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The Investment Practices of the Pension Fund Industry

The following document was commissioned by the United Steelworkers to illustrate the decline in the value of public and private pension funds triggered by the Enron scandal and the rest of the corporate crime wave has had a devastating effect on workers and companies alike.

The impact has been especially severe in the industrial sector where underfunded pension obligations put workers' pensions at risk, damage corporate balance sheets, and undermine companies' ability to secure needed capital to finance operations.

This report by economist Dean Baker, Co-Director of the Center for Economic and Policy Research, makes it clear that the sweeping damage done to pension funds didn't have to happen. The report quantifies the scope of damage done by pension fund managers blind to the economic bubble that Dr. Baker and other leading economists have long contended was readily apparent. It also documents the massive misallocation of capital that resulted from fund managers' fascination with the mythical prowess of the so-called "New Economy" – misallocation of as much as $90 billion, $15 billion of which may be directly attributable to pension fund investments.

To view the document, click HERE.