Labour and Pension Funds

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Labour and Pension Funds

• A Study of Labour Representatives on Pension
  Boards, Trusts and Committees

Anil Verma and Johanna Weststar
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AGENDA

• Project Rationale and Context
• Relevant Research
• Theoretical Model
• Methodology
• Interview findings
• Survey implementation and Next Steps

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RATIONALE CONTEXT

• Economic significance of pension funds
• Movement toward better governance, socially
  responsible investment (SRI) and plan member
  involvement
• Increased labour representation on pension boards
  through collective bargaining and government
  legislation

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LIFE OF A LABOUR REP

• Extremely complicated environment
• Actuarial sciences, investment strategy
• Traditional operation of pension funds
• Sense of inadequacy and pressure to conform
• Pressures of fiduciary responsibility
• Leave your union hat at the door
• Lack of training or other support

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RELEVANT RESEARCH
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LABOUR AGENDA
SRI, ETI, Proxy Voting
Many unions have not reached the first level or
do not wish to
Full Participation in Decision-making
Most trustees barely accomplish the second level
let alone proceed to the next
A Seat on the Board
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THEORETICAL MODEL
Social Resources
Board Trustee Performance
Effective Labour Representation on the Board
Organizational Resources
Personal Resources
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METHODOLOGY

• Interviews with labour reps and others
• Large Public Plans OPSEU, OMERS as well as CLC
  and FTQ
• Collaborative Survey Design
• Paper version
• Web version www.pensionsatwork.ca
• Survey Pre-Test and Implementation
• Follow-up Interviews

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INTERVIEW FINDINGS

• Various structures for labour involvement
• Quebec has mandatory labour representation
• OPSEU Trust established joint-trusteeship
• Union nomination and government appointment

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INTERVIEW FINDINGS

• Steep learning curve
• What do union people know about stocks and
  bonds? It is another universeIts a very very
  very steep learning curve. Ive never had such a
  steep learning curve. And it is always there.

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INTERVIEW FINDINGS

• High individual time commitment
• Large binder on short notice
• 15 days/year personal prep time plus meetings
• Take courses on own initiative
• Develop own networks

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INTERVIEW FINDINGS

• Limited trustee ? union contact
• Low priority for union
• Low accountability to the union
• Dont need to spend time training workers to
  become mini-capitalists

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INTERVIEW FINDINGS

• Fiduciary Responsibility
• says you will act in the best interests of the
  pension plan and in saying that a lot of trustees
  will then lose their role as a union
  representative.
• Because there is this collegial atmosphere,
  there tends to be less challenging and when you
  interject with a union perspective into that sort
  of milieu, if you seem too overt they can always
  fall back on the notion that you are not
  following your fiduciary responsibility.

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INTERVIEW FINDINGS

• Suggestions to help labour representatives
• Training beyond an introductory course with a
  financial perspective
• Network for support and independent advice
• Better linkages to the union
• Training in a labour perspective to combat the
  fiduciary responsibility argument

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NEXT STEPS

• Survey in Five Parts
• The Role You Play 4. Demographics
• Role Preparation 5. Fund Characteristics
• Role Assessment
• Administer survey over the next six weeks hard
  copy and on-line
• Analysis and final report expected by January 2005