Review and Adoption of the Long-Term Strategic Asset Allocation Plan
of the Permanent School Fund
July 23, 2010
COMMITTEE OF THE FULL BOARD: ACTION
STATE BOARD OF EDUCATION: ACTION
SUMMARY: This item provides an opportunity for the committee and board to review and adopt the long-term strategic asset allocation plan of the Permanent School Fund.
STATUTORY AUTHORITY: Texas Constitution, Article VII, §5(f).
PREVIOUS BOARD ACTION: In July 2008, the board reviewed and adopted the Permanent School Fund long-term strategic asset allocation plan.
FUTURE ACTION EXPECTED: None.
BACKGROUND INFORMATION AND SIGNIFICANT ISSUES: One of the primary duties of the board in its oversight of the Permanent School Fund is to establish the long-term asset allocation policy of the Fund. The allocation of the Fund’s assets between various classes of securities will explain more than 90% of the Fund’s variation of returns. The overall risk assumed by the Fund is managed through the diversification of asset classes in which the Fund is invested.
FISCAL IMPACT: The distribution of the Permanent School Fund is projected to be $60.7 million for fiscal year 2010. The distribution earned by the Fund is affected by the asset allocation of the Fund and the capital market environment.
PUBLIC AND STUDENT BENEFIT: The distribution of the Permanent School Fund will flow to the school districts and reduce the tax burden to the public and the state of Texas.
PROCEDURAL AND REPORTING IMPLICATIONS: Not applicable.
PUBLIC COMMENTS: None.
ALTERNATIVES: No alternative actions are proposed regarding this item.
OTHER COMMENTS AND RELATED ISSUES: None.
Commissioner of Education
Staff Member Responsible:
Holland Timmins, Executive Administrator
and Chief Investment Officer of the
Texas Permanent School Fund