Pensions and Public-Private Partnerships: A Cautionary Note for Union Trustees

Abstract

A major demand of public sector unions in recent years has been for greater control over their members’ pension plans. Recently, several provincial governments, most notably British Columbia, have agreed to joint trusteeship, a development which gives union trustees a voice in investment policy.

This article focuses on the implications for union trustees of investments in Public Private Partnerships (P-3s) and related privatization initiatives. Examples of such investments include: transportation infrastructure projects, hospitals and health services, schools, municipal water and sewer systems, electrical utilities, and other projects that, historically, have been within the public sector.

It argues that trustees should be wary of such investments. Public sector unions have criticized privatization initiatives as a threat to public sector jobs and services. P-3 investments are problematic because they may threaten the jobs of their union’s members, undermine the credibility of their union’s public policy objections to privatization and, in the end, may prove far more risky than P-3 promoters contend.