US - The US$380bn TIAA-CREF pension fund has come under fire from advocacy groups and shareholders for failing to "practice what it preaches" on corporate governance and social responsibility.
The groups plan to stage a protest during the CREF annual shareholders’ meeting, set to take place as Global Pensions went to press.
The protestors have lined up a litany of complaints against TIAA-CREF, a pension fund for college personnel.
They are chiefly reacting to news that, following SEC complaints, two of the pension fund’s trustees had to be removed because of financial conflicts of interest. The groups have said TIAA-CREF itself tells others about the need for independent trustees.
The complaints also relate to reports that the pension fund hired “a criminal”, which resulted in a breech in security.
A spokesperson for the pension fund responded that the company had a long history across all disciplines for socially responsible investing.
She said the two trustees had held an inappropriate relationship with the fund’s auditor, both stepping down when this was discovered.
Furthermore, she continued, “the criminal” in question was a contract worker consequently escorted off the premises, and there was no evidence her conduct had negatively impacted any fund participants.
The protestors have also slammed the fund for investing in numerous companies which they say have records of human rights abuses.
Activist and coalition representative Jaime Lagunez commented: “For a group claiming leadership in governance and social responsibility, they need to look in the mirror and recognise their own shortcomings. They need to deal with corporations in their portfolios involved in human rights violations and environmental degradation.”
The pension fund’s spokeswoman responded that TIAA-CREF had an $8bn social choice fund for participants interested in socially responsible investing, “the largest socially screened fund available”.
“Overall we have a fiduciary responsibility to 3.2m participants to make investments that are in their best interests over the long term,” she commented.
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