Approval of Implementation and Investment in Inflation Linked Bonds as
Part of the Real Return Allocation
July 22, 2011
COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: ACTION
STATE BOARD OF EDUCATION: ACTION
SUMMARY: This item provides an opportunity for the committee and board to approve implementation and investment in inflation linked bonds as part of the real return allocation.
STATUTORY AUTHORITY: Texas Constitution, Article VII, §5(f).
PREVIOUS BOARD ACTION: None.
BACKGROUND INFORMATION AND SIGNIFICANT ISSUES: At the July 2006 meeting, the board approved a long-term strategic asset allocation which included a 6% allocation to the real return asset class.
FISCAL IMPACT: The distribution of the Permanent School Fund is projected to be $1.9 billion during the 2012-2013 biennium.
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.
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