Social Investment Organization

Social Investment Organization

September 08, 2005 10:00 ET

Social Investment Organization calls for pension transparency

Federal government urged to introduce Right to Know rules for federal pension plans Attention: Business/Financial Editor TORONTO, ONTARIO--(CCNMatthews - Sept. 8, 2005) - The Social Investment Organization is calling for rules to require federal pension plans to become transparent on their social and environmental policies and how they use the power of their shareholder votes.

The call to action is in response to a national consultation announced by the federal government in May of federally-regulated defined benefit pension funds, which include the major national industries such as banking, airlines and utilities.

The SIO is asking its members to support this campaign by writing letters to the federal government.

Under current rules, Canadians have no access to information on the social and environmental policies of their pension plans - including information on how those plans take sustainability and social responsibility issues into account in portfolio management.

Pension plan members also have no right of access to information on the shareholder votes cast by their funds or the policies used to determine how funds cast their votes.

"This era of closed pension management may soon be coming to an end," said Eugene Ellmen, Executive Director of the Social Investment Organization.

In a brief to the federal government outlining its position, the SIO argues that pension plans benefit from social and environmental policies and proxy voting by reducing long-term risk and enhancing returns. As such, pension plans have a fiduciary duty to take social and environmental factors into account, and to vote their holdings on behalf of their beneficiaries. Accordingly, pension plan members have a right to know what social and environmental policies are in place, and how their pension plans have voted their assets.

"Pension plan members have a vital interest in knowing that their pension plans are being properly managed - including knowledge of the important long-term non-financial factors that could increase the risk to their pension assets or future added value," states the SIO in a brief to the federal government.

On proxy voting, the brief states: "The SIO believes that not only do pension funds have a fiduciary duty to vote their shares on behalf of their plan members, but that plan members have a right to know how their assets are being voted."

In its brief, the SIO calls for regulations that would require pension plans to disclose their social and environmental policies, as well as their proxy voting policies and voting records. The social and environmental disclosure rules are similar to recent legislation in the UK, France and Germany. The proxy voting rules are similar to rules now in effect for mutual funds in the US, and will soon come into effect in Canada.

The SIO is the national association for socially responsible investment in Canada. It has more than 400 members representing staff of financial institutions, asset managers, consultants, fund companies and financial advisors with an interest in SRI. SIO members serve more half a million Canadians.

For further information:
Eugene Ellmen, Executive Director
Social Investment Organization
416-461-6042 tel.
ellmen@socialinvestment.ca

For a copy of SIO's brief to the federal government, click:
http://www.socialinvestment.ca/Policy&Advocacy/Pension%20Disclosure%200805%20Brief.pdf

For information on SIO's campaign, click:
http://www.socialinvestment.ca
IN: FINANCE

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