Texas Government Code 855.301 – Investment of Assets
(a) The board of trustees shall invest and reinvest the 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, “security” or “securities” means 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). 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, currency exchange, or interest rate risk in purchasing, selling, or holding securities, or that derives all or substantially all of its value from the value or performance of one or more securities, including an index or group of securities, is considered to be a security.
(b) The assets of the retirement system may be held in the name of agents, nominees, depository trust companies, or other entities designated by the board of trustees. The records and all relevant reports or accounts of the retirement system must show the ownership interests of the retirement system in these assets and the facts regarding the system’s holdings.
Terms Used In Texas Government Code 855.301
- 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.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- 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.
(c) The board of trustees, in the exercise of its discretion to manage the assets of the retirement system, may select one or more commercial banks or other entities experienced in short-term cash management to invest the system’s cash balances through its short-term investment fund or funds and in such short-term securities as the board of trustees determines and as authorized by this section.
(d) The board of trustees may:
(1) delegate discretionary investment authority to and contract with external investment managers to invest and manage the assets held in trust by the retirement system; and
(2) contract with external investment advisors and consultants to assist and advise the board and the staff of the retirement system.