Columbus Dispatch on HB 151: Pension bill now orders only partial divestment
Instead of approving a bill that would have required the state's five public pension systems to divest all of their nearly $1.1 billion in investments tied to Iran and Sudan, House leaders decided to ask fund executives to voluntarily give up half of those investments by year's end.
They were given 48 hours to decide whether to agree to the deal brokered by House Speaker Jon A. Husted, R-Kettering, after several hours of private meetings. The compromise came after weeks of sometimes emotional debate over whether the money of retired state employees should be used as bargaining chips in national-security policy.
The original bill would have forced the pensions to withdraw investments in all companies that do business with Iran. Reps. Josh Mandel, R-Lyndhurst, and Shannon Jones, R-Springboro, later agreed to strip the bill down to energy companies, but it was expanded to include Sudan.
[Information from chart included with article; chart too small to blog]:
Four of the Ohio's five public pension funds have investments with companies that do business with Iran and Sudan. Under a compromise reached yesterday, the pensions would have to reduce their investments with those companies by at least half by year's end. The total investments by each fund in the affected companies:
FUND..........................................................................INVESTMENTS
Highway Patrol Retirement System.........................................$0.00
Police and Fire Pension Fund......................................$164,353,402
Public Employee Retirement System...........................$216,056,507
School Employee Retirement System...........................$96,710,637
State Teachers Retirement System.............................$616,519,946
TOTAL....................................................................$1,093,640,492
U.S. officials accuse Iran of fomenting religious violence in Iraq as well as developing nuclear weapons. Sudan is accused of harboring terrorist groups and standing by as Arab militias slaughter black Africans.
Pension board members and advocates for retired state employees have resisted any attempts to let political or national-security considerations restrict pension investments.
"It's like the old saying, the devil is in the details," said Laura Ecklar, spokeswoman for the State Teachers Retirement System. "The fact that there's still conversation is certainly always good. That we can accomplish this goal without mandated legislation is a step in the right direction."
Advocates for retired state employees had urged lawmakers to reject any restrictions on pension investments, saying it's unfair to penalize retirees over abstract global-security considerations. There was, however, little data on whether reinvesting $1.1 billion in Iran- and Sudan-connected pension assets would yield lower returns. The Public Employees Retirement System estimated that it would lose $244 million a year, but its calculation was based on an early version of the bill.
Mandel and Jones insisted that the pensions could yield higher returns. They pointed to the example of Missouri, where they said a terrorist-divestment law resulted in a 3.9 percent increase in returns.
Mandel and Jones could not be reached late yesterday.
Husted spokeswoman Karen Tabor said the House speaker hopes that pension executives will voluntarily pull retirees' money out of companies with ties to Iran and Sudan.
"We as a state need to be cautious because clearly there are funds that support terrorism," Tabor said.
William Winegarner, executive director of Public Employee Retirees, an advocacy group for Ohio pensioners, said he remains concerned about any attempt to link pension investments to foreign policy.
"Our position has been all along that the legislature should not be mandating in any way, shape or form the investment policies of the retirement systems," Winegarner said. "The retirement systems have a fiduciary responsibility to their members to handle their money properly. We feel that this particular bill was based on emotions."
posted by Kathie Bracy at 9:03 AM
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