The Investment Committee of the almost $225 billion California State Teachers Retirement System (CalSTRS) has approved a plan to pressure retail companies it owns in its stock portfolio to stop selling firearms that are outlawed in California—or face possible divestment action from the second-largest pension plan in the US.
California has one of the most stringent gun control laws in the nation, banning the sale of many assault weapons, including AK-47s and other military-style rifles.
State Treasurer John Chiang, who also sits on the CalSTRS board, supported the proposal Wednesday even though he has called for the pension system to be tougher and divest immediately from retail companies who continue to sell weapons prohibited in California.
Chiang’s proposal came after the Parkland, Florida, high school shooting, but on Monday, he seemed in step with CalSTRS’s new plan.
“If Congress and state houses are either unwilling or unable to pass sensible policies to stop our schoolyards, work sites, and places of worship from becoming killing fields, then let’s take the battle to where our money is,” Chiang told the Investment Committee before it voted to implement its plan.
Under the new policy, CalSTRS would hire two employees whose job it would be to persuade retail stores nationwide to stop selling firearms banned in California. If the retail companies could not be convinced to change their policies, the retirement system would begin a review progress to determine if CalSTRS should divest its stock.
However, the review progress will also give CalSTRS an out from divestment—if it determined that selling shares of the company would be harmful to CalSTRS in terms of investment losses and its ability to pay retirees their pension benefits.
A CalSTRS investment team report, presented at Wednesday’s meeting, said the retirement plans held in its almost $225 billion portfolio around $400 million of Walmart Inc. and Kroger Co stock. The report said both companies sell weapons banned in California, but also said they were making progress in their firearms policies.
The report said that Kroeger officials have indicated that they are “going to responsibly phase out sales of firearms and ammunition. The report also said both chains have raised the purchase limit for guns to 21.
Investment Committee Chairman Harry Keiley told fellow committee members that he was under no “illusion” that CalSTRS’s actions will end horrific acts of murder.
“But to sit back and say we have done enough, and there is nothing else we can do, I believe would be a breach of our fiduciary duty,” he said.