U.S. state pensions such as Illinois, Kansas and New Jersey are in a “death spiral,” with assets at many insufficient to cover benefits, payouts consuming a growing portion of resources and costs rising twice as fast as investment gains.
Senator Orrin Hatch is pushing an overhaul of public pensions that would let life insurers grab a bigger share of the $3 trillion in state and local funds, a potential windfall for companies such as MetLife Inc. and Prudential Financial Inc.
Britt Harris arrived at the Teacher Retirement System of Texas in 2006 from the world’s biggest hedge fund with a mandate to improve the pension’s performance. He also brought a Wall Street attitude about pay.
Providence was so close to running out of cash a year ago that it couldn’t pay for tires on police cars. This month, Wall Street lined up to lend to Rhode Island’s capital, shrinking its yield penalty 30 percent.
Consumer activist Ralph Nader and a free-market group whose funders include billionaires Charles and David Koch are part of a growing crowd urging the Senate to preserve value for investors in Fannie Mae and Freddie Mac.