PRESS RELEASE: IPFI Urges Pittsburgh Pension Board to Stay Strong Against Politicization of Fund


July 1, 2019           

IPFI Urges Pittsburgh Pension Board to Stay Strong Against Politicization of Fund


As the Pittsburgh Comprehensive Municipal Pension Trust Fund faces calls to divest from gun manufacturers and other companies, board members should continue prioritizing the secure retirement of its retirees.

Arlington, VA – On the heels of Pittsburgh Mayor Bill Peduto submitting a plan to divest the Comprehensive Municipal Public Trust Fund (CMPTF) from gun and ammunition, fossil fuel, and private prison companies, Chairman of the Board Ralph Sicuro has reaffirmed the fund’s commitment to fiduciary responsibility. IPFI applauds and supports Chairman Sicuro’s courage in the face of those seeking to put politics before fiduciary responsibility.

Mayor Peduto outlined his intentions in a recent letter to the seven member board of the CMPTF, which holds $463 million to fund the retirement of the city’s teachers, firefighters, and employees. Some members of the board have already expressed deep concern over the mayor’s proposal. City Spokesman Tim McNulty stated that it is unclear how divestment would impact the fund’s performance. As a result, the board has convened an exploratory committee to determine the potential harm of divesting. Echoing this decision, Chairman Sicuro affirmed that the foremost goal of the fund was not activism, but instead, is adhering to fiduciary responsibility to grow the fund.

IPFI is committed to advocating for a secure future for all public pension funds, and commends the board’s efforts to maintain fiduciary responsibility. Mayor Peduto must recognize that the board exists as the steward for thousands of employees’ retirement and pensions. The city of Pittsburgh faces a net pension liability of $918.4 million. The board must consider the costs of divesting from value-adding assets, and understand the negative impact that this move would have on the pension fund performance.

What Mayor Peduto is pushing for is not classic environmental, social, and governance (ESG) investing; it is political investing plain and simple. ESG investing focuses on best practices and stewardship in all corporations, not just in those that are a political fad today. In doing so he is squarely putting politics, and his political career, ahead of the secure retirement of all current and retired public employees in Pittsburgh. Fiduciary responsibility always trumps politics.

IPFI President Christopher Burnham recently said, “Prioritizing a political agenda instead of fund performance is a breach of fiduciary responsibility and violates the special trust and confidence which hard-working pensioners have placed in their mayor.” He continued, “The board should strongly reject this plan, and continue prioritizing the primary objective of growing the fund for a secure retirement for all. Pittsburgh public servants and Pittsburgh taxpayers should insist that politics and political advancement should never come before fiduciary duty.”

For more on IPFI, proxy advisory firms, and other issues facing public pensions check out our website at A recording of the discussion is also available at


The Institute for Pension Fund Integrity seeks to ensure that local, state and federal leaders are held responsible for their choices in investment, led not by political ideation and opinion but instead by fiduciary responsibility. IPFI is a non-partisan, non-profit organization based out of Arlington, Virginia, and spearheaded by former Connecticut State Treasurer and former Undersecretary General of the United Nations, Christopher B. Burnham.

COMMENTARY: It’s Proxy Season And Here’s Why That Matters For Public Pensions

This op-ed originally appeared in Forbes on June 13, 2019.

This is the time of year when publicly traded companies host their annual shareholder meetings. During these meetings the shareholders vote their shares on various issues impacting the company. The company’s proxy statement will include shareholder resolutions on everything from executive pay to proposals that impact how the company operates. This is a critical part of keeping management focused on increasing shareholder value (i.e., growing the company).

This can be a complicated cycle for public pension plans that typically have thousands of issues to vote on for hundreds of companies. Most pension plans hire outside consultants to advise on how to vote the various issues confronting shareholders, and in some cases, public plans assign their vote directly to the proxy advisory firms.

I disagree with this for two reasons: first, proxy voting firms are not fiduciaries and are not required to be registered with the Financial Industry Regulatory Authority (FINRA); second, they are not managing the money—typically pension funds hire money managers to do that.

