Though most attention is on the presidential race this election season, several state treasurer races could determine the future of pension funds and other retirement programs for Americans all over the country.

Many of those vying for the office of state treasurer are focused on improving their states’ pension funds, while other candidates hold conflicting views over state auto IRA programs — programs that create a retirement plan for those whose employers don’t offer one. In a handful of states, ESG investing is a key issue in the treasurer’s race, given some Republicans’ strong views against what they call a “woke” agenda.

Here are the state treasurer races to watch and what they each entail:

In North Carolina, state Rep. Wesley Harris, a Democrat, is running for treasurer against Republican candidate Brad Briner, former co-CIO of investment firm Willett Advisors, which manages the philanthropic assets of Michael R. Bloomberg, including those of Bloomberg Philanthropies. Briner left his position at Willett to run for office, according to his campaign website.

The state treasurer serves as the sole trustee of the $123 billion North Carolina Retirement Systems, Raleigh. The candidates are vying to succeed Treasurer Dale R. Folwell, who has held the title since 2017. Folwell decided not to run again, instead launching a campaign for the Republican gubernatorial nomination, which he lost in March.

Harris, who holds a Ph.D. in economics and is a former economic consultant, promises to “use his economic know-how to expand our capacity for investment,” according to his campaign website.

He specifically criticizes NCRS, contending that the state is “leaving growth on the table, with a larger portion of our pension fund sitting in cash than any comparable state.”

As of March 31, NCRS’ actual asset allocation was 39.6% public equity; 27.6% investment-grade fixed income and cash; 8.2% pension cash; 6.1% opportunistic fixed income; 5.1% core real estate; 5% private equity; 4.6% inflation-sensitive assets; 2.1% multistrategy portfolio and 1.7% non-core real estate.

The pension fund returned a net 8.2% for the fiscal year ended June 30, falling below its policy benchmark of 10.5% for the period.

Proposed changes to the state pension fund

Briner’s campaign website outlines a detailed plan for reforming the retirement system, which he says is underperforming compared to similar-sized plans in other states. Briner, who holds an MBA from Harvard Business School, recommends two major changes: a restructuring of its governance and an overhaul of investment strategy.

North Carolina is one of only three states that has the “sole trustee” model for their pension fund, which Briner says should be changed.

“As a general matter, small groups make better investment decisions than solo actors,” Briner states on his website. “That is why successful private sector investment firms have investment committees and why state pension plans have almost all followed suit.”

The Republican candidate cites a 2014 study commissioned by the state treasurer’s office which recommended switching to a board of trustees model as well. Briner himself is a member of the board of trustees at the University of North Carolina at Chapel Hill and Phillips Exeter Academy, as well as a board member for the Boston Omaha Corp.

Harris feels the sole trustee model makes the treasurer “accountable to the people, elected by the people. If the people do not like how they invest the money, they can choose somebody else,” he said in an interview with student news site The 9th Street Journal. He added that creating a board of trustees would give more power to the legislature, “and it gets super politicized.”

When it comes to investment strategy, Briner recommends shifting the pension fund’s asset allocation to focus on sectors such as real estate and traditional energy, which he said can provide better returns. He also recommends the fund engage in co-investments, invest more capital in fewer managers and reduce manager constraints.

Briner has a slogan on his campaign website that reads, “Professional Experience not Partisan Politics.” Harris says he aims to “keep the treasurer’s office de-politicized and focus on great returns.”

However, Briner also signals he has a negative view of ESG, stating on his website that “the ESG crowd has driven a lemming-like abandonment of sectors like (the) traditional energy sector that — like tobacco a generation ago — creates compelling returns for the non-politicized investors who remain.”

In June 2023, an anti-ESG bill became law in North Carolina after Republican lawmakers voted to override Democratic Gov. Roy Cooper’s veto. The law requires the treasurer to only evaluate investments based on pecuniary factors and blocks state entities from considering ESG factors when hiring, firing or evaluating employees and awarding state contracts.

Cooper vetoed the bill as he said it limits the treasurer’s ability to make decisions in the best interest of state retirees, while Folwell was supportive.

Harris voted against the bill when it first passed the North Carolina House and also voted against the initiative to override Cooper’s veto.

Incumbent Treasurer Stacy Garrity, a Republican, is on the Pennsylvania ballot alongside Democratic candidate Erin McClelland, a former mental health counselor, small business owner and project manager for the Allegheny County Department of Human Services.

Garrity, who first took office in 2021, said she will “continue her fight for a tax-deductible 401(k)-style retirement savings program for Pennsylvanians not currently covered by pensions or other retirement savings vehicles,” according to her campaign website.

