Investment firms which are seeking investments from CalPERS, CalSTRS or the University of California Retirement System (“UCRP”) are required to register as California “lobbyist employers” and thereafter file quarterly reports with the Secretary of State’s office. Registrations have to be renewed every two years at the beginning of a new legislative cycle; re-registrations for the 2025-2026 cycle must be filed between November 1 and December 31, 2024. If you believe your investment firm is likely to seek or continue seeking an investment from a California state public pension plan next year, you therefore need to re-register before the end of this year.
In our experience, some investment firms do not realize that California’s lobbying law only covers firms which are trying to convince CalPERS, CalSTRS or UCRP to invest in one of their funds, and does not cover firms which have already obtained such an investment. In other words, re-registration as a California lobbyist employer is not required if your firm has already obtained the CalPERS, CalSTRS or UCRP investment and is not seeking a new or increased investment at this time. Saying that, some firms which are already managing CalPERS, CalSTRS or UCRP funds choose to remain registered in case their investor relations staff decides to go after a new or increased investment, or in case the firm decides to solicit one of the other state public pension plans, in order to avoid inadvertently not registering when required to do so.
Another misunderstanding about California lobbyist registration is when the solicitation of the state public pension plan is done by a fund manager rather than an investor relations or marketing employee. The law contains an exception for solicitations done by a principal or employee of an investment firm who spends at least a third of his or her time managing (rather than marketing) the firm’s investments. This exception was a last-minute addition to the law when it was passed several years ago to protect smaller firms from the registration and reporting requirements. In other words, if the only people at your firm who interact with CalSTRS, CalPERS or the UCRP are fund managers, your firm is not required to register or re-register.
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For those firms which are Rutan & Tucker clients, our political compliance staff will contact you in the next week or so to confirm whether you would like to re-register for the 2025-2026 cycle. Those of you who are not Rutan & Tucker clients should feel free to contact us if you would like more guidance about California’s lobbyist/placement agent registration and reporting.
THIS ALERT IS INTENDED FOR GENERAL INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE.
