April 2018 Committee on School Finance/Permanent School Fund Item 7
Approval of an Extension of the Standard Contract with NEPC, LLC and Authorization for Contract Execution by the Commissioner of Education
April 13, 2018
COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: ACTION
STATE BOARD OF EDUCATION: CONSENT
SUMMARY: This item provides an opportunity for the committee and board to extend the standard contract with NEPC, LLC and authorization for contract execution by the commissioner of education.
STATUTORY AUTHORITY: Texas Constitution, Article VII, §5(f).
PREVIOUS BOARD ACTION: At the July 2015 meeting, the board approved a contract with NEPC, LLC to provide services for the Permanent School Fund.
BACKGROUND INFORMATION AND SIGNIFICANT ISSUES: At the July 2015 meeting, the board selected NEPC, LLC as the Permanent School Fund’s investment counsel with the option to extend for two (2) additional three-year terms. The current contract with NEPC, LLC expires August 31, 2018. If renewed, the first extension period would begin September 1, 2018 and end August 31, 2021. The second extension period would begin September 1, 2021 and will end with a termination date of August 31, 2024.
FISCAL IMPACT: The distribution of the Permanent School Fund is projected to be
$2.5 billion during the 2018-2019 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.
ALTERNATIVES: No alternative actions are proposed regarding this item.
OTHER COMMENTS AND RELATED ISSUES: None.
Staff Member Responsible:
Holland Timmins, Executive Administrator
and Chief Investment Officer of the
Texas Permanent School Fund
April 13, 2018
COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: ACTION
STATE BOARD OF EDUCATION: CONSENT
SUMMARY: This item provides an opportunity for the committee and board to extend the standard contract with NEPC, LLC and authorization for contract execution by the commissioner of education.
STATUTORY AUTHORITY: Texas Constitution, Article VII, §5(f).
PREVIOUS BOARD ACTION: At the July 2015 meeting, the board approved a contract with NEPC, LLC to provide services for the Permanent School Fund.
BACKGROUND INFORMATION AND SIGNIFICANT ISSUES: At the July 2015 meeting, the board selected NEPC, LLC as the Permanent School Fund’s investment counsel with the option to extend for two (2) additional three-year terms. The current contract with NEPC, LLC expires August 31, 2018. If renewed, the first extension period would begin September 1, 2018 and end August 31, 2021. The second extension period would begin September 1, 2021 and will end with a termination date of August 31, 2024.
FISCAL IMPACT: The distribution of the Permanent School Fund is projected to be
$2.5 billion during the 2018-2019 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.
ALTERNATIVES: No alternative actions are proposed regarding this item.
OTHER COMMENTS AND RELATED ISSUES: None.
Staff Member Responsible:
Holland Timmins, Executive Administrator
and Chief Investment Officer of the
Texas Permanent School Fund