Spaulding touts pension fund investment

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(Host) State Treasurer Jeb Spaulding wants the state to invest some of its $3 billion in pension funds in projects that will stimulate economic development in Vermont.

The State’s Pension Investment committee also recently adopted policies to prohibit investment in countries that support state sponsored terrorism.

VPR’s Bob Kinzel reports:

(Kinzel) Spaulding says targeting some of the Vermont state employees and teachers retirement funds for innovative economic development projects in Vermont is a win – win situation.

He says the pension funds receive a comparable rate of return on their investment and the state’s economy benefits from new projects such as affordable housing and renewable energy initiatives.

Spaulding says his office hopes to review possible investment proposals in the next month.

(Spaulding) “Our hope is, without limiting the field of investment opportunities, to have some of the creative minds in Vermont look at our new economically targeted investment policy and the criteria by which we will evaluate investment proposals and come up with some innovative ideas that we may not have thought about here or perhaps in other states.”

(Kinzel) Spaulding emphasized that it’s critical for these new projects to match the rate of return of the state’s more standard investment plans:

(Spaulding) “We are not expecting to take any kind of a haircut on our investment performance. We have a fiduciary obligation to get optimal risk, adjusted returns. And we will continue to earn those kinds of returns, but to the extent that we can provide collateral benefits, enhancing quality of life in a targeted area, in this case the state of Vermont. We feel it’s worthwhile making every effort to uncover those kinds of opportunities.”

(Kinzel) Spaulding says the investment committee of the pension funds also recently decided to use their financial power on the international level.

The panel voted to ban investments in government bonds of countries that have been identified as supporting terrorism and in any companies that support these governments:

(Spaulding) “We felt that by trying to weed out those companies that were known to be supporting terrorism or genocide we were reducing risk in our portfolio, at the same time adding the collateral benefit of putting pressure on those companies to be forces for positive change in those countries.”

(Kinzel) Under the state’s policy, Spaulding says pension funds can’t be invested in Iran, the Sudan or North Korea or in companies that provide military hardware to these governments.

But pension funds can be invested in international companies that provide consumer goods in these nations.

For VPR News I’m Bob Kinzel in Montpelier.

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