2013 Indiana Code
TITLE 5. STATE AND LOCAL ADMINISTRATION
ARTICLE 10.3. THE PUBLIC EMPLOYEES' RETIREMENT FUND
CHAPTER 5. ACCOUNTS; INVESTMENTS
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IC 5-10.3-5
Chapter 5. Accounts; Investments
IC 5-10.3-5-1
Accounts in fund
Sec. 1. Accounts in the Fund. The fund consists of separate
annuity savings and retirement allowance accounts established and
administered as specified in IC 5-10.2-2.
As added by Acts 1977, P.L.53, SEC.3.
IC 5-10.3-5-2
Employer contributions; federal money
Sec. 2. Employer Contributions; Federal Moneys. (a) The state
shall make contributions to the retirement allowance account as
specified in IC 5-10.2-2. Participating political subdivisions shall
make contributions as specified in chapter 6 of this article.
(b) If members receive compensation from federal funds, the
board shall at the end of each fiscal year determine the employer's
contribution, excluding administration expenses, to be paid from
federal funds. The amount shall be determined by such method
adopted by the board as results in an equitable sharing of the
employer contribution by the federal government on account of
members receiving compensation from federal funds.
As added by Acts 1977, P.L.53, SEC.3.
IC 5-10.3-5-3
Investments of assets; management agreements; board exemptions
on sale of surplus personal property or state property
Sec. 3. (a) The board shall invest its assets with the care, skill,
prudence, and diligence that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of
an enterprise of a like character with like aims. The board shall also
diversify such investments in accordance with prudent investment
standards, subject to the limitations and restrictions set forth in
IC 5-10.2-2-18.
(b) The board may invest up to five percent (5%) of the excess of
its cash working balance in debentures of the corporation for
innovation development subject to IC 30-4-3-3.
(c) The board is not subject to IC 4-13, IC 4-13.6, and IC 5-16
when managing real property as an investment. Any management
agreements entered into by the board must ensure that the
management agent acts in a prudent manner with regard to the
purchase of goods and services. Contracts for the management of
investment property shall be submitted to the governor, the attorney
general, and the budget agency for approval. A contract for
management of real property as an investment:
(1) may not exceed a four (4) year term and must be based upon
guidelines established by the board;
(2) may provide that the property manager may collect rent and
make disbursements for routine operating expenses such as
utilities, cleaning, maintenance, and minor tenant finish needs;
(3) must establish, consistent with the board's duty under
IC 30-4-3-3(c), guidelines for the prudent management of
expenditures related to routine operation and capital
improvements; and
(4) may provide specific guidelines for the board to purchase
new properties, contract for the construction or repair of
properties, and lease or sell properties without individual
transactions requiring the approval of the governor, the attorney
general, the Indiana department of administration, and the
budget agency. However, each individual contract involving the
purchase or sale of real property is subject to review and
approval by the attorney general at the specific request of the
attorney general.
(d) Whenever the board takes bids in managing or selling real
property, the board shall require a bid submitted by a trust (as
defined in IC 30-4-1-1(a)) to identify all of the following:
(1) Each beneficiary of the trust.
(2) Each settlor empowered to revoke or modify the trust.
As added by Acts 1977, P.L.53, SEC.3. Amended by P.L.51-1983,
SEC.1; P.L.46-1988, SEC.3; P.L.336-1989(ss), SEC.14; P.L.1-1991,
SEC.34; P.L.37-1996, SEC.1; P.L.49-1997, SEC.26; P.L.224-2003,
SEC.187.
IC 5-10.3-5-3.1
Board transactions subject to qualification requirements of
Internal Revenue Code
Sec. 3.1. The board's transactions under section 3 of this chapter
are subject to IC 5-10.2-2-1.5.
As added by P.L.55-1989, SEC.22.
IC 5-10.3-5-4
Investments
Sec. 4. (a) Securities shall be held for the fund by banks or trust
companies under a custodial agreement. Income, interest, proceeds
of sale, materials, redemptions, and all other receipts from securities
and other investments which the board retains for the cash working
balance shall be deposited as authorized by the board.
(b) The board may contract with investment counsel, trust
companies, or banks to assist the board in its investment program.
As added by Acts 1977, P.L.53, SEC.3. Amended by P.L.46-1988,
SEC.4; P.L.55-1993, SEC.2; P.L.195-1999, SEC.19; P.L.1-2002,
SEC.16; P.L.115-2009, SEC.10.
IC 5-10.3-5-5
Custodians
Sec. 5. (a) The custodians must be banks or trust companies that
are domiciled in the United States and approved by the board to:
(1) act in a fiduciary capacity; and
(2) manage custodial accounts;
on behalf of the fund.
(b) The board is authorized to accept safekeeping receipts for
securities held by the custodians. Each custodian must have a
combined capital and surplus of at least ten million dollars
($10,000,000) according to the last published report of condition for
the bank or trust company and have physical custody of such
securities. The state board of accounts is authorized to rely on
safekeeping receipts from the custodian. The custodian may be
authorized by the agreement to:
(1) hold securities and other investments in the name of the
fund, in the name of a nominee of the custodian, or in bearer
form;
(2) collect and receive income, interest, proceeds of sale,
maturities, redemptions, and all other receipts from the
securities and other investments;
(3) deposit all the receipts collected and received under
subdivision (2) in a custodian account or checking account as
instructed by the board;
(4) reinvest the receipts collected and received under
subdivision (2) as directed by the board;
(5) maintain accounting records and prepare reports which are
required by the board and the state board of accounts; and
(6) perform other services for the board as are customary and
appropriate for custodians.
(c) The custodian is responsible for all securities held in the name
of its nominee for the fund.
As added by Acts 1977, P.L.53, SEC.3. Amended by P.L.46-1988,
SEC.5; P.L.25-1994, SEC.7; P.L.72-2003, SEC.1; P.L.97-2004,
SEC.19; P.L.90-2008, SEC.2.
IC 5-10.3-5-6
Termination of agreements
Sec. 6. Termination of Agreements and Contracts. The board may
terminate contracts and custodial agreements with investment
counsel, trust companies and banks and may recover securities and
moneys held under the custodial agreements whenever the board
considers these actions necessary to protect the fund.
As added by Acts 1977, P.L.53, SEC.3.
IC 5-10.3-5-7
Actuarial reports; status of reserve account; charges against
difference between reserves in account and accrued liability
Sec. 7. (a) After each fiscal year, the actuary shall report the status
of the reserve account for persons receiving benefits from the fund.
The report must contain a statement of the reserves in the account
and the accrued liability for these persons.
(b) Taking into consideration the actuary's report, the board shall
after June 30, 1985, charge the costs of postretirement benefit
increases against any difference between the reserves in the account
and the accrued liability. However, the board may withhold from the
difference, as a contingency reserve, an amount less than or equal to
two percent (2%) of the reserve. If the amount of the difference is
insufficient to meet the costs of the postretirement benefit increases,
the excess shall be charged against each employer's account in the
retirement allowance account on a prorata basis.
As added by Acts 1977, P.L.53, SEC.3. Amended by Acts 1977(ss),
P.L.2, SEC.3; P.L.50-1985, SEC.2.
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