Newsom Seeks to Halt State's Pension Investments in Russia

Newsom Seeks to Halt State's Pension Investments in Russia
California Governor Gavin Newsom speaks at California State University Long Beach, in Long Beach, Calif., on March 3, 2021. (John Fredricks/The Epoch Times)
Vanessa Serna

SACRAMENTO—As tensions rise over Russia’s war with Ukraine, California Gov. Gavin Newsom is seeking to halt the state's top pension funds from investing in Russia.

Newsom sent a letter (pdf) on Feb. 28 asking the leaders of the state’s three top pension funds—which jointly hold $970 billion in funds, according to the governor’s office—to halt the flow of money into Russia and ban the purchase of Russian debt.

Newsom also asked the companies to protect current investments in Russian markets, which total over $1.5 billion in stocks and debt, according to the governor’s office.

These pension funds are the state’s Public Employees’ Retirement System (CalPERS), the State Teachers’ Retirement System, and the University of California Retirement System.

“Russia’s brazen and lawless military assault on Ukraine demands our support for the Ukrainian people and exacting an immediate and severe cost upon the Russian government in response to its continuing aggression,” Newsom wrote in the letter. “California has a unique and powerful position of influence given the state’s substantial global investment portfolio.”

The pension systems represent millions of state citizens, including state public employees and public school educators.

Newsom asked the three retirement systems’ chairpersons to respond within 10 days of the letter.

The letter was sent on the same day as state Senate Majority Leader Mike McGuire (D-Healdsburg) announced plans to introduce bipartisan legislation that would force the state’s pension funds to divest from Russia.

“The world is watching the atrocities taking place in Ukraine. It’s sickening,” McGuire said in a statement. “We must stand strong for the people of Ukraine. That’s why we all must mobilize to stop Russia in its tracks. California has unique and remarkable economic power in this circumstance. As the fifth-largest economy in the world, we must use this power for good. We can help stop this autocratic thug, Putin, by advancing this critical legislation and enacting our own financial divestments.”
Theresa Taylor, president of CalPERS’s board of directors, said Feb. 28 that she expects the board will discuss divestment from Russia at its upcoming meeting, scheduled March 14 to 16, the Sacramento Bee reported.

“While I am personally appalled at Russia’s actions, and every pension has holdings in Russia differently, ours are half in public equities and half in private equity and real assets,” Taylor said in a text, according to the Sacramento Bee. “In public markets, access to sell the Russian assets is closed right now due to sanctions. As to the other half, as fiduciaries we really have to look if we can afford to just get rid of those assets.”

Spokespersons for CalPERS, the California State Teachers’ Retirement System, and the University of California Retirement System were not immediately available for comment.