PHILADELPHIA FUND GRAPPLING WITH TOBACCO DIVESTMENT LAW

PHILADELPHIA - Trustees of the Philadelphia Municipal Pension Fund are grappling with how to comply with a city ordinance requiring the $2.75 billion fund to divest its roughly $20 million in securities of tobacco manufacturers. Al though Philadelphia city councilmen-who passed the ordinance on June 19-did not set a deadline for the sell-off, "they want us to do it as soon as possible," said David A. Volpe, first deputy controller, and trustee.While the fun d will attempt to sell the securities in an orderly manner over time to minimize trading costs, city councilmen reckon the fund should be able to get out of tobacco stocks in a couple of months, said Mr. Volpe, who had led the unsu ccessful charge against the legislation. In a June 16 letter to David Cohen, chairman of the Philadelphia city council's committee on law and government, fund trustees had pointed out that the ordinance could cause them to violate their fiduciary duty. Trustees also expressed concern that the action could open the door for further investment restrictions.