Edward Siedle: The Death of Public Pension Transparency

The Death of Public Pension Transparency

June 16, 2021

By Edward Siedle, Contributor

Forbes

Absent full disclosure by investment firms to pension boards and staffs, these individuals cannot fulfill their fiduciary duty to diligently safeguard pension assets. Full disclosure of investment information by the pension to the public is necessary for the stakeholders to understand the investment program, as well as evaluate whether pension fiduciaries are prudently performing their duties.

https://www.forbes.com/sites/edwardsiedle/2021/06/16/the-death-of-publicpensiontransparency/?sh=74a1ada64d83 

Forensic investigations reveal that public pensions in states such as Pennsylvania, California, Tennessee, Rhode Island, North Carolina, and Ohio have long abandoned transparency, choosing instead to collaborate with Wall Street firms to eviscerate state public records laws and avoid accountability to stakeholders. Predictably, billions that could have been used to pay government workers retirement benefits have been squandered.

Transparency in government has long been acknowledged in America as essential to a healthy democracy. On the federal level, the Freedom of Information Act opens up the workings of government to public scrutiny, giving citizens information they need to evaluate and criticize government decision-making.

All 50 states also have public records laws which allow members of the public to obtain documents and other public records from state and local government bodies. State public records laws are built upon the United States’ historical position that the records of government are “the people’s records.”

"Transparency is also critical to the prudent management of trillions of dollars invested in America’s state and local government pensions. Indeed, the single most fundamental de?ning characteristic of our nation’s public pensions is" transparency. 

Of all pensions globally, our public pensions—securing the retirement security of nearly 15 million state and local government workers, funded by workers and taxpayers—are required under our public records laws to be the most transparent.

Public pensions primarily invest government workers’ retirement savings in securities and funds which are regulated on the federal and state level. Our nation’s securities laws require that securities issuers and fund advisers register with regulators, disclose financial and other significant information to "all" investors, including public pensions, as well as prohibit deceit, misrepresentations, and other fraud. The statutorily mandated disclosure information is commonly provided in the form of prospectuses, offering memoranda, annual reports, performance reviews and other documents.

Absent full disclosure by investment firms to pension boards and staffs, these individuals cannot fulfill their fiduciary duty to diligently safeguard pension assets. Full disclosure of investment information by the pension to the public is necessary for the stakeholders to understand the investment program, as well as evaluate whether pension fiduciaries are prudently performing their duties.

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