The AFL-CIO Capital Stewardship Program seeks to ensure that funds invested on behalf of working families are invested and managed in working families’ long-term best interests. The AFL-CIO and its affiliates, working with our trustees, are committed to organizing our funds to be active, responsible stewards of workers’ capital.
Workers have fought long and hard to win secure benefits through retirement, health and welfare plans. This workers’ capital—the accumulated assets in pension plans and other savings—is a major force in global financial markets. In fact, trillions of dollars in workers’ capital is invested through public, single employer, union and Taft-Hartley plans.
The trustees of pension and employee benefit plans are legally bound to promote secure benefits and to seek sustainable long-term investment returns. Capital stewardship is about helping trustees manage pension and employee benefit plan assets with the goal of enhancing the economic value of their plan’s investments.
Because workers’ capital is invested primarily to secure health and retirement benefits, pension and employee benefit plans are long-term investors. Capital stewardship recognizes that the long-term, sustainable performance of any investment requires mutually beneficial cooperation among all those involved in a business.
Pension and employee benefit plan investments are widely diversified. For this reason, promoting sound corporate governance and responsible business practices is important at all companies. To further these goals, the voting rights attached to shares of stock in corporations should be cast in accordance with the economic interests of plans.
Capital stewardship also means that trustees should play an active role in how pension and employee benefit plan assets are invested and managed. When choosing among investment alternatives of equal economic value, pension and employee benefit plans may select those that support working families and their communities.