Retirement Systems of Alabama CEO David Bronner said Tuesday the turbulent start of President Donald Trump’s new term means unsettling times for pension funds, and potential negative consequences that are more far reaching.
Bronner, who has led the RSA for more than 50 years, talked about the federal job cuts and other policies launched by the Trump administration during the quarterly meeting of the Employees’ Retirement Systems Board of Control.
“The volatility of making major decisions and changing your mind a day or two later, it just doesn’t play with the world,” Bronner said.
“It may be fun to do that with your best buddy or something, or your wife or your husband. But it doesn’t work at all in the world that we live in as a pension fund. They don’t work well with instability.”
Healthy financial markets and predictable economic policies are important for the RSA and its members. The RSA manages pension funds for more than 400,000 active and retired education and government employees and paid $4 billion in benefits in 2024.
As of September 2024, the RSA was managing 24 funds with assets of $56 billion.
Stock prices have dropped as Trump moves to impose tariffs on America’s largest trading partners, Mexico and Canada.
Trump was asked during a Fox news interview Sunday whether a recession was imminent and said there would be a disruption during a transition to what he says will be a more prosperous future.
Marc Green, deputy director for investments for the RSA, told the ERS Board Tuesday that volatility and uncertainty are causing businesses to put big decisions on hold. He said the RSA has held back on some investment decisions.
“People are starting to sit on their hands,” Green said. “From the CEO level all the way down to the consumer level, you’re seeing people retrenching right now.
“I think when the rules of the game change every day or every hour, that’s just human nature.”
Bronner told the board, “We’re absolutely flying blind in my opinion until things some way work out one way or the other.”
Bronner said previous presidents have tried to streamline the federal government but that Trump, with Elon Musk leading the Department of Government Efficiency (DOGE), has plowed ahead without regard for consequences.
“When a governor changes, most cabinet positions change, and we live and go on. But we’ve never gone in and wiped out things without knowing what we’re wiping out,” Trump said.
An example that hits close to home, Bronner said, are moves to cut federal funds for medical research that could cost the University of Alabama at Birmingham about $70 million a year.
“That’s UAB. Come on. You take federal funds away from them to do research? All your reputation flutters away. Your bright people that you brought to the state flutter away,” Trump said.
Another example is the effort to dismantle the U.S Agency for International Development, an agency established in 1961 to fight problems like disease outbreaks and starvation in foreign countries.
“It’s just not giving away things,” Bronner said. “It’s feeding people that are starving. It’s stopping diseases that are in Africa before they come here. We don’t want Ebola or anything like that.”
Bronner said American farmers who grow the food purchased to send to other countries are among those affected.
“So, there’s a lot of things to be done, and you can do them with a scalpel. Or you can do it with a sledgehammer. But when you’re dealing with all of these things at one time, the public isn’t going to accept it very well,” Bronner said.
Bronner said the false or exaggerated claims that Trump repeats, such as that Social Security checks are going to millions of people older than 130, undermine public confidence in the government.
“What scares me is that you’re making changes without any thought – how does it affect the public?” Bronner said.
“Or in the case of trying to get up to $2 trillion in savings, making up facts. Stating to the public that you have Social Security people that are 125 or 150 years old still getting a check– is just nonsense.”
Trump accused Ukrainian President Volodymyr Zelensky of starting the war with Russia even though it was Russian President Vladimir Putin who launched the invasion of Ukraine in 2022.
“In the olden days, all a politician had to do was say two or three stupid things,” Bronner said. “Now we get to say 150 stupid things and think it’s OK, but it’s not OK.”
Bronner said Trump has done good things, including improving security on the southern border.
“Everybody wants the president to be successful,” Bronner said. “Nobody would want him not to be successful because it affects everybody, whether you’re for him or against him.
“I just wish that instead of an idea that you implement this afternoon that you look at your idea and ask somebody to say what’s the pluses and minuses of this thing, who will we affect.”
This story was edited at 7:30 a.m. to clarify Trump’s comments about a possible recession or transition period for the economy.
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