In a press release from the National Conference On Public Employee Retirement Systems (NCPERS) dated December 19, 2016, the California Policy Center, and its spinoff online publication, UnionWatch, were both chosen, for the 2nd year in a row, as one of only 28 “policy and research organizations” that NCPERS has deemed to be “Think Tanks that Undercut Pensions.” Ponder the significance of this excerpt from that same press release: “Under the Code of Conduct, NCPERS urges its corporate members to disclose whether they contribute to these organizations.”

What exactly were the transgressions of the California Policy Center, and UnionWatch, that earned them a place on this list of undesirables? That earned them an admonition from NCPERS to its corporate members to boycott us, or else? Here is their list of criteria – and, briefly, our response:

How to be a think tank that gets blacklisted by NCPERS:

(1) Advocate or advance the claim that public defined-benefit plans are unsustainable.

Guilty. Public pension funds cannot possibly withstand the next market downturn. Unaltered, they will either bankrupt public institutions or cause taxes to be raised to punitive levels.

(2) Advocate for a defined-contribution plan to replace a public defined-benefit plan.

Not guilty. Our organization does recognize however that defined-contribution plans may be the only recourse, if significant changes are not made to restore financial sustainability to defined-benefit plans.

(3) Advocate for a poorly designed cash-balance plan to replace a defined-benefit plan.

Not guilty. We have not invested our resources in serious review of this policy option.

(4) Advocate for a poorly designed combination plan to replace the public defined-benefit plan.

Guilty, except that, of course, we believe a well designed combination plan could work. An example of this, fruitlessly advocated by California Governor Brown, is the “three legged stool” solution: A modest, sustainable pension, participation in Social Security, and a 401K savings plan with a modest employer contribution.

(5) Link school performance evaluations to whether a defined-benefit plan is available to teachers and school employees.

Not guilty. While it is probably true that providing teachers with the golden handcuffs of back-loaded pension benefit formulas guarantee the poor performers will stay on the job while those with talent will be more likely to pursue other employment options, we have not done any investigative work in this area. We applaud those who have.

More to the point, we applaud any corporate interest with the courage to stand up to American’s government union controlled pension systems by supporting pension reform organizations. They have a lot to lose.

Anyone who needs evidence to back up our assertion that government pension systems are joined with powerful financial special interests should consider the relationships between NCPERS and their “corporate membership.” NCPERS describes itself as “the principal trade association working to promote and protect pensions by focusing on Advocacy, Research and Education for the benefit of public sector pension stakeholders.”

NCPERS helpfully discloses those 36 corporations who have purchased the “enhanced level of corporate membership,” and it includes some of the most powerful financial firms on earth. To name a few: Acadian Asset Management, BNY Mellon, Evanston Capital Management, J.P. Morgan, Milliman, NASDAQ, Nikko Asset Management Americas, Northern Trust, Prudential Insurance Company, State Street Corporation, and Ziegler Capital Management.

One would think corporate members with this much clout would mean the tail wags the dog, but NCPERS is a very big dog. As the political voice for nearly all major state and local public employee pension systems across the entire U.S., their lobbying muscle is backed up by nearly $4.0 trillion in invested assets. At one of their recent conferences, Chevron was a “platinum sponsor.”

Will Chevron ever oppose the lobbying agenda of NCPERS? Probably not. According to Yahoo Finance, BNY Mellon owns 1.34% of Chevron’s stock, Northern Trust owns 1.35%, and State Street Corporation owns 4.7%. That’s just the holdings of the NCPERS “enhanced members.” Moreover, pension systems don’t just invest through intermediaries such as BNY Mellon, they invest directly in these corporations. There is no financial special interest purchasing publicly traded U.S. stocks that is bigger than the pension fund members of NCPERS, and there is no client to the financial firms on Wall Street bigger than the pension fund members of NCPERS. Nothing comes even close.

No report on NCPERS would be complete without documenting just how thoroughly it is dominated by public sector and union operatives. Their president “served 3 terms on the Chicago Fire Fighters Union Local 2 executive board, resulting in two decades of union leadership.” Their first vice president, a retired police officer, “served as the first woman president of her union, FOP Queen City Lodge No. 69, from 2005 through 2015.” Their second vice president “is currently the statewide president of AFSCME Council 67, representing well over 30,000 members in 21 separate political jurisdictions.” Their secretary “has more than 30 years of service as a Tulsa public employee.” Their treasurer “served as a firefighter for 41 years. During his career, he held offices on the board of the IAFF Local 58.” Their immediate past president “is the treasurer of the United Federation of Teachers (UFT), Local 2, American Federation of Teachers (AFT).”

That’s everyone. The entire management team of NCPERS. A government union controlled financial juggernaut, marching in lockstep with the most powerful players on Wall Street. The consequences are grim for the rest of us.

Public employee pension funds are aggressively attempting to invest nearly $4.0 trillion in assets to get a return of 7.0% per year. Collectively, they are underfunded – according to their own estimates which use this high rate of return – by at least $1.0 trillion. And by nearly all conventional economic indicators, today we are confronting a bubble in bonds, a bubble in housing, and a bubble in stocks. The alliance of financial special interests who don’t want this party to end, and government union leaders who don’t want to lose retirement benefits that are literally triple (or more) what private sector taxpayers can expect, is complicit in policies that have allowed these asset bubbles to inflate. When the bubbles pop, they will share the blame.

In the meantime, they blacklist those of us who call attention to their folly.

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Ed Ring is the vice president for policy research at the California Policy Center.