January 2021 Committee on School Finance/Permanent School Fund Item 13

Review of the Real Return Asset Class for the Permanent School Fund

January 29, 2021

COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: ACTION
STATE BOARD OF EDUCATION: CONSENT

SUMMARY:  This item provides an opportunity for the committee and board to review the real return asset class for the Permanent School Fund (PSF).

STATUTORY AUTHORITY:  Texas Constitution, Article VII, §2 and §5; 19 Texas Administrative Code (TAC) Chapter 33.

The Texas Constitution, Article VII, §2 and §5 establish the permanent school fund, the assets that comprise the permanent school fund, the bond guarantee program, the available school fund, and authorize the State Board of Education (SBOE) to manage and invest the permanent school fund in accordance with the prudent person standard.

As adopted by the SBOE, 19 TAC Chapter 33 codifies administrative rules that provide a statement of investment objectives, policies, and guidelines of the Texas Permanent School Fund and Bond Guarantee Program.

The full text of statutory citations can be found in the statutory authority section of this agenda.

PREVIOUS BOARD ACTION:  At the June 2020 meeting, the board approved the PSF Long-Term Strategic Asset Allocation Plan with an allocation of 4% to the real return asset class.

BACKGROUND INFORMATION AND JUSTIFICATION: None

Staff Member Responsible:
Holland Timmins, Executive Administrator and Chief Investment Officer, Texas Permanent School Fund