BILL AS INTRODUCED S.72
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VT LEG #379759 v.1
S.72 1
Introduced by Senators Perchlik, Clarkson, Cummings, Gulick, Harrison, 2
Major, Vyhovsky, Watson and White 3
Referred to Committee on 4
Date: 5
Subject: State Treasurer; Vermont Pension Investment Commission; 6
investment and oversight of retirement systems’ assets; fossil fuel 7
divestment 8
Statement of purpose of bill as introduced: This bill proposes to require the 9
Vermont Pension Investment Commission to (1) on or before December 15, 10
2025, review the carbon footprint of the holdings of the Vermont State 11
Employees’ Retirement System, the State Teachers’ Retirement System, and 12
the Municipal Employees’ Retirement System, and (2) develop a plan to divest 13
the holdings of the Vermont State Employees’ Retirement System, the State 14
Teachers’ Retirement System, and the Municipal Employees’ Retirement 15
System from the fossil fuel industry by December 31, 2030 with further 16
divestment from any private investments that contain assets in the fossil fuel 17
industry by December 31, 2040. 18
An act relating to divestment of State pension funds of investments in the 19
fossil fuel industry 20 BILL AS INTRODUCED S.72
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VT LEG #379759 v.1
It is hereby enacted by the General Assembly of the State of Vermont: 1
Sec. 1. PUBLIC PENSION FUNDS; FOSSIL FUELS; VERMONT 2
PENSION INVESTMENT COMMIS SION; PLAN AND REPORT 3
(a) Intent. 4
(1) It is the intent of the General Assembly that the Vermont Pension 5
Investment Commission build upon its effective efforts to manage the State’s 6
financial risks to climate change, including investing in low carbon indexes, 7
successfully engaging with fossil fuel and other companies, and supporting 8
initial studies and reviews on climate change. 9
(2) It is also the intent of the General Assembly that, on or before 10
December 31, 2030, the Vermont Pension Investment Commission shall, 11
consistent with sound fiduciary practice, including consideration of any 12
expected increased funding requirements for the actuarially determined 13
employer contribution (ADEC) and administrative costs, and subject to any 14
exceptions, divest the holdings of the Vermont State Employees’ Retirement 15
System, the Vermont Teachers’ Retirement System, and the Vermont 16
Municipal Employees’ Retirement System from the fossil fuel industry. 17
(3) The General Assembly also intends that the Vermont Pension 18
Investment Commission establish a long-term goal to divest from any private 19
investments that contain assets in the fossil fuel industry on or before 20 BILL AS INTRODUCED S.72
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December 31, 2040, if the Commission determines that such divestment is 1
consistent with sound fiduciary practice. 2
(b) Definitions. As used in this section: 3
(1) “Carbon footprint” means the extent to which holdings are invested 4
in stocks, securities, or other obligations of any fossil fuel company or any 5
subsidiary, affiliate, or parent of any fossil fuel company. 6
(2) “De minimis exposure” means the aggregate amount of all fossil fuel 7
holdings in the portfolio amounting to less than two percent of the aggregate 8
amount of all funds invested. 9
(c) Review. On or before December 15, 2025, the Vermont Pension 10
Investment Commission, in consultation with the Office of the State Treasurer, 11
shall complete a review of the carbon footprint of the holdings of the Vermont 12
State Employees’ Retirement System, the Vermont State Teachers’ Retirement 13
System, and the Vermont Municipal Employees’ Retirement System. 14
(d) Plan. 15
(1) Divestment. Except as provided in subdivision (2) of this 16
subsection, the Commission, in accordance with sound investment criteria and 17
consistent with fiduciary obligations, including consideration of any expected 18
increased funding requirements for the actuarially determined employer 19
contribution (ADEC) and administrative costs, shall develop a plan to divest 20
any holdings identified in the review described in subsection (c) of this section 21 BILL AS INTRODUCED S.72
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on or before December 31, 2030. The Commission shall include in the plan 1
consideration of the State’s long-term goal of divestment from any investments 2
that are exceptions to the plan pursuant to subdivision (2) of this subsection on 3
