Sign Up For Our Newsletter

L..A. union story required reading

Can’t believe we failed to mention this from yesterday. 

Some of the nation’s largest teachers unions have joined forces with investment companies to steer their members into retirement plans with high expenses that eat away at returns.

In what might seem an unlikely partnership, the unions endorse investment providers, even specific products, and the companies reciprocate with financial support. They sponsor union conferences, advertise in union publications or make direct payments to union treasuries.

The investment firms more than recoup their money through sales of annuities and other high-fee products to teachers for their 403(b) plans — personal retirement accounts similar to 401(k)s.

New York State United Teachers, for instance, receives $3 million a year from ING Group for encouraging its 525,000 members to invest in an annuity sold by the Dutch insurance giant.

The National Education Assn., the largest teachers union in the country with 2.7 million members, collected nearly $50 million in royalties in 2004 on the sale of annuities, life insurance and other financial products it endorses.

Teachers unions across the country — including those in Las Vegas and San Diego and statewide teacher associations in Pennsylvania, Michigan and Oregon — have struck their own endorsement deals.

Unions in Dallas, Miami, Phoenix, Seattle and Atlanta, among others, refer members to products approved by the NEA and typically receive a share of endorsement revenue in return.

Many teachers say they presume an endorsement means their union has used its clout to get the best price, as unions do on products from eyeglasses to automobiles. But when it comes to retirement accounts, union backing is often a sign that the product will cost more, not less.

Read the whole damning thing.  If unions can’t even be trusted to look out for the interests of their dues-paying membership, just who do they care about?