Texas Senate Bill SB1372

Texas 2021 - 87th Regular

Caption

Relating to the evaluation and reporting of the performance of certain public retirement systems.

Impact

The legislation proposes significant amendments to the Government Code, stipulating that public retirement systems with total assets of certain thresholds must undergo evaluations at specified intervals. For systems with assets over $100 million, evaluations are required every three years, while those with assets between $30 million and $100 million must be evaluated every six years. Furthermore, the bill introduces a grading program that will assign numerical scores based on investment performance, governance practices, and compliance with funding policies, aimed at ensuring that these systems remain accountable for their fiduciary duties.

Summary

Senate Bill 1372 aims to enhance the evaluation and reporting practices related to certain public retirement systems in Texas. The bill addresses the need for accountability and transparency in the management of public retirement funds by mandating the selection of an independent firm to conduct comprehensive evaluations of these systems. Through periodic assessments of their investment practices and performance, the bill seeks to ensure that these retirement systems operate in accordance with state laws and standards, thereby protecting the interests of retirees and taxpayers alike.

Sentiment

Overall, the sentiment surrounding SB 1372 appears to be positive among proponents who argue it will improve the transparency and accountability of public retirement systems in Texas. Supporters believe that regular evaluations and the establishment of performance grading will bring about improved governance and confidence among stakeholders. However, there may be some concerns regarding the financial implications for smaller retirement systems that could be disproportionately affected by the costs associated with hiring independent evaluators.

Contention

Despite the general support for SB 1372, some contention arises from concerns over potential administrative burdens it may impose on smaller public retirement systems. Critics argue that frequent evaluations could lead to unnecessary expenses, particularly for systems with fewer resources. Additionally, the independence of evaluators and potential conflicts of interest have been highlighted as areas needing scrutiny to ensure that the evaluations are conducted fairly and objectively. This underscores a broader debate about the balance between oversight and the operational flexibility that public retirement systems require.