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Employees Retirement System of Texas
| Employees Retirement System of Texas | |
 | |
| Basic facts | |
| Location: | Austin, Texas |
| Top official: | Porter Wilson, executive director |
| Year founded: | 1947 |
| Active members: | 139,958 |
| Website: | Official website |
| Total assets under management | |
| 2023: | $34,049,730,384 |
- See also: Public pensions in Texas
The Employees Retirement System of Texas is a Texas state pension fund that provides retirement, disability, and survivor benefits to the state's agency employees and some higher education institution employees. The Employees Retirement System of Texas had $34,049,730,384 ($34.05 billion) in total assets under management as of August 1, 2023.[1]
The management of public pension funds can indicate support or opposition to environmental, social, and corporate governance (ESG) investment practices. ESG investing considers the extent to which corporations align with and promote certain non-financial standards, such as net carbon emission or corporate board diversity goals. States typically hire asset management companies (AMCs) to direct pension plan investments, some of which have ESG commitments that guide their strategies.
This article features the following sections:
- Background: Information about the structure and functions of the Employees Retirement System of Texas.
- Pension performance overview: Overview of the funding level and assets managed by the Employees Retirement System of Texas.
- Assets and asset management: Information about the asset management companies (AMCs) that contract with Employees Retirement System of Texas, including a list of contracting AMCs that are participants in the Net Zero Asset Managers Initiative and the Climate Action 100+ initiative.
- Governance and accountability: Details about the Employees Retirement System of Texas' oversight board, including members and selection.
Background
- See also: Public pensions
The Employees Retirement System of Texas, founded in 1947, invests the assets of and provides funding for the Employees Retirement System of Texas (ERS), the Judicial Retirement System of Texas Plan Two (JRS II), and the Law Enforcement and Custodial Officer Supplemental (LECOS) Retirement Fund based on a formula established by state law. These plans—based on the employee's length of service and salary—provide retirement, disability, and survivor benefits to the state's agency employees.[2]
The Employees Retirement System of Texas served over 139,958 active members and approximately 124,504 retirees and beneficiaries as of May 2024.[2]
Pension performance overview
The following table features information about the funding level and assets managed by the Employees Retirement System of Texas as of August 31, 2023:[1]
| Employees Retirement System of Texas pension performance (August 31, 2023) | |||
|---|---|---|---|
| Fiscal year | Percent funded | Unfunded liabilities | Total assets[3] |
| 2023 | 70.8% | $14,000,000,000 | $34,049,730,384 |
Assets and asset management
| Environmental, social, and corporate governance |
|---|
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| • What is ESG? • Enacted ESG legislation • Arguments for and against ESG • Opposition to ESG • Federal ESG rules • ESG legislation tracker • Economy and Society: Ballotpedia's weekly ESG newsletter |
Asset management companies (AMCs) are hired to manage asset investment for state pension funds across all 50 states.
As of October 2024, 330 AMCs were members of the Net Zero Asset Managers Initiative (NZAM), and 391 AMCs were investor participants in the Climate Action 100+ initiative. Both international asset manager initiatives aimed to align the investment decisions of signatories with the goal of achieving net zero greenhouse gas emissions by 2050.[4][5]
NZAM announced on January 13, 2025, that it was suspending operations and removing the commitment statement and list of signatories from its website. The group said in a statement it would reevaluate its plans and operations in light of “[r]ecent developments in the U.S. and different regulatory and client expectations in investors’ respective jurisdictions.”[6]
List of AMCs contracting with the Employees Retirement System of Texas
The Employees Retirement System of Texas contracted with 9 asset management companies (AMCs) or specific funds as of August 31, 2023. Of those companies, two were investor participants in Climate Action 100+, and one was a member of NZAM, as of October 2024. The following list identifies the AMCs (and in some cases, the specific funds) contracting with the Employees Retirement System of Texas:[7]
| Employees Retirement System of Texas asset management companies Click on a column header below to sort the list of asset managers. | |||||
|---|---|---|---|---|---|
| AMC name | Investment type | Assets under management | Percentage of total fund assets | NZAM Initiative signatory as of October 2024[8] | Climate Action 100+ signatory as of October 2024 |
| Acadian Asset Management | International Equity; | Yes | Yes | ||
| Altrinsic Global Advisors, LLC | International Equity; | No | No | ||
| Arrowstreet Capital, LP | International Equity; | No | No | ||
| Axiom International Investors LLC | International Equity; | No | Yes | ||
| Brandywine Global Investment Management LLC | Domestic Equity, International Equity; | Yes | Yes | ||
| Global Alpha Capital Management Limited | International Equity; | No | No | ||
| GQG Partners, LLC | International Equity; | No | No | ||
| JOHCM (USA), Inc. | International Equity; | No | No | ||
| Legato Capital Management, LLC | Manager of Emerging Managers; | No | No | ||
Governance and accountability
This section features information about the six-member board of trustees that oversees the Employees Retirement System of Texas. The board is not specific to oversight of the Employees Retirement System of Texas and does exercise oversight duties for other state funds.[9]
Board selection method
The board of trustees that oversees the Employees Retirement System of Texas is made up of six members. Three trustees are appointed—one each by the governor, the speaker of the Texas House of Representatives, and the chief justice of the Texas Supreme Court—and confirmed by the Texas Senate. ERS members and retirees elect the other three.[9]
Board of trustees membership
A six-member board of trustees oversees the operation and administration of Employees Retirement System of Texas. The following individuals served on the board as of May 2024:[9]
- Brian Barth, chair
- I. Craig Hester, vice chair
- Neika Clark
- Stuart Greenfield, Ph.D.
- James Kee, Ph.D.
- John R. Rutherford
See also
- Public pensions in Texas
- Environmental, social, and corporate governance (ESG)
- Arguments about environmental, social, and corporate governance (ESG)
- Opposition to environmental, social, and corporate governance (ESG) investing
- Reform proposals related to environmental, social, and corporate governance (ESG)
- State legislative approaches opposing ESG investing
- State legislative approaches supporting ESG investing
External links
Footnotes
- ↑ 1.0 1.1 ‘’Texas Pension Review Board’’, “Employees Retirement System of Texas,” accessed May 6, 2024
- ↑ 2.0 2.1 ‘’ERS’’, “About ERS,” accessed May 6, 2024
- ↑ Note: By default, this refers to the actuarial valuation of total assets. In some cases, the total market value of assets is shown instead. See the cited source for details.
- ↑ The Net Zero Asset Managers Initiative, "The Net Zero Asset Managers Initiative," accessed January 26, 2023
- ↑ Climate Action 100+, "The Three Goals," accessed June 20, 2023
- ↑ Pensions and Investments, "Net Zero Asset Managers initiative to suspend activities in wake of BlackRock departure," accessed January 15, 2024
- ↑ Ballotpedia, "Ballotpedia: Asset management data for state-administered pension funds across the 50 states," March 2023
- ↑ Note: NZAM announced on January 13, 2025, that it was suspending operations and removing the commitment statement and list of signatories from its website.
- ↑ 9.0 9.1 9.2 ‘’ERS’’, “ERS Trustees,” accessed May 6, 2024
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