Bill
H 2904
Massachusetts independent public pension systems may divest from fossil-fuel companies through the standard procurement process, shifting investments to fossil-free options.
H.2904 proposes to empower Massachusetts’ independent public retirement systems (pension systems under the Public Employee Retirement Administration Commission, PERAC) to divest from fossil fuel companies. The bill defines fossil fuel companies and sets a clear, fiduciary-friendly path for divestment, allowing systems to move away from fossil fuels and toward investments that exclude those firms, subject to established procurement rules.
Authorization to Divest: Independent retirement systems may divest, in whole or in part, from investments in fossil fuel companies. This authority is exercisable notwithstanding any contrary general or special laws.
Procurement Process: Divestment and any related investment decisions must follow the procurement process set forth in section 23B of chapter 32 of the General Laws. This provides a structured, competitive framework for divestment actions.
Alternative Investments: After completing the required procurement process, the board of an independent retirement system may invest in index funds or other investment vehicles that do not include fossil fuel companies.
Effective Date: The act takes effect upon passage.
Independent retirement system: Any Massachusetts public pension system under PERAC oversight.
Fossil fuel company: A company identified by a Global Industry Classification Standard (GICS) code in one of these sectors—
1) Coal and consumable fuels
2) Integrated oil and gas
3) Oil and gas exploration and production
Affected Entities: Massachusetts public pension systems that are independent retirement systems subject to PERAC regulation.
Fiduciary and Investment Implications: The bill creates a clear option for divestment and directs execution through the standard procurement process. It enables diversification away from fossil fuels toward fossil-fuel-free investment vehicles, potentially impacting portfolio composition, risk, and returns in line with fiduciary duties (as interpreted under the procurement framework).
Introduction: February 27, 2025.
Committee Action: Referred to the Joint Committee on Public Service on February 27, 2025.
Hearing: A hearing is scheduled for July 16, 2025, from 1:00 PM to 5:00 PM in Committee Room A-2.
Legislative Actions: The bill is identified as House Docket No. 3792; related to prior similar proposals (HD 2515 in the 2023-2024 session).
Status: Hearing scheduled; the act’s formal passage would depend on committee action and subsequent votes in the House and Senate, followed by any potential reconciliation.
H.2904 would formalize a path for independent Massachusetts public pension systems to divest from fossil fuels through the standard procurement process and to reallocate investments into fossil-fuel-free vehicles, with the act taking effect upon passage. The pending hearing in mid-July 2025 will explore these provisions and their implications for fiduciary management, governance, and investment strategy.
Compiled from official sources — confirm details with the bill’s official record.
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