CalSTRS Statement on its Decision to Divest of Certain Firearms Holdings
Investment Committee decides to begin divestment process from assault weapons manufacturers.
WEST SACRAMENTO, CA – The California State Teachers’ Retirement System (CalSTRS) Investment Committee today issued the following statement on its decision to direct staff to begin the process of divestment from firearms companies that manufacture weapons that are illegal in California.
“I think we’ve taken appropriate action, given the unspeakable and tragic loss of life that occurred in Connecticut last month-the latest in an ongoing line of similar incidents involving assault weapons and mass casualties,” said Investment Committee Chair Harry Keiley. “This latest incident, which occurred at a school and involved fellow educators and the children we cherish, is a tipping point for CalSTRS and speaks to the correctness of our actions. This is not only the right thing to do but positions us to deal with the financial pressures we anticipate this sector of the industry will face.”
The decision occurred after a recent call by CalSTRS board member and California State Treasurer, Bill Lockyer, to divest from companies that manufacture firearms that are illegal for sale or possession in the state of California.
“Divestment in such firms would comply with CalSTRS’ existing investment policy and comport with the board’s fiduciary duty to members and beneficiaries,” Lockyer wrote in a letter to Keiley. Lockyer’s letter noted that assault weapons clearly fall into the category of being a product “detrimental to public health and safety.”
The process of divestment will involve engagement between CalSTRS investment leaders and the management teams of the identified firearms manufacturers in which the fund is invested; analysis of the costs of divestment; and discussions with experts in the fields of firearms, public safety research and investments. CalSTRS’ 2009 decision to divest from the tobacco industry followed a similar process.
The California State Teachers’ Retirement System, with a portfolio valued at $154.3 billion as of November 30, 2012, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans, as well as disability and survivor benefits. For 100 years CalSTRS has served California’s public school educators and their families, who today number 856,000 from the state’s 1,600 school districts, county offices of education and community college districts.