CONTENTS Griffiths, Hon. Martha W., chairman of the Subcommittee on Fiscal White, William L., professor, Graduate School of Business Administration, Murray, Roger F., executive vice president and chairman, CREF Finance Committee, Teachers Insurance and Annuity Association and College Cohen, Manuel F., attorney, Wilmer, Cutler & Pickering, and former Schotland, Roy A., associate dean, Georgetown University Law Center__ Werner, Walter, professor, Columbia University Law School and Graduate Levitt, Arthur, comptroller, State of New York. Dietz, Peter O., professor of finance, Graduate School of Management and Harbrecht, Paul P., professor of law, York University, Toronto, Canada_ Lerner, Eugene M., professor of finance, Graduate School of Management, Babson, David L., president, David L. Babson & Co., Inc., Boston, Mass__ MONDAY, APRIL 27, 1970 "1. Assets of Private Noninsured Pension Funds". "2. Assets of All Private and Public Pension Funds". "1. Purchases, Sales and Net Acquisitions of Common Stock”. "2. Purchases, Sales and Net Acquisitions of Common Stock- "3. Common Stock Activity Rates (Revised)" Javits, Hon. Jacob K.: "S. 2167-Introduction of the Pension and Employee Benefit Page Murray, Robert F.: Response to Chairman Griffiths' query relative to the largest block of stock that the College Retirement Equities Fund has bought or sold in the past 5 years and what happened to that stock within the next 72 hours after the purchase or did the market go up or down and by how much after a large sale or a large purchase.. White, William L.: 89 66 Prepared statement... Babson, David L.: Article entitled "The Investment Management 'Industry' and Its Griffiths, Hon. Martha W.: Correspondence with Chairman Budge of the Securities and Exchange Commission relative to appearing before the subcommittee____ Keenan, Joseph D.: Response to Chairman Griffiths' request to supply for the record a response to Mr. Babson's observation that competition between unions is not comparable to the competition between Chrysler, Ford, and General Motors, and his indictment of organized labor being a cartel and/or monopoly primarily responsible for inflation............... 223 205 235 INVESTMENT POLICIES OF PENSION FUNDS MONDAY, APRIL 27, 1970 CONGRESS OF THE UNITED STATES, The Subcommittee on Fiscal Policy met, pursuant to recess, at 10 a.m., in room S-407, the Capitol Building, Hon. Martha W. Griffiths (chairman of the subcommittee) presiding. Present: Representatives Griffiths, Widnall, and Conable; and Senator Javits. Also present: John R. Stark, executive director; James W. Knowles, director of research; Loughlin F. McHugh, senior economist; and Douglas C. Frechtling, economist for the minority. Chairman GRIFFITHS. The Subcommittee on Fiscal Policy will come to order. Pension funds-both private and public-are one of the major avenues through which savings of our people are channeled to investment-both public and private. As one of our witnesses today suggests, this institutional intermediary is a source of added investment funds because it gives our citizens an incentive-which might not otherwise be present-to continue to put their private and individual resources into regular savings rather than into consumption, while the pension funds provide a base for their oldage living requirements. In other words, total savings of the people are increased, and therefore, hopefully, total investment can be increased, contributing to the strength of the economy. I need not dwell on the facts, but I would like to bring out the importance of this subject as critical to the overall savings-investment process and hence to the potential improvement of our domestic well-being. Today, public and private pension funds own $240 billion of assets, well over double the book value of assets owned less than a decade ago. Private funds, insured and uninsuredbut not counting regular life insurance-now account for roughly $130 billion, compared with $50 billion at the start of the 1960's. Public funds-Federal and those for State and local employeescurrently amount to over $112 billion, just about double that of a decade ago. For the record I should like to include two tables from the SEC release of April 20, 1970, showing (table 1) the assets of private noninsured pension funds, and (table 2) the assets of all private and public pension funds. (Tables 1 and 2 referred to by Chairman Griffiths for inclusion. in the record follow:) (1) TABLE 1.-ASSETS OF PRIVATE NONINSURED PENSION FUNDS [Book value, in millions of dollars; figures may not add to totals due to rounding; includes funds of corporations, nonprofit organizations and multiemployer and union plans] Corporate and other bonds. 15,700 16,880 2,920 18, 100 3,050 3,070 3,100 2,610 2, 170 2,540 2,590 19,560 Preferred stock. 21, 210 22,700 24, 580 780 25, 500 26, 160 760 750 26,640 710 650 Common stock. 750 790 10,730 980 13,340 1,320 1,740 15,730 18, 120 20,840 Mortgages. 24,450 1,300 28,340 33,830 40,260 1,560 1,880 45,960 2,220 Other assets. 2,750 3,320 3,810 1,400 3,940 1,590 3,910 1,800 4,010 2, 120 2,510 2,820 3,430 4,110 4,450 4,740 Source: U.S. Securities and Exchange Commission, release No. 2437, "Private Noninsured Pension Funds 1969," April 20, 1970. TABLE 2.-ASSETS OF ALL PRIVATE AND PUBLIC PENSION FUNDS [Book value, in billions of dollars; figures may not add to totals due to rounding] 2 Estimated. + Not available. $ Separate accounts of life insurance companies, set up for specific pension plans, allow greater investment latitute than is permissible under state laws for general life insurance assets. Includes funds of nonprofit organizations and multiemployer plans. Includes foreign service retirement and disability trust fund. Source: SEC, Apr. 20, 1970, release. |