A Senate proposal to bar most pension funds from investing in oil and agricultural commodities appears to be doomed after Sen. Susan Collins, R-Maine, one of the proposal’s previous backers, dropped support for the measure.
“I do have serious concerns about a major provision in the draft legislation, and that is the proposed ban on institutional investors trading in the commodity futures markets,” Ms. Collins said during a hearing before the Senate Homeland Security and Governmental Affairs Committee.
Sen. Joe Lieberman, I-Conn., the committee chairman, and Ms. Collins, the committee’s ranking Republican, released a legislative draft proposing the pension fund investment ban June 18, as part of a package of proposals that the two said they hoped could help reduce energy and food prices for consumers. But at today’s hearing, Ms. Collins said that although she believed that institutional investments in commodities has had an impact on prices, “prohibiting their investment altogether risks harming current and future retirees.”
In an interview after the hearing, Mr. Lieberman said the institutional investment ban wasn’t “dead in my mind,” but to move quickly on legislation to curtail overall speculation in commodities, “I am not going to push it at this time” if he determined that there was no consensus for the pension proposal. He said he wanted to introduce legislation addressing overall speculation in commodities during the week of July 7.
“(Ms. Collins’) comments were very encouraging,” William F. Quinn, chairman of the Committee on Investment of Employee Benefit Assets, said in an interview after the hearing. “There was not a lot of discussion or controversy (at the hearing) regarding that issue (proposals to restrict pension fund investments in commodities), so hopefully that’s a positive sign.”
Mr. Quinn, who is also chairman of American Beacon Advisors, which oversees management of $9.1 billion in pension assets for American Airlines Inc., Fort Worth, Texas, was the only witness for the pension fund industry at the hearing.