As Connecticut State Treasurer in 1995, I made sure that all our asset managers only collected fees when they out-performed their benchmark. That is the quintessential “alignment of interest”. The problem with proxy advisory firms is that they have no alignment of interest. They may make a recommendation of how to vote based on issues that have a political impact but not a shareholder value impact. No matter what—they still get paid their fee. A far better way would be to do what we did in Connecticut—let the money managers whom you have chosen based on a myriad of factors, including their performance, vote the proxy shares—and pay them their fees only when they outperform the benchmark. Now that is an incentive for money managers to force corporate managers to stay focused on strengthening and growing the company.

Politicians may argue that good politics makes for good shareholder value, but unfortunately, this is a violation of fiduciary responsibility. Make politics in the legislatures, but please leave our precious retirement funds free from your personal political opinion.

The two largest proxy advisory firms, ISS headquartered in Rockville, MD, and Glass Lewis, headquartered in San Francisco, CA, control 97% of the advisory market. Among other services, they develop proxy proposals, analyze proxy proposals, and provide clients with recommendations on how to vote all other proposals. These two companies recommend proxy proposals, provide suggestions to clients about how to vote on those proposals, and in some cases, vote their clients proxy. In other words, they have the ability to control the entire proxy process which has led them to have a duopoly on how institutional investors vote.

This concentrated power has prompted the SEC to take action and begin reviewing the current rules governing proxy firms. This started with a panel discussion in November, 2018 to hear from the various stakeholders that would be affected. Since then, and since the official comment period opened, the SEC has shared more than 250 unique comments on the issue of proxy advisory firms, with a majority in favor of reform.

But how should the SEC deal with this monopolistic concentration? First and foremost, those in charge of our public pension plans (which is not the SEC) should let money managers do their job—and managing money in my mind also means managing the proxy votes. Let those who manage your money also vote your shares in the best interest of all shareholders.

However, if plan sponsors want to continue to use third party firms, then these firms should be held to the same fiduciary standard to which money managers are held—and as a first step they should have to register with FINRA, and the SEC should assign fiduciary responsibility to them for their fiduciary advice.

Our public pensions funds are facing an almost unfathomable unfunded liability burden that will impact the retirement security of our teachers, firefighters, and public servants, including me, very shortly. Proxy advisory firms are making recommendations on decisions that impact company performance. They should be making those decisions in the best interest of improving returns and not based on the political whims of the day or upcoming elections. Applying fiduciary responsibility to proxy advisory firms would be an important first step.

COMMENTARY: State Pension Funds Shouldn’t be Captive to Politics

This op-ed originally appeared in The Buffalo News on June 09, 2019.

The politicization of pensions continues plaguing our state. In a misguided effort to fight climate change, State Sen. Liz Krueger introduced Senate bill 2126, the Fossil Fuel Divestment Act, earlier this year.

This prompted an open letter from New York Comptroller Thomas DiNapoli, urging Krueger to reconsider this legislation on the basis that it limits his fiduciary responsibility to manage the state pension funds for the sole interest of its beneficiaries. DiNapoli is right – and the Legislature shouldn’t limit his ability to do his job.

As a lifelong New Yorker and retired officer of the Fire Department of New York, I believe in empowering fiduciaries to make the best decisions for the funds without the influence of politics. By cutting investments that have generated more than $4 billion over the past decade, the Senate bill would force DiNapoli to abdicate his fiduciary responsibility, which stands independent of political and social opinions.

During an April 2019 hearing on the bill, New York State Common Retirement Fund’s interim chief investment officer, Anastasia Titarchuk, explained the benefits of the fund having a strong diversification strategy – which also includes $10 billion in its sustainable investment program. She called divestment a “blunt instrument that does not actually address the greatest [climate change] risks … ”

New York job opportunities will also suffer if the state divests. In 2018, the fossil fuel sector grew by 4.9% and is projected to grow another 3% in 2019. New York could see economic gains between $2.6 and $5 billion from liquefied natural gas exports alone.

