In his most recent “State of the State” speech, Vermont Governor Peter Shumlin called for the state’s pension funds to divest from coal and certain fossil fuel companies. It seems he made these proclamations before talking to just about anyone responsible for these pension investments, because they are all now pushing back in a big way.
On Thursday, the Vermont Senate Committee on Operations received testimony from several key voices as they discussed S.28 – “An act relating to divesting State retirement funds from the 200 publically traded companies that hold the largest carbon content fossil fuels reserves.”
Testifying at the meeting were Toby Heaps, CEO & Co-Founder, Corporate Knights, Beth Pearce, Vermont State Treasurer and Maura Carroll, Executive Director, Vermont League of Cities and Towns.
As Divestment Facts has already pointed out, Treasurer Beth Pearce, a Democrat, has been a staunch opponent of divestment. Her team calculated that if Vermont’s pensions were to divest, they would lose $10 million annually on top of an $8.5 million fee to implement management changes.
It turns out she is not alone in her beliefs on the topic, or in her ability to crunch numbers. Among documents submitted during the committee meeting were resolutions from no less than five different groups representing state employees and Vermont retirees. These resolutions called for maintaining fiduciary responsibility in making investment decisions.
The groups include:
Many of the resolutions were similar in language and called for:
“…support that the responsibility to make prudent investment decisions in accordance with the appropriate statutory and fiduciary requirements, continue to be vested in the Vermont Pension Investment Committee and not the Legislature or any other entity.” – Signed by Michael O’Neil, President of Vermont Troopers Association
“…recommend to the members of the VSEA Board of Trustees and VSEA Council that the do all in their power to prevent the passage of legislation that would enable members of the Vermont Legislature to be involved in the decision of how or where the monies in the Vermont State Employees’ Pension Fund be invested.” – Adopted by the members of the VSEA Retirees’ Board of Trustees
These groups do not want to cede investment decisions to the legislature or to the political whim of some ideologues. It is clear that pensions are against an empty symbolic gesture like divestment and will fight Gov. Shumlin’s ill-advised proposal. We know that divestment does nothing to impact climate change, and only serves to stigmatize the industry.
As Treasurer Beth Pearce said:
“From our end, legislating investments is bad practice…My first priority is to protect the 49,000 active, vested and retired members of the system, the beneficiaries, and the taxpayers who put dollars into that system. For me, I don’t think that is the best approach.”
Since those overseeing pension finances take their fiduciary responsibility to those 49,000 members seriously, it is obvious that they would be against a money losing proposition like divestment.
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