FIRSTREGULARSESSION
HOUSEBILLNO.769
102NDGENERALASSEMBLY
INTRODUCEDBYREPRESENTATIVEOWEN.
1629H.01I DANARADEMANMILLER,ChiefClerk
ANACT
Torepealsection105.688,RSMo,andtoenactinlieuthereoftwonewsectionsrelatingto
publicemployeeretirementsystems.
BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
SectionA.Section105.688,RSMo,isrepealedandtwonewsectionsenactedinlieu
2thereof,tobeknownassections105.688and105.692,toreadasfollows:
105.688.Theassetsofasystemmaybeinvested,reinvestedandmanagedbyan
2investmentfiduciarysubjecttotheterms,conditionsandlimitationsprovidedinsections
3105.687to105.689.Aninvestmentfiduciaryshalldischargehisorherdutiesintheinterest
4oftheparticipantsinthesystemandtheirbeneficiariesandshall:
5 (1)Actwiththesamecare,skill,prudence,anddiligenceunderthecircumstances
6thenprevailingthataprudentpersonactinginasimilarcapacityandfamiliarwiththose
7matterswoulduseintheconductofasimilarenterprisewithsimilaraims;
8 (2)Actwithdueregardforthemanagement,reputation,andstabilityoftheissuerand
9thecharacteroftheparticularinvestmentsbeingconsidered;
10 (3)Makeinvestmentsforthepurposesofprovidingbenefitstoparticipantsand
11participants'beneficiaries,andofdefrayingreasonableexpensesofinvestingtheassetsofthe
12system;
13 (4)Giveappropriateconsiderationtothosefactsandcircumstancesthatthe
14investmentfiduciaryknowsorshouldknowarerelevanttotheparticularinvestmentor
15investmentcourseofactioninvolved,includingtheroleoftheinvestmentorinvestment
16courseofactionplaysinthatportionofthesystem'sinvestmentsforwhichtheinvestment
17fiduciaryhasresponsibility.Forpurposesofthissubdivision,"appropriateconsideration"
EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 18shallinclude,butisnotnecessarilylimitedtoadeterminationbytheinvestmentfiduciarythat
19aparticularinvestmentorinvestmentcourseofactionisreasonablydesigned,aspartofthe
20investmentsofthesystem,tofurtherthepurposesofthesystem,takingintoconsiderationthe
21riskoflossandtheopportunityforgainorotherreturnassociatedwiththeinvestmentor
22investmentcourseofaction;andconsiderationofthefollowingfactorsastheyrelatetothe
23investmentorinvestmentcourseofaction:
24 (a)Thediversificationoftheinvestmentsofthesystem;
25 (b)Theliquidityandcurrentreturnoftheinvestmentsofthesystemrelativetothe
26anticipatedcashflowrequirementsofthesystem;and
27 (c)Theprojectedreturnoftheinvestmentsofthesystemrelativetothefunding
28objectivesofthesystem;
29 (5)Giveappropriateconsiderationtoinvestmentswhichwouldenhancethegeneral
30welfareofthisstateanditscitizensifthoseinvestmentsofferthesafetyandrateofreturn
31comparabletootherinvestmentsavailabletotheinvestmentfiduciaryatthetimethe
32investmentdecisionismade;
33 (6)Notconsiderenvironmental,social,orgovernancecharacteristicsina
34mannerthatwouldoverridehisorherfiduciarydutiesasdefinedinthissection;
35 (7)Notbesubjecttoanylegislative,regulatory,orothermandatestoinvestwith
36environmentally,socially,orothernoneconomicallymotivatedinfluenceunlesstheyare
37consistentwiththefiduciary'sresponsibilityasprovidedinthissectionorasprovidedin
38thesystem’sgoverningstatuteswithrespecttotheinvestmentofsystemassetsorother
39dutiesimposedbylawrelatingtotheinvestment,management,deposit,orcustodyof
40systemassets;and
41 (8)Notbesubjecttoanylegislative,regulatory,orothermandatesfor
42divestmentfromanyindirectholdingsinactivelyorpassivelymanagedinvestment
43fundsorinprivateassets.
105.692.1.Allsharesofcommonstockhelddirectlybyasystem,asdefined
2undersection105.687,shallbevotedsolelyintheeconomicinterestofplanparticipants.
3Votingsharesforthepurposesoffurtheringnoneconomicenvironmental,social,
4political,ideological,orothergoalsisprohibited.
5 2.Asystemshallvoteallproxiesassociatedwithitsdirectlyheldsharesof
6commonstockbyoneofthefollowingmethods:
7 (1)Byinternalsystemstaff;or
8 (2)Byaninvestmentmanagerorproxyvotingserviceproviderwhohas
9committedinwritingtovotethesharespursuanttoproxyvotingguidelineschosenby
HB769 2 10thesystemorhascommittedinwritingtovotethesharesinamannerconsistentwith
11theobligationtoactsolelyintheeconomicinterestofplanparticipants.
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HB769 3