The Texas Constitution

Fiduciary Essentials for Defined Benefit Plans Part 7: More on Fiduciary Matters The Texas Constitution

Legislature must provide by law for the creation by any city or county of a system of benefits for its officers and employees
Legislature may enact general laws establishing systems and programs for retirement, disability and death benefits for public employees and officers
- Financing must be based on sound actuarial principals
- Assets of a system are held in trust for the benefit of members and may not be diverted
Statewide benefit systems must have a board of trustees responsible to administer the system and invest in such securities as the board may consider prudent investments
In making investments, the board must …..
- “exercise the judgment and care under the circumstances then prevailing that persons of ordinary prudence, discretion and intelligence exercise in the management of their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering probable income there from as well as the probable safety of capital”
Legislature may by law further restrict the investment discretion of the board