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First Amendment Ignored: Your Pension, Their Vote

Wealth Daily's Weekend Edition

Written by Brittany Stepniak
Posted November 4, 2012

Anyone preparing for retirement needs to pay close attention.

How many of you are familiar with the intricacies of the Supreme Court's decision in the 2010 Citizens United case?

Allow me to summarize for those of you who haven't been following this case in the news...

The Supreme Court ruled it unconstitutional to ban free speech through the limitation of independent communications by corporations, associations, and unions.

So corporations and labor unions are permitted to spend their own money in support or opposition of political candidates — as long as it is through an independent medium, like television advertisements.

According to the New York Times:

The Citizens United decision did not disturb prohibitions on corporate contributions to candidates, and it did not address whether the government could regulate contributions to groups that make independent expenditures.

The Citizens United ruling did however remove the previous ban on corporations and organizations using their treasury funds for direct advocacy. These groups were freed to expressly endorse or call to vote for or against specific candidates, actions that were previously prohibited.

Unfortunately, these provisions led to some unintended consequences as the public sector was able to manipulate employee pension plans based on the trustees' plans.

Get Angry

You probably already knew that nearly all local, state, and federal employees are required to make mandatory contributions to pension plans in order to keep the benefits of a government job...

But did you know those employees have NO SAY in how those mandatory contributions are invested?

The individuals or body in charge of a particular group's pension plans decide(s) where the employees' money is invested.

Consequently, most pension plans invest heavily in corporate securities. In fact, at least $1.15 trillion of public pensions existing in 2008 laid in corporate stock.

If that's not enough corruption and manipulation to get you fired up, read what Benjamin I. Sachs, professor at Harvard Law School, explains as being the primary problem with this:

Here’s the problem. In its Citizens United decision, the Supreme Court held that companies have a First Amendment right to make electoral expenditures with general corporate treasuries. And they’ve done so, with relish, pouring millions into the political system.

What Citizens United failed to account for, however, is that a significant portion of the money that corporations are spending on politics is financed by equity capital provided by public pension funds — capital contributions that the government requires public employees to finance with their paychecks.

This consequence of Citizens United is perverse: requiring public employees to finance corporate electoral spending amounts to compelled political speech and association, something the First Amendment flatly forbids.

"But That's Unconstitutional!"

Courts have already outlawed a similar practice when it comes to political spending by unions...

Keeping in line with the First Amendment, the Supreme Court ruled it was unlawful for any union to use an employee's public dues for any political agenda if the employee doesn't wish to be a part of that agenda.

Ideally, the same mandates would exist regarding pension funds and corporate politics.

But on October 1, the Supreme Court began its fall session with what many scholars have called a “First Amendment hiatus” — meaning they shied away from further debate directly related to free speech.

For the time being, public pension plans remain vulnerable and violate the First Amendment.

You could be financially supporting a politician you don't even agree with!

And this is only one example of how your pension plan — as well as your inalienable rights — are being threatened...

Secure Your IRA or 401-K With Precious Metals

Security of pensions of all kinds are under attack. When you add politics to the mix, things get even stickier.

These are not issues that will be easily remedied if the trustees have anything to say about it; we all know how loudly money talks.

And sadly, this issue does not rank highly on the Supreme Court's list of priorities right now.

So it's up to YOU to take the reins and make solid plans for retirement savings that you control. Don't rely on a rigged game to pad your retirement.

You'd be smart to secure your IRA or 401(k) with gold and silver. Be sure to buy silver on dips before the next European bailout ensues... and certainly before the polls close next Tuesday.

And keep in mind, precious metals aren't your only retirement savings option...

Hundreds of people (many who are years away from retirement and many who are already retired) are successfully investing in real estate investment trusts (REITs). Their ownership in a company that leases property to some of the world's biggest retailers affords them a check delivered every single month straight to their mailbox.

Besides precious metals, this is one of the safest and most reliable investments you can make in today's volatile market...

Best wishes for a prosperous future,

Brittany Stepniak Signature

Brittany Stepniak
for Wealth Daily

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