S 1178 Session 111 (1995-1996)
S 1178 General Bill, By Martin, Giese and Wilson
Similar(H 4517)
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Section
11-5-270 so as to authorize the investment of the funds of the various state
retirement systems in equity securities of corporations within the United
States, to establish the equity investment advisory council and provide for
its membership and duties, including recommendations with respect to an annual
equity investment plan prepared by the State Treasurer subject to the review
and approval of the State Budget and Control Board, to establish requirements
for the annual plan, provide reporting requirements, and authorize the
retaining of persons or firms to manage and assist with these investments; to
amend Sections 9-1-1310 and 9-11-240, relating to investing of funds of the
South Carolina Retirement System, so as to allow the investments authorized by
this Act, and to make this effective on the ratification date of a
constitutional amendment authorizing its terms.
02/27/96 Senate Introduced and read first time SJ-7
02/27/96 Senate Referred to Committee on Finance SJ-7
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA,
1976, BY ADDING SECTION 11-5-270 SO AS TO AUTHORIZE
THE INVESTMENT OF THE FUNDS OF THE VARIOUS
STATE RETIREMENT SYSTEMS IN EQUITY SECURITIES OF
CORPORATIONS WITHIN THE UNITED STATES, TO
ESTABLISH THE EQUITY INVESTMENT ADVISORY
COUNCIL AND PROVIDE FOR ITS MEMBERSHIP AND
DUTIES, INCLUDING RECOMMENDATIONS WITH RESPECT
TO AN ANNUAL EQUITY INVESTMENT PLAN PREPARED
BY THE STATE TREASURER SUBJECT TO THE REVIEW
AND APPROVAL OF THE STATE BUDGET AND CONTROL
BOARD, TO ESTABLISH REQUIREMENTS FOR THE
ANNUAL PLAN, PROVIDE REPORTING REQUIREMENTS,
AND AUTHORIZE THE RETAINING OF PERSONS OR FIRMS
TO MANAGE AND ASSIST WITH THESE INVESTMENTS; TO
AMEND SECTIONS 9-1-1310 AND 9-11-240, RELATING TO
INVESTING OF FUNDS OF THE SOUTH CAROLINA
RETIREMENT SYSTEM AND THE POLICE OFFICERS
RETIREMENT SYSTEM, SO AS TO ALLOW THE
INVESTMENTS AUTHORIZED BY THIS ACT, AND TO MAKE
THIS ACT EFFECTIVE ON THE RATIFICATION DATE OF A
CONSTITUTIONAL AMENDMENT AUTHORIZING ITS
TERMS.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Chapter 5, Title 11 of the 1976 Code is amended
by adding:
"Section 11-5-270. (A) This section may be cited as the
`Investment Safeguards Act'.
(B) The State Treasurer may invest and reinvest the funds of the
South Carolina Retirement System, Retirement System for Judges
and Solicitors, Retirement System for Members of the General
Assembly, and Police Officers Retirement System in equity
securities of any corporation within the United States that is
registered on a national securities exchange as provided in Federal
Securities Exchange Act or quoted through the National Association
of Securities Dealers Automatic Quotations System. Investment and
reinvestment of these funds by the State Treasurer in equity
securities and the annual equity investment plan must be consistent
with the provisions of this section.
(C) There is created the Equity Investment Advisory Council
consisting of seven members as follows:
(1) the State Treasurer, ex officio, who shall serve as
chairman;
(2) two members appointed by the Governor;
(3) two members appointed by the Senate Finance Committee
by committee resolution; and
(4) two members appointed by the Committee on Ways and
Means of the House of Representatives by committee resolution.
In addition to the members provided in items (1) through (4), the
State Treasurer may appoint consulting members who shall serve in
the same manner as those members appointed pursuant to items (2)
through (4) of this subsection except that they may not vote on any
matter before the council. All members appointed to the council
must have knowledge of equity investing. Appointed members
shall serve for terms of two years and until their successors are
appointed and qualify and vacancies must be filled in the manner of
the original appointment for the unexpired term. Members shall
serve without compensation but may receive the mileage,
subsistence, and per diem authorized by law for members of state
boards, commissions, and committees. Staff support for the council
must be provided by the Office of the State Treasurer. The
expenses of the council must be paid from earnings from the
investment of funds of the various state retirement systems. The
council shall meet no later than May thirty-first to make investment
recommendations as provided for by this section for the next fiscal
year and at other times the chairman considers appropriate. The
council shall review and make recommendations on the proposed
annual equity investment plan for the retirement systems prepared
by the Office of the State Treasurer.
(D) Before June thirtieth of each year, the State Treasurer shall
present the annual equity investment plan for the succeeding fiscal
year, together with the recommendations of the council on the plan,
to the State Budget and Control Board for review and approval.
The plan is considered approved unless the board by a majority
vote of its membership disapproves the plan. During any fiscal
year, the Treasurer may not invest more than forty percent of the
market value of the assets of a retirement system in equity securities
nor increase the proportion of the market value of the assets of a
retirement system invested in equity securities by more than ten
percent of the market value of that system. The plan must establish
parameters for the allocation of available assets and monies for a
retirement system among industry and market segments and may
include other similar general prudent risk guidelines, but must not
address specific transactions or details of transactions. Amendments
to the plan may be made by the State Treasurer after review and
recommendation by the council and review and approval by the
board in the same manner as the plan is approved. The State
Treasurer may prescribe policies for the implementation of this
section.
(E) The State Treasurer shall provide a quarterly report of
equity investing to each member of the board and council and to
other appropriate officials.
(F) The State Treasurer may hire or retain qualified persons or
firms to manage and assist with investing in equity securities whose
compensation must be paid from earnings from the investment of
funds of the various state retirement systems.
(G) Nothing in this section affects the authority or discretion of
the State Treasurer in investing in fixed income securities or in cash
management activities for any retirement system or state funds, or
in establishing, managing, or closing a bank account, investment
account, or similar account or activity for any retirement system or
state fund."
SECTION 2. Section 9-1-1310 of the 1976 Code is amended to
read:
"Section 9-1-1310. The board shall be is
the trustee of the funds of the system, and the State Treasurer,
on behalf of the board, may invest and reinvest such
these funds, subject to all the terms, conditions,
limitations, and restrictions imposed by Article 7 of
Chapter 9 of Title 11, upon the investment of sinking funds of the
State, Sections 11-5-270 and 11-9-660 and,
subject to like similar terms, conditions,
limitations, and restrictions, may hold, purchase, sell,
assign, transfer, and dispose of any of the securities and
investments in which any of the funds created herein in
this chapter shall have been are invested, as
well as and the proceeds of such the
investments and any moneys monies belonging to
such these funds."
SECTION 3. Section 9-11-240(1) of the 1976 Code is amended
to read:
"(1) The board shall be is the trustee of
the system, may invest and reinvest such these
funds, may hold, purchase, sell, assign, transfer, and
dispose of any of the securities and investments in which any of the
funds created herein in this chapter shall have
been are invested, as well as the proceeds of
such these investments and any moneys
monies belonging to such the fund all
in the manner as funds of the South Carolina Retirement System are
invested and reinvested."
SECTION 4. This act takes effect on the ratification date of a
constitutional amendment authorizing its terms.
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