FOP Issues: Divestment and PERA
During the 2008 legislative session, the big issue was the initiative of some legislators and special interest groups who wanted to require PERA to sell off some of its holdings in a number of companies doing business in Iran.
FOP opposed this effort for these reasons:
- The PERA Board of Trustees is delegated the responsibility by State law to invest the PERA fund solely for the good of the members and retirees. The Legislature should not micro-manage the portfolio or make decisions based on politics.
- A mixed message was being sent to these companies such as Shell Oil Company which has huge investments in Colorado and employs hundreds of Coloradoans yet the state's pension plan would be required to sell off any stocks it had in the company.
- PERA would have had to sell stocks in companies who had only a small portion, less than 1 percent, of its operations in Iran.
- Scores of companies would have been involved since we are not in a global investment climate. PERA's potential investment field would have been limited; it holds stock in practically every energy company already.
- Some legislators were listening to Washington lobbyists and special interest groups and not the 400,000 Coloradoans who have an account with PERA.
- There is no evidence that divestment works or discourages a government from doing any deed it wants to do. The leaders of rogue nations do not care who owns the stock in these companies. (Proponents of divestment often refer to divestments in companies in South Africa in the 1980's, but the situation is not parallel and was greatly exaggerated.)
FOP is pleased that divestment is not an issue this year...at least not yet.
» Link to archived stories and articles about divestment.