Calif. pension system reconsiders tobacco divestment

Associated Press

SACRAMENTO, Calif.

The board overseeing the nation’s largest public-employee pension fund will consider reinvesting in tobacco stocks it sold off more than a decade ago.

The California Public Employees’ Retirement System investment committee decided Monday to review the tobacco divestment over the next two years and make a final decision in early 2018. The committee narrowly rejected a proposal to end the discussion now and continue the current tobacco policy.

Financial advisers found CalPERS has lost up to $3 billion since deciding in 2000 to sell off tobacco stocks.

Board members who want to continue the divestment debate say they need to ensure CalPERS is fulfilling its constitutional obligation to maximize investment returns and protect retirement benefits.

Anti-smoking groups Thursday stepped up pressure on the public pension system to drop plans to consider re-investing in tobacco stocks 15 years after selling them off.

In a letter to the head of the CalPERS board, executives from the American Heart Association, American Cancer Society and the American Lung Association say investing in tobacco companies would send the message that California supports the industry.

“It is simple: investing in Big Tobacco may bring in some additional funds, but at what cost?” they wrote. “California will end up paying much more, physically and financially.”