The American Federation of Teachers added three firms to its list of money managers and others that the union claims are assisting or supporting the elimination of defined benefit plans despite accepting billions of dollars of business from them.
The three firms — Aon PLC, GTCR LLC and Highbridge Capital Management — join 26 others first listed in April 2013 in the report “Ranking Asset Managers: A Retirement Security Report on Money Managers for Pension Fund Trustees.”
It is the union's second such report featuring what it calls money managers with top executives who have “contributed to, or sit on the governing board of, an organization that advocates for the replacement of defined benefit plans with defined contribution or cash balance plans.”
The new report will be distributed to pension funds on March 18. Randi Weingarten, president of the Washington-based union, said the union is not suggesting action be taken by boards of trustees; the report is primarily an exercise in disclosure and transparency.
“We are just making it clear ... what roles some asset managers have,” Ms. Weingarten said in a telephone interview. “We're trying to make sure that pension funds know the efforts that some of these same asset managers have made to harm retirement security.”
“The exercise was simply to say these are asset managers — while they are seeking to enrich themselves or make money off of your pension fund — they are also actually trying to diminish (your) participant's retirement security or other participants' retirement security,” said Ms. Weingarten.
Ms. Weingarten said the overall response to the report issued last year was positive and led to the updated version produced this month. She said the union will not necessarily make this a regular annual report.
Of the three new firms, the union puts special emphasis on Chicago-based private equity manager GTCR. The union added the firm because of its connection with current Illinois Republican gubernatorial candidate Bruce Rauner.
Mr. Rauner had been a partner with the firm since 1981, a year after its founding, and retired as chairman in October 2012.
The report states Mr. Rauner, “who still holds partnership interest in GTCR funds, advocates for the elimination of defined benefit plans.”
“Having earned millions as an asset manager of defined benefit plans, Rauner is now, as a gubernatorial candidate, calling for freezing the benefits of the state's defined benefit pension plans and putting all new public employees in a defined contribution plan,” the report said.
Officials at Mr. Rauner's campaign office and GTCR spokesman Jim McNitt did not reply to requests for comment by press time.