Retirement Board Agrees to Divest Holdings
After 2 1/2 months of bickering with the city’s elected officials, the Fire and Police Retirement Board has agreed to divest its holdings in companies that do business in South Africa.
The retirement board had earlier refused to obey the city Board of Directors’ order to divest, saying the move would hurt the $35.2-million pension fund.
But the retirement board dropped its opposition at a special meeting with the directors on Monday.
David Davis, vice chairman of the retirement board, said the change of heart came after members were told that the City Charter requires that the fund be “subject to the same terms, limitations and restrictions” as the state public employees retirement fund.
Investment Prohibited
Since Jan. 1, 1987, state law has prohibited the California retirement system from investing in companies with South African ties.
Davis said the retirement board’s attorney still has to confirm the City Charter requirements but that he expects no surprises.
“No one is served by having this drag on,” he said.
The fund now has $3.5 million, or 10% of its stock holdings, in companies such as 3M Corp., Control Data Corp. and Texaco Inc. that continue to do business with South Africa.
Under the requirements controlling the state retirement system, all such holdings must be sold by Jan. 1, 1991.
Simmering Since ’86
The battle over the fire and police pension fund has been simmering since 1986 when the directors approved a policy banning such investments.
At that time, the directors asked the retirement board to comply, but it refused, believing the board was an independent body.
The directors did nothing to challenge the board then, and the issue was eventually forgotten.
But in August, Director William Paparian, who serves as the directors’ representative on the retirement board, raised the issue again.
Finally, the directors called for the face-to-face meeting Monday.
If the retirement board had again refused to comply, several directors said they were prepared to fire two members and replace them with representatives who would agree to divest.
