California's teachers pension fund, wading into the recent public debate over guns, will begin the process for selling off investments in companies that make firearms illegal under state law.
The investment committee of the California Teachers Retirement System, CalSTRS, made the decision Wednesday afternoon. The action, in the wake of the December mass shooting in Newtown, Conn., comes after several weeks of discussion about changes in the pension fund's investments.
CalSTRS officials say the circumstances of the fatal shooting -- at an elementary school -- were key.
"This latest incident," said investment committee chair Harry Keiley in a statement, "which occurred at a school and involved fellow educators and the children we cherish, is a tipping point for CalSTRS and speaks to the correctness of our actions."
California state Treasurer Bill Lockyer, a member of the teachers pension board, began the call for divestment in companies that manufacture semi-automatic weapons like the one used in Connecticut, calling the guns "detrimental to public health and safety."
The criteria for what investments to shed is linked to what firearms are, and are not, legal in California. Companies that manufacture what are often called "assault weapons," as well as those that produce large ammunition clips, would be included.
The CalSTRS decision comes after the $154billionpension fund began examining its portfolio immediately after the Newtown incident. That process led -- within a matter of hours after the shootings -- to the private equity firm that owns the manufacturer of the rifle used to announce it would sell the company.
The pension fund's action is not just about a cause, say officials, but cold hard cash.
"This is not only the right thing to do but positions us to deal with the financial pressures we anticipate this sector of the industry will face," said investment chair Keiley.