FOR IMMEDIATE RELEASE
February 13, 2019
IPFI Commends CalSTRS for Prioritizing Fiduciary Responsibility
IPFI commends CalSTRS for opposing a California state bill that would require divesting investments in private prison companies.
Washington, DC – The Institute for Pension Fund Integrity (IPFI) would like to commend the California State Teachers’ Retirement System (CalSTRS) for voting to oppose a state bill that would require CalSTRS and CalPERS to divest investments in private prison companies by July 1, 2020. CalSTRS decided to oppose AB 33 (2018) because they felt it would be an abdication of their authority to allow another entity to dictate investment decisions, according to Harry M. Keiley, Chairman of the CalSTRS Investment committee.
IPFI applauds CalSTRS for prioritizing their fiduciary responsibility and refusing to abdicate any investment decision making authority. The fiduciary responsibility held by CalSTRS managers must be at the forefront of any decision making process. IPFI believes that the fiduciary responsibility held by public pension funds should be strictly adhered to, and agrees with CalSTRS that they should not abdicate that authority. It is our hope at IPFI that CalSTRS will use the same judgement across any investment decision, including regarding the use of proxy advisory firms to influence proxy voting decisions.
In addition, IPFI remains strongly against politically motivated divestment, including CalSTRS’s plan to divest from private prisons. Investment decisions should be made solely on the basis of financial performance and risk, and should never be made for political reasons. Politically motivated acts of divestment are a violation of fiduciary duty and have led to the loss of billions of dollars of income in the past.
IPFI would like to congratulate CalSTRS for choosing to maintain its fiduciary responsibility. For more on IPFI’s positions regarding divestment and fiduciary responsibility, see the research available on www.ipfiusa.org.