Headlines about "Ret plan investments - social"
Gathered from the web by the editors at BenefitsLink.com.
Bill to Require 'Say on Pay' Introduced in Senate (PDF)
2 pages. Excerpt: "Companies [would be required to] give shareholders an annual non-binding vote on executive compensation as disclosed in the proxy statement pursuant to SEC compensation disclosure rules (i.e., 'Say on Pay'). Say on Pay is currently required for companies that received financial assistance under the Troubled Asset Relief Program (TARP) and filed their proxy statements after February 17, 2009. In the prior Congress Say on Pay legislation was passed by the House of Representatives, and Say on Pay provisions were included in Senate bills introduced by then Senators Clinton and Obama. A number of non-TARP companies have announced voluntary adoption of Say on Pay." (Frederic W. Cook & Co., Inc.)
[Opinion] Brief Analysis of Socially Responsible Investing
Excerpt: "Socially responsible investing (SRI) is the practice of choosing stocks, bonds or mutual funds based on political, religious or social values. This investment strategy can be hazardous to an individual's portfolio, and if followed by state and local employee pension funds can adversely affect thousands of people's retirement incomes." (National Center for Policy Analysis)
Think Fannie Mae and Freddie Mac Were a Politicized Financial Disaster? Just Wait Until Pension Funds Implode
Excerpt: "State, local, and private pension plans covering millions of government employees and union workers with 'defined benefit' accounts are teetering on the brink of implosion, victims of both a sinking stock market and investment strategies influenced by political considerations. From January to October 2008, defined benefit funds -- those promising a predetermined amount of retirement money to the payee -- averaged losses of 26 percent, according to Northern Trust Investment Risk and Analytical Services, making it the worst year on record for corporate and public pension funds." (Reason Magazine)
Fiduciary Responsibility and ETIs: A Conflict?
Excerpt: "The U.S. Department of Labor (DOL) recently issued Interpretive Bulletin 08-1, which warns plan fiduciaries against selecting investments to promote public policy preferences. The notice specifically addresses economically targeted investments (ETIs), which create economic benefits apart from their investment return. The bulletin replaces Interpretive Bulletin 94-1 and clarifies and formalizes the DOL's position." (Watson Wyatt Worldwide)
Investment Funds Push an Environmental Agenda - Pension Funds Joining the Effort
Excerpt: "Until recently, green investment funds were mostly a niche for individual investors. But now investing with the idea of improving the environmental actions of corporations, not just maximizing profit, is catching on among some big pension funds and foundations, particularly in Europe and even in the United States." (The New York Times; free registration required)
[Guidance Overview] ERISA for Money Managers (PDF)
84-page PDF version of November 13, 2008 Powerpoint presentation. (Morgan Lewis)
[Guidance Overview] EBSA Clarifies Fiduciary Duties Regarding Proxy Voting
Excerpt: "Emphasizing that a key consideration is whether the shareholder activity ? the proxy voting, the statement of investment policy, or shareholder activism ? seeks to enhance the economic value of the plan's investments (and does not subordinate the economic interest of the plan to unrelated objectives), the Employee Benefits Security Administration (EBSA) issued Interpretive Bulletin 08-2 to update its prior guidance on the duties of ERISA fiduciaries when exercising shareholder rights." (Deloitte via BenefitsLink.com)
It Takes a Plan to Ride Out Bad Times with 401(k) Savings
The article discusses some of the biggest mistakes 401(k) participants could make and offers some positive steps to take. (USA TODAY)
[Guidance Overview] EBSA Reinforces Position on Investment of Plan Assets and Shareholder Rights
Excerpt: "The Employee Benefits Security Administration (EBSA) has issued new guidance clarifying the obligations of plan fiduciaries concerning investments in economically targeted investments and shareholder rights. . . . The guidance, issued in the form of two interpretive bulletins, reiterates that plan fiduciaries, who are charged by law with the responsibility for operating employee benefit plans on behalf of plan participants, may never increase expenses, sacrifice investment returns, or reduce the security of plan benefits in order to promote legislative, regulatory or public policy goals that have no connection to the payment of benefits or plan administrative expenses." (Wolters Kluwer)
[Guidance Overview] DOL's Updated Fiduciary Guidance on Exercising Shareholder Rights and Making Economically Targeted Investments
Excerpt: "On October 17, 2008, the Department of Labor published two interpretive bulletins under Employee Retirement Income Security Act: [1st -] the Department of Labor has published an interpretive bulletin relating to exercise of shareholder rights and written statements of investment policy, including proxy voting policies or guidelines. [The target page provides] summaries of the four categories treated . . . ." (Cypen & Cypen)
[Opinion] Should Feds Rescue Retirement System, Too?
