Forbes recently published an article documenting a teacher’s herculean efforts to file a class action lawsuit in the United States District Court of the Western District of Kentucky claiming mismanagement of the investments of the Kentucky Teachers Retirement Systems (KTRS) Click here to read the article.
In writing this, I understand the level of sophistication it takes to manage a large pension. The mountain of considerations escapes most people – teacher or no teacher. In light of that, I often wonder what would happen if said teacher organized a sustained twitter war against the KTRS, and whether long-standing social pressure would have an impact.
The investment community would quickly chime in that this is ludicrous. How could some social banter impact the procedures of a well-established pension?
Let’s first consider the fact the teacher in the article is a constituent of the pension that is supposedly protecting his self-interest. Second, for arguments sake, lets assume that the teacher’s position is legitimate. (I am in no position to judge). You now have a situation where you have a legitimate voice with a valid gripe.
Now insert the Internet. How many examples do we have where an initially quiet voice turned into a roar?
Recognize also that I said “long-standing.” Nothing would happen over a single tweet; however, if the teacher in the article rallied all the other teachers contributing to the pension to speak up, and the wave of criticism was relentless over 5 years, is the pension immune?
The safe answer would be, yes, the pension is immune. There is one problem, however. The pension is comprised of human beings. The criticism would undoubtedly reach these human beings. If the “teacher’s” position really is valid, isn’t there a chance that one of the “human beings” within the pension could eventually side with the teacher and impact change? Doesn’t seem too farfetched does it?
My point is that the internet, social networks, and technology are great equalizers, and will impact our industry in ways that no one can truly predict. Although I will make one prediction: sitting on the sidelines will lead to your demise, asset manager, allocator alike.
By Kyle Dunn