IC 5-10.4-3-1 Members
Sec. 1. (a) The board consists of six (6) trustees.
(b) Five (5) trustees shall be appointed by the governor. At least
two (2) of the trustees appointed by the governor must be members
of the fund. The governor shall make these appointments after June
30 and before July 16 of each year.
(c) The director of the budget agency or the director's designee is
an ex officio voting member of the board. An individual appointed
under this subsection to serve as the director of the budget agency's
designee serves as a permanent designee until replaced by the
director of the budget agency. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-2 Term of office
Sec. 2. A trustee shall serve a term of four (4) years, beginning on
August 1 following appointment. Whenever a trustee is appointed to
fill a vacancy caused by death or resignation, that trustee shall serve
the unexpired term of the trustee's predecessor. A trustee shall serve
until the trustee's successor is appointed and qualified. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-3 Officers
Sec. 3. On or before the September monthly meeting, the board
annually shall elect a president, vice president, and secretary from its
members to serve as officers of the board. An officer shall serve a
term of one (1) year or until the officer's successor is elected and
qualified. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-4 Compensation; reimbursement of expenses
Sec. 4. (a) On the board's order:
(1) the trustees who are not state officers or employees shall
receive the same per diem, mileage, and travel allowances paid
to members of the general assembly serving on interim study
committees established by the legislative council; and
(2) the trustees who are state officers or employees are entitled
to reimbursement for necessary expenses actually incurred
through service on the board.
These costs shall be paid from resources at the disposal of the fund.
(b) Special meetings may be conducted on the call of the president
or on the written call for a special meeting signed by three (3)
trustees.
(c) A majority of the board constitutes a quorum at any meeting
for transacting business. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-5 Director
Sec. 5. (a) In conjunction with the board of trustees of the public
employees' retirement fund, the board shall:
(1) appoint a director; and
(2) fix the salary of the director.
(b) The director shall perform all of the following:
(1) Maintain a record of the board's proceedings.
(2) Be responsible for the safekeeping of the books and records
of the fund.
(3) Give a bond as specified by the board. As added by P.L.2-2006, SEC.28. Amended by P.L.107-2010, SEC.3.
IC 5-10.4-3-6 Trustee bonds; duties of board
Sec. 6. (a) A trustee shall give bond as specified periodically by
the state board of finance.
(b) The board shall do all the following:
(1) Act on an application for benefits.
(2) Provide the necessary forms for administering the fund.
(3) Establish records and accounts, which:
(A) provide the necessary information for an actuary's
examination; and
(B) are sanctioned by the state board of accounts.
(4) Maintain individual records for each member containing the
member's:
(A) name;
(B) date of birth;
(C) age at beginning service;
(D) service record;
(E) address;
(F) contributions to the fund;
(G) amounts withdrawn; and
(H) benefits paid;
and other items considered necessary.
(5) Employ or contract with employees, auditors, technical
experts, legal counsel, and other service providers as the board
considers necessary to transact the business of the fund without
the approval of any state officer, and fix the compensation of
those persons.
(6) Make rules as required to administer the fund.
(7) Publish a summary of the fund's condition.
(8) Provide for a report for each member, at least annually
before June 1, of the value of the amount credited to the
member in the annuity savings account in each investment
program under IC 5-10.2-2.
(9) Provide for the installation in the general office of a
complete system of:
(A) books;
(B) accounts, including reserve accounts; and
(C) records;
to give effect to all the requirements of this article and to ensure
the proper operation of the fund.
(10) Appoint an actuary.
(11) With the advice of the actuary, adopt actuarial tables and
compile data needed for actuarial studies necessary for the
fund's operation.
(12) Adopt a budget on a calendar year or fiscal year basis that
is sufficient, as determined by the board, to perform the board's
duties and, as appropriate and reasonable, draw upon fund
assets to fund the budget.
(13) Expend money, including income from the fund's
investments, for effectuating the fund's purposes.
(14) Establish personnel programs and policies for the
employees of the board.
(15) Submit a report of the board's activities to the governor, the
pension management oversight commission, and the budget
committee before November 1 of each year. The report under
this subdivision shall set forth a complete operating and
financial statement covering the board's operations during the
most recent fiscal year, including information on the following:
(A) Investment performance.
(B) Investment and administrative costs as a percentage of
assets under management.
