As for the objection that fund managers might not share the interests of the investing worker, this too can be resolved by labor unions. They can simply require that the companies that manage their funds allow the union to appoint the fund's trustees. Currently, the Teamsters Union appoints trustees to its Central States Pension Fund, and Teamsters president Ron Carey is pushing for greater accountability and the democratized election of the fund's trustees by the union's local chapters. As an added bonus to unions, when they become major shareholders and fund trustees, their ability to affect corporate governance increases. Last spring, for instance, six of 87 shareholder proposals initiated by union pension funds passed.
Privatization can only increase their success rate.
What all of this suggests is that under a privatized Social Security system, labor unions can play a crucial role in terms of recommending funds, authorizing funds of their own, establishing leadership roles within those funds and directly influencing corporate governance. Furthermore, workers will be returned control of their earnings via personal retirement accounts and have the freedom to choose among retirement funds, including those endorsed and designed by unions themselves. Most importantly, union members will be better off when they retire, with greater retirement income and the standard of living that goes along with it. It's a shame that union leaders have chosen another course. Their members' best interests lie with privatization.