The following appeared in the Chief Investment Officer on September 20, 2019.

Legislation condemning Turkey for its failure to recognize the Armenian Genocide would result in California divestments.

The California state legislature has passed an act intended to mandate that California public pension funds divest from assets affiliated with Turkey over the government’s failure to officially acknowledge its responsibility for the Armenian Genocide, a century-old atrocity that claimed the lives of approximately 1.5 million Armenians.

Assembly Bill 1320 would bar the California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS)—the two largest pension plans in the US—from making additional investments “in any investment vehicle that is issued, owned, controlled, or managed by the government of Turkey,” until January 2025, or until Turkey officially acknowledges its responsibility. The bill also mandates the pensions’ full liquidation of such investments within 18 months of the bill’s passage.

CalPERS expressed its opposition to the bill in a memo presented to the pension’s board of trustees, stating that any loss in investment income or fees related to divestiture would have to be reimbursed through employee and employer contributions.

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