CRANBERRY TWP — Around the nation, financial and government institutions are pushing to withdraw from Russian investments.

Local officials think it’s the “right thing to do.”

Eric DiTullio, president of the Seneca Valley School Board, said the state’s public school teachers retirement fund made the call in early March to divest from both Russian and Belarusian funds as Russia invaded Ukraine.

The board chairman of the Public School Employees’ Retirement System, or PSERS, brought the idea to the full, 15-member board of trustees, according to DiTullio.

DiTullio serves on the board as a representative of the state school boards’ association.

Given there are 15 members of the PSERS board, DiTullio said there are “people with different political affiliations.” Regardless, he said, there was no dissent in divesting from Russian assets.

“It was easy. It was, ‘This is the right thing to do. We have to do this. What Russia has done is wrong, and there’s no reason to be investing in a country that does something like this,’” DiTullio said. “It was universal agreement.”

The retirement system had roughly $300 million invested in Russian and Belarusian assets as of June 30, 2021, according to a PSERS report. In early March, PSERS trustees unanimously voted to dump those investments by any means necessary.

Divesting from those assets, DiTullio said, may be difficult given trading on the Moscow Exchange — Russia’s stock market — has been closed since Feb. 25.

“To be honest, our fund managers for those were already divesting before we even made the decision to protect those investments,” DiTullio said.

In Butler County, divesting from Russian and Belarusian assets may be more difficult. The county for its retirement system primarily invests in index funds, which are portfolios of investments aimed at mirroring the average composition of a given market.

As of Dec. 31, according to county reports, the county holds seven index funds that may include assets from those two countries: Five international equity — or stock — funds and two international bond funds. All seven funds are from Vanguard, a Pennsylvania-based investment firm.

In sum, Butler County’s retirement fund held roughly $58.5 million in international stock and bond index funds as of Dec. 31, comprising about one-fifth of its total investments.

Benjamin Holland, the county’s controller, did not immediately return a request seeking comment. Jack McMillin, who served in that position until 2014, said it’s up to Vanguard to divest from those assets.

"That's a good question for the people at Vanguard, to ask if they've divested,“ McMillin said. ”Let's say the Vanguard international fund; have they divested (from) Russian holdings in that fund?"

On March 7, the investment firm said it has only 0.01% of its assets in Russian holdings, has suspended the purchase of Russian assets, and is “actively working to further reduce our exposure to Russia and exit the positions across our index funds.”

“Vanguard stands ready to apply further measures announced by governments against Russia for its unprovoked attack on Ukraine,” the company said.

Widespread efforts to divest from assets in a country for human rights abuses or war crimes are not unprecedented, even on the state level.

In the 1980s, according to the Associated Press, colleges and universities sold and refused to purchase more assets based in South Africa to protest Apartheid, the South African racial caste system.

More recently, in the 2010s, certain states sought to divest from Venezuelan assets, and Pennsylvania law required the sale of Iranian and Sudanese investments, the Associated Press reported.

McMillin said there’s no hard line at which investments must be sold, but said there are reasons an investment fund like the county’s would look at divesting.

“I think you look real closely at human rights issues,” he said. “Obviously, the U.S. has, no longer, any kind of foreign relation with Venezuela. That in and of itself ought to be sufficient to say, ‘Is this a country we want to be investing in?’”

DiTullio called the PSERS divestment an easy choice, noting a moral obligation to divest, but adding there was a fiduciary reason to hold those investments in the first place.

“It was the right thing to do; it was an easy decision to make and, as far as why we were doing it in the first place, that's also the right thing to do: To have a diverse portfolio, investing in emerging markets and international funds,” DiTullio said. “It made sense to have some money — not a lot, but some money — invested in emerging markets and international funds.”

In fact, McMillin said there was not just a reason to divest from Russian assets. He said there’s no reason to hold any Russian investments.

“To be holding any kind of Russian investments — whether they be in bonds or equities — today, it’s just abhorrent to think,” he said. “In some way, shape or fashion, you’re indirectly subsidizing the horrible events that are taking place as we speak in Ukraine.”

It’s not just a moral reason, either, the former controller said.

“You’re always, as a fiduciary, evaluating the risk and return of a holding, whether it’s a domestic stock or an international stock,” McMillin said. “You certainly would want to weigh the risk of holding investments in a country that could have a revolution next weekend.”