CalSTRS Board Rejects Law Barring Sovereign Wealth Investments

This is a STRONG and very PUBLIC stance by one of the largest public pension plans in the country.

March 7, 2008 (PLANSPONSOR.com) - The California State Teachers' Retirement System (CalSTRS) trustees on Friday voted to oppose proposed state legislation that targets foreign government-controlled cash reserves called sovereign wealth funds.

In a press release CalSTRS said it is against California Assembly Bill 1967 due to its restriction to the board's investment authority and significant negative financial impact to the investment portfolio. The proposed state legislation would:


Prohibit CalSTRS and the California Public Employees Retirement System (CalPERS) from new or renewed investments with private equity companies wholly or partially owned by a sovereign wealth fund affiliated with a country with a poor record on human rights, and

Require extensive research, evaluation and reporting by CalSTRS on foreign affairs before making a new investment in firms affiliated with sovereign wealth funds that are not prohibited by the bill.

"This bill would be a blow to the retirement security of teachers while doing nothing to ensure a better world," said Dana Dillon, Teachers' Retirement Board chair and teacher/librarian with the Weed Union Elementary School District, in the release. “We have a strong record of addressing these issues in our investment decisions.”