April 2014 Newsletter
EIF Surpasses Another Milestone
I am pleased to share with you first a very important recent milestone for the AFL-CIO Equity Index Fund. Just a few days ago, the Fund surpassed $4.5 billion in commitments!
Only three years old, the Equity Index Fund is the fastest-growing fund in the AFL-CIO’s history.
This success is because of YOU. Union pension funds are moving their money and investing it back into the labor movement.
And already that money is being used to leverage shareholder activism and corporate governance reform through proxy voting.
The Fund votes in line with the AFL-CIO Proxy Voting Guidelines 100 percent of the time. The AFL-CIO Equity Index Fund uses this platform to successfully tackle corporate pay disclosure, golden parachutes, and excessive perks for executives.
We’re taking the power back into our own hands!
In addition, the AFL-CIO has helped develop one of the lowest known management fees of any index fund, and the AFL-CIO Equity Index Fund ranks in the top 10 percent in returns in the Lipper S&P 500 Index Fund Universe Rankings for the quarter, one, two, and three year periods.
If your union is not already investing in the Fund, please respond to this email!
We would love the opportunity to discuss it with you and/or your investment consultant.
Let’s continue investing in ourselves!
President & Managing Director
AFL-CIO Investment Trust Corporation
Brandon Rees is the Acting Director of the AFL-CIO Office of Investment
S&P 500 CEO Pay Is Now 331 Times Average Worker’s Pay
The AFL-CIO recently launched the 2014 edition of its Executive PayWatch website (www.paywatch.org) which draws attention to the nation’s widening income inequality. The gulf between what the typical chief executives of the nation’s largest companies receive and what rank-and-file workers earn is simply unconscionable.
In 2013, CEOs of the S&P 500 companies received, on average, $11.7 million, according to PayWatch. That compares with $35,239 for the typical rank-and-file worker. In other words, CEOs made 331 times what the typical worker earned in 2013, and 774 times more than those receiving the federal minimum wage.
As AFL-CIO President Richard L. Trumka said at the PayWatch launch, “CEOs make a ridiculous amount of money. The workers who create those corporate profits barely make enough to take care of the basics.”
This year’s PayWatch website highlights high-paid CEOs at low wage employers. For example, at Wal-Mart, former CEO Michael Duke received in $20.7 million in total compensation for fiscal 2013. Meanwhile, fewer than half of the hourly workers at the company earn less than $25,000 a year. Other companies profiled on PayWatch include Kellogg’s, Reynolds American, Darden Restaurants and T-Mobile.
Why does the pay gap at these and other companies matter?
“These companies are run by short-sighted business leaders. How are they short-sighted? Well, people who earn minimum wage can’t afford cell phones or dinner at Red Lobster or the Olive Garden, both of which are owned by Darden Restaurants,” President Trumka explained. CEOs of American companies are “cannibalizing their own consumer base,” he added.
This year, PayWatch highlights the AFL-CIO’s efforts to push for an increase in the federal minimum wage to $10.10 an hour for all workers, including those who survive on tips. Increasing the minimum wage would boost our economy.
Between 1979 and 2012, productivity increased 74.5 percent, while a typical worker received only a 5 percent raise in wages. If the federal minimum wage had kept pace with productivity growth, it would be $18.67 today instead of $7.25.
LIUNA Local 17
Laborers’ Local 17 (LIUNA) has more than 1,000 members who work in construction across Upstate New York, including in the Capital Region/Hudson Valley.
“The AFL-CIO Equity Index Fund is about investing our union dollars to leverage our collective assets in ways that support and advance the goals of all workers,” says Todd Diorio, Business Manager, Laborers’ Local 17.
Statewide, the New York State Laborers’ Union represents over 40,000 members employed in the construction industry and other fields. Members are organized into more than 36 local unions and five district councils.
Nationally, LIUNA has more than 800,000 members united through collective bargaining agreements that earn family-supporting pay, good benefits, and the opportunity for advancement and better lives. LIUNA members work in the construction trades, factories, hospitals, and many other workplaces.
Shepard Burr is President of ASB Investment Management division of ASB Capital Management, LLC.
The AFL-CIO Equity Index Fund recently celebrated its third anniversary. We would like to thank all of our investors for choosing the AFL-CIO Equity Index Fund, and we are pleased that the Fund’s returns have made such a positive contribution to the growth of participating pension plans’ assets. Specifically, the Fund’s three-year annualized return is 14.58 percent!
The AFL-CIO Equity Index Fund continues to provide equity market returns by closely tracking S&P 500 Index performance. We hope that the Fund will be a part of helping investors beat their actuarial return assumptions for many anniversaries to come.
What AFL-CIO State Federation Presidents are Saying About the AFL-CIO Equity Index Fund
“There’s too much power in the hands of too few in this country. But the AFL-CIO Equity Index Fund gives workers back some of that power by allowing us to invest in ourselves. Proxy voting and shareholder activism are some of the most important tools for the labor movement to use its pension dollars to help build a union economy.”
– Alan Hughes
“It’s important for us, as unions and union members, to realize the power we also have as investors by supporting vehicles like the AFL-CIO Family of Funds. We can have a big influence on what corporations do—and don’t do—through proxy voting and shareholder resolutions.”
– Brett Voorhies
– Mark MacKenzie
New Hampshire AFL-CIO
– Jon Hendry
New Mexico Federation of Labor, AFL-CIO
– Becky Moeller