PRIOR PRINTER'S NOS. 1077, 1342, 1398 PRINTER'S NO. 1440
No. 974 Session of 1993
INTRODUCED BY SCHWARTZ, AFFLERBACH, JONES, LEWIS, REIBMAN,
FATTAH, HART AND DAWIDA, APRIL 22, 1993
AS AMENDED ON THIRD CONSIDERATION, JUNE 8, 1993
AN ACT
1 Amending Titles 24 (Education) and 71 (State Government) of the
2 Pennsylvania Consolidated Statutes, revising provisions
3 relating to investments of the Public School Employees'
4 Retirement Board and the State Employees' Retirement Board,
5 respectively; excepting such boards from terms, conditions,
6 limitations and restrictions imposed on other administrative
7 boards of the Commonwealth in making investments; and
8 adopting prudent-person rule in lieu of specific "legal list"
9 of authorized investments.
10 The General Assembly of the Commonwealth of Pennsylvania
11 hereby enacts as follows:
12 Section 1. Section 8521 of Title 24 of the Pennsylvania
13 Consolidated Statutes is amended to read:
14 § 8521. Management of fund and accounts.
15 (a) Control and management of fund.--The members of the
16 board shall be the trustees of the fund [and]. Regardless of any
17 other provision of law governing the investments of funds under
18 the control of an administrative board of the Commonwealth, the
19 trustees shall have exclusive control and management of the said
20 fund and full power to invest the same in accordance with the
21 provisions of this section, subject, however, to the exercise of
1 that degree of judgment and care under the circumstances then
2 prevailing which persons of prudence, discretion and
3 intelligence who are familiar with such matters exercise in the
4 management of their own affairs not in regard to speculation,
5 but in regard to the permanent disposition of the fund,
6 considering the probable income to be derived therefrom as well
7 as the probable safety of their capital[, and further subject to
8 all the terms, conditions, limitations, and restrictions imposed
9 by this part or other law upon the making of investments.
10 Subject to like terms, conditions, limitations, and
11 restrictions, said]. The trustees shall have the power to hold,
12 purchase, sell, lend, assign, transfer, or dispose of any of the
13 securities and investments in which any of the moneys in the
14 fund shall have been invested as well as of the proceeds of said
15 investments and of any moneys belonging to said fund, subject in
16 every case to meeting the standard of prudence set forth in this
17 subsection.
18 (b) Crediting of interest.--The board annually shall allow
19 statutory interest to the credit of the members' savings account
20 on the mean amount of the accumulated deductions of all members
21 for whom interest is payable for the preceding year and
22 valuation interest on the mean amount of the annuity reserve
23 account for the preceding year to the credit of that account.
24 The board annually shall allow valuation interest calculated on
25 the mean amount for the preceding year of the balance in the
26 State accumulation account excluding any earnings of the fund
27 credited to the account during that year. In the event the total
28 earnings for the year do not exceed 5 1/2% of the mean amount
29 for the preceding year of the total assets of the fund less
30 earnings credited to the fund during that year plus the
19930S0974B1440 - 2 -
1 administrative expenses of the board, the difference required to
2 be appropriated from the General Fund shall be credited to the
3 State accumulation account.
4 (c) Custodian of fund.--The State Treasurer shall be the
5 custodian of the fund.
6 (d) Payments from fund.--All payments from the fund shall be
7 made by the State Treasurer in accordance with requisitions
8 signed by the secretary of the board, or his designee, and
9 ratified by resolution of the board.
