In Vermont, a race for Treasurer has the possibility of political repercussions on the state’s and retirees’ finances. This year incumbent State Treasurer Beth Pearce is faced with a challenger, financial analyst Richard Dunne, who may not have the experience or forethought to see the challenges of certain financial choices.
One key issue that has these two candidates at odds is divestment. Pearce, who has overly 30 years of experience in the financial field, agrees that investment choices should be based on fact, not social whims, and has recommended that the State Pension Investment Board not partake in divestment.
In an interview with Vermont Edition Tuesday, Pearce said:
“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.”
Unlike Pearce, Dunne believes that the state pension funds should divest from fossil fuels. But what Dunne fails to take into account is the unseen financial consequences that result from divestment, resulting in a lower return on investment for funds. In fact, this action would fail to comply with the responsibility a state treasurer has towards state pension holders.
Chris Ailmain, CalSTRS Chief Investment Officer, has even voiced his opposition of divestment:
“I’ve been involved in five divestments for our fund. All five of them we’ve lost money, and all five of them have not brought about social change.”
As Vermont heads to the polls to vote on the next Treasurer, citizens need to keep in mind the political and financial repercussions of their choice. Divestment is not an action to be taken lightly – with it comes serious consequences that can impact the livelihood of retirees today and in the future.