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.”
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