AFL-CIO Equity Index Fund Reaches Financial Milestone

$4 Billion in Pension Plan Commitments to the Fund


(Los Angeles, Sept. 9, 2013) – The AFL-CIO Equity Index Fund, a collective investment fund available to qualified pension plans, today announced it has grown to more than $4 billion in investment commitments by union, Taft-Hartley and public employee pension plans since its inception in 2011.

AFL-CIO President Richard Trumka
AFL-CIO President Richard Trumka

“The AFL-CIO Equity Index Fund reaching $4 billion is a great accomplishment. It shows that the pension plans of union workers have a strong interest in pooling their investment dollars and demonstrates their belief in the power of shareholder activism,” said Richard Trumka, President of the AFL-CIO.

The AFL-CIO Equity Index Fund provides a low cost investing strategy with an annual investment management fee of just 1.5 basis points (0.015%). The objective of the Fund is to track the returns of the U.S. large cap equity market as represented by the S&P 500 Index, resulting in low fees and expenses.

The AFL-CIO Equity Index Fund promotes good corporate governance through proxy voting and shareholder activism. Unlike many competing index fund products, the Fund votes entirely in line with the AFL-CIO Proxy Voting Guidelines, as does ASB Capital Management which manages the Fund.

“The AFL-CIO Equity Index Fund is a powerful opportunity for pension plans to reduce investment costs while promoting good corporate governance through proxy voting and responsible capital stewardship,” said Michael Stotz, President of the AFL-CIO Investment Trust Corporation. “The growth shows that the labor movement is willing to literally invest in its values.”

In 2013, the AFL-CIO Equity Index Fund submitted shareholder proposals to reform executive compensation practices and to establish independent chairs of corporate boards. After filing these proposals, the Fund successfully negotiated changes in executive compensation practices at Citigroup and Chesapeake Energy, and Pitney Bowes established an independent board chair.

Overall, CEOs of S&P 500 Index companies made 354 times the average wages of rank-and-file workers in 2012. The Wall Street Journal commented on the Fund’s activism that “changes pushed by activist investors are helping tie management compensation more closely to corporate performance, and eliminating several practices that critics have seen as excessive or unfair.” (“Longstanding Pay Practices Under Attack by Activists,” March 20, 2013.)

The Fund has shown strong performance by tracking the S&P 500 Index closely, and beat the Lipper S&P 500 Index Fund Universe average return by 60 basis points in the 12-month period ending 6/30/13. The Fund ranks in the top 15 percent in returns in the Lipper S&P 500 Index Fund Universe Rankings.

The AFL-CIO Equity Index Fund is one of several pension investment vehicles licensed by the AFL-CIO. Other AFL-CIO licensed investment programs include the AFL-CIO Building Investment Trust and the AFL-CIO Housing Investment Trust.  The AFL-CIO Building Investment Trust is an open-ended, commingled core real estate fund. The AFL-CIO Housing Investment Trust is a fixed-income investment fund that is registered with the Securities and Exchange Commission.

Contact: Josh Goldstien (202) 251-7438