HB 2376 would grant authority to the board of trustees to invest and reinvest retirement system assets in any investment instrument commonly known as a security.  The bill authorizes the following:

·         The use of investments even if the retirement system is the only investor or has rights or privileges pertaining to the investment that are not granted to other investors.

·         The board of trustees may buy and sell

o        Future contracts

o        Options

o        Options on futures contracts

o        Forward contracts

o        Swap contracts, including swap contracts with embedded options.

o        Any other instrument commonly used by institutional investors to manage institutional investment portfolios.

• The board of trustees may delegate investment authority and contract with private professional investment management of assets held in trust by the retirement system.
• The board of trustees may delegate investment authority with respect to assets held by the retirement system to the executive director or the staff of the retirement system.
• The board of trustees may contract with advisors and consultants.

HB 2376 stipulates that by accepting a delegation of investment authority or engagement to assist or advise the board or the staff a professional investment manager, advisor, or consultant submits to the jurisdiction of the courts in this state in all proceedings arising from or related to the performance of the delegated authority or engagement.  

The bill provides a definition of the terms “private investment fund”, “reinvestment”, and “restricted securities”.

The bill would grant the board of directors the authority to confer with employees, consultants, or legal counsel of the retirement system or the third party without notification if the only purpose is to receive information from or question the employees, consultants, or legal counsel of the retirement system or the third party relating to (1) an investment or potential investment (2) the purchase, holding, or disposal of restricted securities or a private investment fund’s investment in restricted securities.

The bill, if enacted, would have no material actuarial effect because it does not propose to change the funding or obligations of any public retirement system.