The state pension fund will divest $7.2 million from a Russian bank, officials with Colorado’s Public Employees’ Retirement Association confirmed Friday, as Russia continued its military assault on Ukraine.
The board controlling the fund does not, as a matter of policy, divest from companies for moral reasons unless the state legislature or federal government directs it to do so. This divestment comes as a result of a federal order meant to sanction Russia by hurting its economy.
Colorado’s pension fund has about $8 million invested in five Russian-owned companies, a spokesman said. The majority of that — $7.2 million, as of Thursday — is invested in the Russian state-owned bank Sberbank, which is a target of federal sanctions. Neither state nor federal officials have yet commanded divestment from any of the other Russian companies tied to Colorado: OGK-2, Gazprom, Mosenergo, and Rosneft Oil.
U.S. Department of the Treasury officials have given until May 25 to comply with the order that mentions Sberbank.
“We will be divested of Sberbank by then, for sure, and any others we’re required to divest from by whatever date we have to,” Amy McGarrity, chief investment officer for PERA, told The Denver Post.
As of this week, PERA’s overall portfolio exceeds $61 billion, a spokesman said. While this divestment represents a mere sliver of the fund’s total investment, the action is more than worth it, said Republican state Sen. Kevin Priola of Henderson, who serves on the legislative panel overseeing the pension fund.
“I don’t think we should make life easy for dictators and despots. I think we should make it harder on them,” he said. “It’s a fairly de minimis financial move, but I still think it’s the right thing to do.”
On Thursday, Democratic Gov. Jared Polis announced that the state will probe various other ways to join in the broader international effort to alienate Russia and its president, Vladimir Putin, as punishment for attacking the sovereign nation of Ukraine.
Polis said in a statement, “Colorado will welcome Ukrainian refugees, divest from any potential Russian state-owned assets, urge higher-education institutions to review and reconsider any grants or projects they have with Russia and divest endowments from Russian owned assets while evaluating and terminating any state contracts with Kremlin owned entities. We will also be removing Colorado from the coverage of the Russian consular office in Houston.”
His administration has not yet identified specific contracts or assets it wants to pull, though he told reporters Friday that the state is looking into it. Colorado Treasurer Dave Young has already confirmed that his department has no holdings in Russia.
The Department of Higher Education confirmed that neither of the state’s largest public higher education institutions — University of Colorado and Colorado State University — have active Russian partnerships that would be terminated pursuant to the governor’s statements. Megan McDermott, a department spokeswoman, said the state estimates it has 40 Ukrainian students and 49 Russian students spread among Colorado high school and postsecondary institutions.
“On our end, we’re really checking to make sure they’re supporting these students during this time and supporting their wellbeing,” she said.
State officials continue to voice support for Ukraine in other ways. On Friday the Colorado Senate unanimously passed a resolution condemning the “violent, illegal and immoral assault” by Russia on its neighbor. The state House is set to adopt the same resolution on Monday.
Denver Democratic Sen. Chris Hansen, a sponsor of the resolution, said there’s a “moral imperative to support democracies around the world and to fight back against expansionist dictators, which Putin has clearly shown himself to be.”
Hansen is a member of the legislature’s Joint Budget Committee, and said he’s not aware of any state government financial ties to Russia other than those in the pension fund.
The PERA action on Sberbank may not be the fund’s only divestment this year related to international affairs; board members are set to discuss divestment from Unilever, the parent company of Ben and Jerry’s, at their March meeting. The state legislature passed a law in 2016 declaring loyalty to Israel by requiring PERA divest of any company that boycotts Israel. Ben and Jerry’s last year announced it would end sales of its frozen treats in the occupied West Bank.
