2006 Louisiana Laws - RS 11:3012 — Investments

§3012.  Investments

A.  The Board shall, from time to time determine the current requirements for benefit payments and administrative expenses which shall be maintained as cash working balance except that such cash working balance shall not exceed at any time an amount necessary to meet the current obligations of the system for a period of ninety days.  Any amounts in excess of such cash working balance shall be invested in the following classes of securities:

(1)  Bonds or securities not in default as to principal or interest, which are the direct obligations of or which are secured or guaranteed as to principal and interest by the United States, any state or territory of the United States, or the District of Columbia where there exists the power to levy taxes for the prompt payment of the principal and interest of such bonds or evidences of indebtedness and any federal farm loan bonds issued by federal land banks, debentures issued by federal intermediate credit banks, and debentures issued by banks for cooperatives.  

(2)  Bonds or evidences of indebtedness which are direct general obligations of any county, parish, city, town, village, school district, drainage district, sanitary district, park district, or other political subdivision or municipal corporation of this state or any other state or territory of the United States or the District of Columbia which shall not be in default in the payment of any of its general obligations bonds, either principal or interest, at the date of such investment.  

(3)  Bonds of any levee or other board of this state, and obligations issued or guaranteed by the International Bank for Reconstruction and Development.  

(4)  Bonds or other obligations which are payable from revenues or earnings specifically pledged therefor of a public utility, state or municipally owned, either directly or through any civil divisions, authority or public instrumentality of a state or municipality, provided that the laws of the state or municipality authorizing the issuance of such bonds or other obligations require that rates for service shall be fixed, maintained and collected at all times so as to produce sufficient revenue or earnings to pay all operating and maintenance charges and both principal and interest of such bonds or obligations, and provided further that no such bonds or other obligations shall be in default at the date of such investment.  

(5)  Bonds or evidences of indebtedness issued or guaranteed by any railroad corporation or corporations (other than those organized for the sole purpose of holding stocks of other corporations) created under the laws of the United States or of any of the states of the United States or the District of Columbia or any certificates of any equipment trust created on behalf of any such railroad corporation; provided that such bonds or certificates have not been in default as to principal or interest payments during any of the five years next preceding that date of such investment during the tenure of such issue if issued less than five years prior to such investment.  

(6)  Bonds or evidences of indebtedness of any solvent public utility corporation or corporations (other than those organized and chartered for the sole purpose of holding the stocks of other corporations) created under the laws of the United States or of any of the states of the United States or the District of Columbia, provided that such bonds or evidences of indebtedness are not in default either as to principal or interest.  

(7)  Bonds or evidences of indebtedness issued by any solvent corporation or corporations (other than corporations organized and chartered for the sole purpose of holding the stocks of other corporations) created under the laws of the United States or any of the states of the United States or the District of Columbia.  

(8)  Shares of insured state chartered building and loan or homestead associations and federal savings and loan associations, if such shares are insured by the Federal Deposit Insurance Corporations as specifically set forth under the terms of Title IV of an Act of the Congress of the United States entitled the "National Housing Act."

(9)  Bonds or notes secured by mortgage or trust deed insured by the Federal Housing Administrator, or in debentures issued by him under the terms of an Act of Congress of the United States entitled the "National Housing Act", and in securities issued by National Mortgage Association established by or under the authority of the National Housing Act, and in bonds or notes secured by mortgage or trust deed guaranteed as to principal by the administrator of veterans' affairs pursuant to the provisions of Title III of Act of Congress of the United States of June 22, 1944, entitled the "Servicemen's Re-adjustment Act of 1944", as heretofore or hereafter amended.  

(10)  Preferred or guaranteed stocks issued or guaranteed by any solvent corporation or corporations created under the laws of the United States or any of the states of the United States or the District of Columbia.

(11)  Shares of capital stock and securities of any solvent corporation created under the laws of the United States or any of the states of the United States or the District of Columbia, provided that the shares of such corporation are registered on a national securities exchange, as provided in an Act of Congress of the United States, entitled the "Securities Exchange Act of 1934" approved June 6, 1934, as amended, or local exchanges, or are readily marketable, and provided further that such corporation has earned during any three years of the five year period next preceding the date of the investment, a sum applicable to dividends equal in the aggregate to not less than twelve percent of the par value (or, in the case of shares having no par value, the stated value) of its outstanding shares.  

(l2)  Paving Certificates of the City of Alexandria.  

B.(1)  The total amount of investments at par value in the securities of any one state, except the state of Louisiana, shall not at any time exceed ten (10%) percent of the total amount of investments at par value.  

(2)  The total of investments at par value in the securities of any one political subdivision of any one state, except the City of Alexandria, Louisiana, shall not, at any time, exceed five (5%) percent of the total amount of investments of the system at par value.  

(3)  The total amount of investments at par value in the stocks and securities of any one public utility corporation or other corporations shall not at any time exceed five (5%) percent of the total amount of investments of the system at par value.  

(4)  Any limitations herein set forth 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 system.  

(5)  Subject to the above 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 system, provided that said sale, assignment or transfer has the majority of the entire Board.  

(6)  Except as otherwise provided herein, 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 system.  

(7)  All interest derived from investments and any gains from the sale or exchange of investments shall be credited by the Treasurer to the account of the system.  

C.  The Board of Trustees annually shall credit regular interest on the balances as of December thirty-first of the preceding year in each of the reserves maintained by the Board with the exception of the Expense Account.  This credit shall be made annually from interest and other earnings on the invested assets of the system.  Any additional amount required to meet the interest on the funds of the system shall be charged to the Employer's Accumulation Account and any excess of earnings over such amount required shall credit to the Employer's Accumulation Account.  Regular interest shall mean such percentum rate to be compounded annually as shall be determined by the Board of Trustees on the basis of the interest earnings of the system for the preceding year, such rate to be limited to the maximum of four percent with a rate of two percent applicable during the first year of operation of the system.  

D.  The Executive Secretary shall be the custodian of the funds of the system.  All expense vouchers and retirement allowance payroll shall be certified by the Executive Secretary, who shall furnish the Board a surety bond in a company authorized to do business in Louisiana in such an amount as shall be required by the Board, the premium to be paid by the Board from the Expense Account.  

E.  For the purpose of meeting disbursements for retirement allowances, annuities and other payments there may be kept available cash, not exceeding the requirements of the system for a period of ninety days, on deposit in one or more banks or trust companies of the state of Louisiana organized under the laws of the state of Louisiana or of the United States, provided, that the sum on deposit in any one bank or trust company shall not exceed twenty-five percent of the paid-up capital and surplus of such bank or trust company.  

F.(1)  The monies and/or properties of the City of Alexandria Employees' Retirement System deposited in any bank or banks of the state shall be safeguarded and guaranteed by the posting, by the depository, of bonds, notes, and other securities purchasable by the system as provided elsewhere in this section.  The bonds, notes and other securities purchasable as security, shall be posted by the depository with the Board or with an unaffiliated bank or trust company domiciled within the state of Louisiana for the account of the system acceptable to both the Board and to the fiscal agent bank.  

(2)  The amount of said bonds, notes and other securities guaranteeing the deposits shall at all times be equal to one hundred percent of the amount on deposit to the credit of the City of Alexandria Employees' Retirement System.  

Designated from Acts 1948, No. 459, §11 by Acts 1991, No. 74, §3, eff. June 25, 1991.