Beyond divestment posing a threat to New York’s workforce and retirees, it hasn’t been proved that it fights climate change. An issue brief from the Institute for Pension Fund Integrity (for which I am an advisory board member) explores this topic, showing that divestment doesn’t necessarily force a company to change its actions.

Pension funds have begun to realize that the costs of divestment are not worth the political statement. Recently, New York City police and fire pension funds opted against participating in Mayor Bill de Blasio and City Comptroller Scott Stringer’s divestment plans. And CalPERS voted to oppose legislation which would require divestment from private prison companies.

New York must recognize the futility of divestment and its ineffectiveness for urging change. It only hurts retirees and local economies. Fellow pensioners, retirees and taxpayers must demand separation between political opinions and public pension management. Politicians should not jeopardize our hard-earned retirement and a healthy economy because of a political agenda.

Richard Brower is a former vice chairman of the New York City Fire Department’s Pension Fund.

Be a faithful fiduciary — keep politics out of your decisions when investing other people’s money

This recent op-ed originally appeared in The Washington Examiner on May 21, 2019.

Amid growing calls for divestment from several industries, Milton Friedman’s view on the role of business in politics bears repeating. Friedman explained that corporate executives are agents of the companies to which they are employed, acting on behalf of the company’s owners and tasked with the responsibility of increasing earnings.

Whereas principal actors make decisions about how to spend their own time or money, agents are entrusted with the resources of others. As an agent, executives accept a fiduciary responsibility to the company’s shareholders. Directing investments strategically in an effort to enforce or oppose a political agenda distorts what should be a data-driven decision geared towards maximizing returns.

Furthermore, politically motivated investments erode the integrity of our democratic system by utilizing private entities to carry out processes that traditionally have to earn popular support through the legislative system.

We are seeing a worrying trend of fiduciaries giving in to activist pressure instead of prioritizing fiduciary responsibility. For example, vocal opponents of current immigration policies, which are not new to this administration, have advocated for divestment from private prison companies. This is regardless of the fact that private companies don’t dictate public policy. The California Public Employees’ Retirement System (CalPERS) felt this pressure as it faced a pending bill to divest its holdings from these companies, which total over $10 million in stocks. The transaction costs alone associated with such a move would reach an estimated $175,000.

Breaking from its public pension peers like the California State Teachers Retirement System (CalSTRS) and the New York City Employees’ Retirement System, CalPERS recently voted to oppose the pending bill which would mandate divestment. CalPERS’ decision to uphold its fiduciary responsibility to its plan members, the millions of retirees who have contributed to the fund to guarantee a stable income after dedicating their careers to public service, reminds us what’s at stake.

The private sector should follow CalPERS’ lead and prioritize its fiduciary responsibility over that of political expediency.

In a statement, JPMorgan spokesman Andrew Gray attributed the decision to no longer provide credit to private prisons to “a robust and well established process to evaluate the sectors that we serve.” Nonetheless, the pivot cannot be disentangled from the enormous political pressure that the company faced.

Following this decision, Senate Banking Committee Chairman Mike Crapo sent a letter to the CEOs of eight of the largest banks, stating that they “should not seek to replace legislators and policymakers.” Instead, these executives must focus on the vital role that banks serve in strengthening the economy and creating jobs. Hence, lending decisions ought to be based on creditworthiness, not politics. When politics become a factor in lending, banks run the risk of punishing companies that operate in full compliance with state and federal law while also providing necessary services.

Beyond the authoritarian implications of weaponizing private asset management dealings against politically disfavored industries, the decision to divest from companies with reliable returns harms both the shareholders as well as the local economies that are enriched through employment opportunities.

But the question now is where does it stop? In a subsequent House Financial Services Committee hearing, JPMorgan received criticism for lending to the gun industry. For public pensions, it started with calls to divest from tobacco in the ‘90s; today, it’s everything from fossil fuels to gun manufacturers. Considering the negative health effects of sugar, will soda companies be next?

