The state teachers' retirement fund next month will take up whether to add tobacco investments to its portfolio. In a wide-ranging discussion with The Sacramento Bee's Capitol Bureau this morning, State Treasurer and CalSTRS board member Bill Lockyer, pictured above, said he remains opposed to the idea.
"I'm not sure we ought to be investing in products that kill our members," he said.
CalSTRS, which has about $162 billion in assets, earlier this month reported that its investments during the last fiscal year lost 3.7 percent. It's worth noting that CalPERS, the nation's biggest public pension fund with $269 billion in assets also had an off year, losing about 2.4 percent.
Tobacco stocks have been off limits for both funds for about eight years, when Lockyer's predecessor, Phil Angeledes, successfully led a push to dump them.
Since that time, tobacco stocks have soared in value. CalSTRS figures it wold have banked up to $1 billion if it had stayed in the game.
Lockyer, however, believes tobacco stocks could be poised for a downturn. New legal cases in Florida and elsewhere are playing out, he said today.
"And it's not as if the money that wasn't in tobacco ... was in a mattress," he said. "It was invested in other things."
Of course, as The State Worker noted last week, sex, booze and gambling are funding California's two biggest public pensions, CalPERS and CalSTRS. Visitors to the blog had a spirited debate over whether "sin" stocks should fund public employee retirement.
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