Earlier this week, the Wall Street Journal captured the political battles being fought behind the scenes of one of the largest public employee pension fund in the country: the California Public Employees’ Retirement System, or CalPERS.
In the article, aptly titled, “Calpers’ Dilemma: Save the World or Make Money?” the author reviews the fund’s choices throughout recent years to sell off and ban purchasing of stocks for controversial companies.
Entire industries have been on the CalPERS blacklist including tobacco and fossil fuels. Of course, gun control activists who have been having little luck in passing irrational legislation, are also targeting pension funds nationwide to urge divestment.
The problem with divestment is that it ties the hands of the pension fund managers, the ones in charge of investing and generating enough of a return to support the retirement of every covered worker. Taking potentially strong investment options off the table at a time when public pensions are underfunded and struggling is a losing proposition for state workers.
The article illustrates this with a chart showing that the existing ban on investing in the manufacturers of firearms that are illegal for sale in California (hint: that’s a lot), has cost the fund $11 million. That’s an expensive political statement to make with other people’s money, especially considering the duty that fund managers have to serve the interests of the workers.
Fortunately, there are rational voices within CalPERS who are willing to take a stand for workers and reject politically motivated investment restrictions. According to the article, the board will be undertaking a review in 2021 of its existing divestment policies.
As an industry, we are devoted to programs that help improve the safety of our communities. If CalPERS needs any information about the strength of the firearms and ammunition industry in the U.S., or what we do to help ensure the safe and legal use of our products, it knows where to find us.
Elizabeth McGuigan is Director of Legislative and Policy Research at the National Shooting Sports Foundation.