Sponsors of the bill are preparing to push the
issue of divestment by the State Board of Administration,
the pension investment agency, when the Florida
Legislature returns this week following its
Easter-Passover break, according to a South Florida
Sun-Sentinel news report.
According to the news story, divestiture of holdings in entities that do business with Iran’s energy sector has the most lawmaker backing. Concerned about what they see as Iran’s threat to Israel, Jewish Democratic and Republican lawmakers from South Florida are leading the effort.
“Iran is a festering weed. By not watering it, by not investing in it, we will kill it off and keep it from spreading any further harm,” state Representative Ari Porth told the newspaper. State Representative Adam Hasner helped round up support. “We invest in these companies at our own peril,” he said.
The Iran provision is also championed by the influential national political organization American Israel Public Affairs Committee.
The news report said the Sudan provision has the support of a growing grassroots movement that has helped lead to divestiture in seven states. Legislation is pending in 12 more.
The Costs of Divestiture
Meanwhile, Coleman Stipanovich, executive director
of the State Board of Administration told the newspaper
that divestiture could prove costly and subject the funds
to legal challenges.
There is a potential cost, the news report said. If the funds get lower returns, the governments that cover their employee pension costs ultimately could have to pay more. Employees in the government version of 401(k) plans might have less in their accounts when they retire.
In its discussion of the issue last week, the CalSTRS board warned that sweeping investment bans could hurt investment returns and cost the fund money (See CalSTRS Opposes Broad Investment Bans).