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Bill

A 11078

Prohibits investment managers from assisting in investing moneys belonging to retirement system

2025 Regular Session Introduced by Jenifer Rajkumar

Prohibits the New York common retirement fund from contracting with or renewing contracts for external investment managers to invest fund assets.

REFERRED TO GOVERNMENTAL EMPLOYEES
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Bill Summary · A 11078

Summary: Bill A.11078 (2025-2026) – Prohibits investment managers from assisting in investing moneys belonging to retirement system (New York)

Overview

  • Jurisdiction: New York
  • Session: 2025-2026
  • Introduced by: Assembly Member Rajkumar (Co-sponsor: Jenifer Rajkumar)
  • Committee: Governmental Employees
  • Introduced date: April 24, 2026
  • Purpose: To prohibit retirement boards/funds from contracting with, hiring, or engaging investment managers to invest moneys belonging to the retirement system and to prohibit renewal of existing contracts with investment managers.

Main purpose and intent

The bill seeks to remove the role of external investment managers in managing assets of the common retirement fund (and related retirement systems) in New York. It aims to ensure that, starting in 2026 (and in effect thereafter), the fund does not delegate investment authority to external managers and instead limits activity to internal management (excluding real property owned by the fund).

Key provisions and changes

  1. Prohibition on engaging investment managers (new contracts):

    • Beginning on the effective date of 2026 amendments, the retirement board is prohibited from entering into any contract to engage, hire, invest with, or commit to an investment manager to invest moneys belonging to the retirement system (excluding real property managed by the fund).
    • The term “investment managers” includes, but is not limited to, independent contractors identified by the retirement board.

  2. Prohibition on renewing existing contracts:

    • Beginning on the same effective date (2026 amendments), the fund must not renew any existing contracts to engage, hire, invest with, or commit to an investment manager to assist in obtaining investments for the fund.

  3. Definitions and scope:

    • Investment manager: Any person (other than an employee of the state comptroller) or entity engaged by the common retirement fund to manage a portion or all of an investment portfolio of the fund, excluding real property owned by the fund.
    • Manage: Includes, but is not limited to, analysis of portfolio holdings and the purchase, sale, and lending of investments.

  4. Effective date:

    • The new restrictions take effect on January 1 of the year following the enactment’s effective date (the act’s effective date is the first of January after it becomes law).

Who/what is affected

  • Affected entity: The New York common retirement fund system (and its retirement boards) that would otherwise engage external investment managers.
  • Excluded items: Real property owned by the fund is not affected by this prohibition; the prohibition specifically targets investment management services for investment of moneys belonging to the retirement system.

Procedural and timeline aspects

  • Effective date mechanics: The prohibitions become operative on the date specified by the act’s effective date, with the requirement to start applying on January 1 of the year after enactment.
  • Transition considerations: The act appears to prohibit both new engagements and renewals of existing investment-manager contracts, suggesting a mandatory shift away from external investment management for the fund’s investments.

Practical implications and potential impact

  • Management structure shift: The retirement fund would limit or eliminate external investment management arrangements, potentially increasing reliance on internal investment staff or alternative internal strategies.
  • Investment approach changes: Depending on current practices, this could affect portfolio diversification, leverage, and performance management that previously depended on external managers.
  • Administrative considerations: The retirement board may need to adjust governance, staffing, and internal controls to responsibly manage investment activities without external managers.
  • Policy rationale (inference): While not stated explicitly in the text provided, prohibiting investment-manager arrangements often aims to increase oversight, reduce costs associated with external management fees, or align investments with state policy objectives.

If you’d like, I can provide a comparison to current law (Education Law § 508(18)) and outline anticipated budgetary or governance ramifications, or draft a plain-language FAQ for retirees and stakeholders.

Compiled from official sources — confirm details with the bill’s official record.

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