The city of Sterling Heights is divesting Russian investments, equated to $678,952, within its pension and retiree health care funds because of the Russian invasion of Ukraine.
The city, the state’s fourth largest, made the announcement Thursday, indicating that as of Wednesday, all Russian-related investments have been liquidated.
“The City Council and I agree it made no sense for the city of Sterling Heights to conduct business with Russia on any level in light of atrocities perpetrated against innocent Ukrainian citizens,” Mayor Michael Taylor said in a release. “We urge cities across the country to take similar action.”
City Finance and Budget Director Jennifer Varney said the portfolios equating to more than $500 million are balanced across numerous funds, so there won’t be any material impact on the retiree pensions or health care accounts.
“However, if other municipalities choose to follow Sterling Heights’ lead, and we certainly hope they do so, there could be wide sweeping negative financial impacts on Russian markets,” she said.
Varney said the funds have fund managers who coordinate investments on behalf of the funds and routinely shift and reallocate funds to achieve the highest return on investment. The funds are invested internationally, similar to many personal investments namely through mutual funds.
On Wednesday, the State of Michigan Investment Board voted unanimously to divest the State of Michigan Retirement Systems (SMRS) pension plans from companies based in Russia and Belarus.
With the SMRS portfolio exceeding $98 billion, about 0.06% of state pension assets are associated with Russian institutions and organizations. There are no Belarusian holdings in the state portfolio, according to a release.
It stated the Russian holdings are managed by external investment managers and primarily invested in low-cost international stock index funds, which are the direct owners of the Russian securities.
The State of Michigan Investment Board will begin divesting from Russian and Belarusian companies “as soon as practical when market conditions allow,” according to the release.
The action came after Gov. Gretchen Whitmer issued a letter March 1 calling for a special meeting to divest from institutions and companies based in Russia in response to the invasion.
Warren Mayor Jim Fouts said Thursday that he would be happy to support the divesting of any investments with Russia, if the city has any.
“I want nothing to do with Russia making any blood money. What they’re doing in Ukraine is horrendous,” he said.
Fouts said he is working on a program where the city would openly accept Ukrainians, as Warren already is home to a large number of Ukrainian Americans.
In addition to its divestment of Russian investments, the city of Sterling Heights also is going to:
Reach out to refugee placement organizations to let them know the city is a safe harbor for Ukrainians and refugees.
Light ‘The Halo,’ the large gold icon in the median on Hall Road, yellow and blue through the end of March.
Recognize the suffering of Ukrainians and provide a donation opportunity for relief efforts to the approximately 1,000 people attending Friday’s Cultural Exchange. The Ethnic Community Committee is spearheading the effort.
Contact Christina Hall: [email protected] Follow her on Twitter: @challrepoter.
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This article originally appeared on Detroit Free Press: Sterling Heights divests its Russian investments