A year into a state law prohibiting the investment of pension funds into companies that do business in Iran and Sudan, State Rep. Dan Frankel (D-Pittsburgh), who advocated for the legislation, says the pension plans' investments have not been hurt by these restrictions.
"When you take a look at mutual fund portfolios around the country that target terrorist-free investments, they've outperformed the general market," Frankel said. "So we believe there's been no negative impact and probably positive impact on Pennsylvania's pension funds."
The law prohibits investing pension funds from the Public School Employees', State Employees', and Pennsylvania Municipal Retirement Systems in Iran, which has been associated with harboring and sponsoring terrorism, and Sudan, which perpetuates genocide in Darfur.
According to the Office of the State Treasurer, 10 companies — including Royal Dutch Shell — have already ended operations in these nations to avoid divestment.
Frankel said statutes like this can be "another tool in the toolbox" for foreign policy, and in the future could force changes in these prohibited nations.
"I don't think it's imminent, but I do think that the possibility exists that citizens in those countries will look at the sacrifices that their economies are being forced into because other countries are not investing in their communities," Frankel said.
Frankel said the opportunity remains that these nations may be removed from the list if they show vast internal changes, and that more nations could be added to avoid indirectly supporting terror and genocide.
