Public pensions, international affairs and divestment regulations: A critical analysis and call for a model law

Abstract

This article undertakes a critical examination of the state laws of the United States requiring public pension funds to divest from companies that do business with Cuba, Iran, Syria and Sudan, countries that are currently listed as ‘state sponsors of terrorism’ by the federal government. The article finds that divestment statutes contain legal and public policy deficiencies that are worth revisiting and rectifying. The article argues that a model law that addresses the divestment schemes’ statutory deficiencies be drafted. The project posits that the voluntary adoption of the proposed model law by the states would ensure the constitutionality of the divestment statutes and would also protect pension fund employees, retirees and government employees. The project, to the best of the author's knowledge, is the first study that analyses the substance of state divestment statutes and places them in a comparative perspective to highlight the laws’ strengths and weaknesses.