(The Center Square) — South Carolina Gov. Henry McMaster ceremonially signed a measure mandating the state’s retirement system to consider only “pecuniary factors” when making investment decisions.
H.3690, the ESG Pension Protection Act, effectively bans the South Carolina Retirement System Investment Commission from weighing environmental, social and governance factors and orders the system to maximize the highest rate of return for beneficiaries. The state House passed the measure by a 103-5 margin, while the state Senate passed it 45-0.
The RSIC manages and invests assets held in trust for the beneficiaries of the five state-defined benefit plans of the state’s RSIC.
“South Carolina’s economy continues to break records thanks to our conservative, fiscally responsible approach,” McMaster, a Republican, said in a statement. “This bill – which passed with overwhelming bipartisan support – is yet another example of our commitment to responsible financial stewardship and will safeguard the interests of our retirees and taxpayers from the liberal ESG agenda.”
According to an estimate from the South Carolina Revenue and Fiscal Affairs Office, RSIC outlined three scenarios to meet the bill’s requirements: managing proxy voting in-house, hiring an external proxy advisor, or delegating the proxy voting to an external investment manager. The estimate indicated the measure could require the RSIC to spend an additional $1 million to hire five additional employees, depending on how the legislation is implemented.
It would not, however, impact retirement funds.
“This law takes necessary steps to keep South Carolinians’ retirement savings protected from politically motivated investments, and we are thrilled the legislative body and Governor took action for their constituents by passing the measure,” Americans for Prosperity-SC State Director Candace Carroll said in a statement.
“Budgets are already strained in our current economy and people who have saved their entire lives should see their money maximized, not penalized by the woke ESG agenda,” Carroll added. “South Carolinians want limited government in their lives and especially in their pocketbooks.”
