Input to TRS on Policies and Procedures for Infrastructure Investment and political involvement in investment decisions
September 19, 2008
Historically, the Association of Texas Professional Educators’ (ATPE) policy regarding TRS investments has been to refrain from supporting or opposing individual investment decisions. Instead, we have relied upon TRS investment staff and the TRS Board of Trustees to make prudent investments that are in the best interest of TRS members.
As I am certain the board is acutely aware, there has been much speculation and commentary regarding the potential for TRS funds to be invested in toll roads. While the prospect for this investment is a cause for concern for many of our members -- and based on several problems arising from toll road investment nationwide, this concern may be well-founded -- this action alone is not our point of contention.
Our concerns relate to any attempt by an outside interest to alter TRS investment practices in a way that would result in an allocation of funds that would not typically occur absent external influence. ATPE strongly opposes any attempt to inject political influence of any nature into TRS investment practices. We believe that the letter sent by the Governor, Lt. Governor and Speaker of the House to TXDOT Chair Deidre Delisi suggesting that state trust funds invest in a corporation established to finance roads exerts a dangerous influence on TRS pensions.
Chief Investment Officer Britt Harris put it best when he said, “[The pension fund’s] ultimate loyalty is to the members…” It is with this mentality that ATPE urges the board to consider every potential investment where millions of dollars in educator contributions, as well as state tax dollars, are at stake, especially when politics is a factor.
If TRS investment staff determines, absent outside influence, that certain investments in infrastructure projects are prudent, then we support these decisions. However, we believe it would be irresponsible for anyone not charged with managing the TRS trust fund for the benefit of educators to suggest or attempt to influence investment practices for gain elsewhere.
It is for this reason that ATPE strongly opposes any attempt by the state’s leadership to influence TRS investment decisions, especially in a time when the market is experiencing extreme volatility. We recommend that the board continue to operate with integrity and to resist the urge to be influenced by political pressures. In light of the recent announcement of Lehman Brothers declaring bankruptcy, ATPE also asks that the board sever relationships with entities that have demonstrated mismanagement and/or the inability to effectively manage TRS fund dollars in a manner most beneficial to its members.
For more information, please contact Josh Sanderson, Lobbyist for the Association of Texas Professional Educators, at (800)
777-ATPE or jsanderson@atpe.org.
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