Laborers Pensions Key to Social Security Victory

Missouri Laborers and their hard-earned pension and health and safety funds are playing a key role in backing down an investment firm pushing President Bush’s privatization scheme for Social Security.

The hard-earned pensions of Laborers and all working people should work for us, not against us,” said Laborers General President Terence M. O’Sullivan.

Bush’s plan, built around private accounts, would cut guaranteed benefits for retirees on average by $152,000, and through fees would virtually wipe out any investment gains. In addition, experts project that the cost of the Bush plan would saddle future generations with trillions of dollars in debt. The only people certain to gain would be Wall Street investment firms – many of whom have formed the pro-privatization Alliance for Worker Retirement Security. It is estimated that investment firms would make $940 billion from privatization within the first 75 years of implementing the Bush plan.

The Alliance included the firm Waddell & Reed – until the firm heard from Missouri Laborers and their pension funds.

On March 4, trustees of the funds wrote Waddell & Reed expressing displeasure with their membership in the privatization group and asking that the firm withdraw from any support of Social Security privatization. It was clear to the trustees that cuts to Social Security would put even greater pressure of union pension funds and retirement security overall. The Laborers Greater Kansas City Pension Fund and the Construction Industry Laborers Pension Fund in Jefferson City, Mo., are both clients of Waddell and Reed, which manages millions of dollars in Laborers funds.

The same day Waddell & Reed heard from Laborers, they withdrew from the pro-privatization alliance.

Our members’ funds in Missouri made a real difference in the fight to protect Social Security. We’re proud that Waddell & Reed listened,” said O’Sullivan. “We have to keep up the pressure on other firms so they too are responsive to working people.”

Waddell & Reed is the second investment firm to withdraw from the Alliance for Worker Retirement Security. Edward D. Jones & Co. withdrew after union members expressed concern.