In June 2023, the Pennsylvania House of Representatives passed a bill to create the Keystone Saves Program, a state-run auto IRA program for employees of companies with five workers or more that do not currently offer a retirement plan. The legislation would require such employers to join the program, though there would be no penalty for employers that choose not to join, and the bill specifically states that no penalties can ever be assessed.

The bill currently awaits an uncertain future in the state Senate, where it has yet to move.

McClelland is a staunch critic of such a program, calling it a “snake-oil securities scam” and “The George W. Bush Great Recession Starter Kit” in her campaign prospectus.

“As the Pennsylvania state treasurer, I will fight to protect our workers and our taxpayers from dangerous, unregulated financial products and scam investments like the Keystone Saves program,” McClelland states.

The Pennsylvania treasurer serves on approximately 20 boards, including those overseeing the $75.2 billion Pennsylvania Public School Employees’ Retirement System and the Pennsylvania State Employees’ Retirement System, which had a $36.4 billion defined benefit plan and $189.4 million defined contribution plan as of Dec. 31, 2023.

Garrity states on her website that she “took on the waste and lack of accountability at the two largest state pension funds and worked to make certain that fees were reduced and investments earned more interest” during her time as treasurer.

Garrity also points to her support for the PA 529 College and Career Savings Program, contending that she “helped families save a total of $11 million by reducing fees and costs, while increasing participation.” The program offers two different 529 plans, with only one of the plans requiring Pennsylvania residence from the account owner or beneficiary.

In Oregon, three candidates are vying for the role of state treasurer, as current Treasurer Tobias Read is running for secretary of state.

Democratic candidate Elizabeth Steiner is a state senator and associate professor at Oregon Health & Science University. She touts her experience serving as the state’s chief budget writer and says she “will continue to grow OPERF (the Oregon Public Employee Retirement Fund) and invest in ways that protect the pensions of hard working Oregonians,” according to her campaign website.

“We can meet our obligations to those who serve the state in such important ways while also reducing the unfunded PERS liability, which in the long-run allows us to allocate more funding to schools, road improvements, public safety, and other essential programs,” Steiner said on her website.

Steiner told The Oregon Capital Chronicle that she would specifically invest the pension fund’s portfolio “with an eye towards long-term stability, rather than volatile short-term gains.”

The state treasurer has a seat on the Oregon Investment Council, Tigard, which oversees the investment and allocation of all the state’s trust funds, including the $94.5 billion Oregon Public Employees Retirement Fund. As of Dec. 31, 2022, OPERF had an unfunded liability of $28 billion.

Steiner also promises to “leverage the power of Oregon’s investments to build toward a net zero portfolio and push companies to adopt clean energy goals.” Before it became law, Steiner was a chief sponsor of state legislation requiring OPERF to divest up to $1 billion in coal-related holdings.

Another state senator, Brian Boquist, is running for treasurer as the Republican candidate. An Army veteran, Boquist lists three occupations on his LinkedIn besides state senator: managing partner of Powder River Cartridge Co., managing partner of ICI Cattle & Timber Co., and executive vice president of International Charter Inc.

Boquist is barred from running for senator again, due to a state law punishing lawmakers who miss 10 or more days of work. He was among a group of 10 Republican senators that staged a walkout lasting six weeks in 2023, according to reporting from the Oregon Capital Chronicle.

Boquist told The Oregon Capital Chronicle that he would work to fix the pensions system’s unfunded liability by making a series of changes, including reducing “closed door private equity fund” companies located outside Oregon and reducing fixed income “government bond type investments” outside Oregon over time.

“We need a self-help effort to put Oregon first,” Boquist contends, adding that “Oregon private sector housing investments should be increased via direct and depository actions,” and “fixed income investments should be done internally to address Oregon road, sewer and water infrastructure issues.”

Mary King, the candidate representing the Working Families Party, is an economist, professor and union leader, according to a news release from the party website.

She wants to “phase out the $53 billion Oregon has invested in ‘corporate raider’ private equity,” as well as “divest from fossil fuels, arms manufacturers and countries violating international law,” the news release states.

In Vermont, incumbent Treasurer Mike Pieciak will face off against Joshua Bechhoefer, a credit analyst associate at Farm Credit East.

The treasurer is one of the commissioners on the Vermont Pension Investment Committee, which manages the investments of the $6.4 billion Vermont State Retirement Systems.

Pieciak says on his campaign website that he will work “to fully fund the state’s pension system and drive down unfunded liabilities.”

Prior to his role as treasurer, Pieciak led the state’s Department of Financial Regulation, where he worked on reforming the state’s pension funds.

“Appointed to Vermont’s Pension Task Force by the Legislature, Mike spent months working alongside lawmakers and union representatives to forge a compromise that strengthens Vermont’s pension system and reduces its unfunded liabilities by $2 billion,” Pieciak’s website states. “Passed unanimously by both the House and Senate, this proposal is now law.”

