N.Y. Retirement & Social Security Law § 13: Management of funds

§ 13. Management of funds. a. The funds of the retirement system shall

be managed in accordance with this section.

b. The comptroller shall be trustee of the several funds of the

retirement system. Such funds shall be invested by the comptroller in

securities in which he is authorized by law to invest the funds of the

state, except that he may invest in obligations consisting of notes,

bonds, debentures, or equipment trust certificates issued under an

indenture, which are the direct obligations of, or in the case of

equipment trust certificates are secured by direct obligations of, a

railroad or industrial corporation, or a corporation engaged directly

and primarily in the production, transportation, distribution, or sale

of electricity or gas, or the operation of telephone or telegraph

systems or waterworks, or in some combination of them; provided the

obligor corporation is one which is incorporated under the laws of the

United States, or any state thereof, or of the District of Columbia, and

said obligations shall be rated at the time of purchase within the three

highest classifications established by at least two standard rating

services. The maximum amount that the comptroller may invest in such

obligations shall not exceed thirty per centum of the assets of the New

York state employees' retirement system's funds; and provided further

that not more than two and one half per centum of the assets of the New

York state employees' retirement system's funds shall be invested in the

obligations of any one corporation of the highest classification and

subsidiary or subsidiaries thereof, that not more than two per centum of

the assets of the New York state employees' retirement system's funds

shall be invested in the obligations of any one corporation of the

second highest classification and subsidiary or subsidiaries thereof,

that not more than one and one half per centum of the assets of the New

York state employees' retirement system's funds shall be invested in the

obligations of any one corporation of the third highest classification

and subsidiary or subsidiaries thereof. He shall, however, be subject to

all terms, conditions, limitations and restrictions imposed by this

article and by law upon the making of such investments. The comptroller

shall have full power:

1. To hold, purchase, sell, assign, transfer or dispose of any of the

securities or investments, in which any of the funds of the retirement

system shall be invested, including the proceeds of such investments and

any monies belonging to such funds, and

2. In his name as trustee, to foreclose mortgages upon default or to

take title to real property in such proceedings in lieu thereof and to

lease and sell real property so acquired.

c. The comptroller annually shall credit to each of the funds of the

retirement system regular interest on the mean amount therein for the

preceding year.

d. The custody of all funds of the retirement system shall be in the

charge of the head of the division of the treasury of the department of

taxation and finance, subject to the supervision and control of the

commissioner of taxation and finance.

e. Payment of all pensions, annuities and other benefits shall be made

as provided in this article. For the purpose of meeting disbursements

for pensions, annuities and other payments ordered by the comptroller,

the head of such division may keep on deposit an available fund which

shall not exceed ten per centum of the total amount of the several funds

of the retirement system. Every such deposit shall be kept only in a

bank or trust company organized under the laws of this state, or in a

national bank located in this state, which shall furnish adequate

security therefor.

f. The comptroller, however, shall have a fund in his immediate

possession. Such fund shall be used for the immediate payment of:

1. All pensions, annuities and other benefits, and

2. Such expenses as may necessarily be incurred in acquiring,

servicing and foreclosing mortgages and in acquiring, managing and

protecting investments, and

3. Such special expenditures for which the retirement system will be

paid by the state or a participating employer.

Such fund shall be reimbursed from time to time by the head of such

division on the warrant of the comptroller.

g. Neither the comptroller nor any person employed on the work of the

retirement system shall:

1. Except as herein provided, have any interest, direct or indirect,

in the gains or profits of any investment of the retirement system, nor,

in connection therewith, directly or indirectly, receive any pay or

emolument for his services.

