Seattle Pension Board Puts Retirees First, Rejects Divestment

Good news came out of Seattle this week, as the Seattle City Employees’ Retirement System (SCERS) Board voted to reject a measure to divest the fund of energy holdings. Regarding the decision, the SCERS memo read:

While we are concerned with the profoundly negative impact that climate change is having on our environment, divesting … would negatively affect expected investment performance, even if pursued on a limited scale (e.g. only coal) or if pursued over many years.

Jason Malinowski, chief investment officer at SCERS evaluated the issue of divestment bluntly, unequivocally stating that:

we do not see the economic justification. To our knowledge, there are no investment consultants to U.S. public pensions that have recommended that those public pensions divest from fossil fuel companies.

Malinowski went on to explain that divestment doesn’t have any effect on the company targeted:

We are a very small shareholder in these companies (…) If we were to sell our shares, there would be no impact on that share price. (…) Within milliseconds they’d be purchased by someone else.

The views expressed by Malinowski reflect the position of many pension boards and officials throughout the country, including those in Vermont, California, and New York. This position has been backed up by numerous studies, including a study conducted by Prof. Daniel Fischel of the University of Chicago Law School, which calculated millions of dollars in losses for some of the largest pensions funds in the country, should they choose to divest. For example, a municipal fund like San Francisco’s SFERS would lose between $149.4 billion and $201.7 billion over a 50 year period. Chicago’s Policemen’s Annuity & Benefit Fund would lose between $18 billion and $25.4 billion over a 50 year period.

Protect our Pensions recognizes the men and women of SCERS who have resisted the loudest voices in this debate, instead choosing to focus on the actual duties of their job, to grow and protect the investments of retired civil servants.

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