Colorado's public employee retirement portfolio contains small gun, ammo investments

Investments make up 0.003% of full portfolio
Colorado's public employee retirement portfolio contains small gun, ammo investments
Posted at 3:53 PM, Feb 23, 2018
and last updated 2018-02-23 19:03:14-05

DENVER – The massive retirement fund for Colorado’s public employees contains about $1.7 million in indexed investments in gun and ammunition manufacturing companies, including one of the makers of the AR-15, according to the fund's financial records.

The fund, the Colorado Public Employees’ Retirement Association (PERA), has a defined benefit investment portfolio of approximately $48 billion, so the $1.7 million represents a small fraction of the total investments (about 0.0035 percent). The fund serves hundreds of thousands of current and former state employees.

Some states and employees across the country have expressed concern that their pensions are partially funded by these companies. Bloomberg reported that teachers in 12 states, including Colorado, have pensions that are partially funded by the manufacturers.

The Associated Press reported Wednesday that the Florida Retirement System has 41,000 shares in American Outdoor Brands Corp. that add up to a market share of $528,000, which “sickened” Florida Education Association President Joanne McCall.

American Outdoor Brands Co. is the parent company of Smith & Wesson, which manufactured the AR-15 used in the Stoneman Douglas High School shooting.

As it turns out, PERA also has investments in four companies linked to guns, though according to PERA, the investments are contained inside indexed, passive portfolios that PERA investors mirror.

“PERA investment professionals have not actively selected to purchase these stocks,” PERA spokeswoman Katie Kaufmanis told Denver7 in a statement. She said that the portfolio’s investment in the four companies amounted to approximately $1.3 million.

According to SEC fillings from this month, contained within the PERA portfolio were 2,717 shares in American Outdoor Brands worth $35,000.

But the portfolio also contained investments in Vista Outdoor Inc., which makes firearms; ammunition manufacturer Olin Corp. and gun manufacturer Sturm Ruger & Co.

The latest SEC filing shows the portfolio contained 36,620 shares of Olin Corp. worth $1.3 million; 12,193 shares of Vista Outdoor Inc. worth $178,000; and 3,678 shares of Sturm Ruger & Co. worth $205,000.

“Passive index investments are a cost-effective way to get broad market exposure,” Kaufmanis said in a statement.

PERA also has a long-standing statement on divestment that was written in 2007 and notes that “there are occurrences of violence in today’s world that are and should be intolerable in any civilized community….As individual Americans we all enjoy the political and philosophical freedom to speak out against the atrocities and join in those causes which align with our personal beliefs.”

It goes on to say that despite the changing conversations surrounding some of these issues, like gun control, PERA’s goal is to maximize its investments for the current and former state employees—something Kaufmanis also reiterated.

“The purpose of PERA’s long-term investment program is to achieve one goal: to secure the retirement benefits promised to Colorado’s current and former public employees.”

However, Kaufmanis added that PERA’s board of trustees discussed the divestment policy at its January meeting, and said there were “tentative plans” to continue those discussions with its investment committee “later this year.”

The Denver Post has reported extensively in recent months on the funding crisis PERA faces. State lawmakers and others in the state government are working to find a solution, as The Post reports that it only has about 58 percent of the money it needs to pay out future retirement benefits.