BDS Victory at State Retirement System

Matt Clark

Detroiters rally against Gaza genocide. (Jim West)

FOR THE FIRST time in 30 years, the State of Michigan Retirement System (SMRS) is free of Israel Bonds, ending this long-term financial relationship following a year-long statewide divestment campaign by Michigan Divest. Our victory is a testament to the power of Boycott/Divestment/Sanctions (BDS) organizing and widespread public support for Palestine.

For decades, state and local governments across the country have directly funded Israel by investing in Israel Bonds. Israel Bonds are not neutral investments but openly politicized as a way to support the Zionist state. For example, after October 7, 2023 Israel Bonds President and CEO Dani Naveh said, “By buying Israel Bonds, they are helping to raise the funds needed for the war effort.”

For too long, these investments have flown quietly under the radar, but are now becoming major national divestment targets following Israel’s escalation of genocide in Gaza as organizers have examined how our public institutions are invested in Israel.

The SMRS is one such institution. Man­aged by the Michigan Department of Treasury, it holds approximately $115 billion in defined benefit pension funds for more than half a million active and retired public employees, largely public school employees.

The SMRS consists of multiple sub-component retirement systems — the Michigan Public School Employees’ Retirement System (MPSERS), the Michigan State Employees Re­tirement System (SERS), the Michigan Judges Retirement System (MJRS), the Michigan State Police Retirement System (MSPRS) and the Michigan Military Retirement Provision.

In November 2023, a month into the genocide in Gaza, SMRS purchased a $10 million Israel Bond. This bond matured in November 2025, and by the terms of this financial instrument could not be sold prior to maturity. After discovering that SMRS held this genocidal investment, I met with other organizers to form Michigan Divest — a statewide coalition of Michigan residents, human rights activists, and active and retired public employees with SMRS pensions — to demand that the SMRS end its 30-year investment relationship with Israel Bonds.

Historically, the SMRS has repurchased new Israel Bonds upon maturity of the prior bond, and we demanded not to reinvest upon maturity in November 2025.

Mobilizing to Stop Reinvestment

Beginning in October 2024, we packed the quarterly State of Michigan Investment Board meetings to demand non-reinvestment in Israel Bonds. We mobilized thousands of Michigan residents to endorse our petition, including hundreds of active and retired public employees with SMRS pensions.

We obtained the endorsement of over 50 organizations across the state, including faith groups, student groups, peace groups, and labor unions representing public school and state pensioners. This included the Dearborn Federation of Teachers (AFT Local 681), UAW Local 6000 Region 1A Retirees Subchapter representing state pensioners, the Wayne County Community College Federation of Teachers (AFT Local 2000), and the Lansing Community College Administrative Association (AFT Local 4751).

We obtained the endorsements of the Ingham County Democratic Party and the Kalamazoo County Democratic Party, in what we believe is the first time any Michigan local Democratic Party has supported divestment for Palestine. We also obtained the support of the Michigan Democratic Party Progressive Caucus.

We held teach-ins and webinars, worked with students, and campaigned at any public event we could attend. At every turn, we met enthusiastic support from Michigan residents from all walks of life, eager to stand with the Palestinian people and take this concrete action to oppose our state’s public investment in genocide.

In addition to our “outside strategy” of mobilization, we employed an “inside strategy” of building strong relationships and communication channels within the Michigan Department of Treasury. The State of Michigan Investment Board had never faced a sustained public campaign like ours, and didn’t quite know how to handle us.

While we remained unflinching on the issue — describing at investment board meetings how the SMRS investment in Israel Bonds was funding the genocide in Gaza — we were careful not to personally attack individual decision makers within the Department of Treasury.

This strategy paid off, allowing us to build relationships and hold several direct meetings with key SMRS decision makers, who listened to our demands and shared important infor­mation about investment decision making within the SMRS. This, combined with a series of robust public records requests under Michigan’s Freedom of Information Act, required the Michigan Treasury to take us seriously.

Our hard work and mobilization paid off. In November 2025, the SMRS declined to reinvest in Israel Bonds, becoming the first known state retirement system in the country to drop its Israel Bonds in response to a divestment campaign.

Consistent with its standard practice, the SMRS declined to comment on the motivations for its investment decisions. But there can be little doubt that our campaign was the reason it ended its 30-year investment relationship with Israel Bonds.

We commend them for hearing our call for justice. And we commend them for resisting Zionist political pressure.

Internal Treasury correspondence obtained via public records request reveals how, leading up the bond maturity date, the Israel Bonds National Managing Director of Corporate & Institutional Sales personally called the SMRS’ Chief Investment Officer in an unsuccessful attempt to persuade the SMRS to continue its investment relationship.

Moving Forward

The Michigan Department of Treasury’s decision occurs amidst a growing nationwide trend of divestment from Israel Bonds. Just after we announced our victory, we learned that North Carolina organizers had succeeded in their campaign for their state treasurer’s office to drop all investments in Israeli government bonds.

Amidst a sustained divestment campaign, the Minnesota State Board of Investment has sharply reduced its holdings in Israel Bonds. A number of counties in Ohio have similarly dropped their investment in Israel Bonds amidst similar public opposition.

Michigan came together for Palestine to achieve the most significant BDS win in our state thus far. We will continue to monitor the SMRS to ensure they remain free of Israel Bonds. And we are already building for other divestment projects now that we exist as a statewide network committed to divestment of Michigan public funds from Israel’s ongoing genocide.

In partnership with the Engineers Against Apartheid, Jewish Voice for Peace Detroit, and the US Palestinian Community Network Detroit, we are launching the MI Money Out of MIBA campaign.

The Michigan Israel Business Accelerator (MIBA) is a “nonprofit” organization that receives public funds to facilitate business relationships between Israel and Michigan, including in the weapons industry.

Since 2018, MIBA has received over $6 million in public funds through the Michigan Economic Development Corporation (MEDC), in the name of promoting business in the state. Our public funds should go to schools, infrastructure and helping people — not to the war machine.

This February, MEDC awarded a $650,000 grant to MIBA to promote Israel to Michigan throughout 2026. MEDC has the authority to unilaterally terminate this contract prior to expiration, and we demand they do so, and cease all future MIBA funding.

MIBA has also applied for $1 million in Legislatively Directed Spending Items (LDSI) allocated by our state legislature. LDSI appropriations commonly fund wholesome local endeavors in Michigan — updating senior centers, fire stations, water pipes, and local museums.

These public funds should not be allocated to serve the interests of a foreign genocidal state.

Our campaign is putting pressure on the legislative committees responsible for considering MIBA’s pending funding request, and we will continue to track this situation. Stay tuned as we ramp up our campaign to demand MI Money Out of MIBA.

May-June 2026, ATC 242