The bill, introduced by Paul H.B. No. 4807, seeks to enhance the fiduciary responsibilities of public retirement systems in Texas, along with their investment managers and proxy advisors. It introduces definitions for key terms such as "financial factor," "investment manager," and "proxy advisor," establishing a framework that mandates these entities to prioritize the financial interests of participants and beneficiaries. The bill emphasizes that investment decisions should be based solely on financial considerations, prohibiting actions that further social, political, or ideological interests. Additionally, it amends existing laws to improve transparency in proxy voting and investment reporting, requiring public retirement systems to disclose their proxy voting practices and submit annual reports to the State Pension Review Board detailing investment relationships and performance metrics.

Moreover, the bill includes several amendments that enhance reporting requirements and clarify fiduciary duties. It mandates that investment managers report the net value of managed assets and total fees for the past year, with these reports to be made publicly accessible on the State Pension Review Board's website. The bill also allows public retirement systems to take legal action against investment managers or proxy advisors for breaches of contract, while clarifying that compliance with certain requirements may be waived if they conflict with fiduciary responsibilities. The State Pension Review Board is tasked with adopting rules for these changes, which will apply only to contracts entered into after the bill's effective date of September 1, 2025, and it includes provisions for deferring mandatory requirements if funding is not appropriated.

Statutes affected:
Introduced: Government Code 802.001, Government Code 802.002, Government Code 802.203 (Government Code 802)