Maryland Pension to Add Climate Advisory Panel

The board of the Maryland State Retirement and Penson System seeks three outside experts to assist the fund in achieving a sustainable portfolio.

The board of the Maryland State Retirement and Pension System approved a charter at its Tuesday board meeting that establishes a climate advisory panel to advise the board of trustees and the pension fund’s investment division on developing and achieving a long-term sustainable portfolio.

The fund seeks to hire at least three outside experts to this panel. The panelists should be experienced in climate science and climate economics and should have diverse backgrounds that include climate research, investment management, climate change policy and climate risk.

The charter for the establishment of the climate advisory panel was approved by the administrative committee of the board on December 4, a spokesperson for SRPS said. The charter then was submitted to the board, who approved it today.

“By establishing this advisory panel, we can leverage outside expertise and work collaboratively as we establish a path to a long-term sustainable portfolio consistent with our fiduciary duties,” said Maryland State Treasurer Dereck E. Davis in a statement.

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While pension funds in some states, such as Maryland and California, push forward with sustainability initiatives, other states are banning funds from considering environmental, social and governance factors in investments. In Indiana, BlackRock was terminated as a fixed-income manager for the Indiana Public Retirement System due to the firm’s ESG commitments. A newly passed bill in Ohio bans the state’s funds from considering ESG factors in investment decisions.

The Maryland SRPS is accepting expressions of interest from candidates to serve on the panel, according to the release. The SRPS is a signatory to several net-zero and sustainability initiatives, such as the Climate Action 100+ and the Ceres Investor Network.

Since 2019, SRPS investment staff has evaluated environmental, social and governance risks for its investments, as well as external manager policies for addressing such risks. The fund also began managing some assets internally, according to the fund’s 2022 ESG Risk Committee report. Previously, these functions were addressed by external managers.

“Creating this climate advisory council will ensure that Maryland’s pension system can be at the forefront of seizing opportunities to ensure we are generating excess returns for our beneficiaries,” said Brooke E. Lierman, Maryland’s comptroller, in a statement. Lierman sponsored legislation in 2022 that led to the establishment of the climate advisory panel.

“I am confident that if used correctly by our system, the expertise we will bring in through this new council will allow for innovative investments that make our system more profitable with less risk over the long term,” Lierman continued.

Per the state’s Climate Pollution Reduction Plan, established in December 2023, Maryland aims to achieve zero greenhouse gas emissions by 2045. The plan also calls for reducing statewide emissions by 60% from 2005 levels and achieving net-zero emissions from large buildings.

In June, Maryland Governor Wes Moore signed an executive order to advance the pollution reduction plan.

The Maryland SRPS system manages $66 billion in assets, as of January 31, and has 168,000 retirees and beneficiaries and 245,000 active and former members. 

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Illinois Police Fund Finishes Consolidation of Local Pensions

The 14th and final tranche of asset transfers was valued at $1.6 billion, bringing IPOPIF assets to $12.9 billion.



The Illinois Police Officers’ Pension Investment Fund has completed the consolidation of 351 local police pension funds, it announced Monday. Approximately 18 local pension funds had their assets transferred as part of the 14th and final group to be added, bringing the value of the IPOPIF’s assets under management to $12.9 billion.
 

“During this final tranche, approximately 2,100 line items valued at $1.6 billion were transferred to IPOPIF, bringing the total fund value to $12.9 billion as of the end of November,” said Kent Custer, the IPOPIF’s CIO, in a statement. 

The IPOPIF was established in December 2019 by state law that mandated the consolidation of the state’s numerous police officer and firefighter pension funds into two investment funds, one for police and one for firefighters. There were 357 police pensions in Illinois; while 351 are now consolidated, another six are considered “special situations” which the Illinois Department of Insurance and the IPOPIF are evaluating, according to a statement.  

The IPOPIF began consolidation of assets on March 1, 2022. This last tranche included the funds that had filed a lawsuit questioning the constitutionality of the legislation that established IPOPIF, a spokesperson for IPOPIF said.  

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“Transferring assets from 351 separate local police pension funds was a monumental task for our investment and administrative teams at IPOPIF,” said Richard White, the executive director of the IPOPIF, in a statement.  

The fund had $11.28 billion in assets under management as of September 30, prior to asset consolidation. The fund allocates 58.1% to a growth portfolio consisting of equities, 20.6% to risk mitigation strategies, 15.5% to fixed income and 5.8% to real assets.  

The fund hired Deputy CIO Greg Turk in July to spearhead a push into the private markets. As of September, the fund’s investment policy calls for a 20% allocation to private markets, 7% of which would be private equity, 5% to both private credit and real estate, and 3% to infrastructure.  

The Illinois Firefighters’ Pension Investment Fund, created by the same 2019 state law, completed its consolidation into a $7 billion fund by June 30, 2022. It reported more than $9.69 billion in assets under management as of September 30. 

Related Stories: 

Illinois Police Pension Appoints Greg Turk as Deputy CIO Amidst Private Markets Push 

Illinois Nears Completion of Statewide Police Pension Consolidation 

Court Rejects Legal Challenge to Illinois Pension Consolidation 

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