"Despite the urge to spin it politically, there’s no right or left here. Only right or wrong." - Ted Siedle
Recent news articles have focused on Tim Walz as Chair of the Minnesota Pension System. We believe it's important to share these reports with our members, as we believe that what has happened at MN RTA is happening at public pensions across the country. We hope this current spotlight on MN RTA will shine some light on the investment practices of all public pension funds. Pensions reform is not a red issue. It's not a blue issue. It's a nonpartisan issue impacting millions of Americans. - STRS Ohio Watchdogs
Wall Street money managers knew Vice President Kamala Harris had selected a governor as her running mate because of the deadline attached to a campaign fund-raising request.
The Harris presidential campaign needed Wall Street money in hand before the vice presidential nominee was announced because a governor’s power over state pensions invokes the Security & Exchange Commission rules against pay-to-play.
Contributions above $350 to a campaign with a governor on the ballot bring big fines from the SEC unless the money manager gives up the pension business.
A recent case from Minnesota brought a $60,000 fine to a fund manager for a $4,000 contribution to a government official with the ability to influence pension investment decisions.
Minnesota’s public pensions require especially close scrutiny because of Gov. Tim Walz’ selection as the Democratic vice presidential nominee. He is the chairman of Minnesota’s State Board of Investment, which manages all state retirement funds.
The Blade Editorial Board became aware of the Minnesota pension plan when teachers there began a drive to emulate the reform process initiated by the Ohio Retirement for Teachers Association.
We found the reported investment management fees paid by the Minnesota teachers pension fund were about 10 percent of the average cost to a public pension.
Our conclusion was Minnesota either has a world-class pension system or they are cooking the books.
Investment management expenses of $83,208,488 shown by the total Minnesota fund of $134.7 billion are even more suspicious. The Minnesota State Board of Investment claims investment management fees of just over 6/100s of 1 percent on a fund they say is mostly managed by external experts.
If Governor Walz presided over a deal with Wall Street that is 94 percent better than the multi-state average of 54 big pensions measured over 15 years, he should be bragging about that achievement at every presidential campaign stop.
If, however, those numbers don’t stand up to close scrutiny, Governor Walz should explain why not and reveal what the Minnesota State Board of Investment actually pays Wall Street.
There is a $1.2 billion difference between what would be the expected fee to Wall Street fund managers and Minnesota’s reported payment. That’s way too much money to ignore and should be a campaign issue whether it helps or hurts the Harris-Walz ticket.
The Blade Editorial Board 8/11/24
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