Vermont Pension Board Declines to Divest From Fossil Fuels

The Vermont Pension Investment Committee (VPIC), the entity that manages the state’s pension assets, on Tuesday voted not to consider divesting from fossil fuel companies.

Two elements drove the decision: the Board was told divestment could cost $9 million and wasn’t a sound financial decision; additionally, the state Treasurer urged the Board to act as fiduciaries, not as agents of social change.

More from the Vermont Digger:

VPIC Chairman Stephen Rauh stressed the board’s fiduciary duty to beneficiaries of the retirement system.

“We were not created as an agent of social change,” Rauh said.

[…]

Douglas Moseley of NEPC LLC, a fiduciary adviser for the state, recommended against divesting from fossil fuels. He said there would be transaction fees associated with moving pension fund investments, and eliminating fossil fuel companies from the portfolio “would change the overall risk balance” of the fund.

Matt Considine, director of investments for the State of Vermont, said divestment would be a $9 million hit annually to the pension fund.

[…]

State Treasurer Beth Pearce spoke at length about the committee’s first duty: Vermont retirees.

“Our first and foremost responsibility [is] to the 48,000 active and retired members,” of the state’s retirement system, she said. “We are fiduciaries; our job is to get enough income in the fund to support the retirement security of those 48,000 people and I take that very seriously. At the same time I believe that climate risk is real.”

Fossil fuel-related assets make up $263 million of the state’s $4 billion pension portfolio.

Photo by  Paul Falardeau via Flickr CC License