Excerpt: "Even before the recent collapse of investment values, the paltry sums in private retirement accounts caused concern if not alarm among pension and retirement experts. Now, the wolf is not only at the door but in the room, and is devouring what little remains of the financial future of millions of Americans. Pretty much all of Washington is shoveling hundreds of billions of dollars to shore up the nation's financial system and restore liquidity to the global credit system. And there is growing if belated support for providing direct aid to millions of homeowners who otherwise can't afford to stay in their homes. But while these concerns are front and center, there's been little but hand-wringing when it comes to the huge losses suffered by individual retirement accounts, what's left of traditional private defined benefit pensions, and state and local retirement programs." (U.S. News & World Report)
[Opinion] American Fiduciaries Must Not Vote Plan Proxies
Excerpt: "On October 17, 2008, the U.S. Department of Labor issued and Interpretive Bulletin Relating to Exercise of Shareholder Rights for pension funds regulated by ERISA, the federal pension law. The crux of the ruling was that U.S. pension funds subject to ERISA may no longer vote their proxies if they want to avoid the risk of investigation and possible prosecution by the federal government." (Global Investment Watch)
[Guidance Overview] DOL Updates Guidance on Economically Targeted Investments, Exercise of Shareholder Rights
Excerpt: "The DOL has issued interpretive bulletins that update its guidelines on economically targeted investments and the exercise of shareholder rights. Under the updated guidelines, plan fiduciaries may not consider any factor other than the economic interest of the plan when selecting plan investments, except in specified -- and very limited -- circumstances. Similarly, when exercising shareholder rights, plan fiduciaries may not engage in shareholder activism and socially directed proxy voting unless they reasonably expect that those activities will enhance the economic value of the plan's investment." (Employee Benefits Institute of America)
Plan Assets for Retirements, Not Politics, Department of Labor Says
Excerpt: "One DOL bulletin, on economically targeted investments, clarifies that 'fiduciary consideration of non-economic factors should be rare and, when considered, must comply with ERISA's rigorous fiduciary standards,' according to a DOL news release issued Thursday, October 16. The second bulletin, on shareholder rights issues, clarifies that plan fiduciaries 'may never increase expenses, sacrifice investment returns or reduce the security of plan benefits in order to promote legislative, regulatory or public policy goals that have no connection to the payment of benefits or plan administrative expenses.'" (Workforce Management; free registration required)
Guidance Needed for Labor Department's Guidance on Pension Plan Activism
Excerpt: "The guidance largely echoes existing law, and would not affect governance proposals on things like say-on-pay, majority voting or poison pills, all of which the agency said 'are reasonably likely to affect the economic value of the plan.' Where the guidance would come into play is on social or political proposals. According to the guidance, 'the mere fact that plans are shareholders in the corporations in which they invest does not itself provide a rationale for a fiduciary to spend plan assets to pursue, support or oppose such proposals.' The guidance is vague in its wording and has been interpreted differently by groups on both sides." (Financial Week; free registration required)
DOL Says Plan Assets for Retirements, Not Politics
Excerpt: "Pension plan assets must be invested and used solely to provide for the retirements of plan participants, not to advance political, corporate or other goals, according to new bulletins from the Department of Labor." (Pensions & Investments)
EBSA Gives Thumbs Down to SRI Investment Criteria
Excerpt: "Federal regulators reaffirmed their position that the goal of ERISA plans must be to generate maximum returns to meet pension liabilities and not for socially responsive investing purposes. The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) said in a news release that its guidance asserts that plan fiduciaries may never increase expenses, sacrifice investment returns, or reduce the security of plan benefits to promote legislative, regulatory, or public policy goals with no connection to the payment of benefits or plan administrative expenses." (planadvisor)
