Testimony Before the Texas Senate State Affairs Committee on Senate Bill 667 Relating to Ensuring Security in Texas State Retirement Systems
Heartland Impact
March 17, 2025
Chairman Hughes, and Members of the Committee:
Thank you for holding this hearing on Senate Bill 677, legislation that would prohibit Texas state retirement systems from investing in certain Chinese-affiliated entities.
My name is Samantha Vick, and I am the Senior Manager for State Government Relations at Heartland Impact. Heartland Impact is the advocacy and outreach arm of The Heartland Institute. Both are independent, national, nonprofit organizations working to discover, develop, and promote free-market solutions to social and economic problems. Heartland Impact specializes in providing state lawmakers the policy and advocacy resources to advance free-market policies towards broad-based economic prosperity.
While this issue may initially seem far-fetched and long distance, digging into the details of the largest United States pension funds tells a very different, and alarming, story. Of the 74 largest American pension funds, 56 have invested money into the Chinese market since 2020, despite the deterioration of relations between the United States and China. A report by the bipartisan nonprofit Future Union notes that these funds and investments contribute to the “[T]echnological advancements of China.”
Per the numbers, New York and California lead the pack in these investments with the New York State Common Retirement Funds investing a total of $8.3 billion in China and Hong Kong in recent years. The California Public Employees Retirement System is not far behind, having invested close to $7.8 billion in China in recent years. The data shows a trend that one doesn’t typically see in state-based politics – Texas keeping company with New York and California.
To Compare, in 2022, the Teacher Retirement System of Texas invested $2.7 billion in China and Hong Kong. The Texas County & District Retirement System invested $1.6 billion in China and Hong Kong, and the Employees Retirement System of Texas invested $1.3 billion in China and Hong Kong.
We also see an overwhelming number of Texas Public University Endowments investing heavily in China and Hong Kong with the Texas Permanent School Fund, The University of Texas System Endowment, the Texas A&M University System Endowment, and the Texas Tech University System Endowment all making the list.
The significant financial contributions from hardworking Texans into Texas Pension funds have no place flowing into foreign governments that do not put Americans, and more specifically, Texans first.
Over the last few years, there have been various forms of state-based legislation that pursue the divestment of public funds in China and Hong Kong, very similar to the legislation that Senator Hughes has sponsored and that you are considering today.
Indiana became the first state to enact a China divestment law in May 2023 and by July 1, 2024, the Indiana Public Retirement System fully divested the $1.2 billion of investments it had in Chinese assets.
Missouri’s State Employees’ Retirement System Board of Trustees voted in favor of divesting the pension fund’s investments in China within 12 months of the motion’s approval while the Missouri legislature considered various legislation that sought divestment of China-linked investments.
Additionally, the Kansas legislature passed the “Countries of Concern Divestment Act” and the Florida legislature enacted legislation that stipulates that the State Board of Administration responsible for investing the assets of the Florida Retirement System Pension Plan develop a divestment plan for all “direct holdings” in China and Hong Kong owned companies.
I mention what these other states have done in an effort to say that the geopolitical atmosphere in many states across the country, and in Texas, is ripe for legislation such as SB 667. Through this bill, Texas has the opportunity to join the other states declaring that their constituents’ hard-earned retirement funds are worth so much more than investing in a country that does not stand with the values of freedom we hold so dear in Texas.
Thank you for your time and consideration today.
