Michigan Compiled Laws Act 314 Of 1965 Public Employee Retirement System Investment Act (38.1121 - 38.1141)

AN ACT to authorize the investment of assets of public employee retirement systems or plans and the contributions made by employees to retirement systems or plans created and established by the state or any political subdivision; to provide for the payment of certain costs and investment expenses; to authorize investment in variable rate interest loans; to limit employer and plan official liability for certain investment decisions; to define and limit the investments which may be made by an investment fiduciary with the assets of a public employee retirement system; and to prescribe the powers and duties of investment fiduciaries and certain state departments and officers.

History: 1965, Act 314, Imd. Eff. July 22, 1965 ;-- Am. 1980, Act 31, Imd. Eff. Mar. 8, 1980 ;-- Am. 1982, Act 55, Imd. Eff. Apr. 6, 1982 ;-- Am. 1988, Act 252, Eff. Jan. 1, 1989 ;-- Am. 1988, Act 253, Eff. Jan. 1, 1989 ;-- Am. 1988, Act 343, Imd. Eff. Oct. 19, 1988 ;-- Am. 2014, Act 242, Imd. Eff. June 27, 2014

Section 38.1121-38.1131 Repealed. 1982, Act 55, Imd. Eff. Apr. 6, 1982.
Compiler's Notes: Prior to the repeal of MCL 38.1121 to 38.1131, MCL 38.1125a had expired by its own terms.
Section 38.1132 Short Title; Meanings Of Words And Phrases.
(1) This act shall be known and may be cited as the “public employee retirement system investment act”. (2) For the purposes of this...
Section 38.1132a Definitions; A.
“Assets”, for the purpose of meeting asset limitations contained in this act, means the total of the cash and investments of a system valued...
Section 38.1132b Definitions; D To G.
(1) "Defined contribution plan" means a defined contribution plan as defined in section 414(i) in the internal revenue code, 26 USC 414. (2) "Derivative"...
Section 38.1132c Definitions; I To L.
(1) "Investment fiduciary" means a person other than a participant directing the investment of the assets of his or her individual account in a...
Section 38.1132d Definitions; N To P.
(1) "National rating services" means Moody's investors service, inc.; Standard & Poor's ratings group; Fitch investors service inc.; Duff & Phelps credit rating corp.;...
Section 38.1132e Definitions; S.
(1) “Small business” means a corporation, partnership, sole proprietorship, or other entity which does not meet the specific requirements of investments permitted under this...
Section 38.1132f Definitions; V.
“Venture capital firm” means a corporation, partnership, proprietorship, or other entity, the principal business of which is or will be the making of investments...
Section 38.1133 Investment Authority; Investment Fiduciary; Investing, Reinvesting, Holding In Nominee Form, And Managing Assets Of System; Powers And Duties; Compliance With Divestment From Terror Act; Costs; Disclosure Of Fees Or Other Compensation By Investment Service Provider; "Investment Service Provider" Defined; Prohibited Acts; Exceptions; Requirements; Debt Instrument Issued By Foreign Country; Out-of-state Travel; Investment In Hazardous Waste Deep Disposal Well Facility.
(1) This act supersedes any investment authority previously granted to a system under any other law of this state. (2) The assets of a...
Section 38.1133a “macbride Principles” Defined; Duties Of Investment Fiduciary; Effect Of Unlawful Principle.
(1) As used in this section, “MacBride principles” means those requirements for companies doing business in Northern Ireland designed to do all of the...
Section 38.1133b, 38.1133c Repealed. 1993, Act 214, Imd. Eff. Oct. 27, 1993.
Compiler's Notes: The repealed sections pertained to encouragement or condonation of legally required discrimination; extension of deadlines for divestment of assets; developing and maintaining register...
Section 38.1133c Definitions; Effort By Fiduciary To Identify Scrutinized Companies; Assembly Into Scrutinized Companies List; Update And Availability Of List; Procedures; Report; Effectiveness Of Section; Exemption Of Fiduciary From Conflicting Statutory Or Common Law Obligations; Liability; Affirmative Exclusion From Federal Sanctions; Severability.
(1) As used in this section: (a) "Active business operations" means all business operations that are not inactive business operations. (b) "Business operations" means...
Section 38.1133d Definitions; Scrutinized Companies; Identification By Fiduciaries; Assembling Scrutinized Companies List; Update By Fiduciary; Procedure; Report; Effectiveness Of Section; Conditions; Liability Of Fiduciary; Scrutinized Company Affirmatively Excluded From Federal Sanctions; Effect; Severability.
(1) As used in this section: (a) "Active business operations" means all business operations that are not inactive business operations. (b) "Business operations" means...