(C) Investment asset allocation strategy.
(D) Member services.
(E) Member communications.
(16) Establish a code of ethics or decide to be under the
jurisdiction and rules adopted by the state ethics commission.
(17) Cooperate with the board of trustees of the public
employees' retirement fund to the extent practicable and
feasible in:
(A) administering and investing the assets of the fund; and
(B) hiring investment managers, investment advisors, and
other service providers. As added by P.L.2-2006, SEC.28. Amended by P.L.107-2010, SEC.4.
IC 5-10.4-3-7 Financial information; annualization of data
Sec. 7. The board shall annually analyze the fund's:
(1) income and expenditures;
(2) actuarial condition;
(3) reserve accounts;
(4) investments; and
(5) such other data as necessary to interpret the fund's condition
and the board's administration of the fund;
for internal control purposes.
As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-8 Powers
Sec. 8. (a) The board may do the following:
(1) Adopt and enforce rules regarding the fund's administration
and the control and investment of the fund.
(2) Give bond for an employee for the fund's protection.
(3) Receive the state's share of the cost of the pension
contribution from the federal government for a member on
leave of absence in order to work in a federally supported
educational project.
(4) Sue and be sued as the board of trustees of the Indiana state
teachers' retirement fund.
(5) Summon and examine witnesses when adjusting claims.
(6) When adjusting disability claims, require medical
examinations by doctors approved or appointed by the board.
Not more than two (2) examinations may be conducted in one
(1) year.
(7) Conduct investigations to help determine the merit of a
claim.
(8) Meet an emergency that may arise in the administration of
the board's trust.
(9) Determine other matters regarding the board's trust that are
not specified.
(10) Enter into agreements with an insurance company to
provide life, hospitalization, surgical, medical, dental, vision,
long term care, or supplemental Medicare insurance, using
individual or group insurance policies for retired teachers, and
deduct premium payments for the policies from the teachers'
retirement benefits and remit the payments to the insurance
companies when deduction is authorized by the respective
retired teacher.
(11) Enter into agreements with one (1) or more insurance
companies to provide annuities for retired teachers and upon a
member's authorization transfer the amount credited to the
member in the annuity savings account to the insurance
companies.
(12) Exercise all powers necessary, convenient, or appropriate
to carry out and effectuate the board's public and corporate
purposes and to conduct the board's business.
(13) Establish and amend rules:
(A) for the administration and regulation of the fund and the
board's affairs; and
(B) to effectuate the powers and purposes of the board;
without adopting a rule under IC 4-22-2.
(b) An agreement under subsection (a)(10) may be for a duration
of three (3) years.
(c) This subsection does not apply to:
(1) an agreement under subsection (a)(10); or
(2) investments of the board.
A contract that the board enters into under section 10(b) of this
chapter or any other provision may be for a term of not more than
five (5) years, with the ability to renew.
(d) The board's powers and the fund's powers specified in this
chapter shall be interpreted broadly to effectuate the purposes of this
chapter and may not be construed as a limitation of powers. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-9 Management of property
Sec. 9. (a) The board is responsible for the fund's property. The
board may take and hold any property given outright or on condition
to the fund and shall perform the conditions accepted. Unless
restricted by a condition, the board may transfer the property when
necessary for the fund's benefit.
(b) The board shall receipt:
(1) property belonging to or coming into the fund and shall
judiciously invest the property; and
(2) money coming into the fund and, except as specified in
sections 13 and 14 of this chapter, shall deposit the money as
authorized by the board.
(c) The board shall direct the fund's disbursements on itemized
vouchers approved by the president of the board and the director or,
in the absence or incapacity of both officers, by another trustee
directed by order of the board. As added by P.L.2-2006, SEC.28. Amended by P.L.115-2009,
SEC.13.
IC 5-10.4-3-10 Investments
Sec. 10. (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 also shall
diversify 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:
(1) make or have investigations made concerning investments;
and
(2) contract for and employ investment counsel to advise and
assist in the purchase and sale of securities.
(c) The board is not subject to IC 4-13, IC 4-13.6, or IC 5-16 when
managing real property as an investment. A management agreement
entered into by the board shall ensure that the management agent acts
in a prudent manner regarding 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 the 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) shall 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:
(A) purchase new properties;
(B) contract for the construction or repair of properties; and
(C) 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 the following:
(1) Each beneficiary of the trust.