Friedman’s championing of fiduciary responsibility doesn’t need to be at odds with social justice values. In keeping politics out of investment strategy, fund managers help facilitate economic growth that benefits communities across the socioeconomic spectrum. While it is prudent to mitigate perceived reputational risks, investors cannot allow the political causes of the day to compromise their fiduciary responsibility to secure long-term returns. This is true across the public sector, but we must also remind our private sector counterparts that adhering to their fiduciary responsibility is not an option, it’s an obligation.

Ken Blackwell is a board member of the Institute for Pension Fund Integrity and a senior fellow at the Family Research Council. He is the former Ohio State Treasurer from 1994-1999 and is a former member of the Board of Directors of Fifth-Third Bank and the Fifth-Third Bank holding company.

PRESS RELEASE: Pension Funds Should Not be Used as Leverage for Social Movements


May 8, 2019           

Pension Funds Should Not be Used as Leverage for Social Movements


The Institute for Pension Fund Integrity hosted a morning breakfast discussion on public pensions, proxy advisory firms, and the ESG investing with all participants ultimately agreeing that “pension funds should not be used as leverage for social movements.”

WASHINGTON, D.C. – This morning at the National Press Club, a panel of experts joined the Institute for Pension Fund Integrity (IPFI) to discuss the relationship between public pensions, proxy advisory firms, and Environmental, Social, and Governance (ESG) principles. The rise in ESG investing and popular scrutiny around what types of industries public pensions profit from has sparked much debate. The tendency of proxy advisory firms to favor proposals with strong ESG components despite their pattern for lower returns raises concerns. IPFI welcomed Congressman Sean Duffy (R-WI-8) as keynote speaker and a panel of experts including Jason Perez (CalPERS), Jeff Mahoney (Council of Institutional Investors), and Dr. Wayne Winegarden (Pacific Research Institute).

Setting the scene, IPFI President Christopher Burnham emphasized the need for a strict adherence to fiduciary responsibility for all investors and those providing investment advice, including proxy advisory firms. Underfunded public pensions cannot afford to sacrifice potential earnings in favor of advancing a political agenda, and the proxy advisory firms that public pensions rely on for proxy voting guidance are actively pushing factors that may ultimately harm company performance, and therefore returns.

Congressman Sean Duffy was then welcomed to the podium to frame the issue from a legislative standpoint. Rep. Duffy had previously sponsored the Corporate Governance Reform and Transparency Act and has been engaging in a bipartisan effort to pass this bill. This legislation, while not as interesting as healthcare or tax reform, is necessary to “bring about more responsibility, accountability and transparency for proxy advisory firms,” said the Congressman.

The panel discussion then followed, discussing everything from the impact of ESG investing to the role of proxy advisory firms. When asked the impact of divestment movements in California, California Public Employees’ Retirement System (CalPERS) board member Jason Perez cited external influences as the primary driving force for divestment from companies with proven substantial returns. He asserted that “public pensions should not be a lever” to further social movements, which all panelists strongly agreed with.

While there was some disagreement regarding the question of applying fiduciary responsibility to proxy advisory firms, the panelists agreed that greater disclosures and transparency would benefit all parties involved. Dr. Wayne Winegarden, Senior Fellow in Business and Economics at the Pacific Research Institute, also argued that it might not be necessary to always vote the proxy, which would be a stark change from today’s understanding of SEC guidelines. This was just one of the lively discussion topics that the panelists covered with all panelists presenting unique view points.

For more on IPFI, proxy advisory firms, and other issues facing public pensions, check out our website at A recording of the discussion is also available at


The Institute for Pension Fund Integrity seeks to ensure that local, state and federal leaders are held responsible for their choices in investment, led not by political ideation and opinion but instead by fiduciary responsibility. IPFI is a non-partisan, non-profit organization based out of Arlington, Virginia, and spearheaded by former Connecticut State Treasurer and former Undersecretary General of the United Nations, Christopher B. Burnham.

Public Pensions, Proxy Advisory Firms, And ESG Investing: Join IPFI for a breakfast discussion – May 8, 2019

You’re invited! Join IPFI for a breakfast discussion on Wednesday, May 8, 2019 at 8:15 am. RSVP Required.

