At the May 2 public hearing of the Joint Committee on Public Service, the Board submitted written testimony in support of the legislation to divest Massachusetts public pension assets from ammunition and firearms companies
In the wake of the horrific school shootings in Parkland, Florida, and the prevalence of gun violence across the nation since the shootings at Columbine High School in 1999, Sandy Hook Elementary School in 2012, and many others, the Massachusetts Teachers’ Retirement Board (“the Board”) was compelled to add its voice to the growing chorus of state and local retirement systems, financial institutions and stakeholder groups calling for gun divestment. To that end, the Board submitted written testimony in support of legislation, An Act requiring public pension fund divestment from ammunition and firearms, filed by Senator Cynthia Creem of Newton (S. 2407) and Representative Lori Ehrlich of Swampscott (H. 4402) in partnership with Treasurer Deborah Goldberg.
If enacted, S. 2407/H. 4402 would require the Massachusetts Pension Reserves Investment Management (PRIM) Board to divest state pension funds from companies that derive more that 15% of revenues from the sale or manufacture of ammunition, firearms or firearm accessories for civilian purposes.
The Board believes the legislation as drafted takes a measured and narrow approach on divesting from gun and munitions companies. It recognizes the Massachusetts Pension Reserves Investment Management (PRIM) Board’s fiduciary responsibility to maximize returns while mitigating risk for the benefit of the Commonwealth’s public employees and retirees by allowing PRIM to cease or reverse divestment upon evidence that the fund would decrease in value by more than 0.5%. Today, that would represent a reduction in assets of approximately $350M, whereas PRIM’s current holdings in this category total just over $5M.
The Board does not take this position lightly. In the past, the Board has remained neutral regarding divestment initiatives, because our first priority is to ensure the funding and security of benefits for our members and their beneficiaries. However, at $5M, PRIM’s holdings in gun companies represent a tiny fraction—approximately 0.007%—of total plan assets, and the Board believes that equivalent investments can be made so that divestment would have no detrimental impact on the fund’s bottom line.
Further, the Board takes this action as a means of demonstrating support for the children, educators and communities that have been victims of horrific school shootings.
On May 2, 2018, the Joint Committee on Public Service held a public hearing on S. 2407/H. 4402. In addition to the testimony from the MTRS, the committee heard testimony from Senator Creem and Representative Ehrlich, as well as several other supporters of the legislation. State Treasurer Goldberg also submitted written testimony in support of the bills.
Recently we learned that the gun divestment legislation was sent to a study for further review. We anticipate the legislation will be refiled for the next legislative session by the sponsors. Future updates will be posted on this website.