Arizona lawmakers should not make investment decisions

Listen to this article

Anyone saving for retirement needs security. They need to believe that their savings are safe, that the professionals entrusted with this vital responsibility are focused on maximizing profits and increasing investment opportunities.

That’s why when it comes to retirement savings and pensions for firefighters, police officers, nurses, teachers and other public employees, the simplest strategy is best: investment decisions should be made by investment fiduciaries and professionals – not by politicians following their own. agendas.

Tim Hill
Tim Hill

But the Arizona Senate has a proposal to bar public entities — the state, counties, cities, schools, the whole shebang — from contracting with any company that “discriminates” against firearms businesses.

First, this is the government trying to tell private companies how to do business. This is a bad twist on the idea of ​​free markets.

Second, it reduces the number of companies competing for business with local governments, which will leave less reason for the remaining companies to lower prices to compete. This will cost taxpayers money for everything from office supplies to public bonds to building materials.

Third, it means companies hired to invest money for public pensions will be judged by lawmakers for something other than their primary job, which is to maximize investment returns and create retirement savings for important public workers like officers. of police, firefighters and teachers. They’ll be wondering if they’re stepping on the political ladder instead of focusing on making the best investments to take care of Arizona’s retirees who deserve financial security.

The idea has been vetoed once before. And it would still go to a public vote before becoming law. But it is clear that politicians are gripped by the perceived threat of so-called “ESG investing” – where environmental, social and corporate governance concerns are taken into account in the assessment of pension investments and public finance and borrowing decisions.

How to worry about return on investment?

Retirement savings and investments are very important to these political games. Our state’s public employees deserve secure futures built on sound investments and less interference from politicians.

No matter which way the political winds blow, it is an investor’s fiduciary duty to prioritize returns for their clients. All investment decisions must be made in the interests of the beneficiaries. Nothing has changed about that.

But Arizona politicians’ aggressive pursuit of professional asset managers—especially the so-called “Big Three:” BlackRock, State Street and Vanguard—hurts you, me, and all other investors. The price will be paid by taxpayers and public servants in the form of limited returns, higher costs, curtailed freedoms and unnecessary polarization.

Free market principles and the good faith requirements of investment professionals should drive investment decisions for our public employee pensions. For the benefit of future Arizona retirees, the standard should be simple and unencumbered by current political trends.

Pensions are the only source of retirement income for some public employees. Many police officers, firefighters and teachers are not eligible for Social Security. Continued attacks from politicians and regulators could destroy their public pensions. This political activism can no longer go unchecked. Politicians and regulators must be restrained from limiting investment choices that lead to less competition, higher prices and lower returns.

We cannot allow politics to jeopardize the financial security of current and future retirees. We need to keep politics out of our pension and retirement options and stay focused on savings, investment solutions, maximizing returns and increasing investment choices for all Americans.

Tim Hill is the former director of the International Association of Fire Fighters (IAFF) Pension Resources Department. He is a past president of the Professional Firefighters of Arizona (PFFA) and Vice President of Phoenix Firefighters Local 493. He is also a retired firefighter with the Phoenix Fire Department.

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *