US - A Louisiana state representative has proposed legislation that would force investment managers and consultants that do business with the state's 13 public retirement systems to file quarterly reports disclosing all conflicts of interest and business ties with firms other than pension funds.
Representative Pete Schneider’s proposed legislation would specifically require consultants to disclose information pertaining to all payments, in hard or soft dollars, that they receive from money managers for any services, including performance measurement, business consulting, and education. If passed, the reports would have to be filed beginning 1 July, 2005.
If conflicts of interest are not disclosed, consultants or investment managers will be forced to pay the system a fine equal to the value of the revenue not disclosed. If the failure to disclose is “intentional”, the fine will be tripled, according to the bill.
“If someone is intentionally causing hurt to the system and hurt to the taxpayers who put the monies in there, then they should have to be held accountable,” said Schneider.
Schneider’s legislation would amend a law passed last year setting new performance standards and fiduciary responsibilities at the state’s public pension funds.
While receiving and analysing the quarterly reports will bring a “minimal” administrative burden to Teachers’ Retire-ment System of the state of Louisiana (TRSL), it will be outweighed by the benefit of having full disclosure, added Bonita Brown, executive director of the $11.9bn TRSL.
The bill will be taken up for debate when the state legislature opens its session in May.
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