|Posted:||April 1, 2015 10:01 AM|
|From:||Senator Rob Teplitz|
|To:||All Senate members|
|Subject:||Co-Sponsorship memorandum - SERS & PSERS|
|In the near future, I plan on introducing legislation that will amend the State Employees’ Retirement System Retirement Code and the Public School Employees’ Retirement Code to require both SERS and PSERS to maintain formal training programs for Board members and to develop conflict of interest standards that relate to a Board member’s fiduciary duty. The legislation will also require all investment advisory consultants and investment managers to provide an up-to-date comprehensive disclosure statement of all campaign contributions made by their investment firms to Board members within the past ten (10) years.
According to Special Performance Audits by the Auditor General that I led, neither SERS nor PSERS maintain a formal training program for their board members or sufficiently track the number of training programs attended by each board member. The Audit reports also stated that SERS’ and PSERS’ board policies regarding conflict of interest require improvement to ensure that the policies properly reflect the fiduciary duties of board members of public pension plans like SERS and PSERS. The proposed legislation not only incorporates several recommendations from the Auditor General reports, but also incorporates some recommendations from the companion Independent Fiduciary Services reports.
Specifically, under the proposed legislation, SERS and PSERS will maintain formal training programs for Board members with minimum annual training requirements. Additionally, the Retirement Systems will develop conflict of interest standards that relate to a Board member’s fiduciary duty including establishing a minimum campaign contribution amount that would trigger under what circumstances a Board member should publicly disclose a potential conflict, abstain from voting, and disclosure on the record the nature of the potential conflict. The legislation will require all investment advisory consultants and investment managers to provide an up-to-date comprehensive disclosure statement of all campaign contributions made by their investment firms to Board members. The legislation will also amend the SERS and PSERS Retirement Codes to reflect the prudence formulation in the Uniform Prudent Investor Act.
Please join me in improving how SERS and PSERS ensure that potential conflicts of interest are adequately monitored and disclosed by board members and in improving the operations of SERS and PSERS. Thank you for your consideration.
Introduced as SB982