California Public Employees' Retirement System (CalPERS) will decide whether to reinvest in tobacco stocks in early 2017 rather than early 2018 as originally planned .
The $294 billion pension scheme upheld the decision made last month to review its tobacco divestments. However, it shortened the time period for reviewing the issue, which is going to be examined in six to nine months rather than 12 to 24 months.
Commenting on the subject, CalPERS' board vice president and investment committee chair, Henry Jones, said: ‘Our action today is not a decision to reinvest in tobacco. Rather, it is nothing more than a decision to move forward with a review of the issue, consistent with our fiduciary obligation to our members and contracting employers.'
CalPERS staff will continue to develop a new loss threshold policy for all non-tobacco divestments. Such a policy would include an automatic review of divested assets when losses incurred as a result of the divestment reach a certain amount.
‘The policy will call for staff to inform the board in open session when a loss threshold is triggered. Staff anticipates bringing a draft of this policy to the board this summer,’ CalPERS added.
The decision to periodically review CalPERS' divestments from an investment came following an October 2015 report by the investment consultant Wilshire. The report revealed that CalPERS lost approximately $8 billion from its various divestments and tobacco was responsible for approximately $3 billion in losses, as of the end of 2014.