STATUTORY CHANGES ALLOW STATE OF WISCONSIN INVESTMENT BOARD TO MAKE PRUDENT INVESTMENTS FROM OTHER THAN ENUMERATED LIST, VAN HOLLEN REASONS IN FORMAL OPINION
Tuesday, December 16, 2008
MADISON - Attorney General J.B. Van Hollen today issued a formal opinion concluding that 2007 Wisconsin Act 212 - which made changes to the authority of the State of Wisconsin Investment Board ("SWIB") under Wis. Stat. ch. 25 regarding the management of Wisconsin Retirement System assets - allows SWIB to select investments from other than those on a statutorily-enumerated list.
Van Hollen found that the statutory changes expanded SWIB's authority from making solely those investments enumerated in Wis. Stat. ch. 25 to making management decisions consistent with the prudent investor standard. Van Hollen's opinion further noted that the statute as amended expresses no preference for investments on the legal list as opposed to other investments.
Van Hollen also said that SWIB would be held to the same standard of prudence regardless of whether it invested from the legal list. The standard of prudence, articulated in Wis. Stat. 25.15(2), requires SWIB to manage the money and property with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a similar capacity, with the same resources, and familiar with like matters, exercises in the conduct of an enterprise of a like character with like aims.
The opinion was requested by Keith Bozarth, the Executive Director of SWIB. A copy of the original request is available at
http://www.doj.state.wi.us/ag/opinions/2008_12_16BozarthSWIBAuthority-Request.pdf.
A copy of Attorney General Van Hollen's formal opinion is available at
http://www.doj.state.wi.us/ag/opinions/2008_12_16BozarthSWIBAuthority.pdf.
