Wall Street to Workers: Give Us Your Retirement Savings and Stop Asking Questions - Working In These Times

 

If you are a public school teacher in Kentucky, the state has a message for you: You have no right to know the details of the investments being made with your retirement savings.

That was the crux of the declaration issued by state officials to a high school history teacher when he asked to see the terms of the agreements between the Kentucky Teachers’ Retirement System and the Wall Street firms that are managing the system’s money on behalf of him, his colleagues and thousands of retirees.

The denial was the latest case of public officials blocking the release of information about how billions of dollars of public employees’ retirement nest eggs are being invested. Though some of the fine print of the investments has occasionally leaked, the agreements are tightly held in most states and cities. Critics say such secrecy prevents lawmakers and the public from evaluating the propriety of the increasing fees being paid to private financial firms for pension management services.

The secrecy trend is spreading throughout the country. Last month, for instance, Illinois officials denied an open records request for information identifying which financial firms are managing that state’s pension money. Like their Kentucky counterparts, Illinois officials asserted that the firms’ identities "constitute trade secrets." Illinois’ Freedom of Information Act includes special exemptions for information about private equity firms.

The denial from Illinois pension officials followed a decision earlier this year by Rhode Island General Treasurer Gina Raimondo, a Democrat, to reject a newspaper’s open-records request for information about state pension investments. The treasurer's office argued that financial firms have the right to “minimize attention” around their compensation. Last week Raimondo, who is now Rhode Island's governor-elect, held a closed-door meeting of the state investment commission to review the state’s $61 million investment in a controversial hedge fund.

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