|
Pension Fund Politics: The Dangers of Socially Responsible Investing (Business Economics Series) | 
 enlarge | Author: Jon Entine
Publisher: AEI Press
Category: Book
List Price: $15.00
Buy New: $5.15
You Save: $9.85 (66%)
New (24) Used (12) from $3.91
Rating:  1 reviews
Sales Rank: 1349153
Media: Paperback
Pages: 120
Number Of Items: 1
Shipping Weight (lbs): 0.4
Dimensions (in): 8.4 x 5.5 x 0.4
ISBN: 084474218X
Dewey Decimal Number: 332.67254
EAN: 9780844742182
ASIN: 084474218X
Publication Date: September 25, 2005
Availability: Usually ships in 1-2 business days
| |
| Similar Items:
|
| Editorial Reviews:
Product Description
This book shows that pension funds and mutual funds that screen investments according to social and ethical preferences frequently harm those people and causes (for example, the poor and the environment) that they are designed to help.
|
| Customer Reviews:
Valuable information for anyone wanting to understand how Socially Responsible Investing impacts pension funds January 13, 2006
Craig Matteson (Ann Arbor, MI)
3 out of 6 found this review helpful
The idea of corporate executives looting and mishandling pension funds (defined benefit programs) and harming their retiree's sickens all of us. Those that abuse these trusts (sacred trusts, in my book) should be punished. And if the law can't get them, they deserve every bit of public opprobrium we can send their way. However, it is vital to realize that the boardroom is not the only threat to pension fund well being. This book talks about the threat from those who would use the treasury of the funds they have been entrusted to administer for political and social engineering ends; too often at the cost of the people who depend on that money for their retirement.
This book consists of four essays; each discussing a different aspect of the ways in which the politicization of the administration and investing of pension funds puts the beneficiaries (actually, owners) of the funds at risk. While the book does not claim that pension funds are currently at risk of failing because of this activity, it does point out the ways in which such activities are costing retirees millions upon millions of dollars. That some claim this is small potatoes compared to the billions under management shows the danger of this collectivist mindset. If those millions are measured against each individual retiree, how many pensions are effectively squandered? That it might be claimed it is only pennies is beside the point. Whose pennies and dollars and tens of millions of dollars are being co-opted to indulge someone else's agenda?
The first essay by the editor, Jon Entine, lays out the nature and scope of the problem. While still small, the Socially Responsible Investing (SRI) movement is a disturbing trend. He does point out that that a CalPERS president had to be removed from the board because of his efforts to use the fund's great power to intervene in a dispute between Safeway and the union for which he was also executive director.
The second essay describes the different approaches to SRI and its financial realities. The approaches range from screening (hospital worker's funds not investing in tobacco stocks) to activist approaches to management (CalPERS) to transforming the corporation into a social entity with effects on its products and policies. The paper concludes that the amount of SRI is actually quite small and overstated. That its effects in the marketplace are nill and the purported benefits to investors is ambiguous at best. The paper concludes that screening is probably harmless because there are other investors to step in when the SRI fund pulls out. Screening makes sense when the members of the fund are like minded. However, in large funds with very diverse memberships, it is difficult to reconcile such deviations from the fiduciary responsibility maximum returns with such non-financial considerations.
The third essay lays out why the growth of these non-financial considerations and approaches threaten the property rights of the beneficiaries of the funds. The sheer volume of the money available attracts those who would use it for their own purposes. The author also compares the fiduciary responsibility required by these property rights versus the purely political Social Security program, which confers no property rights. The federal program versus state laws and regulations are also compared.
The fourth essay powerfully pulls together these threads to demonstrate the social agenda of many of these pension boards, how interconnected they are, and exposes their statements of these purposes. The seemingly benign but actually very radical notion of stakeholder ownership of corporations is also discussed. This popular doctrine is gaining ground in developed countries. The threats are not only to pensioners, but to the real owners of the firm, the shareholders, whose property is being disposed of by people who do not share their risk.
This is an interesting set of papers that I recommend to anyone interested in gaining a better understanding of this additional threat to the pensions of millions of Americans. As an aside, I think this book provides yet another reason to switch to defined contribution plans from these defined benefit programs that are failing at an ever increasing pace for a variety of reasons.
|
|
|
Payroll-Software-and-Books.com | |
