The Texas Association of Public Employee Retirement Systems (TEXPERS), an organization not typically known for its impartiality toward pension reform policies, released a poll yesterday claiming, not so surprisingly, that “Texans see the current system of pension benefits as working for public employees and state and local governments”.

This is exactly the finding one would expect from an organization whose main purpose is to perpetuate the current defined-benefit public pension system in Texas. Without guaranteed pension benefits, TEXPERS would be forced to cede significant power to private investors and the individuals they currently represent.

Here are the survey results:

• 43% think public employees should be allowed to retain their defined benefit plans; 28% think they should be forced into 401(k) type plans.
• 45% of Texas voters think an employer pension system would do a better job of managing their retirement investments; 21% think individuals would do a better job.
• 29% believe that the average return of 401(k) investments is not competitive with the returns generated by larger defined benefit pension systems, compared with 17% who do think the returns would be competitive. This indicates a low-level of confidence in 401(k) returns.
• 51% of voters don't believe that cutting public employee pensions is an effective way to balance city and state budgets.
• 58% said their 401(k) has less money in it or is about the same as three years ago.
• 31% don't believe their 401(k) will have enough money in it when they retire and another 23% aren't sure.

According to TEXPERS’ Max Patterson, “Our research shows a lack of confidence in the self-managed investment portfolios of 401(k)s among Texans who own them. We were actually quite surprised by the level of antipathy toward them and policymakers should view their actual effectiveness among the general populace with healthy levels of skepticism."

The wording of questions asked in the poll, however, is suspect. The first question in the poll asks respondents if public employees should give up their current defined benefit pensions for a 401(k) plan. Since a majority of Texans agreed that public employees have the right to continue with their contractually-obligated pensions (which few are suggesting), TEXPERS makes the assumption that Texans are opposed to pension reform. How different do you think the responses would have been if worded something like: “Using a portion of your personal income, would you be willing to promise every public employee in Texas a retirement package worth over $1 million?” I doubt very many respondents would have agreed, yet it is one way (albeit a very different way) of asking the question.

When asked if an employer or employee would do a better job of account management, respondents chose employers, which is hardly surprising yet has nothing to do with the debate over pension reform. Investment officers are more knowledgeable of investment options than the average person, and that’s why they manage 401(k)s. Having a defined contribution pension plan in no way means your retirement depends entirely on your own investing prowess.

As for the other questions asked in the survey, they demonstrate little more than a general feeling of apathy toward the future of the economy, and hardly point to any kind of support for the public sector’s defined benefit pensions or opposition to pension reform.

I don’t put too much stock in a lot of polls, especially ones conducted by an organization with such a high stake in a particular outcome.