10 (e) Fiduciary status of board.--The members of the board,
11 employees of the board, and agents thereof shall stand in a
12 fiduciary relationship to the members of the system regarding
13 the investments and disbursements of any of the moneys of the
14 fund and shall not profit either directly or indirectly with
15 respect thereto. The board may, when possible and consistent
16 with its fiduciary duties imposed by this subsection SECTION or <--
17 other law, including its obligation to invest and manage the
18 fund for the exclusive benefit of the members of the system,
19 consider whether an investment in any project or business
20 enhances and promotes the general welfare of the Commonwealth
21 and its citizens BY, including, but not limited to, investments <--
22 that increase and enhance INCREASING AND ENHANCING the <--
23 employment of Pennsylvania residents, encourage ENCOURAGING the <--
24 construction and retention of adequate housing and stimulate <--
25 STIMULATING further investment and economic activity in this <--
26 Commonwealth.
27 (f) Name for transacting business.--By the name of "The
28 Public School Employees' Retirement System" or "The Public
29 School Employes' Retirement System" all of the business of the
30 system shall be transacted, its fund invested, all requisitions
19930S0974B1440 - 3 -
1 for money drawn and payments made, and all of its cash and
2 securities and other property shall be held, except that, any
3 other law to the contrary notwithstanding, the board may
4 establish a nominee registration procedure for the purpose of
5 registering securities in order to facilitate the purchase,
6 sale, or other disposition of securities pursuant to the
7 provisions of this part.
8 (g) Deposits in banks and trust companies.--For the purpose
9 of meeting disbursements for annuities and other payments in
10 excess of the receipts, there shall be kept available by the
11 State Treasurer an amount, not exceeding 10% of the total amount
12 in the fund, on deposit in any bank, savings bank or savings and
13 loan association in this Commonwealth organized under the laws
14 thereof or under the laws of the United States or with any trust
15 company or companies incorporated by any law of this
16 Commonwealth, provided any of such banks, trust companies,
17 savings banks or savings and loan associations shall furnish
18 adequate security for said deposit. The sum deposited in any one
19 bank or trust company shall not exceed 25% of the paid-up
20 capital and surplus of said bank or trust company or, in the
21 case of savings banks or savings and loan associations, shall
22 not exceed 25% of the unappropriated surplus.
23 [(h) Investment in corporate stocks.--Preferred and common
24 stock of any corporation organized under the laws of the United
25 States or of any commonwealth or state thereof or of the
26 District of Columbia and preferred and common stock as defined
27 in subsection (i) of any corporation as defined in subsection
28 (j) whose shares are traded in United States dollars on the New
29 York Stock Exchange and American Stock Exchange shall be an
30 authorized investment of the fund, provided that they fulfill
19930S0974B1440 - 4 -
1 certain guidelines in paragraph (1), regardless of any other
2 provision of law provided that:
3 (1) in the case of any stock other than stock of a bank
4 or insurance company, the stock is listed or traded (or if
5 unlisted or not entitled to trading privileges shall be
6 eligible for listing and application for such listing shall
7 have been made) on the New York Stock Exchange or American
8 Stock Exchange. No investment in the stock of corporations
9 not organized under the laws of the United States or of any
10 commonwealth or state thereof or of the District of Columbia
11 shall be made which would cause the book value of such
12 investment to exceed 5% of the book value of the total assets
13 of the fund. Shares of banks and insurance companies shall be
14 eligible for purchase whether or not traded on the New York
15 Stock Exchange. The shares of unlisted nonfinancial companies
16 shall be eligible for purchase provided such corporations
17 produce revenue of $200,000,000 or more in their most recent
18 fiscal year-end and have paid cash dividends for the past
19 five or more consecutive years;
20 (2) no investment in common stock be made which at that
21 time would cause the book value of the investments in common
22 stock to exceed 50% of the total assets of the fund;
23 (3) the amount invested in the common stock of any one
24 company shall not exceed at cost 2% of the book value of the
25 assets of the fund at the time of purchase and shall not
26 exceed 5% of the issued and outstanding common stock of that
27 company; and
28 (4) the percentage limitations of paragraph (3) shall
29 not apply to the reinvestment of funds realized from the sale
30 or transfer of common stocks and no sale or other liquidation
19930S0974B1440 - 5 -
1 of any investment shall be required solely because of any
2 change in market values whereby the percentages of stocks set
3 forth in this subsection are exceeded.
4 (i) Common stock defined.--"Common stock" as used in
5 subsection (h) shall include the stock certificates,
6 certificates of beneficial interests, or trust participation
7 certificates issued by any corporation or unincorporated
8 association included under the definition of "corporation" in
9 subsection (j).
