SEC Rulemaking and What It Means for Proxy Advisory Firms
- “The SEC recently announced proposed rules aimed at addressing the outsized influence of proxy advisory firms, restoring much-needed protections to the proxy voting process and those who bear the financial consequences of the decisions made throughout. The proposed rules stand to correct a number of issues related to proxy advisory firms that compromise the shareholder voting process, company performance, and financial returns on public pension investments.” Read the full report here.
CalSTRS Need to Focus More on Investment Performance, Less on Proxy Advisory Firms
- “CalSTRS’ management – by voting automatically with proxy advisory firms’ recommendations – is silencing the voice of everyday pensioners who are the main beneficiaries of the pension fund. Reforming this automatic voting status will create greater transparency for all CalSTRS pensioners.” Read more here.
LACERS Must Stand Up Against Divestment Pressure
- “As the new year begins, fiduciaries must remain vigilant against misguided abuse of our nation’s pensions. Those in charge of California’s retirees have a duty to manage the Los Angeles City Employees’ Retirement System (LACERS) with the sole objective of increasing returns. Forced divestment and politically-motivated financial decisions have been shown to compromise that outcome.” Read more here.
The Misguided Movement to Divest
- “The head of the world’s largest money manager should know that selling stock is an ineffective vehicle for change. Instead, it provides an opportunity for major oil and gas companies to buy back their stock. In the end, it’s the pension plan members who have committed a portion of every paycheck to funds that invest in these industries that wind up suffering.” Read more here.
Bucking the Trend to Rescue New Jersey’s Pension
- “As three of New York City’s five pension funds move to divest from fossil fuels, one state government in the neighborhood is bucking the trend to move away from corporations operating in the carbon-based fuel industry. Governor Phil Murphy of New Jersey has warned against the impulse to sever ties completely with industries or companies when one does not agree with their practices.” Read more here.
Fallout from COVID-19 Demonstrated Rose-Colored Perspective on Pension Returns
- “While an economic disruption of this magnitude may not have been on the radar of investors and public officials, it demonstrates the unrealistic optimism that states have held for pension fund returns on investment.” Read more here.
The SEC Is Right To Force More Transparency Into Proxy Voting
- IPFI President Christopher Burnham lends his support to the SEC’s efforts to codify overdue regulations limiting the influence of proxy advisory firms on the shareholder voting process. “The Securities and Exchange Commission is about to take an important first step in bringing accountability and transparency to the proxy voting world. For far too long pension funds have off-loaded their fiduciary duty to their beneficiaries to proxy advisory firms by outsourcing to them, the review of proxy proposals. These firms, in turn, then make recommendations to plan sponsors but without any oversight and very little transparency.” Read the article here.
ESG Versus Impact Investing
- “ESG is used around the world as a way to help both large and small companies increase shareholder value by good governance, being good stewards of the environment and taking care of their employees. ESG is not about forcing pension funds, or banks, to stop funding soda companies, coal companies, private prison companies, defense industry companies or anything else that offends politicians, activists, elitists or scared bank CEOs seeking to impose their supercilious arrogance over fiduciary responsibility.” Read the full article here.
What the SEC’s Proposed Rule Means for Investors
- IPFI Advisory Board member Chris Cummiskey details how investors can navigate the new SEC rules relating to proxy advisory firms. “As the SEC’s recently proposed rule S7-22-19 […] makes its way through the public comment period, investors must understand how this rule will bring long-overdue accountability to the proxy voting process, and what that means for bottom-line dollars.” Read the full article here.
In the coming months, IPFI will continue to assert its four core principles:
- Adherence to fiduciary responsibility
- Balanced economic, social and governance (ESG) factor investment
- Long term pension fund returns
- Data driven investment