The 2014 Pension 40: The Battle Is On

Pension reform has staggered out of the closet and into a political dustup. The underfunding of many defined benefit plans has been evident for years, but when cities like Detroit and Stockton, California, went bust, the issues remained the bailiwick of experts. That ended with the 2014 elections. Public pensions were suddenly not just about calculating liabilities or debating investment strategies; they were driving higher taxes and reduced services, stirring charges of selling out to Wall Street or abandoning police officers and firefighters. The hope that a few bullish years and some investment prowess could repair a long-fraying retirement system was lost. Someone had to pay, whether it was taxpayers, beneficiaries or bondholders. As former Service Employees International Union president Andy Stern (No. 37), now at Columbia University, says, “You can’t fight the math.”

The emergence of pension reform as an electoral issue has recast Institutional Investor’s second annual ranking of the 40 most important people in the fight over defined benefit pensions. This year some 22 of the 40 are new to the list — many, like our No. 1, Illinois Governor-elect Bruce Rauner, elevated by politics. The Pension 40 covers not only public pensions but corporate and Taft-Hartley, or multiemployer, plans. Many of these plans are in trouble. Some view a shift to defined contribution plans as the only way out; others see that as an attack on long-promised, hard-earned benefits.

The Pension 40 includes a diversity of voices: executives and union members; academics, politicians and judges; plan administrators and government officials. Some have long been influential. Others, mostly politicians, have been swept into the maelstrom: Rauner, the former private equity executive who beat incumbent Pat Quinn, now faces what may be the U.S.’s worst state pension problem. Other officials, like Chicago Mayor Rahm Emanuel (No. 4), New Jersey Governor Chris Christie (No. 9) and Puerto Rico Governor Alejandro García Padilla (No. 22), also face pension woes whether they like it or not. Another theme in the Pension 40: the emerging role of the courts. Bankruptcy judge Christopher Klein (No. 23) defied America’s largest pension fund, the California Public Employees’ Retirement System, in the Stockton Chapter 9 case. And state courts in California, Illinois and Rhode Island are telling politicians and voters what will pass muster.

Pension politics has come to reflect the polarized, often bitter conventional variety, with big-money groups taking sides, from the American Federation of Teachers, run by Randi Weingarten (No. 3) to the Laura and John Arnold Foundation (No. 2) to advocacy operations like Randy DeFrehn’s (No. 6) National Coordinating Committee for Multiemployer Plans. The best news? There’s no deficiency on the Pension 40 of voices offering creative solutions. In the end, they may have to lead us out of the wilderness.

The Pension 40 was compiled under the direction of Senior Contributing Editor Robert Teitelman. Individual profiles were written by Teitelman; Editor Michael Peltz; Associate Editor Kaitlin Ugolik; Senior Writers Frances Denmark, Imogen Rose-Smith and Julie Segal; and Editorial Research Assistant Georgina Hurst.

1	2	3	4	5
Bruce Rauner Illinois	John and Laura Arnold Laura and John Arnold Foundation	Randi Weingarten American Federation of Teachers	Rahm Emanuel Chicago	David Boies Boies, Schiller & Flexner
6	7	8	9	10
Randy DeFrehn National Coordinating Committee for Multiemployer Plans	Damon Silvers AFL-CIO	Laurence Fink BlackRock	Chris Christie New Jersey	Robin Diamonte United Technologies Corp.
11	12	13	14	15
Ted Eliopoulos California Public Employees’ Retirement System	John Kline Minnesota	J. Mark Iwry U.S. Treasury Department	Gina Raimondo Rhode Island	Phyllis Borzi U.S. Labor Department
16	17	18	19	20
Orrin Hatch Utah	Abigail Johnson Fidelity Investments	Ted Wheeler Oregon	Caitlin Long Morgan Stanley	James Hoffa International Brotherhood of Teamsters
21	22	23	24	25
Amy Kessler Prudential Financial	Alejandro García Padilla Puerto Rico	Christopher Klein U.S. Bankruptcy Court for the Eastern District of Caifornia	Steven Rhodes Bankruptcy Court for the Eastern District of Michigan	Kevin de León California
26	27	28	29	30
David Draine Pew Charitable Trusts	Jordan Marks National Public Pension Coalition	Sam Liccardo California	Joshua Rauh Stanford Graduate School of Business	Karen Ferguson and Karen Friedman Pension Rights Center
31	32	33	34	35
Timothy Blake Moody’s Investors Service	Kathleen Kennedy Townsend Center for Retirement Initiatives, Georgetown University	Edward (Ted) Siedle Benchmark Financial Services	Daniel Loeb Third Point	Judy Mares Employee Benefits Security Administration, U.S. Labor Department
36	37	38	39	40
Andrew Biggs American Enterprise Institute	Andy Stern Columbia University	Kenneth Mehlman KKR & Co.	Teresa Ghilarducci New School for Social Research	A. Melissa Moye U.S. Treasury Department