2. Except as provided in section fifty of this article:

(a) Directly or indirectly, for himself or as an agent or partner of

others, borrow any of its funds or deposits or in any manner use the

same except to make such current and necessary payments as are

authorized by the comptroller, or

(b) Become an endorser, surety or an obligor in any manner of monies

loaned by or borrowed of such funds.

h. The retirement system may use a part of its funds, not exceeding

ten per centum of its assets, (1) for purchasing or leasing of land in

the city of Albany and the construction thereon of a suitable office

building or buildings for the transaction of the business of the

retirement system and (2) for purchasing or leasing of land in the

cities of Albany, Syracuse, Buffalo, Binghamton, New York, Rochester and

Utica and the construction thereon of a suitable office building or

buildings for purposes of lease or sale to the state and (3) for

purchasing or leasing of land in the city of Albany on the north and

south sides of Washington avenue commonly known as the "Campus Site"

acquired by the state for a state buildings site pursuant to the

provisions of chapter five hundred seventy-two of the laws of nineteen

hundred forty-seven and the construction thereon of power plants

including service connections, electric substations including service

connections, garages, warehouses and restaurant facilities deemed

necessary for the efficient and economical operation of the office

building or buildings constructed on such land and (4) for purchasing or

leasing of land in the city of Albany acquired by the state for suitable

parking facilities for the use primarily of employees of the state and

persons having business with state departments and state agencies and

the construction thereon of such structures, appurtenances and

facilities deemed necessary for the efficient and economical operation

of the parking facilities constructed on such land and (5) for

purchasing or leasing of land in locations approved by the state

university trustees and the construction, acquisition, reconstruction,

rehabilitation or improvement of suitable buildings or facilities

thereon for purposes of lease or sale to the state university

construction fund, such buildings or facilities to be used by the state

university or by state-operated institutions or statutory or contract

colleges under the jurisdiction of the state university or by the

students, faculty and staff of the state university or of any such

state-operated institution or statutory or contract college, and their

families and (6) for purchasing of lands from the New York state thruway

authority and the construction thereon of an office building or other

buildings for purposes of lease or sale to the thruway authority for its

own use under such terms and conditions, including consideration and

length of term, as shall be agreed upon between the retirement system

and the thruway authority.

The retirement system from time to time may lease to any public agency

any portion of a building constructed for the transaction of its

business which may not be required for such purpose, upon such terms and

conditions as shall be deemed to be for the best interest of the

retirement system.

Real property of the retirement system acquired or constructed

pursuant to this subdivision shall be exempt from taxation.

i. At the close of each fiscal year, the average rate of investment

earnings of the retirement system shall be computed by the actuary and

certified to the comptroller. This rate shall be determined from the

investment earnings during the calendar year which ended three months

prior to the close of the fiscal year. For any year that such average

rate of earnings is in excess of three per centum but not in excess of

four per centum, the comptroller shall declare a rate of special

interest, for members earning regular interest of three per centum,

equal to the difference between such average rate of earnings and three

per centum expressed to the lower one-tenth of one per centum, but not

in excess of one per centum. For any year, commencing with the fiscal

year the first day of which is April first, nineteen hundred seventy,

that such average rate of earnings is in excess of four per centum, the

special rate of interest for members earning regular interest of three

per centum shall be equal to the difference between such average rate of

earnings and three per centum expressed to the lower one-tenth of one

per centum, but not in excess of two per centum, and for members earning

regular interest of four per centum, it shall be the difference between

such average rate of earnings and four per centum, expressed to the

lower one-tenth of one per centum, but not in excess of one per centum.

Special interest at such rates, shall be credited by the comptroller at

the same time that regular interest is credited, to the individual

annuity savings accounts of persons who are members as of the close of

the fiscal year. Special interest shall not be considered in determining

rates of contribution of members. In the case of persons who last became

members on or after July first, nineteen hundred seventy-three, the

provisions of this subdivision shall apply only to the fiscal years

beginning April first, nineteen hundred seventy-two and ending March

thirty-first, nineteen hundred seventy-three.

j. The retirement system may invest, within the limitations authorized

for investments in conventional mortgages, a part of its funds in first

mortgages on real property located anywhere within the boundaries of the

United States and leased to the government of the United States,

provided however, that no such investment shall be made unless the terms

of the mortgage shall provide for amortization payments in an amount

sufficient to completely amortize the loan within the period of the

lease.

k. The funds of the retirement system may be invested in the purchase

of promissory notes or bonds from the farmers home administration issued

in connection with the purchase or improvement of real property and

which are insured by the farmers home administration.