Police, Fire Panel Accepts Divestment

The Los Angeles Board of Police and Fire Commissioners--the city’s largest pension board--today adopted a controversial divestiture plan that would purge its $1.8-billion fund of investments in firms that do business in South Africa.

In a 4-2 vote, the commissioners--over the protests of members representing police and firefighters--approved the five-year phase-out of South African-related investments, which is to be carried out with the help of independent legal and financial experts to ensure that there is no financial loss to the pension fund.

“This program is a cautious and careful approach to divestiture,” said Commissioner Sherman Andelson. He said safeguards have been included to protect the soundness of the pension fund.

Legal Action Promised

Kenneth E. Buzzell, a representative of the United Firefighters of Los Angeles, which represents 3,000 firefighters, charged however, that the action is “social investing” and promised a legal challenge if divestiture threatens the pension benefits of the 18,000 retirees and firefighters and police officers who rely on the fund.

Under its plan, the board would gradually begin divesting the $350 million in South African-related investments from its portfolio. Within a year, the board must completely rid its portfolio of assets from all companies that provide military goods and services to the South African government.

First With Policy

The police and fire commission is the first pension board to adopt a divestiture policy that has been pushed by Mayor Tom Bradley and that was unanimously adopted by the City Council. The City Employees Retirement Board and the Department of Water and Power Commissioners have yet to act on a similar proposal.

The commission’s action got swift approval from the office of Mayor Tom Bradley, who had introduced the original divestiture package in May.