Assemblyman Joel Anderson talks about CalPERS, CalSTRS and University of California pension funds and divestment policy in this interview today with Frontpage Magazine, an online publication of the David Horowitz Freedom Center.
Anderson, R-Alpine, wrote legislation last year mandating that the funds dump their Iranian holdings. According to an analysis of the bill, CalPERS figured that
... if all 50 of the companies potentially meeting the criteria for divestment were excluded from the fund over the past five years, the overall annualized rate of return would have fallen from 9.84 percent to 9.83 percent -- a $66 million loss in fund value. These losses would have been made up through higher employer contributions over a multi-year period.
Gov. Arnold Schwarzenegger signed the legislation over the objections of the funds' boards, which argued it cut into their obligation to chase the most profitable investments for their members. In the FrontPage interview, Anderson says he wants the UC system's $42 billion retirement fund to divest its Iranian holdings.
Now consider this: CalPERS assets have gone from $260 billion to about $193 billion in the last 12 months. Since Sept. 15, the fund's stock holdings have declined $12.4 billion to $36.8 billion, according to Bloomberg news service estimates.
Iranian holdings represented a tiny fraction of CalPERS portfolio, and money pulled from them is invested elsewhere. But you have to wonder if Wall Street's meltdown and its devastating impact on pension funds' portfolios will work against similar divestment policies in the future.