Legislation: In 2011, Iowa passed House File 484, a law requiring the Iowa Public Employees’ Retirement System to scrutinize its holdings in companies that are linked to Iran’s petroleum, power, mining and military industries. The law requires IPERS to request that scrutinized companies clarify their operations related to Iran and to divest from companies that do not cease those operations. HF 484 distinguishes between direct holdings, assets in companies held directly by the fund, and indirect holdings, assets in companies held by other funds. IPERS must divest direct holdings, but it is not required to divest indirect holdings if transaction costs are too high (1).

Effect: IPERS maintains a list of prohibited companies; holdings in six companies (Gazprom OAO, Glencore plc, MMC Corp Bhd, National Aluminum Co. Ltd., Power Construction Corporation of China, Ltd., Stroytransgaz OAO) are to be divested in 2016 (2). IPERS has divested other holdings in the past. In 2012, seven securities in prohibited companies, valued at $9 million, were sold (3). As of 2014, IPERS has $21,980,145.62 in indirect holdings (4).

Key Actors: Governor Terry Branstad (R) signed HF 484 into law.  

Of note: IPERS employed IW Financial to assist in the scrutinization process (5). It is unclear how the lifting of some federal sanctions will change IPERS policy, said Judy Akre, IPERS spokesperson (6), as the law expires only with the lifting of all sanctions or with an executive order prohibiting state sanctions.

Updated: 05/31/2016

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IW Financial