Houston-based hedge-fund billionaire and former Enron trader John Arnold for years has mounted an attack on public pensions providing guaranteed lifetime benefits that you cannot outlive—pension plans like your Texas Teacher Retirement System. Arnold’s attacks have been aimed at state and local pension programs around the country. His Laura and John Arnold Foundation has been one of the main channels for this effort.
Now Arnold has opened a new front in the war on pensions. Texas Gov. Greg Abbott has nominated a functionary of the Arnold Foundation to chair the State Pension Review Board, which oversees public pension funds in the state, including the Texas Teacher Retirement System.
The Texas Senate still has to confirm this appointment, by a two-thirds vote, and that process begins March 9 with a hearing in the Senate Nominations Committee. Let your senator know you do not want to put an anti-pension fox in charge of the pension henhouse at this key pension-oversight agency of Texas government.
That Arnold Foundation nominee to chair the Pension Review Board is foundation vice president Josh McGee. McGee has made a name for himself by claiming that the superior cost-effectiveness of defined-benefit pensions (like TRS annuities) is a myth and arguing that defined-contribution plans are a good option for workers—as well as a way for public employers to cut their retirement obligations.
McGee has been criticized by the authoritative National Institute on Retirement Security (NIRS) for presenting “fundamentally flawed” research that misrepresents the performance of public pension programs. McGee’s claims are contradicted by NIRS data and other empirical evidence showing defined-benefit pensions can deliver a target retirement benefit at half the cost of a defined-contribution account.
The Texas Senate has the power to reject McGee’s appointment to a full six-year term. Tell your state senator now: The McGee nomination does a disservice to the public employees and people of Texas, and McGee’s appointment merits a “no” vote when it comes up for Senate confirmation.