ENGROSSED
Senate Bill No. 306
(By Senator Burdette, Mr. President)
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[Introduced February 8, 1994;
referred to the Committee on Pensions.]
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A BILL to amend and reenact section eleven, article twenty-two,
chapter eight of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, relating to
diversifying approved investments of retirement system funds
in Class I, II and III municipalities; defining a standard
of care; permitting limited investments in certain types of
private corporation stocks and in insured savings accounts
at various financial institutions; and allowing the use of
federally issued, guaranteed and backed instruments and
similarly secured certificates of deposits, as well as those
secured by general obligation or revenue bonds issued by
states and political subdivisions.
Be it enacted by the Legislature of West Virginia:
That section eleven, article twenty-two, chapter eight of
the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be amended and reenacted to read as follows:
ARTICLE 22. RETIREMENT BENEFITS GENERALLY; POLICEMEN'S PENSION
AND RELIEF FUND; FIREMEN'S PENSION AND RELIEF FUND; PENSION
PLANS FOR EMPLOYEES OF WATERWORKS SYSTEM, SEWERAGE SYSTEM OR
COMBINED WATERWORKS AND SEWERAGE SYSTEM.
PART II. GENERAL RETIREMENT SYSTEMS FOR CLASS I,
II AND III CITIES.
§8-22-11. Investment of funds; standard of care.
The board shall keep as an available sum for the purpose of
making retirement, disability and death payments and
administration expense an amount estimated to meet such payments
for a period not to exceed ninety days. The board in acquiring,
investing, reinvesting, exchanging, retaining, selling and
managing property for the benefit of the fund shall exercise the
judgment and care which persons of experience, prudence,
discretion and intelligence exercise in the management of
financial affairs, considering the probable income as well as
probable security of the investment and with regard to the
permanent disposition of the fund. Within the limitations of the
foregoing standard, the board is authorized in its sole
discretion to invest and reinvest any funds received by it in the
following:
(1) Obligations of the United States or any agency thereof,
which are guaranteed by the United States or for which the full
faith and credit of the United States is pledged for the payment
of principal and interest, or any obligation of an agency of the
United States designated in section nine, article six, chaptertwelve of this code.
(2) Certificates of deposit secured by: (i) Obligations as
listed previously in subdivision (1) of this section; (ii)
general obligation or revenue bonds of the state of West
Virginia; (iii) general obligation bonds of any other state; (iv)
general obligation bonds of any county in this state or any
county board of education in this state; or (v) general
obligation bonds of any municipality in this state.
(3) Interest bearing savings accounts in banking
institutions, the accounts of which are insured by the federal
deposit insurance corporation, or in federal savings and loan
associations, the accounts of which are insured by the federal
savings and loan insurance corporation, or in building and loan
associations, the accounts of which are insured by the federal
savings and loan insurance corporation: Provided, That an
investment in any such savings account in excess of the amount
insured by the federal deposit insurance corporation or the
federal savings and loan insurance corporation, as the case may
be, shall not be made unless such banking institution, federal
savings and loan association or building and loan association
provides adequate bond or other adequate security for the amount
of the proposed municipal investment in excess of such insurance
coverage, the adequacy of any such bond or other security to be
determined by the treasurer of such municipality.
(4) Federally insured mortgages under sections two hundred
three and two hundred seven of the national housing act.
(5) Common and preferred stocks issued or guaranteed by a
corporation created or existing under the laws of the United
States or of any state or commonwealth thereof or of the District
of Columbia if such stock, at the time of the acquisition of the
stock, is traded in United States dollars on the New York stock
exchange: Provided, That:
(i) No investment in common stock be made which at the time
of its purchase would cause the book value of investments in
common stock to exceed fifty percent of the total assets of the
fund or funds available for investment under this article;
(ii) The amount invested in the common stock of any one
company shall not exceed at cost two percent of the book value of
the assets of such fund or funds at the time of the purchase; and
(iii) The amount invested in the common stock of any one
company shall not exceed at time of purchase five percent of the
issued and outstanding common stock of that company.