Lifetime Citizen Portal Access — AI Briefings, Alerts & Unlimited Follows
Trustees briefed on fossil‑fuel‑free options for employee retirement plan; Vanguard FTSE Social identified as available choice
Loading...
Summary
CapTrust presented an ESG landscape and trustees discussed faculty requests for fossil‑fuel‑free options in the defined contribution plan. Advisers noted the Vanguard FTSE Social Index is a prospectus‑defined fossil‑fuel‑exclusion option in the plan but flagged data provider differences and implementation costs for adding bespoke funds.
Trustees were briefed on options for offering fossil‑fuel‑free investments in the University of Maine System’s defined contribution retirement plan and discussed next steps after faculty requests.
Pete Ruffle of CapTrust led an ESG landscape presentation and said the universe of bona fide fossil‑fuel‑free mutual‑fund strategies is limited. “Today, there is a deliberate fossil fuel free fund in your plan, and that is the Vanguard FTSE social index,” Pete said, noting the fund’s FTSE Russell socially‑responsible index and the prospectus exclusions that underpin it.
Pete also flagged inconsistent third‑party measures: while Vanguard’s prospectus and Morningstar screening show the fund excludes fossil‑fuel companies, another publicly available tracker (fossilfuelfreefunds.org) reported some fossil‑fuel involvement tied to holdings such as Blackstone. Pete summarized the point as a data‑standard issue: different providers and methodologies can return different results.
Trustees and staff discussed how participant‑directed DC plans differ from institutional portfolios that have an explicit system goal of fossil‑fuel reduction. Tracy and other staff noted that other UMS portfolios (managed investment pool, defined‑benefit pension and operating fund) have low‑carbon goals, but the DC plan is participant money and subject to different fiduciary constraints.
Trustees asked whether participants could access fossil‑fuel‑free strategies today. Advisers noted two routes: (1) the Vanguard FTSE Social Index is already in the core menu, though take‑up has been small (advisers cited approximately $187,000 invested, about 0.01% of plan assets), and (2) participants can use the self‑directed brokerage window (about $105 million in assets, representing under 5% of plan assets) to select third‑party fossil‑free funds directly.
CapTrust offered to screen the Vanguard fund holdings on an ongoing basis and to evaluate candidates against benchmarks such as the Carbon Underground 200 on an ad hoc basis, while cautioning that bespoke DC options add recordkeeper and unitization costs. Trustees asked staff to package a clear communication about existing socially responsible choices for faculty and others who asked for a fossil‑free option.
Trustees did not take a formal vote on adding additional menu options at the meeting; advisers will screen candidate funds and staff will report options and potential costs back to the committee.
