UNM faculty and staff will soon have a fossil-fuel-free retirement plan option.
“For me and many others, having the option not to invest in fossil fuels is of utmost importance when considering not only my future but my students’, my children’s and the planet’s as a whole,” said Tema Milstein, professor of communications and journalism. “Currently, in the UNM-designated options available via my TIAA retirement plan, I have no choice but to invest my retirement payments each month in the fossil fuel industry.”
On Wednesday, UNM’s Retirement Plan Investment Committee voted to add a brokerage option to supplemental retirement plans. Milstein was one of the UNM community members who attended to show their support for adding the brokerage option.
The supplemental retirement plans include the 403(b) and 457(b) retirement plans, which allow UNM employees to invest in mutual funds through TIAA, Fidelity, Valic, Voya and Metlife in order to build extra savings for retirement.
The brokerage option gives UNM employees the freedom to choose their own investments, said Cherie Knight, human resources project specialist. Four of the five funding companies who run these plans said they could easily open the brokerage option with no additional cost to the University or to the employees using these retirement plans.
Metlife was the only company that said they could not easily add this option, Knight said.
The committee could decide to limit the brokerage option to funds with no transaction fees, she said, but that might restrict the employees’ choices.
Adding this option will not require an amendment to the existing retirement plan, only a change in services, Knight said.
Director of University Benefits Brenda De La Peña said that 27 percent of peer universities similar in size to UNM provide this brokerage option already and only two percent of employees at those universities use the brokerage option.
Because employees would be making these investments on their own, the University is not liable for the risks involved in the investment, Knight said. Currently UNM already has retirement advisors available on campus from the different funding companies who would be able to answer employee questions about the brokerage options.
Using this brokerage window takes more financial and investment knowhow than other retirement plans, UNM accountant Dave Collymore said.
“You do everything on your own,” Collymore said. “You have to know what you’re doing.”
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This decision does not affect the Education Retirement Board (ERB) plan or the Alternative Retirement Plan (ARP). According to the UNM Human Resources website, participation in either the ERB or ARP is mandatory for most UNM employees.
Milstein said the fact that the ERB and ARP are not affected needs to be addressed, but she’s encouraged by the decision to add the brokerage option.
“I hope employees will take advantage of the ability to invest in ecologically and socially responsible ways,” Milstein said.
Art ecology and landscape architecture professor Catherine Harris said it’s an excellent first step towards becoming a more sustainable university.
“We have to recognize that as one of the largest employers in the state, and as one of the largest money pots available, we have huge clout and say in how the world conducts itself in the future,” Harris said. “This is a small potential decision that has huge ramifications.”
Director of Sustainability Studies Bruce Milne said he’s glad to see UNM take a leadership role in being sustainable, as making greener investments could help employees fulfill the UNM value of sustainability.
“There’s a lot of things changing right now with shifts to clean energy,” he said. “There’s a reduction in electricity consumption in the U.S. That means that we’re going to need less coal, less oil going forward. There’s about 100 trillion dollars of fossil fuels still underground, and that’s what constitutes the value of these corporations, and if all of those assets are left in the ground because we don’t want climate change then those investments will decrease in value, so I think this is a chance for people to get on a train that’s moving in the right direction.”
Cathy Cook is a news reporter at the Daily Lobo. She can be reached at news@dailylobo.com or on Twitter @Cathy_Daily.
