Pension Funds as Owners and Investors

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2012-07-13

Summary:

Editor’s Note: Luis A. Aguilar is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on a Commissioner Aguilar's keynote address before the NAPPA 2012 Legal Education Conference; the full address, including footnotes, is available here. The views expressed in the post are those of Commissioner Aguilar and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff.

As an SEC Commissioner focused on investor protection, I’d like to talk to you today about some issues important to investors in the current capital market environment, and how public pension funds, in their capacity as shareowners and investors, can be a more effective voice for America’s working families.

Investors are the Capital Providers — The Economic Impact of Public Pension Funds

First, I want to quickly highlight the critical role public pension plans have in our economy. As they often do, the statistics tell the story: State and local pension plans serve about 14.4 million active employees, and pay benefits to about 7.5 million current beneficiaries. In 2010, public pensions paid an average benefit of just under $26,000 per year. That regular income provides security, stability and peace of mind that individual savings and defined contribution plans alone cannot ensure for most workers.

Pension plans may also help reduce the disparity in retirement incomes between men and women, as well as the wide income gulf between white and non-white households in retirement. A 2009 report by the National Institute on Retirement Security found that, while older households headed by women, and those headed by people of color, were significantly more likely to be classified as poor than their male and/or white counterparts, that disparity is substantially reduced among households receiving pension income.

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Link:

http://blogs.law.harvard.edu/corpgov/2012/07/13/pension-funds-as-owners-and-investors/

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Tags:

financial regulation securities regulation regulators materials speeches & testimony luis aguilar sec dodd-frank act institutional investors investor protection institutional monitoring audits pension funds

Authors:

Luis A. Aguilar, Commissioner, U.S. Securities and Exchange Commission,

Date tagged:

07/13/2012, 15:40

Date published:

07/13/2012, 09:24