MI HB5618

Establishes investment fiduciary duties requiring management of system assets solely in the interest of participants and beneficiaries, with care, skill, prudence, and diligence comparable to prudent professionals in similar capacities.

Requires investment fiduciaries managing specified Michigan public retirement systems to comply with the Divestment from Terror Act (2008 PA 234) and prohibits investment in debt instruments issued by foreign countries identified by the U.S. State Department as sponsoring terrorism.

Mandates that investment fiduciaries use best efforts to invest at least 5% of system assets in Michigan businesses for Tier 1 plans under state employees', judges', state police, and public school employee retirement systems, with investments to be managed by firms with physical presence in Michigan through competitive bidding.

Requires at least one-half of Michigan business investments to be in specific investments with physical presence in "cities of promise" and establishes reporting requirements on investment status, types of businesses selected, and reasons for application denials by January 1, 2015.

Requires systems to establish standards and procedures ensuring consideration of emerging fund managers and emerging broker-dealers in contract evaluation and to report annually on methods and results of these efforts in financial or summary reports.