US pension funds scramble over what to do with Russian investments

The pressure to divest from Russian investments is everywhere. Both from an environmental, social and governance perspective and from a prudent financial perspective, Russian assets are currently extremely high risk. But many of the largest US pension funds still have assets in the country, making them vulnerable to an even deeper financial downturn as the war with Ukraine continues.

The Moscow stock market is already experiencing one of the worst crashes in its history. The Russian trade index plunged 23.6% between February 22 and 25. It is expected to fall further throughout the day as Russian banks have been cut off from SWIFT, the independent organization that facilitates international payments by linking more than 11,000 banks and other financial institutions. players in more than 200 countries and territories.

The largest pension funds in the United States, the California Public Employees Retirement System and the California State Teachers Retirement System, both have funds invested in Russian assets. A CalPERS spokesperson told Reuters the fund had $900 million in exposure to Russia. CalSTRS has about $800 million of exposure to Russia, according to Reuters.

Colorado’s public pension fund had $7.2 million invested in a Russian state bank called Sberbank. The new federal sanctions forced the fund to withdraw its money from the bank almost immediately.

In New Jersey, New York and Illinois, lawmakers are making similar calls to divest from Russian investments. New York State Senator Elijah Reichlin-Melnick has proposed legislation that would force the state pension fund, New York Common Retirement, to divest from any company or organization with business ties to Russia .

New Jersey State Senator Paul Sarlo introduced a similar bill. The New Jersey pension fund currently has $226.6 million invested in Russian stocks. It has also invested $21.4 million in Belarus, a Russian ally which is currently holding a referendum on whether to allow Russian nuclear weapons on its soil.

Illinois Minority Leader Jim Durkin is also trying to introduce a bill that would require all state-owned pension assets to be turned over to Russian companies. Other large pension funds, such as the Pennsylvania Public School Employees’ Retirement System and the Minnesota State Board of Investment, are currently trying to calculate their level of exposure to the Russian market, according to the Wall Street Journal.

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Tags: Belarus, CalPERS, CalSTRS, Colorado, New Jersey, New York, New York Common Retirement, Russia, SWIFT, Ukraine