10 (j) Corporation defined.--"Corporation" as used in
11 subsection (h) shall include a voluntary association, a joint-
12 stock association or company, a business trust, a Massachusetts
13 trust, a common-law trust, and any other organization organized
14 and existing for any lawful purpose and which like a
15 corporation, continues to exist, notwithstanding changes in the
16 personnel of its members or participants and conducts its
17 affairs through a committee, a board, or some other group acting
18 in a representative capacity.
19 (k) Investment in real estate and mortgages.--Real estate,
20 whether direct or through pooled funds, including but not
21 limited to real estate which shall not require managerial
22 responsibility by the board; and bonds, notes and deeds of
23 trust, of individuals or corporations secured by mortgages on
24 real estate located in any state, district or territory of the
25 United States, shall be an authorized investment of the board
26 regardless of any other provision of law. All instruments,
27 transfers of interest, and all records pertaining to real
28 estate, mortgages or bonds invested in by the board, shall be
29 open to public inspection.
30 (l) Additional board power on investments.--Regardless of
19930S0974B1440 - 6 -
1 any limitations, conditions or restrictions imposed on the
2 making of investments by this part or other law, the board may,
3 at its discretion, invest a maximum of 10% of the book value of
4 the assets of the fund in any investments not otherwise
5 specifically authorized, provided that such investments are made
6 with the exercise of that degree of judgment and care under the
7 circumstances then prevailing which persons of prudence,
8 discretion and intelligence who are familiar with such matters
9 exercise in the management of their own affairs not in regard to
10 speculation, but in regard to the permanent disposition of the
11 fund, considering the probable income to be derived therefrom as
12 well as the probable safety of their capital.
13 (m) Obligations of United States to be authorized
14 investments.--Regardless of any other provision of law,
15 obligations of the United States Government and its agencies
16 shall be authorized investments of the fund.
17 (n) Vehicles for authorized investments.--The board may make
18 any investments authorized in this part or other law by becoming
19 a limited partner in partnerships that will hold such
20 investments, or by acquiring shares or units of participation or
21 otherwise participating beneficially in bank collective trusts
22 or in separate accounts of any insurance company authorized to
23 do business in this Commonwealth, or by acquiring stocks or
24 shares or units of participation or otherwise participating
25 beneficially in the fund of any corporation or trust organized
26 or existing under the laws of the United States or of any state,
27 district or territory thereof which fund is maintained for and
28 consists of assets of employees' benefit trusts (including
29 governmental plans as defined in section 414(d) of the Internal
30 Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 414(d)), as
19930S0974B1440 - 7 -
1 from time to time amended) which meet the requirements for
2 qualification under section 401 of the Internal Revenue Code of
3 1986; provided that, in any such case, the liability of the
4 Public School Employees' Retirement Fund shall be limited to the
5 amount of its investment. In the case of authorized investments
6 in real estate or interests therein, the board's acquisition of
7 the stock or shares of or its other participation beneficially
8 in the fund or any such vehicle (including any entity organized
9 and maintained as a vehicle for an investment or investments of
10 the board exclusively) shall not be deemed an investment in the
11 common stock as defined in subsection (i) of any corporation as
12 defined in subsection (j) for the purposes of any limitation on
13 investment in corporate stocks set forth in subsection (h).
