WASHINGTON - Pension issues will get more attention no matter who is elected president of the AFL-CIO, observers say.
John Sweeney, president of the Service Employees International Union, Washington, is expected to win the Oct. 26 election. His opponent is Tom Donahue, interim president of the AFL-CIO. The pair came from the same local service union in New York, and both have solid pension backgrounds.
"Under both candidates, I think you would see a marked increased attention to pension issue.....based on the need to protect pensions," one labor official said.
In his platform, Mr. Sweeney outlines a pension investment clearinghouse that would manage a database of union pension fund investments. The clearinghouse would be an exchange for trustees and union members to share ideas and strategies on investment issues.
"We are very interested in continuing and expanding an education campaign directed at union members," said John Howley, assistant director of public policy for the SEIU.
Mr. Howley expects Mr. Sweeney will use the bully pulpit to teach union leaders the importance of pension education.
"There's a lot of misinformation out there," Mr. Howley said. ".....We need to make sure union trustees understand what the issues are and what can be done."
But Mr. Donahue has had his hand in pension matters for some time as well. Mr. Donahue negotiated pension contributions and helped construct pension plans for Local 32B of the Service Employees in New York.
And for 16 years as secretary-treasurer for the AFL-CIO, Mr. Donahue has been a leader in setting pension policy, and has been involved in more than 50 different council resolutions, convention and other statements concerning pension funds, benefits and investments, sources said.
"He's got a real good sense of the broader economic context and the role pension plans play," said one labor source.
Mr. Donahue has encouraged labor union plan sponsors to consider prudent economically targeted investments.
In a 1992 speech, he said an ETI program "aims to make good investments that are good for the economy and good for the shared interests of plan participants." He said an ETI "is not a charity campaign for failing companies, or an economic development agency. (It) is not in the business of providing subsidies or concessionary rates of return."
Mr. Sweeney, meanwhile, is chairman of the SEIU's $610 million, multiemployer pension plan. When he became chairman in 1980, the plan had only $17 million in assets.
Mr. Howley said the plan had to address the needs of the service employees' erratic schedules: many participants work part time, or only at certain times during the year. In 1988, the plan incorporated five-year vesting periods, and in 1994 reduced service requirements to 700 hours a year from 1,000. In addition, participants could earn half a year if they work 350 hours.