Social(k) Calling for Retirement Plan Pressure on Fidelity

May 17, 2007 ( - If your retirement plan has investments at Fidelity, you may soon be asked to help prod the mutual fund giant to divest itself of investments linked to Sudan.

Up till now, the call to pull pension fund investments has largely been limited to public pension plans, and at the instigation of lawmakers.   However, Springfield, Massachusetts-based Social(k) – a socially-responsive 401(k) platform provider – has teamed up with an organization calling itself Fidelity Out of Sudan to…well, to help prod the mutual fund giant to divest itself of those investments.      

Day-Light Strategy

Part of their strategy is to “day-light” the names of 29 major companies that have significant amounts of retirement plan assets in Boston-based Fidelity Investments. The assets of the 29 companies, which include Verizon Communications, Ford Motor Company and Eastman Kodak, total $228,303,397,058, according to Social(k) fund President Rob Thomas, who made the announcement due to concerns the financial titan invests in companies doing business with the genocidal regime of Sudan.   Fidelity Out of Sudan will be writing these companies to request they divest their retirement assets of Fidelity Investments so long as the company retains major investments in Sudan.

Fidelity Out of Sudan’s web site  also calls on participants to ask their plan administrator to “avoid offering Sudan-related stocks and mutual funds, to offer alternatives to using Fidelity funds, and to register a complaint with Fidelity on behalf of the company and its employees.”   An ” Action Plan for Companies With a Fidelity 401(k) ” provides an outline of steps plan sponsors with a Fidelity 401(k) can take in pursuit of this objective.

Divestiture Rationale

Since 2003, Arab militias, called the Janjaweed, have attacked predominantly black local tribes in the Darfur region of Sudan. According to , approximately 400,000 have died along with millions forced into refugee camps, and widespread reported rapes. The goal of divestment is to end the Darfur genocide by generating financial pressure on Sudan and the firms doing business there.

Of course, in theory, Sudan divestiture should not affect plans’ domestic investments – since back in 1997, Congress passed sanctions that prevented U.S. companies from doing business in Sudan because of its support of terrorism (see  Doing the Right Thing? ). However, while federal law prohibits U.S. firms from doing business in Sudan, no such restrictions apply to foreign firms – and Thomas and Fidelity Out of Sudan are pushing divestment due to Fidelity Investment’s large holdings of PetroChina and Sinopec, two Chinese oil companies.   They claim that approximately 70% of the oil revenue is used by the government of Sudan to fund the military which is implicated in the death of hundreds of thousands of Sudanese people.

Who’s “In”, Who’s “Out”

Fidelity Out of Sudan’s website claims that 13 states and 42 colleges and universities have already taken action on divestment from Sudan. ) .  

Companies and organizations that have already signed with Social(k) on this initiative include:

  • Co-op America (Washington, DC),
  • Social Investment Forum (Washington, DC ), and
  • the Social Venture Network (San Francisco, CA)
  • Parnassus Investments (San Francisco, CA) and
  • Winslow Management Company (Boston, MA).

Social(k) provides over 600 funds for companies and their financial advisors to choose from. Included in these funds are Socially Responsible funds, Judeo Christian funds and traditional funds; which include actively managed funds, index funds, and lifestyle funds.   You can read more about Social(k) at