SACRAMENTO -- The nation's biggest public pension fund is taking a stand against gun violence by voting to sell all its investments in two firearms manufacturers: Smith & Wesson Holding Corp. and Sturm, Ruger & Co.
On Tuesday, the Investment Committee of the California Public Employees' retirement System voted to sell about $5 million worth of the gun makers' stock and other securities.
Some of the two companies' products -- particularly assault weapons and cheap handguns, known as Saturday night specials -- are illegal in California.
They "present a significant danger to the health, safety and lives of California residents, including our members, no matter where such weapons are sold or trafficked in the United States," read the motion approved by the CalPERS board's Investment Committee in a 9 to 3 vote.
Representatives of Smith & Wesson and Sturm, Ruger did not respond to requests for comment on the CalPERS vote.
Sale of the stock should not affect the financial health of CalPERS' $254-billion investment portfolio, staff said in a report to the board.
The move to divest gun securities was the second by a California public pension fund since the December massacre of 20 Sandy Hook Elementary School children and six adults in Newtown, Conn. Last month, the $154-billion California State Teachers' Retirement System, the country's second largest government retirement plan, took a similar action.
CalSTRS and CalPERS took up the divestment issue at the request of state Treasurer Bill Lockyer, a member of both boards. Lockyer called the vote "largely symbolic" but stressed that it's an important way to spur incremental change.
"We're limited by the constraints of our responsibility and the rules that CalPERS has," said Lockyer. "There's only one way that we speak and that's with money.
Board members Dan Dunmoyer, Richard Costigan and Bill Slayton, who opposed the move, questioned the wisdom of sellling stock in companies for nonfinancial reasons. "The premise we are taking is one that is fraught with tremendous peril," said Dunmoyer, an insurance company executive.
The divestment actions by the two California pension funds are expected to encourage other large government employee pensions to sell their gun securities. Funds in Chicago, New York state, New York City, Connecticut, Rhode Island and Massachusetts have publicly said they are exploring such divestments.
The California funds have a long history of using divestment as a tool for social and political change. Their decision to sell investments in companies operating in South Africa played a role in ending the white supremacist regime and its apartheid policy of separating the races.