(2) Each settlor empowered to revoke or modify the trust. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-11 Compliance with federal law
Sec. 11. The board's transactions under section 10 of this chapter
are subject to IC 5-10.2-2-1.5. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-12 Form of securities
Sec. 12. Each security may be held in bearer form or registered in
the name of:
(1) the fund;
(2) a nominee created by the board; or
(3) a nominee of a custodian bank or safekeeping bank,
approved by the board. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-13 Custodial agreements
Sec. 13. (a) The board may enter into a custodial agreement on
terms the board considers in the best interest of the fund with a bank
or trust company that is 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 agreement described in subsection (a) may authorize the
custodian to:
(1) hold the fund's securities and other investments in the name
of the fund or a nominee, or in bearer form;
(2) collect the income and other receipts from the securities and
other investments and deposit them subject to the instructions
of the board or the board's representative;
(3) reinvest the receipts on the direction of the board or the
board's representative;
(4) maintain accounting records and prepare reports as may be
required for use by the fund and the state board of accounts; and
(5) perform other services for the board that are appropriate and
customary for the custodian.
(c) The custodian is responsible for all securities held in the name
of its nominee for the fund. As added by P.L.2-2006, SEC.28. Amended by P.L.90-2008, SEC.3.
IC 5-10.4-3-14 Management of custodial account
Sec. 14. All income and other receipts from securities may be:
(1) collected by the custodian bank or safekeeping bank
approved for that purpose by the board and deposited in the
custodial account or a checking account of the board;
(2) reinvested from the custodial account or checking account
when the board determines that the receipts may be safely
invested; or
(3) withdrawn by the board for the immediate needs of the fund
from the checking account or custodial account. As added by P.L.2-2006, SEC.28. Amended by P.L.115-2009,
SEC.14.
IC 5-10.4-3-15 Conflict of interest prohibited
Sec. 15. (a) Except as otherwise provided, a trustee or employee
of the board may not have any direct interest in the income of an
investment made by the board or may not receive any pay or
emolument for services connected with any investment made by the
board.
(b) The board may purchase a security or financial interest issued
or owned by a:
(1) custodian bank or trust company; or
(2) subsidiary, parent corporation, or holding company of a
custodian bank or trust company.
(c) A trustee or employee may not become an obligor for money
loaned by or borrowed from the fund. As added by P.L.2-2006, SEC.28. IC 5-10.4-3-16 Criminal penalties
Sec. 16. A person who recklessly violates:
(1) IC 21-6.1-3-9 (repealed), IC 21-6.1-3-11 (repealed),
IC 21-6.1-3-15 (repealed), or IC 21-6.1-3-18 (repealed), before
July 1, 2006; or
(2) section 10, 12, 14, or 15 of this chapter, after June 30, 2006;
commits a Class A misdemeanor. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-1 Members
Sec. 1. (a) The board consists of six (6) trustees.
(b) Five (5) trustees shall be appointed by the governor. At least
two (2) of the trustees appointed by the governor must be members
of the fund. The governor shall make these appointments after June
30 and before July 16 of each year.
(c) The director of the budget agency or the director's designee is
an ex officio voting member of the board. An individual appointed
under this subsection to serve as the director of the budget agency's
designee serves as a permanent designee until replaced by the
director of the budget agency. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-2 Term of office
Sec. 2. A trustee shall serve a term of four (4) years, beginning on
August 1 following appointment. Whenever a trustee is appointed to
fill a vacancy caused by death or resignation, that trustee shall serve
the unexpired term of the trustee's predecessor. A trustee shall serve
until the trustee's successor is appointed and qualified. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-3 Officers
Sec. 3. On or before the September monthly meeting, the board
annually shall elect a president, vice president, and secretary from its
members to serve as officers of the board. An officer shall serve a
term of one (1) year or until the officer's successor is elected and
qualified. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-4 Compensation; reimbursement of expenses
Sec. 4. (a) On the board's order:
(1) the trustees who are not state officers or employees shall
receive the same per diem, mileage, and travel allowances paid
to members of the general assembly serving on interim study
committees established by the legislative council; and
(2) the trustees who are state officers or employees are entitled
to reimbursement for necessary expenses actually incurred
through service on the board.
These costs shall be paid from resources at the disposal of the fund.
