JEFFERSON CITY — Missouri’s state workers’ retirement program will sell off its Russian holdings and cease all business with the country, its board of directors decided Thursday.

The board of directors of the Missouri State Employees Retirement System (MOSERS) convened for a special meeting Thursday afternoon, with the only item on the agenda being its exposure to Russian assets. Treasurer Scott Fitzpatrick moved the motion to cease all business with Russia and related entities, and divest all related funds as soon as possible, which was unanimously approved.

“I think it’s important for MOSERS, as the state’s flagship plan, to have the initiative on this issue and to take a stand on this,” Fitzpatrick said. “Hopefully other plans in the state will do the same.”

While the motion was primarily about future business deals, MOSERS chief investment officer TJ Carlson said the majority of existing Russian investments would dissipate on their own. He said the benchmark used by MOSERS would reclassify Russian indices at “a price that is effectively zero”, essentially deleting the majority of them without board action next week after the index of benchmark concluded that the risk of exposure no longer outweighed the economic potential. benefits.

He said some of the funds would still have to be divested going forward as they were subject to Russia’s capital controls, although discussions were ongoing on how best to eliminate any exposure as soon as possible. possible. He said MOSERS’ level of exposure to Russian assets fell from $18 million at the end of 2021 to $1.6 million on Wednesday.

Carlson said the plan has active and passive investing through its range of international equity investments.

While the United States imposed sanctions on several Russian assets, Carlson said none of them impacted the funds MOSERS was associated with.

A spokeswoman for MOSERS said the system uses external fund managers rather than investing directly in non-US securities. She said MOSERS had about $9 million of indirect exposure to Russia, which is about 0.07% of the total exposure of MOSERS’ $13 billion portfolio.

Fitzpatrick called on the board to hold the meeting this week, calling Russian President Vladimir Putin “crazy” and encouraging members to cut him off as much as possible. The council is made up of legislators, financial professionals, appointed governors, and the Commissioner of the Office of Administration alongside the state treasurer.

Other Missouri officials prioritized the state’s response to the war this week. Lt. Governor Mike Kehoe and House Majority Floor Representative Dean Plocher unveiled a bill that would sever financial ties with Russia, Russian entities and other countries that occupy NATO or other countries. other European countries. Kehoe also encouraged Missouri retailers to replace their Russian-made products with items made in Missouri or the United States.

The Missouri House also advanced a resolution condemning Russia’s actions which would see the General Assembly send a letter to President Joe Biden asking for additional sanctions for Russia and the shipment of supplies to Ukraine.

Governor Mike Parson addressed the impending meeting on Thursday afternoon, saying he supported any move to respond to the Russian invasion through the state portfolio.

“These are things we need to look at to see what you can do in the state of Missouri to really impact the Russian government, and what kind of message can you send?” Parson told reporters Thursday. “I think it’s more about how to deal with this situation in the long term.”

Missouri is the latest state to consider stopping and redistributing Russian investments; Pennsylvania, Georgia, Maryland and Kansas are among the states considering similar moves. According to the Los Angeles Times, California lawmakers are considering legislation that would require the state’s public employee and educator pension systems to eliminate its Russia-related investments.

Russia began its invasion of Ukraine last week, prompting an economic backlash from governments around the world. The United States imposed sanctions on Russian officials, banks and companies over the past week.