California State Teachers' Retirement System staff yesterday recommended opposition to California State Senate Bill 1879 that would prohibit additional or new investments in Swiss banks and investment firms. The bill - affecting state trust funds or state trust money, including state pension fund money - is aimed at pressuring the Swiss government to reach a settlement with Holocaust survivors.
The bill interferes with the trustees' fiduciary responsibility, restricts the funds' investment universes and fails to provide indemnification for the fund or trustees, CalSTRS' staff said.
Staff members of the $88 billion Sacramento-based fund said they had been unable to measure the extent to which the bill would hurt normal investment operations. However, they likely would incur additional clearing and settlement costs on securities trades not prohibited but routed through Swiss investment banks or Swiss investment firms.
Although several trustees wanted to support the staff's position, the trustees failed in two tries to take action on the recommendation because several trustees abstained from voting.
If approved by the Legislature, the bill should go to the governor for signing before Sept. 1.