Texas Government Code 825.301 – Investment of Assets
(a) The board of trustees shall invest and reinvest assets of the retirement system without distinction as to their source in accordance with § 67, Article XVI, Texas Constitution. For purposes of the investment authority of the board of trustees under § 67, Article XVI, Texas Constitution, “securities” includes any investment instrument within the meaning of the term as defined by § 4001.068, 15 U.S.C. § 77b(a)(1), or 15 U.S.C. § 78c(a)(10), any derivative instrument, and any other instrument commonly used by institutional investors to manage institutional investment portfolios. An interest in a limited partnership or investment contract is considered a security without regard to the number of investors or the control, access to information, or rights granted to or retained by the retirement system. Any instrument or contract intended to manage transaction or currency exchange risk in purchasing, selling, or holding securities is considered to be a security. Subject to § 825.3013, an interest in a title-holding entity that is wholly owned, organized, and controlled by the retirement system is considered a security. Investment decisions are subject to the standard provided in the Texas Trust Code by § 117.004(b), Property Code.
(a-1) Repealed by Acts 2017, 85th Leg., R.S., Ch. 932 (S.B. 1665), Sec. 2, eff. June 15, 2017.
Terms Used In Texas Government Code 825.301
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Property: means real and personal property. See Texas Government Code 311.005
- Written: includes any representation of words, letters, symbols, or figures. See Texas Government Code 311.005
(a-2) Repealed by Acts 2017, 85th Leg., R.S., Ch. 932 (S.B. 1665), Sec. 2, eff. June 15, 2017.
(a-3) For the purpose of carrying out policy decisions made by the board of trustees, the board may delegate investment authority with respect to assets held by the retirement system to the executive director or the staff of the retirement system.
(b) The board of trustees may delegate discretionary investment authority to external investment managers to invest and manage not more than 30 percent of the total assets held in trust by the retirement system and may contract with external investment advisors and consultants to assist and advise the board and the staff of the retirement system.
(b-1) By accepting a delegation of discretionary investment authority or an engagement to assist or advise the board or the staff of the retirement system under Subsection (b), an external investment manager, advisor, or consultant submits to the jurisdiction of the courts of this state in all proceedings arising from or related to performance of the delegated authority or engagement. An action relating to services rendered under this section shall be brought only in a state district court sitting in Travis County, Texas. Chapter 2260 does not apply to a contract under this section. This subsection does not waive any immunity of the retirement system.
(c) The board of trustees shall employ one or more performance measurement services to evaluate and analyze the investment results of those assets of the retirement system for which reliable and appropriate measurement methodology and procedures exist. Each service shall compare investment results with the written investment objectives developed by the board, and shall also compare the investment of the assets being evaluated and analyzed with the investment of other public funds.
(d) The board of trustees may invest assets of the retirement system in obligations issued, assumed, or guaranteed by the Inter-American Development Bank, the International Bank for Reconstruction and Development (the World Bank), the African Development Bank, the Asian Development Bank, and the International Finance Corporation.
(e) The board of trustees shall develop written investment objectives concerning the investment of the assets of the retirement system. The objectives may address desired rates of return, risks involved, investment time frames, and any other relevant considerations.