CalSTRS Chief Investment Officer Supports Proposed SEC Rules Change
The change would require financial representatives to clearly state they are acting solely for the benefit of their clients.
WEST SACRAMENTO, CA – The California State Teachers’ Retirement System (CalSTRS) announced today its support for proposed Securities and Exchange Commission (SEC) rules requiring financial representatives to act solely for the benefit of their clients when offering defined contribution investment options. The proposed standard is known as the fiduciary standard.
The following is a statement from CalSTRS Chief Investment Officer Christopher J. Ailman in support of the proposed rules changes, which are also detailed in a letter to the SEC:
“As a fiduciary ourselves, CalSTRS has for 100 years worked solely and exclusively to provide retirement benefits and related services to our members. That’s why we strongly support the application of a uniform fiduciary standard to any broker providing professional investment or financial advice to a retail investor. This new standard must be clear, principles-based and enforceable.
“The current standard, in which brokers providing such advice must only disclose conflicts of interest, requires strengthening to advance retail investor protection. We are pleased that the Chartered Financial Analyst (CFA) Institute supports this new standard and hope they are included in the crafting of any rules changes.”
The California State Teachers’ Retirement System, with a portfolio valued at $170 billion as of July 31, 2013, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. For 100 years, CalSTRS has served California’s public school educators and their families, who today number 862,000 from the state’s 1,600 school districts, county offices of education and community college districts.