This month, Florida will finish ridding its public pension fund of $1.3 billion in so-called terror stocks: shares of Royal Dutch Shell, Repsol, and other energy companies doing business in Sudan and Iran. Other states, including Texas, New Jersey, and California, will follow suit, and Senator Joe Lieberman is planning to propose a bill that would let federal employees divest from “terror” investments.

It’s a virtuous move. But does virtue pay? The California Public Employees’ Retirement System (the nation’s largest pension, at $232 billion) estimates that such a divestment from offending global energy companies would have cost the fund as much as $725 million over the past five years. For Florida, whose $125 billion pension fund is the fourth largest in the country, the timing may be fortunate: Growing exploration and infrastructure costs—and recent market jitters about falling demand for costly gasoline—have sent shares of Royal Dutch Shell down 13 percent since last year and Repsol 14 percent.

Still, most analysts advise against unloading oil holdings right now. Luckily, Florida has a loophole: Should a sell-off incur losses of more than 0.5 percent of the fund’s total value, terror stocks would suddenly be welcome again. “We would have the right to make reversals,” a spokesperson says. “But it’s hard to imagine that would ever happen.”