By Louise Sundin
A seminar on retirement plans for workers was held in May at the U of M. Greg Mennis, the director of public sector retirement systems for Pew Charitable Trusts; Jeff Bailey, finance lecturer at the Carlson School of Management and former director of benefits for Target; and Kurt Winkelmann, senior fellow of pension policy at the Heller-Hurwicz Economics Institute, all shared their insights on retirement systems.
The group definitely had a bias for defined contributions plans and 401k’s for both unionized and unorganized workers. The guy from Target admitted that the 2/3 of Target employees who are not long-term employees have no employer-sponsored way to save for retirement. They seemed willing to say that employees need to look to the insurance industry for help. Are they serious?
They think there will be a ‘market correction’ within the next two years, a euphemism for ‘crash’. If that happens, the Legislature, who is in charge of public employee pension plans, will get nervous and either encourage or actually legislate to change current Defined Benefit plans to Defined Contribution Plans leaving public employees at the mercy of their investments in the stock market. Then employers will be told to change to defined contribution plans.
The two national Foundations that are going state to state to undermine public employee pensions are the Arnold Foundation and the PEW Charitable Trust. The Arnold Foundation is paying for research at the U of M being done by Professor Winkelmann. And PEW director Mennis espoused the same strategy. Both will be continuing to report to the MN LCPR, Legislative Commission on Pensions and Retirement, encouraging them to change to DC plans. Workers, stay tuned, stay vigilant!