From the TJ today:
Tom Mann says it’s time to make New Brunswick’s public pension plans work for the entire province by turning the public dollars into government bonds that will keep money in the province instead of investing in the stock market and elsewhere.
Mann is a bit like the alien taking on Sigorney Weaver. He is flailing away in a desperate attempt to protect his membership from ‘cuts’.
I have been talking about the potential of using the public pension money for economic development right here. My suspicion, turns out mistaken, would have been that guys like Mann would want the money invested as far away as possible. Why risk the future pension of the NB civil service on a declining market like New Brunswick. Now, of course, I realize how twisted that is. That the province where the civil service actually works is not good enough for its pension monies. The people in charge of the province don’t believe in it enough to invest even 1% of its pension monies here. But I realize that is just hyperbole and cheeky talk on my part.
The truth is that the people investing this pension money have a mandate and it turns out can’t find enough projects in New Brunswick to even invest just 1% of public pension monies.
The challenge is simple. Obviously, right now placing public funds in low risk, low return investments like bonds to finance public works projects makes sense. These funds are getting hammered in the equity markets. But when (if?) the markets return, the best returns will continue to be in high growth markets and New Brunswick is not and never really has been a high growth market.
I do think that when the government pension fund looks at New Brunswick investments it should consider the economic benefits beyond the direct ROI. If the civil service retirement funds can make 15% in India and only 7% in New Brunswick but that 7% leads to thousands of new good paying jobs this should be a consideration.
Back to Mann. It seems to me this he is actually dipping his toe in the water of economic development. This is new ground for public sector unions. Maybe they will finally figure out the link between economic development (i.e. taxes raised) and the ability to pay for the large and growing public sector.