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State investments in Iran, Sudan challenged
Representatives voice fears about having $1 billion at stake in unstable areas.
Wednesday, May 30, 2007
COLUMBUS — A battle is brewing over Ohio public pension and workers' compensation funds being indirectly invested in Iran and Sudan — two countries that U.S. Department of State says sponsor terrorism.
State Reps. Shannon Jones, R-Springboro, and Josh Mandel, R-Lyndhurst, are sponsoring a bill to force the pension systems, state treasury and Bureau of Workers' Compensation to divest from several dozen companies that do business in Iran and Sudan. Jones said the pension systems have about $1 billion invested in these companies, primarily foreign oil interests.
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But four of the five pension systems oppose the bill, saying mandated divestiture on a timetable could cost them a bundle and conflict with their fiduciary responsibilities to manage the investments for the best return.
The Ohio Retirement Study Council, which reviews legislation affecting the pension systems, recommended against the bill.
The five pension systems collectively control $175 billion, BWC has an $18 billion portfolio and the treasury controls $11 billion but rarely invests in stocks and bonds.
Retirement Study Council Director Aris Hutras pointed out that the bill doesn't mandate divestment by other large state investors, such as public universities or the Ohio Public Employees Deferred Compensation Program.
Jones says it isn't about making a political statement. Instead, the bill is designed to protect retirees' money since investing in Iran and Sudan is risky.
"I can't understand why the pension funds are resisting this," Jones said. "It's their responsibility to be assessing this risk. They are not."
The bill is pending in the House Financial Institutions committee and is scheduled to get another hearing today.
State Sen. Jeff Jacobson, R-Butler Twp., also introduced legislation in the Senate that would force the pension systems and other government agencies to divest from companies doing business in Sudan because of the genocide in the Darfur region.
Contact this reporter at (614) 224-1624 or lbischoff@DaytonDailyNews
.com.
