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Public Employee Unions Are Indirectly Some of Wall Street's Biggest Customers

"On June 30, 2011, the Maryland State Retirement and Pension System ('the System') reported net assets of $37.6 billion.... During the fiscal year ending June 30, 2011, the System spent $221 million on Wall Street money management fees, though fund management appears to have yielded subpar results. There is substantial evidence that Wall Street managers are unable to beat passive equity index funds that cost much less in fees.... The ratio of the System's Wall Street fees equaled 0.693 percent in FY 2011, above the 0.409 percent of similar state systems nationwide."

Are State Pension Funds Paying Wall Street Too Much?

"A recent report by two Maryland think tanks makes the case for state retirement systems to dump Wall Street investment firms for more passive equity index funds. The study by the conservative-leaning Maryland Tax Education Foundation and Maryland Public Policy Institute outlines fees state pension funds pay investment firms, totaling $7.8 billion nationwide in 2011. This price tag is too high, the authors argue, given their meager returns in recent years."