(a)In each instance in which any provision of this section requires a determination of the value of a security, or securities, in the fund, the fair market value of such security or securities as determined by pricing sources acceptable to the custodian, shall be deemed to be the value thereof.
(b)The fund shall include all assets of the fund in any form, and the city director of finance shall be, ex officio, the custodian of the fund. The custodian shall keep a separate account of the fund and of all assets and liabilities thereof and of all receipts and disbursements thereof and of all prior service time and paid membership time of employee members. The custodian shall keep all monies of the fund in a separate bank account. The custodian shall keep in force and effect a bond in a penal
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(a) In each instance in which any provision of this section requires a determination of the value of a security, or securities, in the fund, the fair market value of such security or securities as determined by pricing sources acceptable to the custodian, shall be deemed to be the value thereof.
(b) The fund shall include all assets of the fund in any form, and the city director of finance shall be, ex officio, the custodian of the fund. The custodian shall keep a separate account of the fund and of all assets and liabilities thereof and of all receipts and disbursements thereof and of all prior service time and paid membership time of employee members. The custodian shall keep all monies of the fund in a separate bank account. The custodian shall keep in force and effect a bond in a penal amount equal to the total amount of monies and securities in such custodian’s custody or possession, but in no event in excess of fifty thousand dollars ($50,000), payable to the board and conditioned for faithful performance of such custodian’s duties and for faithful accounting to the board for all monies, securities, and property coming into his or her control, custody, or possession as custodian. Such bond shall be executed by a surety company authorized to do business in the State of Alabama, and the premium on such bond, and all necessary expenses of the board, shall be paid out of the fund upon order of the board. All bonds and securities acquired for the fund shall be registered by the custodian, or his or her designated representative, in the name of the system promptly upon acquisition and shall remain so registered until sold or otherwise disposed of by authority of the board. The board shall select a financial institution as subcustodian of securities, with authority to collect and remit to the custodian dividends, principal, and interest of securities entrusted to its custody as the same may mature, and pay it such reasonable fees or compensation for its services as the board may deem proper, and the board, if it sees fit, may waive any bond otherwise required of such institution as subcustodian so long as the net worth of the subcustodian exceeds one and one-half times the total value of the securities entrusted to its custody. Securities in the custody of the subcustodian shall not be counted as in the custody of the custodian for the purpose of computing the amount of the custodian’s bond. The board is authorized to accept and receive gifts, donations, or legacies for the fund, and to administer same as may be directed by the board. No member or employee of the board of managers, directly or indirectly, shall for himself or herself or as an agent in any manner use the fund, except to make current and necessary payments authorized by the board, nor shall any member or employee of the board of managers become an endorser or surety or in any manner an obligor for monies loaned to or borrowed from the board. In the adjudication of claims against the fund, the records of the city director of finance and subcustodian made and kept for the purpose of this subpart shall be deemed prima facie, to speak the truth.
(c) The board of managers shall have the sole and absolute discretion, if the board deems it advisable to invest, reinvest, and have invested and reinvested all funds of the system, real and personal, in the classes of bonds, mortgages, common and preferred stocks, shares of investment companies or mutual funds, real estate investment trusts, international equity, corporate fixed income, international fixed income, index funds, and derivative securities, and investments recognized as alternative investments or other investments as the board of managers may approve, subject to the limitations herein provided. No money of the fund shall be invested, paid out, or disbursed except pursuant to order or authorization of the board given prior, at the time, or subsequent to same. The board shall be trustee, and have entire management and control of the fund, and shall direct or subsequently approve investment of monies of the fund not needed to meet disbursements provided for in this subpart, in the loans to members hereinabove referred to, in bills, notes and bonds of the United States government, or general obligation bonds of the State of Alabama, or in common or preferred stock of corporations or in bonds registered with the Security and Exchange Commission, mortgage-backed securities, or asset-backed securities, or in securities issued by federal agencies and government sponsored entities, or may invest in Federal Saving and Loan Associations or in other corporations having Federal Savings and Loan Association’s guarantee or in certificates of deposit or bonds issued by banks organized under federal laws or under laws of the State of Alabama and insured by the federal government or in such other assets as the board may prudently approve, with due regard to their suitability and creditworthiness. No funds shall be invested in common or preferred stocks of corporations unless such common or preferred stocks are listed upon exchanges registered with and subject to the jurisdiction of the United States Securities and Exchange Commission, are traded through NASDAQ Stock Market, are Rule 144A securities, or are traded on an organized exchange, and the total investment in fixed income securities shall not be less than 15 percent of the fair market value of all the funds available in the system for investment. Securities issued by any single nonguaranteed agency or entity may not constitute more than 10 percent of the fixed income allocation of the fund at the time of purchase. The fair market value of all of the funds available in the system for investment is to be determined periodically, but not less than annually. In exercising its discretion to invest, reinvest, and have invested and reinvested all funds of the system, the board shall act with the care, skill, prudence, and diligence under the circumstances then prevailing 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 and with like aims.