Texas public employee pension systems will face clearer timelines and applicability rules for required investment reviews under updated guidance approved by state regulators in December, a move aimed at strengthening investment oversight and compliance planning.

At its Dec. 11, 2025, board meeting, the Pension Review Board of Texas adopted revised Guidance for Investment Practices and Performance Evaluations, commonly referred to as IPPE. The updates align with statutory requirements in Section 802.109 of the Texas Government Code and clarify which public retirement systems are required to undergo independent evaluations, the frequency of those evaluations, and the due dates for reports.

An IPPE is an independent review of a pension system's investment policies, asset allocation, performance, and risk management practices. The evaluation is designed to help boards assess whether investment decisions and governance processes are aligned with statutory requirements, best practices, and long-term funding objectives.

Under the updated guidance, public retirement systems with assets of at least $100 million are required to complete an IPPE every three years. Systems with assets between $30 million and $100 million are subject to a six-year evaluation cycle. Systems with assets below $30 million are not required to conduct an evaluation unless they exceed the threshold by the end of a fiscal year.

The guidance also outlines revised reporting schedules to the PRB, with initial report deadlines beginning June 1, 2027. Applicability is determined based on financial reports submitted by Dec. 31 of the preceding year, according to the document.

For trustees and administrators, the updated guidance affects investment governance, compliance planning, and budgeting for independent evaluations. Understanding whether an evaluation is required, when it is due, and how the board review-and-comment process works with independent evaluators can help systems avoid missed deadlines and compliance risks.

Additional clarification addresses the expectations and communication requirements for asset class reviews between governing boards and evaluators.

Note: A more in-depth article will appear in the first quarterly edition of TEXPERS' quarterly magazine, publishing in March.

Read More: Pension Review Board of Texas

About the Author: Allen Jones serves as TEXPERS' Director of Communications and Event Marketing. He brings more than two decades of experience in journalism and publication management and now guides the Association's strategic communications. [email protected]