Bill Text: TX SB1372 | 2021-2022 | 87th Legislature | Comm Sub
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the evaluation and reporting of the performance of certain public retirement systems.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Engrossed - Dead) 2021-05-25 - Placed on General State Calendar [SB1372 Detail]
Download: Texas-2021-SB1372-Comm_Sub.html
Bill Title: Relating to the evaluation and reporting of the performance of certain public retirement systems.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Engrossed - Dead) 2021-05-25 - Placed on General State Calendar [SB1372 Detail]
Download: Texas-2021-SB1372-Comm_Sub.html
By: Huffman, Schwertner | S.B. No. 1372 | |
(In the Senate - Filed March 10, 2021; March 18, 2021, read | ||
first time and referred to Committee on Finance; April 9, 2021, | ||
reported adversely, with favorable Committee Substitute by the | ||
following vote: Yeas 15, Nays 0; April 9, 2021, sent to printer.) | ||
COMMITTEE SUBSTITUTE FOR S.B. No. 1372 | By: Huffman |
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relating to the evaluation and reporting of investment practices | ||
and performance of certain public retirement systems. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 802.109, Government Code, is amended by | ||
amending Subsections (a), (d), (e), (f), and (h) and adding | ||
Subsection (e-1) to read as follows: | ||
(a) Except as provided by Subsection (e) and subject to | ||
Subsections (c) and (k), a public retirement system shall select an | ||
independent firm with substantial experience in evaluating | ||
institutional investment practices and performance to evaluate the | ||
appropriateness, adequacy, and effectiveness of the retirement | ||
system's investment practices and performance and to make | ||
recommendations for improving the retirement system's investment | ||
policies, procedures, and practices. Each evaluation must include: | ||
(1) a summary of the independent firm's experience in | ||
evaluating institutional investment practices and performance and | ||
a statement that the firm's experience meets the experience | ||
required by this subsection; | ||
(2) a statement indicating the nature of any existing | ||
relationship between the independent firm and the public retirement | ||
system and confirming that the firm and any related entity are not | ||
involved in directly or indirectly managing the investments of the | ||
system; | ||
(3) a list of the types of remuneration received by the | ||
independent firm from sources other than the public retirement | ||
system for services provided to the system; | ||
(4) a statement identifying any potential conflict of | ||
interest or any appearance of a conflict of interest that could | ||
impact the analysis included in the evaluation due to an existing | ||
relationship between the independent firm and: | ||
(A) the public retirement system; or | ||
(B) any current or former member of the governing | ||
body of the system; and | ||
(5) an explanation of the firm's determination | ||
regarding whether to include a recommendation for each of the | ||
following evaluated matters: | ||
(A) an analysis of any investment policy or | ||
strategic investment plan adopted by the retirement system and the | ||
retirement system's compliance with that policy or plan; | ||
(B) [ |
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system's investment asset allocation, including: | ||
(i) [ |
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target allocations; | ||
(ii) [ |
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rate of return, categorized by asset class; | ||
(iii) [ |
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selection and valuation methodologies of alternative and illiquid | ||
assets; and | ||
(iv) [ |
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needs; | ||
(C) [ |
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investment fees and commissions paid by the retirement system; | ||
(D) [ |
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governance processes related to investment activities, including | ||
investment decision-making processes, delegation of investment | ||
authority, and board investment expertise and education; and | ||
(E) [ |
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investment manager selection and monitoring process. | ||
(d) A public retirement system shall conduct the evaluation | ||
described by Subsection (a): | ||
(1) once every three years, if the total assets of the | ||
retirement system [ |
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the last day of the preceding [ |
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(2) once every six years, if the total assets of the | ||
retirement system [ |
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the last day of the preceding [ |
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than $100 million. | ||
(e) A public retirement system is not required to conduct | ||
the evaluation described by Subsection (a) if the total assets of | ||
the retirement system [ |
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of the last day of the preceding fiscal year were[ |
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$30 million. | ||
(e-1) Not later than the 30th day after the date an | ||
independent firm completes an evaluation described by Subsection | ||
(a), the independent firm shall: | ||
(1) submit to the public retirement system for | ||
purposes of discussion and clarification a substantially completed | ||
preliminary draft of the evaluation report; and | ||
(2) request in writing that the system, on or before | ||
the 30th day after the date the system receives the preliminary | ||
draft, submit to the firm: | ||
(A) a description of any action taken or expected | ||
to be taken in response to a recommendation made in the evaluation; | ||
and | ||
(B) any written response of the system that the | ||
system wants to accompany the final evaluation report. | ||
(f) The independent firm shall file the final evaluation | ||
report, including the evaluation results and any response received | ||
from the public retirement system, [ |
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(1) not earlier than the 31st day after the date on | ||
which the preliminary draft is submitted to the system; and | ||
(2) not later than the later of: | ||
(A) the 60th day after the date on which the | ||
preliminary draft is submitted to the system; or | ||
(B) May 1 in the [ |
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in which the system is evaluated under Subsection (a) [ |
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(h) A governmental entity that is the employer of active | ||
members of a public retirement system evaluated under Subsection | ||
(a) may pay all or part of the costs of the evaluation. The [ |
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public retirement system shall pay any remaining unpaid [ |
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of the [ |
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SECTION 2. Section 802.109, Government Code, as amended by | ||
this Act, applies only to an evaluation commenced on or after the | ||
effective date of this Act. An evaluation commenced before the | ||
effective date of this Act is governed by the law in effect on the | ||
date the evaluation was commenced, and the former law is continued | ||
in effect for that purpose. | ||
SECTION 3. This Act takes effect September 1, 2021. | ||
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