WHEREAS:
The assets of state and local government pension plans, which approximate $800 billion, represent the deferred wages and future financial security of public employees; and
WHEREAS:
Federal laws and regulations applicable to public pension funds require that assets of such funds be used for the exclusive benefit of participants, and that pension fund trustees have the duty of undivided loyalty to the participants; and
WHEREAS:
Public pension funds too frequently ignore the interests of public employees in making investment decisions. In fact, some public pension funds have been among the most aggressive investors in leveraged takeovers, many of which caused extensive layoffs, disrupted communities, and eroded the tax base; and
WHEREAS:
Pension funds have too frequently invested large amounts of capital in the stocks and bonds of corporations doing business in South Africa and have thus unwittingly contributed to financially bolstering its racist regime; and
WHEREAS:
Investments of state and local government pension funds have often been used to help finance corporate mergers, acquisitions, hostile takeovers, and junk-bond leveraged buy-outs, which often result in the loss of jobs and a shrinking tax base. These shortsighted investment decisions are not necessarily in the long-term interest of the participants; they may routinely made by fund managers over whom pension plan members have little or no control; and
WHEREAS:
Public pension funds managers often ignore the interest of public employees in exercising shareholder rights. Many fund managers fail to vote at annual and special shareholder meetings altogether while others oppose measures important to labor interests, such as improved workplace conditions and economic security; and
WHEREAS:
Individual states and compacts of states have begun to develop public pension fund investment programs for the purpose of promoting the economic growth of the state and its citizens; and
WHEREAS:
Pension funds can promote economic development by actively searching for worthwhile projects passed over by traditional investors. Investing in such projects is sometimes referred to as “economically targeted investments.”
THEREFORE BE IT RESOLVED:
AFSCME reaffirms its position that the assets of public pension funds represent the deferred wages and future economic security of plan participants, and as such, belong to the plan participants and should be used for the exclusive benefit of the plan participants. Within this framework, we believe there is considerable latitude for plan investments that contribute to the economic health and vitality a of state or local government and its citizens and meet other laudable policy objectives. Also, within this framework, we believe such funds should not be used to finance unproductive merger and takeover activities, especially those which result in loss of jobs and undermine local communities; and
BE IT FURTHER RESOLVED:
That AFSCME reaffirm its longstanding position that pension funds should not be used, in any way, to financially bolster the racist regime in South Africa. All pension plans should develop and implement a plan to divest themselves of the stocks and bonds of companies doing business in South Africa; and
BE IT FURTHER RESOLVED:
That AFSCME will promote the establishment and growth of such investment opportunities by the following methods:
BE IT FURTHER RESOLVED:
Public pension plans should participate in the ownership and governance of corporations through the active exercise of their shareholders rights, including the voting of proxies; and
BE IT FINALLY RESOLVED:
That the International shall render assistance to councils and unaffiliated locals that wish to promote the establishment of a statewide program similar to the proposed federal program.
SUBMITTED BY:
International Executive Board