In the Know
Socially Conscious Investment

TIAA-CREF critics say 81 percent of participants in the plan's social choice account want their money invested in companies that have a record of good performance on social issues.

A newly formed Social Choice for Social Change Campaign for a New TIAA-CREF is now pressing TIAA-CREF, as the Teachers Insurance and Annuity Association-College Retirement Equities Fund is commonly known, to begin "positive investing."

TIAA-CREF dominates the higher ed pension market, managing $290 billion for about 2 million customers, primarily in traditional retirement accounts available solely to educators and academic researchers.

The new social action campaign hopes to convince TIAA-CREF to invest 5 to 10 percent of one of its funds, the Social Choice Account, in progressive companies and community development corporations.

The Social Choice Account was created by TIAA-CREF in 1989, in response to pressure from some of the same activists, who wanted an opportunity to invest their pension funds in corporations with some social conscience.

The account currently allows contributors to avoid investments in companies involved with tobacco, alcohol, nuclear energy or weapons, or the military.

The Social Choice campaign aims to persuade TIAA-CREF to expand the socially conscious fund's activities to include making investments in companies making a positive contribution to society.

"Positive investing" directs invested assets toward small, progressive companies and community development corporations.

Investing in companies that are pioneering socially and environmentally responsible products, campaign organizers say, helps these companies expand and promotes corporate responsibility. Investing in community development can also help create low-income, affordable housing and fund small business loans to companies that otherwise might not qualify for assistance.

These companies are often characterized by equitable salary structures, union friendly policies, and truthful advertising. TIAA-CREF is resisting this change in investment strategy, arguing that investors would balk at the potentially lower returns on investment. The Social Choice Account, officials say, is successful as is.

Only grassroots pressure, campaign organizers note, will convince TIAA-CREF to change the current Social Change Account orientation. For more information, contact Neil Wollman at njw@manchester.edu.