NJ Treasury details pension system’s gun-industry connections

Workers’ pension funds are invested in a maker of high-end weapons, an ammunition manufacturer, and the Walmart retail chain, which sells firearms

New Jersey public-worker pension links to the gun industry include stakes in a maker of high-end shotguns and rifles, a manufacturer of ammunition, and a major retail chain that’s under pressure to stop selling firearms to the public following a recent mass shooting.

The combined value of those holdings is roughly $180 million, according to the state Department of Treasury. But, because they are part of broader investments, that valuation also involves other items that aren’t tied to the sale of firearms or ammunition.

Treasury officials detailed the pension system’s gun-related holdings in response to questions and a public-records request that NJ Spotlight submitted last month in the wake of several mass-shootings that brought new attention to firearms-industry investments.

Such investments first faced scrutiny from state lawmakers last year following a gun massacre at Marjory Stoneman Douglas High School in Parkland, Florida. But after a deadly shooting occurred at a Walmart in El Paso, Texas, last month, both Gov. Phil Murphy and Senate President Steve Sweeney (D-Gloucester) came out in support of legislation that would formally ban the New Jersey pension system from holding any investments in companies with ties to manufacturers of guns or ammunition.

Texas was the scene of another deadly mass shooting this past weekend.

High-end shotguns and rifles

New Jersey’s public-worker pension system, which covers the retirements of an estimated 770,000 current and retired workers, is worth an estimated $75 billion. On the list of its gun-industry connections provided by Treasury is common stock worth $22.3 million in Compagnie Financiere Richemont, the parent company of James Purdey & Sons, a London-based company that manufacturers high-end shotguns and rifles for commercial use. Purdey & Sons’ gun sales account for less than 1 percent of CF Richemont’s overall sales, Treasury officials said.

The pension funds also own common stock worth $2.3 million in Olin Corporation, the parent company of the Winchester Ammunition Company. Winchester manufactures and sells ammunition to military, law enforcement and commercial customers. It accounts for less than 10 percent of Olin’s overall sales, according to Treasury officials.

The two stock holdings are part of passively managed investment portfolios (meaning they simply follow a market index). The state Division of Investment, which handles the pension funds’ assets daily, does not control which securities are included in such indexes, Treasury spokesman William Skaggs said.

“Investments held across the Pension Fund do not represent an endorsement of any company, subsidiary, or product,” he said.

The public records provided by Treasury also indicate the pension funds own holdings worth $132.6 million in the giant retailer Walmart Inc., and holdings worth another $21 million in Walmart de Mexico, the company’s division based in Mexico and Central America.

What Walmart is doing

Not all Walmart stores offer guns and ammunition to customers. Company officials estimate Walmart accounts for 2 percent of U.S. gun sales and 20 percent of the nation’s ammunition market. In addition, Walmart stopped selling military assault rifles in 2015. And last year, it also increased the age required to buy a firearm in stores from 18 to 21.

Credit: Twenty20
“We’ve attempted to take common sense steps that allow us to serve customers and create a safer environment,” Walmart president and chief executive Doug McMillon said in a recent public statement.

Still, the company is being pressed to ban all gun sales after a mass shooter killed 22 people inside a Walmart store in El Paso, Texas last month. A public petition seeking a companywide ban on gun and ammunition sales had collected nearly 150,000 signatures as of yesterday.

Skaggs, the Treasury spokesman, stressed that New Jersey’s pension funds do not own any stakes in companies that manufacture automatic or semi-automatic weapons for civilian use. He also added: “The remaining companies offer many other commodities and services, only a part of which are tied to firearms.”

“As such, these investment values may overstate the total dollars invested into the firearms industry and should not be interpreted as such,” he said.

Legislative ban has not advanced in NJ

The legislation seeking to ban New Jersey public-worker pension assets from being invested in the gun industry stops short of addressing stakes in companies like Walmart that sell guns and ammunition. But it would likely prohibit investments tied to manufacturers like James Purdey & Sons and Winchester.

The bill was introduced in late February 2018, just weeks after the massacre in Parkland, FL left 17 people dead. It would give state pension-fund managers two years to shed any existing investments in “companies that manufacture firearms or firearm ammunition.” It would also provide fund managers some discretion to prevent a “premature or otherwise imprudent sale, redemption, divestment, or withdrawal of an investment.”

In addition, the legislation, which has yet to advance in either the Assembly or Senate, would require officials to submit annual reports detailing compliance with the proposed investment ban.

New Jersey pension-fund managers have a fiduciary responsibility to maximize returns for beneficiaries, but lawmakers have at times prohibited specific investments to prevent public-worker funds from being used to support certain activities (including, most recently, banning investment in companies that have decided to boycott Israel to protest its treatment of Palestinians).

Murphy, a first-term Democrat, praised the pension system last year after it shed a $1.9 million stake in Vista Outdoor, a company that manufactures semi-automatic rifles for civilian use. Asked by NJ Spotlight last month if the pension funds should get rid of all gun-industry holdings, Murphy said, “Count me in on getting out of these investments and starving these companies, particularly the bad actors.”

Sweeney, the Senate leader, offered his support a few days earlier, telling NJ Spotlight writers and editors during a meeting in Newark, “I don’t think we should be investing in guns or ammunition.”

Among the state’s power triumvirate, only Assembly Speaker Craig Coughlin (D-Middlesex) has yet to weigh in similarly, but a spokesman has indicated the divestment legislation is “under review” by the speaker.

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