14 (o)] (h) Venture capital.--[The provisions of subsection (l)
15 notwithstanding, venture] Venture capital investments [made
16 through limited partnerships and through separate accounts]
17 shall be limited to not more than 2% of the book value of the
18 total assets of the fund as determined for financial statement
19 purposes as of June 30 next preceding the date of investment. [A
20 venture capital investment shall be made only if such investment
21 will enhance the general welfare of this Commonwealth and its
22 citizens through economic development and meets the standard of
23 prudence set forth in subsection (l)]. An investment shall be
24 deemed a venture capital investment if it results in the
25 acquisition of equity interests or a combination of debt and
26 equity interests in a business which is expected to grow
27 substantially in the future and in which the expected return on
28 investment is to come predominantly from an increase in value of
29 the equity [interest and that are not held through or secured by
30 stock that is an authorized investment under the authority of
19930S0974B1440 - 8 -
1 subsection (h)] interests and are not interests in or secured by
2 real estate. A venture capital investment may be made only if,
3 in the judgment of the board, the investment is reasonably
4 likely to enhance the general welfare of this Commonwealth and
5 its citizens and meets the standard of prudence set forth in
6 subsection (a). In determining whether the investment meets the
7 standard of prudence, the board may consider, together with the
8 expected return on and the risk characteristics of the
9 particular investment, the actual and expected further returns
10 and the risk characteristics of the total venture capital
11 investments held by the board at the time and the degree to
12 which proposed new investment would promote further
13 diversification within the venture capital asset class.
14 (i) Vehicles for authorized investments.--The board in its
15 prudent discretion may make any investments which meet the
16 standard of prudence set forth in subsection (a) by becoming a
17 limited partner in partnerships that will hold such investments,
18 or by acquiring shares or units of participation or otherwise
19 participating beneficially in bank collective trusts or in the
20 separate accounts of any insurance company authorized to do
21 business in this Commonwealth, or by acquiring stocks or shares
22 or units of participation or otherwise participating
23 beneficially in the fund of any corporation or trust organized
24 or existing under the laws of the United States or of any state,
25 district or territory thereof which fund is maintained for and
26 consists of assets of employees' benefit trusts, including
27 governmental plans as defined in section 414(d) of the Internal
28 Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 414(d)), as
29 from time to time amended, which meet the requirements for
30 qualification under section 401 of the Internal Revenue Code of
19930S0974B1440 - 9 -
1 1986 (Public Law 99-514, 26 U.S.C. § 401), provided that, in any
2 such case, the liability of the fund shall be limited to the
3 amount of its investment.
4 (j) Legislative declaration concerning certain authorized
5 investments.--The General Assembly finds and declares that
6 authorized investments of the fund, made by or in behalf of the
7 board pursuant to this section whereby the board becomes a joint
8 owner or stockholder in any company, corporation or association,
9 are outside the scope of the original intent of, and therefor do
10 not violate the prohibition set forth in section 8 of Article
11 VIII of the Constitution of Pennsylvania.
12 Section 2. Section 5931 of Title 71 is amended to read:
13 § 5931. Management of fund and accounts.
14 (a) Control and management of fund.--The members of the
15 board shall be the trustees of the fund [and]. Regardless of any
16 other provision of law governing the investments of funds under
17 the control of an administrative board of the Commonwealth, the
18 trustees shall have exclusive control and management of the said
19 fund and full power to invest the same in accordance with the
20 provisions of this section, subject, however, to the exercise of
21 that degree of judgment, skill and care under the circumstances
22 then prevailing which persons of prudence, discretion and
23 intelligence, who are familiar with such matters, exercise in
24 the management of their own affairs not in regard to
25 speculation, but in regard to the permanent disposition of the
26 funds, considering the probable income to be derived therefrom
27 as well as the probable safety of their capital[, and further
28 subject to all the terms, conditions, limitations and
29 restrictions imposed by this part or other law upon the making
30 of investments. The board shall, when possible and consistent
19930S0974B1440 - 10 -
1 with the terms, conditions, limitations, responsibilities and
2 restrictions imposed by this subsection or other law, invest in
3 any project or business which promotes employment of
4 Pennsylvania residents. Subject to like terms, conditions,
5 limitations and restrictions, said]. The trustees shall have the
6 power to hold, purchase, sell, lend, assign, transfer or dispose
7 of any of the securities and investments in which any of the
8 moneys in the fund shall have been invested as well as of the
9 proceeds of said investments and of any moneys belonging to said
10 fund, subject in every case to meeting the standard of prudence
11 set forth in this subsection.
