Martin D. Cano

The committee reviewed the Executive Director's proposed areas of focus for the upcoming fiscal year, including success measures and deliverables. Updates were provided on the strategic plan, covering IT and security initiatives, facilities management, and enterprise risk. Additionally, the committee received a report on the member and employer outreach plan, which includes communication strategies for new member experience centers, website enhancements, and health plan enrollment.

The Policy Committee discussed and recommended several amendments to the Investment Policy Statement, including new asset class target weights, the addition of All Country public equity and Government Bonds-Real as asset classes, and changes to various benchmarks such as the Stable Value Hedge Fund and Private Equity benchmarks. Furthermore, the committee authorized a six-month transition plan to implement new asset class weights, established a tracking error maximum for Government Bonds-Real, clarified the allocation of global equity hedge funds, and expanded the CIO's authority regarding internal shorting capacity. Additionally, the committee discussed and proposed the repeal and adoption of rules in the Texas Administrative Code related to vendor protests, retiree health care benefits, and contested cases.

The meeting focused on discussions regarding performance pay plans for the Investment Management Division, TRICOT, and the Executive Director. The committee reviewed the timeline for annual evaluations of board direct reports and received updates from compensation consultants regarding performance incentive plans for the upcoming performance period. Discussions included benchmarking against public pension plans, the inclusiveness of the current performance pay plan, and organizational alignment of roles.

The committee meeting focused on presentations by the State Auditor's Office regarding pension and post-employment benefits liability, as well as the planned audit of the Annual Comprehensive Financial Report. Other topics included the financial audit of the TRS Investment Company, an overview of compliance and ethics reports, and the new IIA Global Internal Audit Standards. The agenda also featured discussions on the Audit Charter, the Internal Audit's Strategic Plan, the Audit Plan for Fiscal Year 2025, an update on the Data Analytics Program, and reviews of various internal audit reports covering risk parity operations, contract oversight, cyber controls, and cybersecurity response. Administrative reports concerning governance, risk management, and internal controls were also discussed.

The meeting includes updates from the Chief Investment Officer regarding talent management, accomplishments, industry awards, and a market update. The committee will also discuss the second quarter performance review and review the semi-annual risk report.