(b) Special meetings may be conducted on the call of the president
or on the written call for a special meeting signed by three (3)
trustees.
(c) A majority of the board constitutes a quorum at any meeting
for transacting business. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-5 Director
Sec. 5. (a) In conjunction with the board of trustees of the public
employees' retirement fund, the board shall:
(1) appoint a director; and
(2) fix the salary of the director.
(b) The director shall perform all of the following:
(1) Maintain a record of the board's proceedings.
(2) Be responsible for the safekeeping of the books and records
of the fund.
(3) Give a bond as specified by the board. As added by P.L.2-2006, SEC.28. Amended by P.L.107-2010, SEC.3.
IC 5-10.4-3-6 Trustee bonds; duties of board
Sec. 6. (a) A trustee shall give bond as specified periodically by
the state board of finance.
(b) The board shall do all the following:
(1) Act on an application for benefits.
(2) Provide the necessary forms for administering the fund.
(3) Establish records and accounts, which:
(A) provide the necessary information for an actuary's
examination; and
(B) are sanctioned by the state board of accounts.
(4) Maintain individual records for each member containing the
member's:
(A) name;
(B) date of birth;
(C) age at beginning service;
(D) service record;
(E) address;
(F) contributions to the fund;
(G) amounts withdrawn; and
(H) benefits paid;
and other items considered necessary.
(5) Employ or contract with employees, auditors, technical
experts, legal counsel, and other service providers as the board
considers necessary to transact the business of the fund without
the approval of any state officer, and fix the compensation of
those persons.
(6) Make rules as required to administer the fund.
(7) Publish a summary of the fund's condition.
(8) Provide for a report for each member, at least annually
before June 1, of the value of the amount credited to the
member in the annuity savings account in each investment
program under IC 5-10.2-2.
(9) Provide for the installation in the general office of a
complete system of:
(A) books;
(B) accounts, including reserve accounts; and
(C) records;
to give effect to all the requirements of this article and to ensure
the proper operation of the fund.
(10) Appoint an actuary.
(11) With the advice of the actuary, adopt actuarial tables and
compile data needed for actuarial studies necessary for the
fund's operation.
(12) Adopt a budget on a calendar year or fiscal year basis that
is sufficient, as determined by the board, to perform the board's
duties and, as appropriate and reasonable, draw upon fund
assets to fund the budget.
(13) Expend money, including income from the fund's
investments, for effectuating the fund's purposes.
(14) Establish personnel programs and policies for the
employees of the board.
(15) Submit a report of the board's activities to the governor, the
pension management oversight commission, and the budget
committee before November 1 of each year. The report under
this subdivision shall set forth a complete operating and
financial statement covering the board's operations during the
most recent fiscal year, including information on the following:
(A) Investment performance.
(B) Investment and administrative costs as a percentage of
assets under management.
(C) Investment asset allocation strategy.
(D) Member services.
(E) Member communications.
(16) Establish a code of ethics or decide to be under the
jurisdiction and rules adopted by the state ethics commission.
(17) Cooperate with the board of trustees of the public
employees' retirement fund to the extent practicable and
feasible in:
(A) administering and investing the assets of the fund; and
(B) hiring investment managers, investment advisors, and
other service providers. As added by P.L.2-2006, SEC.28. Amended by P.L.107-2010, SEC.4.
IC 5-10.4-3-7 Financial information; annualization of data
Sec. 7. The board shall annually analyze the fund's:
(1) income and expenditures;
(2) actuarial condition;
(3) reserve accounts;
(4) investments; and
(5) such other data as necessary to interpret the fund's condition
and the board's administration of the fund;
for internal control purposes.
As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-8 Powers
Sec. 8. (a) The board may do the following:
(1) Adopt and enforce rules regarding the fund's administration
and the control and investment of the fund.
(2) Give bond for an employee for the fund's protection.
(3) Receive the state's share of the cost of the pension
contribution from the federal government for a member on
leave of absence in order to work in a federally supported
educational project.
(4) Sue and be sued as the board of trustees of the Indiana state
teachers' retirement fund.
(5) Summon and examine witnesses when adjusting claims.
(6) When adjusting disability claims, require medical
examinations by doctors approved or appointed by the board.
Not more than two (2) examinations may be conducted in one
(1) year.
