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A bill currently before the Georgia General Assembly would affect the exercise of fiduciary duties regarding the investment of retirement plan assets. The law includes provisions that require trustees to prioritize the interests of participants and their beneficiaries over “non-financial interests” such as social, political and ideological interests.
Rep. John Carson (R-Marietta) introduced HB 481 in the Georgia House of Representatives on February 16. Ten days later, Congress passed it by a vote of 114-51. The bill was sent to the Senate on February 27th.
What does this bill do?
HB 481 would amend the Public Retirement System Investment Authority Act to provide that there is a fiduciary duty to invest retirement assets solely for the economic benefit of participants and their beneficiaries.
Definition of “Trustee”. The bill would define “fiduciary”, with respect to a retirement plan to which this act applies, as a retirement plan, administration, or person, and would add the following language:
- Exercise discretion or control over the management or disposition of retirement plan assets.
- Provides, or has the authority or responsibility to, directly or indirectly, for commission or other remuneration, provide investment advice with respect to monies or other property of a retirement plan.or
- Has discretionary power or control over the management or operation of the retirement plan.
Exercise of Fiduciary Responsibility. HB 481 provides that each fiduciary shall perform its duties solely for the benefit of and for the sole purpose of providing benefits to plan participants and their beneficiaries. Masu. Furthermore, it is stipulated that:
- You shall invest only under the circumstances and with the care, skill, prudence and diligence that a prudent professional acting in a similar position would do.
- Unless it is unwise, you shall diversify your investments to minimize the risk of significant losses.and
- You must not prioritize the interests of participants and their beneficiaries, sacrifice investment returns or accept increased investment risk to advance non-financial interests.
Such non-financial benefits include the promotion of social, political, or ideological interests.
Purpose of investment. HB 481 states that the investment objective of a retirement plan is to provide the greatest possible long-term benefit to its members by maximizing investment returns consistent with all regulations and within prudent risk limits for that type of retirement plan. It stipulates that it is to be provided. The investment return requirements assumed by the actuary in determining the current and future health of the fund.
situation
HB 481 currently awaits action by the Senate Retirement Committee.
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