Responsible Guidance for Investments

The TCDRS Board of Trustees is responsible for overseeing the investment of TCDRS assets. They receive assistance from the investment officer and staff, along with professional firms they have hired, in carrying out that responsibility.

Governance and standards

The board of trustees establishes the TCDRS Investment Policy, which provides a foundation for the investment of system assets. The investment policy establishes the investment objective of an 8% return over the long-term with an acceptable level of risk.

The policy also:

Provides an asset allocation plan that establishes risk/return parameters
Lists duties of people who are responsible for investment activity
Includes other requirements concerning standard of care, ethics, monitoring and reporting

The policy is updated by the board of trustees periodically to reflect changes in strategy and market.

Our board’s investment decisions are subject to the “prudent person” standard of care as found in Sec. 67, Article XVI, Texas Constitution and incorporated into the TCDRS Act. The board is to “exercise the judgement and care … that persons of ordinary prudence exercise in the management of their own affairs … considering the probable income therefrom as well as the probable safety of their capital.” The investment operations of the board are also guided by the standard of review in the Property Code, Texas Trust Code, Sec. 117.004(b) that provides “investment and management decisions respecting individual assets must be evaluated not in the isolation but in the context of the trust portfolio as a whole ….”

Roles and responsibilities

TCDRS investments are managed by an experienced team with diverse skills and responsibilities. Our strong internal team is supported by industry-leading consultants and external managers. We all work together to make informed, responsible decisions about TCDRS investments.