![](https://californiaglobe.com/wp-content/uploads/2023/05/Screenshot-2023-05-18-at-9.27.49-PM-1210x642.png)
Sen. Lena Gonzalez. (Photo: sd33.senate.ca.gov)
Bill To Force CalPERS, CalSTRS Divestment from Fossil Fuel Investments Delayed Until Next Year
‘No one wants to be responsible for destabilizing state pension systems’
By Evan Symon, July 5, 2023 1:56 pm
A bill to phase out fossil fuel investments in the California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS) state public pension funds was delayed until next year earlier this week, giving time to both build needed support in the Senate and to further look into what the overall impact would be on the pension funds.
Senate Bill 252, authored by Senator Lena Gonzalez (D-Long Beach), would specifically prohibit the boards of CalPERS and CalSTRS from making new investments or renewing existing investments of public employee retirement funds in fossil fuel companies. Complete divestment from the companies are due by 2030, with an additional five years being given on top of that in case market conditions aren’t favorable for a divestment for a time. Both boards are also required to file a report with the legislature and the Governor beginning in 2025 on which companies they have divested from in the past year.
Authored by Senator Gonzalez over CalPERS and CalSTRS continuing to invest in fossil fuel companies, despite California’s continuing legislative actions regulating moving away from fossil fuels under the mantra of combatting climate change, Gonzalez and bill supporters hope that SB 252 will help California achieve zero carbon and green energy goals by taking away billions in investments to fossil fuel companies.
In total, up to $14.8 billion can be deinvested from both pension funds. CalPERS, which currently has an investing power of $469 billion, is investing $9.4 billion in fossil fuel companies. Meanwhile CalSTRS, worth $327 billion, currently has $5.4 invested in those companies. Both funds have continued investing in the companies in recent years, having a combined $1.3 billion in Exxon alone, as well as $817 million in Chevron.
SB 252 worked it’s way through the Assembly throughout the first half of the year. After being passed in the Senate Labor, Public Employment and Retirement Committee by a vote of 4-1 and the Judiciary Committee 8-2 in April, the bill was approved the Senate in May. The May vote proved crucial for the bill, as the previous version of the bill, SB 1173, failed to even make it out of the Assembly Committees in 2022, proving that the bill had staying power.
Despite the win for SB 252 in the Senate, support for the bill in the Assembly proved to be lacking, with some in the Assembly signaling they wanted more time to look into the bill. Not wanting the bill to die yet again before reaching the Governor, Gonzalez made a the bill a two year bill earlier this week, promising to bring it back next year.
SB 252 delayed until 2024 in Assembly
CalPERS, which opposes the bill, further noted that the delay would give Gonzalez, Assemblywoman Tina McKinnor (D-Hawthorne) and others ample time to understand the bill and what it would mean for the pensions funds.
“We respect assembly member McKinnor’s decision to take more time to understand the impact of the bill to our pension funds and members and employers,” explained CalPERS spokesman Brad Pacheco on Monday. “We’re committed to achieving a net zero investment portfolio that achieves the goals of the bill through engagement with companies, investments in alternative energies and addressing climate risks.”
Insiders told the Globe on Wednesday that there is still a divide in support of the bill, as proved by last year’s Assembly Committee failure and the 23-10 and 7 abstention Senate vote in May.
“Unlike a lot of climate-related bills, this is far from a sure thing,” said “Dana,” a Capitol staffer, to the Globe on Wednesday. “Many are for these climate related bills, and many just don’t want to have anything to do with oil companies, even if it is just an investment in the pension system. But there is still a lot of concern over what the divestment could do. No one wants to be responsible for destabilizing state pension systems or causing the funds to be harmed in any way. Most state employees wouldn’t like it if their pensions were harmed or were put into any question.”
“But now we also have a bunch of incoming Assemblymembers and Senators who haven’t really read the bill yet or looked into it enough to make an informed decision on it. After last years fiasco, bill supporters know every vote counts, especially in the Assembly who can be a bit more divided and squirrely on votes. That’s why there is the delay. And you can bet that they are not happy about it either. They’ve been trying this for years now, but concern over the pensions or the economy, or something else always pops up.
“Now they have to wait until next year, and since the bill has some 2024 deadlines in it, that likely means amendments and even more time and effort being put on SB 252. Their heels are dug in, so it will come again next year in all likelihood, but as for the bills success, well, we’ve seen the track record.”
SB 252 is due to be reintroduced to the Legislature next year.
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“Gonzalez and bill supporters hope that SB 252 will help California achieve zero carbon and green energy goals by taking away billions in investments to fossil fuel companies.”
It most likely will not (achieve zero carbon) and even if it could, it would amount to less than nothing in the grand global scheme of things. Sorry to resort to ad hominem, but Lena Gonzalez is not very intelligent.
Dem/Marxist legislators as destructive as the ones we have in California are BEGGING to be subjected to ad hominem attacks. If they weren’t they would be more constructive and reasonable. 🙂
This stall of this bill (for now) is good news.
Maybe Democrat Senator Lena Gonzalez is getting some form of financial incentives to push this climate change nonsense? If so, she’ll have to wait until next year for her payoffs? Senator Lena Gonzalez and her fellow Democrats should instead focus on the unfunded CalPERS and CalSTRS pension liabilities that are estimated to be at over a trillion dollars?
Dem. Sen. Lena Gonzalez represents the 33rd District consisting of nearly 1 million residents of Los Angeles County, including Long Beach, and the Southeast Los Angeles cities of Bell, Bell Gardens, Cudahy, Huntington Park, Lakewood, Lynwood, Maywood, Paramount, Signal Hill, South Gate, and part of Los Angeles. Are her constituents, most of whom are Hispanic and of lower income, requesting this legislation and is it a priority for them? No es posible!
STOP PLAYING POLITICAL GAMES WITH PEOPLES LIVES! CalPERS has a fiduciary responsibility to its members and cannot do this effectively if the most worthless amongst us keep interfering to gain votes or to make a political statement.