Two Massachusetts legislators have proposed a bill that would require the state pension fund to sell its shares in companies that derive 15% or more of their revenue from firearms and ammunition.
The bill, which is sponsored by State Rep. Lori Ehrlich and State Sen. Cynthia Creem, calls for the state’s Pension Reserves Investment Management (PRIM) board not to invest in any ammunition, firearm, or firearm accessory manufacturing or retailing companies.
Should the bill become law, PRIM will have 30 days after the bill’s enactment to identify all ammunition, firearm, or firearm accessory manufacturing or retailing companies in which the fund owns direct or indirect holdings. It would be required to file a list of any such holdings with the state’s attorney general, and with the clerks of the Massachusetts Senate and House of Representatives. The fund would then have 12 months after enactment to sell, redeem, divest, or withdraw all publicly-traded securities of each company identified on the list.
“This bill asks our Massachusetts public pension fund managers to no longer invest in companies that manufacture guns and ammunition,” said Creem in a release. “By enacting this bill, Massachusetts will stand with thousands of individuals and entities exercising their right as consumers to send the message that we must do more to stop gun violence.”
The divestment requirements would not apply to indirect holdings in actively managed investment funds, as long as the fund submits letters to the managers of funds that contain companies singled out by the bill to request that they remove the investments from the fund, or create a similar actively managed fund without the prohibited holdings.
However, the bill has a provision that would allow the state’s pension fund to end the divestment, and return to investing in firearms and ammunition manufacturers and retailers if the divestment hurts the fund’s returns. There would have to be “clear and convincing evidence” that the value for all assets under management become equal to or less than 99.5% (50 basis points) of the hypothetical value of all assets under management by the public fund had no divestment occurred.
In this case, the fund would have to provide a written report, updated annually, to the attorney general, the senate and house committees on ways and means, and the joint committee on public service that provides evidence backing the decision.
“Congress is unable to act even in the face of overwhelming support,” said Ehrlich in a release. “It is time for state stewards to ensure our retirement savings and pension funds are not profiting from that violence.”