Our Collective Strength

October 2014 Newsletter

 The Power of Solidarity

Mike StotzAt a recent AFL-CIO Investment Trust Corporation reception in Boston, AFL-CIO President Trumka sent a clear message to the attendees:

“Now, more than ever, we need to pool our collective strength so that our money is working for us rather than against us. We are always stronger when we work together.”

That is what the AFL-CIO Equity Index Fund is all about, and I am thrilled to see the labor movement really taking the theme of “investing in ourselves” to heart and putting union pension dollars in funds that work for us, rather than against us.

That is what the AFL-CIO Equity Index Fund is all about!

In Solidarity,

mike sig

 

 

Mike Stotz
President
AFL-CIO Investment Trust Corporation (ITC)

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Heather’s Corner: 

Heather Slavkin Corzo is Director of the AFL-CIO Office of Investment

It’s time for public companies to disclose the ratio of CEO-to-worker pay

heather slavin resizedIn 2013, the CEO-to-worker pay ratio was 331:1 according to the AFL-CIO’s Executive Paywatch.  To address this problem, Congress mandated that public companies disclose the ratio of CEO-to-worker pay as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In order for the mandate to go into effect, however, the Securities and Exchange Commission has to finalize a rule implementing it.The SEC proposed a rule last October and, earlier in the year, predicted that the rule would be finalized this month. It now seems unlikely that the SEC will meet its self-imposed deadline. The AFL-CIO and the AFL-CIO Equity Index Fund have supported the proposed rule in letters to the SEC.CEO-to-worker pay ratio disclosure will provide important information to help investors evaluate companies. For example, a big jump in the ratio could signal that a company is squeezing workers to fund big payouts to senior executives. This strategy can lead to a short-term rise in stock prices but long-term under-performance as experienced employees who are necessary for a company’s success find work elsewhere.In a time of nearly unprecedented income inequality, CEO-to-worker pay ratio disclosure will help inform investors and the public. According to a new study released by Harvard Business School, “In the United States… the actual pay ratio of CEOs to unskilled workers (354:1) far exceeded the estimated ratio (30:1), which in turn far exceeded the ideal ratio (7:1).”

The SEC has had more than four years to finalize this rule. In contrast, India adopted pay ratio disclosure as part of its 2013 Companies Act. The regulations implementing the statute went into effect April 1, 2014, just seven months after pay ratio disclosure became law.

It is time for the SEC to finalize this rule! Sign the AFL-CIO petition supporting the SEC’s proposal and tell them investors want this information!

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Shep’s Corner

Shepard Burr is President of the ASB Investment Management division of  ASB Capital Management, LLC.  ASB Capital Management, a registered investment manager, is the manager of the AFL-CIO Equity Index Fund.

Shep BurrThe third quarter saw continued strong growth for the AFL-CIO Equity Index Fund, as assets topped $5 billion for the first time.  In fact, more than $1 billion in participant investment was added during the quarter, with ten pension plans making initial investments in the Fund, and ten plans adding to their existing investments.

That is real momentum, and shows that pension plan trustees and consultants see the value in the AFL-CIO Equity Index Fund’s excellent performance, low fees, and sensible proxy voting and shareholder actions.

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Union Spotlight: Teamsters Local 805

sandy popeTeamsters Local 805, headquartered in Long Island City, New York, is a local union with more than 1,000 members working in a diverse number of sectors including service, retail, education, transportation, higher education, and manufacturing.

“It is critical that unions use their pension dollars to advance workers’ interests. The AFL-CIO Equity Index Fund helps ensure that our dollars are being voted with our values in corporate boardrooms across the United States,” said Sandy Pope, President of Teamsters Local 805 (pictured at left).

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What AFL-CIO State Federation Presidents are Saying About the AFL-CIO Equity Index Fund:

 

NV - Thompson“Companies like Fidelity, BlackRock, Northern Trust, Vanguard, and others vote with the labor movement less than 50 percent of the time (as measured by the AFL-CIO 2013 Key Votes Survey). The AFL-CIO Equity Index Fund ensures that proxy voting is 100 percent in line with the AFL-CIO Proxy Voting Guidelines.”*

 – Danny Thompson
Executive Secretary-Treasurer
Nevada State AFL-CIO

 

NJ - Wowkanech“Putting union pension dollars into the AFL-CIO Equity Index Fund is a way that our financial investments can further support increased corporate accountability. Not doing so may work to the detriment of our members, since many of the largest companies offering S&P 500 index funds vote less than 50 percent of the time with the AFL-CIO Proxy Voting Guidelines.”*

– Charles Wowkanech
President
New Jersey State AFL-CIO

 

PA- Bloomingdale 2“The AFL-CIO Equity Index Fund is voted 100 percent in accordance with the AFL-CIO Proxy Voting Guidelines. This means that the pension plan assets managed by the Fund are being voted the right way—every vote, every time.”*

– Richard Bloomingdale
President
Pennsylvania AFL-CIO

 

PR - Baez 2“Through the AFL-CIO Equity Index Fund, union pension funds are able to make sure the votes on corporate governance issues reflect our values.”*

– Jose Rodriguez Baez
President
Puerto Rico Federation of Labor, AFL-CIO

 

 

*Testimonials may not be representative of the experience of other customers. Testimonials are no guarantee of future performance or success.