(7) Conduct investigations to help determine the merit of a
claim.
(8) Meet an emergency that may arise in the administration of
the board's trust.
(9) Determine other matters regarding the board's trust that are
not specified.
(10) Enter into agreements with an insurance company to
provide life, hospitalization, surgical, medical, dental, vision,
long term care, or supplemental Medicare insurance, using
individual or group insurance policies for retired teachers, and
deduct premium payments for the policies from the teachers'
retirement benefits and remit the payments to the insurance
companies when deduction is authorized by the respective
retired teacher.
(11) Enter into agreements with one (1) or more insurance
companies to provide annuities for retired teachers and upon a
member's authorization transfer the amount credited to the
member in the annuity savings account to the insurance
companies.
(12) Exercise all powers necessary, convenient, or appropriate
to carry out and effectuate the board's public and corporate
purposes and to conduct the board's business.
(13) Establish and amend rules:
(A) for the administration and regulation of the fund and the
board's affairs; and
(B) to effectuate the powers and purposes of the board;
without adopting a rule under IC 4-22-2.
(b) An agreement under subsection (a)(10) may be for a duration
of three (3) years.
(c) This subsection does not apply to:
(1) an agreement under subsection (a)(10); or
(2) investments of the board.
A contract that the board enters into under section 10(b) of this
chapter or any other provision may be for a term of not more than
five (5) years, with the ability to renew.
(d) The board's powers and the fund's powers specified in this
chapter shall be interpreted broadly to effectuate the purposes of this
chapter and may not be construed as a limitation of powers. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-9 Management of property
Sec. 9. (a) The board is responsible for the fund's property. The
board may take and hold any property given outright or on condition
to the fund and shall perform the conditions accepted. Unless
restricted by a condition, the board may transfer the property when
necessary for the fund's benefit.
(b) The board shall receipt:
(1) property belonging to or coming into the fund and shall
judiciously invest the property; and
(2) money coming into the fund and, except as specified in
sections 13 and 14 of this chapter, shall deposit the money as
authorized by the board.
(c) The board shall direct the fund's disbursements on itemized
vouchers approved by the president of the board and the director or,
in the absence or incapacity of both officers, by another trustee
directed by order of the board. As added by P.L.2-2006, SEC.28. Amended by P.L.115-2009,
SEC.13.
IC 5-10.4-3-10 Investments
Sec. 10. (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 also shall
diversify 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:
(1) make or have investigations made concerning investments;
and
(2) contract for and employ investment counsel to advise and
assist in the purchase and sale of securities.
(c) The board is not subject to IC 4-13, IC 4-13.6, or IC 5-16 when
managing real property as an investment. A management agreement
entered into by the board shall ensure that the management agent acts
in a prudent manner regarding 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 the 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) shall 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:
(A) purchase new properties;
(B) contract for the construction or repair of properties; and
(C) 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 the following:
(1) Each beneficiary of the trust.
(2) Each settlor empowered to revoke or modify the trust. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-11 Compliance with federal law
Sec. 11. The board's transactions under section 10 of this chapter
are subject to IC 5-10.2-2-1.5. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-12 Form of securities
Sec. 12. Each security may be held in bearer form or registered in
the name of:
(1) the fund;
(2) a nominee created by the board; or
(3) a nominee of a custodian bank or safekeeping bank,
approved by the board. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-13 Custodial agreements
Sec. 13. (a) The board may enter into a custodial agreement on
terms the board considers in the best interest of the fund with a bank
or trust company that is 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 agreement described in subsection (a) may authorize the
custodian to:
(1) hold the fund's securities and other investments in the name
of the fund or a nominee, or in bearer form;
(2) collect the income and other receipts from the securities and
other investments and deposit them subject to the instructions
of the board or the board's representative;
(3) reinvest the receipts on the direction of the board or the
board's representative;
(4) maintain accounting records and prepare reports as may be
required for use by the fund and the state board of accounts; and
(5) perform other services for the board that are appropriate and
customary for the custodian.
(c) The custodian is responsible for all securities held in the name
of its nominee for the fund. As added by P.L.2-2006, SEC.28. Amended by P.L.90-2008, SEC.3.