America’s public pensions are faced with increasing pressure from outside stakeholders to influence their investment strategies. This pressure includes everything from urging pensions to divest from various holdings, to the outsized influence that proxy advisory firms leverage to push environment, social and governance (ESG) initiatives. Join experts from across the public, academic, and nonprofit sectors to discuss these issues and the latest in public pension policy.

Featured Speakers:

  • Congressman Sean Duffy – Sponsor of the Corporate Governance Reform and Transparency Act
  • Jason Perez – CalPERS Board Member
  • Dr. Wayne Winegarden – Sr. Fellow in Business & Economics, Pacific Research Institute
  • Christopher Burnham – Former Connecticut State Treasurer, IPFI President

Wednesday, May 8, 2019, 8:15 am – 10:15 am

National Press Club – First Amendment Lounge

529 14th St NW, Washington, DC 20045


Please RSVP by Friday, May 3, 2019 to Molly Hall at [email protected] or 202-210-9955


A recording of this event is available here:

IPFI Issue Brief: ESG and the Proxy Process – What Does the Research Say?

With environmental, social, and governance (ESG) investing on the rise and calls for public pensions to divest from fossil fuels, private prisons, gun manufacturers, and others, IPFI compiled the latest research to determine the efficacy of ESG investing for public pensions.

Public pensions across the country are facing almost $6 trillion in unfunded liabilities. Any strategy that adds value to pension fund investments is worth examining. However, if the strategy doesn’t produce stronger returns, it should be dropped. In fact, evidence shows that ESG funds fall short of traditional fund performance, prioritizing ethical, social, or even political concerns ahead of optimizing returns for investors.

Beyond the challenges of ESG investing, the issue brief details the role that proxy advisory firms are now playing in the ESG investment ecosystem, which is relevant especially in light of the Securities and Exchange Commission’s review of the proxy process. The issue brief summarizes four key points:

  • Years of experience show ESG funds fall short
  • Frictional costs and values screens limit fund performance
  • Exclusions and divestments are particularly harmful to returns
  • The role of proxy advisors in the ESG ecosystem deserves scrutiny

Read the full Issue Brief: ESG and the Proxy Process – What Does The Research Say

IPFI Opposes NY Fossil Fuel Divestment Act

Institute for Pension Fund Integrity Opposes New York Senate Bill 2126, the Fossil Fuel Divestment Act


The Institute for Pension Fund Integrity has authored a letter of opposition to New York State Senator Liz Krueger and New York Assembly Assistant Speaker Felix Ortiz to express the organization’s position against the proposed Fossil Fuel Divestment Act. IPFI’s opposition supports New York Comptroller Thomas DiNapoli who, in an unprecedented action, sent a letter to the legislature opposing the proposed divestment. IPFI stands firmly against politically motivated divestment, and urges public pension funds to adhere strictly to their fiduciary responsibility to maximize returns for plan beneficiaries.

Read the full letter here.

Download: IPFI Opposes NY Fossil Fuel Divestment Act


CalPERS Chooses Prudent Management Over Politics Earning Praise From Pension Warriors


March 19, 2019

CalPERS Chooses Prudent Management Over Politics Earning Praise From Pension Warriors

During the monthly CalPERS Investment Committee meeting, the board members voted to support the staff recommendation to oppose AB 33, which would require the divestment of funds from private prisons.  

WASHINGTON, D.C. – In part driven by one of the newest board members Jason Perez, the California Public Employees’ Retirement System (CalPERS) voted to oppose pending state legislation to require the divestment of funds from private prison companies. The Institute for Pension Fund Integrity (IPFI) stands with Perez and his fellow board members, commending them for choosing prudent management of the fund over following political whims.

CalPERS yesterday chose to focus on its fiduciary responsibility to “make money” for the millions of retirees who have earned a secure retirement after dedicating their lives to public service. Beyond the estimated $175,000 in transaction costs associated with a potential divestment, the proposed divestment would negatively impact the fund’s investment strategy, exposing the fund to unnecessary risk and reducing returns.

