Divestiture and......is Golden Boy Mandel up to his old tricks again?

From John Curry, January 22, 2012

http://www.vindy.com/news/2012/jan/21/pressure-on-pension-funds/?newswatch

Pressure on pension funds

January 21, 2012
Columbus

Remember that brouhaha a few years back about how public funds shouldn’t be invested in companies that are bolstering the coffers of countries that are trying to kill Americans?

Turns out Ohio’s public employee pension systems still hold investments in companies with ties to the governments of Iran and Sudan, though most have made progress in decreasing those interests over the past five years.

And one, the Ohio Police and Fire Pension Fund, has instituted a new policy to fully divest in all such holdings — a change some state officials hope the other pension systems will adopt.

“The goal here is to maximize the returns for their beneficiaries, for their retirees and for the current plan members, which is something we all support,” said Sen. Keith Faber, a Republican from Celina who serves as chairman of the Ohio Retirement Study Council. “I believe it can be done without having to invest in companies that are doing business and helping prop up the government of Iran and the people committing genocide in Sudan.”

The divestment status report was offered during a meeting last week of the Ohio Retirement Study Council.

Legislation

In 2007, lawmakers were poised to pass legislation requiring the public employee pension systems to pull their investments in such companies.

State Treasurer Josh Mandel, a Republican who is hoping to unseat U.S. Sen. Sherrod Brown, was the original co-sponsor of that bill.

“The ultimate goal is they should have zero holdings in foreign companies that are drilling oil in Iran while Iran is [backing] roadside bombs against American troops overseas,” said Mandel, also a Marine Corps veteran.

Ohio was one of the first states in the country to consider such legislation, and Mandel said about 30 other states now have comparable policies in place.

But lawmakers stopped short of passing the bill at the time after pension officials adopted policies voluntarily agreeing to decrease such holdings. And they’ve done that. The Ohio Police and Fire Pension Fund holdings in such companies had a market value of about $41.8 million as of October, down from more than $251 million in June 2008.

The School Employees Retirement System held fewer shares in such companies, but the market value of its holdings increased to more than $73 million as of June 30 from about $64 million a year earlier, according to documents.

And the State Teachers Retirement System decreased the market value of its holdings to about $476 million as of the end of June from more than $1.6 billion four years earlier, according to documents.

However, at least one group says the state pension funds have not made enough progress on the issue.

“My leadership has expressed to me that they are frustrated by what they see as the state pension funds dragging their feet on divestment,” Joyce Garver Keller, executive director of Ohio Jewish Communities, said in testimony to the Ohio Retirement Study Council.

She added that the group supported the Ohio Police and Fire Pension Fund’s new attempts to fully divest in companies with ties to Iran and Sudan.

“We hope that the other pension funds will adopt this language and move to fully divest, making a strong statement that Ohio stands against genocide and terrorism by taking these actions.”

Faber later added, “I don’t think it’s good that hard-working Ohioans’ money is invested in companies that are essentially profiting [Iran and Sudan].”

And Mandel: “We hope that the pension funds would not drag their feet as they have. It’s my hope that the legislature continues to apply pressure and the pension funds continue to see that the people of Ohio reject what they’re doing.”

Marc Kovac is The Vindicator’s Statehouse correspondent. Email him at mkovac@dixcom.com or on Twitter at OhioCapitalBlog.