AFSCME Releases Best Practices for Trustees and Pension Systems

An AFSCME press release says “Enhancing Public Retiree Pension Plan Security: Best Practice Polices for Trustees and Pension Systems” serves as a road map for improving pension plan governance. The report reviews best practice policies and recommends policy language for pension systems to adopt with a focus on board member responsibilities, education, core competencies, and ethical and fiduciary conduct.

Additional recommendations found in the report include prohibiting insider trading, requiring strict compliance with conflict of interest laws, limiting gifts, disclosing communications with prospective vendors, prohibiting pay-to-play political contributions, and restricting the use of placement agent services. The report proposes banning current and former pension trustees and staff from providing placement agent services at any system where they were previously employed.

A probe started by New York Attorney General Andrew Cuomo has called attention to the use of placement agents in pension systems across the country (see Placement Agent Probe Yields Another Settlement).

“Our members’ retirement security is directly tied to the investment performance of public pension systems,” said AFSCME President Gerald W. McEntee, in the press release. “Pension plans continue to be the best and most efficient way to deliver retirement security to public employees. Just as AFSCME has been a leader in promoting good corporate governance, our leadership in promoting effective governance of pension plans will ensure that they remain strong.”