Blue-State Pensions Are Subsidizing the Billionaire Takeover: This Must Stop!

Across the United States, the federal government—and the corporations backing it—are tearing communities and families apart, with ICE officers kidnapping parents, siblings, neighbors, and friends.

Workers’ retirement funds, one of the largest pools of capital in the world…[are] invested with some of the worst actors engineering the current takeover.

For advocates of multiracial democracy to prevail, movements need to draw on every available tool. From the May Day Strong campaign to the No Kings alliance, groups are creating spaces for people to come together, protest, and strategize.

The Power of Pensions

President Donald Trump and his authoritarian allies are actively working to intimidate any institutions, companies, organizations, or wealthy individuals with money that might be thinking of stepping up.

But working people in the United States actually have a major source of money on their side, even if they have largely ceded control of it: workers’ retirement funds, one of the largest pools of capital in the world.

Some of these funds individually are larger than many countries’ entire economies. We’re talking about tens of trillions of dollars, housed in many places, ranging from public and private pension funds to foundation and university endowments.

The truth about this money: It is invested with some of the worst actors engineering the current takeover. That includes private equity firms, venture capitalists, and asset managers—the most powerful corporations in the world and the billionaires that run them. Many of these people are actively supporting the Trump administration; most are doing little to nothing to oppose it. And all oversee millions, if not billions, of dollars in worker and community capital.

Some of the beneficiaries are household names like Elon Musk. Others are less widely covered, like Peter Thiel and Palantir, or are largely hidden from view, such as Stephen Feinberg and Cerberus Capital Management. These men—and they are almost always men—haven’t always had our money. Working people fought incredibly hard to ensure that part of their earnings would go toward enabling them to retire with dignity—that’s what pension funds and 401(k)s are all about.

The funds are workers’ deferred compensation, hard-earned after decades of employment and challenging negotiations with their employers. Pension fund capital once largely financed schools, government buildings, and community infrastructure—things that both improved communities and provided steady, reliable returns.

Mounting Financialization

When the titans of Wall Street recognized the opportunity these pools of capital presented, they convinced workers and their representatives that they could make more off their investments, and, of course, that workers needed the investment companies to make it happen. They then rewrote laws to entrench their hold.

Thus began the hyperfinancialization of the nation’s retirement system. Now, at each stage of the investment process, asset managers earn guaranteed fees and huge shares of profits, while coercing those who are actually in charge of investing—either a board of trustees or elected officials—to cede power, pushing an austerity narrative that any questioning of the money managers will threaten workers’ ability to retire.

Today, pension funds subsidize profiteering in everything from housing to healthcare to the environment. The results are plain to see: people evicted from their homes, families denied care, increased mortality rates in nursing homes, dangerous working conditions, climbing carbon emissions, and thousands of people who had worked for companies for decades laid off, all while the financial returns for workers have fallen far short of what was promised.

Indeed, one study from a decade ago showed that Florida pensioners would have earned a billion dollars more over a 23-year period if the pension fund had not invested in private equity and instead invested in the Russell 3000 index of small business stocks.

Families got hurt while financiers made a fortune. Notably, the “blue” states—those led by Democratic governors and other statewide elected officials, with Democratic Party-controlled legislatures, where public workers have generally won more, including larger pensions—have some of the pension funds that are most heavily invested in harmful asset classes and companies.

For example, pension funds in California, New York, Oregon, Washington, Illinois, New Mexico, New Jersey, Colorado, Maryland, and Pennsylvania hold shares collectively worth a total of $2.4 billion in a company called Palantir, likely with millions more in indirect holdings through major asset managers. A “leader” in data and AI, Palantir has been a key player supporting the Trump administration’s detention and deportation of immigrants, enabling its mission to share and compile data to surveil all of us, and playing a growing part in the war machine. Palantir was cofounded in 2003 by venture capitalist Peter Thiel, with an estimated net worth of roughly $26 billion, and led by CEO Alex Karp, who has a net worth of roughly $16 billion.

Meanwhile, the Washington State Investment Board, which had over $179 billion in total assets under management as of June 2025, had $51 billion invested in private equity. That works out to 28.5 percent of fund assets, the highest proportion among public pension funds in the country.

Private equity’s debt-driven model is exploitative, resulting in job losses and lower wages, bankruptcies, increased mortality in hospitals, and rent hikes and evictions in housing, all while enriching the tiny number of “general partners” at the top of the firms above all else. Many private equity firm founders and leaders have lined up behind Trump, donating to his campaigns, taking high-level appointments, and legitimizing his reign, including Blackstone CEO Stephen Schwarzman and Apollo CEO Marc Rowan. In return, the Trump administration has already issued an executive order to make it easier for private equity and other ‘alternative’ asset classes to get access to trillions in individual retirement savings in the massive 401(k) market.

The list goes on. Public pension funds directly hold over half a billion dollars in Airbnb stock while the company has systematically tried to erode housing laws in cities across the country. Its cofounder, Joe Gebbia, previously at the so-called Department of Government Efficiency or DOGE, now serves as Trump’s “chief design officer.” The same pension funds hold another half a billion dollars’ worth of direct shares in Coinbase, a risky cryptocurrency company that recently donated to Trump so he can build his vanity ballroom. Nine separate pension funds in California, Illinois, New York, and Pennsylvania have money with Antonio Gracias’s Valor Equity Partners, one of the biggest backers of Elon Musk, Donald Trump, and DOGE.

