CalPERS Opposes Tobacco Divestment

The investment committee of the California Public Employees’ Retirement System decided on an 11-0 vote to oppose two bills that would force the system to sell its tobacco stocks within three years and would prohibit it from making any future investments in tobacco companies. The $128-billion fund’s tobacco holdings are worth more than $1 billion. State Controller Kathleen Connell, a committee member, was the lone abstention. “My primary responsibility to PERS is that of a financial officer,” she said. “It is my role to make sure that I make prudent decisions for the retirement plans for state workers.” She said that although she supports the legislation’s merits, she is concerned that it could set a precedent for the Legislature to meddle in board investment decisions. Separately, CalPERS’ benefits committee approved ethics reforms that would ban any contractor or prospective contractor from making political contributions to board members and fiduciaries. The full CalPERS board is scheduled to vote today on whether to adopt the guidelines, which were prompted by a series of Los Angeles Times articles that probed the CalPERS board’s decision-making process.