Commonwealth of Massachusetts | Public Employee Retirement Administration Commission
Five Middlesex Avenue, Suite 304, Somerville, MA 02145
Ph 617 666 4446 | Fax 617 628 4002 | TTY 617 591 8917 | www.mass.gov/perac
Domenic J. F. Russo, Chairman | A. Joseph DeNucci, Vice Chairman
Paul V. Doane | Kenneth J. Donnelly | James M. Machado | Donald R. Marquis
Joseph E. Connarton, Executive Director
M E M O R A N D U M
TO: All Retirement Boards
FROM: Robert A. Dennis, Investment Director
RE: Tobacco Company List
DATE: April 11, 2007
On October 22, 1997 PERAC Memo #37/1997 informed you of the adoption of Chapter 119 of
the Acts of 1997. That statute prohibits retirement systems from making any new investments in
stocks, securities, or other obligations of any company which derives more than 15% of its
revenue from the sale of tobacco products. On December 18, 1997 PERAC sent Memo #48
regarding the implementation of Chapter 119 and the first Tobacco Company List.
Enclosed please find a Tobacco Company List dated April 2007. This list replaces any other
Tobacco Company List previously sent to your board and is effective upon receipt by the
retirement boards. Most of these companies appeared on previous lists and such investments
were prohibited from the time the companies first appeared on the list. Please forward a copy to
your investment advisors or inform them that this list is available on the PERAC Home Page
under the Investment Unit’s 2007 Memo Index. In communicating with your investment
advisors, please inform them that the Tobacco Company List is only for their Massachusetts
public fund clients and that any other use of the list is strictly prohibited.
As part of its audit process, PERAC will assess the portfolio of each board to determine
compliance. That review will determine if the board, after January 13, 1998, has purchased
stock, securities, or other obligations of any company which derives more than 15% of its
revenue from the sale of tobacco products. In the event a portfolio is not in compliance, the
board must bring the portfolio into compliance by divesting in a prudent manner. Prior to taking
any action, the board shall consult with PERAC.
In applying the statute to pooled funds, PERAC will assess the 15% rule against the entire pool
as the board is purchasing shares in the pool not the individual holdings of the pool. Thus a
pooled fund, if in violation of this standard, will be included on the list.
If you have any questions, please call me at 617-666-4446 ext. 922.
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