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September 17, 2007         
                        
Chamber Challenges AFL-CIO Health Care Proxy Campaign

 

WASHINGTON, D.C.-In a letter to the U.S. Department of Labor, the U.S. Chamber of Commerce today raised concerns under federal pension security laws about a plan by the AFL-CIO to pursue shareholder activism, typically undertaken by union pension funds, to pressure companies on health care issues.  Last week the U.S. Chamber also alerted the Securities Exchange Commission to reports of the AFL-CIO's plan to push shareholder proxy resolutions requiring employers to provide expansive new health care benefits to their workers and forcing them to disclose the personal political contributions of executives and directors to candidates who oppose the AFL-CIO's political agenda on health care.

 

"The billions of dollars held in union pension funds belong to workers, not to union officials," said Randel Johnson, Chamber vice president for Labor, Immigration & Employee Benefits.  "Those funds exist solely for the purpose of ensuring a secure and dignified retirement for beneficiaries and retirees - not to be cannon fodder for other people's political agendas."

 

The Chamber's letter to the Department of Labor points out that, under the Employee Retirement Income Security Act (ERISA) of 1974, pension trustees are to act solely in the interest of pension plan participants and must not subordinate the interest of those participants to unrelated objectives.  In fact, if union pension funds adopted the AFL-CIO's new proxy agenda, they could diminish the value of companies in which they were invested, thereby harming union retirees' pension assets.

 

This is not the first time the AFL-CIO has encouraged union pension plans to tap workers' retirement savings in support of political and legislative action.  In 2005, the Department of Labor wrote the AFL-CIO concerning reports that the AFL-CIO had encouraged union pension funds to threaten withdrawal of pension plan assets from companies that supported President Bush's Social Security reform proposal.  The Department's letter stated that such tactics could constitute a violation of pension trustees' fiduciary obligations under ERISA.
      
"The AFL-CIO's shareholder activism plan appears to promote using union members' retirement savings to advance a legislative and political agenda that has virtually nothing to do with securing and enhancing those pension savings," added Johnson.  "Those who are responsible for overseeing workers' retirement security need to curtail the politicization of pension plan assets."
      
The U.S. Chamber is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.
     

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