In Vermont, the subject of divestment has long been a hot topic issue and matter of debate for treasury and state pension officials. The dispute finally boiled over into the August primary election as incumbent State Treasurer Beth Pearce, a vocal opponent of divestment, ran against a new face, Richard Dunne, who focused on a pro-divestment campaign. Fortunately, Vermont’s citizens recognized the wisdom and responsibility of Pearce’s message and granted her another opportunity to serve the state in November’s election.
Throughout her service, Pearce has been an advocate against divestment measures. Standing before legislators time and time again, Pearce has explained that divestment is bad practice and that “selling off stocks achieves nothing more than putting assets back into the market where they will be absorbed almost immediately” (Vermont Biz). And in a recent interview with Vermont’s National Public Radio, Pearce argues that the State Treasury should make decisions based on financial reality, not social whims:
“We have a fiduciary responsibility of stewardship of those taxpayer dollars, and the dollars for the members of the system. When those dollars go into a trust we are obliged to maximum return for those individuals. So … I’m going to be guided by facts not by politics.”
Although vocal about her views on divestment, Pearce has made considerable efforts to hear arguments for and against divestment. But study after study has shown that divesting state pension funds is not a smart financial choice. In fact, the Vermont Treasury concluded that divestment would cost the state pension funds $10 million per year in lost returns and $8.5 million to implement the new measures alone. Aside from the annual losses, other finance experts – like Tom Golonka, chair of Vermont Pensions Investment Committee (VPIC) – have pointed out that divestment is a complicated process that requires an excess of compliance costs.
Having held office for three terms and more than 30 years of financial experience in her back pocket, Pearce knows what she’s talking about. Pearce’s efforts to serve Vermont and its pension holders in a responsible manner underscore the kind of leadership she represents. In a world where politicians are often vacillating on various issues, Pearce shows strength and confidence by standing by the principles she believes in, including her opposition to divestment. Vermont, thankfully, sees her wisdom and voted 56 percent to 29 percent in the recent primary election.
The election for State Treasurer is on November 8, 2016. Pearce will be challenged by Liberty Union Party candidate Murray Ngoima and Vermont Progressive Party candidate Don Schramm.