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Counterpoint: State investment choices are free of politics
The public servants who work on these investments are apolitical by nature, and assertions otherwise are meant to stoke fear, diminish trust.
By Don C. Leathers
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It was with near disbelief that I read the editorial counterpoint by Republican House members Eric Lucero and Mary Franson ("Politics has no place in public investments," Oct. 8). Their criticism of the Minnesota State Board of Investment (SBI) contains both falsehoods and premises that defy common sense. Further, it appears to be another veiled attempt by Republicans to diminish public pensions in the minds of the Minnesota taxpayer and create fear in public employees.
First off, the writers assert that Minnesota's public retirement plans are "unusual compared to other states" because the plans are "managed" by the State Board of Investment. Franson and Lucero confuse the investment body, which is housed in the Empire Building in St. Paul, with the Investment Board, comprised of four constitutional officers — all, incidentally, Democrats — which sets policy and approves annual budgets and executive reports at the State Capitol. They are two separate entities.
I sit on two elected boards in southeastern Minnesota, and our task as board members is to approve and set policy, then allow the experts in our organization to execute their daily operational duties to achieve goals. The board governs; administrators manage. As boards, we do not "control the investment decisions" of our respective organizations. Nor does the State Investment Board, despite what the counterpoint writers maintain. Their assertion lacks a firm understanding of what's really happening in St. Paul concerning investment strategies.
The State Board of Investment, led by Mansco Perry III (soon Jill E. Schurtz) and over 30 investment managers, oversees retirement accounts for public employees, both active and retired. The SBI staff has a fiduciary responsibility to invest and protect retirement dollars for public employees. To further support SBI's mission, the state established an Investment Advisory Council (IAC) to aid the SBI in its investment strategies. Made up of leaders from both private and public sectors, the group does outstanding work advising the SBI on fund management.
Later in their counterpoint, the authors claim that the SBI is "replacing a method of growing a retirement nest egg by maximizing return on investment" with political strategies to advance a culture war on "individual liberty and free-market competition." That simply is not true. SBI's mission is essentially fiduciary in nature.
As a former legislative chair for the Retired Educators Association of Minnesota (REAM), I have had the privilege of interacting on occasion with Perry, two Teachers Retirement Association (TRA) directors, Laurie Hacking and Jay Stoffel, and Public Employees Retirement Association (PERA) Director Doug Anderson and their staff. I, and the membership of REAM, resolutely trust the professional, knowledgeable and ethical manner in which these experts do their work.
Notwithstanding what the House members assert, Minnesota pension fund managers are not "playing politics" with public employee assets to "conform to a progressive agenda." Minnesota actives and retirees can rest assured that their retirement dollars are being invested in a professional, exemplary manner by the fund managers and their staff in St. Paul.
The headline of the counterpoint by Reps. Franson and Lucero, "Politics has no place in public investments" is prescient. From my experience, "politics" does not enter into the decisionmaking process of the fund managers and staff at Minnesota's retirement associations. The individuals who work at SBI, TRA and PERA are apolitical by nature, focusing fully on the investment job at hand for the benefit of public employees.
The real "politics" is in an accusation that those public servants do otherwise.
Don C. Leathers lives in Austin.
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Don C. Leathers
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