The 2022 law was aimed at boosting the Vermont State Teachers’ Retirement System and the Vermont State Employees’ Retirement System, which had funded ratios of 52.9% and 67.6%, respectively, at the end of 2021. Specifically, the legislation called for teachers and state employees to gradually boost their contributions over a three- to five-year period and accept more modest cost-of-living adjustments, so the state could make a $200 million payment to the state pension systems to pay down unfunded liabilities in fiscal year 2022. It also allowed for the state to make ongoing additional payments beginning in 2024 that ramp up to $15 million and remain at that level until the pension systems are 90% funded.

Bechhoefer said in an interview with local news outlet Vermont Public that he would be open to restructuring the state’s pension system.

“I’m willing to open up the can and say, ‘Hey, we should have a real discussion about how our population is aging, our revenue base is potentially shrinking over time, and we should have a talk about restructuring and making sure that our pensions are fully funded or we’re paying as we go with a defined contribution plan,’” Bechhoefer said.

He added that the pension funds’ investments in BlackRock are “deleterious to the state of Vermont,” and he would want to “look at alternatives towards spinning it off.”

In June 2023, Vermont Gov. Phil Scott signed into law a state-run auto IRA program known as VT Saves, which will require employers with five or more workers to enroll in the program or face penalties.

“VT Saves will make saving for retirement easy and automatic, at no cost to employers and no ongoing cost to taxpayers,” Pieciak states on his website. The bill was a collaborative effort between Pieciak and state legislators, and the program is administered by the Vermont treasurer’s office.

In other state treasurer races across the U.S., environmental, social and governance investing is in the spotlight.

Utah Treasurer Marlo Oaks, who is running for re-election as a Republican, has a whole tab on his campaign website titled, “Stop ESG.”

In 2022, Oaks was one of several state officials, including the governor, to sign a letter objecting to S&P Global’s decision to publish ESG scores for U.S. states.

When asked if the treasurer should consider factors beyond getting the best investment return, Neil Hansen, the Democratic candidate for Utah treasurer, told The Salt Lake Tribune, “The office should never be used for political gain.”

Miles Pomeroy, the candidate for the Utah Forward Party, said that one of his priorities as treasurer would be to “stay independent from national party politics, bickering, and grandstanding,” according to his campaign website.

Utah’s state treasurer sits on the board of the Utah State Retirement Board, which oversees the state’s $59.9 billion in DB and DC assets.

In Arkansas, an anti-ESG law passed in 2023 is one of the issues at the center of the race.

The law, known as Act 411, set up an ESG oversight committee at the treasurer’s office to compile a list of financial services companies that discriminate against companies based on ESG considerations, such as energy, fossil fuel, firearms or ammunition companies.

John Pagan, the Democratic candidate for treasurer, told the Arkansas Advocate that the law is an example of the state government “weaponizing” investment money in “culture wars.” He added that he would enforce the law unless it is struck down in court.

Michael Pakko, the Libertarian candidate, called the law “a big nothing burger” and told the Arkansas Advocate it’s just “posturing” from the state Legislature.

When first announcing his run in 2023, Secretary of State John Thurston, the Republican candidate, told the Arkansas Democrat-Gazette that he was “committed to working with the ESG oversight committee, the governor and the Legislature to ensure that Arkansas tax dollars are not being used by out-of-state providers imposing their viewpoints and standards on Arkansas investment opportunities.”

The Arkansas treasurer also serves on the board of trustees overseeing the $22.4 billion Arkansas Public Employees’ Retirement System, Little Rock.

Missouri Treasurer Vivek Malek is running for re-election as a strong advocate of anti-ESG policy. He says he is “committed to preventing taxpayer funds from being influenced by ‘woke’ special interests,” according to his campaign website, and “he supports a ban on state investments that adhere to liberal ESG guidelines.”

Malek also supports divesting from Chinese companies, specifically in his role as a member of the board of trustees of the $9 billion Missouri State Employees’ Retirement System, Jefferson City.

In December, the MOSERS board voted to sell most of its investments in Chinese companies, with Malek’s campaign highlighting the move in an email to supporters as “protecting taxpayer money from the risks associated with investing in a nation that has repeatedly proven adversarial,” according to the Missouri Independent.

Mark Osmack, the Democratic candidate, told St. Louis Public Radio that if the state wants to divest from China, it should be done in a way that doesn’t hurt the state’s agriculture industry.

“I think there’s a way to make this work to where we are not supporting communist nations to the detriment of the United States or our allies, while also maintaining strong economic ties that benefit Missouri farmers,” Osmack said.

Libertarian candidate John Hartwig Jr. said he wants to “initiate a non-partisan review of the policies and procedures of the office of Missouri State Treasurer,” according to his campaign website. Green party candidate Reagan Haase does not have a website for her campaign.