Maximizing Value for our Members and Beneficiaries

Recent executive order on “ESG” investing will not impact NHRS portfolio

Apr 13, 2023
  • Investments

For Immediate Release: April 13, 2023

Contact: Marty Karlon, Director of Communications and Legislative Affairs, (603) 410-3594;

CONCORD, NH – This week, Gov. Christopher T. Sununu signed Executive Order 2023-03: “An Order Directing State Entities to Prioritize Investment Returns and Minimize Risk in Fulfillment of Their Fiduciary Duties.”

The order, in part, encourages the New Hampshire Retirement System (NHRS, the retirement system) to avoid investment funds and strategies solely based on non-financial considerations, including environmental, social, and governance (ESG) criteria.

This executive order will not impact the retirement system’s $11 billion investment portfolio and decision-making processes.

In lay terms, the retirement system’s goal has always been – and continues to be – to make prudent, long-term investments designed to meet its funding requirements. The retirement system’s primary goal is to obtain the highest return based on investment strategies at a prudent level of risk and volatility. ESG is not considered as an end unto itself, but is one of many factors viewed in regard to its potential impact on our ability to obtain the highest return for New Hampshire’s active and retired public employees.

Under existing constitutional and statutory provisions governing NHRS, as well as general trust law under the Internal Revenue Code, fiduciaries must follow the duty of loyalty at all times.  Pursuant to RSA 100-A:15, I-a(a)(1), this duty requires NHRS fiduciaries, including its Board of Trustees and members of its Independent Investment Committee (IIC), to make all decisions “[s]olely in the interest of the participants and beneficiaries.” 

Further, Part I, Article 36-a of the NH Constitution requires that: “All of the assets and proceeds, and income there from, of the New Hampshire retirement system … shall be held, invested or disbursed as in trust for the exclusive purpose of providing for such benefits and shall not be encumbered for, or diverted to, any other purposes.”

The Board of Trustees, with research and input from NHRS investment staff, outside experts, and a recommendation from the IIC, sets an investment policy that includes asset allocation targets and ranges that seek to maximize return at a prudent level of risk.  All of the NHRS stakeholders continuously monitor and evaluate NHRS plan performance on a monthly basis, in addition to the IIC making determinations regarding the hiring, retention and disposition of fund managers.

Since June 30, 2009 – the depths of the great financial crisis – NHRS trust fund assets have more than doubled, despite paying out more than $9 billion in benefits over that same period. Nearly 80 percent of benefit recipients continue to reside in New Hampshire, which means most of these benefit payments remain in-state, helping support the local economy.

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About NHRS

NHRS provides retirement, disability, and death benefits to its eligible members and their beneficiaries.  The State of New Hampshire and more than 460 local government employers participate in NHRS for their employees, teachers, firefighters, and police officers. NHRS has approximately 48,500 active members and 42,000 benefit recipients. NHRS administers a defined benefit plan qualified as a tax-exempt entity under sections 401(a) and 501(a) of the Internal Revenue Code.

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