State Treasurer Bill Lockyer asked the board of the State Teachers'… (CalSTRS )
SACRAMENTO -- Acting on a request from the state treasurer, the board of the state teachers pension fund has begun the process of selling its holdings in some gun and ammunition-clip manufacturers.
Treasurer Bill Lockyer's motion was approved unanimously Wednesday by the Investment Committee of the $154-billion California State Teachers' Retirement System.
Lockyer brought the issue to the board in response to December's mass shooting of 20 students and six adults at Sandy Hook Elementary School in Newton, Conn.
"CalSTRS' action targets ammunition clips that turn ordinary guns into killing machines, assault weapons and other firearms that pose extreme dangers to public health and safety," Lockyer said. "Divestment from the makers of these products complies with the board's fiduciary duty and its investment policy, which specifically allows divestment from manufacturers of products that endanger public health."
CalSTRS now must engage the management of firearms manufacturers that have received $11.7 million from the California pension fund: Smith & Wesson, Sturm Ruger and Freedom Group. The fund's staff will then analyze the cost of the divestment and report back to the board.
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After Lockyer's initial request, the private equity firm that owns Freedom Group, Cerberus Capital Management, announced that it planned to sell its holdings in Freedom Group. The company makes the Bushmaster semi-automatic rifle, the weapon used in the Newtown massacre.
The process is similar to a 2009 CalSTRS decision to sell its holdings in tobacco companies, CalSTRS said.
The latest action is appropriate "given the unspeakable and tragic loss of life that occurred in Connecticut last month -- the latest in an ongoing line of similar incidents involving assault weapons and mass casualties," Investment Committee Chairman Harry Keiley said.
Treasurer Lockyer has made a similar divestment request to the larger California Public Employees' Retirement System, though the matter has not yet been taken up by the fund's board.
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