Unions say, 'Give us more control over those huge pension funds'
Organized labor is opening a nationwide campaign for greater control over investments by administrators of private and public pension funds. Such funds have assets exceeding $600 billion and are expected to reach $1 trillion by 1986 and triple that in the next decade.
The AFL-CIO, with more than 100 affiliates, and the independent United Automobile Workers (UAW), acting separately, say that while more than half of the total amount in pension funds resulted from collective bargaining or other union action, investments often ignore "the best interests of union members and participants . . . and frequently are made in ways harmful to their welfare."
Relatively few pension plans are jointly administered by the employer and union. Most are controlled solely by employers through banks, insurance companies, or other financial managers. "As a result," says AFL-CIO president Lane Kirkland, "most important investment decisions are made without workers or their representatives having any say in them."
The AFL-CIO says the result frequently is investments "in companies which are among the most antiunion, which export workers' jobs to low-wage countries, which ignore workers' needs for health and safety protection, and which in other ways hinder rather than help workers in the achievement of their most basic needs."
The AFL-CIO is calling on its unions to win, through collective bargaining or agreements with employers, the right to participate in investment decisionmaking "to better serve the interests of workers without jeopardizing the primary purpose of pension funds -- to secure retirement benefits for workers through prudent investments."
It wants more of the pension funds billions invested for "reindustrialization of manufacturing, construction, transportation, maritime, and other major industries" and for such social purposes as worker housing and health facilities.
Two AFL-CIO departments are pressing parallel campaigns:
* The Industrial Union Department (IUD) has launched a monthly newsletter to help industrial unions with strategies for negotiating a stronger voice in fund investment. Noting that the funds now are the greatest single source of investment capital in the country, with assets worth about 27 percent of the gross national product, the IUD sees the funds as critical for the massive capital investments necessary for economic revitalization of American industry and the creation of new jobs to ease persistently high unemployment.
* The Building and Construction Trades Department is seeking the use of pension funds for low-cost mortgages for home building. Unions recently won conditional approval from the US Labor Department for residential mortgages to be made at below prevailing interest rates.
Meanwhile, the UAW has won from Chrysler Corporation what it hopes will be a precedent for a stronger voice in investment of pension funds. In return for wage concessions to Chrysler, the UAW was given the right to recommend communities in which loans will be made for social purposes -- private housing, nursing homes, day-care centers, and the like -- and the right to identify five companies whose securities Chrysler pension funds will be barred from buying be cause of their involvement in South Africa.