Administration July 6, 2000

SMOKE OUT – Teacher Fund To Sell Tobacco Holdings

June 7, 2000 (PLANSPONSOR.com) - The nation's third largest public pension fund plans to sell more than $237 million worth of tobacco stocks - most of its tobacco holdings - as quickly as prudent, noting that recent litigation makes it a risky investment.

Reported by

Nevin E. Adams

The $114 billion California State Teachers’ Retirement System (CalSTRS) has been considering the move for six months, leading up to today’s unanimous decision by the CalSTRS investment committee.

“It was the right to do from a financial standpoint and also the right thing to do given the ill effects of tobacco on California,” State Treasurer and CalSTRS board member Phil Angelides said in a statement.

Angelides imposed a moratorium on state investments in tobacco stocks last December, noting that pending litigation made tobacco an imprudent investment.

The $175 billion California Public Employees Retirement System, the nation’s largest public pension fund, will consider a similar move June 19.

Several states, including Maryland, Florida, Vermont, Massachusetts and Minnesota, have set similar policies for their public employee pension funds, according to the Investor Responsibility Research Center. Others have barred new investments in tobacco stocks.