Survey asks critical question: What do actual pensioners think of fossil fuel divestment?
The District of Columbia Retirement Board intends to divest its direct financial holdings in hydrocarbon-energy producers, while not selling any of its larger commingled funds that contain many of the same stocks, according to the Independent Petroleum Association of America.
The IPAA unveiled new research findings that quantify the opinions of those who stand to lose the most under activist-led divestment campaigns: the pension beneficiaries themselves.
Completed last month, the survey captures the views of nearly 800 individuals from all across the United States who self-identified as beneficiaries of pension-fund disbursements, with all respondents deriving pension-related income from prior service in the public sector.
The sample is comprised primarily of retired teachers, fire and police officers, and state, municipal and federal government personnel.
Asked whether they could support divestment if doing so could lead to lower returns, nearly two out of three respondents said they could not.
Asked to name an industry from which they might be comfortable divesting under certain circumstances, only nine percent of respondents identified firms or industries related to oil and gas.
“Arguably the strangest thing about the current debate over pension-fund divestment is that no one seems to know or particularly care what actual pension beneficiaries think about these policies,” said Jeff Eshelman, senior vice president of IPAA and director of the association’s DivestmentFacts.com campaign.
In Texas, 88 per cent of respondents said they would actively oppose divesting from oil and gas companies, and large majorities registered the same position in Pennsylvania (77%), Ohio (71%) and New York (72%) as well, among other states.
“This new, first-of-its-kind survey helps us at least answer that basic question: pensioners, no matter where they live or how they vote, don’t like these divestment schemes one bit,” said Eshelman.
“What the findings show is that folks believe they’ve earned this money, that they’re entitled to receive it, and that they don’t want their financial well-being later in life to be impacted by activist-led political stunts. And who could blame them?”
As respondents during the course of the survey were presented with arguments both in support and opposed to divestment, opposition continued to mount throughout.
Opposition levels reached a high of 75 per cent after participants were presented with the argument that divesting from oil and natural gas firms makes no sense so long as society continues to rely on the products they produce as a key component of everyday life.
Among the key demographics represented in this survey, a plurality of participants identified themselves as Democrats (38%), with a large majority indicating they were holders of at least a college degree (69%).
The release of these new survey results follows the issuance earlier this month of a new report by a professor at Arizona State Univ. quantifying the “frictional costs” of divestment – primarily transactional and compliance-related costs that all institutions that attempt to fully divestment would bear simply for executing the transaction.
These costs, which the research showed could exceed $7.4 billion for a large portfolio over a 20-year period, would come in addition to any performance-related losses incurred as a result of having a less-diversified, hollowed-out portfolio thanks to divestment.
The survey also comes as divestment activists launch a new protest later today targeting the California State Teachers’ Retirement System.
CalSTRS’s chief investment and executive officers have previously said that divestment is a bad idea, and one they could not support.