Columbus Dispatch: Arm-twisting gets Ohio pensions to divest from Iran, Sudan
Ohio's five public pension systems capitulated to demands from lawmakers that they give up investments in companies that do business with Iran and Sudan.
After resisting calls to divest as an affront to their ability to make money for government employees, the executives of the five pension funds told House Speaker Jon A. Husted that they would work to pull most of their money out of companies with ties to the two Islamic nations.
The pensions, which collectively represent 1.3 million current and retired public employees, agreed to drop at least half of their investments connected to Iran and Sudan by the end of the year. They committed to the goal of ultimately withdrawing all such investments.
The agreement, although not final, appears to end a standoff between pension executives and lawmakers who say money from state and local workers shouldn't be used to fund terrorism or the slaughter of civilians.
Husted, R-Kettering, brokered the compromise Tuesday as an alternative to a bill that would have required the pensions to give up all holdings in Iran and Sudan as quickly as possible.
Husted's spokeswoman, Karen Tabor, said the speaker supports any measure to pull out Ohio pension investments from countries that sponsor terrorism.
"It's irrelevant whether the divestment is accomplished by public policy or legislation or voluntarily," Tabor said. "The goal was to make sure that public pension dollars were not used to support terrorism or put our troops in harm's way, no matter how that was to be accomplished."
Pension executives notified Husted's office of their decision in a letter delivered late this afternoon, just minutes before the deadline for them to withdraw their investments voluntarily or face legislation that would force them to do so.
Ohio pension funds historically have resisted attempts to link their investment policies to political goals. Efforts to force them to divest holdings in companies with ties to apartheid-era South Africa in the 1980s and Northern Ireland in the 1990s were defeated.
One of the sponsors of the current bill, Rep. Josh Mandel, R-Lyndhurst, has signaled that he still wants a vote — regardless of any compromise measure. An aide to Mandel said yesterday that the representative needs to read the pension systems' letter before deciding whether to push for a vote on his bill Tuesday.
Some retired public employees have said they're angry that their pensions are being dragged into a foreign-policy debate. An analysis done for the largest Ohio pension fund, the Public Employees Retirement System, estimated that it could lose nearly $250 million a year by moving investments to companies with no ties to Iran.
"This seems to me like an abdication of their fiduciary responsibilities," said Jeff Glasgow, a retired assistant Franklin County prosecutor who lives in Westerville. "To say I'm disappointed would be an understatement. With any compromise, they're playing with my money and other retirees' money."
In their letter to Husted, the five pension executives said they were trying to balance their opposition to terrorism and genocide with their responsibility to fund pension and health benefits for their members.
"We're going to have to make these divestiture decisions in line with our fiduciary duties," said Laura Ecklar, spokeswoman for the second-largest pension, the State Teachers Retirement System. "The whole goal is to maximize returns and not lose money."
jnash@dispatch.com
posted by Kathie Bracy at 9:32 AM
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