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Pennsylvania House of Representatives
04/25/2024 04:37 AM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20190&cosponId=30432
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House of Representatives
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted: September 30, 2019 11:23 AM
From: Representative Francis X. Ryan
To: All House members
Subject: LEGISLATION: PENSION BOARD GOVERNANCE
 
Public pension governance is grounded in certain fundamental principles. Among these principles are independence, adherence to fiduciary responsibilities, consideration of the interests of all stakeholders, including taxpayers and ongoing professional education at the board level. I believe that it is imperative to strengthen these fundamentals and affirm their importance in statute.

I intend to introduce legislation that will institute changes at the board level that support these principles. First, my legislation proposes to amend our state and public school retirement codes to require the SERS and PSERS boards to each establish a number of board committees, including:
  • an independent audit committee,
  • an Asset Liability Contingency Operating Committee (ALCO), and
  • an executive committee.
Also aimed at bolstering the independence of each board is a provision that will impose limits on the number of terms SERS and PSERS board members may serve.

Continuous learning at the board level helps to ensure that board members can adapt to changing conditions, particularly when it comes to their oversight of system investments. Current law establishes annual SERS and PSERS board training and education requirements. My bill proposes to expand these annual training requirements to include asset allocation and risk assessment.

Finally, the bill will also require periodic independent fiduciary reviews of each system. A fiduciary review is intended to provide independent reassurance to stakeholders that the board members are fulfilling their fiduciary duties and that the systems are well run.

While much of our focus as policy makers has rightfully been on returning the systems to fiscal health, I believe that there is much to gain by enhancing pension system governance with an eye toward independent and informed decision-making.

Please consider cosponsoring this measure.

Introduced as HB1996