Public retirement systems: development projects: labor standards.

Plain English Breakdown

The official source material does not provide specific details about how the prohibition will affect individual development projects or retirement funds until after the study is completed.

Public Retirement Systems: Labor Standards for Development Projects

This law requires public retirement systems to study and report on the impacts of prohibiting investments in development projects that do not provide labor standards protections.

What This Bill Does

• Requires the boards of PERS (Public Employees’ Retirement System) and STRS (State Teachers’ Retirement System) to contract with University of California Labor Centers to conduct an independent study on the impacts of prohibiting investments in development projects without labor standards protections.
• Prohibits these boards from investing in development projects or providing financing for such projects unless those projects include labor standards protections.

Who It Names or Affects

• Boards of PERS and STRS
• Development project investors in California

Terms To Know

Labor standards protections

Rules that ensure workers are treated fairly, such as safe working conditions and fair pay.

Public employee retirement funds

Money set aside by the government to provide for retired public employees.

Limits and Unknowns

• The boards of PERS and STRS are not required to take action unless they determine it is consistent with their fiduciary responsibilities established in the California Constitution.
• It's unclear how this law will affect specific development projects or retirement funds until the study is completed.

Official Summary Text

AB 1439, as amended, Garcia.
Public retirement systems: development projects: labor standards.
The California Constitution grants the retirement board of a public employee retirement system plenary authority and fiduciary responsibility for investment of moneys and administration of the retirement fund and system. These provisions qualify this grant of powers by reserving to the Legislature the authority to prohibit investments if it is in the public interest and the prohibition satisfies standards of fiduciary care and loyalty required of a retirement board.
Existing law prohibits the boards of the Public Employees’ Retirement System
(PERS)
and the State Teachers’ Retirement System
(STRS)
from making
certain new investments or renewing existing investments of public employee retirement funds, including in a thermal coal company, as defined. Existing law provides that a board is not required to take any action regarding those investments unless the board determines in good faith that the action is consistent with the board’s fiduciary responsibilities established in the California Constitution.
This bill would
prohibit
state that its purpose is to require the boards of PERS and STRS to contract with the University of California Labor Centers to conduct an independent study to determine the impacts on public employee retirement funds of prohibiting
the
board of a public pension or retirement system from making any additional or new investments of public employee pension or retirement funds
board of a public pension or retirement system, as defined, from investing
in development projects in California
or providing financing for those projects with public employee pension or retirement funds unless those projects include labor standards protections, as defined.
that do not provide labor standards protections for workers. The bill would require the study and a report of its findings to be completed and provided to the Legislature and the Department of Finance by January 1, 2028, as specified.
The bill would provide that a board is not required to take action pursuant to this provision unless it determines in good faith that the action is consistent with the board’s fiduciary responsibilities established in the California Constitution.

Current Bill Text

Download Bill PDF