Labor Dept. Weighs In On Union Pension-Plan Activism

[Omaha Steve]

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By Judith Burns, Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- Business groups are applauding a recent Labor Department clarification regarding limits on shareholder activism but some question whether it will stop pension plans from pressuring companies on contentious social and governance matters.

The Labor Department's Dec. 21 letter to U.S. Chamber of Commerce Chief Executive Thomas Donohue, released by the chamber Friday, reiterates concerns about using pension plan assets to promote an agenda other than the bottom line - enhancing the value of the fund's holdings.

"This sends a clear message that union pension trustees need to put workers' retirement security first, instead of any political agenda," Donohue said in a statement.

Union officials say the Labor Department letter simply reaffirms the agency's longstanding view that pension plan managers must act in the best interest of plan participants.

"I don't think it's going to impact the advocacy," said William Patterson, executive director of CTW Investment Group, an arm of Change to Win, a coalition of labor unions.

Labor-union advocacy sparked the letter, as the chamber wrote the Labor Department on Sept. 14 asking whether AFL-CIO activism on corporate health care benefits ran afoul of U.S. pension laws and guidance on shareholder activism by pension plans issued in 1994 under President Bill Clinton.

FULL story at link.