The standards of fiduciary conduct under state law and, indirectly, under federal law impose on retirement plan fiduciaries "the highest standard of conduct known to the law." The application of this standard has given rise to a number of well-publicized controversies involving public sector benefit plans, including economically targeted investments, prudent investment practices, proxy voting and corporate governance, and governmental "raids" on pension funds. Attorneys in our Public and Multiemployer Plans Group have:

•	Represented the Philadelphia Municipal Retirement System when its trustees were requested to save the city sponsor from bankruptcy by purchasing city-issued "junk" bonds.
•	Drafted legally acceptable investment guidelines for the trustees of the Baltimore City  Retirement System when they were directed to invest in local economically targeted investments.
•	Advised the CalSTRS Board, the Texas Teachers Board, and the Comptroller of New York State on the establishment and monitoring of their private equity investment programs.
•	Rendered an Opinion for the LACERA and Oakland Boards on their fiduciary responsibilities in connection with changes in LA County and Oakland funding policies.
•	Advised the CalSTRS and Florida SBA Boards on the divestment of tobacco-related equity investments.
•	Counseled the Texas Teachers and CalSTRS Boards on conflict-of-interest investment issues faced by their trustees and staff.
•	Advised the CalSTRS and Ohio PERS Boards on proxy voting and other corporate governance policies.

The Board of the California State Teachers Retirement System
Last year the Board of CalSTRS asked Groom’s Public and Multiemployer Plans Group to address fiduciary issues stemming from the decision by the California legislature and governor to withhold $500 million in state contributions due and owing to the Plan.

At first, the decision was made to withhold the entire amount based on the expressed need of the state to use the money elsewhere.  We advised the Board that this decision would constitute an illegal raid on the assets of the Plan.  The Board so advised state representatives.

The state representatives then proposed a re-payment schedule to keep the Plan whole in the long term.  We analyzed the proposal and recommended amendments in favor of the Plan.  Agreement was not achieved.

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