Project Source Code Legislative Initiative

Fiduciary duty is best understood as a “Duty to follow instructions.” It’s the obligation of a fiduciary to follow the instructions from a beneficiary. The scope and deliverables of that agreement are defined in a trust document and when it comes to public pensions for, say Massachusetts, the agreement takes shape in the governing laws.

That’s the basis for MA Senate bill S.1644. Better instructions equals better fiduciary duty.

The origin of the legislative initiative called “Project Source Code” comes from three sources:

  1. Tamar Frankel, the law professor emerita from Boston University and one of the world’s foremost experts on the powers of fiduciary duty.
  2. The very public partisan debate in the US about whether ESG-rated securities comply with fiduciary duty in state-level public pension plans.
  3. The history of public pensions rooted in a public good to enhance society and the economy.

A stickler technician, Prof. Frankel is very clear that fiduciaries must follow instructions as part of their duty to beneficiaries or face accusations of fiduciary duty breaches. “It doesn’t matter what you want if it’s not explicit in the trust document.”

While there are all kinds of fiduciaries, public pension fiduciaries like MassPRIM are guided by the Commonwealth’s governing law (MGL Chapter 32, aka the trust document). This matters because of the enormous financial wealth of public pension fiduciaries that affects the economy.

Meanwhile, the US media showcased the lack of consensus about what “fiduciary duty” means in the context of public pensions.

  • In June 2022, Texas Governor Abbott, supported subsequently by other GOP governors, signed an anti-ESG bill into law.
  • In August, 19 Republican State Attorneys General, in an eight-page letter, excoriated asset manager BlackRock for its “quixotic climate agenda” [that seems] “ motivated by interests other than maximizing financial return.”
  • In September, 13 Democratic state treasurers, including Deborah B. Goldberg of Massachusetts, issued a statement of support for ESG.
  • In March 2023, the US congress passed an anti ESG-bill that (as of this writing) US President Joe Biden was expected to veto.

This feud matters to parties at odds with each other because of the… enormous financial wealth of public pension fiduciaries that affects the economy.

Also, recent legal opinions in Kentucky and Indiana point to the “sole interest” of a public pension to grow. That’s neither the historical basis of public pensions — which were a Human Resources strategy to better workers, society and the economy — nor what the law actually says. There is no duty to grow. There is a duty to be impartial and public pensions, especially, have a very diverse set of beneficiaries, each with a different expectation of what fiduciary duty delivers, but who all must be treated equally nonetheless.

So, the central question in the Project Source Code is: “Do the beneficiaries know how they are instructing their fiduciaries?”  What does the law say? What should it say as a way to guide better the fiduciaries in charge of the most consequential duty-bound piggybank in the world?

We took a look at how Massachusetts defines “fiduciary duty” in the Chapter called Pension and Retirement Systems. It doesn’t. That’s the opportunity.

Project Source Code is an initiative to review every public pension for language that prevents a full expression of fiduciary duty. The bill outlines what that is and, if enacted, tightens the “upstream”, source code language that guides the most potent public money fund in the economy and paves the way to fixing “downstream” confusions about whether fiduciary duty as executed is allowed in the law.

There are 6,000 public pensions in the US representing 26 million and valued at $4.5 trillion. Project Source Code is designed to review how, why and for whom those trillions are spent in the economy.

This is our legislative challenge. What does your governing law for public pensions say about fiduciary standards? What is the quality of the instruction?

If you can connect us with a legislator in the US or abroad who would use this model to review their own fiduciary standards, send the details to

Project “Source Code” Action Plan

  • Expose fiduciary malpractice posing fiduciary best practice
  • Engage politicians to amend fiduciary standards language in governing law
  • Make explicit in law what is already implied in practice
  • Force a fiduciary reviewof public pension fund assets
  • Ensure a full expression of fiduciary duty for 26 million American public service workers to ensure climate-security for everyone