African Activist Archive

Contents: Executive Summary • I. THE DISTRICT OF COLUMBIA COUNCIL POSSESSES THE AUTHORITY TO AMEND THE RETIREMENT ACT • A. Congress Intended To Allow the Council To Amend the Retirement Act • B. The Council Possesses the Authority To Amend the Retirement Act Under the Home Rule Act • II. SOUTH AFRICAN DIVESTITURE IS CONSISTENT WITH THE RETIREMENT BOARD'S FIDUCIARY DUTY • A. The Fiduciary's Duties Under the Retirement Act • 1. "Solely in the interests of the participants and beneficiaries" • 2. "Exclusive Purpose for Providing Benefits" • 3. Divestiture Is Consistent With the Common Law Duty of Loyalty • B. Other Pension Funds Have Lawfully Engaged in Divestiture • Conclusion • Memorandum to the DC City Council on some legal points raised by the opposition to the a divestment bill. The memorandum says the District of Columbia Council is considering legislation that would, among other things, require the District of Columbia Retirement Board to divest its funds from companies making loans to, or doing business with, the Republic of South Africa. Opponents of Bill 5-18 have challenged its legality on two grounds: that the District of Columbia Council has no authority to amend, in any way, the Retirement Reform Act, Pub. L. No. 96-122, 93 Stat. 868 (1979) and that divestiture would be a breach of the Retirement Board's fiduciary duty. The memorandum says both these contentions are without merit. The District of Columbia Council must, of course, ascertain whether divestiture would compromise the financial integrity of the retirement system; if the Council concludes that divestiture will not affect that system adversely, then there would be no legal impediments to adoption of this legislation. The memorandum discusses Arnold and Porter, the Employee Retirement Income Security Act (ERISA), Congressman Dellums, District of Columbia General Counsel Lawrence H. Mirel, the Retirement Fund, financially neutral social investments, the Chrysler Corporation, the United Auto Workers (UAW), public pension funds, and restricting investment of state trust funds in South Africa.

African Activist Archive

RE: Authority To Adopt Bill 5-18, The South African Divestiture Legislation

TO: D.C. Divest

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