LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6968 NOTE PREPARED: Dec 30, 2020
BILL NUMBER: HB 1180 BILL AMENDED:
SUBJECT: Public Retirement Fund Investments.
FIRST AUTHOR: Rep. Morrison BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: GENERAL IMPACT: State
X DEDICATED
FEDERAL
Summary of Legislation: The bill requires the Indiana Public Retirement System (INPRS) to divest from
businesses that engage in action or inaction to penalize, inflict economic harm on, or otherwise limit
commercial activity with companies invested in or assisting in the production of or manufacturing of certain
carbon based or nuclear products. The bill provides for notice to businesses, reinvestment, and civil
immunity. It requires certain reports to the Legislative Council. It also makes a conforming amendment.
Effective Date: July 1, 2021.
Explanation of State Expenditures: INPRS: The bill’s requirements for the Public Employees’ Retirement
Fund (PERF) and the Indiana State Teachers’ Retirement Fund (TRF) to divest from certain investments
represent an additional workload and expenditure on the agency outside of the agency’s routine
administrative functions. The costs to implement the proposal are indeterminate at this time and will depend
on administrative actions. The administrative costs of the affected funds are paid from the respective funds.
Administrative costs for the defined contribution accounts are paid by members of the funds through monthly
administrative fees. [In 2020, the monthly administrative fee was $3.75.]
The bill requires INPRS to determine which businesses would be restricted investments under the proposal,
divest from restricted investments, communicate with investment funds regarding restricted investments, and
track and report on the divestment activities. Costs of divestment include the costs associated with the sale,
redemption, divestment, or withdrawal of an investment and the costs associated with the acquisition and
maintenance of a replacement investment. The potential also exists that the funds may earn a lower rate of
return by divesting from restricted holdings under the proposal. The bill allows INPRS to contract with a
research firm to determine which businesses would be restricted investments under the proposal.
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Additional Information - INPRS currently pays a third party provider approximately $71,000 annually to
provide lists for the Sudan, terror states, and Anti-BDS divestment requirements in current law.
The expected rate of return on investment for the pension funds is 6.75%. If the funds do not achieve the
expected rate of return over time and administrative costs increase, the actuarially defined contribution rate
and the employer contribution rate for the actuarially-funded retirement funds may increase.
Explanation of State Revenues:
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Indiana Public Retirement System.
Local Agencies Affected:
Information Sources: Scott Davis, Chief Investment Officer, INPRS, ScDavis@inprs.in.gov.
Fiscal Analyst: Camille Tesch, 317-232-5293.
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