12 (b) Crediting of interest.--The board, annually, shall allow
13 the required interest on the mean amount for the preceding year
14 to the credit of each of the accounts. The amount so allowed
15 shall be credited thereto by the board and transferred from the
16 interest reserve account.
17 (c) Custodian of fund.--The State Treasurer shall be the
18 custodian of the fund.
19 (d) Payments from fund.--All payments from the fund shall be
20 made by the State Treasurer in accordance with requisitions
21 signed by the secretary of the board, or his designee, and
22 ratified by resolution of the board.
23 (e) Fiduciary status of board.--The members of the board,
24 employees of the board and agents thereof shall stand in a
25 fiduciary relationship to the members of the system regarding
26 the investments and disbursements of any of the moneys of the
27 fund and shall not profit either directly or indirectly with
28 respect thereto. The board may, when possible and consistent
29 with its fiduciary duties imposed by this subsection SECTION or <--
30 other law, including its obligation to invest and manage the
19930S0974B1440 - 11 -
1 fund for the exclusive benefit of the members of the system,
2 consider whether an investment in any project or business
3 enhances and promotes the general welfare of the Commonwealth
4 and its citizens BY, including, but not limited to, investments <--
5 that increase and enhance INCREASING AND ENHANCING the <--
6 employment of Pennsylvania residents, encourage ENCOURAGING the <--
7 construction and retention of adequate housing and stimulate <--
8 STIMULATING further investment and economic activity in this <--
9 Commonwealth.
10 (f) Name for transacting business.--By the name of "The
11 State Employees' Retirement System" or "The State Employes'
12 Retirement System" all of the business of the system shall be
13 transacted, its fund invested, all requisitions for money drawn
14 and payments made, and all of its cash and securities and other
15 property shall be held, except that, any other law to the
16 contrary notwithstanding, the board may establish a nominee
17 registration procedure for the purpose of registering securities
18 in order to facilitate the purchase, sale or other disposition
19 of securities pursuant to the provisions of this law.
20 (g) Deposits in banks and trust companies.--For the purpose
21 of meeting disbursements for annuities and other payments in
22 excess of the receipts, there shall be kept available by the
23 State Treasurer an amount, not exceeding 10% of the total amount
24 in the fund, on deposit in any bank or banks in this
25 Commonwealth organized under the laws thereof or under the laws
26 of the United States or with any trust company or companies
27 incorporated by any law of this Commonwealth, provided any of
28 such banks or trust companies shall furnish adequate security
29 for said deposit, and provided that the sum so deposited in any
30 one bank or trust company shall not exceed 25% of the paid-up
19930S0974B1440 - 12 -
1 capital and surplus of said bank or trust company.
2 [(h) Investment in corporate stocks.--Preferred and common
3 stock as defined in subsection (i) of any corporation as defined
4 in subsection (j) organized under the laws of the United States
5 or of any commonwealth or state thereof or of the District of
6 Columbia and preferred and common stock as defined in subsection
7 (i) of any corporation as defined in subsection (j) whose shares
8 are traded in United States dollars on the New York Stock
9 Exchange shall be authorized investments of the fund, regardless
10 of any other provision of law provided that:
11 (1) no investment in common stock be made which at that
12 time would cause the book value of the investments in common
13 stock to exceed 50% of the total assets of the fund;
14 (2) the amount invested in the common stock of any one
15 company not exceed at cost 2% of the book value of the assets
16 of the fund at the time of purchase and shall not exceed 5%
17 of the issued and outstanding common stock of that company;
18 (3) no investment in the stock of corporations not
19 organized under the laws of the United States or of any
20 commonwealth or state thereof or of the District of Columbia
21 shall be made which would cause the book value of such
22 investment to exceed 5% of the book value of the total assets
23 of the fund; and
24 (4) no sale or other liquidation of any investment be
25 required solely because of any change in market values
26 whereby the percentages of stocks hereinabove set forth are
27 exceeded.
28 (i) Common stock defined.--"Common stock" as used in
29 subsection (h) shall include the stock certificates,
30 certificates of beneficial interests or trust participation
19930S0974B1440 - 13 -
1 certificates issued by any corporation or unincorporated
2 association included under the definition of "corporation" in
3 the following paragraph.
