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State board directs Michigan pension funds to dump Russian assets

The Michigan Capitol building in Lansing, featuring a lamppost and the Gov. Blair statue.
Emma Winowiecki
Michigan Radio
The Michigan Capitol building in Lansing.

The state of Michigan will divest its pension fund investments in Russian and Belarusian assets. That includes index funds that invest in an array of stocks and bonds.

Those types of investments make up a small share of the state’s portfolio. Governor Gretchen Whitmer requested the action last week and a state board made that decision on Wednesday.

But Michigan State University economics professor Charles Ballard says the impact will be felt as part of a worldwide divestment movement. He also says there are no guarantees.

“The effects of sanctions and divestment and all sorts of other things that we might do, stopping buying Russian oil, those effects take time and, yet, the war is happening right now and it is not clear whether these strategies will succeed.”

State investment managers have started the divestment process, says Ron Leix with the Michigan Department of Treasury.

“It’s the right thing to do with what’s going on over in Ukraine right now. The State of Michigan investment board signaled to the world that Michigan stands firmly in solidarity with Ukraine.”

Before the invasion, the $98 billion pension fund portfolio had 0.06% of its holdings tied to Russia. It largely is in international index funds managed by outside firms and is likely worth far less now due to sanctions and Russia's closed stock market.

Russia's long-term debt rating has already been downgraded to junk status.

Rick Pluta is Senior Capitol Correspondent for the Michigan Public Radio Network. He has been covering Michigan’s Capitol, government, and politics since 1987.
The Associated Press is an independent global news organization dedicated to factual reporting.
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