Biss051016Illinois taxpayers would know more about currently undisclosed investment fees charged to public pension funds under legislation sponsored by Senator Daniel Biss (D-Evanston).

Under current state law, these sometimes lucrative fees charged by private equity firms and hedge fund managers are not subject to public disclosure under Illinois’ Freedom of Information Act, even though taxpayers are on the hook for them.

“I find it extraordinary that we accept Wall Street’s demands that these fees be kept secret from the people who are responsible for paying them,” Biss said. “Not only are taxpayers shut out of knowing how much is being charged to the pension systems, the entity making those payments is not privy to the information either.

“The result is a system in which the people of Illinois are in the dark about the kinds of significant financial liabilities they’re being exposed to.”

According to a 2015 ranking by Institutional Investor’s Alpha magazine, the country’s 25 top-earning hedge fund managers raked in an estimated $11.6 billion in 2014. The previous year, the top 25 collectively earned nearly double that, estimated to be more than $21 billion.

Comparatively, the aggregate pay for all of the kindergarten teachers in the nation in 2014 was an estimated $8.5 billion.

The legislation, House Bill 6292, would bring greater transparency to investment fees by requiring public annual disclosures.

“Not only is this a transparency bill, it is a bill without an agenda,” Biss said. “Disclosure of these fees will lead to better decision making and perhaps healthier competition for the pension funds’ business.”

The Senate Executive Committee voted Wednesday to send the legislation to the Senate floor for consideration.

Category: News

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