Several grantees of the Laura and John Arnold Foundation, which has funded research on public pension reform, are under pressure from public employee unions not to accept funding from the foundation, the Wall Street Journal reports.
The unions argue that the foundation is trying to shift public opinion toward greater support for defined-contribution plans, which are similar to 401(k)s, and away from the defined-benefit plans that many municipal and state governments are struggling to fund. Nonprofits that took money from LJAF have “rented their credibility to a right-wing ideologue bent on gutting public pensions,” said Jordan Marks, executive director of the National Public Pension Coalition, an advocacy group funded by seven major unions.
John Arnold, a former Enron Corp. trader who went on to create an energy hedge fund, called the allegations “an organized smear campaign” against him and his foundation by unions that want to avoid any discussion of solutions to the public pension problem. Arnold told the Journal that he isn’t looking to end public pension plans per se but rather to stabilize them, and that he is agnostic with respect to possible solutions. A “solution paper” (8 pages, PDF) written by the foundation’s vice president for public accountability initiatives outlines several proposed alternatives to the status quo, including defined contribution plans, cash balance plans, side-by-side and stacked hybrid plans, and a cap on employer contributions.
In February, New York City public broadcasting station WNET announced that it would return a $3.5 million grant from LJAF for a series on the economic sustainability of public pension funds. Union groups also are calling on the Brookings Institution, which since 2012 has received more than $500,000 from LJAF for research on pensions, to cut its ties with the foundation. Brookings spokeperson David Nassar told the Journal that the think tank has no plans to return the grant. The Pew Charitable Trusts also has come under fire for accepting $4.85 million from LJAF for aresearch project on underfunded public pensions. Although the organization declined to comment for the Journal article, a Q&A on its Web site explains that it works with the foundation because “we share the goal to help states design and adopt retirement systems that are fair, affordable and fiscally sustainable.”
LJAF has awarded grants totaling nearly $241 million since 2005 in support of charter schools, criminal justice reform, obesity-prevention efforts, and other initiatives. Grants made by the foundation in support of research related to public pension reform include more than $1 million to the Reason Foundation, a libertarian research group; nearly $1 million to the Center for State & Local Government Excellence, Inc.; and $693,600 to George Mason University in support of symposia on the topic.
“The unions are very skilled at framing our intent as wanting to gut the savings of the middle class,” said Arnold. “We are just trying to get a better policy for America.”