Fighting for Responsible Capital Stewardship to Benefit American Workers

WHEREAS, the staff and trustees of our pension funds uphold their fiduciary duties when they make decisions solely in the interests of participants and beneficiaries, with the care, skill and diligence that a prudent expert would use; and

WHEREAS, investment decisions that undermine the long-term interests of our benefit plans and our members as plan participants may conflict with these duties, which could include plans’ and participants’ interests in the health of the public sector workforce, the integrity of contributing employers and the systemic stability of the financial system in which members’ pension fund assets are invested; and

WHEREAS, history shows that the harms of financial crises are most deeply felt by working people and retirees, through pension fund losses, benefit cuts, job losses and reduced public services, rather than by the individuals and financial institutions whose actions contributed to the crisis; and

WHEREAS, the International Monetary Fund, the European Central Bank, the Federal Reserve, Moody’s and the World Bank have identified numerous recent indicators of a growing risk of financial crisis and/or recession, which constitute material risks that fiduciaries must assess, including:

• Consumer credit reaching 2008-era stress levels, with credit card delinquencies escalating and households funding consumption through debt; and
• The stalling U.S. labor market, with “zero net job creation in the private sector,”¹ according to former Federal Reserve Chair Jerome Powell; and
• An AI investment bubble in equity markets, which could produce a stock market crash; and
• The threat of labor market instability if AI use triggers widespread layoffs;² and
• The rapid growth of the unregulated private credit sector, its integration within the banking system and its funding from insurance companies and workers’ pension funds, which have led some economists to call it a probable “locus of contagion” in a future crisis; and
• Political attacks on Federal Reserve independence, which make it more difficult for regulators to address these risks; and
• Trump administration policies in areas ranging from tariffs to conflicts with allies and aggressive wars in economically critical regions, which are threatening global economic stability and investor confidence in the dollar; and 

WHEREAS, the labor movement pushed for a post-2008 global financial crisis regulatory framework and protections to prevent systemic financial crises, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Consumer Financial Protection Bureau and the Financial Stability Oversight Council; and

WHEREAS, the Trump administration has been rolling back those very protections, effectively choosing to amplify these systemic risks, which without oversight accumulate invisibly until they can no longer be managed; and

WHEREAS, pension fund assets are working people’s deferred wages, and are the single largest source of capital for the private equity industry, despite its pattern of anti-worker conduct, including tolerating child labor, attacking freedom of association and often loading portfolio companies with debt leading to bankruptcies, all documented in the AFT’s “Managing Labor Risks in Private Equity” report; and

WHEREAS, public pension fund investments have too often been used to finance the privatization of the very same public sector jobs that generate pension contributions via private contracting, which weakens employer contribution bases and undermines the long-term solvency of pension funds; and

WHEREAS, several pension funds have adopted responsible workforce management policies, demonstrating that this approach is legally defensible, practical and consistent with fiduciary duty; and

WHEREAS, investments that fund union-busting, job destruction and public sector privatization directly weaken the economic security of working people and the retirement security of AFT members; and

WHEREAS, pension plan fiduciaries have many choices when they allocate workers’ capital, and when choosing among investment alternatives of equal economic value, they are never obligated to allocate to investment managers that are indifferent or hostile to the long-term economic well-being of plan participants when there are alternative choices with comparable investment characteristics:

RESOLVED, that the AFT will work with the fiduciaries of our members’ capital and promote these as key tenets of the AFT Capital Stewardship Framework: 

1. Pension Funds Should Not Finance Their Own Destruction. Our funds should not knowingly invest in entities whose business model privatizes public sector jobs, extracts short-term profit from portfolio companies at the expense of long-term value, cuts pension obligations in bankruptcy or opposes workers’ rights to organize and bargain collectively; and
2. Asset Manager Conduct, Including Policy Conduct, Is Material. Asset managers who use firm-derived wealth, authority and resources to shape public policy to harm their client pension funds and their beneficiaries, to harm working people more broadly or to advance their own interests at the expense of plan beneficiaries’ interests are engaged in conduct that is material to a fiduciary’s analysis; and
3. Beneficiary and Benefit Plan Interests are Central to Fiduciary Decision‑Making. These interests include economic and financial stability, job security, the health of other components of retirement security, including Social Security and Medicare, wages, bargaining rights and the health of the public sector workforce; and

RESOLVED, that the AFT will publicize the actors, actions and inactions in the capital markets that threaten the long-term health and stability of our pensions and the economy and hold accountable those who are responsible for future recessions/crises; and

RESOLVED, that the AFT will encourage trustees to carefully assess the long-term risk-adjusted performance of asset managers whose actions harm or attack working people, and where possible avoid allocating workers’ capital to such managers.

Adopted July 19, 2026

1 https://www.cbsnews.com/news/fed-rate-decision-jerome-powell-uncertainty-iran-war/

2 https://www.wsj.com/economy/jobs/white-collar-jobs-ai-324b749c