Signed by Governor Andy Beshear

Vote Smart's Synopsis:

Vote to pass a bill that requires public pension investments be based on financial risks and returns and not ESG factors.

Highlights:

• Requires that the state’s public pension investments be based on only financial risks and returns and not on environmental, social and governance factors, commonly known as ESG (Sec. 1). 

• Requires that benefits related to the retirement fund be funded through a reputable life insurance company (Sec. 1).

• Establishes that the board members, financial manager, or other proxies shall discharge their duties regarding the retirement funds and providing members benefits while acting in accordance with federal, state, and common laws (Sec. 1). 

• Defines that a fiduciary has acted in a non-pecuniary capacity based on the following pieces of evidence (Sec. 1): 

• Statements; 

• Communications; 

• Policies made individually or jointly; 

• Votes of shares or proxies; and 

• Agreements. 

• Specifies that fiduciary managers shall comply with deferral regulations and the Investment Advisers Act of 1940 (Sec. 1)

• Specifies there are no waivers or restrictions that will be made on the manager’s liability (Sec. 1). 

• The board of the fund shall adopt proxy voting guidelines that are consistent with fiduciary duties and other requirements (Sec. 1). 

• Specifies that a proxy’s recommendations will not be implemented unless they comply by section 1 of the act (Sec. 1). 

• Specifies that all shares will be voted according to proxy voting guidelines (Sec. 1).

• Requires that all proxies votes be reported quarterly to the board of the fund with information regarding the votes (Sec. 1).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that requires public pension investments be based on financial risks and returns and not ESG factors.

Highlights:

• Requires that the state’s public pension investments be based on only financial risks and returns and not on environmental, social and governance factors, commonly known as ESG (Sec. 1). 

• Requires that benefits related to the retirement fund be funded through a reputable life insurance company (Sec. 1).

• Establishes that the board members, financial manager, or other proxies shall discharge their duties regarding the retirement funds and providing members benefits while acting in accordance with federal, state, and common laws (Sec. 1). 

• Defines that a fiduciary has acted in a non-pecuniary capacity based on the following pieces of evidence (Sec. 1): 

• Statements; 

• Communications; 

• Policies made individually or jointly; 

• Votes of shares or proxies; and 

• Agreements. 

• Specifies that fiduciary managers shall comply with deferral regulations and the Investment Advisers Act of 1940 (Sec. 1)

• Specifies there are no waivers or restrictions that will be made on the manager’s liability (Sec. 1). 

• The board of the fund shall adopt proxy voting guidelines that are consistent with fiduciary duties and other requirements (Sec. 1). 

• Specifies that a proxy’s recommendations will not be implemented unless they comply by section 1 of the act (Sec. 1). 

• Specifies that all shares will be voted according to proxy voting guidelines (Sec. 1).

• Requires that all proxies votes be reported quarterly to the board of the fund with information regarding the votes (Sec. 1).

Full Bill Text