The 2022 legislative session recently crossed its halfway point. MSRS staff are tracking the Legislature closely and anticipate the session’s brisk pace to continue until adjournment in May.
Omnibus Pension Policy Bill
A collection of administrative provisions is making its way through the legislative process as the 2022 Omnibus Pension Policy Bill. This is expected to travel independently from other pension-related proposals and does not make any benefit changes. This bill has been heard and approved by the House and Senate state government committees.
Investment Return Assumption
While the State Board of Investment’s 2021 investment performance was above the 7.5% assumed rate of return used to value the funding of our plans, investment market projections are suggesting that returns in the next twenty-year period will be less favorable.
The MSRS Board of Directors proposed reducing the assumed rate of return to 7.0%. Legislation to achieve this change was introduced earlier in the session by Senator Julie Rosen (R-Fairmont) and Representative Kaohly Her (DFL-Saint Paul). The bill has not been discussed yet.
Divestment from Russia
A bill requiring the State Board of Investment (SBI) to divest assets based in Russia and Belarus is heading towards enactment. The SBI is responsible for investing Minnesota’s cash reserves and pension funds. Prior to Russia’s invasion of Ukraine, it was estimated that the SBI held about $135 million in such assets, or about 0.15% of the $100 billion under management. Economic sanctions have since caused those values to decrease significantly.