ATLANTA (April 7, 2009) – State Sen. Kasim Reed (D-Atlanta) presented legislation that will give local pension funds more flexibility in meeting their current and long term goals by changing the definition of large versus small pension funds and changing the equity percentage allowed in large funds. The definition of large retirement system would be expanded to include any public retirement system that has assets in excess of $200 million.
“This bill will allow retirement systems to update the way they invest their assets, and improve overall return,” said Sen. Reed. “These systems will move away from focusing on bonds and will now focus on investing in stocks. History has shown that stocks perform much better over time than bonds.”
In an effort to modernize retirement systems and improve their investment structure, large retirement systems can now invest up to 20 percent of their assets in equities to foreign corporations in any fiscal year.
“Moving the focus to foreign investments will enhance diversification and yield better return for retirement systems,” Said Sen. Reed. “We have a vibrant economy in this country, but our equity market has shrunk form 70 percent of the total global market in the 1980’s to 45 percent today. We have to invest on a global scale.”
The bill has passed the House and Senate, and will now go to the Governor for signature. For additional information on the bill, contact Senator Reed or go to www.legis.ga.gov.
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Sen. Kasim Reed represents the 35th Senate District which includes portions of Douglas and Fulton counties. He may be reached by phone at 404.463.1379 or by e-mail at kasim.reed@senate.ga.gov