HB 78: Employees' Retirement System of Georgia; total percentage of funds invested in alternative investments; raise limit

Georgia law limits how much of a public pension fund's assets can go into 'alternative investments,' a category that generally includes things like private equity, hedge funds, and real estate rather than traditional stocks and bonds. Under current law, most large pension systems can put up to 10% of their assets into these investments, but the law sets lower, fund-specific caps for some systems, including a 15% cap for the Georgia Firefighters' Pension Fund and a 5% cap for the Employees' Retirement System of Georgia. House Bill 78 amends the Public Retirement Systems Investment Authority Law (O.C.G.A. Title 47, Chapter 20, Article 7) to raise the Firefighters' Pension Fund's cap from 15% to 20%. It also deletes the separate 5% cap that applied only to the Employees' Retirement System of Georgia, which means that system would instead fall under the general 10% cap that applies to large retirement systems. The bill has already passed both chambers and repeals any conflicting laws.

• Raises the cap on alternative investments for the Georgia Firefighters' Pension Fund from 15% of its assets to 20%.
• Deletes the separate 5% alternative-investment cap that applied only to the Employees' Retirement System of Georgia.
• As a result of that deletion, the Employees' Retirement System of Georgia would instead be governed by the general 10% cap that applies to large retirement systems.
• Leaves unchanged the existing 10% general cap for large retirement systems, the 15% cap for the Peace Officers' Annuity and Benefit Fund, and the 5% cap for the Teachers Retirement System of Georgia.
• Repeals any other state laws that conflict with these changes.

The Georgia Firefighters' Pension Fund and the Employees' Retirement System of Georgia, along with the state employees, retirees, and firefighters whose retirement benefits are funded through these systems, are directly affected. The officials who manage investment strategy for these pension funds gain more flexibility under the new limits.

By allowing more money to flow into alternative investments like private equity or real estate, these two pension funds gain more flexibility to pursue potentially higher returns, but also take on the different risk profile that comes with those investment types, which can affect the long-term financial health of retirement benefits for firefighters and state employees.

• Section 1 revises paragraph (1) of subsection (d) of O.C.G.A. § 47-20-87, which governs alternative investment limits for eligible large retirement systems.
• Subparagraph (B) raises the Georgia Firefighters' Pension Fund's alternative investment cap from 15 percent to 20 percent of its assets.
• Subparagraph (D), which had capped the Employees' Retirement System of Georgia's alternative investments at 5 percent, is struck entirely, leaving that system subject to the general 10 percent cap in subparagraph (A).
• Subparagraph (B.1) keeps the Peace Officers' Annuity and Benefit Fund's cap at 15 percent, and subparagraph (C) keeps the Teachers Retirement System of Georgia's cap at 5 percent, both unchanged.
• Section 2 repeals any existing laws that conflict with these changes.

1. 2025-07-01Effective Date
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-46)
• Gary Richardson (R, HD-125)
• Bill Yearta (R, HD-152)
• Mike Cameron (R, HD-1)
• Rick Williams (R, SD-25)

1. PassedHouse voteFebruary 24, 2025

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

   PASSAGE: House Vote #72

2. PassedSenate voteApril 2, 2025

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

   PASSAGE: Senate Vote #427

• public pensions
• retirement system investments
• firefighter pensions
• state employee benefits