The bill SB1013 amends Arizona Revised Statutes by adding new requirements and prohibitions concerning the State Treasurer's investments and the duties of fiduciaries managing state or political subdivision plans. The bill mandates that the State Treasurer's investment evaluations must be based solely on pecuniary factors, which are defined as factors materially affecting the financial risk or return of an investment. It prohibits the State Treasurer from taking unnecessary investment risks or promoting nonpecuniary benefits or social goals. The bill also requires the State Treasurer to post a current list of investment managers and state investments on their website and update it within a reasonable time frame.

For fiduciaries, the bill stipulates that they must act solely in the interest of plan participants and beneficiaries, focusing exclusively on providing pecuniary benefits, defraying reasonable plan administration expenses, and earning a return on investments. Fiduciaries are prohibited from considering nonpecuniary factors when evaluating investments or discharging their duties. The bill also restricts the voting of plan-held shares to the pecuniary interest of the plan and prohibits entrusting plan assets to fiduciaries who engage with companies or vote shares based on nonpecuniary factors. Proxy voting guidelines must be consistent with the fiduciary's obligation to act based only on pecuniary factors.

Statutes affected:
Introduced Version: 35-320
Senate Engrossed Version: 35-320