CIEBA Urges Lawmakers not to Restrict Pension Investments

June 24, 2008 (PLANSPONSOR.com) - In testimony to the Senate Homeland Security and Governmental Affairs Committee, William F. Quinn, chairman of the Committee on Investment of Employee Benefit Assets (CIEBA), said he was deeply concerned about the prospect of any legislation that would bar pension plans from investing in certain types of assets, including commodities.

According to a CIEBA news release, Quinn noted that Congress has long recognized that direct government regulation of pension plan investments is ill-conceived, and he emphasized the need to ensure that any action by Congress does not undermine the retirement of millions of working Americans and their families.

While CIEBA survey data shows commodities investments are not a significant part of most pension plan investments, as Quinn testified: “Regulating pension investments would only make it difficult for pension plans to adequately diversify investments to hedge against market volatility and inflation.”

“It is critical that pension plans have the ability to invest in accordance with modern portfolio theory and pursue the best investment strategy available… without having to comply with lists of permitted and impermissible investments. Our concern is both with specific restrictions on pension plan investments in commodities and with the precedent that action will set for allowing the government to intrude on pension investment decisions,” Quinn said, according to the news release.

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