Minnesota Pension Declines to Dump Israeli Bonds In Face of Protests

Israel

Minnesota and its retirement system hold about $10 million worth of Israeli bonds.

Those bonds have been the focus of public scrutiny recently, as one advocacy group has accused the System of taking sides in the Israel-Palestine dispute.

The group, called the Break the Bonds Campaign, has been attending recent meetings of the State Board of Investment and calling for divestment, according to the Associated Press.

On Wednesday, the Board voted on the issue – and decided 3-1 to keep the holdings intact and allow future purchases of the bonds.

Reaction from state officials who talked to AP:

“We do not make investments based on international policy. That is not our job. It’s not our role,” [State Auditor Rebecca] Otto said. “Although there are horrible things happening in the world, SBI is not the place to solve them.”

[…]

“This is obviously a very public and a very hypersensitive issue with strong feelings on both sides here and elsewhere,” Gov. Mark Dayton said as he presented the resolution, defending it as providing needed guidance to those in charge of Minnesota’s $80 billion portfolio. “I don’t think it is appropriate for us as a board to duck this decision and foist it onto the professional staff.”

Minnesota has been buying Israeli bonds since 1993, a decision Dayton helped steer while state auditor and still considers steady and reliable investments.

State chief investment officer Mansco Perry said the current 10-year bond due to mature this summer has a 2.4 percent yield compared to the 1.5 percent benchmark for treasury bills.

The Minnesota State Board of Investment manages $80.3 billion in assets, most of which are pension assets.

 

Photo credit: “Emblem of Israel” by Original design by Max and Gabriel Shamir; Tonyjeff, based on national symbol. – symbol created in 1948.. Licensed under Public Domain via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Emblem_of_Israel.svg#mediaviewer/File:Emblem_of_Israel.svg

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