Thanks to Isaac Furtney for today’s blog post. Isaac is a PERA member and believes that PERA should join the global divest-invest movement, not only to be on the “right side of history” environmentally speaking, but also to ensure it fulfills its sole purpose: to maintain its assets in the present and in the future to fund the retirement of its members.
As a relatively green school bus driver, I recently became aware of PERA, or the Colorado Public Employees Retirement Association as it is the retirement plan my colleagues and I (as well as one-in-ten Coloradans) are contributing to in place of Social Security. Roughly 8% of my pre-tax paycheck goes straight into it, while my employer pays a little over double that amount. It will be part of the income I rely on when I retire many years from now. Retirement is potentially the most financially vulnerable period of a person’s life, and it is important to me that the funds I contribute to while working are there for me when I need them down the road.
The recent legislation concerning PERA alarmed me, particularly that members are now forced to contribute more to keep the fund solvent. I began wondering why the Colorado Congress deemed this measure necessary. I began to wonder why, with the market rising consistently over the last few years, our investments weren’t growing similarly. The fact that managed funds typically perform no better than indices crossed my mind. Knowing that PERA’s investments are managed by people caused me to wonder what exactly the financial advisers are deciding to invest my colleagues’ and my money in. And, who are they being advised by on the issue of fossil fuel investments? If they are only being counseled by an oil and gas lobbying firm as a November, 2018 article indicated, this is problematic.
Although I’m not retiring for many years, I still don’t want PERA taking any unnecessary risks with its investment strategy. I also wish PERA to be invested in ethically sound companies. Also, as a relatively “green-minded” school bus driver, I am aware of the urgency of climate change. Toward these ends, I don’t want to see PERA investing in fossil fuel companies, including oil and gas extractors and utility companies that burn coal, which are aiding in the destruction of the planet–which is another thing besides an income I want to be around when I retire. While my school bus is currently powered by fossil fuels, my retirement need not–and should not–be.
According to PERA’s SEC filings, PERA has over 5% of its total global equity invested in oil and gas and utility companies. PERA is not only invested in Colorado-based oil and gas companies, as might seem justifiable as “supporting the state,” but is heavily invested in companies like the Texas-based Anadarko Petroleum Corp. Supporting fossil fuel companies not only endorses their destructive behavior, it also represents a large financial risk. Tom Sanzillo, Director of the Finance Institute for Energy Economics and Financial Analysis points out in a Colorado Politics article entitled, “Colorado’s PERA Shouldn’t Bank on the Future of Oil and Gas,” that “competition from wind and solar on the power-generation side of the equation and from the rise of electric vehicles on the transport side [will harm the future performance of fossil fuel stocks].” These companies and their shareholders also need to be concerned about the probability of stranded assets–i.e. fossil fuel reserves that will become legally unattainable once global initiatives to reduce carbon emissions (such as the Paris Climate Accord)–diminishing their profitability.
There is an entire global movement of divestment from fossil fuels and investment in green energy occurring called the Go Fossil Free/Divest-Invest movement that has already garnered the commitment of 1,000+ institutions totaling over $8B of investments. PERA should join this movement, not only to be on the “right side of history” environmentally speaking, but also to ensure it fulfills its sole purpose: to maintain its assets in the present and in the future to fund the retirement of its members.
Want to learn more and get involved in the Fossil Free PERA campaign? To sign the petition calling on PERA to divest from fossil fuels, click here. To learn more about 350 Colorado’s work on divestment, click here.
Isaac Furtney is a Colorado native, a PERA member, an intern for 350 Colorado, a Fort Lewis College graduate, and a bus operator for SVVSD.