Dan Loeb

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Dan Loeb is the head of the hedge fund firm Third Point, LLC. Loeb founded the company in 1995.[1] He is on the Forbes 400 Richest People in America list.[2]

Public School Teacher Pensions

In 2013, Loeb came under harsh scrutiny for his hedge fund work with public pension plans and the contradicting position of organizations with which he is affiliated.[3] Through his work at Third Point, he manages money for several public school funds that rely on defined benefit plans while simultaneously working for StudentsFirst, an organization that lobbies specifically against these kinds of plans.[3]

Loeb was set to speak before the Council of Institutional Investors, a major umbrella group representing, among others, public retirement funds.[4] He backed out of the April 18 meeting to avoid questions by teacher union bosses about his stance on their public pension plans.[5] Anne Sheehan, the director of corporate governance for the California Teachers Retirement System was to interview Loeb and another activist hedge fund manager, Barry Rosenstein.[6] In a letter to Sheehan, Loeb stated, "Contrary to reports, I have never taken a position against DB Plans nor has any philanthropic organization I lead. In fact, my support for and contribution to DB Plans is demonstrated by maximizing returns for union members who rely on us to deliver their pension goals."[6]

However, StudentsFirst, of which Loeb is a New York chapter board member pushes "for states to abandon defined benefit plans – packages which guarantee certain retirement benefits for public workers like teachers – in favor of defined contribution plans, where the benefits are not guaranteed."[3] On their website, the group asserts "states should move from defined benefits to retirement plans that are more sustainable and can be immediately accessed by all teachers."[7] Additionally, Loeb sits on the board of the Manhattan Institute, which also advocates for the switch to defined contribution plans.[8][9] A Manhattan Institute report about defined benefit plans claims, "States should consider shifting to defined-contribution retirement plans" and "In cases where defined-contribution plans face major political resistance, states should consider hybrid options like cash-balance plans."[9]

Articles and Resources

Related Sourcewatch

References

  1. "Company Overview of Third Point LLC", Businessweek, accessed May 2013.
  2. "Daniel Loeb", Forbes, accessed May 2013.
  3. 3.0 3.1 3.2 Matt Taibbi, "Dan Loeb Simultaneously Solicits, Betrays Pension Funds", Washington Post, April 11, 2013.
  4. Matt Taibbi, "Billionaire Dan Loeb Turtles, Flees Investor Conference, After Political Affiliations Exposed", Washington Post, April 22, 2013.
  5. Michelle Celarier, "Hedgie playing hooky", New York Post, April 18, 2013.
  6. 6.0 6.1 Rob Copeland, "Dan Loeb cancels pension confab appearance amid potential protests", Hedge Fund Intelligence, April 17 2013.
  7. StudentsFirst, "Strategy 3.4: Create pension and benefit programs responsibly", organizational website, accessed May 2013.
  8. Manhattan Institute for Policy Research, "Manhattan Institute Board of Trustees", organizational website, accessed May 2013.
  9. 9.0 9.1 Josh Barro and Stuart Buck, "Underfunded Teacher Pension Plans: It's Worse Than You Think", Manhattan Institute Civic Report, April 2010.