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March 08, 2005

Union Pension Funds Knock Out Privatization Supporter

Showing the power of collectively controlling $400 billion in its pension plans, the AFL-CIO convinced St Louis-based Edward Jones & Co., the nation's largest operator of retail brokerage offices, to withdraw from a social security privatization coalition, the Alliance for Workers Retirement Security, with the threat of withdrawing all business from the firm and advocating to its members that they pull their business as well. This was followed yesterday by Waddell & Reed, a Kansas-based financial services company, also withdrawing from the Alliance.

Which just shows why progressives should be paying more attention to Arnold Schwarzenneger's campaign to destroy the state pension fund, CALPERS, which has also been campaigning against social security privation. Union pension funds are a critical tool for workers in being able to keep some pressure on the big financial services company, which they HATE. One goal of destroying regular pension funds in favor of IRAs, 401(k)s and other individual accounts is that it becomes almost impossible for unions and other activists to organize so many individuals for proxy fights and other corporate campaigns against corporations.

Corporations are very clear that killing CALPERS is part of their campaign to defang corporate accountability:

Business leaders have argued that Calpers, and its sister fund, the California State Teachers Retirement System (Calsters), which have combined assets of $250bn (£130bn), have been over zealous in their pursuit of more accountability in business.

Calpers led the shareholder revolt against Walt Disney last year that resulted in Mr Eisner being stripped of the chairman's job. He is still chief executive. In Britain, the fund has argued for more transparent structures at Shell and against the appointment of James Murdoch at Sky.

The fight for CALPERS is the same as the fight against social security privatization. Progressives need to understand that "social capital", pension funds controlled directly by workers and communities collectively, are a critical resource that need to be defended with all our efforts.

Posted by Nathan at March 8, 2005 08:00 AM