachers called for the Financial Stability Oversight Council to investigate risks arising from AI-related investment, including concentrated valuations and financing arrangements in which connected companies fund one another. Union trustees oversee nearly 5,000 individual public pension plans. The action follows concerns expressed by members of the AFT Trustee Council.
AFT President Randi Weingarten sent a letter to Treasury Secretary Scott Bessent. Weingarten is calling for “an immediate investigation into serious financial risks from the artificial intelligence sector’s rapid debt-laden expansion.”
“The alarm bells could not ring any louder,” said Weingarten. “If President Donald Trump won’t act to protect working people’s deferred wages from the dangers AI poses to the U.S. economy, public officials need to act. Educators, nurses and public employees didn’t create this AI bubble, and they shouldn’t be the ones who pay for it if it bursts.
“Our members have already lived through one devastating financial crisis that set workers back financially for more than a decade, and we will not stand by while regulators look the other way as Wall Street piles up trillions in hidden debt and circular deals to chase the next valuation high.” 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.