Resolution could take away some of RSA's Bronner's power -, GA News Weather & Sports

Resolution could take away some of RSA's Bronner's power

File Photo: Dr. David Bronner File Photo: Dr. David Bronner

In a surprise move the Employees Retirement System Board of Control approved a resolution Tuesday that could limit the role that Dr. David Bronner, the Retirement Systems of Alabama's long time CEO, has over investments.

Curtis Stewart, who was appointed to the ERS Board by Governor Robert Bentley six months ago, presented the resolution at the beginning of Tuesday's regularly scheduled meeting.

"I wanted to write up something that just allowed a procedure to be put in place, to give the staff and the secretary-treasurer the freedom to make day-to-day transactions, which is what they need and they say they've always wanted, but would still allow the investment committee to function," Stewart said. "And I think this does both."

Stewart is a state employee who works as a Deputy Commissioner in the Department of Revenue. Only one other board member knew of Stewart's intentions before Tuesday's meeting and it caught Bronner off guard.

"I guess we'll have a meeting in February to decide what my authority really is within the Employees System," Bronner told reporters following the meeting.

The Employees Retirement System is the pension fund for all non-education state employees. According to the RSA's 2012 Annual Report, the fund's investment had assets worth more than $9 billion. For comparison, the Teachers Retirement System reported investments and assets worth more than $18 billion.

Bronner has served as CEO of the RSA for nearly 40 years and has enjoyed proxy control over investment decisions. Put another way, Bronner has been allowed to make investment decisions on behalf of the Teachers Retirement System and Employees Retirement System for decades without requiring the direct oversight of a committee.

"That's just not how Wall Street works," Bronner said. "A simply illustration is that if someone calls and says I have a half a million shares of IBM to sell, do you want them or not? Do you think I can call back in a week and find out? It doesn't work that way."

When asked if he thought the move by Stewart, who's held his seat on the board for less than a year, was more politics or policy related, Bronner said, "politics."

Tuesday wasn't the first time that the ERS has seen proposed changes from gubernatorial appointees. Former Governor Jim Folsom's appointed members attempted to make changes to the way investments are decided but they later backed off their requests.

Stewart says there is no political motivation behind the resolution that would essentially cede control over investments to the board's investment committee. He also said he hasn't talked with Gov. Robert Bentley about the resolution. Gov. Bentley and Dr. Bronner have recently clashed over the governor's decision not to expand Medicaid.

"I have had absolutely no conversations with the governor about this, certainly not this resolution" Stewart said. "In fact, since I was appointed to the board I haven't had a conversation with the governor about the board. He just said to me when he appointed me to keep my eyes open and do my duty seriously."

Bronner and the staff of the RSA have until February 1, 2014 to propose a sort of procedure for the approval of investment decisions. It is possible that wholesale changes to the procedure could be adopted, or no changes and Bronner and the RSA staff reach some sort of agreement when it comes to how investments are decided.

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