NCPERS Hits Back Hard at Biased Media Coverage

• By: admin
• On: 05/04/2020 13:22:16
• In: Pension Defense
• Comments: 0

It's our practice at NCPERS to deal fairly and forthrightly with all news organizations. The vast majority of them reciprocate. They approach us in a spirit of inquiry, and they're willing to listen to the experience and perspective of public pension professionals and weigh our positions with care.

But now and then, a reporter or an op-ed writer has such a negative point of view toward public pensions that attempts at engagement are as futile—and every bit as unpleasant—as spitting in the wind. 

That doesn't stop us. We fight back anyway.

As everyone knows, we are in the midst of a massive public health crisis that has stopped global commerce in its tracks and wreaked havoc on markets. There are no safe harbors right now; everyone is feeling the pain. Our energy in the pension community has been focused on supporting one another and our employees, sharing best practices, and, above all, making sure that retirees understand that their hard-earned benefits remain safe.

It strikes us as particularly bizarre for a news organization to choose this time to mount an attack on public pensions. And yet, it is happening. NCPERS Executive Director and Counsel Hank Kim recently fired back at The New York Times for publishing a deeply biased article on April 2, titled “Coronavirus is Making the Public Pension Crisis Even Worse”:

To the Editor:

While I'm hard-pressed to think of a single time Mary Williams Walsh has ever published a balanced, let alone positive, thought on public pensions, her latest column is jaw-droppingly crass. In the middle of a crisis, when people are dead and dying and nations are spending tens of trillions of dollars to beat back a pandemic, her contribution to the public discourse is that the public pension sky is falling.

News flash: Governments and businesses are working frantically against a health threat no one yet fully understands while tirelessly endeavoring to stabilize the global economy. In the midst of it, however, public pensions continue to do our part. Pension systems are issuing checks as they always do, providing stable income to retirees, powering spending in communities, and providing revenue to governments. They are a source of calm and confidence in the midst of chaos. All this is happening at a time when the stability that pensions provide is in woefully short supply.  

The very essence of public pensions is long-term thinking. Pensions are in it for the long haul. For a more than 150 years, public pensions have steadily delivered modest but reliable retirement income to millions of dedicated public servants like the nurses, doctors, and EMS personnel who are on the coronavirus front lines. Pensions have withstood and rebounded from crisis after crisis. Their focus right now is on helping members through the turmoil and delivering on their promises.

If Ms. Walsh's contribution is to report on the trumped-up “crisis” within public pensions, maybe she should take a breath and save precious space in The New York Times for truly valuable reporting on the coronavirus crisis.

We've also taken on opinion writers at the Washington Post, who picked up Walsh's reporting arguing vigorously that financial markets were better in 1942. This purely academic argument may or may not be true, but it has very little bearing on the real world in which public pensions operate today, and in any event the observation does not support the dramatic conclusions the authors drew. Kim responded to the April 17 article, “The next covid-19 victim? Public pension funds” with this letter:

To the Editor:

The musings of two academics demonstrate the danger of possessing a little knowledge of history but no insight into the workings of public pension plans.

Should readers be shocked to learn from a PhD student and an assistant professor of independent studies that 78 years ago, investing looked different than it does today? No. Most Americans grasp this. 

Is it informative to read that bonds were the choice of public pensions at a time when Studebakers and rotary phones were the choice of the public? No again. To pretend this is meaningful information ignores eight decades of progress in the capital markets—progress that has not succeeded in repealing economic cycles, but that nevertheless has delivered the concepts of diversification and risk management.

We are in the midst of a deep and unexpected shock to the entire economy—one facet of which is the stock market, in which public pensions invest a portion, but not all, of their holdings. Everyone is affected; there is no safe haven. Eventually a clearer picture will emerge. For now, public pensions continue to meet their obligations, paying benefits to the nurses, community hospital employees, firefighters, police officers, teachers and other public servants who play critical roles in the fight against the pandemic. Public pensions have not missed a payment; there's no sign that they will.

Rather than focus their attention on pension practices of 1942, the authors might instead ponder the value of patient investing, which is second nature to public pension funds. 

No one is immune from bad press, and responding to it requires constant vigilance. We continue to push back when we see public pensions covered in a way that is ill-informed and unfair. Unfortunately, at this time, when anxiety is high about markets and the economy, we can anticipate a certain amount of misinformation and ill-will. And you can be confident that we will be fighting back against it every step of the way.