American Journal News: “These Investments Were Mismanaged, Resulting in Higher Retirement Costs for […] Firefighters and Police Officers”
American Journal News: “The Changes Prompted More Than 400 Police Officers to Resign the Following Year”
PENNSYLVANIA — Connecticut hedge fund CEO and mega-millionaire David McCormick’s long record of putting his bottom line ahead of workers is back in the spotlight this week following a breaking report from American Journal News that uncovered how he mismanaged the investment funds of police officers and firefighters “resulting in higher retirement costs” and hundreds of police officers resigning.
ICYMI: American Journal News: Dave McCormick’s business mishandled funds for teachers, first responders
- Prior to running for office, Pennsylvania U.S. Senate candidate David McCormick ran a firm that invested billions of dollars for state pension funds. These investments were mismanaged, resulting in higher retirement costs for teachers, firefighters, and police officers.
- “I was the CEO, so whatever we did I’m responsible for,” McCormick told the American Enterprise Institute in 2023.
- Between 2007 and 2017, Bridgewater managed up to $133 million in assets for the Dallas Police and Fire Pension System (DPFPS). This accounted for between 3.4% and 4.2% of the pension fund’s total assets. According to publicly available disclosures, Bridgewater collected more than $17 million in management fees from DPFPS during this period.
- In 2015, DPFPS faced an insolvency crisis. As with PSERS, excessive management fees and lower-than-expected returns from Bridgewater were contributing factors. According to DPFPS, Bridgewater routinely invested the pension’s funds in high risk assets.
- To remedy the crisis, the Texas state legislature passed a bill that cut pension benefits for police and firefighters, eliminated cost of living increases, raised the retirement age from 55 to 58, and required police and firefighters to pay more annually into the pension fund. The changes prompted more than 400 police officers to resign the following year.
- In 2018, a new governing board was appointed to ensure the solvency of DPFPS. Their first recommendation was to liquidate the Bridgewater holdings.
- The Los Angeles Fire and Police Pensions (LAFPP) paid Bridgewater over $30 million in fees from 2007 to 2022. LAFPP says Bridgewater returns underperformed in 2017, 2019, and 2020. LAFPP fired Bridgewater in 2021.
- A McCormick spokesperson did not immediately respond to questions for this story.
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