PROVIDENCE — Rhode Island General Treasurer Seth Magaziner said Monday his office is aiming to liquidate all of the state pension fund’s investments in Russian stocks and bonds in response to President Vladimir Putin’s decision to invade Ukraine.
“We do not want the state of Rhode Island to be funding or supporting Putin’s illegal war in any respect, and we want to make a strong statement that we stand with Ukraine,” Magaziner said in an interview.
Russia’s invasion of Ukraine, its democratic neighbor, had led to widespread international condemnation and sanctions ranging from removal of certain Russian banks from a network connecting global financial institutions to sanctions on Russian President Vladimir Putin himself. Now, Rhode Island is joining in, and although it’s not the biggest state, Magaziner said other state pension plans and investors could increase the economic leverage against Russia.
“In Rhode Island, we believe in democracy and in peace, and we cannot stand for what Putin is doing in Ukraine,” said Magaziner, a Democrat who’s also running for Rhode Island’s second congressional district.
About 0.3 percent of the state’s pension plan is tied up in Russia, Magaziner said, roughly $20 million to $30 million.
There’s precedent for this sort of move, Magaziner said: For more than a decade, the state has not invested in Sudan or Iran.
Right now, the state’s Russian stock investments are mostly through emerging markets index funds managed by State Street. Index funds are a broad-based portfolio that might invest a small amount in a large swath of companies. An emerging markets fund would invest in companies across many nations. Magaziner said his office is still looking into how to extricate itself from these investments, and the timeline is unclear, but the goal is to get down to zero Russian investments at all in the pension fund, which provides retirement benefits for some 60,000 state employees, public school teachers, judges, state police and local workers.
Because the state not only needs to decide to sell these investments but also find buyers, it could take some time for the state to get to zero Russian investments. Magaziner said he’s calling an emergency meeting of the state’s investment commission as part of these efforts.
Asked about whether the state would take a similar step if a different country with more exposure in the state’s pension plan invaded a neighbor, Magaziner said he couldn’t deal in hypotheticals.
“What we have now is a very serious, rapidly unfolding situation in Ukraine,” Magaziner said, “and that’s what we’re focused on today.”