New Hampshire Judicial Retirement Plan Sues on Divestment Law
Excerpt: "The New Hampshire Judicial Retirement Plan has asked a Superior Court judge to decide the constitutionality of a law ordering it to sell its holdings in selective companies doing business in the Sudan. The law, passed this spring, orders the state's two public pension systems to shed any investments that support Sudan's campaign of genocide and rape in Darfur. Both plans question whether the law is constitutional, but the Judicial Retirement Plan is the first to go to court. The much larger New Hampshire Retirement System would like to join the case." (The Boston Globe)
Pension Fund Activism: The Double-Edged Sword
Excerpt: "Many public pension funds engage in activism by using their pooled ownership of stock to affect changes in the corporations they own. The merits of activism depend on: (1) the conflicts of interest between corporate managers and shareholders, and (2) the conflicts of interest between portfolio managers and investors. These conflicts lead to two types of activism: shareholder activism and social activism. Portfolio managers can use their position to monitor conflicts that might arise between managers and shareholders (shareholder activism), but they can also abuse their position by pursuing actions that advance their own moral values or political interests at the expense of investors (social activism)." (Pension Research Council; registration required to download fulltext of paper)
[Opinion] Are State Officials Risking Public Employee Retirement Benefits by Playing Global Warming Politics?
Excerpt: "We conclude that state and local pension fund administrators who promote or ignore global warming regulation may be contributing to undesirable economic conditions that will adversely impact the portfolios they manage. Moreover, pension administrators who are promoting global warming regulation appear to be doing so for partisan political purposes. This could be considered a breach of their fiduciary responsibility. We recommend that, unless global warming regulation can be justified as a significant benefit to the broad economy and stock market, state and local pension fund administrators actively oppose it." (The National Center for Public Policy Research)
CalSTRS Adds Public Health Criteria to Investment Policy Statement
Excerpt: "The California State Teachers' Retirement System (CalSTRS) has added a new plank to its investment policy calling for a consideration of public health issues when deciding on future investment moves. CalSTRS' Investment Committee unanimously approved the addition of the public health criterion on the motion of State Treasurer Bill Lockyer. A Lockyer news release said the component was added to CalSTRS' Environment, Social and Governance Policy (ESG), which measurers risk and governs decisions related to CalSTRS investments." (PLANSPONSOR.com; free registration required)
Big Funds Eye Reinvesting in Tobacco Firms
Excerpt: "[C]alifornia's public pension fund system is considering reversing its policy of refusing to invest in tobacco companies. The California State Teachers' Retirement System, the nation's third-largest public pension fund with $162 billion in assets, could vote as early as this fall on a plan to start buying tobacco stocks, which it has shunned since 2000." (The New York Sun)
Two Public Pension Funds' Virtuous Mistake: CalPERS and CalSTRS Do-Good Investment Strategy Has Cost California Retirees Billions
Excerpt: "Eight years ago, then-state treasurer Philip Angelides launched his 'Double Bottom Line' initiative, espousing a philosophy of profits and social reform. As part of the plan, the $239 billion California Public Employees' Retirement System (CalPERS) dropped investments in countries that lacked a free press, labor unions, and other hallmarks of democracy. CalPERS and the $162 billion California State Teachers' Retirement System (CalSTRS) also dumped tobacco stocks and plowed money into businesses and real estate that would benefit the local economy." (BusinessWeek)
NH Retirement Systems Must Divest Sudan-Related Holdings
Excerpt: "Under a bill signed into law by New Hampshire Governor John Lynch, the state retirement system board of trustees and the judicial retirement plan board of trustees must divest assets relating to Sudan." (PLANSPONSOR.com; free registration required)
Mercer's HRadio Podcast, July 15, 2008
This week's lineup includes: News highlights; Understanding health care predictive models; Hurdles in the road to global pay; Socially responsible investing goes mainstream. Total time: 15:26 (Mercer LLC)
Social Investing Revisited?
