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The Pensions and Capital Stewardship Project was established to educate and inform workers, scholars, researchers, and practitioners on issues of retirement security, including employment-based retirement plans, and of pension fund governance, management, investment, and related matters.
Controversies over the future of Social Security, challenges to public and private sector defined benefit plans and the rise of defined contribution and other private-account based schemes are evidence of serious and pressing concerns about the ability of households to sustain themselves through the transition to retirement and beyond. These concerns about the adequacy of income are exacerbated by ones relating to the cost of health benefits and the expense of care and support, especially long term care during retirement. For these reasons, the Pensions and Capital Stewardship Project is focuses its work not only on challenges to retirement security for those who already enjoy some measure of it through existing schemes but also to ways in which such security can be extended to and enhanced for more households in America.
Pension stewardship and the choices made by those responsible for overseeing trillions of dollars in retirement plan assets are of tremendous significance for active and retired plan participants’ ability to enjoy sufficient retirement income. These choices also have profound implications for internal corporate stakeholders including workers, shareowners, and management as well as the larger community that is affected by employment trends, economic development and growth, the environment, worker and human rights, and social services. The Project’s work on pension plans focuses on institutions, systems, and practices of pension fund investment that encourage capital markets and corporate policies to work more effectively for workers and the health and well-being of the community at large.
The Pensions and Capital Stewardship Project is unique in that it has gained the interest of and financial support from diverse players in the pension community including unions, pension fund investment managers and consultants. In all of its work, the Project will be able to draw upon international experience with similar issues. The Project has established relationships with scholars, union leaders, trustees, and others active on these matters in across the world. Most recently, the Project has been collaborating with the European Trade Union Institute and Trade Union Advisory Committee to the OECD to convene what is hope to be first of a series of Capital Matters in Europe conferences..
In spring 2009, the Project held the seventh annual Capital Matters: Managing Labor's Capital conference. The success of previous conferences, organized by the LWP, and attendees’ enthusiasm for the creation of a long-term program to spur research, education, and engagement on the kinds of issues discussed were the reasons for the LWP establishing the Project. The 2009 conference brought together public and Taft-Hartley pension trustees, labor leaders, members of the pension investment community, legal experts, scholars, researchers, and others. for a cross-Atlantic perspective on the financial crisis and labor’s response to it; a critical review of efforts at financial markets reform in light of that crisis; a consideration the Securities Exchange Commission’s agenda for action under the new administration; an evaluation and comparison of how well pension funds and mutual funds have acted as owners; a contrast of experience with infrastructure finance in the UK and the US and its relation to pension fund investment in infrastructure; a review of efforts to formulate broad and meaningful policy proposals for retirement security; and the nature and impact of litigation in response to the financial meltdown.. The eighth annual conference will take place on April 21-23, 2010.
The Project convened working meetings in February and March 2007 which focused on private equity investment for market-based returns and labor friendly outcomes and collaboration among labor, pension, SRI, faith-based, foundation, and other shareholder activists, respectively. The Project co-sponsored with the Building and Construction Trades Department of the AFL-CIO on “Investment in Infrastructure and the Pension Fund Role in It” on February 2009. As the first step in a major initiative on the subject, the Project convened a meeting on “Long-term Investment Decisions: Assessing the Sustainability Risks of Labor and Human Rights and other Workplace Factors” in March 2009. Starting in 2007, in partnership with the National Conference on Public Employee Retirement Systems, the Project offered the first seminar in its Program of Advanced Trustee Studies for a group composed primarily of experienced public sector trustees. The next program is scheduled for July 26-28, 2010. One set of sessions will look at investment strategies in relation to modern portfolio theory and its critics/limits, anticipating and taking account of investment risk, and informed and accountable investment decision-making more generally.
In April 2008, the Project commenced publication of papers (“Capital Matters: Occasional Papers) on a variety of issues ranging from incorporating workplace/labor and human rights factors in investment decisions to pension fund investment in infrastructure to efforts at pre-funding of health benefit costs.
In October 2007, the Project published the first issue of a quarterly newsletter the aim of which was to share information and insights on issues of retirement security and capital stewardship drawn from the Project’s own work, as well as scholarly and other research and activities on those issues. The timing and format of the publication will be changed so that issues of “Capital Matters: Occasional Notes” will commence shortly.
The Pensions and Capital Stewardship Project is engaging in research – and related convenings – on a number of topics. They include: a critical review of fiduciary responsibility for public as well as private pension fund trustees and other aspects of pension fund activity; an analysis of the relationship between pension fund governance and management and a variety of incomes, including investment returns; continued work on incorporating workplace/labor and human rights issues in investment decisions; and a critical review of recent and proposed policy changes to increase retirement security in the United States, especially for households solely or predominantly reliant on Social Security.