Welcome to the latest edition of This Week in Pensions! This week, we’ve gathered stories about Larry Fink’s push for more data centers, one lawmaker’s plan to fix the housing affordability crisis with pension fund money, and the intense landscape of Alaska’s midterm elections.
Alaska Candidates Face Off on Pensions
The race to restore pensions in Alaska continues to play out on the campaign trail.
This week, candidates in a southwest Alaska state Senate race took pensions to the debate stage. Four candidates are seeking to replace Alaska’s recently retired longest-serving state lawmaker, Senator Lyman Hoffman, who voted against last session’s pension restoration efforts. The candidates include the current House Speaker, Rep. Bryce Edgmon, who voted in favor of HB 78 and the attempted override of Governor Mike Dunleavy’s subsequent veto. But Edgmon isn’t alone in his support for reviving pensions–one of his opponents, Wassilie Guy, is also pushing for a return to defined benefits.
In Homer, an upset in the August primary for Alaska House of Representatives is threatening to unseat long-time pension opponent Sarah Vance. Her challenger, Brent Johnson, says he is committed to restoring pensions to Alaska’s public workforce.
Johnson, who was a commercial setnetter in Alaska’s fishing industry for over 50 years, knows how critical pensions are to retaining employees, and connected that to people in the public workforce, saying, “We have a huge turnover in teachers. I know from my setnet experience, you want to keep people. You want to have workers that are happy and keep people there.”
So far, 48,510 Alaskans have voted early in person, and 23,641 mail-in ballots have been received. Four years ago, 35% of voters in the state voted early or by mail. The Associated Press expects some of the results to be announced hours after the polls close, “with the bulk of mail voting results released in the days following election night.”
Oklahoma Governor’s Race a Statistical Tie
A surprising matchup in Oklahoma with pension implications is drawing national attention.
On October 13, Cook Political Report shifted the contest from “Solid Republican” to “Likely Republican”, signaling that a once-safe GOP race deserves attention Tuesday night. An October poll described Republican Mike Mazzei and Democrat Cyndi Munson as statistically tied, although Mazzei remains favored.
For public employees, the pension stakes are clear. Mazzei helped raise the normal retirement age for new teachers and supported shifting many new state employees into 401(k)-style accounts. His campaign has revised its website to exempt state retirement systems covering many workers from his county pension proposal, but his plan still calls for 401(k)s for employees in large urban counties. A website revision does not erase his legislative record. Meanwhile, teachers’ organizations are backing Munson financially, with political funds associated with OEA, AFT Oklahoma, NEA and Oklahoma retired educators each contributing $5,000.
BlackRock CEO Thinks More Data Centers Will Slow Inflation
While attending the Berlin Global Dialogue conference in Germany, BlackRock CEO Larry Fink told a Bloomberg reporter that Americans’ opposition to building more data centers will make U.S. inflation rates higher in the coming years.
Fink has been vocal in his support for a data center boom, opining that if America does not take the lead in expanding infrastructure to support growing demands for AI and cloud storage, other countries, namely India, Canada, and Abu Dhabi, will fill the top spot. “About two-thirds of the U.S. economy is capital expenditures right now on technology, whether it’s cloud or whether it’s AI, whether it’s just a capex of making sure you’re competitive,” he said last Wednesday. Fink previously threatened a recession if the U.S. hyperscale data center buildout slows.
Fink also noted that, “For the U.S. to be a leader in this technology, which we are today, we also have to be the leader in the compute, the inference in our own nation,” claiming that the American public has been fed “misinformation” about the existential impact of expanding the data-center network. Many experts theorize that BlackRock’s AI investments are not panning out as planned, and the investment firm’s leader is pitching data centers to keep shareholders’ pockets lined.
Can Pensions Solve the Housing Affordability Crisis?
In an opinion piece for The Hill this week, former U.S. Senator John Tester (MT) addressed one way that lawmakers could effectively tackle the U.S. housing affordability crisis–by investing public pension dollars into building more housing.
Touching on the recent passage of the 21st Century Road to Housing Act, Tester notes that the bipartisan measure, which is designed to increase housing supply and federal housing programs, will bring some relief–but it will still leave many working-class families in the lurch. The bill limits the number of single-family homes that investment firms and “Wall Street landlords” can purchase, while ensuring that real estate investors and private landlords can invest in refurbishing existing homes and building new homes to rent, which will increase housing supply and theoretically lower home prices.
Tester’s opinion hinges on the idea that because only 53% of Americans own their homes, a number that has been falling in recent years, building more rental properties will meet the acute needs of those most affected by the affordability crisis. He encourages public pension plans to invest in private real estate, similar to investments by four New York City pension systems in the AFL-CIO Housing Investment Trust, reiterating the financial power states can wield with their public pension dollars.
Regardless of the mechanism, public pension funds can play an important role in aiding housing affordability.
Check back next Friday for the latest news in the fight for a secure retirement! For now, sign up for NPPC News Clips to receive daily pension news from across the country directly to your inbox.