Chicago Teachers Pension Fund trustees vote to drop investments in firearms companies that produce and sell 'assault weapons'
Trustees of the Chicago Teachers Pension Fund (CTPF) vote unanimously at their January 17, 2013 meeting to stop investments in corporations that manufacture and sell dangerous firearms. The vote came a month after the trustees first proposed the move, following an investigation by the fund's staff and attorney to evaluate the best legal way to do the move.
During the meeting, CTPF attorney Tiffany Reeves gave the trustees a report on the complexity of the proposal. She noted, among other things that weapons investments can include as wide a range of investments as antique firearms and corporations, some of which are among the largest in Chicago and the world, that produce both civilian and military products. The resolution was carefully crafted to take into account, as well, the responsibilities of the trustees to protect the interests of the CTPF annuitants and current teachers.
CTPF is one of the oldest defined benefit pension plans for teachers in the USA. The current trustees include six teachers (elected by active duty teachers), three retired teachers (elected by retirees drawing pensions, one of whom is this reporter), one principal, and two members of the Chicago Board of Education. The two Board members were not present at the time of the vote on the firearms resolution.
THE RESOLUTION THAT WAS APPROVED JANUARY 17.
"The CTPF Board recognizes that as a fiduciary it must act solely in the interest of the participants and beneficiaries of the Fund. The Board has an obligation to protect Fund assets and minimize the risk of investment losses. Consistent with its fiduciary duties, the Board is sensitive to the significant reputational, regulatory and statutory risks that may affect the shareholder value of assault weapon manufacturers. The Trustees hereby instruct the separate account managers to liguidate any and all public market holdings in retail assault weapon manufacturers as soon as reasonably practicable, and in accordance with the manager's fiduciary duties.
"Further, the Trustees hereby instruct private market managers to review investment in retail assault weapon manufacturers, and work with CTPF staff to evaluate divestment options.
"In addition, the Board hereby instructs staff to monitor the economic and regulatory environment, and work with legal counsel to develop comprehensive divestment and investment risk policies."
Contrary to some reports, the CTPF trustees were working on the policy, which had been discussed at two meetings (one general meeting; one a committee meeting) since the tragic murders at Sandy Hook Elementary School in Newtown, Connecticut again brought the issue of "assault weapons" to public attention.
Because CTPF does not invest the Fund's $10 billion directly, but through hired managers for various activities, the resolution above consists mostly of instruction to those managers. CTPF has long held policies about certain kinds of investments, as long-time trustee James Ward pointed out earlier. For example, CTPF divested from corporations doing business with South Africa during the apartheid days. CTPF also insists on minority, women-owned and local investments in its business dealings.