Connect with us

Hi, what are you looking for?

News

Senator Scott Beason on RSA

By Brandon Moseley
Alabama Political Reporter

A decade of poor performance by the RSA has shaken public confidence in the Retirement Systems of Alabama (RSA) and Alabama decision makers from both the right and the left are openly discussing what can be done to shore up the investment performance of the state’s pension plan. ‘The Alabama Political Reporter’ spoke with Alabama State Senator Scott Beason (R) from Gardendale about this topic on Friday.

Senator Beason said that the state legislature is concerned because the state of Alabama has been having to prop up RSA’s losses.  Beason said that the legislature had to divert $100 million away from schools to the RSA last year and it is likely that the legislature will have to divert that much money again in the 2012/2013 budget.

Senator Beason said that he wants the state retirees to get the benefits that they were promised.  The conservative Senator from Gardendale said that that there needs to be changes made to the board so that there are more board members with investing experience.  Beason said that the state legislature would be happy to leave RSA alone if the state were not on the hook for their poor investing performance.

Many critics of the management at RSA have criticized the more exotic investments that RSA has made including; golf courses, hotels, resorts, newspapers, T.V. stations, an airline, office buildings, an outlet mall, and even the world’s largest railcar factory.  The Alabama Political Reporter’ asked Beason if the state legislature should limit what classes of investments that RSA can make and he said no that the Board’s managers should have freedom to seek out the best investments.

‘The Alabama Political Reporter’ asked Sen. Beason if the state would ever consider raising taxes to pay for covering the performance of RSA. Beason said that the state would likely divest itself of RSA before doing that.

Beason said the he did not want the legislature managing RSA and using those funds to pick winners and losers in the Alabama economy.

Advertisement. Scroll to continue reading.

Sen. Beason said that he has been criticized for the last several years by teachers for his criticism of RSA.  The Senator said that it has been interesting to see how AEA has reversed itself on RSA and become one of the fund’s biggest critics.

In private industry, defined benefit plans (pensions) are being replaced with defined contribution plans such as 401 (k)s where the employer is not responsible for ups and downs in the fund’s performance.  ‘The Alabama Political Reporter’ asked Beason if the state would soon move new hires to a less financially risky 401 (k) strategy.  Beason said that he has been told that the state can not do that because RSA needs new employees to keep paying in to the plan to keep paying the benefits for current retirees.  Beason said that is the definition of a Ponzi scheme and is similar to what the federal government is doing with Social Security and Medicare.

‘The Alabama Political Reporter’ asked if the legislature had any plans to deal with the RSA crisis in this legislative session.  The Senator said that he had no knowledge of any legislation addressing the RSA issue.

RSA has been managed by Dr. David Bronner for the last 40 years.

Brandon Moseley
Written By

Brandon Moseley is a senior reporter with over nine years at Alabama Political Reporter. During that time he has written 8,297 articles for APR. You can email him at [email protected] or follow him on Facebook. Brandon is a native of Moody, Alabama, a graduate of Auburn University, and a seventh generation Alabamian.

DIG DEEPER

Opinion

"The contributions of engineers are literally everywhere and benefit everyone."

Opinion

"Fortunately, it’s a disaster that Alabama has taken aggressive steps to avoid."

Elections

The GOP commission is co-chaired by Alabama Secretary of State John Merrill and Michigan state Sen. Ruth Johnson.

Featured Opinion

"Alabama has never had a public school as progressive as the Magic City Acceptance Academy."