Excerpt: "There appears to be a continuing debate, with the Department of Labor's involvement, between the AFL-CIO and the U.S. Chamber of Commerce concerning use of plan assets in proxy voting and shareholder related activities as well as in connection with union organizing campaigns and union goals in collective bargaining negotiations." (Pension Protection Act Blog)
Green 401(k) Plans
Excerpt: "Even though socially responsible investing (SRI) has been around for decades, only recently have some companies begun to offer their employees greener options for 401(k) retirement investment accounts. According to Rona Fried of SustainableBusiness.com, SRI options for retirement plans are still only offered to about 20 percent of employees, but that's changing fast." (HealthNewsDigest.com)
ProxyDemocracy Web Site Provides Tools to Help Investors Put Their Voting Power to Use
Excerpt: "ProxyDemocracy provides a set of tools to help investors use their voting power to produce positive changes in the companies they own. It is a nonprofit, nonpartisan project supported by foundations that are themselves interested in being responsible investors." (ProxyDemocracy)
Twenty States Have Passed, or Are Considering, Divestment Laws, for Pension Funds
Excerpt: "Divestments will, however, hurt U.S. taxpayers if Iran-tainted stocks are sold at depressed prices. Fund managers at Calstrs predict that its substitute non-Iranian stocks will yield $200 million a year less in returns. This year, from the 20 states enacting legislation, $8 billion in total divestment can be expected with $70 million in transaction costs. Any losses will be borne by taxpayers, who are on the hook for public employee pensions." (Forbes.com)
[Opinion] Tide May Be Turning Against Practice of Divesting Pension Funds from Terrorist States
Excerpt: "These well-intended political initiatives are a festering sore for pension funds. They force public trustees to violate their duty of loyalty and put political interests ahead of the sole interest of their beneficiaries. At minimum, divestment laws impose administrative headaches and financial losses on pension plans -- losses that are not reimbursed by legislatures. At worst, they seriously impair investment returns and impose costs on future generations who will be forced to pick up the tab for investment underperformance." (Governing.com)
CalPERS Toughens Standards on Corporate Governance
Excerpt: "The California Public Employees' Retirement System wants companies in its investment portfolio to be environmentally responsible and to have diverse boards of directors. The investment committee of the world's largest public pension fund voted to affirm those standards during Monday's meeting in Sacramento, adding them to the system's Global Principles of Accountable Corporate Governance." (The Sacramento Bee)
Maine Rejects Bid to Divest Investment
Excerpt: "Bucking a committee recommendation and a vote in the Senate, the Maine House is rejecting a bill calling for a divestiture of pension funds in companies doing business in Iran." (AP via International Business Times)
Proposed - that Two Largest Texas Pension Funds Loan Money for Infrastructure Projects
Excerpt: "Senate Finance Committee chairman Steve Ogden floated the idea of a public-private partnership to invest in roads and other infrastructure in Texas, possibly using state pension fund money. His rationale: if the likes of Spanish company Cintra are willing to pony up billions of dollars (eventually) to build and operate roads in Texas, why not get the state's big pension funds into the deals as lenders or investors?" (The Austin American-Statesman)
State Divestment Legislation
Excerpt: "Growing concern over genocide in Sudan and countries that sponsor terrorism has prompted state legislatures to consider actions to limit or eliminate state investments in firms doing business with such countries. Legislation includes total divestment of the states interests in firms doing business in targeted divestment focused on specific firms and shareholder engagement strategies. The . . . charts summarize enacted legislation from 2005 and 2006 and bills introduced in the 2007 and 2008 legislative sessions." (National Conference of State Legislatures)
Institutional Investors Fuel Surge in Socially Responsible Investing
Excerpt: "The growth in socially conscious investing -- now comprising $1 of every $11 invested -- is being driven both by 'growing institutional investor demand and by a host of factors driving retail investor demand,' said Cheryl Smith, executive vice president at Trillium Asset Management. Institutional investors have acquired the largest slice of the socially screened assets. The $1.9 trillion in institutional assets was up 27% from 2006, when the last bi-annual report was released." (Financial Week; free registration required)
Resources on Mandatory Divestment Issues
The association has published a list of publications, with links to fulltext, on the issue of divestment. (National Association of State Retirement Administrators)
