By Jim Spencer
SpencerSpeaks.com
First the
The road to stripping public pensions of immoral investments will require significant detours.
The question of whether the flood gates of divestiture have opened is itself an open question.
However, until the concept of fiduciary responsibility changes, buying stocks and bonds that generate enough return to fund the retirement checks of former state employees begins and ends with an amoral commitment to making money.
Meredith Williams, who directs the Colorado Public Employees’ Retirement Association known as PERA, acknowledged as much after the hoopla of a press conference in the governor’s office announcing the agreement on
“PERA employees are part of a trust,” Williams explained. “By law, they have a fiduciary responsibility to do what is in the best interest of (retired) employees.”
That means that for all the talk of punishing
“That’s possible,” Williams agreed in an impromptu press conference in the halls of the Capitol.
The legislature set the legal standard for automatic divestiture at genocide. There is no genocide in
The moratorium on future investments in Iran-linked companies is a start. It avoided legislative action that is hard to adjust to meet changing circumstances. It received the blessings of Republicans and Democrats, as well as the Jewish Community Relations Council.
State Treasurer Cary Kennedy, a Democrat, called the Iranian divestiture resolution an “example of success achieved when everyone works together without partisan bickering.”
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It is also a model without deadlines. The
“The biggest change is in gathering information (about companies’ Iranian connections),” Williams said. “We’ll go more in depth and engage the companies (in discussions of their Iranian ties) – what portion of their operations are in
PERA will file quarterly reports of its progress in Iranian divestiture. But right now, it has not even developed a list of companies that will be excluded from future investments nor has it decided which, if any, of its current holdings ought to be shed.
The standard will be if a company has invested more than $20 million in the Iranian energy industry in any one of a specified 10 years, Williams explained.
Once again, no time frame exists for PERA establishing a list of those who have done that.
The promise of action hinges on untangling often complex trails of ownership that wind their way back to
But even that does not guarantee the sale of existing holdings if PERA can’t find non-Iran-linked companies that offer a comparable value and return.
Gov. Bill Ritter was right when he said that divestiture by public pensions helped bring an end to apartheid in
But as long as the road to what’s morally right runs through the intersection of what’s fiscally sound, the citizens can expect gridlock.
Copyright 2008 by Jim Spencer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
3 users commented in " Divesting in Iran Could Prove Tricky for Public Pensions "
Follow-up comment rss or Leave a TrackbackThis is not an isolated phenomenon: every corporation, not just pension plans, is required either by statute or founding documents to maximize profit first and foremost. Leaves little or no room for entities that want to do some social betterment projects, does it? Not that I’m convinced we should do this to Iran. It’s a naughty bunch over there but not the worst by a long shot. We could find our state employees without a place to invest in if we don’t think this through. After all, investments congregate where the money is, just like corruption, greed, and malice do. We want investments where there is no corruption? Hmmm.
[…] Jim Spencer wrote an interesting post today on Divesting in Iran Could Prove Tricky for Public PensionsHere’s a quick excerptOn Tuesday, the state’s retirement program announced a moratorium on new investments in companies doing significant amounts of business in the Iranian energy industry. This follows legislation last year that decreed divestiture of … […]
I guess the quandry is whether to sacrifice principle for principal then? It would be harder for the pensioners to live on “principles” than the extra principal generated by these funds. The extra principal could mean they don’t have to choose between prescriptions and food each month.
I would guess our country originally furnished a lot of the weapons that eventually took American lives in Afghanistan and perhaps Iraq. Does that make us a terrorist country too?
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