Bill Would Bar U.S. Institutional Investors From Russia

The bill cites vulnerable pension and participant retirement fund exposure to Russia assets.

U.S. institutional investment in Russian securities would be barred by a bill introduced by Sen. Marco Rubio, R-Florida. Rubio introduced the bill—Instituting Measures to Protect American Investors and Retirees from Russia Act—because many investors, including retirees and pensioners, hold investments with exposure to Russia but are unaware, he says.

“Vladimir Putin’s invasion of Ukraine has left the Russian economy in shambles,” Rubio states. “We need to minimize the resultant harm to Americans, including teachers and retirees, who have pensions and retirement accounts invested in Russian securities.”

“Many Americans do not even realize that fund managers have placed their money in these Russian companies,” he states. “My bill would change that, protecting American retirees and denying Russian companies a critical source of capital.”

The Ukraine invasion has sent ripple effects across world economies. The war has already crashed Russia’s stock market, which plunged 23.6% in late February.

Many of the largest U.S. pension funds, including the California Public Employees’ Retirement System and California State Teachers’ Retirement System, have retirement participant funds with exposure to Russia assets. According to reports, the CalPERS fund has $900 million in Russia exposure, and CalSTRS approximately $800 million.

Sanctions imposed on Russia have forced Colorado’s public pension to offload a $7.2 million investment in Sberbank, a Russian state-owned bank. The Russian economy is expected tumble further from the country being isolated from the international economy, as Russian banks have been cut off from SWIFT, an independent organization that facilitates international payments by linking more than 11,000 banks and other financial players in over 200 countries and territories.  

In Illinois, New York and New Jersey, lawmakers are advancing measures to divest from Russian investments. 

The Rubio bill sets parameters to define “institutional Investor,” as an investment company defined by Section 3 of the Investment Company Act of 1940; an insurance company, as defined in section 2(a) of the Investment Company Act of 1940; and a fiduciary “within any meaning of Section 3(21) of the Employee Retirement Income Security Act.”