Turn the demand
into decisions.

How Arkansas can stop lending

Ending future investment takes decisions from the people who control each fund. Treasury, the Arkansas Public Employees’ Retirement System (APERS), and the Arkansas Teacher Retirement System (ATRS) have different powers and responsibilities. A campaign demand must become a lawful decision, a documented instruction, and a verifiable result.

This guide explains those routes and their limits. It does not claim that the campaign’s moral case, by itself, satisfies pension investment law. The underlying transactions are on the evidence page; the amounts and dates are explained under Arkansas investments. Sources checked September 7, 2026.

State Treasury: a choice about future purchases

Arkansas Code § 19-3-323 permits the Treasurer to purchase Israel’s sovereign bonds using funds available for investment. It does not command a purchase or prescribe automatic renewal. The State Board of Finance establishes Treasury investment policy under § 19-3-504; the Treasurer implements investments within that policy. These are the current section numbers following the 2025 recodification. Act 419, pages 86–87 and 92–93.

The Treasury policy amended November 10, 2025 ranks safety, liquidity, and return in that order. It includes Israel Bonds among eligible investments, requires prudent management, and assigns policy revisions to the Board of Finance. Eligibility is permission to consider an investment; it does not settle whether a particular purchase serves the portfolio. Treasury investment policy.

A concrete administrative route is to ask the Treasurer and Board to examine a plan for no additional purchases and no reinvestment at maturity, with alternative investments and cash needs documented. Ask them to identify the official responsible for the next purchase decision, any approval needed to change policy, and the record that will show what happened to each maturity payment. A continuing policy commitment should be recorded through the Board’s policy process; an individual investment decision must remain within existing authority.

There is a source discrepancy to resolve. The live codified rule requires pre-trade analysis for all bond purchases and sales and conditional competitive quotations. The November 2025 policy uses different language about when analysis is appropriate and quotations for sales. We ask Treasury to identify the operative rule, amendment history, and transaction requirements. This discrepancy alone does not establish a violation. 19 CAR § 11-204; posted policy, pages 9–10.

APERS: protect retirement benefits and examine the next decision

APERS trustees control investment policy and oversee system assets. The published policy text assigns substantial investment authority to the Investment Finance Subcommittee on recommendations from the executive director and chief investment officer; staff implement delegated decisions. The Treasurer cannot unilaterally direct APERS to divest. The 2025 governance manual affirms Board authority, but its downloadable copy omits the investment-policy annex listed in its contents. The latest complete delegation and any subsequent amendments should therefore be confirmed before presenting a motion. APERS governance manual; published policy text, pages 100–102.

Arkansas Code § 24-4-213 expressly covers decisions to invest, not invest, or withdraw. It prohibits basing those decisions on the investment’s location in Israel. Separately, § 24-2-804 requires pension fiduciaries to use only pecuniary factors: material financial risks or opportunities evaluated under accepted investment principles. Calling a decision “nonrenewal” does not remove those requirements. Act 770 of 2017; Act 498 of 2023, pages 3–4.

The law also does not say that every bond must be replaced at maturity. Where a social or governance consideration is evaluated as financial, § 24-2-804 requires comparison of diversification, liquidity, risk, and return against alternatives serving a similar portfolio role, including whether an investment ranking poorly on that consideration could earn more. The administrative route is that documented comparison, followed by the decision required under APERS’s delegation. Request the current mandate, maturity instructions, consultant analysis, and recorded decision on future purchases. Our APERS evidence establishes a particular purchase; it does not settle whether another investment would have been better. Act 498, page 4.

ATRS: written advice and institutional approval

On June 2, 2025, the ATRS Board approved the motion for Resolution 2025-22 concerning an investment of up to $50 million in Israel Bonds, managed by Scout Investments through its Reams Asset Management division. This records the Board’s authorization; it does not establish settlement of individual bonds. Official Board minutes, page 4; authorization source.

