Legislation
2011 Legislation Report
The 2011 Iowa General Assembly enacted legislation (HF 484) applicable to the public retirement systems in Iowa. The legislation establishes divestment requirements for investments in companies that do business in or with the country of Iran. The legislation seeks to further the pressure on the government of Iran to end its ties to international terrorism.
The legislation requires each retirement system in Iowa to develop and maintain a list of scrutinized companies with oil, power production, and military business directly operating within Iran. The list of scrutinized companies is initially due March 1, 2012, and it will be updated on a regular basis thereafter.
MFPRSI will notify the System's investment managers concerning the identified companies and request they consider divestment of any such holdings from the portfolio they manage on its behalf. Additionally, the System will communicate to each company concerning the requirements of the statute, encouraging them to cease activities in or with Iran. Since the retirement System invests through commingled funds, it does not have direct holdings in the shares of companies, including those on the referenced list. Such indirect holdings are not subject to divestment.
MFPRSI will be working with the other retirement systems in Iowa to implement the legislation. An annual report detailing the System's activities undertaken to comply with the legislation will be submitted to the legislature by October 1, 2012, and each October 1st thereafter. While the legislation will add to the System's administrative workload, the legislation will not substantially add to the cost of implementing and maintaining MFPRSI's investment portfolio.
This act of divestiture is similar to the divestment legislation enacted by the Iowa General Assembly in 2007 requiring investment dissociation from Sudan in an effort to end the human atrocities occurring within that country.