Thursday, April 10, 2008

CalPERS Investment Restriction Bill On Hold

AB 1967, which would prohibit CalPERS and CalSTRS investments in private equity companies whose other investors do not pass certain human rights treaties tests, was pulled from the Assembly Committee on Public Employees, Retirement and Social Security hearing schedule yesterday by its author, Alberto Torrico (D-Fremont).

This followed an editorial in the Los Angeles Times by Governor Schwarzenegger subtitled California can't afford a symbolic divestment that won't affect human rights. The governor, who previously signed legislation blocking investment in Sudan and Iran, calls this proposal an ineffective way to demonstrate California's concern and says it would cause more problems than it purports to solve. Schwarzenegger points to the losses to California's retirement funds ($12 billion in 10 years to CalPERS alone), and says the resulting unfunded liabilities would require cutting other government services, such as public safety, health and human services and education.

KQED quotes the head of CalSTRS as saying If you are denied access, by law, to the best performing investment players, by definition you’re going to start putting your money in mediocre investments.

The bill analysis lists SEIU as the sponsor, with SEIU Local 1000 as the other supporter.

CSUEU is SEIU Local 2579; CSUEU members are SEIU members.


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