Pension funds: tobacco investment up in smoke

Like all Australian employees, Bronwyn King, a radiation oncologist at the Peter MacCallum Cancer Centre in Melbourne, automatically contributes to an occupational pension. And like many investors it was something she gave little thought to. This changed when she arranged a meeting with a representative from her pension fund. They were discussing investment options when the representative dropped a bombshell: King and many of her colleagues were investing in mining, alcohol, and tobacco.

“I was very concerned. It was such a bad fit for me to be a shareholder in tobacco companies responsible for the death of my patients,” she told The BMJ.

Rather than simply switch to a more ethical pension, King did something more radical. She asked the chief executive of the hospital whether he was aware that his staff were unwitting shareholders in tobacco companies. He was not, and he gave King his blessing to challenge the fund, Health Super, which also managed the pensions of other hospitals.

Over the next year King learnt as much as she could about pensions and investments before presenting her reasons for divesting from tobacco to the board of Health Super. The board agreed in May 2011. And when it merged with a bigger fund, First Union, this also agreed to divest …