ATRS’s Board Policy 4, amended through December 1, 2025, requires written investment-consultant advice or recommendation before an investment. Material changes to a direct investment require that advice, outside legal counsel if needed, and subsequent written approval from the Investment Committee and Board. The policy also allows delegated management within defined terms. The route depends on whether the proposed action changes the mandate or implements it. ATRS Board Policy 4, pages 1–3.

Arkansas Code § 24-7-105 contains the same Israel-location restriction for ATRS and its alternate retirement plans. ATRS also operates under the pecuniary standard in § 24-2-804. Its February 2026 Board packet restates both restrictions. A trustee therefore needs more than an ethical objection to justify an investment decision under existing law. Neither provision supplies a blanket instruction to keep making loans. ATRS’s statutory summary, page 66.

A concrete request is for the Board to commission a written comparison of renewing exposure, allowing holdings to mature, and reinvesting in suitable alternatives, with counsel explaining how each option fits current law. Ask for the manager’s instructions, any required committee and Board approvals, and security-level confirmation of the outcome. The ATRS funding record must remain distinct from proof that particular bonds were purchased or are still held.

For both pension systems, principal and interest received remain retirement-system assets for beneficiaries and lawful expenses. Ending reinvestment changes future lending. It does not turn pension repayments into unrestricted money for the state budget. Their governing materials preserve that beneficiary purpose. APERS; ATRS.

What a fair financial comparison needs

Development Corporation for Israel reports that Israel has made every principal and interest payment on its bonds since DCI began underwriting them in 1951. That is the seller’s repayment-history claim, which we have not independently audited across the full period. Its own statement also says past payment history does not guarantee future performance. A fair assessment should acknowledge that history while examining the actual risks and terms of the next loan. DCI’s payment-history statement.

A coupon is a contractual interest rate. It is not, on its own, a measure of comparative performance. APERS’s October 2025 bondholder advice records a 4.06% rate and an October 1, 2027 maturity for its $15 million purchase. Treasury’s June 30, 2025 schedule records seven positions. These dated records help define what to compare; they do not demonstrate that the bonds underperformed. APERS purchase record; Treasury position schedule.

A fair comparison should identify the same valuation date and investment horizon, actual purchase price, coupon and cash-flow dates, yield to maturity, duration, credit exposure, liquidity, fees, concentration, and the fund’s benefit-payment or operating-cash needs. Alternatives must be legally eligible and capable of serving a similar portfolio role. Comparing a short bond with a whole pension portfolio’s annual return would not answer that question.

The issuer’s August 2025 prospectus says the covered savings and Jubilee-series bonds have no secondary trading market and restricted transferability. Early redemption and transfer provisions have conditions. Those terms must be matched to the actual security; they should not be generalized to every Israeli sovereign instrument. The prospectus also acknowledges that other Israeli debt may offer greater yields. That is a reason to compare actual offers, not proof of loss on an Arkansas purchase. Issuer prospectus and supplement.

We have not established a complete comparison of net returns, current executable prices, matched alternatives, or transaction-specific fees for all three institutions. For Treasury, request contemporaneous trade analysis and the cash-flow plan. For APERS, request the purchase-date alternatives and current renewal analysis. For ATRS, first reconcile the funded account to individual securities, then compare those positions. Any comparison should state its assumptions and identify information that is still missing.

Possible legislative changes

Administrative discretion has limits. Legislators could consider amending or repealing the separate APERS and ATRS Israel-location provisions. Repealing them alone would leave the pecuniary standard in place. A broader proposal could address that standard expressly while preserving benefit protections, sound investment management, and clear implementation rules. These are possible legislative routes, not enacted permissions or an adopted campaign bill.

For Treasury, legislators could consider changing the specific purchase authority or imposing prospective limits. A disclosure proposal could require security-level holdings, maturities, new commitments, fees, and the financial basis for decisions, with sensitive account information protected. Any bill should distinguish new lending from existing contractual rights, specify who approves and implements it, and address conflicts with other investment restrictions. No legislative change described here has been verified as adopted.

The immediate public task is concrete: identify the decision-maker, obtain the governing record, ask for a recorded decision, and verify the result. Take action with the campaign to help make that scrutiny sustained and public.