§ 11:3370 — Investment of fund; permanent fund

Louisiana § 11:3370

• Jurisdiction: Louisiana
• Title 11: Consolidated Public Retirement Systems

Text

A. The sum of five hundred thousand dollars when accumulated shall be retained as a permanent fund, and thereafter the annual income only may be made available for the use and purposes of the pension and relief fund. Fifty percent of any earnings or gains in excess of the actuarially assumed rate of return of the system shall be dedicated on an annual basis for increasing benefits to members of the fund.
B. The board of trustees shall invest funds regularly except an amount to meet the current disbursements of the board. Investments shall be governed by the provisions of this Part. All such securities shall be deposited with the secretary-treasurer of the board and shall be held subject to the orders of the board.
C. The prudent man rule shall be applied to this pension and relief fund.
D. The prudent man rule as used herein means that in investing fund assets, the board of trustees shall exercise the judgment and care under the circumstances then prevailing that an institutional investor of ordinary prudence, discretion, and intelligence exercises in the management of large investments entrusted to it not in regard to speculation but in regard to the permanent disposition of funds considering probable safety of capital as well as probable income.
E. The prudent man rule shall require each fiduciary of this pension and relief fund and the board of trustees acting collectively on behalf of this fund to act with the care, skill, prudence, and diligence under the circumstances prevailing that a prudent institutional investor 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.
F. This standard requires the exercise of reasonable care, skill, and caution, and is to be applied to investments not in isolation, but in the context of the trust portfolio, and as part of an overall investment strategy, which shall include an asset allocation study and plan for implementation thereof, incorporating risk and return objectives reasonably suitable to that trust.
G. Notwithstanding the prudent man rule, the board of trustees shall not invest more than sixty-five percent of the total portfolio in equities.

Legislative History

Amended by Acts 1962, No. 403, §1; Acts 1969, No. 120, §1; Redesignated from R.S. 33:2107 by Acts 1991, No. 74, §3, eff. June 25, 1991; Acts 1993, No. 449, §1, eff. June 9, 1993; Acts 1997, No. 505, §1, eff. July 3, 1997; Acts 2007, No. 305, §1, eff. July 9, 2007.