Kan. Lawmakers Mull Pension Fund Iran Divestment

January 30, 2012 (PLANSPONSOR.com) - A Kansas House committee discussed a proposal to compel the Kansas' Public Employee Retirement System (KPERS) to divest financial holdings in Iran.

The chamber’s pensions and benefits committee didn’t take action, but Representative Scott Schwab argued the nuclear threat posed by Iran justified reform at KPERS, reports the Topeka Capital-Journal. “Iran is a legitimate threat to our nation,” he said. “Any country that has interests in Iran could have their interests nationalized which would harm those companies’ values, which in turn hurts our pension recipients.”  

Elizabeth Miller, acting executive director and chief investment officer of KPERS, said divestment in companies doing petroleum business with Iran could cost the system millions of dollars. In addition, divestment could have fiduciary implications for KPERS’ board of trustees, members of which are required to invest to preserve capital and provide benefits to members and their beneficiaries, she said, according to the news report.  

“Restrictions which limit the system’s ability to invest in particular assets reduce investment opportunities and can result in less efficient investment portfolios,” Miller stated.  

She suggested House Bill 2411 directing action by the state pension system may not be the appropriate forum for attempting to influence foreign policy.  

In 2007, a law was signed requiring the state’s pension fund to stop investing in companies that do business in Sudan (see Kansas Jumps on Sudan Divestiture Bandwagon).