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TIAA-CREF yields

THE TEACHERS INSURANCE and Annuity Association-College Retirement Equities Fund (TIAA-CREF) has, for the first time, adopted a Responsible Contractor Policy dealing with its real estate investments. The decision came after AFT president Randi Weingarten met with TIAA-CREF chief executive officer Roger Ferguson. She announced the fund's new policy at a New York State United Teachers delegate assembly on April 12.

This "really important step," Weingarten said, makes "common cause with our brothers and sisters in the building trades."

TIAA-CREF, which has a stated commitment to socially conscious investing, has typically used responsible contractors for construction projects under its control. However, it recently came under some criticism for investing as a limited partner in a building venture in Queens, N.Y., with the developer O'Connor Capital Partners and its general contractor McGowan Builders. Local unions complained that McGowan subcontracts to firms that do not provide their workers fair wages and fair benefits, including retirement and healthcare.

In the fall, the Professional Staff Congress of the City University of New York asked TIAA-CREF about the partnership. PSC represents 23,000 faculty and staff at CUNY. Along with many PSC retirement accounts, TIAA-CREF also holds the accounts of many of the 35,000 faculty and staff of the United University Professions of the State University of New York, and other NYSUT affiliates. PSC has been meeting with TIAA-CREF for some years to discuss how the company is honoring its commitment to socially responsible investing, says PSC treasurer Michael Fabricant.

"We have made the case that higher education faculty were the point of origin for the development of this firm," says Fabricant. "TIAA pension services were created out of higher education faculty paychecks."

TIAA-CREF's new policy defines a responsible contractor as one who pays its workers a fair wage on comparable projects based on local market factors and fair benefits, said Weingarten. The company says that it will provide a copy of its Responsible Contractor Policy when working with prospective contractors and will notify national trade unions when it's soliciting bids. The company further recognizes the right of employees to unionize and will maintain a position of neutrality during an organizing drive in construction, maintenance, operation and service of TIAA-CREF-owned property.

TIAA-CREF also determined that the sale of its interest in the Queens project was appropriate to align with its objectives for its multibillion-dollar portfolio.

President Weingarten praised TIAA-CREF CEO Ferguson for his vision, commitment and support of the Responsible Contractor Policy.

Reprinted from the May/June 2013 issue of On Campus.