Long & short-term challenges
The investment of worker retirement savings is meant to provide
long-term financial returns to pension fund beneficiaries. However, the
way these funds are invested can also have significant impacts.
Unnerving global trends such as corporate malfeasance, soaring
executive compensation, or the privatization of public sector services
demonstrate the need for unions to mobilize. In recent years, corporate
scandals have rocked the financial world, destroyed jobs, and
devastated pension funds.
This has drawn attention to the lack of
diligence on the part of mainstream investment managers, analysts, and
auditors, and highlighted the leeway corporate executives and
controlling shareholders have to act against the interests of
non-controlling shareholders, including pension funds. Such scandals
also called into question the legal frameworks for corporate
governance, and the role of workers and unions in both pension fund and
corporate governance structures.
Worker retirement savings and pension funds own a large portion of the
capital markets. Assets held in trust in workers’ retirement funds are
increasingly global, and often invested in transnational corporations.
Many such companies benefit from, or are otherwise involved in human
rights and international labour standards violations, the privatisation
of public sector jobs or polluting the environment. With companies
typically focused on short term returns, long-term social and
environmental challenges go unaddressed, which may eventually undermine
the ability of pension plans to deliver the future benefits they
promise. |
