PRESS RELEASE: California Treasurer Inserts Politics Into the Management of Teacher Retirement Fund


September 12, 2019

California Treasurer Inserts Politics Into the Management of Teacher Retirement Fund 

The Institute for Pension Fund Integrity urges California Treasurer Fiona Ma to prioritize her fiduciary duty instead of politics to optimize state investments.  

Arlington, VA – Yesterday, California Treasurer Fiona Ma, CPA, decided that supporting a political stunt was more important than prioritizing strong fiscal policy to ensure a stable retirement for California’s teachers. During an Investment Committee hearing on September 5, Treasurer Ma and young climate activists urged the California State Teachers’ Retirement System (CalSTRS) to divest its funds from fossil fuel companies as a means of fighting the current climate crisis. While finding sustainable solutions for fighting climate change is important, the Institute for Pension Fund Integrity (IPFI) maintains that divestment based on political instead of financial considerations goes against Treasurer Ma’s fiduciary duty and puts the secure retirement of almost a million Californian teachers at risk. 

Divestment has been shown repeatedly to be ineffective and actually cost funds more than the companies that they divest from. California’s other major pension fund, the California Public Employees’ Retirement System (CalPERS) is a great case study for the cost of divestment. After divesting from tobacco in 2000, CalPERS lost nearly $3 billion over the next thirteen years. In fact, CalPERS has lost almost $7.8 billion since 2001 due to various divestments. Furthermore, while divestment often seeks to impact a company’s bottom line, several studies show that divestment campaigns have minimal to no impact on company finances.  In the end, divestment is simply a political maneuver that has real costs. 

IPFI President Christopher Burnham recently reiterated that “activist investing has a place in personal portfolios but no place in public pension plans.” He continued saying, “the oath of fiduciary responsibility is one of the strongest oaths we can take, and we must focus on keeping politics out of our fiduciary decisions.” 

IPFI’s recent study on public pension fund performance showed that 47 out of 52 pension plans could not outperform a simple index fund of 60% stocks and 40% bonds. To already be grossly underperforming a simple index fund while under active management, to now want to add activist investment, is the height of fiduciary irresponsibility. IPFI encourages CalSTRS and Treasurer Ma to prioritize the dedicated teachers of California, and to ensure that today’s investments result in tomorrow’s secure retirement. 

For more on IPFI’s positions regarding divestment and fiduciary responsibility, see IPFI’s research available on