Running a pension fund in New Orleans and the rest of the gulf region devastated by Hurricane Katrina might seem of little consequence in the face of catastrophe. Pension fund staffs, many personally affected by the storm's fury, are dealing with their own crises, or assisting their communities.
Funds in the region have logistical problems keeping operations running amid the wreckage, flooding, loss of electricity and uncounted deaths. This devastation is testing whatever backup systems they have and revealing the necessity of even more profound backup planning. Pension funds outside the disaster area should try to lend whatever assistance they can, perhaps providing temporary office space or computer use.
Pension fund investments must continue to be well managed during this crisis. Many residents have lost everything: their houses, cars, even livelihoods and, worst of all, loved ones. While certainly pension plans are not on their minds, for many of them much of what they have remaining is the assurance that pension investments are secure and growing.
Pension funds will provide a large share of the necessary capital, mostly indirectly, for the immense rebuilding of the economy that will have to be undertaken. But through creative financing and imaginative projects, they will have opportunities to invest in reconstruction projects directly.
But pension funds are not non-profit economic development agencies. When making their investments, plan trustees must keep foremost in mind the interests of their participants, who now more than ever need sound pension management.
Pension fund executives paying attention to their mission in spite of the disaster around them are doing important work for the stricken inhabitants and the economy. The constructive use of pension fund capital can more than match Katrina's destructive fury.
