Teachers across Florida and at a high school where 17 people were shot dead Feb. 14 pay into a retirement fund that invests in gun companies, it was revealed earlier this week.
It turns out they’re not alone.
Pension funds managed for public school teachers in at least a dozen states, including Pennsylvania and New Jersey, own stocks issued by the makers of firearms, including American Outdoor Brands Corp., the company previously known as Smith & Wesson that manufactured the semiautomatic AR-15 used in the attack at the Marjory Stoneman Douglas High School. This type of assault rifle has been the weapon of choice in America’s mass shootings.
The financial stakes held by teacher pension funds in gun companies, like those of other equities, each represent only a sliver of the multibillion dollar state retirement systems’ investments, according to a Bloomberg analysis. But the holdings have already become a hot-button issue in Florida, where last week’s massacre prompted teachers and students to pressure public officials to prevent similar attacks.
The Florida Education Association, which represents educators but doesn’t control the pension fund, urged the state body that does to sell its more than half-million dollars worth of American Outdoor stock, as well as that of other gun companies.
“I am sure that most of Florida’s public school employees are as sickened as I am to learn that the state has invested some of our pension fund holdings in the maker of the AR-15,” said Joanne McCall, president of the FEA, an affiliate of the National Education Association. “Surely there are better places for the state to invest its public employee retirement money than in companies that make products that harm our children.”
The statement followed a Bloomberg report Tuesday detailing the Florida pension fund’s investments in the firearms industry. Like holdings listed in other states, Florida’s shares of firearms companies were actively purchased by the fund’s managers, although the holdings may be part of state efforts to track equity indexes.
John Kuczwanski, a spokesman for the Florida State Board of Administration, which manages the fund, said “as fiduciaries, the SBA must act solely in the interest of the participants and beneficiaries.” He didn’t say whether the fund will follow the divestment demand by the teachers’ union.
The SBA is overseen by Florida Gov. Rick Scott and members of his cabinet. Scott has no role in individual investment decisions made by the pension plan, according to a statement from his office. The board’s two other trustees, Florida chief financial officer Jimmy Patronis and Attorney General Pam Bondi, didn’t return requests for comment on divestment. All three state officials are Republicans.
Other states with teacher fund investments in the firearms industry include Alaska, Arizona, California, Colorado, Kentucky, Michigan, New Jersey, New York, Oregon, Pennsylvania, and Wisconsin.
The California State Teachers’ Retirement System, one of the largest pension funds in the country, has divested from firearms that are illegal in the state. It has also liquidated an investment in Vista Outdoor Inc. “related to guns that are illegal for sale in California,” according to spokeswoman Michelle Mussuto. CalSTRS maintains an investment in Olin Corp., which makes ammunition, she added.
“If a company’s actions have a possibility of affecting the value of their stock, certainly that’s something we look at.”
Jennifer Sciortino, a spokeswoman for the New Jersey treasurer’s office, said her state’s investments are “a complex matter” since some of the companies in which the pension fund invests also provide weapons to the military and police. “There is no discussion underway right now to alter these investments,” she said. On Thursday, Democratic state legislators in Trenton were moving to introduce legislation barring such investments.
“These passive portfolios track a broad market index,” a spokesperson for the New York State Teachers’ Retirement System said in response to a query about its gun company stock. “No decision has been made on divestment.”
The Teachers Retirement System of Kentucky confirmed its holdings in gunmaker Sturm Ruger & Co. “There has been no discussion in recent days” about divesting, said Beau Barnes, the fund’s deputy executive secretary and general counsel. “If a company’s actions have a possibility of affecting the value of their stock, certainly that’s something we look at.” Two students were killed and as many as two dozen were injured in a late January shooting at Marshall County High School in southwestern Kentucky.
In Oregon, a teachers’ fund held a $5.9 million stake in Olin at the end of November as part of an S&P 400 midcap index investment, according to James Sinks, a spokesman for the state treasury.
Other states with holdings in weapons makers, according to the most recent data available, either declined comment or didn’t respond to email and phone requests.
“Given there are so many other sources of investment capital available in the global financial markets, I have not seen meaningful long-term impact on the valuations of companies in the firearms industry from such divestment actions in the past,” said Rommel Dionisio, managing director of equity research at Aegis Capital Corp. and a gun industry expert.