The Institute for Pension Fund Integrity firmly believes that politically-motivated divestment does not belong in the management of our public pensions. Beyond the financial repercussion to the funds, divestment as a means of creating change is ineffective. For instance, advocates in favor of divesting from private prisons want to do so in opposition to current immigration policy. However, private companies don’t set the public policy that that has determined today’s immigration strategies. Divestment advocates are directly infusing politics into the financial management of one of the country’s largest public retirement funds. Therefore, IPFI supports the decision by CalPERS to prioritize fiduciary responsibility, and to oppose allowing politics into the management of the fund.

IPFI President Christopher Burnham reacted to the vote saying, “It’s clear that new board member Jason Perez is bringing a much-needed focus on fiduciary responsibility to CalPERS, and that the board is moving in the right direction.” He continued, “the politically motivated divestment movement across the country has proven to hurt pension performance and funding levels. This threatens all current employees, and retirees such as me.”

IPFI supports CalPERS for choosing to oppose California Assembly Bill 33 to mandate the ineffective and costly divestment from private prisons.

For more on IPFI, divestment, and other issues facing public pensions, check out our website at


The Institute for Pension Fund Integrity seeks to ensure that local, state and federal leaders are held responsible for their choices in investment, led not by political ideation and opinion but instead by fiduciary responsibility. IPFI is a non-partisan, non-profit organization based out of Arlington, Virginia, and spearheaded by former Connecticut State Treasurer Christopher B. Burnham.

IPFI Applauds CalPERS for Choosing Fiduciary Responsibility Over Political Pressure


March, 14, 2019

IPFI Applauds CalPERS for Choosing Fiduciary Responsibility Over Political Pressure

Instead of caving to fringe political movements, IPFI commends CalPERS for prioritizing its members and opposing legislation forcing it to divest from private prison companies.

WASHINGTON, D.C. – As California faces the possibility of another forced divestment, the Institute for Pension Fund Integrity (IPFI) supports California Public Employees’ Retirement System (CalPERS) for prioritizing California’s public retirees and focusing on their fiduciary responsibility. CalPERS’s opposition to California bill AB 33, introduced by State Assemblyman Rob Bonta (D-Alameda), comes ahead of the March 18 investment committee meeting. AB 33 would require CalPERS to divest stocks or bonds in private prison companies on or before July 1, 2020, despite the stable and profitable returns those investments provide.

In agenda materials released ahead of the investment committee meeting next week, CalPERS argues against any divestment from private prison companies for two primary reasons. The first, is that their “primary duty and obligation” is to their members, and that divestment would result in worse investment performance by compromising current strategies and incurring unnecessary transaction costs. The second reason that CalPERS explains is that divestment rarely achieves the political or social agendas it tries to address. This further highlights that the divestment would be purely political, inherently harming the retirees who depend on CalPERS to provide the retirement they have worked so hard for. IPFI is in full agreement with CalPERS and urges other public pension funds to continue prioritizing their fiduciary responsibility over political movements.

Beyond the principles opposing divestment, there are real costs associated with the potential requirement. CalPERS estimates that if it sold the private prison companies’ stock, it would lose $175,000. This would be on top of the 0.7% loss already incurred based on other divestments like from tobacco or thermal coal companies. “CalPERS simply cannot gamble away the money of its retirees based on political preference,” said IPFI President Christopher Burnham. He continued, saying “As financial professionals, we hold no higher responsibility than that of our fiduciary duty, and CalPERS is making the right decision to oppose the mandatory divestment, and I congratulate them.”

As the fight for fiduciary responsibility continues, California public retirees have a strong leader in CalPERS Chief Investment Officer Ben Meng. Unlike his counterparts at CalSTRS, who voted in November to divest from private prisons, Meng has steadfastly prioritized the fiscal health of the fund over political whims. IPFI stands with Meng as he continues this pattern of leadership at the March 18 investment committee meeting. IPFI supports CalPERS for choosing its fiduciary responsibility over politics.

For more on IPFI’s positions regarding divestment and fiduciary responsibility, see IPFI’s latest research available on and follow us on twitter @SecurePensions