Major Union Pension Trustees to Consider Divestment from Russian Assets

WASHINGTON —American Federation of Teachers President Randi Weingarten today sent a letter to the union’s pension trustees urging that they take immediate action to review investments with ties to Russia following the country’s ongoing acts of unprovoked war against Ukraine. The AFT has previously condemned Russian aggression and Vladimir Putin’s ongoing attacks on the democratic sovereign state of Ukraine.

Weingarten presented the letter to the AFT trustee council Thursday, and trustees overwhelmingly embraced its sentiment and endorsed its call to action. Many funds have or will soon take steps to divest, including in California, Minnesota, New Mexico, New York City, New York state, Ohio, Pennsylvania and Rhode Island.

Weingarten said:

“As this unprovoked and increasingly barbaric war on the sovereign and democratic country of Ukraine continues, we must do all we can to not simply condemn Putin, but exert whatever economic and political pressure we can to try and stop this carnage. That’s why the AFT is asking the public pension plans that operate on behalf of our members to examine our exposure to risky Russian investments and weigh where we invest our members’ deferred wages carefully. Several public plans have already chosen to divest from assets tied to Russia to avoid the investment risks of funding barbaric and criminal attacks on the Ukrainian people in an attempt to destroy their country.

“I urge all AFT trustees to do the same. AFT members participate in defined benefit pension plans totaling an estimated $4.2 trillion. We must closely monitor where our members’ money is invested across all asset classes—including commodities; real estate; natural resources, such as oil, gas and timber; and private equity and hedge funds—and withdraw from any investments with ties to Russia wherever possible, consistent with our fiduciary duty.”

The full text of the letter is below.

Dear AFT Trustees:

Last month, we all watched in horror as Russia launched a full-scale invasion of Ukraine, an unprovoked and unjustified act of war that is not just an assault on the democratic people of the sovereign state of Ukraine, but also a flagrant violation of international law and a threat to the stability of the global economy. The AFT immediately and unreservedly condemned this act of war because it traduces the fundamental principle that unprovoked wars of aggression can never be the answer to disputes among nations.

I am writing to you because of the serious issues Russia’s invasion of Ukraine creates for pension fiduciaries. As trustees, you understand that financial markets operate best when democracy and freedom are promoted and valued, and that the use of pension fund investments to fund an illegal war represents a significant investment risk.

As I am sure you are aware, international calls for Russian President Vladimir Putin to cease hostilities and seek a diplomatic and negotiated resolution to this conflict have gone unheeded. As the war enters its third week, there are now credible reports of Russian war crimes, including attacks on civilians, and the more than 2 million Ukrainians who have fled to neighboring countries represent the fastest-growing refugee crisis in Europe since World War II. Millions of lives are now at risk as Putin continues his premeditated attack against a sovereign nation. These acts create serious risks of civil and criminal legal consequences as well as risks of severe adverse market reactions for any business entity that is engaged economically with Russia or Russian nationals associated in any way with the Putin government.

The Biden administration and other governments around the world have responded to Putin’s attack on Ukraine by levying economic and diplomatic sanctions against Russia and its oligarchic rulers. These sanctions, and the widespread global public revulsion at Putin’s actions, have led to a wide range of businesses withdrawing from Russia, depriving Russia of access to the critical infrastructure of a modern economy—from access to the global banking system to aviation parts—adding to the extraordinary risks facing anyone who continues to do business in, or with any entity in, Russia.

In response, a number of public pension plans have examined their exposure to Russian investments and chosen to withdraw from assets tied to Russia. These actions echo similar steps that funds have taken in the past around investments in Iran and Sudan, in an effort to avoid the investment risks of funding attacks on democracy and civilians.

I am writing you as a fiduciary for a pension fund that members of the American Federation of Teachers participate in. I understand that Putin’s attack on Ukraine raises issues that have few precedents in recent decades. I want to first express my thanks to those pension fiduciaries who have taken action to address the risks posed by investments in Russia, including those whose funds have divested from Russia-related assets.

I urge all of you to closely examine your funds for exposure to Russia across all asset classes—including commodities; real estate; natural resources, such as oil, gas and timber; and private equity and hedge funds—and to withdraw from these investments where possible, consistent with fiduciary duty. I believe that, at a minimum in this situation, exercising your fiduciary duty of care requires:

1. That you determine all of your fund’s exposure to Russian and Russia-related assets, including but not limited to any investments that are related in any way to Russian oligarchs or entities controlled by Russian oligarchs;

2. That you ask your asset managers to conduct a similar investigation into the extent that the assets they manage on your fund’s behalf have exposure to Russian or Russia-related assets; and

3. That you ask your asset managers to explain to you what steps they are taking to manage the full range of risks associated with continuing to hold any Russian or Russia-related assets.

While I recognize your duty as a fiduciary to assess these issues independently, in the best long-term interests of your plan and its beneficiaries, I wish to re-emphasize that the American Federation of Teachers believes that no pension fund should hold any Russian or Russia-related assets.

The AFT stands in solidarity with our fellow unionists in the Ukrainian labor movement; with the educators, students and families in Ukraine; and with their democratic government in its desire for self-determination, democracy and peace. I ask that you join us in taking this stand by ensuring that our members’ pension savings are not used to support Putin’s war in Ukraine.

In unity,

Randi Weingarten
AFT President