Fiduciary duty bill hearing scheduled June 13

File written testimonies by June 20 or book your oral testimony by June 12

As you know, we authored a Senate bill that is just now scheduled for its first hearing June 13 in Boston, Massachusetts.

https://malegislature.gov/Events/Hearings/Detail/4538

Our explanatory brief is here. More details are below.

The bill — called An Act relative to pensions, fiduciary standards, and sustainable investment — will be introduced to the Public Service Committee June 13 in the afternoon. It will be live-streamed starting at 1 PM at https://malegislature.gov/.

I hope our friends can support the bill. That includes written and oral testimony, endorsements, introductions and other visible support.

To speak at the hearing virtually, you must register online by June 12 at this link. To speak in person at the hearing, you can also register via the link but you may also register at the hearing itself. Oral testimony is limited to three minutes per speaker.

Written testimony must be received by June 20 via email to Fiona.BruceBaiden@mahouse.gov or to snail mailed to the Committee on Public Service at 24 Beacon Street, Room 156, Boston, MA 02133.

If you can would like to use a template:

The General Court of Massachusetts
Joint Committee on Public Service
Representative Kenneth I. Gordon, Chair
Senator Michael D. Brady, Chair

[DATE]

To the Joint Committee:

I submit this letter as support for Senate Bill S.1644 (An act relevant to pensions, fiduciary standards and sustainable investment)

A review of the fiduciary standards guiding $95 billion in public pension money in Massachusetts is in the public’s interests and is necessary to ensure that fiduciary best practice and fiduciary law are in synch and compliant with fiduciary duty obligations.

Sincerely

[Name
Street Address
City
State
Zip
Email]

Please indicate the bill number S.1644 in the subject of the email.

For other questions, please email ian@bankofnature.eco

What to know

We filed bill S.1644 earlier this year. If you’re unfamiliar with fiduciary duty — and there many people who are not — it is easiest to understand as a legal obligation to follow the instructions required to deliver a pension promise. If you have a job that includes a pension as compensation — as compared to a self-directed retirement account — that retirement fund is managed by someone called a fiduciary who is guided by “fiduciary duty” instructions.

In MA, that duty is the focus of fiduciary standards law that oversees public pensions worth $90 billion active now in the economy. Similar laws in other states, together, control $5 trillion in retirement accounts.

How this really big money moves matters a great deal. Control of that really big money is the focus of the bill.

Our bill makes clear how, why and for whom billions and trillions are invested in the economy to deliver a dignified retirement for eligible retirees. It differs from divestment campaigns and Environmental, Social, Governance-rated investments in that it comes at the issue from the other direction — through the fiduciary language itself.

The current law in MA is deficient in explicit instructions to fiduciaries of the public pensions. For example, it does not have a definition for fiduciary duty nor does it have explicit mention of the fiduciary precepts like Duty of Care, Duty of Loyalty and Duty of Impartiality. For a profession that must follow instructions, the instructions are critical. Poorly written fiduciary instruction leaves open the greater likelihood of poorly executed fiduciary duty that may, in fact and practice, be non fiduciary.

The bill makes clear what is fiduciary and non fiduciary.

The US is embroiled in a partisan debate about fiduciary duty, state pension plans and the role of ESG investments. One side says it is a breach of fiduciary duty to invest in ESG — which is not supported in law in MA — and the other side says ESG can be used to make fiduciary choices — which is also not explicit in the law. An anti-ESG bill in the US Congress is President Biden’s one and only veto so far.

Fiduciary money — the money controlled by public pension fiduciaries totaling $5T in just the US and $30T globally — has unique characteristics and obligations to steward a dignified future into which the youngest beneficiaries will retire. At issue is the gap between fiduciary law and fiduciary best practice that doesn’t take into account the future consequences of fiduciaries’ very sizable investment choices today.

Bill S.1644 seeks to clarify the scope, purpose and duties of a public pension plan so that the fiduciaries can better defend their choices, or change their choices to fit the law.

Please consider supporting the bill either in oral or written testimony. Book a meeting with me to go over the details that need more explanation. ian@bankofnature.eco

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