Ohio State Teachers Retirement System Newsletter
September 21, 2007
RETIREMENT BOARD CONTINUES DISCUSSION ON DRAFT DIVESTMENT POLICY
At its August 2007 meeting, the State Teachers Retirement Board
reviewed
a draft policy developed by STRS Ohio staff regarding the divestment
of
investments in Iran and Sudan. The Retirement Board continued its
discussion of this draft policy at its September 2007 meeting and
received input on the policy from its investment consultant, Russell
Investment Group, as well as from fiduciary counsel. The draft policy
is
limited to STRS Ohio's actively managed international portfolios in
equities and fixed income. As written, STRS Ohio would not divest of a
restricted security in Iran or Sudan unless a comparable substitute of
equal risk and return, including transaction costs, is available.
Both the investment consultant and the fiduciary counsel concluded that the draft policy presented to the board protects the board's fiduciary responsibilities to the membership. This is in contrast to the provisions of Substitute House Bill 151 and Senate Bill 161 that mandate divestment by all five Ohio public pension plans. The Retirement Board has previously passed a motion opposing any legislatively mandated divestment of investments in Iran and Sudan, citing that such divestment is inconsistent with the board's fiduciary duties. Staff will respond at the October 2007 meeting to the board's request for more information about the proposed divestment process.
