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Legislative Updates

Legislative Update No. 79, Session 80
By Tim Lee, Executive DirectorPrinter Friendly ||| Print as PDF

January 30, 2008

Texas Senate Releases Interim Charges

The Texas Senate has released its interim legislative charges. These charges are important as they reveal what the Senate members will be focusing on during the months leading up to the next legislative session. Though there are charges for numerous Senate committees, those posted with this update include only the Senate State Affairs Committee and the Senate Finance Committee and are those that are pertinent to TRTA issues. TRTA members may be very concerned about some of the information in these charges, and TRTA is working diligently to bring you the most in-depth information possible. A TRTA special update will be sent before the end of the week regarding some of the most concerning information in the Senate charges.

Senate State Affairs Charges (those relating to TRS)

  • Analyze the advantages and disadvantages of phasing in a defined-contribution pension for future employees versus the existing defined-benefit pension plan. Study options for transition or implementation issues and how the phase-in could be structured. Evaluate the possibility of requiring the state employee contribution rate to meet the annually required contribution for the statewide retirement funds each biennium in order to prevent unfunded liabilities.
  • Study the feasibility and the advisability of establishing an investment policy that is consistent across all state trust funds, including the trust funds of the Employees Retirement System, the Teachers Retirement System, the Permanent University Fund, and the Permanent School Fund. Identify best investment policies for state trust funds. Examine recent portfolio diversification strategies and the effect they have on long-term fund performance. The recommendations should consider what is an acceptable rate of return, an acceptable degree of risk, the appropriateness of certain investments. (Joint charge with Senate Finance Committee)
  • Monitor the implementation of legislation addressed by the State Affairs Committee, 80th Legislature, Regular Session, and make recommendations for any legislation needed to improve, enhance, and/or complete implementation. In particular, monitor and report on the effect of HB 2365, which allows public entities to report "other post employment benefits" (OPEBs) on a statutory modified accrual basis, including any effect on auditor opinions, bond ratings, or other fiscal issues. Monitor the implementation of Senate Bill 1731, relating to transparency of health information, and Senate Bill 1846, relating to TRS.

Senate Finance Committee Charges (One relating to TRS)

  • Study the feasibility and the advisability of establishing an investment policy that is consistent across all state trust funds, including the trust funds of the Employees Retirement System, the Teachers retirement System, the Permanent University Fund, and the Permanent School Fund. Identify best investment policies for state trust funds. Examine recent portfolio diversification strategies and the effect they have on long-term fund performance. The recommendations should consider what is an acceptable rate of return, an acceptable degree of risk, the appropriateness of certain investments. (Joint charge with Senate State Affairs Committee)

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