Brown Calls for CA Divestment Law Compliance

February 8, 2010 (PLANSPONSOR.com) – California Attorney General Edmund G. Brown Jr. on Monday demanded that the state’s two largest public pension funds comply with state law requiring them to divest from Iran-linked companies.

A Brown news release said letters sent to the pension funds asserted that the California Public Employees' Retirement System (CalPERS) and the California State Teachers' Retirement System (CalSTRS) needed to honor the California Public Divest from Iran Act signed into law in October 2007 (see Schwarzenegger Backs Iran Divestment Bill). The law requires CalPERS and CalSTRS to annually report holdings in companies doing business in the defense, nuclear, petroleum, and natural gas industries in Iran and to divest from any company that fails to take substantial action to cease or limit operations in Iran.

"CalPERS and CalSTRS need to honor the state law requiring them to divest from companies doing business in Iran," Brown said, in the news release. "It's time for our public pension funds to show some leadership and stop supporting companies that do business with a tyrannical regime."

Brown said although CalPERS and CalSTRS both filed annual reports at the end of 2009, these reports failed to:

• Explain whether investments in companies with ties to Iran have been reduced;

• Describe when the funds anticipate fully divesting from these companies;

• Summarize investments transferred to funds that exclude these companies; and

• Calculate divestment costs or losses.

Text of the CalPERS and CalSTRS letters are available here. 

Fred Schneyer
editors@plansponsor.com