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General Assembly Raised Bill No. 1235
January Session, 2023
LCO No. 4291
Referred to Committee on FINANCE, REVENUE AND
BONDING
Introduced by:
(FIN)
AN ACT IMPLEMENTING THE TREASURER'S RECOMMENDATIONS
CONCERNING THE INVESTMENT ADVISORY COUNCIL AND
RELATED STATUTES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 3-13a of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective from passage): 2
(a) The Treasurer, with the advice and consent of the Investment 3
Advisory Council, shall appoint a chief investment officer and may 4
appoint a deputy chief investment officer, [and] principal investment 5
officers, investment officers and other personnel to assist the chief 6
investment officer, for the Connecticut retirement pension and trust 7
funds, who shall serve at the pleasure of the Treasurer and whose 8
compensation shall be determined by the Treasurer within salary ranges 9
established by the Treasurer in consultation with the Investment 10
Advisory Council. The provisions of section 4-40 shall not apply to the 11
compensation of [said] such officers and personnel. The chief 12
investment officer shall be sworn to the faithful discharge of duties 13
under law and shall, under the direction of the Treasurer and subject to 14 Raised Bill No. 1235
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the provisions of sections 3-13 to 3-13d, inclusive, and 3-31b, advise the 15
Treasurer on investing the trust funds of the state. [Said] The chief 16
investment officer shall also perform such other duties as the Treasurer 17
may direct. [In addition to said officers, the Treasurer may appoint 18
investment officers and other personnel to assist said chief investment 19
officer, which officers and other personnel shall serve at the pleasure of 20
the Treasurer.] 21
(b) The Treasurer may retain professional investment counsel to 22
evaluate and recommend to the Treasurer changes in the portfolio of the 23
state's trust and other funds. [Said] Such counsel shall inform the 24
Treasurer of suitable investment opportunities and shall investigate the 25
investment merit of any security or group of securities. 26
(c) The cost of operating the investment department including the 27
cost of personnel and professional investment counsel retained under 28
sections 3-13 to 3-13d, inclusive, and 3-31b shall be paid by the Treasurer 29
charging the income derived from the trust funds. 30
Sec. 2. Section 3-13b of the general statutes is repealed and the 31
following is substituted in lieu thereof (Effective from passage): 32
(a) (1) There is created an Investment Advisory Council [which] that 33
shall consist of the following: 34
[(1)] (A) The Secretary of the Office of Policy and Management who 35
shall serve as an ex-officio member of said council; [(2) the State] 36
(B) The Treasurer who shall serve as an ex-officio member of said 37
council; [(3) five] 38
(C) (i) Five public members all of whom shall be experienced in 39
matters relating to investments. The Governor, the president pro 40
tempore of the Senate, the Senate minority leader, the speaker of the 41
House of Representatives and the minority leader of the House of 42
Representatives shall each appoint one such public member to serve for 43
a term of four years. [No such public member or such member's business 44 Raised Bill No. 1235
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organization or affiliate shall directly or indirectly contract with or 45
provide any services for the investment of trust funds of the state of 46
Connecticut during the time of such member's service on said council 47
and for one year thereafter. The term of each public member in office on 48
June 30, 1983, shall end on July 1, 1983.] The appointing authority shall 49
fill all vacancies of the public members; [(4) three] 50
(ii) Such public members shall recuse themselves from discussions or 51
votes related to any direct or indirect contract with such public member 52
or such member's business organization or affiliate for the provision of 53
any services for the investment of trust funds of the state; 54
(D) Three representatives of the teachers' unions, and two 55
representatives of the state employees' unions. On or before July 15, 56
1983, the teachers' unions shall jointly submit to the [State] Treasurer a 57
list of three nominees, and the state employees' unions or a majority 58
thereof who represent a majority of state employees shall jointly submit 59
to the Treasurer a list of two nominees. On or before July 30, 1983, the 60
Governor shall appoint five members of the council from such lists, for 61
terms of two years. Any person appointed to fill a vacancy or to be a 62
new member at the expiration of a given term, whose predecessor in 63
that position was either a representative of one of the teachers' unions 64
or one of the state employees' unions, shall also be a representative of 65
such respective union group. Any such appointee shall be appointed by 66
the Governor from a list of nominees submitted to the Treasurer by the 67
teachers' unions or state employees' unions or such majority thereof, as 68
the case may be, within thirty days of notification by the Treasurer of 69
the existence of a vacancy or a prospective vacancy, or the expiration or 70
prospective expiration of a term. 71
(2) All members of the council shall serve until their respective 72
successors are appointed and have qualified. No public member of the 73
council shall serve more than two consecutive terms. [which commence 74
on or after July 1, 1983.] 75
(b) The Governor shall designate one of the members to be 76 Raised Bill No. 1235
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chairperson of the council to serve as such at the Governor's pleasure. 77
The Treasurer shall serve as secretary of said council. A majority of the 78
members of the council then in office shall constitute a quorum for the 79
transaction of any business, and action shall be by the vote of a majority 80
of the members present at a meeting. Votes by members on investment 81
policies shall be recorded in the minutes of each meeting. Members of 82
said council shall not be compensated for their services but shall be 83
reimbursed for all necessary expenses incurred in the performance of 84
their duties as members of said council. The council shall meet at least 85
once during each calendar quarter and at such other times as the 86
chairperson deems necessary or upon the request of a majority of the 87
members in office. Special meetings shall be held at the request of such 88
majority after notice in accordance with the provisions of section 1-225. 89
Any member who fails to attend three consecutive meetings or who fails 90
to attend fifty per cent of all meetings held during any calendar year 91
shall be deemed to have resigned from office. 92
(c) (1) The Treasurer shall recommend to the Investment Advisory 93
Council an investment policy statement [which] that shall set forth the 94
