State pensions to keep Sudan investments
BOISE – Idaho’s public pension fund managers will keep investing in companies that do business in Sudan, despite concerns from critics who fear the companies may be supporting genocide in the war-torn African country.
Idaho law requires that the Public Employee Retirement System of Idaho (PERSI) manage its money for financial, not political reasons, said Jody Olson, the fund’s board chairman.
The fund has about $23 million invested in six companies that do business in Sudan, and if those companies were doing poorly, it could drop them from its portfolio, Olson said. Those holdings represent about 0.2 percent of the fund’s assets.
In the fiscal year ended June 30, PERSI’s assets rose 20 percent to $11.46 billion from $9.59 billion a year ago. The funds including the Sudan companies are performing well.
Equity funds based in the United States showed a 19.4 percent gain, but the largest increases were in global equity funds – at more than 30 percent – and foreign equity – at more than 34 percent – PERSI board members learned Tuesday.
The pension fund managers can’t simply eliminate the six companies from the funds, Olson said. Instead, they would have to select different, so-called Sudan-free funds that may not perform as well.
“Really it’s a policy issue for us,” Olson said. “We have been asked before to divest from companies that sell tobacco or liquor or that do business in North Korea, and as a policy we don’t limit our managers on those guidelines. We give them financial benchmarks. I’m not sure that, legally, we have any choice.”
The PERSI board of directors reviewed a report on divestiture before making the decision Tuesday. But the board denied a request from Dan Millenson, president of the Sudan Divestment Task Force, who had asked to make a presentation before the final decision was made.
“It’s a very, very sad decision and one that is out of step with what is happening in the rest of the country,” said John Sullivan, a retired Boise attorney who represents the task force in Idaho. “We asked that they poll their membership on the matter, and they refused to do that as well.”
About 18 other state funds have decided to divest in some way from Sudan-related companies, Sullivan said, and 19 more are considering divestiture. The state’s legal argument is shaky, he said.
There are roughly 115,000 public employees covered by the $11.5 billion PERSI public pension fund. Of those, only about a dozen people have written or called to urge divestiture of companies that do business in Sudan. Another six or so wrote or called not to divest, Olson said.
If PERSI had divested, it would have had to sell shares in Petrochina; China Petroleum and Chemical; Mitsui Engineering and Ship Building; French turbine maker Alstom; Swedish energy exploration company Lundin and Malaysian oil and gas company Petronas.