California teachers demand a gun-free retirement
The teachers held a protest Thursday at the California State Teachers Retirement System headquarters in West Sacramento.
has a portfolio of $190.8 billion and is the second-largest public pension fund in the United States, behind only CalPERS, California's Public Employee Retirement System.
CalSTRS serves about 879,000 public school educators and their families.
But many of those teachers are upset that part of their pensions are invested in guns.
The Bushmaster rifle used in the Sandy Hook attack that killed 26 students and teachers in Connecticut in December 2014 was made by Freedom Group, now known as Remington Outdoor. It's part of the pension portfolio used by CalSTRS investment partner Cerberus Capital Management.
On Thursday, California teachers read a letter from Sandy Hook parents.
"More than two years have passed since that horrible Friday," said Ann Killebrew, a retired teacher. "We remain grief-stricken and heartbroken, but we are also angry."
Two years ago, CalSTRS voted to get rid of its gun portfolio, but that didn't happen.
"Any crisis that happens to students and teachers in schools, it's close to the heart," said Maggie Ellis, of the California Teachers Association.
But the investment, worth millions of dollars, has been difficult to get rid of.
"We've been unable to divest ourselves from that up to this point," said Mike Sicilia, a spokesman for CalSTRS.
CalSTRS can't sell the gun portfolio by itself, so it has been putting pressure on its investment partner to do so, but to no avail. That's been frustrating to CalSTRS board members, including State Controller Betty Yee.
"It really has a lot to do with how those investments are embedded into a private equity class that doesn't become liquid for a period of time," Yee said.
That means California teachers have limited options in trying to break a contract with investment partner Cerberus.
"It is contradictory for the contributions that we make to our own retirement to be invested in gun manufacturing," said Jeff Freitas, of the California Federation of Teachers.
Cerberus said it would have no comment on the matter, but the investment is valued at $375 million overall.
But the gun portion of that, according to CalSTRS, is 3 percent, amounting to $10 million or less.
When asked how long it could take for California to get rid of the gun investments, Sicilia told KCRA that CalSTRS would like this to be resolved immediately.
But given the fact that private equity partnerships are a long-term investment, it could take a long time -- even years -- to fully divest.