standards governing investment of trust funds by the Treasurer. Such 95
statement shall include, with respect to each trust fund, without 96
limitation, (A) investment objectives; (B) asset allocation policy and risk 97
tolerance; (C) asset class definitions, including specific types of 98
permissible investments within each asset class and any specific 99
limitations or other considerations governing the investment of any 100
funds; (D) investment manager guidelines; (E) investment performance 101
evaluation guidelines; (F) guidelines for the selection and termination 102
of providers of investment-related services who shall include, but not 103
be limited to, investment advisors, external money managers, 104
investment consultants, custodians, broker-dealers, legal counsel, and 105
similar investment industry professionals; and (G) proxy voting 106
guidelines. A draft of the statement shall be submitted to the Investment 107
Advisory Council at a meeting of said council and shall be made 108
available to the public. Notice of such availability shall be published in 109
at least one newspaper having a general circulation in each municipality 110 Raised Bill No. 1235
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in the state which publication shall be not less than two weeks prior to 111
such meeting. Said council shall review the draft statement and shall 112
publish any recommendations it may have for changes to such 113
statement in the manner provided for publication of the statement by 114
the Treasurer. The Treasurer shall thereafter adopt the statement, 115
including any such changes the Treasurer deems appropriate, with the 116
approval of a majority of the members appointed to said council. If a 117
majority of the members appointed to said council fail to approve such 118
statement, [said] such majority shall provide the reasons for its failure 119
to approve to the Treasurer who may submit an amended proposed 120
statement at a subsequent regular or special meeting of said council. 121
Such revised proposed statement shall be made available to the public 122
in accordance with the provisions of the Freedom of Information Act, as 123
defined in section 1-200. Any revisions or additions to the investment 124
policy statement shall be made in accordance with the procedures set 125
forth in this subdivision for the adoption of the statement. The Treasurer 126
shall annually review the investment policy statement and shall consult 127
with the Investment Advisory Council regarding possible revisions to 128
such statement. 129
(2) All trust fund investments by the [State] Treasurer shall be 130
reviewed by [said] the Investment Advisory Council. The Treasurer 131
shall provide to the council all information regarding such investments 132
which the Treasurer deems relevant to the council's review and such 133
other information as may be requested by the council. The Treasurer 134
shall provide a report at each regularly scheduled meeting of the 135
Investment Advisory Council as to the status of the trust funds and any 136
significant changes [which] that may have occurred or [which] that may 137
be pending with regard to the funds. The council shall promptly notify 138
the Auditors of Public Accounts and the Comptroller of any 139
unauthorized, illegal, irregular or unsafe handling or expenditure of 140
trust funds or breakdowns in the safekeeping of trust funds or 141
contemplated action to do the same within [their] said council's 142
knowledge. The Governor may direct the Treasurer to change any 143
investments made by the Treasurer when in the judgment of said 144 Raised Bill No. 1235
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council such action is for the best interest of the state. Said council shall, 145
at the close of the fiscal year, make a complete examination of the 146
security investments of the state and determine as of June thirtieth, the 147
value of such investments in the custody of the Treasurer and report 148
thereon to the Governor, the General Assembly and beneficiaries of trust 149
funds administered, held or invested by the Treasurer. With the 150
approval of the Treasurer and the council, [said] such report may be 151
included in the Treasurer's annual report. 152
(d) The Investment Advisory Council shall be within the office of the 153
[State] Treasurer for administrative purposes only. 154
(e) For the purposes of this section, "teachers' union" means a 155
representative organization for certified professional employees, as 156
defined in section 10-153b, and "state employees' union" means an 157
organization certified to represent state employees, pursuant to section 158
5-275. 159
Sec. 3. Section 3-13i of the general statutes is repealed and the 160
following is substituted in lieu thereof (Effective from passage): 161
(a) On and after January 1, 2001, or on and after the first adoption of 162
an investment policy statement under section 3-13b, as amended by this 163
act, whichever is later, any contract for services related to the investment 164
of trust funds, as defined in section 3-13c, shall be subject to the 165
investment policy statement adopted under section 3-13b, as amended 166
by this act. [No contract for services related to the investment of such 167
funds shall be awarded to a provider of such services until the 168
Treasurer's recommendation of a provider is reviewed by the 169
Investment Advisory Council. The] If any contract for services related 170
to the investment of trust funds deviates from such investment policy 171
statement, the Treasurer shall provide notice of [such] the Treasurer's 172
recommendation concerning the selection of such provider at a meeting 173
of the council. Not later than forty-five days after such meeting, the 174
council may file a written review of the Treasurer's recommendation 175
[concerning the selection of such provider] with the Office of the 176 Raised Bill No. 1235
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Treasurer where it shall be available for public inspection. The Treasurer 177
may proceed to award the contract after such forty-five-day period. 178
(b) Commencing with the calendar quarter ending September 30, 179
2023, and each calendar quarter thereafter, the Treasurer shall submit a 180
report to the Investment Advisory Council regarding contracts awarded 181
during each such calendar quarter for services related to the investment 182
of trust funds. The initial report shall include all such contracts awarded 183
and in effect on July 1, 2023, and each report shall include the name of 184
each provider awarded any such contract and the value of such contract. 185
This act shall take effect as follows and shall amend the following
sections:
Section 1 from passage 3-13a
Sec. 2 from passage 3-13b
Sec. 3 from passage 3-13i
Statement of Purpose:
To implement the Treasurer's recommendations concerning the
Investment Advisory Council and related statutes.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]