Courtesy of the State Treasurer's Office

On Tuesday, in conjunction with states across the nation, State Treasurer Shawn T. Wooden announced that Connecticut’s $47 billion dollar Common Retirement Plans and Trust Funds will divest $218 million of Russian domiciled assets. 

Following a call from Gov. Ned Lamont for the state’s government to identify any economic or business ties that the government may have with Russia after the invasion of Ukraine, the state’s pension fund has already sold off around $60 million of the Russian assets, and Wooden has announced that the state will divest entirely. The CRPTF provides pensions to 212,000 state and municipal employees and is a combination of the Teacher’s Retirement Fund, the State Employees’ Retirement Fund and Municipal Employees Retirement System. The state government has not found any other economic ties to Russia. 

“Eliminating our holdings of Russian assets is not only a moral imperative but the current crisis also constitutes a substantial risk for Connecticut’s investments, our national policy and economic security,” Treasurer Wooden told the News in an email. “Connecticut’s action today will apply further economic pain on a dangerous autocrat who needs to know that the free world stands in solidarity with the Ukrainian people and that Putin’s abhorrent actions will have enduring, harrowing economic consequences in the days, months, and years ahead.”

Prior to the announcement by Wooden, the CRPTF’s Russian assets consisted of $15 million in corporate bonds, $53 million in sovereign bonds, $78.1 million in oil, gas and consumable fuel securities, $68 million in metals and mining securities and $4 million in food securities. 

Wooden told the News that the process of divestment has already begun with the state dumping $60 million in the last 24 hours. The rest of the assets will be sold down “in a prudent fashion.” He added that the economic isolation created by divestment is already working, as Russia’s economy is in free fall. 

“Pension funds investments provide the needed funds for the Russian war machine when most other funding sources are already unavailable,” said Ukrainian advocate and international Yale student Oleksii Antoniuk ’24. “Most Russian publicly traded companies are government-run or affiliated with it. Any funding for them automatically translated into more money flowing into the Russian war coffins. … More pressure from all the pension funds’ divestment could make a final blow to the Russian financial war machine.”

According to Wooden, the CRPTF’s Russian investments have continued to fall since 2014 when Russia annexed Crimea in the face of international sanctions. Moreover, the fund has actively worked to decrease its Russian assets following sanctions as well as Russian cyberattacks and election interference, since all of these actions made the Russian markets “less favorable relative to others.” 

The treasurer’s office does not expect this move to have a negative effect on the economic health of the pension system and that office has concluded that they are reducing the portfolio’s risk since Russia’s economy is in free fall. 

Wooden also serves as the president of the National Association of State Treasurers and has been in contact with other state officials across the nation to enact similar actions. 

The CRPTF is overseen by the Investments Advisory Council, which provides support and advice to the Treasurer’s office. The IAC consists of members nominated by the governor to represent the interests of different stakeholders involved, including the state’s teachers, municipal and governmental unions. 

“As a representative of AFT Connecticut on the Investment Advisory Council, I applaud Treasurer Wooden’s action in divesting state pension funds from Russian-owned assets,” said AFT Connecticut Vice President At-Large Joshua Hall. “He sent a clear message to the people of Connecticut, the country and the world, that we will not sit by and watch an assault on the sovereign country of Ukraine. Treasurer Wooden treats his role as sole fiduciary with great care and we trust him to always do what is in the best interests of Connecticut’s retirement plans and trust fund beneficiaries.” 

School of Management professor Jeffrey Sonnenfeld told the News that the state government was making the “correct and moral” decision by divesting and setting an example for other states as well as other investment funds. He added that he believes Yale should follow the state’s example and disclose as well as divest Russian assets that are held. 

The CRTPF currently complies with state statutes related to investing in nations like Sudan and Iran due to Connecticut’s Sudan, Iran and MacBride law. According to Chairman of the State House Financial Committee Sean Scanlon, the legislature is discussing taking similar actions against Russia. 

“The unprovoked invasion of Ukraine has rightfully sparked businesses and governments from around the world into taking action when it comes to sanctioning or divesting from Russia,” said Scanlon. “There must be consequences for Putin’s reckless attack on a democratic ally, and I fully support Connecticut joining others in doing our part to stand for Ukraine by inflicting financial punishment on Putin and his oligarchs.” 

Wooden was sworn in as Connecticut’s 83rd State Treasurer on Jan. 9, 2018.

YASH ROY
Yash Roy covers education & youth services in New Haven and is a P&D staffer. He is a first year in Timothy Dwight College and is from Princeton, NJ.