SEC permits TIAA-CREF pension fund to ignore divestment proposal

WASHINGTON (JTA) — TIAA-CREF does not have to consider an investor’s proposal to divest from companies allegedly complicit in Israel’s occupation of the West Bank, the Securities and Exchange Commission said.

The SEC, responding to a TIAA-CREF request in March to omit the divestment proposal for consideration at its annual meeting in Charlotte, N.C., in July, agreed with the major pension fund that it had already met “the essential objectives” of the proposal by divesting from companies that violate human rights.


Such proposals, when submitted by shareholders, may be excluded only with the permission of the SEC. This one was submitted by Steve Tamari of Glen Carbon, Ill., in coordination with We Divest, a coalition of anti-occupation groups that includes Jewish Voice for Peace.

Tamari asked the fund for teachers and other academics to “end investments in companies that, in the trustees’ judgment, substantially contribute to or enable egregious violations of human rights, including companies whose business supports Israel’s occupation.”

A senior SEC counsel, Deborah Skeens, in a letter this month granted the TIAA-CREF permission based on its “essential objectives” argument.

“TIAA-CREF already has put in place policies and practices designed to address human rights matters, which may include divesting from companies in appropriate circumstances,” the pension fund said in its plea to the SEC.

The pension fund had also argued that it was within its rights to reject the proposal under another SEC regulation that permits rejection of shareholder proposals if they amount to micromanagement.

Tamari  in his submission to TIAA-CREF had cited the fund’s investment in Veolia Environment, a Paris-based company that runs landfills in the West Bank and is a part owner of bus lines serving West Bank settlements.

We Divest continued this week to urge its activists to press TIAA-CREF to consider the proposal despite the SEC ruling.

“I know the SEC has said you do not have to include the resolution, but you can still choose to do the right thing and include it,” was one of the coalition’s suggested talking points for TIAA-CREF clients who were urged to phone Roger Ferguson, the fund’s CEO.

In an almost identical case in 2011, TIAA-CREF won SEC permission not to consider a divestment proposal organized by Jewish Voice for Peace.

Last year, Jewish Voice for Peace claimed it help bring about a decision by an investment index that advises TIAA-CREF to delist Caterpillar, the tractor manufacturer that supplies Israel’s army. MSCI-ESG, which advises clients that take into consideration good governance and human rights in their investments, denied JVP pressure played a role in its decision, but acknowledged that Caterpillar’s sales to Israel were a factor, although not the determinative one, in delisting the company.

TIAA-CREF continued to invest in Caterpillar, albeit in funds that were not linked to the MSCI-ESG index.

Ron Kampeas is JTA’s Washington bureau chief, responsible for coordinating coverage in the U.S. capital and analyzing political developments that affect the Jewish world. He comes to JTA from The Associated Press, where he worked for more than a decade in its bureaus in Jerusalem, New York, London and, most recently, Washington. He has reported from Northern Ireland, Afghanistan, Bosnia and West Africa. While living in Israel, he also worked for the Jerusalem Post and several Jewish organizations.