Law Commons^™

The Other Janus And The Future Of Labor’S Capital, David H. Webber

Faculty Scholarship

Two forms of labor’s capital—union funds and public pension funds—have profoundly reshaped the corporate world. They have successfully advocated for shareholder empowerment initiatives like proxy access, declassified boards, majority voting, say on pay, private fund registration, and the CEO-to-worker pay ratio. They have also served as lead plaintiffs in forty percent of federal securities fraud and Delaware deal class actions. Today, much-discussed reforms like revised shareholder proposal rules and mandatory arbitration threaten two of the main channels by which these shareholders have exercised power. But labor’s capital faces its greatest, even existential, threats from outside corporate law. This Essay addresses …

Reforming Pensions While Retaining Shareholder Voice, David H. Webber

Faculty Scholarship

Public pension and labor union funds have been the driving force in diversified shareholder activism. They have also fended off attacks on jobs and proactively created jobs for fund contributors. These funds currently represent almost $4 trillion in assets over which workers have substantial control. That worker control - and the collective nature of defined benefit pension plans - is the necessary precondition for their shareholder activism. Both worker control and collective investment are directly threatened by the rise of defined contribution funds, particularly by well-funded efforts to promote the 401(k) in the public sector, the last bastion of the …

Can God Create A Rock So Heavy That He Cannot Lift It?: Outlawing Pensions Under State Constitutions, Chad J. Pomeroy

Faculty Articles

Public pensions are a problem. More than twenty-seven million people participate in state and local government pension plans. And those plans are in the hole trillions of dollars. This means that state and local governments are going to have to raise additional trillions in taxes (or shift those trillions away from schools, police, firemen, or other spending targets) to satisfy these obligations.

What can be done about such a large, seemingly intractable problem? A number of states have installed specific pension funding requirements within their constitutions. Most state constitutions contain some kind of balanced budget requirement, and a number of …

The Impact Of Law On The State Pension Crisis, Elizabeth S. Goldman, Stewart E. Sterk

Articles

While some state and municipal pension plans have funds sufficient to meet obligations to retirees without imposing onerous obligations on current and future taxpayers, underfunding of plans in other states has reached disastrous proportions, raising the possibility of default on pension obligations, cuts in public services, steep tax increases, or some combination of the three. The substantial differential in pension funding might be attributed to divergent political pressures, different responses to uncertainty about investment returns, or other factors. Our examination of pension funding law in ten states-five with the best-funded plans and five with the worst-funded plans-highlights the role of …