Frankfort, Kentucky (February 23, 2023) – Earlier this week, members of the House Committee on Natural Resources and Energy voted to approve legislation that would protect the state’s public retirement systems from investment practices commonly referred to as environment, social, and governance standards (ESG). The measure, HB 236, sponsored by Representative Scott Sharp of Ashland, would require all state retirement systems fulfill their fiduciary duty to all stakeholders in the state managed pension funds such as the Kentucky Teacher’s Retirement fund.
Currently, investment funds used by pension fund management implement an investment concept based not on maximizing a fiduciary return, but on a concept based on ESG, which typically have a less robust return than of a traditional investment method.
“This measure prevents political and ideological interests from minimizing investment returns. It is about giving our citizens who depend on these pension funds the absolute best financial outcomes possible. We’re already facing a multi-billion pension liability, we don’t need to promote decisions based on social activism,” Representative Scott Sharp noted.
“Our public pensions are no place for politics to and ESG standards have no proven fiscal benefit.”
Sharp’s bill now goes before the full House of Representatives for a vote. For more information on HB 236 as well as past and present legislative measures, please visit legislature.ky.gov or click here.
Is my welfare check a public pension?