Sacramento, CA — Ignoring the advice of its internal advisors, the investment committee for the state’s largest public pension system voted to sell off its final $550-million worth of tobacco related investments.
The Associated Press reports that the vote was 9-3. State Treasurer John Chiang was among the state leaders calling for the move. He says, “Smoking causes addiction, disease and death. No public pension fund should associate itself with an industry costing taxpayers billions annually in public health expenses and is a magnet for costly litigation and reputational disdain.”
The move came nearly two decades after CalPERS sold off a majority of tobacco investments, back in 2000. Internal financial advisors recommended that CalPERS reverse the 2000 sell-off, arguing that the move has cost the pension system $3-billion in lost earnings. Opponents argued that CalPERS can only maximize its returns with a diversified portfolio.