or before December 31, 2040. 4
(2) Exceptions. Until such time as the Commission deems divestment to 5
be prudent and consistent with sound fiduciary practice, the following holdings 6
are exceptions to the plan: 7
(A) de minimis exposure of any funds held by the Commission to the 8
stocks, securities, or other obligations of any fossil fuel company or any 9
subsidiary, affiliate, or parent of any fossil fuel company; and 10
(B) private investments that contain fossil fuel company stocks, 11
securities, or other obligations of any fossil fuel company or any subsidiary, 12
affiliate, or parent of any fossil fuel company. 13
(3) Definitions and methodology. The Commission shall include in the 14
plan described in this subsection: 15
(A) a definition for “fossil fuel company”; and 16
(B) a method for determining the metric of the portfolio’s carbon 17
footprint that allows for an exemption of private investments for the purpose of 18
determining the de minimis exposure. 19 BILL AS INTRODUCED S.72
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(e) Report. 1
(1) On or before February 15, 2026, the Commission shall submit a 2
report on the review described in subsection (c) of this section to the House 3
Committee on Government Operations and Military Affairs and the Senate 4
Committee on Government Operations and to the Joint Public Pension 5
Oversight Committee. The report shall include any recommendations for 6
legislative action, if necessary, to implement the divestment plan. 7
(2)(A) On or before September 1, 2026, the Commission shall submit a 8
report on the plan described in subsection (d) of this section to the House 9
Committee on Government Operations and Military Affairs and the Senate 10
Committee on Government Operations and to the Joint Public Pension 11
Oversight Committee. The report shall include any recommendations for 12
legislative action, if necessary, to implement the divestment plan. 13
(B) Pursuant to 2 V.S.A. § 23, with approval of the Speaker of the 14
House and the President Pro Tempore, as appropriate, the House Committee on 15
Government Operations and Military Affairs and the Senate Committee on 16
Government Operations may each meet up to one time when the General 17
Assembly is not in session to evaluate the report described in subdivision (A) 18
of this subdivision (e)(2). 19
(3) Beginning on January 15, 2027, and annually thereafter until January 20
15, 2040, the Commission shall submit a report to the House Committee on 21 BILL AS INTRODUCED S.72
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Government Operations and Military Affairs, the Senate Committee on 1
Government Operations, and the Joint Public Pension Oversight Committee on 2
the progress of divestment described in this section. The report shall also 3
include: 4
(A) an update on the composition and percentage of exposure of any 5
investments exempt from the divestment plan pursuant to subdivision (d)(2) of 6
this section; and 7
(B) a summary of the fee impacts and any instance of excessive 8
charges or demands related to the rebalancing of the funds consistent with the 9
implementation of this act. 10
(4) On or before January 15, 2041, the Commission shall make a final 11
report to the House Committee on Government Operations and Military 12
Affairs and the Senate Committee on Government Operations and the Joint 13
Public Pension Oversight Committee regarding completion of divestment 14
described in this section. 15
Sec. 2. DIVESTMENT PLAN; VERMONT PENSIO N INVESTMENT 16
COMMISSION; APPROPRIATION 17
In FY 2026, the amount of $127,000.00 is appropriated to the Vermont 18
Pension Investment Commission to establish one staff position to support 19
improvements and efficiencies in the administration of the Commission and to 20
meet the review, planning, and reporting requirements of this act. The 21 BILL AS INTRODUCED S.72
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appropriation to the Commission shall be distributed from the following 1
funding sources pursuant to the allocation set forth below: 2
(1) 40.86 percent from the Vermont State Retirement Fund, established 3
in 3 V.S.A. § 473; 4
(2) 44.01 percent from the Vermont Teachers’ Retirement Fund, 5
established in 16 V.S.A. § 1944; and 6
(3) 15.13 percent from the Vermont Municipal Retirement Fund, 7
established in 24 V.S.A. § 5064. 8
Sec. 3. EFFECTIVE DATE 9
This act shall take effect on passage. 10