California’s two largest pension funds have invested more than $2.7 billion with companies that contract with Immigration and Customs Enforcement or the Department of Homeland Security, a new analysis shows.
CalPERS, the statewide megafund for public employees, has invested about $1.6 billion in tech firm Palantir, arms makers General Dynamics and L3Harris, and telecommunications companies AT&T and CACI. According to an analysis The report, conducted by non-profit advocacy and research group Stand.Earth, was released on Thursday.
CalSTRS, which funds public school teacher pensions, has invested $1.1 billion in these companies.
The largest contributions by pension funds were to Palantir, with CalPERS investing $734 million and CalSTRS investing $625 million.
The data included in the analysis was taken from quarterly filings with the US Securities and Exchange Commission through December 2025.
Richard Brooks, who leads Stand.earth’s research focused on the financial sector, pointed to the seeming paradox of teachers in California, a sanctuary state that first saw the government’s aggressive immigration enforcement leave students’ families broken up while their retirement funds swelled.
“There should be an alignment between where the money is being invested and the values that the people of the state embrace,” he said. “People’s hard-earned savings would enable ICE to break up families. It is deeply sobering to me that California’s two largest pensions have decided to turn a blind eye to this.”
CalPERS spokesman James Scullery said the pension fund does not comment on individual holdings, but it does consider “environmental, social and governance matters.”
“Once issues are identified, we work to analyze the situation, gather relevant facts, and find solutions,” Scullery said.
CalPERS, with more than $550 billion in assets, is the largest pension fund in the US with investments Earning 11.6% In returns in the previous financial year.
Both CalPERS and CalSTRS state that investment portfolios attempt to minimize risk and maximize returns.
CalSTRS spokeswoman Barbara Zumwalt said the fund “takes a long-term investment approach to manage opportunities and risks across a global portfolio.”
“Everything we do at CalSTRS is based on our mission to secure the financial future of California’s current and retired public school teachers,” Zumwalt said.
According to the CalSTRS website, about 10% A portion of a California teacher’s gross annual compensation is invested in CalSTRS’ pension fund.
Andrea Pritchett, 62, a middle school teacher in Berkeley, said a group of teachers in Los Angeles, San Diego, Berkeley and elsewhere in California, called CalSTRS Divest, has been lobbying the pension fund for two years to divest its stake in Palantir, as well as other companies involved in Israel’s U.S.-backed war in Gaza, such as aerospace and defense company Lockheed Martin, heavy machinery company Caterpillar Inc. and weapons manufacturers. Elbit is emphasizing systems.
Pritchett said Palantir is a focal point “because the harm it does to people overseas is also related to the harm (the company) is doing to people in this country.”
Israel signed a deal with Palantir in 2024 to provide artificial intelligence systems to monitor and target Palestinians in “war-related missions”. Bloomberg reported. Last year, the Department of Homeland Security awarded Palantir a nearly $30 million contract to create an AI-supported system to help find and track individuals up for deportation, and it signed a new contract earlier this year $1 billion purchase agreement With a tech firm.
CalSTRS Divest members say such investments create conflicts with the fund self stated policies, Which considers whether a company or industry makes a product that is extremely harmful to human health. But, Pritchett said there has been little movement so far from CalSTRS.
“Their response has been that their fiduciary responsibility outweighs any other consideration,” Pritchett said.
Two California pension funds have also refused to divest from fossil fuel companies. CalPERS and CalSTRS both unveiled sustainable investment strategies to increase stakes in low-carbon assets and other climate solutions several years ago, but continued to invest in multinational oil giants like ExxonMobil and Chevron.
In 2024, the California Legislature considered a bill mandating CalPERS and CalSTRS to divest from fossil fuel companies by 2031. But it faced some opposition and the bill’s author, Lina Gonzalez (D-Long Beach), later withdrew the proposal with plans to reintroduce it.
Gonzalez said in a statement Thursday that the pension fund’s investments in ICE contractors were “extremely concerning” and that workers “should not rely on outside investigations to understand where their retirement funds are going.”
“We must demand transparency and accountability, especially when billions of dollars are being funneled into contracts that threaten the safety and dignity of Californians,” Gonzalez said.
Combined, 30 U.S. public pensions have invested more than $8.8 billion in ICE contractors, according to an analysis by Stand.Earth, which also includes private prison companies Core Civic and Geo Group. Contributors include the New York State Common Retirement Fund, the New York State Teachers’ Retirement System, and the Florida State Board of Administration.
Stand.Earth researchers also analyzed bank disclosures and found that the top eight U.S. banks — including JPMorgan Chase, Bank of America, Wells Fargo and Citi — provided more than $72 billion in financing to ICE contractors since 2020.
Wells Fargo said the analysis’s description of banks funding such companies as strictly loans was inaccurate, because the numbers in the analysis include commitments by credit facilities. Through credit facilities, banks provide annual pre-approved lines of credit that are sometimes used only sporadically or partially.
Other banks did not respond to requests for comment.
