On March 18, Gov. J.B. Pritzker and Illinois General Assembly leaders released a statement pledging they would work together to advance “legislation to remove any Russian businesses from Illinois’ pension funds.” This declaration came a few weeks after Russia invaded the sovereign Ukraine, which all sides condemned. $111.9 million in Illinois public pension funds have investments in Russia, and the governor and other top state officials want a complete divestment of those funds immediately.
However, a bill to divest those public pension funds still languishes in the State Senate, though it passed the State House by 114-0 on April 5. However, Senate President Don Harmon, (D)-Oak Park, never took up the legislation before the session ended on April 9, leaving his spokesperson to say the Senate would take up the legislation during the Fall veto session. That is not enough for Rep. Jim Durkin, (R)-Western Springs, the House Minority Leader, who said it was an embarrassment for the state to do nothing when Illinois could have been a leader in this situation. He also stated it was a massive failure when the Democrats have a super majority in the House and Senate and a Democrat in the Governor’s Mansion.
Of the $155 billion invested in public pension funds, the Russian investments constitute a fraction of 1%. Moreover, divestments from prohibited transactions find major complications because several pension funds invest in more considerable pooled equity funds, meaning pension managers must pull out of large and often profitable funds because of a tiny prohibited investment. Two significant investment funds, the Illinois Municipal Retirement Fund, serving many of the state’s public employees outside of Chicago and Cook County, and the Chicago Teachers’ Pension Fund, work to divest pension funds from Russia regardless of state legislative proposals. Both entities found significant divestitures in Russian oil and gas companies, securities, and other Russian companies.
The Teachers’ Retirement System (TRS), Illinois’ largest fund that represents teachers outside of Chicago Public Schools, found nearly $59 million in assets in its portfolio. The TRS spokesperson, Dave Urbanek, termed the TRS, similar to other funds, as waiting for the state to act and stated that when the directive comes from “on high,” they will work and divest from any Russian companies.