Gov. Rick Snyder today announced the creation of the State of Michigan Investment Board and the abolition of the Investment Advisory Committee.
"Updating our current pension investment system will benefit and protect hundreds of thousands of Michiganders during their retirements," Snyder said. "By dissolving the Investment Advisory Committee and replacing it with the State of Michigan Investment Board, we are able to ensure Michigan pensions are invested in a more robust way."
Executive Order 2018-10, signed today by the governor, switches the state pension plan governance structure from a sole fiduciary model to a board model. This will shift fund investment responsibilities from the state treasurer to the State of Michigan Investment Board.
The board will be comprised of the state treasurer, who will serve as the board's chairperson, the state budget director and three individuals appointed by the governor.
"This is an important step that modernizes our approach to managing the state and teacher retirement funds," State Treasurer Nick Khouri said. "The new board will provide collective expertise and oversight of the state's investments to ensure yesterday's promises are paid in the future."
EO 2018-10 also does the following:
Modernizes the old governance model to better suit today's investment system and ensures the safety and high performance of the investment of more than $70 billion of Michigan retirement funds.
Conforms to the governance structure of nearly all other states.
Establishes experience requirements for board members.
Addresses potential conflicts of interest.