A Georgia Senate Committee has favorably reported a bill that would require a fiduciary of a retirement plan funded wholly or in part by public funds to put the interests of participants and their beneficiaries ahead of “nonpecuniary interests” such as social, political, or ideological concerns. 
The bill, HB 481, would amend the Public Retirement Systems Investment Authority Law so that it would set forth that there is a fiduciary duty to invest retirement assets solely in the financial interest of participants and their beneficiaries.
Rep. John Carson (R-Marrietta) introduced the bill in the state House of Representatives on Feb. 16; the chamber passed it in a 114-51 vote 10 days later. The bill was sent to the Senate on Feb. 27; that chamber’s Committee on Retirement held a hearing March 7.
“Was there heartburn in the House?” regarding the bill’s import that “non-pecuniary” interests such as social, political, or ideological concerns should not supersede the interests of participants and their beneficiaries in investing the assets of those retirement plans, Committee Chair Rick Williams (R-Milledgeville) asked Rep. Carson, who had come to address the committee. Carson responded that there was none in committee deliberations in the House, although there might have been some concern about it on the floor.
“To me, those interests are secondary at best to the plan participants,” said Carson. Committee member Sen. Josh McLauren (D-Sandy Springs) added that the measure’s language saying that social, political, or ideological concerns shouldn’t trump or supersede financial interests is “a pretty standard statement of fiduciary duties as we understand them under the law.”
David Morgan, Government Affairs Associate for the Reason Foundation, offered remarks on the bill. Said Morgan,
“One of the things that makes 481 unique and effective is that the bill avoids directing, limiting, or interfering with the public pension trustees’ core duty, which is to maximize returns and deliver constitutionally protected benefits at a reasonable cost. [HB] 481 would prevent the politicization of Georgia’s public pension fund investments by providing clear boundaries for public fiduciaries to ensure investment decisions are based on material factors.”
Morgan continued,
“Public pension systems should invest to maximize returns so constitutionally protected retirement benefits are delivered at minimum cost to taxpayers and employees. Investments targeted toward political agendas should play no role in that process.”
Status
The committee approved the bill by voice vote and has reported it back to the Senate.
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