NYC Public Pensions to Companies - Reveal Political Payouts
Excerpt: "Acting on behalf of New York City's Pension Funds, William C. Thompson, Jr., the city's comptroller, is asking ten of America's biggest companies to disclose their political contributions. Thompson submitted the resolution to: Halliburton Corp.; Duke Energy; Charles Schwab Corp.; DTE Energy; Wal-Mart; United Technologies; Devon Energy; Computer Sciences Corp.; Entergy Corp.; and Union Pacific. United Technologies has already has agreed to adopt the proposal." (CFO.com)
[Opinion] Michigan Governor Calls for Pension Plan Investment in State
Excerpt: "For seven straight years, Michigan has lost jobs and currently suffers the nation's highest unemployment rate. So, what do we say about this species of socially responsible investing?" (Cypen and Cypen)
[Opinion] The Socially Responsible Investing Fiduciary Cop-Out, Round 2
Excerpt: "Fiduciary law assesses prudence and loyalty based upon the care, skill, diligence and reasonableness of the manner in which decisions are made, not based upon the outcomes of those decisions. [Environmental, social and governance] factors provide attractive opportunities to enhance investment decision making." (Blaine Aikin of Fiduciary360 published by ProducersWEB)
Maybe Those Who Practice Socially Responsible Investing Should Settle for Lower Returns – and More Satisfaction
Excerpt: "For some conscientious investors who deploy capital in part to tackle thorny social and environmental problems, the time may have come to adopt a new goal: lowering expectations for financial returns. That idea represents heresy at mutual fund companies committed to socially responsible investing (SRI). For decades, they have insisted that investors can 'do well by doing good' – that is, address moral issues and still grow wealth at competitive rates." (The Christian Science Monitor)
[Guidance Overview] DOL's Opinion Letter on Pension Assets and Politically Motivated Proxy Activity
Excerpt: "Under ERISA, plan fiduciaries must act solely in the interest of plan participants and beneficiaries. Plan fiduciaries may not increase expenses, sacrifice investment returns or reduce the security of plan benefits to support or promote goals not directly related to the plan.' (Watson Wyatt Worldwide)
[Opinion] Labor Union Pension Funds - Undertaking 'to Monitor or Influence the Management of Corporations'
Excerpt: "As public companies sift through shareholder proposals in preparation for their annual meetings, a recent Labor Department action could indicate stepped-up scrutiny of one of the most activist investor groups -- labor-union pension funds." (The Wall Street Journal)
Improving Corporate Governance at CalPERS
Excerpt: "Calpers proposed 33 resolutions last year -- more than twice the number filed in 2006. A record six came to a vote, snaring an average of nearly 63% of votes cast, according to ISS Governance Services, the proxy-advisory unit of RiskMetrics Group Inc. Calpers expects to file as many resolutions this year as it did in 2007. Mr. Johnson broke another record by hanging 11 companies out to dry on Calpers's 2007 'Focus List,' a tally of underperforming companies that the fund has put out annually since 1992." (The Wall Street Journal)
Job Market Paper: Corporate Governance Objectives of Labor Union Shareholders (PDF)
44 pages. Excerpt: "I examine the proxy votes of AFL-CIO pension funds in director elections of 503 companies from 2003 to 2006. Using the 2005 AFL-CIO breakup as a source of exogenous variation in the union affiliations of workers across firms, I find that AFL-CIO affiliated shareholders become significantly more supportive of director nominees once the AFL-CIO no longer represents workers at a given firm." (Ashwini K. Agrawal, University of Chicago, via HR Policy Association)
Overview: Sudan Divestment Law Signed by President Bush
Excerpt: "The new law specifically provides the authority to require divestment from companies that State or local governments determine are conducting (or have direct investments in) business operations in Sudan that include power production activities, mineral extraction activities, oil-related activities, or the production of military equipment. Explicit exclusions are provided for companies whose business in Sudan only involves investments in the regional government of Southern Sudan; legal transactions under a license from the Office of Foreign Assets Control (OFAC) or other U.S. authorization; delivery of goods and services for marginalized populations or internationally recognized humanitarian organizations, and other similar investments." (National Council on Teacher Retirement)
Two Texas Public Pensions Could Soon Divest in Companies Doing Business in Sudan
Excerpt: "A 2006 state law is intended to put economic pressure on the government in Sudan, where militias allied with the government are accused of a campaign of atrocities against ethnic African civilians in the Darfur region. As required by the law, the comptroller Wednesday released a list of 27 companies that meet the law's definition of doing business in Sudan." (The Austin American-Statesman)
