Ontario Teacher's Pension Plan Buys-out BCE

Economic democracy has to do with people being empowered in order to collectively influence economic decisions that impact their lives.

Hence, we invite Pension Funds to participate in the economy and to buy shares and grow but that for us is just a first step. We believe that these funds must be under the democratic control of their members. I think funds that give one member one vote (what I call solidaristic collective shareholding) rather than one dollar one vote provide a much more desirable form of ownership from a democratic point of view.

Hence, the board of directors should be responsible to the members of the Pension Plan Fund. Currently, the OTPP is governed as follows. It is basically governed by a Board of directors appointed by the Ontario Teacher's Federation in conjunction with Provincial Government of Ontario. Unions and Governments are democratic in a traditional sense but are not participative and hence have many democratic shortcommings as certain decisions move further and further away from the represented.

think we should seek out structures that are more transparent and are much more directly linked to the members. This will increase the democratic and responsible governance of such Funds. Things like participative regional assemblies of members which can debate policies and elect regional Board members, as well as key managerial positions. Regional assemblies can also have power over certain percentages of the pension plan for local community investment etc., they can debate the general mandate of the fund which can be voted on by a General Convention of delegates. Conventions can also elect executive committees and review the performance of the Fund.

We look psotively on funds such as the OTPP but of course want to ambitiously expand and improve on them. As mentioned, the existence of such funds is but a first step.

Now, let us take into consideration that such a Pension Fund meets desirable criteria of participatory democracy, what does that change between the capital holders (i.e. the Teachers of Ontario) and the workers (i.e. the BCE workers)? One group of workers acting as capitalists over another group of workers is not a long term solution for building a solidaristic economic democracy.

Hence, we should look at Pension Confederations where the Pension Funds of all unions are pooled together but controlled by the various member groups of the Confederation. We can take this a step further and look at Labour Capital Fund Confederations where various funds (Pensions, Investment, Credit Union,) are pooled tohgether but with each fund keeping its sovereignty over its own capital.

In such an arrangement, a Teacher's Union Pension plan can decide to invest in a Corporation such as BCE. The Pension Plan would then look for partners within the above mentioned "Confederation Fund". Let us assume that the various Fund members are mandated to give the first right of refusal for partnerships to members within the Confederation Fun. Moving along, after the buy-out, the Teacher's Pension Plan would have to (according to Confederation Rules) reach an equity partnership with all the employees of BCE. This way, the employees of BCE would also become collective owners of their place of employment in accordance with a long term loan by the Teacher's Union Pension Plan in order to give the BCE workers the investment capabilities of buying into BCE. Such a Confederation Fund can also be mandated to promote worker self-management policies within a period of a few years in the businesses it takes over.

The Confederation as a whole would also be responsible for any transitions (i.e. people that would otherwise be layed off due to the non-profitability of a firm) We don't see that this would be the case very often since most layoffs are in order to maximize the profits of the shareholders and we would want these types of Funds to be built in such a way as to have internal incentives for maximizing employment. Various internal methods can be used to achieve this, first of all, democratizing the funds would allow workers to set the overall general policies, second the Funds since their initial capital come from the salaries of workers, they would logically need workers who work for a salary to be able to contribute each year into the Pension Fund or the Investment Fund etc. Yet, there may be transitions nevertheless since some of the branches of a given business may not be viable. Hence, such a Confederation Fund should get a percentage of all profits from its member funds (like the Teacher's Pension Fund) in order to have packages for workers who would be cut from employment at given companies. Instead of handing pink slips this package can prepare a transition programme for relocating workers to another job, training them and providing assistance on top of any government aid they may need. The first objective of anypackage would be to look at ways of investing in the company to save and expand the firm in order to save the jobs and then if that proves impossible look at other alternatives.

As mentioned above, such a Confederation Fund should get a percentage of all profits from its member funds. In this way the Confederation Fund itself would have investment capabilites independent of its members.

These types of ideas can be used to build on what we already have: Unions, Pension Funds and Labour Investment Funds but go alot further towars an alternative form of economic organization based on partipatory and solidiraristic democratic values.

We have the building blocks, now we have to build the system.