May 06, 2005

Pension Fund Follies

Oliver Willis has a nasty bit of defamation in describing a Labor Department Letter telling union pensions to obey the law.

So, the Bush administration has decided that union opposition to social security privatization and benefit cuts is somehow a violation of the law.

The New York Times article on which all this is based makes it clear that this is in no way what is going on. I suspect that the unions tried to illegally strong arm the financial services industry through their pension funds and somebody at a brokerage had the courage to report it to the federal government. The letter is a gentle reminder that if pension funds get caught playing politics with union members' pension money, these pension funds could be taken over by the government and their present fiduciaries sent to jail.

It's very much settled law that fiduciaries can't reduce their members' rates of return just to make a political point. Willis doesn't seem to like the idea of enforcing this particular law much, especially when it's a Republican doing it so he just makes up a nasty accusation that somehow it's the Bush administration that is behaving out of bounds.

Posted by TMLutas at May 6, 2005 11:13 AM