HB78: HB78 Employees' Retirement System of Georgia; total percentage of funds invested in alternative investments; raise limit

Georgia law caps how much of a public pension fund's assets can go into 'alternative investments,' a category that includes things like private equity, hedge funds, and other non-traditional holdings, as opposed to standard stocks and bonds. This cap is set out in the Public Retirement Systems Investment Authority Law (O.C.G.A. § 47-20-87). House Bill 78 amends that law by rewriting the subsection that lists the specific caps for different retirement systems. The bill's text clearly raises the Georgia Firefighters' Pension Fund's cap from 15 percent to 20 percent of its assets. The bill's title also states that it raises the cap for the Employees' Retirement System of Georgia, and the revised text sets that system's limit at 5 percent of its assets, though the extracted text does not clearly show what the prior figure was. All other systems, including the Peace Officers' Annuity and Benefit Fund and the Teachers Retirement System of Georgia, keep their existing caps. The bill repeals conflicting laws and does not list a separate effective date beyond standard enactment.

• Rewrites O.C.G.A. § 47-20-87(d)(1), the section capping how much of a public pension fund's assets can go into alternative investments.
• Raises the alternative investment cap for the Georgia Firefighters' Pension Fund from 15 percent to 20 percent of its total assets.
• Sets the alternative investment cap for the Employees' Retirement System of Georgia at 5 percent of its assets, consistent with the bill's stated purpose of raising that system's limit.
• Leaves the general 10 percent cap for other eligible large retirement systems, and the 15 percent cap for the Peace Officers' Annuity and Benefit Fund, unchanged.
• Repeals any existing state laws that conflict with these new caps.

The bill affects the Georgia Firefighters' Pension Fund and the Employees' Retirement System of Georgia, along with the firefighters, state employees, and retirees whose pensions those funds manage. It also indirectly touches the investment managers and boards that oversee those funds' portfolios.

Raising the alternative investment caps lets these pension funds put more money into private equity, hedge funds, and similar assets, which can offer higher returns but also carry more risk and less liquidity than traditional stocks and bonds. This changes the investment options available to funds that pay retirement benefits for firefighters and state employees.

• Section 1 revises paragraph (d)(1) of O.C.G.A. § 47-20-87, the section governing alternative investment limits for eligible large retirement systems.
• Subparagraph (d)(1)(A) keeps the general rule that alternative investments cannot exceed 10 percent of an eligible large retirement system's assets.
• Subparagraph (d)(1)(B) raises the Georgia Firefighters' Pension Fund's alternative investment cap from 15 percent to 20 percent of its assets.
• Subparagraph (d)(1)(B.1) keeps the Peace Officers' Annuity and Benefit Fund's cap at 15 percent of its assets.
• Subparagraph (d)(1)(C) keeps the Teachers Retirement System of Georgia's cap at 5 percent of its assets.
• Subparagraph (d)(1)(D) sets the Employees' Retirement System of Georgia's cap at 5 percent of its assets.
• Section 2 repeals any conflicting state laws.

1. 2025-05-01Effective Date 2025-07-01
2. 2025-05-01Act 63
3. 2025-05-01House Date Signed by Governor (House)
4. 2025-04-08House Sent to Governor (House)
5. 2025-04-02Senate Passed/Adopted (Senate)
6. 2025-04-02Senate Third Read (Senate)
7. 2025-04-02Senate Taken from Table (Senate)
8. 2025-04-02Senate Tabled (Senate)

• Lehman Franklin (R, HD-160)Primary sponsor
• John Carson (R, HD-046)
• Gary Richardson (R, HD-125)
• Bill Yearta (R, HD-152)
• Mike Cameron (R, HD-001)
• Ricky Williams (R, SD-025)

1. PassedHouse voteFebruary 24, 2025

   161 yea, 9 nay (2 not voting, 8 absent)

   Passage: House Vote #72

2. PassedSenate voteApril 2, 2025

   35 yea, 18 nay (2 not voting, 1 absent)

   Passage: Senate Vote #427

• public pensions
• retirement systems
• investment rules
• firefighter pensions
• state employee benefits