PROTECTION OF RETIREMENT FUNDS

WHEREAS, there is noted a growing trend toward abuse by public employers of retirement benefit trust funds; and

WHEREAS, this abuse can take the form of improper investments, negligent management of the funds and using those funds to fund state and local governments; and

WHEREAS, retirement benefits are a primary benefit of all employees; and

WHEREAS, efforts are underway to move authority and responsibility for determining pension policy from trustees representing members to the state legislatures who would first represent the interest of the state and not the pension plan member; and

WHEREAS, state legislatures often attempt to divert the state share of pension plan contributions as the source of relief from general fiscal crises in their state; and

WHEREAS, state legislatures are seeking to substitute their judgments regarding increases needed to maintain economic neutrality in benefit levels and to eliminate cost-of-living adjustments (COLAs) as the vehicle to ensure against economic reduction of benefit levels; and

WHEREAS, state legislatures have attempted to set minimum qualifications for trustees in an attempt to ensure pension fund investments are made according to generally accepted principles for investments, and as a consequence are placing unacceptable pre-conditions on the democratic selection of trustees by plan participants; and

WHEREAS, defined benefit plans offer substantial protection for retirees over defined contribution plans by ensuring a guaranteed benefit level for retirees that could be supplemented by voluntary savings including contributions to defined contribution plans, and benefits accumulated through contributions to Social Security, rather than relying solely on defined contribution plans now being recommended by state legislatures that would guarantee no level of benefits, have no disability benefits, and no COLA provisions; and

WHEREAS, the interests of employees are the raison d’être of the American Federation of Teachers:

RESOLVED, that the American Federation of Teachers is willing to support and participate in stringent measures to protect against such activity.