HB 5416 Summary

• Increases investment flexibility limits for pension systems: raises real estate investment cap from 5% to 10% of assets, increases alternative investment allowances from 5-20% to 15-30% depending on system size, and raises global securities limit from 20% to 30% for large systems.

• Establishes ethics and training requirements for investment fiduciaries: requires written policies on ethics and professional development, caps annual board member training/travel costs at $150,000 or $12,000 per member (whichever is less), with individual member limit of $30,000 annually.

• Mandates comprehensive annual reporting by pension systems: requires publication of summary annual reports including investment performance (1, 3, 5, 7, and 10-year returns), administrative expenses, soft dollar expenditures, budget projections, and detailed actuarial information.

• Implements contribution restrictions based on political donations: prohibits pension systems from paying service providers whose employees made contributions to governmental officials in the past 24 months, with limited exceptions for small contributions and voting eligibility.

• Adds removal procedures for board members: allows removal by unanimous board vote or court order for cause including incapacity, material breach of duties, or criminal conviction, with petition process for elected members and appeal rights to circuit court.