COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:1629H.01I Bill No.:HB 769 Subject:Retirement Systems and Benefits - General; Retirement - Schools; Employees -
Employers; Teachers
Type:Original Date:January 29, 2023Bill Summary:This proposal modifies provisions related to proxy voting and fiduciary
investment duties for certain public employee retirement and pension
systems.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on General
Revenue $0$0$0
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on Other State
Funds $0$0$0
Numbers within parentheses: () indicate costs or losses. L.R. No. 1629H.01I
Bill No. HB 769
Page 2 of
January 29, 2023
JLH:LR:OD
ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on FTE 000
☐ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Local Government$0$0$0 L.R. No. 1629H.01I
Bill No. HB 769
Page 3 of
January 29, 2023
JLH:LR:OD
FISCAL ANALYSIS
ASSUMPTION
Officials from the Joint Committee on Public Employee Retirement (JCPER) state this
proposal has no direct fiscal impact to the JCPER. The JCPER’s review of this legislation
indicates it will not affect retirement plan benefits as defined in Section 105.660(9).
Officials from the Missouri State Employee's Retirement System, Kansas City Employees'
Retirement System, Kansas City Firefighter's Pension System, Kansas City Supplemental
Retirement Plan, Local Government Employees Retirement System, Rock Community Fire
Protection District Retirement Plan and the County Employees’ Retirement Fund each
assume the proposal will have no fiscal impact on their respective organizations.
Officials from MoDOT & Patrol Employees’ Retirement System state this proposal, if
enacted, would modify provisions related to proxy voting and fiduciary investment duties for
public retirement plans. Specifically, the proposed provision addressing the approach to
environmental, social, and governance (ESG) issues would exclude those issues from
consideration if consideration would override the investment fiduciary’s duty as otherwise
defined in section 105.688.
The second proposed amendment to section 105.688 states that the investment fiduciary shall not
be subject to divestment legislation.
Proposed section 105.692 defines how proxy voting should be handled, in general and
specifically where (ESG) issues are a factor. In this case, voting shares for the purpose to further
ESG is prohibited.
The changes proposed in this bill would have the effect of managing matters that are currently
politically and socially important without the negative impact of more restrictive legislation on
public retirement system investments.
Officials from Public Schools and Education Employee Retirement Systems state this
legislation modifies provisions relating to duties of fiduciaries for public employee retirement
systems. Currently, an investment fiduciary has to discharge his or her duties relating to the
investment, reinvestment and management of the assets of the system for the participants, based
upon certain specified standards. This legislation includes additional standards and provides that
the investment fiduciary shall not consider environmental, social, or governance characteristics
in a manner that overrides his or her fiduciary duties. Further, the investment fiduciary shall not
be subject to legislative, regulatory, or other mandates to invest with environmentally, socially, L.R. No. 1629H.01I
Bill No. HB 769
Page 4 of
January 29, 2023
JLH:LR:OD
or other noneconomically motivated influence unless they are consistent with the fiduciary's
responsibilities, or divest from any direct holdings as mentioned in the bill.
The legislation also provides for voting of all shares of common stock solely to further the
economic interest of the plan participants and prohibits voting to further noneconomic
environmental, social, political, ideological or other goals. The bill also specifies the methods for
voting by proxy.
As currently drafted this bill has no substantial fiscal or operational impact on PSRS or PEERS
of Missouri.
Officials from the Sheriffs' Retirement System state this proposal may have a negative impact
if this legislation passes. The Retirement system hires investment managers to invest its assets
based on the investment policy. Setting constraints on investment guidelines has a potential of
limiting investment earnings used to finance the retirement system.
Officials from the St. Louis Public Schools Retirement System noted the following impacts:
incorporate environmental, social or governance (ESG) as a stand alone consideration,
engage with companies on these issues, or work with managers that market their
commitment to “ESG”, “sustainable”, etc.
SMAs.
Oversight assumes this proposal may limit investment decisions to already established fiduciary
duties. Based on the majority of responses, Oversight assumes this proposal would not have a
direct fiscal impact on their respective organizations.
FISCAL IMPACT – State GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026$0$0$0FISCAL IMPACT – Local GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026$0$0$0 L.R. No. 1629H.01I
Bill No. HB 769
Page 5 of
January 29, 2023
JLH:LR:OD
FISCAL IMPACT – Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
FISCAL DESCRIPTION
The proposed legislation appears to have no direct fiscal impact.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Joint Committee on Public Employee Retirement
Missouri State Employee's Retirement System
MoDOT & Patrol Employees’ Retirement System
Public Schools and Education Employee Retirement Systems
Kansas City Employees' Retirement System
Kansas City Firefighter's Pension System
Kansas City Supplemental Retirement Plan
Local Government Employees Retirement System
Rock Community Fire Protection District Retirement Plan
County Employees’ Retirement Fund
Julie MorffRoss StropeDirectorAssistant DirectorJanuary 29, 2023January 29, 2023