4 (j) Corporation defined.--"Corporation" as used in
5 subsection (h) shall include a voluntary association, a joint-
6 stock association or company, a business trust, a Massachusetts
7 trust, a common-law trust and any other organization organized
8 and existing for any lawful purpose and which like a
9 corporation, continues to exist, notwithstanding changes in the
10 personnel of its members or participants and conducts its
11 affairs through a committee, a board or some other group acting
12 in a representative capacity.
13 (k) Investment in real estate and mortgages.--Real estate
14 subject to a lease to one or more financially responsible
15 tenants which lease shall not require managerial responsibility
16 by the board; and bonds, notes and deeds of trust, of
17 individuals or corporations secured by mortgages on real estate
18 located in any state, district or territory of the United
19 States, shall be an authorized investment of the board
20 regardless of any other provision of law. The board shall
21 promulgate regulations to implement the foregoing to insure the
22 safety of investments made pursuant to this subsection which
23 regulations shall be in accordance with generally accepted
24 standards and investment principles for pension funds of
25 comparable size. All instruments, transfers of interest, and all
26 records pertaining to real estate, mortgages or bonds invested
27 in by the board, shall be open to public inspection. Reports as
28 requested by the board, shall be submitted on all real estate
29 and mortgage investments by mortgage advisors and
30 correspondents.
19930S0974B1440 - 14 -
1 (l) Investment in institutional real estate.--Institutional
2 real estate funds shall be an authorized investment of the fund
3 provided that no investment shall be made which, at the time of
4 purchase, would cause the book value of such investments to
5 exceed 15% of the book value of the total assets of the fund.
6 (m) Additional board power on investments.--Regardless of
7 any limitations, conditions or restrictions imposed on the
8 making of investments by this part or other law, the board may,
9 at its discretion, invest a maximum of 10% of the book value of
10 the assets of the fund in any investments not otherwise
11 specifically authorized, provided that such investments are made
12 with the exercise of that degree of judgment, skill and care
13 under the circumstances then prevailing which persons of
14 prudence, discretion and intelligence, who are familiar with
15 such matters, exercise in the management of their own affairs
16 not in regard to speculation, but in regard to the permanent
17 disposition of the funds, considering the probable income to be
18 derived therefrom as well as the probable safety of their
19 capital.
20 (n) Obligations of United States to be authorized
21 investments.--Regardless of any other provision of law,
22 obligations of the United States Government and its agencies
23 shall be authorized investments of the fund.
24 (o) Holding entities for authorized investments.--The board
25 may make any investments authorized by this part or other law by
26 becoming a limited partner in partnerships that will hold such
27 investments, or by acquiring shares or units of participation or
28 otherwise participating beneficially in bank collective trusts
29 or in separate accounts of any insurance company authorized to
30 do business in this Commonwealth, or by acquiring stocks or
19930S0974B1440 - 15 -
1 shares or units of participation or otherwise participating
2 beneficially in the fund of any corporation or trust organized
3 or existing under the laws of the United States or of any state,
4 district or territory thereof which fund is maintained for and
5 consists of assets of employees' benefit trusts, including
6 governmental plans as defined in section 414(d) of the Internal
7 Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 414(d)), or
8 which meet the requirements for qualification under section 401
9 of the Internal Revenue Code of 1986, provided that, in any such
10 case, the liability of the State Employees' Retirement Fund
11 shall be limited to the amount of its investment. In the case of
12 authorized investments in real estate or interests therein, the
13 board's acquisition of the stock or shares of or its other
14 participation beneficially in the fund of any such vehicle,
15 including any entity organized and maintained as a vehicle for
16 an investment or investments of the board exclusively, shall not
17 be deemed an investment in the common stock as defined in
18 subsection (i) of any corporation as defined in subsection (j)
19 for the purposes of any limitation on investment in corporate
20 stocks set forth in subsection (h). Nothing in this subsection
21 shall be deemed to supersede the limitation on investment in
22 institutional real estate funds as set forth in subsection (l).
