ANNAPOLIS -- Lawmakers are trying to require that $50 million of Maryland's pension money be invested in up-and-coming bioscience and green technology companies, which the pension fund's managers say are risky, low-return investments.

"This is an encroachment on the fiduciary duty" of the State Retirement Agency's Board of Trustees, said R. Dean Kenderine, the agency's executive director. "We would have our hands tied behind our backs with respect to investments and how they should be made."

The legislation sponsored by Del. Brian J. Feldman, a long-time advocate of expanding Maryland's biotech industry, would require the state pension fund to invest in venture capital funds that focus on information technology, green technology, bioscience and medical devices. It also would require the venture capital funds to invest in state companies.

He said the bill would affect less than 0.05 percent of the $32 billion pension fund.

"We have a huge venture capital gap," said Feldman, D-Bethesda. "It is killing many of our most promising early-stage companies."

Del. Murray D. Levy, D-Charles County, said nothing justifies an attempt by lawmakers to decide where to invest the state's pension money. That job, as stipulated by the General Assembly, belongs to the Retirement Agency's investment professionals, he said.

"I think this is a very bad idea," he said. "We hire experts to do this. We shouldn't be deciding where they invest their money." But Feldman suggested the "experts" need help doing their jobs successfully. "We've underperformed," he said. "Our track record isn't a great one." The state's pension system is underfunded by $19 billion, one of the worst systems in the country, according to a report from the Pew Center on the States. Mansco Perry, the agency's chief investment officer, said investing in venture capital funds, which invest in startup companies, is not how the pension fund will fatten up. "Venture capital is one of the riskiest classes of investment assets," he said, adding that the agency makes few investments in venture capital because it has been the "worst performing [asset] in the last decade." Feldman also is pushing a bill that would empower Montgomery County to make stock investments in Maryland biotech companies. State law prohibits local government from making equity investments, which are regarded as high-risk, according to a legislative analysis of the bill. State law prohibits local government from making equity investments, which are regarded as high-risk, according to a legislative analysis of the bill. The entire Montgomery County House delegation, which Feldman heads, support the bill. Del. Stephen R. Schuh, R-Anne Arundel, said it won't be long before all lawmakers try to push their investment ideas through the General Assembly. "I have all kinds of great ideas for investing," he said. "I know Del. [Jay] Walker has a particularly strong feeling about Russian investing right now, and Del. [Wendell R.] Beitzel about clean coal," he quipped."We all have a lot of good ideas."

hpeterson@washingtonexaminer.com