NUNN’S BILL TO PROTECT STATE PENSION INVESTMENTS FROM POLITICAL AGENDAS WITH BESHEAR FOR CONSIDERATION

NUNN’S BILL TO PROTECT STATE PENSION INVESTMENTS FROM POLITICAL AGENDAS WITH BESHEAR FOR CONSIDERATIONt

Nunn encourages the Governor to sign SB 183 into law

FRANKFORT, Ky. (March 20, 2025)—Senate Bill (SB) 183, sponsored by Sen. Matt Nunn, R-Sadieville, received final legislative approval Friday and now awaits action from Governor Andy Beshear. The measure requires investment decisions for Kentucky’s state-administered retirement systems to focus solely on financial interests, not political or social agendas.

SB 183 comes as national scrutiny grows over proxy advisory firms’ influence on investment decisions. Prominent market leaders have criticized the dominance of Glass Lewis and Institutional Shareholder Services (ISS), which control 90 percent of the proxy advisory market. Those proxy advisors have promoted ideological agendas instead of sound financial strategies.

Under SB 183, proxy advisers who make recommendations on voting Kentucky’s shares in its retirement system investments must either follow a company’s board of directors' recommendations or, if voting against them, provide a detailed economic analysis showing their decision financially benefits Kentucky’s retirees and pension beneficiaries.

The legislation prohibits these large proxy advisory firms from prioritizing ESG (environmental, social, and governance) goals over financial performance, which will protect current and future retirees from investment strategies that could reduce stock value and pose a risk to pension stability.

“This bill is about financial stewardship and protecting the hard-earned retirements of Kentucky’s public employees,” Nunn said. “Investment decisions ought to be based on economic returns, not ideological agendas. Public employees deserve a pension system focused on their financial security.”

Recent national attention on the performance of proxy advisors demonstrates the importance of SB 183. ISS and Glass Lewis have influenced corporate governance decisions while selling consulting services to companies seeking their support—an inherent conflict of interest. ISS’s recent shift in diversity, equity, and inclusion (DEI) policies provoked criticism from pension fund managers, demonstrating that proxy firms disproportionately influence investment strategies. This legislation prevents state pension funds from being subjected to external political pressures. 

“This bill is on the Governor’s desk today, and I really hope he signs it into law,” Nunn added. “It’s the right thing to do for our teachers and state employees. They deserve to know their pension system’s primary focus is getting the best financial returns possible for their retirements.”

Additional information can be found here in a Wall Street Journal editorial.

Follow updates at Legislature.ky.gov.

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Sen. Matt Nunn represents the 17th Senate District, including Grant and Scott Counties, southern Kenton County, and northwestern Fayette County. He is co-chair of the Budget Review Subcommittee on Economic Development, Natural Resources, and Environmental Protection. Nunn is also a member of the Senate Committees on Economic Development, Tourism, and Labor; Appropriations and Revenue; Licensing and Occupations; Agriculture; and Veterans, Military Affairs, and Public Protection. Additionally, Nunn serves on the Legislative Oversight and Investigations Committee.

Please visit Legislature.ky.gov for more information on Senate Majority Caucus members and the 2025 Legislative Session, including committees, membership, legislation, and more.

Live legislative coverage is available at KET.org/legislature and via the Legislative Research Commission YouTube channel.