ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Pension Fund Giants - Global Viewpoint

Updated on April 27, 2015

Are pension funds "too big to fail."? When we label a pension fund public, we equate tax dollars to the support of the financial viability of that fund. In Illinois, the pension funds are decentralized into smaller individual governmental units. In Wisconsin, the pension funds are centralized under one umbrella - under one governing body's oversight and management control.

The pros and cons are many. Succinctly , the scale of economy for managing investment fees alone support a centralized management unit and conversely, the democracy of competing units supports the theory of decentralized pension funds.

Consolidating pension funds and having the management fall under the direction of one team that can specialize in the management of the portfolio is an important financial metric for citizens of the United States to actively consider.

The differences between two adjoining states - Wisconsin and Illinois give us the ability to see side by side the costs and benefits.

One item that must be clarified for Illinois, while the legal requirement require the reporting of fees, fees historically have been compiled on an annual basis rather than by each individual trade ticket. Is this practice in the best interest of the taxpayer? Is this practice in accordance with the intent of the law? Should financial firms be held accountable for not properly reporting fees of the pension funds' trades?

Global Viewpoint Pension Assets as of 2009
Global Viewpoint Pension Assets as of 2009 | Source

Paradigm of Sole Source Pension Needs to Change

"Sole source defined benefit plans may be a disguise for socialized government."

American Choices

Public or Private Pension Giants

In reviewing the needs of our public pension funds, the viewpoint must be taken that the giants in the industry who are too big to fail are quasi governmental units.

If the funding source is ultimately, the American taxpayer, the pension fund rules must at the very least request the same best practices as the requirements and standards of the public pension funds.

  • Golden parachute rules must be established with financial penalties for non-adherence.
  • Responsibility measures for fiduciary duties must be more clearly defined for the taxpayers benefit.
  • Platinum pensions must be viewed as a socialized regulation not as a democratic regulation.



Just Who Are the Pension Fund Giants?

The giants of the pension fund world include of course General Motors but also many teacher funds and state public employment funds.

Are all of these really private? Shouldn't we consider General Motors a public pension fund? If the taxpayer may support that fund? If the entity is deemed too big to fail - is it no longer then private?

Where are the antitrust laws? Where is the individual intelligence of the voting taxpayer?

Trade Tickets for Pension Funds Need Legal Mandate

Reporting fees should not be a year-end computation. To actively manage fees, all fees for fixed income and equity trades should be reported on each trade ticket. This should be not just a state mandate, it should be a federal mandate. If you think the banker's have been upset before, they will turn from red to purple with the installation of this requirement. I would go so far as to instill new bidding requirements that break out the fees anticipated in the bid.

Which brings to the investment bidding process. Fair market competition mandates a fair bid. Public funds that invest in securities need not just a strong financial manager but a manger who implements bidding procedures to ensure the market remains competitive.

Mortgage holders must be stakeholders in the communities where they hold assets.

Pension Fund Investment Results Must Include Geography

The author believes strong that a return to matching geographical location of assets and liabilities needs to be gradually implemented. Regional banking has proven detrimental. The continuation of regional banking will lead to national banking and international regulation with no accountability.

Mortgage holders must be stakeholders in the communities where they hold assets.

A return to accountability and ownership can only be made IF the regulatory authorities recognize this basic financial principle. In the real estate world, it is well known that renters do not take care of properties, landlords do. A landlord who is more than 50 miles away ends up hurting the community where the asset is located. Likewise, financial institutions need to not just know their investment, they need to see the community that they are investing in.

Foreclosures are hurting not just homeowners and neighbors, they are hurting the American taxpayer.

Too big to fail is a lesson that regulators must take to heart and implement new regulations that migrate the financial market return to the marriage of local assets and local liabilities.

Liberty and the Pursuit of Freedom

Statue of Liberty - symbol of freedome
Statue of Liberty - symbol of freedome | Source

Platinum Pensions Can Shield Socialized Economic Vehicles

Platinum pensions where the defined benefit contribution plan is established as the sole source of retirement earnings is a disguise for socialized economic vehicles. This is contrary to the basic economic principals that the United States was founded upon - free commerce.

It is in short a wolf in sheep's clothing.

Defined benefit contribution plans have a time and place in limited quantities. The giants of too big to fail are now running our government and we run the risk of losing the very freedom that our valiant soldiers are fighting for.

Financial Fight for Freedom - For Our Future

The financial fight is "big fight". It is a fight for money and people will do and say crazy things.

This financial fight is more than a fight for today; it is a fight for the freedom of retirement for tomorrow and for the financial security of our children and grandchildren.

© 2012 American_Choices

Comments

    0 of 8192 characters used
    Post Comment

    • American_Choices profile imageAUTHOR

      American_Choices 

      6 years ago from USA

      Credence2,

      Great question which I can only answer in a limited fashion because the quantitative factors are too many to explore.

      Having stated that, I would define 'platinum pensions' as those that are seeking be the sole income. The social security system and the defined pensions both I feel should be supplemental income not a 'sole source'.

      The theory is simple - change the way we view the pensions overall. Gone are the days of not paying the bill, now that the bill is here we must realize we cannot afford the cake and the appetizer and a glass of wine all on the public bill.

      If the private sector - the true private section can afford platinum pensions - that is their option but we as citizens must start realizing there is a cost to us as a society.

      Migrating away from sole source is a step, a big step in correcting decades of problems that we have chosen to ignore. Pay day is here and we are hurting. We must step up to the plate and be accounted for.

    • Credence2 profile image

      Credence2 

      6 years ago from Florida (Space Coast)

      Hi, AC, you recognized that defined benefit pension plans have a place in limited quantities. What would you consider limiited quantities and what is your definition of a 'platinum pension plan'?

    • American_Choices profile imageAUTHOR

      American_Choices 

      6 years ago from USA

      HowardBThiname,

      Your high marks mean allot. I wrote this from the heart and hesitated to show my emotions. I have been listening from the sidelines and know the back office of the real figures of the pension funds. Luckily someone else had already compiled the numbers for me.

      Putting the numbers together for us to make good decisions is my specialty.

      Your words mean allot to this lonely writer. Thank you!

    • profile image

      HowardBThiname 

      6 years ago

      Excellent! I've only been on HubPages for a short time, but this is the best hub I've read here!

      Your quote, "The giants of too big to fail are now running our government and we run the risk of losing the very freedom that our valiant soldiers are fighting for," are words to live by, indeed.

      To be truthful, I'd never really considered the impact of these mega pension funds.

      Thanks for this article. It belongs on a much bigger media source, though. You deserve some recognition for this one.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)