High Impact Crowdfunded Investigations Of Pensions Are Crucial For America's Retirement Savers

The financial stability of America's retirement systems, especially pensions, is a growing concern. Participants are leading a movement to correct the course of our nation's pensions.

The financial stability of American retirement systems, especially pensions, is a growing concern for millions of workers and retirees across the nation. Public sector workers—including teachers, police officers, firefighters, and other vital service personnel—depend on public pension plans to ensure their retirement security. Many of these workers accept lower wages during their careers, with the understanding that their retirement benefits will make up for the pay gap between public and private sector jobs. However, this promise is increasingly in jeopardy as these pension plans face chronic underfunding, mismanagement, and a lack of accountability.

• Public Pension Lack of Regulation, Fiduciary Oversight and Mismanagement

While American public pension systems hold substantial assets—an estimated $6.25 trillion—and the average annual benefit is a modest $24,000, the reality is far more concerning. These pensions are only able to meet about 75% of their obligations, with a massive shortfall of $1.44 trillion. This means that the retirement promises made to those who serve the public are increasingly at risk of being unfulfilled. Despite the substantial financial resources in these funds, poor management and lackluster investment strategies are at the heart of the problem, rather than a lack of adequate contributions or overly generous benefits. Current legislative proposals to invest up to 10% of assets in cryptocurrency and digital assets are especially disturbing.

For most retirement savers, especially those in the public sector, the fear that their hard-earned retirement funds may be mismanaged is a very real one. The true financial health of these plans is often obscured by a lack of transparency and regulatory oversight. Unlike private sector pension plans, which are governed by strict federal regulations (ERISA), public pensions are not subject to comprehensive federal standards and no comparable state safeguards exist. This means that the management of these funds is often left in the hands of boards composed of individuals with little to no financial expertise, including politicians, workers, and retirees.

This regulatory gap has allowed Wall Street firms and pension consultants to profit at the expense of the very retirees whose financial futures are at stake. Financial industry conflicts of interest, compounded by a lack of oversight, have led to widespread underperformance in public pension investments. The average return of these pensions has consistently underperformed the broader market, leaving billions of dollars on the table that could otherwise have been used to secure the promised retirement benefits.

The importance of improving these systems cannot be overstated. Retirees who worked for decades in the public sector—often with the understanding that they were sacrificing higher wages for stable retirement benefits—are increasingly finding their futures uncertain. Without proper oversight, mismanagement continues to drain these pensions, leaving future generations at risk. Furthermore, taxpayers who contribute to these funds, have a vested interest in ensuring that pension plans are properly managed and that their contributions are being invested effectively.

• Private Sector Pension Promises Increasingly Broken

Likewise, private sector workers are concerned as the number of corporate pensions has been steadily declining, a significant number are underfunded and thousands have already been taken over by the Pension Benefit Guaranty Corporation—the federal government agency created to protect private pensions. The PBGC does not necessarily pay the full pension promised by the corporation. Instead, it guarantees only a portion of the promised benefit which is typically much lower. As more companies' pension plans fall into distress the PBGC's financial stability has become an issue from time to time.

• Why Crowdfunding Pension Investigations Matters

This issue is so critical for American retirement savers because it impacts not only their financial future but the broader economic stability of our communities. Public pensions fund the livelihoods of over 34 million Americans, including some of the most essential workers in our society. By empowering pension plan participants—through tools like our High-Impact Preliminary Forensic Investigations (HIPFIs)—to hold pension sponsors accountable, we can start to address these systemic issues head-on.

The introduction of crowdfunding for pension investigations has been a game-changer.

Crowdfunding allows pension stakeholders, such as retirees and workers, to directly fund forensic investigations into mismanagement, without relying on biased experts selected by the pension plan sponsors themselves. This innovative model gives participants a voice in how their funds are managed and holds decision-makers accountable for the consequences of their actions.

By using crowdfunding, we have already been able to identify billions of dollars in mismanagement, overpaid fees, and conflicts of interest that have undercut the financial security of millions of retirees. For instance, our investigation into the Rhode Island Employee Retirement System revealed that the pension’s fee disclosures were woefully inadequate, leading to a dramatic increase in fees paid to Wall Street—fees that ultimately hurt the returns of the pension and the retirement security of its participants.

These investigations not only expose wrongdoing but also encourage corrective action. Plans that undergo scrutiny often adjust their practices, reducing excessive fees and eliminating risky investments that put pension funds in jeopardy. The more transparency we can bring to these plans, the better we can safeguard the retirement benefits that millions of Americans rely on.

Ultimately, the importance of this movement lies in the ability to correct the course of American pensions. Through forensic investigations and participant-driven crowdfunding, we have the potential to uncover financial mismanagement and set a new standard for accountability. This model empowers the very people whose futures are at risk to take action and advocate for change, ensuring that retirement savers in the public, as well as private sectors, will have the security they were promised.

In sum, this initiative is about more than just exposing fraud or mismanagement—it's about securing the financial futures of millions of Americans. It's about ensuring that public pensions, which are supposed to provide for the retirement security of our teachers, police officers, firefighters, and other essential workers, live up to their promises. It’s also about ensuring that private pensions address mismanagement and underfunding before the PBGC takes over, paying workers much less than they were promised. For every American who relies on pensions, these investigations are a vital step toward ensuring that retirement security is a reality, not just a promise.