Union Issues

Using Pension Funds to Push Agenda

Labor leaders want to use their control of billions of dollars' worth of union pension assets to pressure corporations to adopt policy changes.

  • Actions would range from intervening in bargaining disputes and pushing environmental agendas to persuading corporations to abandon poison-pill strategies.

  • Union pension holdings now total $1.379 trillion -- about 14 percent of all outstanding shares of stock in the country.

  • By law, however, unions share control over members' retirement assets with management-appointed trustees and all trustees are required to be fiduciaries for retirees.

  • At present, there are about 6,000 union-controlled trustees in the U.S.

The AFL-CIO launched the campaign last fall by establishing an Office of Investment.

Managers of investment funds are suspicious of the new union activism, fearful that their almost single-minded dedication to maximizing shareholder value will be side-tracked. In the past, most union trustees have left investment decisions to the managers.

But one union official reportedly warned fund managers in a meeting in Chicago that "the party's over."

Source: Aaron Bernstein, "'Working Capital:' Labor's New Weapon," Business Week, September 29, 1997.

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