Retirement funds scrutinized
Bills seek divesture from firms tied to Iran, Sudan
Rep. Julie Fisher, R-Fruit Heights, and Rep. David Litvack, D-Salt Lake, both have bills that could force the Utah Retirement System to take money out of firms — divest their investments — if they have dealings with those two countries, which are abusing human rights in various ways, they say. Fisher's bill deals only with foreign firms, Litvack's with domestic and foreign firms.
Fisher said that the state system should not be investing in a country that sup- ports terrorism, especially against American troops in the Middle East.
"It really bothers me that we are sending our sons and daughters over to Iraq to fight for our freedom when our own state retirement system may be investing in (Iran), the very economy that is trying to destroy us," she said.
The bill is supported by the Retirement and Independent Entities Interim Committee, although it will be heard again during the upcoming general session. During a November committee hearing, Fisher said that "whatever we can do (to fight) the war on terror, we should. And Iran is leading the terrorist movement."
"It targets the worst offending companies," Litvack said. "We're really going after those that are contributing to the genocide."
These bills reflect a growing trend in financial circles for "socially responsible investments," said Dan Andersen, staff counsel for the Utah Retirement System. But it's also a trend that could cost large public retirement systems considerable money, both through additional consulting costs and potential lost profits, while showing little benefit to the original causes, he said.
The bills, he said, should be rejected because they are "ineffective, costly, burdensome, inefficient, fraught with legal problems and (could well) violate the principles of federalism." Federal courts have already struck down some state SRI laws as being unconstitutional because they stepped into foreign policy, a right reserved for the federal government, Andersen added.
The URS currently is not under any legal requirements on where its investments can go, other than standard investing laws followed by most public funds. Even if there were special laws for the URS, however, they could be difficult to implement because the system works with various consulting firms. "We try to have the safest and best investments — but that's it," Andersen said. Over a 30-year span, the URS has made just under 10 percent interest each year, a rate considered very good by industry standards. "We have 130,000 people in our retirement plan, between those who have retired and those still working" and contributing to the URS, he said, and the system's job is to maximize their pensions, not taking up social causes, no matter how good they might be.
Recent comments
Why is it that so many of the state legislators and school districts...
travelgirl 39 | Jan. 13, 2008 at 12:57 p.m.
