According to a Yahoo story, public pension plans will begin asking their service providers to commit to a new set of ethical guidelines designed to protect the interests of plan participants and beneficiaries, the National Conference on Public Employee Retirement Systems (NCPERS) announced at its Annual Conference and Exhibition, being held in New Orleans May 3-7.
The NCPERS Code of Conduct for Public Pension Service Providers identifies 10 principles for service providers with the first eight falling into the ‘duh’ category including:
3. Act with independence and objectivity.
4. Fully disclose to public plan clients conflicts of interest that arise that may impair the ability to act independently or objectively.
and only when you get to the last two principles do you see where the NCPERS is heading with this:
9. Not advocate for the diminishment of public defined benefit plans.
10. Fully disclose all contributions made to entities enumerated in Schedule A
that advocate for the diminishment of public defined benefit plans.
Principle 10 requires some explanation that I do not have but in combination the NCPERS is under the mistaken impression that a defined benefit system under the control of people like this:
is the gold standard and any talk of switching to the transparency of a defined contribution system, even if it would provide safer and possibly bigger benefits for most, is anathema to their mission. Then why, in explaining their suggested Code of Conduct, is there not this disclosure somewhere:
NCPERS is subsidized by union leaders who are older and higher paid and benefit disproportionately under a defined benefit system so we, as a group, obey the money and advocate for keeping the defined benefit system for public plans even if the politicians in charge of most of those plans will eventually bankrupt them.
Likewise there were oral arguments in the pension payment case yesterday in Trenton with njspotlight providing the most complete summary. There seems a good chance that the seven Supreme Court justices will side with the Christie administration* and, if so, will there this disclosure be anywhere in their opinion:
Three of us were nominated and our Chief Justice was renominated by Christie so we are bending over backwards to see it from his point of view.
That would be the ethical thing.
* Not that it matters too much. The amount in question is a fraction of the actual underfunding which New Jersey has absolutely no chance of ever making up. The state’s arguments were that (1) the courts should not be in the budget process each year though having voters weigh in on the process each year would be OK, and (2) New Jersey did not have the $1.6 billion to pay this year or next though no evidence was provided as to what that money was being used for (Bridgegate studies et alia).