Sunday, January 11, 2015

On Teacher Pensions and US Foreign Policy: A Guest Post by Brian Crowell





After scanning the Cal STRs and the Connecticut Teachers Retirement System two countries stood out in the pension portfolio list. Those names being Russia and Venezuela. As you may or may not know Russia and Venezuela are under economic sanctions. These countries have been ravaged by United States Sanctions and the dramatic drop in oil prices. Although consumers have benefited of the savings in gas prices, there is also I argue unintended consequences of economic sanctions on Russia and Venezuela. (Please see footnotes below)

As you can see Cal Strs has invested roughly 4.2 million in the Russian Federation, with a nice 7.5% return on investment. (See below; numbers are in thousands 3 zeros)

RUSSIAN FEDERATION
3,607
7.500
3/31/2030
4,177
RUSSIAN FEDERATION
651
7.500
3/31/2030
754

The bonds run through year 2030. If Russia defaults that would be a loss in the pension portfolio for teachers. Lets take a look at Venezuela for the sake of inquiry. Again an impressive return on investment. These countries encompass a small percentage of the portfolio but the overall yield is in line with the Cal STRS mandate of return on investment. 9.375% on the high end and 5.75% on the low end.

REPUBLIC OF VENEZUELA
169
9.375
1/13/2034
142
REPUBLIC OF VENEZUELA
36
8.500
10/8/2014
36
REPUBLIC OF VENEZUELA
2,329
5.750
2/26/2016
2,207

The Connecticut Pension Fund has similar investment albeit smaller but the trend lines are the same. The whose who on the list of the Cal STRS pension fund fixed income assets include, Goldman Sachs, Lockheed Martin, Monsanto, MGM Grand, Bank of America and the now defunct Bear Stearns Investment Bank. Several questions come to mind when seeing the direct connections between teachers, wall st. and foreign policy.

1. Whose interest is served if the economics of Russia and Venezuela suffer?
2. With Americans being on the hook for derivative exposure what happens to the pension of teachers if wall st goes belly up again with their reckless gambling? ( See citation: http://www.huffingtonpost.com/ellen-brown/russian-roulette-taxpayer_b_6357210.html)

3. Isnt in time that world relations be handled in a more productive way? It is clear that this is an interconnected world and an inter connected economy. The country of Argentina is also on the Cal STRS portfolio and has frosty relations with the United States. (See: citation;http://theunhivedmind.com/wordpress3/on-its-independence-day-argentina-slams-vultures-we-will-not-be-blackmailed/)

4. How can teachers have more of a say who our Pension Managers do business with? After all its our money that we pay into every month. Monsanto and Wall Mart dont have many fans in teachers on the left center of the political spectrum. Questions like these will have to be addressed in 2015 as we go deeper into an interconnected multipolar world.

5. Is the interconnectedness with wall st. risky assets the reason the unions are so captured by corporate education reform?

Brian Crowell
Teacher; California
Member NEA/AFT

Footnotes:


*any factual errors on data will be corrected promptly if pointed out.*