The nation’s largest public pension fund isn’t ready to entirely break from companies that sell the kinds of weapons and ammunition that are associated with mass shootings from San Bernardino to Parkland, Florida.
The CalPERS Board of Administration on Monday instead wants to continue its practice of using its clout as a $355 billion pension fund to compel changes in business practices.
Its leaders believe pressure from CalPERS contributed to recent decisions by Dick's Sporting Goods and Walmart to restrict gun sales.
“If we are divesting, we lose our seat the table,” said CalPERS board member Theresa Taylor.
The board rejected a request from Treasurer John Chiang that would have called on the pension fund to look at divesting from national retailers that sell guns that are illegal in California.
Chiang, who is a member of the CalPERS board, brought families who lost loved ones in mass shootings to help him make his case. In tearful testimony, they implored CalPERS to pull its money out of gun-related industries.
"Shock and remorse provide little consolation to the families who must now bury a child, a sibling, a spouse, or a loved one. If ‘thoughts and prayers’ could be converted into currency, our pension fund’s $139 billion unfunded liability would have been zeroed out, long ago," he said.
Robert Velasco, a retired California Highway Patrol lieutenant whose daughter Yvette was murdered in the December 2015 attack that killed 14 people in San Bernardino, urged the board to divest from retailers that sell assault-style weapons.
“The rounds from these weapons are designed to tear and destroy tissue inside the human being, causing maximum deadly tissue damage. That was exactly what they did to my baby daughter, who was shot three times. I am haunted by the terror, the thought of the terror she must have felt,” Velasco said.
Divestment is a hot button issue at CalPERS.
Last year, the board faced calls from lawmakers and environmental activists to pull its money out of the controversial Dakota Access Pipeline. Some wanted to go further and divest from fossil fuels.
CalPERS estimates that it missed about $8 billion in earnings because of its divestment decisions that pulled money out of tobacco, coal, companies that manufacture guns that are illegal in California and South Africa during the apartheid era.
The gun divestment discussion “has nothing to do with having the fund healthy,” said Jason Perez of the Corona Peace Officers Association, which has been outspoken in its opposition to divestment.
Perez turned directly to Chiang and accused the treasurer of making a stunt. “Mr Chiang, you made it political by bringing these folks here. This is nothing more than a political ploy for you and your run for governor.”
Chiang in October asked CalPERS and the California State Teachers’ Retirement System to consider divesting from national retailers that sell weapons that are illegal in California. The list would have included Big 5 Sporting Goods, Dick’s Sporting Goods, Walmart and the grocery store chain Kroger.
CalPERS last week reported that those companies have agreed to the pension fund’s objectives, which were to discontinue the sale of assault-style weapons, cease selling high-capacity magazines, not sell bump stocks and sell firearms only to people who are 21 years of age or older.
Three of the companies made those decisions after Chiang’s request.
A fifth company, Sportsman’s Warehouse Holdings, has not responded to CalPERS requests for information.
CalPERS leaders consider those engagement efforts to be successful.
“It’s a strong example of how CalPERS can use our size and influence to make a real impact,” board member Henry Jones said.