Pension plans are not the only ones leading the charge in divesting Russian assets. Government officials at the state and federal level are working on legislation related to selling off Russian investments.
The U.S. Senate is looking to ban institutional investors from investing in Russian securities. Sen. Marco Rubio, R-Fla., on March 2 introduced the Instituting Measures to Protect American Investors and Retirees from Russia Act, or IMPAIR Russia Act. Institutional investors would be barred from purchasing a security issued by a Russian entity on or after the date of the bill's enactment.
Investment companies and insurance companies under the Investment Company Act of 1940 as well as fiduciaries under the Employee Retirement Income Security Act of 1974 would be subject to the bill, which was co-sponsored by Sen. Rick Scott, R-Fla.
The IMPAIR Russia Act would allow the president to impose penalties on offending institutional investors under the International Emergency Economic Powers Act.
The New Jersey Legislature already passed legislation that prohibits certain government dealings with businesses linked to Russia and Belarus and calls on the $93.8 billion New Jersey Pension Fund, Trenton, to divest certain investments in those countries. Gov. Phil Murphy signed it into law March 9.
"We are sending a strong message today to Vladimir Putin and his cronies in Belarus that their actions will not be tolerated," Mr. Murphy said in a news release.
New Jersey Pension Fund had $50 million in Russia-related investments as of Feb. 28.
The law prohibits the state from investing pension or annuity funds in an entity appearing on a "prohibited activities" list developed by the Department of the Treasury. The law says the state and its subdivisions are prevented from "banking with, holding equity investments in or maintaining insurance coverage issued by a financial institution" for any entity on the list.
On March 3, California state Sen. Mike McGuire and a bipartisan coalition of legislators introduced a bill to divest state public funds, such as the $473.6 billion California Public Employees' Retirement System, Sacramento, from Russia and Russia-state entities.
"As the fifth largest economy in the world, we must use this power for good. We can help stop this autocratic thug, Putin, by advancing this critical legislation and enacting our own financial divestments," Mr. McGuire said in a Feb. 28 news release.
In North Carolina, Treasurer Dale R. Folwell wants Congress to amend the Foreign Sovereign Immunities Act of 1976 to enable the $118.2 billion North Carolina Retirement Systems to confiscate the Russian assets the systems hold through a private lawsuit, as a response to Russia's invasion of Ukraine.
Mr. Folwell, who is sole trustee of the Raleigh-based retirement systems, called for the amendment to the 1976 sovereign immunity act to complement the sanctions the U.S. government has already imposed on Russia and to provide institutional investors the opportunity to hold "corrupt regimes and foreign state-owned corporations accountable for losses stemming from their deadly misdeeds," the news release said.
"Amending FSIA language to provide state pension funds with greater legal mechanisms to more easily recoup economic losses is a crucial step to impose serious financial consequences on the Russian tyrant, diminishing his ability to fund his evil war," Mr. Folwell said in the news release.
As of Feb. 25, the retirement systems had about 0.067%, or just under $80 million, of its total portfolio domiciled in Russia, according to the news release.
The news release said that while sanctions freeze Russian assets, the ability to actually confiscate assets through lawsuits based on economic harm is difficult because of legal barriers, and Mr. Folwell said amending the FSIA to create additional exceptions to the law could allow institutions to file lawsuits. Mr. Folwell gave an example of victims' rights against state-sponsored terrorism as one such exception that could provide a model for his suggested amendment.
In South Carolina, state Rep. Russell W. Fry introduced a bill March 1 that would force the South Carolina Retirement System Investment Commission, Columbia, to divest from companies owned in whole or in part by Russia. The commission oversees the investment management of the $39.7 billion South Carolina Retirement System.
Information on how much South Carolina holds in Russian-related investments was not immediately available.
In Illinois, state Rep. Jim Durkin last month introduced legislation that would require the state's five pension funds to divest from any holdings in Russian companies.
Overseeing the state pension funds' investments are the $66 billion Illinois Teachers' Retirement System, Springfield; the $29.1 billion Illinois State Universities Retirement System, Champaign; and the $24.7 billion Illinois State Board of Investment, Chicago, which manages the investments of the State Employees' Retirement System, General Assembly Retirement System and Judges' Retirement System.
