Springfield Retirement Board cautious on divestiture
Will seek advice before responding to mayor's request
SPRINGFIELD -- Representatives of city retirees responded cautiously yesterday when Mayor Michael Albano, who is making a precedent-setting attempt to import lower-cost Canadian drugs for city workers, asked the Retirement Board to rid its investment portfolio of pharmaceutical stocks.
The board didn't vote and said it would consult outside fiscal advisers before responding to the proposal. Board members said they were open to the idea but wanted to make sure retirees' pensions would not be hurt in the name of protesting high drug prices.
"It's not an easy move," board member James Harrigan, a retired firefighter, said after Albano had made his request, surrounded by reporters and television crews. "It's a matter of consulting with our members and coming up with an opinion."
The board gave no timetable. Three of the five members were appointed by Albano, who is not running for reelection and will be leaving office in three months.
In arguing for divestiture of $6 million in drug stocks from the $223 million pension fund, Albano said the Springfield Retirement Board had established a precedent of social investing in the 1980s by divesting from companies doing business in South Africa. He said high drug costs charged by US pharmaceutical companies required similar action, because these costs contributed to fiscal problems that have forced massive layoffs in Springfield's police and fire departments. Albano has already made headlines with the city's first-in-the-nation Canadian drug importation plan for city employees, which the US Food and Drug Administration says is illegal. Massachusetts Treasurer Timothy Cahill criticized Albano's divestiture proposal Monday, saying the city should not mix investment decisions with social policy. After yesterday's meeting, Harrigan and another retiree representative, retired firefighter Joseph Nowak, said they would try to strike a balance.Nowak said the board could adopt Albano's proposal but time the sale of drug stocks over several months to minimize potential losses.
"The social statement is probably a good idea," he said, "but you have to weigh the losses vs. the social issue, and whether you can do both."
Christopher Rowland can be reached at firstname.lastname@example.org.
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