Opinion: The Socially Responsible Investing Fiduciary Cop-Out
Excerpt: "For SRI to be incompatible with the duty of loyalty, the interests of society and investors would have to be inherently at odds. This is preposterous. The capitalist system is dependent upon a stable and sustainable society. This is not to say that all socially responsible investment strategies align with portfolio beneficiaries' interests, but there is clearly no reason to believe that none will." (Boomer Market Advisor)
Bush Signs Sudan Divestment Bill into Law
Excerpt: "President Bush signed legislation on Monday that makes it easier for mutual funds and private pension funds to sell their investments in companies doing business with Sudan." (PLANSPONSOR.com; free registration required)
New Report on Social Investing Suggests Positive Results
Excerpt: "The Asset Management Working Group of the United Nations Environment Programme Finance Initiative (UNEP FI) and Mercer LLC have recently issued a joint report suggesting that 'responsible investing' in companies based on environmental, social and governance (ESG) factors does not necessarily compromise investment performance, and may actually enhance it in some cases." (National Council on Teacher Retirement)
U.S. Senate Passes Sudan Divestment Bill
Excerpt: "Reuters reports the legislation permits U.S. state and local governments, as well as mutual funds and private pension funds, to divest their investments in companies involved in four Sudanese business sectors. The bill permits divestment from companies involved in Sudan's oil industry, mineral extraction, power production, and the production of military equipment.' (PLANSPONSOR.com; free registration required)
CalPERS, CalSTRS Are Teaming with 150 Business Leaders on Climate Change Issues
Excerpt: "California pension fund leaders are going international with their climate change campaign, joining 150 corporate executives from around the globe in demanding mandatory curbs on greenhouse gas emissions. The unprecedented call comes as international talks begin today in Indonesia to craft a new global climate change pact." (The Sacramento Bee)
Lawmakers Push Pension Clout for `Terror Free' Market
Excerpt: "Legislators from four different states have written the governors of the 50 U.S. states and 277 leaders of all the state legislatures suggesting divestment from companies doing business in Syria, Iran, North Korea and Sudan." (Bloomberg News)
Iran Divestiture Proposal Announced by NY State Comptroller
Excerpt: "New York State Comptroller Thomas P. DiNapoli last week announced a plan to divest state retirement funds from companies doing business in Iran.' (PLANSPONSOR.com; free registration required)
Texas Teacher Retirement System to Study Governor's Request to Sell Shares of Companies with Links to Iran
Excerpt: "Next year, the state's two largest public pension funds could start selling shares they hold in companies doing business in Sudan and Iran. Trustees of the $113 billion Teacher Retirement System said Friday that they would study Gov. Rick Perry's request to sell shares of companies with links to Iran." (The Austin American-Statesman)
Does 'Value Driven' Investing Mean Lower Returns? A Look at Socially Responsible Investing
Excerpt: "For most investors who have an interest in SRI, they are often willing to slightly underperform a benchmark for a period of time, if it allows them to keep their personal values aligned with the values of companies held by their portfolio." (Richmond.com)
Zelinsky on the Reality of ERISA Social Investing
Excerpt: "Ed Zelinsky (Cardozo) has a thoughtful and provocative piece on the issue of social investing in the pension context. Here's a snippet from the National Law Journal . . . ." (Workplace Prof Blog)
Study Touts CalPERS' Benefit to Economy
Excerpt: "Investments by the California Public Employees' Retirement System, the nation's largest public pension fund, spurred $15.1 billion in economic activity in California in 2006, creating more than 124,000 jobs, a new study found. The study, to be released today at a California pension fund conference in Los Angeles, found that the $247-billion fund created more economic activity last year than industries including machinery manufacturing, oil and gas extraction, and amusements, gambling and recreation." (Los Angeles Times)
The links shown above have been gathered from the web by the editors at BenefitsLink.com. Each article's publisher is shown above in parentheses. Opinions expressed in each article are those of the article's publisher, not necessarily those of BenefitsLink.com, Inc. or any web site that displays these headlines in a "frame." You should contact the listed publisher for copyright information about any particular article or to inquire into the right to use the article in any manner.