Bill to require 20% of pension funds spent in Missouri met with skepticism
(The Center Square) – Missouri’s public employee retirement systems would be required to invest billions in state-based assets under a bill being considered in the House.
House Bill 2825, sponsored by Rep. Michael O’Donnell, R-St. Louis would ensure at least 20% of Missouri’s public pension systems’ venture capital and real estate investments are invested in Missouri-owned businesses and real estate. He emphasized the bill needs to start investment conversations.
“There’s no better example than the Russian invasion of Ukraine and its impact on investments on why we should be investing in Missouri,” O’Donnell said during testimony before the House Pension Committee on Wednesday. “This is not a call to stop investing in emerging markets. We simply want to focus attention on investing in Missouri.”
O’Donnell testified his 30-year career as a bond trader for a St. Louis firm provided his focus. The bill’s fiscal note stated the Missouri State Employee’s Retirement System (MOSERS) currently has $9.7 billion in assets.
When Rep. Jim Murphy, R-St. Louis, stated MOSERS would be investing $2 billion, he suggested the bill require “up to 20%” instead of “at least.”
“I can see where we’re just going to be chasing things to put money in at some point, right?” Murphy asked.
O’Donnell said the percentage is negotiable. During the hearing, he and others often mentioned their desire to avoid another “catfish farm,” referring to pension funds lost in a failed venture after a legislative mandate.
A 1987 law required the Missouri Department of Transportation and Patrol Employees’ Retirement System to invest between 3% and 5% of assets in certain Missouri-based small businesses, investment companies or venture capital firms, according to the bill’s fiscal note. It was repealed in 1992, but a section was kept giving preference to Missouri-based companies in the selection of venture capital firms, consultants or fiduciaries.
“I don’t like the idea of tying anybody’s hands in the investment world to make the best investments possible,” said Rep. Bill Owen, R-Springfield.
Rep. Rusty Black, R-Chillicothe, noted he was appointed to the MOSERS board with a duty to safeguard pension funding.
“I don’t think this is a vehicle that’s going to do that,” Black said.
Maria Walden, executive director of the Missouri Retired Teachers Association, and Ronda Stegmann, executive director of MOSERS, both testified against the bill.
“We just don’t support any bill that would diminish or impair our board of trustees’ authority to invest the funds as they see fit,” Walden said.
However, both said their organizations are required to report on Missouri investments by state statute.
Disclaimer: This content is distributed by The Center Square
