Pension funds seek US SEC halt on proxy proposals

By Rachelle Younglai

WASHINGTON, Nov 19 (Reuters) - Institutional investors urged the U.S. Securities and Exchange Commission on Monday to refrain from acting on two proposals that would determine ways shareholders can nominate directors using a corporate proxy.

Eight domestic and international pension funds, representing more than $300 billion in U.S. public equity, are asking SEC Chairman Christopher Cox not to act, especially given that the agency is operating with four commissioners instead of five.

One of the Democratic commissioners left for a law firm in September, the other Democrat on the panel has announced her resignation but has not set a departure date.

"We are dead serious in opposing this action," Fred Buenrostro, chief executive of the California Public Employees' Retirement System told a conference call with reporters. Calpers is the largest U.S. pension fund with $252 billion assets under management.

The SEC is expected to proceed with a proposal this year to clarify its proxy rules after a 2006 federal court decision questioned the agency's interpretation of them.

Proxy statements are sent to shareholders ahead of annual meetings telling them about nominations for director seats, executive pay levels and other information.

Calpers and other funds such as the California State Teachers' Retirement System (CalSTRS) and five New York City pension funds sent terse letters to Cox on Monday, but stopped short of threatening the agency with lawsuits.

"You are about to preside over the largest setback to shareholder rights in over three decades," Calpers said in its letter. CalSTRS said; "Why waste the resources of the market and the agency by enacting this unsatisfactory measure."