Connecticut establishes Investment Board and sunsets Advisory Council in new pension review bill

On April 9, 2025, the Connecticut State Legislature introduced Senate Bill 1557, a significant legislative proposal aimed at reforming the state's investment oversight structure. The bill seeks to establish a new Investment Board while simultaneously phasing out the existing Investment Advisory Council. This change is intended to streamline the management of the state's pension funds and enhance their investment performance.

One of the key provisions of Senate Bill 1557 mandates the Office of Legislative Management to solicit proposals for an advisory firm tasked with conducting an independent review of the investment performance of Connecticut's pension funds. This review will compare the state's investment outcomes with those of peer states, with the advisory firm required to submit an annual report detailing its findings. This initiative aims to ensure transparency and accountability in the management of public funds, addressing concerns about the effectiveness of current investment strategies.

The introduction of this bill has sparked notable discussions among lawmakers and stakeholders. Proponents argue that the establishment of the Investment Board will lead to more informed decision-making and improved financial outcomes for the state's pension systems. Critics, however, express concerns about the potential disruption caused by dismantling the Investment Advisory Council and question whether the proposed changes will yield the desired improvements in performance.

The implications of Senate Bill 1557 extend beyond administrative restructuring. If enacted, the bill could significantly impact the financial health of Connecticut's pension funds, which are crucial for the retirement security of state employees. Experts suggest that a more rigorous evaluation process could lead to better investment strategies, ultimately benefiting taxpayers and retirees alike.

As the legislative process unfolds, the future of Senate Bill 1557 will depend on ongoing debates and potential amendments. Lawmakers will need to weigh the benefits of reform against the challenges of implementation, making this bill a focal point in Connecticut's legislative agenda for the coming months.