Several US pension funds are announcing that they are, or are considering, divesting from certain arms manufacturers, in light of the Connecticut school atrocities that occurred last month.
The California State Teachers' Retirement System (CalSTRS) pension fund first made this announcement last week after a recent call by CalSTRS board member and California State Treasurer, Bill Lockyer, to divest from companies that manufacture firearms that are illegal for sale or possession in the state of California.
"I think we've taken appropriate action, given the unspeakable and tragic loss of life that occurred in Connecticut last month- the latest in an ongoing line of similar incidents involving assault weapons and mass casualties," said CalSTRS investment committee chair Harry Keiley.
He added: "This latest incident, which occurred at a school and involved fellow educators and the children we cherish, is a tipping point for CalSTRS and speaks to the correctness of our actions. This is not only the right thing to do but positions us to deal with the financial pressures we anticipate this sector of the industry will face."
Since then, public figures and politicians in major cities around the US have called for pension funds to reconsider their strategy regarding investing in certain arms manufacturers, and some pension funds have responded to that call.
Earlier this week in Chicago, Mayor Rahm Emanuel asked all the city's pension funds to check whether they have investments in assault weapons (semi-automatic guns) manufacturers and sellers, and to move towards divesting from these investments.
The Chicago Teachers' Pension Fund board responded yesterday by voting to liquidate its investments in gun manufacturers.
In Los Angeles, Mayor Antonio Villaraigosa yesterday called for the city's three pension fund managers to move their retirement funds away from companies that make certain types of ammunitions.
"I don't want to make a quarter, not a penny, not a dime on companies that make those weapons of war," he said. He added: "It is a moral and financial imperative to end the relationship with these companies."
It was also announced this week that New York's state public workers' pension fund is freezing investment in firearms companies, as directed by New York state comptroller Thomas DiNapoli, in light of the recent tragedy in Connecticut.
"After the terrible events in Newtown, it is clear that the national movement toward greater regulation of firearms manufacturers will impose significant reputational, regulatory and statutory hurdles that may affect shareholder value.
"As the fiduciary of the fund, it is my obligation to protect and grow fund assets, and we will continue to monitor the economic and regulatory environment before taking any additional steps," said DiNapoli.
Pension funds, particularly those that cover public school teachers, are under extra scrutiny regarding which companies they invest in, and some are being pressurised into rethinking their strategy.
In Illinois, it was discovered that two major pension schemes covering public school teachers have small holdings in firearms manufacturing.
A fund spokesman in the area was forced to disclose that even though it had invested in three gun manufacturers, those companies were part of an index fund with many other companies, and that individual companies could not be removed from the strategy.
Back in the UK, The Guardian, under the headline 'Check your pension fund's investments-they may include firearms companies', reported last month that after pressure from CalSTRS, the private equity firm Cerberus announced that it would divest from the company that manufactures the type of gun, which was used in the school shooting where 20 children and six adults were killed.
First published 18.01.2013
monique_simpson@wilmington.co.uk
