STATEHOUSE-State Representative Doug Gutwein (R-Francesville), the House Republican conferee to House Bill 1205, today signed the conference committee report and allowed the measure to come before the House for a vote. Today HB 1205 passed the House 86 to 0 and the Senate 49 to 1. The bill now advances to the governor's desk for final approval.
House Bill 1205 is projected save an estimated $44.6 million annually by combining the investment management of the Indiana Public Employees' Retirement Fund (PERF) and the Indiana State Teachers' Retirement Fund (TRF).
The bill requires the board of trustees of the Public Employees' Retirement Fund (PERF) and the board of trustees of the Indiana State Teachers' Retirement Fund (TRF) to appoint a common director for PERF and TRF. It further requires the PERF and TRF boards to cooperate in administering and investing the assets of the funds, in addition to hiring investment managers, investment advisors, and other service providers.
The Legislative Services Agency has estimated an annual increase of $44.6 million in investment return based upon an additional 0.2% increase in investment return achieved from the savings. As of November 30, 2009, PERF net assets were $14.2 billion and TRF net assets were $8.1 billion. A 0.2% increase on the combined net assets of $22.3 billion yields approximately $44.6 million in increased annual investment returns.
"During these difficult economic times, it's important to examine every area where waste or redundancy might be taking place," said Rep. Gutwein. "The state has had to reduce expenditures due to declining revenues, and combining what are essentially duplicate processes is a no-brainer in my opinion. It's our job to protect the taxpayer, and this bill does exactly that. It's one of the largest cost-saving measures the legislature has considered this year, and I was happy to sign off on the conference committee report to help move this bill to the governor's desk."