TRS Complies with Divestment Laws

The Teachers’ Retirement System is prohibited by state law from investing in companies that do business in Sudan and Iran. TRS fully supports the intent of these laws, designed to protest global terrorism and ethnic violence.

TRS was previously required to divest securities to comply Public Act 94-0079, the Act to End Atrocities and Terrorism in the Sudan implemented in January of 2006. TRS held minimal investments in companies that had ties to Sudan but restructured its portfolio to ensure compliance with the law, which was overturned in February of 2007.

The new Illinois law, Public Act 95-0521, takes a more targeted approach by applying only to the five state pension systems, while all public pension systems in Illinois were required to comply with the previous divestment law.

The statute excludes companies licensed by the U.S. Department of the Treasury or which are operating legally within the existing restrictions put into place by the United States government. Exemptions also include the divestment of holdings in companies that provide humanitarian relief in Sudan. Additionally, the new law expands and clarifies compliance requirements for private equity investments.

TRS appreciates the willingness of the General Assembly to have an open dialogue with the public pension systems to ensure the new law will be effective and enable the systems to remain competitive in the investment arena.

Illinois also mandates that TRS divest from investments held in companies that do business in Iran. Public Act 95-0616 was signed into law on September 11, 2007. The law, which took effect January 2008, requires all five state pension systems to sell public equities in energy companies that do business in Iran. TRS has already divested from many of the companies that do business in Iran in the course of complying with the previous Sudan divestment law.