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View More Press Releases by American Federation of State, County and Municipal Employees [AFSCME]

Press release:

AFSCME Releases Best Practices Guide for Pension Systems

Issued by: American Federation of State, County and Municipal Employees [AFSCME]

Date: Dec. 15, 2009

Report Serves as a Road Map to Protect Retirement Security

WASHINGTON, Dec. 15 -- The American Federation of State, County and Municipal Employees, AFL-CIO, today released a first of its kind report on pension plan governance. Enhancing Public Retiree Pension Plan Security: Best Practice Polices for Trustees and Pension Systems serves as a road map for improving pension plan governance.

"Our members' retirement security is directly tied to the investment performance of public pension systems," said AFSCME President Gerald W. McEntee. "Pension plans continue to be the best and most efficient way to deliver retirement security to public employees. Just as AFSCME has been a leader in promoting good corporate governance, our leadership in promoting effective governance of pension plans will ensure that they remain strong."

The AFSCME report proposes banning current and former pension trustees and staff from providing placement agent services at any system where they were previously employed. "When vendors gain access and have inside knowledge because of their placement agent's relationships within any given pension system, investment decisions are not made on purely fiduciary grounds," said McEntee. "This lifetime ban would protect the fiduciary integrity of the system."

The report reviews best practice policies and recommends policy language for pension systems to adopt with a focus on board member responsibilities, education, core competencies and ethical and fiduciary conduct. Additional recommendations, for best practice policies for pension systems to adopt, include prohibiting insider trading, requiring strict compliance with conflict of interest laws, limiting gifts, disclosing communications with prospective vendors, prohibiting pay-to-play political contributions and restricting the use of placement agent services.

AFSCME members and retirees participate in a public pension system with $1 trillion in assets. In 2007, state and local government retirement systems paid $162.7 billion in benefits to 7.5 million retirees and beneficiaries.

AFSCME has taken a leadership role in corporate reform and since 2005 has been leading the fight to make corporations more responsible and accountable. AFSCME commissioned Chris Waddell, of Olson Hagel & Fishburn LLP, to produce the report. Waddell previously served as General Counsel at the California State Teachers Retirement System and the San Diego City Employees Retirement System. Enhancing Public Retiree Pension Plan Security: Best Practice Polices for Trustees and Pension Systems is available on the AFSCME web site at www.afscme.org/pensions.

View More Press Releases by American Federation of State, County and Municipal Employees [AFSCME]

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