Texas Senate Bill SB1665

Texas 2017 - 85th Regular

Caption

Relating to the investment authority of the Teacher Retirement System of Texas.

Impact

The impact of SB1665 on state laws is mainly seen in the modification of the Texas Government Code, particularly concerning the investment practices of the Teacher Retirement System. By allowing external managers to handle a portion of the investments, the bill is designed to modernize the investment approach to ensure that it aligns with current best practices in the industry. This restructuring is expected to create greater flexibility and potentially higher returns on investments, benefiting retirees in Texas.

Summary

Senate Bill 1665 pertains to the investment authority of the Teacher Retirement System of Texas. The legislation aims to amend existing provisions that govern how the board of trustees of the retirement system can invest and reinvest its assets. A significant change introduced by the bill allows the board to delegate discretionary investment authority to external investment managers, thus enabling them to manage up to 30% of the total assets held by the retirement system. This move is intended to enhance investment strategies and leverage expertise from external sources, potentially leading to better asset management outcomes for pension fund beneficiaries.

Sentiment

Overall, the sentiment surrounding SB1665 appears to be positive, as indicated by the overwhelming support during the voting process, with the bill passing both the Senate and House unanimously. Proponents of the bill argue that empowering external professionals to manage investment portfolios will optimize the performance of retirement assets. This sentiment likely reflects broader confidence in professional investment management to navigate complex financial markets better than an in-house board may be able to alone.

Contention

Despite the overall positive reception, some debate may still arise concerning the delegation of power to external managers. Critics could raise concerns about transparency and accountability when external entities handle significant state funds. Additionally, the reliance on external management might lead to questions about the long-term sustainability of investment strategies and how they align with the retirement system’s goals. However, such points did not significantly impede its passage, as evidenced by the unanimous approval.