23 (p)] (h) Venture capital.--[The provisions of subsection (m)
24 notwithstanding, venture] Venture capital investments [made
25 through limited partnerships and through separate accounts]
26 shall be limited to not more than 2% of the book value of the
27 total assets of the fund as determined for financial statement
28 purposes as of December 31 next preceding the date of
29 investment. [A venture capital investment shall be made only if
30 such investment will enhance the general welfare of this
19930S0974B1440 - 16 -
1 Commonwealth and its citizens through economic development and
2 meets the standard of prudence set forth in subsection (m).] An
3 investment shall be deemed a venture capital investment if it
4 results in the acquisition of equity interests or a combination
5 of debt and equity interests in a business which is expected to
6 grow substantially in the future and in which the expected
7 return on investment is to come predominantly from an increase
8 in value of the equity [interest and that are not held through
9 or secured by stock that is an authorized investment under the
10 authority of subsection (h)] interests and are not interests in
11 or secured by real estate. A venture capital investment may be
12 made only if, in the judgment of the board, the investment is
13 reasonably likely to enhance the general welfare of this
14 Commonwealth and its citizens and meets the standard of prudence
15 set forth in subsection (a). In determining whether the
16 investment meets the standard of prudence, the board may
17 consider, together with the expected return on and the risk
18 characteristics of the particular investment, the actual and
19 expected further returns and the risk characteristics of the
20 total venture capital investments held by the board at the time
21 and the degree to which the proposed new investment would
22 promote further diversification within the venture capital asset
23 class.
24 (i) Vehicles for authorized investments.--The board in its
25 prudent discretion may make any investments which meet the
26 standard of prudence set forth in subsection (a) by becoming a
27 limited partner in partnerships that will hold such investments,
28 or by acquiring shares or units of participation or otherwise
29 participating beneficially in bank collective trusts or in the
30 separate accounts of any insurance company authorized to do
19930S0974B1440 - 17 -
1 business in this Commonwealth, or by acquiring stocks or shares
2 or units of participation or otherwise participating
3 beneficially in the fund of any corporation or trust organized
4 or existing under the laws of the United States or of any state,
5 district or territory thereof which fund is maintained for and
6 consists of assets of employees' benefit trusts, including
7 governmental plans as defined in section 414(d) of the Internal
8 Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 414(d)), as
9 from time to time amended, which meet the requirements for
10 qualification under section 401 of the Internal Revenue Code of
11 1986 (Public Law 99-514, 26 U.S.C. § 401), provided that, in any
12 such case, the liability of the Public School Employees' <--
13 Retirement Fund FUND shall be limited to the amount of its <--
14 investment.
15 (j) Legislative declaration concerning certain authorized
16 investments.--The General Assembly finds and declares that
17 authorized investments of the fund make by or in behalf of the
18 board pursuant to this section whereby the board becomes a joint
19 owner or stockholder in any company, corporation or association
20 are outside the scope of the original intent of, and therefor do
21 not violate the prohibition set forth in section 8 of Article
22 VIII of the Constitution of Pennsylvania.
23 Section 3. The provisions of section 7 of the act of July 9, <--
24 1981 (P.L.208, No.66), known as the Public Employee Retirement
25 Commission Act, shall not apply to this act.
26 Section 4 3. This act shall take effect as follows: <--
27 (1) Except as provided in paragraph (2), this act shall
28 take effect immediately.
29 (2) Notwithstanding paragraph (1), any and all
30 investments of the Public School Employees' Retirement Board
19930S0974B1440 - 18 -
1 and of the State Employees' Retirement Board, respectively,
2 which on the effective date of this act are owned or held
3 through a vehicle as described in 24 Pa.C.S. § 8521(i)
4 (relating to management of fund and accounts) or 71 Pa.C.S §
5 5931(i) (relating to management of fund and accounts), as
6 applicable, shall be deemed to have been lawfully made
7 through such vehicle at inception.
B11L24JS/19930S0974B1440 - 19 -