The editorial board of The Press Democrat, of Santa Rosa, California, came out against a trio of divestment bills currently under review by the California State Legislature. The board strongly objected to pensions being used as “a tool for making political statements,” a fact that has been “lost on (…) some state lawmakers.”
At the heart of the editorial board’s argument was the idea that shortfalls in earnings will have to be borne by California’s taxpayers:
The pension funds have a unique position in the financial markets. If their earnings aren’t adequate to meet their obligations, or if they lose money, taxpayers must make up the difference.
As the editors pointed out, the California Public Employees Retirement System (CalPERS) would have suffered losses of $8 billion due to divestment efforts, and divesting from the Dakota Access Pipeline alone would incur a loss of $4 billion. With all the troubles that the state’s pension funds are facing, “adding political litmus tests to investment portfolios would make a bad situation even worse.”
Protect our Pensions had been very active in California, urging policymakers to reject divestment as a financially costly and ineffective tool to advance a political agenda.
Read the full editorial here.