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UUA pulls pension fund from Fidelity

Board of Trustees approves switch to TIAA-CREF over Fidelity’s ties in Darfur.
By Jane Greer
5.24.10

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The UUA Board of Trustees voted unanimously on May 20 to switch retirement plan providers after Fidelity Investments refused to divest from companies doing business in the Sudan.

The Unitarian Universalist Organizations Retirement Plan provides benefits to about 2,800 UUA staff members, ministers, church staff, and their families, with investments totaling approximately $178 million. Fidelity has managed the UUA accounts since 1999. In the fall, the UUA’s plan will switch to TIAA-CREF.

In other business during its May 20 teleconference, the board voted to approve a $20,000 grant from the Panel on Theological Education to the Unitarian Universalist Ministers Association for its “Whose Are We?” campaign; approved a motion to test off-site participation in this summer’s General Assembly with four to five congregations; tabled a discussion of a policy on financial reporting until the August meeting; and amended a policy describing leaders’ roles to include a description of the board youth observer’s role and responsibilities. The board also approved a motion setting up policy infrastructure so that the moderator can appoint members to write blog posts.

The May teleconference was the first monthly meeting the board will hold between its quarterly meetings. (The board also met via teleconference May 6 to discuss Arizona’s new anti-illegal immigration law; the board voted at that time to urge the General Assembly to withdraw from Arizona, where it is scheduled to meet in 2012.)

The UUA’s Compensation, Benefits, and Pension Committee began its review of pension plan providers in 2007 in response to growing public criticism of Fidelity Investments’ refusal to divest completely from companies doing business in Darfur. The UUA General Assembly had passed a resolution in 2005 calling for the end to crimes against humanity in Darfur. In 2007, UUA President William G. Sinkford wrote to Edward C. Johnson, Fidelity’s chair and chief executive officer, “The UUA has worked with Fidelity Investments for several years, but we cannot ignore even indirect participation in genocide as an acceptable cost of doing business.”

In a statement released May 21, UUA President Peter Morales praised the decision saying, “We are morally bound to consider the impact of our financial decisions. We couldn’t continue to watch passively as money we earned through religious service was directed to companies profiting from a genocidal regime. As clients of Fidelity, we tried to create change from within, but after four years, it became clear that Fidelity’s position on investing in the Sudan hadn’t changed one iota.”

The Committee put out a call for proposals and received two: one from Fidelity and one from TIAA-CREF. (TIAA-CREF provides investment and retirement products and services to employees in academic, medical, cultural, and research fields.)

The Committee evaluated the proposals using five criteria: recordkeeping and administrative capacity, investment performance and fees, customer service, ease of transition, and compatibility with the mission of the Unitarian Universalist Association. Paul Rickter, trustee from the Massachusetts Bay District, said, “On the first four items, Fidelity and TIAA-CREF were just about identical. But in terms of the compatibility with mission, TIAA-CREF was a much better fit.”

TIAA-CREF divested all of its holdings, totaling $58 million, from Darfur in 2009.

The Compensation, Benefits, and Pension Committee used two consultants to help evaluate the proposals: Angell Pension Group and Fiduciary Investment Advisors.

UUA Financial Advisor Dan Brody said that the committee’s vote to switch to TIAA-CREFF was unanimous. “I was surprised that it came out that way because there were a lot of strong views going into the process,” he said. “I’m delighted and strongly support the move.”

The transition from Fidelity to TIAA-CREF, which will start this fall, is expected to go smoothly, according to a report from the Committee, because Fiduciary Investment Advisors has selected a number of TIAA-CREF funds that have “similar investment characteristics” to the ones currently provided by Fidelity.

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