As Amended
SEC. 25-11-145. Health insurance plan for current and future retirees; definition of "retiree"; coverage; alternatives for those declining coverage; subsidy; employer contribution; late charges and interest penalties; powers and duties of the board.
[Effective from and after July 1 of the year following the year in which the board determines and the board's actuary certifies that the employer's contribution rate to the Public Employees' Retirement System can be reduced by 1% without causing the unfunded accrued actuarial liability amortization period for the retirement system to exceed 20 years, this section shall read as follows:]
(1) This provision of this section shall become effective from and after July 1 of the year in which Section 25-11-143 becomes effective as provided in subsection (1) of Section 25-11-143.
(2) In managing the funds received for the insurance program established in Section 25-11-143, the board from time to time shall determine the current requirements for payments and administrative expense that will be maintained as a cash working balance, except that the cash working balance shall not exceed at any time an amount necessary to meet the current obligations of the fund for a period of ninety (90) days. Any amounts in excess of the cash working balance shall be invested, as follows, at such periodic intervals as the board may determine:
(a) Funds may be deposited in federally insured institutions;
(b) Corporate and taxable municipal bonds of investment grade as rated by Standard and Poor's or by Moody's Investment Service, with bonds rated BAA/BBB not to exceed five percent (5%) of the book value of the total fixed income investments, or corporate short-term obligations of corporations or of
wholly owned subsidiaries of corporations, whose short-term obligations are rated A-3 or better by Standard and Poor's or rated P-3 or better by Moody's Investment Service;
(c) Bonds of the Tennessee Valley Authority; bonds, notes, certificates and other valid obligations of the United States, and other valid obligations of any federal instrumentality that issues securities under authority of an act of Congress and are exempt from registration with the Securities and Exchange Commission; bonds, notes, debentures and other securities issued by any federal instrumentality and fully guaranteed by the United States;
(d) Interest-bearing bonds or notes that are general obligations of any other state in the United States or of any city or county in that state, provided that the state, city or county has not defaulted for a period longer than thirty (30) days in the payment of principal or interest on any of its general obligation indebtedness during a period of ten (10) calendar years immediately preceding the investment;
(e) Shares of stocks, common and/or preferred, of corporations created by, or existing under, the laws of the United States or any state, district or territory thereof, provided that:
(i) The maximum investments in stocks shall not exceed fifty percent (50%) of the book value of the total investment fund;
(ii) The stock of such corporation shall be listed on a national stock exchange, or be traded in the over-the-counter market;
(iii) The outstanding shares of the corporation shall have a total market value of not less than Fifty Million Dollars ($50,000,000.00);
(iv) The amount of investment in any one (1) corporation shall not exceed three percent (3%) of the book value of the total investment fund; and
(v) The shares of any one (1) corporation owned by the fund shall not exceed five percent (5%) of that corporation's outstanding stock;
(f) Bonds rated Single A or better, stocks and convertible securities of established non-United States companies, and in foreign government securities rated Single A or better by a recognized rating agency, provided that the total book value of investments under this paragraph at no time shall exceed thirty percent (30%) of the total book value of the total investment fund. The board may take requisite action to effectuate or hedge those transactions through foreign or domestic banks, including the purchase and sale, transfer, exchange, or otherwise disposal of, and generally deal in foreign exchange through the use of foreign currency, interbank forward contracts, futures contracts, options contracts, swaps and other related derivative instruments;
(g) Covered call and put options on securities traded on one or more of the regulated exchanges;
(h) Pooled or commingled funds managed by a corporate trustee or by a Securities and Exchange Commission registered investment advisory firm retained as an investment manager by the board of trustees, and shares of investment companies and unit investment trusts registered under the Investment Company Act of 1940, where the pooled or commingled funds or shares are comprised of common or preferred stocks, bonds, money market instruments or other investments authorized under this section. The investment in commingled funds or shares shall be held in trust. Any investment manager approved by the board of trustees shall invest the commingled funds or shares as a fiduciary;
(i) Pooled or commingled real estate funds or real estate securities managed by a corporate trustee or by a Securities and Exchange Commission registered investment advisory firm retained as an investment manager by the board of trustees, provided that the total book value of investments under this paragraph at no time shall exceed five percent (5%) of the total book value of all investments of the total investment fund. The investment in commingled funds or shares shall be held in trust. Any investment manager approved by the board of trustees shall invest the commingled funds or shares as a fiduciary.
(3) All investments shall be acquired at prices not exceeding the prevailing market values for the securities.
(4) Any limitations set forth in this section shall be applicable only at the time of purchase and shall not require the liquidation of any investment at any time. All investments shall be clearly marked to indicate ownership by the fund and to the extent possible shall be registered in the name of the fund.
(5) Subject to the preceding terms, conditions, limitations and restrictions, the board shall have power to sell, assign, transfer and dispose of any of the securities and investments of the fund, provided that the sale, assignment or transfer has the majority approval of the entire board. The board may employ or contract with investment managers, evaluation services or other such services as determined by the board to be necessary for the effective and efficient operation of the fund.
(6) Except as otherwise provided in this section, no trustee and no employee of the board shall have any direct or indirect interest in the income, gains or profits of any investment made by the board, nor shall any such person receive any pay or emolument for his services in connection with any investment made by the board. No trustee or employee of the board shall become an endorser or surety, or in any manner an obligor for money loaned by or borrowed from the fund.
(7) All interest derived from investments and any gains from the sale or exchange of investments shall be credited by the board to the account of the fund.
(8) The board of trustees shall be the custodian and fiduciary of the fund.
(9) For the purpose of meeting disbursements, cash may be kept available, not exceeding the requirements of the fund for a period of ninety (90) days, on deposit in one or more banks or trust companies organized under the laws of the State of Mississippi or the laws of the United States, provided that the sum on deposit in any one (1) bank or trust company shall not exceed thirty-five percent (35%) of the paid-up capital and regular surplus of the bank or trust company.
(10) The board of trustees shall determine the degree of collateralization necessary for both foreign and domestic demand deposit accounts in addition to that which is guaranteed by the Federal Deposit Insurance Corporation or such other federal insurance program as may be in effect.
(11) The board, the executive director and employees shall discharge their duties with respect to the investments of the system solely for the interest of the fund with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an enterprise of a like character and with like aims, including diversifying the investments of the system so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so.
(12) Investment management fees and costs shall be paid from the fund.
SOURCES: Laws, 2002, ch. 636, § 2, HB 1386, eff from and after July 1, 2002.