IC 5-10.4-3-14 Management of custodial account
Sec. 14. All income and other receipts from securities may be:
(1) collected by the custodian bank or safekeeping bank
approved for that purpose by the board and deposited in the
custodial account or a checking account of the board;
(2) reinvested from the custodial account or checking account
when the board determines that the receipts may be safely
invested; or
(3) withdrawn by the board for the immediate needs of the fund
from the checking account or custodial account. As added by P.L.2-2006, SEC.28. Amended by P.L.115-2009,
SEC.14.
IC 5-10.4-3-15 Conflict of interest prohibited
Sec. 15. (a) Except as otherwise provided, a trustee or employee
of the board may not have any direct interest in the income of an
investment made by the board or may not receive any pay or
emolument for services connected with any investment made by the
board.
(b) The board may purchase a security or financial interest issued
or owned by a:
(1) custodian bank or trust company; or
(2) subsidiary, parent corporation, or holding company of a
custodian bank or trust company.
(c) A trustee or employee may not become an obligor for money
loaned by or borrowed from the fund. As added by P.L.2-2006, SEC.28. IC 5-10.4-3-16 Criminal penalties
Sec. 16. A person who recklessly violates:
(1) IC 21-6.1-3-9 (repealed), IC 21-6.1-3-11 (repealed),
IC 21-6.1-3-15 (repealed), or IC 21-6.1-3-18 (repealed), before
July 1, 2006; or
(2) section 10, 12, 14, or 15 of this chapter, after June 30, 2006;
commits a Class A misdemeanor. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-1 Members
Sec. 1. (a) The board consists of six (6) trustees.
(b) Five (5) trustees shall be appointed by the governor. At least
two (2) of the trustees appointed by the governor must be members
of the fund. The governor shall make these appointments after June
30 and before July 16 of each year.
(c) The director of the budget agency or the director's designee is
an ex officio voting member of the board. An individual appointed
under this subsection to serve as the director of the budget agency's
designee serves as a permanent designee until replaced by the
director of the budget agency. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-2 Term of office
Sec. 2. A trustee shall serve a term of four (4) years, beginning on
August 1 following appointment. Whenever a trustee is appointed to
fill a vacancy caused by death or resignation, that trustee shall serve
the unexpired term of the trustee's predecessor. A trustee shall serve
until the trustee's successor is appointed and qualified. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-3 Officers
Sec. 3. On or before the September monthly meeting, the board
annually shall elect a president, vice president, and secretary from its
members to serve as officers of the board. An officer shall serve a
term of one (1) year or until the officer's successor is elected and
qualified. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-4 Compensation; reimbursement of expenses
Sec. 4. (a) On the board's order:
(1) the trustees who are not state officers or employees shall
receive the same per diem, mileage, and travel allowances paid
to members of the general assembly serving on interim study
committees established by the legislative council; and
(2) the trustees who are state officers or employees are entitled
to reimbursement for necessary expenses actually incurred
through service on the board.
These costs shall be paid from resources at the disposal of the fund.
(b) Special meetings may be conducted on the call of the president
or on the written call for a special meeting signed by three (3)
trustees.
(c) A majority of the board constitutes a quorum at any meeting
for transacting business. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-5 Director
Sec. 5. (a) In conjunction with the board of trustees of the public
employees' retirement fund, the board shall:
(1) appoint a director; and
(2) fix the salary of the director.
(b) The director shall perform all of the following:
(1) Maintain a record of the board's proceedings.
(2) Be responsible for the safekeeping of the books and records
of the fund.
(3) Give a bond as specified by the board. As added by P.L.2-2006, SEC.28. Amended by P.L.107-2010, SEC.3.
IC 5-10.4-3-6 Trustee bonds; duties of board
Sec. 6. (a) A trustee shall give bond as specified periodically by
the state board of finance.
(b) The board shall do all the following:
(1) Act on an application for benefits.
(2) Provide the necessary forms for administering the fund.
(3) Establish records and accounts, which:
(A) provide the necessary information for an actuary's
examination; and
(B) are sanctioned by the state board of accounts.
(4) Maintain individual records for each member containing the
member's:
(A) name;
(B) date of birth;
(C) age at beginning service;
(D) service record;
(E) address;
(F) contributions to the fund;
(G) amounts withdrawn; and
(H) benefits paid;
and other items considered necessary.
(5) Employ or contract with employees, auditors, technical
experts, legal counsel, and other service providers as the board
considers necessary to transact the business of the fund without
the approval of any state officer, and fix the compensation of
those persons.
