Federal proposals would impact Florida’s retirement fund | Opinion
Congress is currently considering shortsighted proposals like S. 2992 that attempt to clamp down on tech companies that operate online platforms and marketplaces. However, lawmakers and other critics fail to recognize the real victims of their efforts: hard-working Americans counting on pensions to see them through their retirement years.
Radical proposals to overhaul federal antitrust laws would cost some 27.9 million teachers, firefighters, nurses, and other public employees almost $4,000 per person in lost retirement benefits. Here in Florida, it would hurt even more, with a long-term impact of $4,146 each, according to an analysis by the Computer & Communications Industry Association.
How?
Compliance with restrictions in these federal proposals would significantly increase operating costs for regulated businesses, which in turn would reduce the value of the companies’ stocks and other securities. State and local pension plans are large shareholders in many of these tech companies, so if the companies suffer, their shareholders – including public sector pension and retirement plans – suffer.
For example, the Florida Retirement System (FRS) Pension Plan holds retirement savings for more 635,000 active members. These individuals include state employees, people who work for hundreds of different schools, universities, and colleges, and local governments. In total, the FRS Pension Plan managed about $200 billion in assets last year.
Those assets are used to provide hardworking Floridians with the money they need to enjoy their retirement. But those assets aren’t just stored in a bank vault somewhere. Much of it is invested into the companies that many of us use throughout our daily lives.
The reality is that pension plans like the FRS Pension Plan manage the retirement savings of 1 in 7 American workers, many of whom will depend on their pensions to make ends meet when they stop working. And the pension plans are heavily invested in the very companies targeted by the legislative proposals. An estimated 86% of state and local government employee pension plans include five major tech companies – Google, Facebook, Apple, Microsoft, and Amazon – among their top 10 holdings.
As both investors and consumers, Floridians would be harmed by these proposals. Increasing costs on impacted businesses would likely result in higher retail prices and loss of free and valued services for consumers. The cost to users of just one of the impacted services, Amazon Prime, is estimated at $148 per user per year.
The economic study suggests that public sector pension plans across the U.S. would lose up to $109 billion, while U.S. investors would lose upwards of $1.02 trillion in added costs.
And for what?
The proposed federal legislation will not stabilize prices or reduce inflation. By requiring regulated firms to divest, discontinue, or fundamentally restructure numerous service offerings, the legislation would substantially increase their operating costs while reducing the market value of stocks held by investors and pension plans.
If the objective is lower prices for consumers, then increasing the operating costs for these companies is entirely counterproductive. Supporters of these bills have yet to show any measurable benefits for American workers in return for what it would cost.
Legislative proposals like S. 2992 are misguided, aiming at innovative companies but inadvertently harming countless Florida families. They are a bad idea and should be rejected.
Trevor Wagener is director of research and economics at the Computer & Communications Industry Association. From 2019 to 2021, he was deputy chief economist of the U.S. Department of State.
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This article originally appeared on Tallahassee Democrat: Federal proposals would impact Florida’s retirement fund | Opinion
