FIRST REGULAR SESSION
SENATE BILL NO. 389
103RD GENERAL ASSEMBLY
INTRODUCED BY SENATOR BLACK.
1175S.01I KRISTINA MARTIN, Secretary
AN ACT
To repeal section 105.688, RSMo, and to enact in lieu thereof two new sections relating to public
employee retirement systems.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Section 105.688, RSMo, is rep ealed and two new 1
sections enacted in lieu thereof, to be known as sections 2
105.688 and 105.692, to read as follows:3
105.688. The assets of a system may be invested, 1
reinvested and managed by an investment fiduciary subject to 2
the terms, condition s and limitations provided in sections 3
105.687 to 105.689. An investment fiduciary shall discharge 4
his or her duties in the interest of the participants in the 5
system and their beneficiaries and shall: 6
(1) Act with the same care, skill, prudence, and 7
diligence under the circumstances then prevailing that a 8
prudent person acting in a similar capacity and familiar 9
with those matters would use in the conduct of a similar 10
enterprise with similar aims; 11
(2) Act with due regard for the manageme nt, 12
reputation, and stability of the issuer and the character of 13
the particular investments being considered; 14
(3) Make investments for the purposes of providing 15
benefits to participants and participants' beneficiaries, 16
and of defraying reasonable expenses of investing the assets 17
of the system; 18 SB 389 2
(4) Give appropriate consideration to those facts and 19
circumstances that the investment fiduciary knows or should 20
know are relevant to the particular investment or investment 21
course of action invol ved, including the role of the 22
investment or investment course of action plays in that 23
portion of the system's investments for which the investment 24
fiduciary has responsibility. For purposes of this 25
subdivision, "appropriate consideration" shall inclu de, but 26
is not necessarily limited to a determination by the 27
investment fiduciary that a particular investment or 28
investment course of action is reasonably designed, as part 29
of the investments of the system, to further the purposes of 30
the system, taking into consideration the risk of loss and 31
the opportunity for gain or other return associated with the 32
investment or investment course of action; and consideration 33
of the following factors as they relate to the investment or 34
investment course of actio n: 35
(a) The diversification of the investments of the 36
system; 37
(b) The liquidity and current return of the 38
investments of the system relative to the anticipated cash 39
flow requirements of the system; and 40
(c) The projected return of the in vestments of the 41
system relative to the funding objectives of the system; 42
(5) Give appropriate consideration to investments 43
which would enhance the general welfare of this state and 44
its citizens if those investments offer the safety and rate 45
of return comparable to other investments available to the 46
investment fiduciary at the time the investment decision is 47
made; 48 SB 389 3
(6) Not consider environmental, social, or governance 49
characteristics in a manner that would override his or her 50
fiduciary duties as described in this section; 51
(7) Not be subject to any legislative, regulatory, or 52
other mandates to invest with environmentally, socially, or 53
other noneconomically motivated influence unless such 54
mandates are consistent with the fiduciary's responsibility 55
as provided in this section or as provided in the system's 56
governing statutes, ordinances, charter, or documents with 57
respect to the investment of system assets or other duties 58
imposed by law relating to the investment, management, 59
deposit, or custody of system assets; and 60
(8) Not be subject to any legislative, regulatory, or 61
other mandates for divestment from any indirect holdings in 62
actively or passively managed investment funds or in private 63
assets unless such mandates are c onsistent with the 64
fiduciary's responsibility as provided in this section . 65
105.692. 1. All shares of common stock held directly 1
by a system, as such term is defined in section 105.687, 2
shall be voted solely in the economic interest of the 3
participants of the system. Voting shares for the sole 4
purposes of furthering noneconomic environmental, social, 5
political, ideological, or other goals is prohibited. 6
2. A system shall vote all proxies associated with its 7
directly held shares of common stock by one of the following 8
methods: 9
(1) By internal system staff; or 10
(2) By an investment manager or proxy voting service 11
provider who has committed in writing to vote the shares 12
pursuant to proxy voting guidelines chosen b y the system or 13
has committed in writing to vote the shares in a manner 14 SB 389 4
consistent with the obligation to act solely in the economic 15
interest of the participants of the system. 16