The bill amends the Public Employee Retirement System Investment Act of 1965, specifically section 13, to enhance the responsibilities and limitations of investment fiduciaries managing public employee retirement system assets. A key insertion is the term "pecuniary interest," which requires fiduciaries to act solely in the financial interest of participants and beneficiaries. The bill allows defined contribution plan participants to direct their investments without fiduciary liability for those decisions. It also mandates that fiduciaries consider only pecuniary factors when evaluating investments, explicitly excluding social, political, or ideological objectives. Additionally, fiduciaries are required to maintain comprehensive written policies and reports on investment strategies and ethics, disclose all fees associated with investment services, and avoid transactions that could benefit their own interests or those of conflicting parties.

Further provisions include prohibiting investment fiduciaries from investing in debt instruments from countries designated as state sponsors of terror and restricting large sponsored systems from using funds for out-of-state travel unless specific conditions are met. The bill also establishes requirements for fiduciaries involved with hazardous waste deep disposal well facilities, mandating divestment within 180 days under certain circumstances. It requires representatives from the office of retirement services to testify before legislative appropriations committees upon request and mandates the Department of Treasury to post executive summaries of annual reports online. Transparency measures include public posting of proxy votes in advance and ensuring that all fiduciary meetings are open to the public and broadcasted. The bill clarifies the definition of a "state unit" and introduces a new definition of "fiduciary commitment."

Statutes affected:
Senate Introduced Bill: 38.1133