2023 Maryland Statutes › State Personnel and Pensions › Division II - Pensions › Title 21 - State Retirement and Pension System › Subtitle 1 - Administration › Section 21-116 - Investment Committee -- Powers

(a)    By resolution, the Board of Trustees shall specify the powers of the Investment Committee.
(b)    The Investment Committee shall advise the Board of Trustees and make recommendations on:
(1)    the investment programs;
(2)    compliance of the investment programs with the policies of the Board of Trustees; and
(3)    bonding for employees of the State Retirement Agency in the form and amount required by law.
(c)    (1)    Subject to subsections (d) and (e) of this section, the Board of Trustees shall adopt an investment policy manual that details:
(i)    the functions of the Investment Division of the State Retirement Agency;
(ii)    the goals and objectives of the several investment programs; and
(iii)    the policies that govern the selection and retention of investments.
(2)    The Investment Committee shall:
(i)    prepare and maintain the investment policy manual; and
(ii)    submit the investment policy manual, and any subsequent amendments to the manual, to the Board of Trustees for approval.
(d)    (1)    (i)    Consistent with minority business purchasing standards applicable to units of State government under the State Finance and Procurement Article and consistent with the fiduciary duties of the Board of Trustees, the Board of Trustees shall direct the Investment Committee to attempt to use to the greatest extent feasible minority business enterprises to provide brokerage and investment management services to the Board.
(ii)    For the fiscal year beginning July 1, 2022, and each fiscal year thereafter, the Board of Trustees shall assess the use of minority business enterprises as required under this subsection.
(iii)    For purposes of this subsection, brokerage and investment management services shall include services relating to all allocated asset classes.
(2)    (i)    To assist it in achieving the goal described under paragraph (1) of this subsection, the Investment Committee shall undertake measures to remove any barriers that limit full participation by minority business enterprises in brokerage and investment management services opportunities afforded under this title.
(ii)    The measures undertaken by the Investment Committee shall include the use of a wide variety of media, including the State Retirement Agency’s website, to provide notice to a broad and varied range of potential providers about the brokerage and investment management services opportunities afforded by the State Retirement Agency.
(3)    In consultation with the Governor’s Office of Small, Minority, and Women Business Affairs and the Investment Committee, the Board of Trustees shall develop guidelines to assist the Investment Committee in identifying and evaluating qualified minority business enterprises in order to help the State Retirement Agency achieve the objective for greater use of minority business enterprises for brokerage and investment management services.
(4)    On or before September 1 each year, the Investment Committee shall submit a report to the Board of Trustees, the Governor’s Office of Small, Minority, and Women Business Affairs and, subject to § 2–1257 of the State Government Article, the General Assembly on:
(i)    the identity of the minority business enterprise brokerage and investment management services firms used by the Investment Committee in the immediately preceding fiscal year;
(ii)    the percentage and dollar value of the assets that are under the control of the Investment Committee that are under the investment control of minority business enterprise brokerage and investment management services firms for each allocated asset class; and
(iii)    the measures the Investment Committee undertook in the immediately preceding fiscal year in accordance with paragraph (2)(ii) of this subsection.
(e)    (1)    Consistent with its fiduciary duties, the Board of Trustees shall include policies in the investment policy manual adopted under subsection (c) of this section regarding the management of risk, including the management of climate risks in accordance with § 21–116.1 of this subtitle, in the investment of system assets, and shall address:
(i)    investment principles, guidelines, and policies that govern the selection and retention of the investments of the several systems, including proxy voting and engagement guidelines; and
(ii)    a policy that proxy votes and sample due diligence questionnaires for prospective managers be published on the State Retirement Agency’s website.
(2)    (i)    Consistent with its fiduciary duties, on or before January 31, 2019, and every year thereafter, the Board of Trustees shall submit a report on the risk assessment of the several systems, including climate risk, in accordance with § 21–116.1 of this subtitle and § 2–1257 of the State Government Article, to the General Assembly.
(ii)    The assessment shall:
1.    identify recent studies or actions by other U.S. state public pension funds, financial institutions, or risk experts, including those related to disclosure, risk assessment, investment principles, or other related issues or activities;
2.    based on the information obtained in item 1 of this subparagraph, recommend best practices and consider whether these best practices can be incorporated into the investment policy manual;
3.    examine the potential magnitude of the long–term risks and opportunities of multiple scenarios and related regulatory developments across industry sectors, asset classes, and the total portfolio of the several systems; and
4.    include any other information the Board of Trustees or Investment Committee deems necessary.
(iii)    The State Retirement Agency shall post a report regarding the risk assessment on its website.
(3)    To the extent practicable, the State Retirement Agency shall request all information necessary from managers, brokers, or other entities to carry out the policies of the Board of Trustees with respect to an assessment conducted in accordance with this subsection.
(4)    The Board of Trustees, or any other fiduciary of the several systems as defined in § 21–201(b) of this title, may not be held liable for any actions taken or decisions made in good faith for the purpose of complying with or executing this subsection.
(5)    Nothing in this subsection shall require the Board of Trustees to take action as described in this section unless the Board of Trustees determines, in good faith, that the action is consistent with the fiduciary responsibilities of the Board of Trustees as described in Subtitle 2 of this title.