CHAPTER 5. ACCOUNTS; INVESTMENTS
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 separateannuity savings and retirement allowance accounts established andadministered 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 stateshall make contributions to the retirement allowance account asspecified in IC 5-10.2-2. Participating political subdivisions shallmake contributions as specified in chapter 6 of this article.
(b) If members receive compensation from federal funds, theboard shall at the end of each fiscal year determine the employer'scontribution, excluding administration expenses, to be paid fromfederal funds. The amount shall be determined by such methodadopted by the board as results in an equitable sharing of theemployer contribution by the federal government on account ofmembers 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 exemptionson 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 likecapacity and familiar with such matters would use in the conduct ofan enterprise of a like character with like aims. The board shall alsodiversify such investments in accordance with prudent investmentstandards, subject to the limitations and restrictions set forth inIC 5-10.2-2-18.
(b) The board may invest up to five percent (5%) of the excess ofits cash working balance in debentures of the corporation forinnovation development subject to IC 30-4-3-3.
(c) The board is not subject to IC 4-13, IC 4-13.6, and IC 5-16when managing real property as an investment. Any managementagreements entered into by the board must ensure that themanagement agent acts in a prudent manner with regard to thepurchase of goods and services. Contracts for the management ofinvestment property shall be submitted to the governor, the attorneygeneral, and the budget agency for approval. A contract formanagement of real property as an investment:
(1) may not exceed a four (4) year term and must be based uponguidelines established by the board;
(2) may provide that the property manager may collect rent andmake disbursements for routine operating expenses such as
utilities, cleaning, maintenance, and minor tenant finish needs;
(3) must establish, consistent with the board's duty underIC 30-4-3-3(c), guidelines for the prudent management ofexpenditures related to routine operation and capitalimprovements; and
(4) may provide specific guidelines for the board to purchasenew properties, contract for the construction or repair ofproperties, and lease or sell properties without individualtransactions requiring the approval of the governor, the attorneygeneral, the Indiana department of administration, and thebudget agency. However, each individual contract involving thepurchase or sale of real property is subject to review andapproval by the attorney general at the specific request of theattorney general.
(d) Whenever the board takes bids in managing or selling realproperty, the board shall require a bid submitted by a trust (asdefined 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 ofInternal Revenue Code
Sec. 3.1. The board's transactions under section 3 of this chapterare 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 trustcompanies under a custodial agreement. Income, interest, proceedsof sale, materials, redemptions, and all other receipts from securitiesand other investments which the board retains for the cash workingbalance shall be deposited as authorized by the board.
(b) The board may contract with investment counsel, trustcompanies, 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 thatare 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 forsecurities held by the custodians. Each custodian must have acombined capital and surplus of at least ten million dollars($10,000,000) according to the last published report of condition forthe bank or trust company and have physical custody of suchsecurities. The state board of accounts is authorized to rely onsafekeeping receipts from the custodian. The custodian may beauthorized by the agreement to:
(1) hold securities and other investments in the name of thefund, in the name of a nominee of the custodian, or in bearerform;
(2) collect and receive income, interest, proceeds of sale,maturities, redemptions, and all other receipts from thesecurities and other investments;
(3) deposit all the receipts collected and received undersubdivision (2) in a custodian account or checking account asinstructed by the board;
(4) reinvest the receipts collected and received undersubdivision (2) as directed by the board;
(5) maintain accounting records and prepare reports which arerequired by the board and the state board of accounts; and
(6) perform other services for the board as are customary andappropriate for custodians.
(c) The custodian is responsible for all securities held in the nameof 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 mayterminate contracts and custodial agreements with investmentcounsel, trust companies and banks and may recover securities andmoneys held under the custodial agreements whenever the boardconsiders 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 againstdifference between reserves in account and accrued liability
Sec. 7. (a) After each fiscal year, the actuary shall report the statusof the reserve account for persons receiving benefits from the fund.The report must contain a statement of the reserves in the accountand the accrued liability for these persons.
(b) Taking into consideration the actuary's report, the board shallafter June 30, 1985, charge the costs of postretirement benefitincreases against any difference between the reserves in the accountand the accrued liability. However, the board may withhold from the
difference, as a contingency reserve, an amount less than or equal totwo percent (2%) of the reserve. If the amount of the difference isinsufficient to meet the costs of the postretirement benefit increases,the excess shall be charged against each employer's account in theretirement 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.