PERAC Memo #22 - 1999: Tobacco Company List
Tobacco Company List
View original on MA State Library →Summary
This memo transmits the updated Tobacco Company List (effective April 1, 1999), which supersedes all prior lists and identifies companies deriving more than 15% of revenue from tobacco sales—in which boards are statutorily barred from making new investments under Chapter 119 of the Acts of 1997. Boards must forward the list to their investment advisors (or notify them it's available on PERAC's website), and PERAC will audit portfolios for compliance, including pooled funds assessed at the pool level; any noncompliant holdings must be divested prudently and only after consultation with PERAC.
Full Text
PERAC MEMO #22/1999 M E M O R A N D U M TO: All Retirement Boards FROM: Joseph I. Martin, Deputy Executive Director RE: Tobacco Company List DATE: May 14, 1999 On October 22, 1997 PERAC Memo #37/1997 informed you of the adoption of Chapter 119 of the Acts of 1997. That statute prohibits retirement systems from making any new investments in stocks, securities, or other obligations of any company which derives more than 15% of its revenue from the sale of tobacco products. On December 18, 1997 PERAC sent Memo #48 regarding the implementation of Chapter 119 and the first Tobacco Company List. Enclosed please find a Tobacco Company List dated April 1, 1999. This list replaces any other Tobacco Company List previously sent to your board and is effective upon receipt by the retirement boards. After that, no new investments may be made in stocks, securities, or other obligations of these companies. Please forward a copy to your investment advisors or inform them that this list is available on the PERAC Home Page. As part of its audit process, PERAC will assess the portfolio of each board to determine compliance. That review will determine if the board, after January 13, 1998, has purchased stock, securities, or other obligations of any company which derives more than 15% of its revenue from the sale of tobacco products. In the event a portfolio is not in compliance, the board must bring the portfolio into compliance by divesting in a prudent manner. Prior to taking any action, the board shall consult with PERAC. In applying the statute to pooled funds, PERAC will assess the 15% rule against the entire pool as the board is purchasing shares in the pool not the individual holdings of the pool. Thus a pooled fund, if in violation of this standard, will be included on the list. If you have any questions, please call Robert Dennis, Investment Unit Director at 617-666-4446 ext. 922.