Wisconsin Retirement System Members Miss Out on Pension Increase

Researchers estimate that SWIB would be $4.3 billion richer if it had divested.

New research shows that numerous U.S. public pension funds would be $21 billion richer had they divested from fossil fuels a decade ago. The University of Waterloo study in partnership with Stand.earth, analyzed the public equity portfolios of eight major U.S. public pension funds including the funds of the State of Wisconsin Investment Board (SWIB). The study examined the effect divesting from energy sector holdings would have had on investment returns and the benefits provided to over 3 million people who rely on their pensions. In total, researchers estimate that the State of Wisconsin Investment Board (SWIB) would be $4.3 billion richer if it had divested.

For Wisconsin Retirement System members, that equates to approximately $6000 of missed benefits for each member over the ten-year period.

Another analysis in the study found that if SWIB had divested a decade ago, its portfolio would have produced 28.5 million metric tons less carbon dioxide. This is equivalent to the greenhouse gas emissions of 6.3 million cars driven for one year. Researchers say the report proves that divesting creates additional financial value, lowers exposure to climate risks, and reduces the carbon footprint of portfolios.

“Influential investors, like these large public pension funds, can bring about positive change on a few fronts,” said Dr. Olaf Weber, professor and study author at the University of Waterloo. “Energy divestments can create higher returns for the funds, which leads to higher returns for the beneficiaries and reduced exposure to climate risks. Consequently, it leads to safer pensions.”

“In Wisconsin we can feel and see the impact of carbon dioxide driven climate change,” said Pete Knotek, member of Climate Safe Pensions for Wisconsin (CSPWI). “My 94-year-old dad commented he’d never seen anything in his life like the Canadian wildfire smoke that recently made air unhealthy across Wisconsin for days.”

The full report is available here.

About CSPWI: The organizers of Climate Safe Pensions for Wisconsin are members of the Wisconsin Retirement System (WRS) who are concerned about the risks of continuing to invest our retirement savings in fossil fuels. We believe divestment from fossil fuels is in line with the State of Wisconsin Investment Board’s (SWIB) fiduciary responsibilities to invest prudently for its annuitants. CSPWI has delivered a petition with over 500 signatures of WRS members to SWIB officials. The petition calls on SWIB to stop making any new investments in fossil fuels and to develop a plan to move the $6.4 billion it has invested in fossil fuels (4.7% of total portfolio) into safer investments. More information is available at Climate Safe Pensions for Wisconsin.