US Pension Funds' Labour Friendly Investments

2 Pages Posted: 22 Apr 2008 Last revised: 18 Aug 2008

See all articles by Tessa Hebb

Tessa Hebb

Carleton Centre for Community Innovation

Larry Beeferman

Harvard University - Labor and Worklife Program


Pension funds can be thought of as deferred workers wages. In many cases occupational pension funds have been established at the bargaining table through union representation. While all pension funds are established for the benefit of the pension plan beneficiaries, these deferred workers wages also have a significant impact on the communities in which they are invested. Labor friendly investments seek to direct the impacts of investment in a manner that creates strong and healthy communities and supports union or fair wage employment practices.

Labor friendly pension funds in the US are generally either Taft-Hartley pension plans (jointly trusteed or union trusteed multi-employer plans) or public sector pension funds with a significant presence of union trustees. These funds often have a range of labor friendly policies and programs aimed at building strong and healthy communities. Such programs include responsible contractors' policies, responsible investors' policies, and specific allocations for targeted (or economically targeted) investments in their investment portfolio. These targeted investments often require union built construction (in the case of real estate or fixed income mortgage backed securities) or are aimed at job creation and retention (in the case of private equity investments).

This paper explores the evolution of labor friendly US investments by pension funds in the period since the downturn of the financial markets in 2001. It argues that both pension funds and investment vehicles that bring intentional targeting to their investments are becoming increasingly sophisticated financial players. Labor friendly investments that focus on risk adjusted rates of return as the driver for investment are increasingly able to point to strong track records that encourage a wide range of pension fund investors to engage with these vehicles and practices.

Keywords: pension funds, labor, targeted investment, responsible investment

Suggested Citation

Hebb, Tessa M. and Beeferman, Larry, US Pension Funds' Labour Friendly Investments. 2008 Industry Studies Conference Paper, Available at SSRN: or

Tessa M. Hebb (Contact Author)

Carleton Centre for Community Innovation ( email )

1125 Colonel By Drive
DT 2125
Ottawa, Ontario K1S0R2

Larry Beeferman

Harvard University - Labor and Worklife Program ( email )

United States
617-999-9824 (Phone)

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