Mission Compatibility Moves Unitarians Toward a New Recordkeeper

May 24, 2010 (PLANSPONSOR.com) - The Unitarian Universalist Association has decided to dump its incumbent recordkeeper for reasons that have nothing to do with its recordkeeping services.

At a special board meeting last week, it was noted that the Compensation, Benefits, and Pension Committee had undertaken an “exhaustive review of firms that are capable of providing recordkeeping services to the UU Organizations Retirement Plan,” had issued a request for proposal, and had received “adequate” proposals from two firms; Fidelity Investments and TIAA-CREF. 

Having retained Angell Pension Group to evaluate the services, the firm noted that “The proposed recordkeeping and administrative services for Fidelity and TIAA-CREF have more similarities than differences. No single issue eliminates either from consideration.” 

Instead the decision to replace Fidelity appears related to a 2005 UUA General Assembly vote “that Unitarian Universalists should advocate for immediate action to end the crisis in Darfur.”  According to the report of the committee, in 2007 the Save Darfur Coalition called on Fidelity to “stop investing in companies that fund genocide in Darfur,” noting that in the first three months of 2007 Fidelity sold 90% of its Darfur-related stock, “while stating that the sales were unrelated to outside pressure, and then persuaded media companies to pull scheduled ads by SaveDarfur.org that were critical of the firm’s investments in the Sudan.”

According to the report, the committee considered five broad issues in evaluating the two firms:

  • Recordkeeping and administrative capacity
  • Investment performance and fees
  • Customer service
  • Ease of transition
  • Compatibility with the mission of the Unitarian Universalist Association


Divestiture Discussion 

The report said that, during discussions with the Committee, Fidelity explained its refusal to divest as follows: “We have concluded that when it is appropriate to remain actively invested in a company, we will do so, thus retaining the ability to oppose company practices that we do not condone.” However, a senior Fidelity official also told the Committee that “we do not have an active program in shareholder advocacy and shareholder engagement,” according to the report. 

The committee noted that, “by contrast, TIAA-CREF is a leader in socially responsible investing, including the full range of environmental, social and governance issues as expressed through its record of corporate engagement, social screening of investments, and community investing”.  Additionally, TIAA-CREF supported 17 of the 18 UUAsponsored shareholder resolutions in 2008 and 2009, according to the report.

The Committee retained Fiduciary Investment Advisors (“FIA”) to negotiate with Fidelity and TIAACREF to develop for each firm a recommended menu of investment choices that would be available to participants in the Plan, and noted that FIA concluded that significant changes in the fund menu would be warranted even if the UUA retained Fidelity as recordkeeper. 

Angell Pension Group reported its conclusion as follows: “All things being considered as outlined above and after factoring all fiduciary considerations to make an informed and prudent decision on behalf of the participants, if mission compatibility is an institutionally important decision making factor to UUA, then TIAA-CREF may be the more appropriate choice.”

The Committee report is available online at http://www.uua.org/documents/cbpc/100408_report.pdf