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Calpers accelerates timeline for tobacco study
May 16, 2016 / 8:51 PM / 2 years ago

Calpers accelerates timeline for tobacco study

SAN FRANCISCO, May 16 (Reuters) - The board of the California Public Employees’ Retirement System on Monday shortened the timeline for the completion of a study examining its 16-year-old decision to divest from tobacco.

In April, Calpers, the largest U.S. pension fund, voted to conduct the study to see if the pension fund took huge losses and should potentially re-invest in tobacco.

On Monday the board said the review should be complete in six to nine months instead of the original timeline of 12 to 24 months.

Calpers spokesman Joe DeAnda said the board will likely make an investment decision upon completion of the study but stressed that the review “is in no way an indication of a desire to reinvest.”

In 2015, Wilshire Associates reported that Calpers tobacco divestment had reduced the pension fund’s portfolio returns by an estimated $2 billion to $3 billion. The pension fund’s total market value currently stands at approximately $296 billion.

The review by Calpers sparked criticism from health groups and some state officials, including California State Treasurer John Chiang.

“Investing in tobacco companies is harmful to public health and to our fiscal bottom line,” he said in a statement last month.

No public pension fund should associate itself with an industry that is “a magnet for costly litigation, reputational disdain, and government regulators around the globe,” he said.

Calpers had originally estimated in April that it would cost $500,000 to study tobacco reinvestment.

Calpers’ decision to review its tobacco divestment has caught the attention of industry shareholders, institutional investors, health groups, and many of Calpers’ beneficiaries across California.

Tobacco is the leading preventable cause of death in the United States, according to the U.S. Department of Health and Human Services. (Reporting by Rory Carroll; Editing by Sandra Maler)

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