Indiana Senate passes bill to eliminate pension investments in Chinese government

Indiana senators approved a bill that calls for the state's public employee pension plans to withdraw from investments controlled by China.

Senate Bill 268 passed unanimously and now heads to the House for review.

The bill, sponsored by Majority Floor Leader Chris Garten, R-Charlestown, would give the Indiana Public Retirement System five years to divest from companies controlled by the world's most populous country or the Chinese Communist Party. It would also bar any future investments in companies or funds controlled by either.

Garten cited several reports noting the Asian country's interest in initiating cyberattacks and persecuting ethnic minorities.

"We have to acknowledge that any investment in China is an issue of national security and a monetary endorsement of human rights violations," he said. "It is important to protect Indiana's economic foundation and Hoosiers by ensuring their hard-earned money is being kept close to home instead of in the hands of adversarial states."

According to the fiscal note attached to the bill, INPRS has more than $1 billion tied to Chinese investments. SB268 would require INPRS to liquidate about $750 million of that, with $400 million tied to stocks and $350 million in a commingled fund.

The note also warns of potentially lower returns on investment if INPRS needs to divest from restricted holdings. That does not seem to be an issue for Garten.

"We, as a state and as a nation, are in direct and daily conflict with the Communist Chinese Party, and yet we, the State of Indiana, remain invested in Chinese Communist Party interests," he said. "I cannot reconcile those two facts in my mind."

The pension plan said it already abides by restrictions put in place by Washington that prohibit investments that support companies working on Chinese military or surveillance projects.

The proposal to divest from Chinese interests comes as the state has already taken steps to block social media apps like TikTok from being downloaded or used on most state government devices. The company behind the video content site is based in China, raising concerns that it could access sensitive data.