Philadelphia Board of Pensions and Retirement soon will begin a process to divest half of its holdings in gun and ammunition manufacturers, distributors and retailers, said Christopher DiFusco, director of investments.
Separately, the $469 million Philadelphia Gas Works Retirement Reserve next month also will begin divesting the companies.
The municipal board in January approved a resolution to adopt Philadelphia Mayor Michael A. Nutter's “Sandy Hook Principles” that are designed to influence the corporate behavior of gun and ammunition companies. Under the resolution, the companies had 90 days to sign the principles, which address five specific categories of reform in terms of procedures, coordination management, safety and technology.
Most of the companies “have failed to sign or affirmatively chose not to sign it,” Mr. DiFusco said in a telephone interview. The resolution states “at least 50% of assets under management with that company will be removed by nine months and 100% of assets removed within 15 months.”
Mr. DiFusco said the clock will be starting shortly on the nine-month period.
The $4.4 billion pension fund has about $8.6 million in investments in Alliant Techsystems Inc., Cabela's Inc., Compagnie Financiere Richemont SA, Daicel Corp., Dick's Sporting Goods, Olin Corp., Sears Holdings Corp., Smith & Wesson Holding Corp., Sturm Ruger & Co. and Wal-Mart Stores Inc.
Mr. DiFusco said he is not expecting any issues from managers in divesting the holdings.
Separately, the Philadelphia Gas Works Retirement Reserve also adopted the principles this year. Charles Jones, executive director of the Philadelphia Sinking Fund Commission, which manages the pension plan, said he will ask commission members in September to begin a divestment process for the $859,000 the plan has invested in companies covered by the principles. About $517,000 is invested with managers and the rest is in mutual funds. Mr. Jones said he will ask the commission to initiate a search to replace the mutual funds.
“Hopefully we will be totally divested of these holdings by first quarter of 2014,” Mr. Jones said in an e-mail.
The Sandy Hook Principles resolution and a list of companies covered are available on the municipal pension fund's website.