(6) Make rules as required to administer the fund.
(7) Publish a summary of the fund's condition.
(8) Provide for a report for each member, at least annually
before June 1, of the value of the amount credited to the
member in the annuity savings account in each investment
program under IC 5-10.2-2.
(9) Provide for the installation in the general office of a
complete system of:
(A) books;
(B) accounts, including reserve accounts; and
(C) records;
to give effect to all the requirements of this article and to ensure
the proper operation of the fund.
(10) Appoint an actuary.
(11) With the advice of the actuary, adopt actuarial tables and
compile data needed for actuarial studies necessary for the
fund's operation.
(12) Adopt a budget on a calendar year or fiscal year basis that
is sufficient, as determined by the board, to perform the board's
duties and, as appropriate and reasonable, draw upon fund
assets to fund the budget.
(13) Expend money, including income from the fund's
investments, for effectuating the fund's purposes.
(14) Establish personnel programs and policies for the
employees of the board.
(15) Submit a report of the board's activities to the governor, the
pension management oversight commission, and the budget
committee before November 1 of each year. The report under
this subdivision shall set forth a complete operating and
financial statement covering the board's operations during the
most recent fiscal year, including information on the following:
(A) Investment performance.
(B) Investment and administrative costs as a percentage of
assets under management.
(C) Investment asset allocation strategy.
(D) Member services.
(E) Member communications.
(16) Establish a code of ethics or decide to be under the
jurisdiction and rules adopted by the state ethics commission.
(17) Cooperate with the board of trustees of the public
employees' retirement fund to the extent practicable and
feasible in:
(A) administering and investing the assets of the fund; and
(B) hiring investment managers, investment advisors, and
other service providers. As added by P.L.2-2006, SEC.28. Amended by P.L.107-2010, SEC.4.
IC 5-10.4-3-7 Financial information; annualization of data
Sec. 7. The board shall annually analyze the fund's:
(1) income and expenditures;
(2) actuarial condition;
(3) reserve accounts;
(4) investments; and
(5) such other data as necessary to interpret the fund's condition
and the board's administration of the fund;
for internal control purposes.
As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-8 Powers
Sec. 8. (a) The board may do the following:
(1) Adopt and enforce rules regarding the fund's administration
and the control and investment of the fund.
(2) Give bond for an employee for the fund's protection.
(3) Receive the state's share of the cost of the pension
contribution from the federal government for a member on
leave of absence in order to work in a federally supported
educational project.
(4) Sue and be sued as the board of trustees of the Indiana state
teachers' retirement fund.
(5) Summon and examine witnesses when adjusting claims.
(6) When adjusting disability claims, require medical
examinations by doctors approved or appointed by the board.
Not more than two (2) examinations may be conducted in one
(1) year.
(7) Conduct investigations to help determine the merit of a
claim.
(8) Meet an emergency that may arise in the administration of
the board's trust.
(9) Determine other matters regarding the board's trust that are
not specified.
(10) Enter into agreements with an insurance company to
provide life, hospitalization, surgical, medical, dental, vision,
long term care, or supplemental Medicare insurance, using
individual or group insurance policies for retired teachers, and
deduct premium payments for the policies from the teachers'
retirement benefits and remit the payments to the insurance
companies when deduction is authorized by the respective
retired teacher.
(11) Enter into agreements with one (1) or more insurance
companies to provide annuities for retired teachers and upon a
member's authorization transfer the amount credited to the
member in the annuity savings account to the insurance
companies.
(12) Exercise all powers necessary, convenient, or appropriate
to carry out and effectuate the board's public and corporate
purposes and to conduct the board's business.
(13) Establish and amend rules:
(A) for the administration and regulation of the fund and the
board's affairs; and
(B) to effectuate the powers and purposes of the board;
without adopting a rule under IC 4-22-2.
(b) An agreement under subsection (a)(10) may be for a duration
of three (3) years.
(c) This subsection does not apply to:
(1) an agreement under subsection (a)(10); or
(2) investments of the board.
A contract that the board enters into under section 10(b) of this
chapter or any other provision may be for a term of not more than
five (5) years, with the ability to renew.
