It's been two months since the AFT's Center for Workers' Benefits and Capital Strategies spearheaded the release of the report, "Ranking Asset Managers: A Retirement Security Report on Money Managers for Trustees," and it has made an impact on the investment community. The groundbreaking report calls out money managers who have been profiting from work with public pension funds but acting behind the scenes to undercut AFT members' long-term interests—managers who bankroll and serve on the board of organizations like StudentsFirst, the Manhattan Institute and the Show Me Institute.
To date, two big interests with ties to investments, Dimensional Fund Advisors (DFA) and Court Square Capital Partners, severed ties to the groups named above. Court Square's managing partner, Thomas McWilliams, resigned from the board of trustees of the Manhattan Institute, and DFA removed co-founder Rex Sinquefield from its board after his ties to the Show Me Institute were revealed.
"Other firms are in the process of demonstrating support for retirement security" and following the lead of Court Square and DFA, says Dan Pedrotty, co-director of the AFT's Center for Workers' Benefits and Capital Strategies.
Along with providing transparency and disclosure to trustees, the center is shaping the AFT's proactive voice in the capital markets. It supported AFT's leadership in a coalition of unions and pension funds that partnered with former president Bill Clinton and his Clinton Global Initiative to finance construction and repair of public infrastructure, including an energy-efficient retrofitting of AFL-CIO headquarters.
"Harnessing the strength of the pension funds of teachers, nurses, firefighters and other workers to rebuild our roads, schools, and bridges and create the infrastructure America needs is not just a financially sound investment—it creates jobs, accelerates our economic growth and invests in the future of our nation," says AFT president Randi Weingarten, who also chairs the AFL-CIO investment committee.
The center provided support when the Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF) adopted a new union-friendly Responsible Contractor Policy dealing with its real estate investments. It's a trend that bodes well for AFT members across the board, and one that the union and AFT pension fund trustees are poised to lead, says Pedrotty.
AFT trustees "are standing up and holding Wall Street accountable" for managing money responsibly and in ways that promote long-term growth and the interests of members, the center's director says. "We're here to support and work with trustees and pension funds."