Notwithstanding any general or special law to the contrary, there shall be a special commission to investigate and study the prospect of divesting the following from fossil fuel companies: the Pension Reserves Investment Trust or the Pension Reserves Investment Management Board charged with managing the pooled investment fund consisting of the assets of the State Employees’ and Teachers’ Retirement Systems as well as the assets of local retirement systems under the control of the board.
The commission shall evaluate the positive impact that divestment may have upon the environment and the fossil fuel industry, weighed against the potential risk that divestment may pose to the Commonwealth’s pension funds and retirees.
The commission shall consist of 11 members: 2 of whom shall be the chairs of the joint committee on public service, who shall co-chair the commission; 1 of whom shall be the secretary of administration and finance, or the secretary’s designee; 1 of whom shall be the treasurer, or the treasurer’s designee; 1 of whom shall be the executive director of the public employee retirement administration commission, or the director’s designee; 1 of whom shall be a member of the Retired State, County and Municipal Employees Association of Massachusetts; 1 member who shall be the house minority leader or a designee; 1 member who shall be the senate minority leader or a designee; 3 of whom shall be private citizens appointed by the co-chairs, based upon the citizens’ expertise in academia, environmental issues, or finance, who shall not be members of any of the 105 contributory retirement systems.
The commission shall consult with experts in the relevant fields and file a report of its recommendations. The report shall include, but not be limited to: (i) an analysis of the current and future environmental impact of fossil fuel companies; (ii) an analysis of the potential environmental and policy benefits derived from divestment; (iii) an estimate of how much risk, if any, will be incurred by divestment, expressed as a percentage of increased volatility; (iv) an analysis of the potential impact that divestment may have on the amortization schedules for the Commonwealth’s pension funds; (v) recommendations on which “fossil fuel” companies should be subject to divestment, including analysis on the possibility of divesting solely from companies dealing directly in coal; (vi) recommendations on potential exceptions to divestment for indirect holdings, particularly regarding exceptions for mutual funds and index funds that may invest in fossil fuel companies; (vii) analysis on the potential impact that divestment may pose to companies and employees based in the Commonwealth; (viii) recommendations on a potential “escape clause” in the legislation providing that pension funds may cease divestment and reinvest in fossil fuel companies if investment loss reaches a certain threshold; (ix) recommendations on effective administration and oversight of divestment.
The commission shall file a report of its recommendations, together with the actuarial analysis, if any, with the clerks of the house and senate, the chairs of the house and senate committee on ways and means and the chairs of the joint committee on public service not later than February 15, 2015.
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