(d) The board's powers and the fund's powers specified in this
chapter shall be interpreted broadly to effectuate the purposes of this
chapter and may not be construed as a limitation of powers. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-9 Management of property
Sec. 9. (a) The board is responsible for the fund's property. The
board may take and hold any property given outright or on condition
to the fund and shall perform the conditions accepted. Unless
restricted by a condition, the board may transfer the property when
necessary for the fund's benefit.
(b) The board shall receipt:
(1) property belonging to or coming into the fund and shall
judiciously invest the property; and
(2) money coming into the fund and, except as specified in
sections 13 and 14 of this chapter, shall deposit the money as
authorized by the board.
(c) The board shall direct the fund's disbursements on itemized
vouchers approved by the president of the board and the director or,
in the absence or incapacity of both officers, by another trustee
directed by order of the board. As added by P.L.2-2006, SEC.28. Amended by P.L.115-2009,
SEC.13.
IC 5-10.4-3-10 Investments
Sec. 10. (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 also shall
diversify 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:
(1) make or have investigations made concerning investments;
and
(2) contract for and employ investment counsel to advise and
assist in the purchase and sale of securities.
(c) The board is not subject to IC 4-13, IC 4-13.6, or IC 5-16 when
managing real property as an investment. A management agreement
entered into by the board shall ensure that the management agent acts
in a prudent manner regarding 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 the 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) shall 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:
(A) purchase new properties;
(B) contract for the construction or repair of properties; and
(C) 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 the following:
(1) Each beneficiary of the trust.
(2) Each settlor empowered to revoke or modify the trust. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-11 Compliance with federal law
Sec. 11. The board's transactions under section 10 of this chapter
are subject to IC 5-10.2-2-1.5. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-12 Form of securities
Sec. 12. Each security may be held in bearer form or registered in
the name of:
(1) the fund;
(2) a nominee created by the board; or
(3) a nominee of a custodian bank or safekeeping bank,
approved by the board. As added by P.L.2-2006, SEC.28.
IC 5-10.4-3-13 Custodial agreements
Sec. 13. (a) The board may enter into a custodial agreement on
terms the board considers in the best interest of the fund with a bank
or trust company that is 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 agreement described in subsection (a) may authorize the
custodian to:
(1) hold the fund's securities and other investments in the name
of the fund or a nominee, or in bearer form;
(2) collect the income and other receipts from the securities and
other investments and deposit them subject to the instructions
of the board or the board's representative;
(3) reinvest the receipts on the direction of the board or the
board's representative;
(4) maintain accounting records and prepare reports as may be
required for use by the fund and the state board of accounts; and
(5) perform other services for the board that are appropriate and
customary for the custodian.
(c) The custodian is responsible for all securities held in the name
of its nominee for the fund. As added by P.L.2-2006, SEC.28. Amended by P.L.90-2008, SEC.3.
IC 5-10.4-3-14 Management of custodial account
Sec. 14. All income and other receipts from securities may be:
(1) collected by the custodian bank or safekeeping bank
approved for that purpose by the board and deposited in the
custodial account or a checking account of the board;
(2) reinvested from the custodial account or checking account
when the board determines that the receipts may be safely
invested; or
(3) withdrawn by the board for the immediate needs of the fund
from the checking account or custodial account. As added by P.L.2-2006, SEC.28. Amended by P.L.115-2009,
SEC.14.
IC 5-10.4-3-15 Conflict of interest prohibited
Sec. 15. (a) Except as otherwise provided, a trustee or employee
of the board may not have any direct interest in the income of an
investment made by the board or may not receive any pay or
emolument for services connected with any investment made by the
board.
(b) The board may purchase a security or financial interest issued
or owned by a:
(1) custodian bank or trust company; or
(2) subsidiary, parent corporation, or holding company of a
custodian bank or trust company.
(c) A trustee or employee may not become an obligor for money
loaned by or borrowed from the fund. As added by P.L.2-2006, SEC.28. IC 5-10.4-3-16 Criminal penalties
Sec. 16. A person who recklessly violates:
(1) IC 21-6.1-3-9 (repealed), IC 21-6.1-3-11 (repealed),
IC 21-6.1-3-15 (repealed), or IC 21-6.1-3-18 (repealed), before
July 1, 2006; or
(2) section 10, 12, 14, or 15 of this chapter, after June 30, 2006;
commits a Class A misdemeanor. As added by P.L.2-2006, SEC.28.
