Amendment would allow public money investment

Stocks may not have been performing so well recently, but that is not always the case.

And one of the seven proposed state constitutional changes on the ballot Nov. 4 will ask for your opinion as to whether public money reserved in state and local trusts for non-pension benefits, such as health care and life insurance for former government employees, should be allowed to be invested in the stock market.

According to the Public Affairs Research Council of Louisiana, stock market investments for these benefits is currently constitutionally prohibited, though it is allowed for state retirement systems that include public money and employee contributions.

This means currently, low-risk, low-yield investments in places like the U.S. Treasuries, U.S. government agencies, bank certificates of deposit and investment-grade commercial paper are the only ones allowed for non-pension benefits.

Related legislation would mitigate some of the risk for local trusts by ensuring not too much is put in one basket — for example, no more than 5 percent in any one company, 25 percent in any single industry or 55 percent in equities.

State Sen. Troy Hebert, D-Jeanerette, said investing experts testified this is a way to diversify investments and to give the people investing the money tools to get the best returns possible.

“The stock market obviously has done well historically,” said Hebert, who added that given the current market crisis, he does not give the amendment “a snowball’s chance in anywhere.”

The proposed amendment, Act 934, was authored by state Rep. Hollis Downs, R-Ruston, and passed unanimously in the Louisiana House and the Senate.