Background

Private prisons have operated within the United States since the 19th century, but a more formalized industry emerged in the 1980s during a period in which incarceration rates at the state and federal level increased dramatically. Today, after years of decline and multiple instances of changing federal policy, these for-profit prisons have expanded beyond correctional services to become an essential part of the Immigration and Customs Enforcement (ICE) Agency’s mass deportation efforts, with no directive to rectify the substantial risks associated with them. 

In addition to the social and economic harm for-profit prisons have had in the United States, they also represent investment risk. In considering the significant reputational and legal risks associated with the private prison industry, the market volatility and wide swings in federal utilization policies, the Treasurer has determined they present risks that run counter to the goals and objectives of the Connecticut Retirement Plans and Trust Funds (CRPTF).

As a result, pursuant to the Policy for Implementation of Investment Restrictions set forth in the Investment Policy Statement, the Office of the Treasurer is restricting assets of the Connecticut Retirement Plans and Trust Funds (CRPTF) from being invested in any company that is the primary operator or manager of private prison facilities in the United States. The Treasurer’s Private Prisons Policy reduces risk in the CRPTF while eliminating exposure to an industry that carries significant legal and reputational risks.

Private Prisons Policy

Assets of the Connecticut Retirement Plans and Trust Funds (CRPTF) will be divested from and not be further invested in any company that is the primary operator or manager of, or that derives a significant portion of its revenues from business related to the operation of, private prison facilities in the United States. In addition, as part of the due diligence of the Pension Fund Management (PFM) Division, disclosure of investments in private prison operators will be requested of private investment service providers seeking to do business with the Office. This information will be one factor, among others, considered by the office in its deliberations on contracts with these institutions.

The Restricted Investment List will identify the investments prohibited pursuant to this policy.