SOMERVILLE – Somerville’s push to divest its retirement fund from the fossil fuel industry has been set back over a process concern raised by the state.
The Somerville Retirement Board (SRB) decided in June to move $9.2 million in assets, representing 4.5 percent of the system’s total funds, into a fossil fuel free index fund. The move is the first part of a four-part plan to move the retirement system’s assets out of funds that include the top 200 fossil fuel companies.
But the state of Massachusetts has thrown an obstacle in the board’s path. The compliance office of the state Public Employee Retirement Administration Commission told the board that it should have issued a request for proposals (RFP) before moving the assets. The SRB decided in its July meeting to put the $9.2 million back into the original (fossil fuel inclusive) fund and begin the RFP process at its August meeting.
“This is disappointing, but we’re glad that the board is still committed to divestment,” said Sean Donaghy, of Fossil Free Somerville. “Divesting from the fossil fuel industry makes sense for the planet and for the financial health of the retirement fund. The performance of fossil fuel companies has been erratic at best, and as the world turns away from fossil fuels, investing in those companies will increasingly be a bad bet.”
The SRB previously submitted a new Statement of Investment Objectives to PERAC that stated that it will consider investment funds that do not include fossil fuels, and that statement was accepted. Fossil Free Somerville hopes that PERAC’s advisory is not an attempt to undermine the SRB’s ability to make sensible investment decisions that take into account dangerous long-term trends.
“The SRB has shown that it’s committed to divestment and will do it the right way,” said Nate Gundy, of Fossil Free Somerville. “The Somerville community, mayor and Board of Aldermen have also shown strong support for divestment. We will continue to support the SRB’s efforts, and we urge PERAC to not stand in the way of Somerville and other communities as they make the smart decision to divest.”
Contact: Colby Cunningham – 617-417-1100 or email@example.com