How Can Movements Respond?

So, how can working people respond to this plundering? Historically, movements have focused on a specific company with a particularly bad track record and pushed for concessions, so workers are treated better, or guardrails like investment principles to prevent future bad practices, or divestment.

More recently, there have been demands for broader accountability or divestment from asset classes like private equity and asset types like fossil fuels. These strategies are important steps in the right direction, but the devil is in the implementation details.

Everyday people also need to send a clear message to wealthy financiers, billionaires, and their companies that people are paying attention, and if they don’t act in workers’ interests, workers will change fund management.

There are lots of ways to get started. Using existing membership committees on issues that intersect with pension holdings, like housing or immigration, and/or creating an interlocking pension committee can help create a structure for workers to take leadership.

Investment decisions are often discussed at board meetings that are open to the public. By looking at proposed agendas and meeting calendars, examining public reports on investment holdings, requesting meetings with labor-side trustees to educate them to ask questions and ultimately approve policies and investment decisions that implement workers’ recommendations, and generating member turnout at what are often thinly attended meetings, workers and community members can create low-lift actions that increase public awareness and develop membership engagement on these funding questions.

From there, staging public actions with press and broader attendance in the run-up to pension board or endowment investment meetings can provide a way to bring these issues out of meeting rooms and back into the community.

In California, members of the University of California (UC) employee union AFSCME Local 3299, which has over 40,000 members, partnered with the statewide community organizing network Alliance of Californians for Community Empowerment, which has over 15,000 members, to challenge the UC Board of Regents’ $4 billion bailout of private equity firm Blackstone’s troubled real estate investment trust.

Even a relatively small action before a board meeting drew a significant reaction from UC, which was concerned enough to invite company representatives to meet with the groups to discuss their demands. Although the specific investment was still approved, press coverage helped amplify the groups’ concerns and highlight the challenges faced by Blackstone’s real estate investment trust.

Since private market asset managers rely on repeated commitments from the same handful of limited partners, interrupting and challenging moments of fundraising can be the opening volley in a longer campaign arc and has the potential to reverberate long past the initial engagement. Furthermore, sustained press coverage even after the approval can help raise broader questions about the entire business model.

And familiarity with the business model is essential. Workers and community members will be asked how their recommendations to stop funding specific investments, types of assets, or specific asset managers comport with the fiduciary duty of the pension fund to provide a stable retirement for all pension fund beneficiaries.

Being able to articulate how the harms created by investments translate into financial risk for the pension fund is essential. And make no mistake about it—these investments have significant financial risk, on top of the abhorrent moral and ethical implications.

For example, companies that pose an existential threat to public sector jobs are endangering the participants whose contributions help maintain funding levels for a pension fund. Corporate landlords that foster displacement and drive up housing costs may make these same member participants move away from their neighborhoods and force them to leave their jobs. Fossil fuel investments will lead to more severe climate and environmental disasters that come with hefty price tags for relief and recovery, which create economic costs that leave less for workers’ wages and retirement savings. Not to mention the reputational risk that these areas of investment—privatization of healthcare, housing displacement, and fossil fuels—create for the fund, the asset managers, and the companies.

Taking a Stand

The Chicago Teachers Union (CTU) recently issued a powerful public statement making these arguments. CTU members came together to create an inventory of their priority concerns about their pension fund. They brought these concerns to the executive board of the union. They drafted an original resolution that then went through several rounds of review and editing before being passed by the Chicago Teachers House of Delegates. The resulting Resolution for a Pension Fund That Provides a Dignified Retirement While Promoting a More Just Society stated that:

The CTU urges CTPF [Chicago Teachers’ Pension Fund] to assess the appropriateness of continuing investments to the maximum extent permitted and consistent with its Trustees’ fiduciary duties…in businesses that have contracts with ICE and the prison industrial complex…in businesses: (a) that account for more than 10% of the total net worth of billionaires; or (b) where billionaires are executives or members of the board of directors, and if appropriate to take action to mitigate the risks associated with those businesses pursuant to the CTPF’s fiduciary duty to participants and beneficiaries.

Now is the time for workers—especially union members, their families, and communities—to exercise the power of their trillions of dollars.It also includes a positive vision for what their money could be used for, including affordable housing, retiree healthcare access, and full funding for the schools where their members work.

CTU’s resolution represents a potential first step for local unions and community organizations with pensioners in their base nationwide to demand not just divestment from one company or guidelines for how their fund leaders can do better, but a systemic change in how these funds operate.

From there, union members and their allies can engage the funds as they make key investment decisions, clarifying the impact and risk profile of the pension board trustees’ decisions and sharing viable and responsible investment alternatives like those laid out in the report Investing for the Common Good: How Workers’ Pensions Can Help Solve the Housing Crisis from the Americans for Financial Reform Education Fund and Georgetown’s Kalmanovitz Initiative for Labor and the Working Poor.

Now is the time for workers—especially union members, their families, and communities—to exercise the power of their trillions of dollars in organized money. As many union contracts are lined up to expire on May 1, 2028, many in labor and community movements are inspired by talk of a general strike in 2028.

Confronted with the nation’s richest-ever administration that is powered in large measure by workers’ own money, millions of union members can organize to stop the grift. Such a change is not only possible—the scale of what we are confronting requires no less.

Visit www.stopfundingbillionaires.org to learn more.