US - Texan senators have failed to reach conclusion after lengthy discussions over whether politicians should have a say in the investment policy of state pension funds.
Senator Steve Ogden said the group would "study the feasibility of establishing an investment policy that is consistent across all state trust funds."
He continued: "[They] have different policies and basically different constitutional statutory direction and the question is should we have a standard for everybody, including the Employees Retirement System (ERS) [and] Teachers Retirement System (TRS)."
The committees were tasked with identifying the best investment policies for state trust funds, examining recent portfolio diversification strategies and the effect they had on long term fund performance.
The members had then to consider what would be an acceptable rate of return, degree of risk and the appropriateness of certain investments.
The committee heard from source witnesses and delegates from the affected funds who advised on this major policy decision.
David Mattax, chief, financial litigation division, Office of the Attorney General, explained how the Employee Retirement Income Security Act of 1974 (ERISA) was a significant consideration in the debate.
Mattax told the committee pension funds must be invested in the sole interest of the members. He gave an example of the legislature instructing a retirement system to invest in a product or industry that would benefit the state but not necessarily the fund members.
He said: "If in making their determinations as a fiduciary as to what an appropriate investment is, they can certainly consider investing [in that area] if it fitted within their overall plan."
Bruce Zimmerman, CEO, University of Texas Investment Management Company, recommended continuing under the current system of funds tailoring investments according to their specific needs.
Further meetings have been scheduled to continue the debate. ERS and TRS said their policy was not to comment on proposed or pending legislation.
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