Section 38.1133e Prohibited Conduct By Investment Fiduciary, Service Provider, Or Covered Associate Of Service Provider; Exceptions; Definitions; Official Of Governmental Entity.
(1) An investment fiduciary shall not make a payment from the assets of a system to a service provider if the service provider or...
Section 38.1133f Breach Of Public Trust By Investment Fiduciary Or Service Provider; "Service Provider" Defined.
(1) An investment fiduciary or a service provider who is convicted of or who enters a nolo contendere plea accepted by a court for...
Section 38.1133g Investment Committee; Establishment By Large Sponsored System; Duties; Recommendation; Definitions.
(1) Subject to a plan for adjustment, each large sponsored system shall establish an investment committee. (2) The investment committee shall recommend to the...
Section 38.1134 Investment In Stock Or Global Security.
(1) An investment fiduciary shall not invest more than 70% of a system's assets in stock or the type of global security described in...
Section 38.1135 Investment In Investment Companies.
An investment fiduciary may invest in investment companies registered under the investment company act of 1940, 15 USC 80a-1 to 80a-64. The management company...
Section 38.1136 Investment In Annuity Investment Contracts Or Participations In Separate Accounts Of Life Insurance Company; Investment In General Account Of Life Insurer; Requirements.
(1) An investment fiduciary may invest in annuity investment contracts or participations in separate real estate, mortgage, bond, stock, or other special investment accounts...
Section 38.1137 Other Authorized Investments; Prohibited Investments.
(1) An investment fiduciary may invest in any of the following: (a) Obligations issued, assumed, or guaranteed by a solvent entity created or existing...
Section 38.1138 Investment In Real Estate Or Mortgages On Certain Leased Real Property.
An investment fiduciary may invest in real estate or mortgages on real property leased or to be leased to the United States government, or...
Section 38.1139 Investment In Real Estate Investment Trust Or Real Or Personal Property.
(1) An investment fiduciary may invest up to 10% of a system's assets in publicly or privately issued real estate investment trusts or in...
Section 38.1139a State Treasurer As Investment Fiduciary; Investments In Private Equity; Limitation; Investment Fiduciary Not State Treasurer; Limitation.
(1) If the investment fiduciary is the state treasurer, investments in private equity shall not be more than 30% of the system's total assets....
Section 38.1139b Deduction From Employee Compensation By Public Employer; Automatic Enrollment Of Employee; Notice; Investment Alternatives; Liability; Definitions.
(1) A public employer may deduct from the compensation of an employee an amount for contribution to an individual account for the employee's benefit...
Section 38.1140 Investment In Secured Loans; Real Property Not Considered Encumbered; Investment In Part Of Obligation Or Participation Interest In Loan Or Group Of Loans; Investment In Real Estate Loan; Investment In Loan Or Loans Or Certificate Of Participation Secured By Loan Or Loans Made On Single Family Residential Property; Investment In Certificates Representing Interest In Mortgages Or Group Of Mortgages; Limitations And Restrictions; Investment In Second Mortgage; Investment With Variable Interest Rate.
(1) An investment fiduciary may invest in loans secured by any of the following: (a) First liens upon improved or income bearing real property,...
Section 38.1140a Investment In Debt, Warrant, Or Equity Interest In Small Business, Small Business Investment Company, Or Venture Capital Firm; Creation Of Small Business Investment Companies Or Venture Capital Firms To Invest In Small Businesses; Limitation.
(1) Except as provided in subsection (2), an investment fiduciary of a system having assets of more than $250,000,000.00 may invest not more than...
Section 38.1140b Deposits By Investment Fiduciary.
An investment fiduciary may make interest bearing deposits with the treasurer of the political subdivision sponsoring the system or with the state treasurer, either...
Section 38.1140c Financial Institution, Trust Company, Or Management Company Retained As Investment Fiduciary; Investment Of System Assets In Collective Investment Fund, Common Trust Fund, Or Pooled Fund Established And Maintained By Financial Institution Or Management Company; “financial Institution” Defined.
(1) A financial institution, a trust company, a management company qualified under section 15, or any affiliate of a person described in this section...
Section 38.1140d Investments Not Qualified Under Act.
(1) An investment fiduciary of a system having assets of less than $250,000,000.00 may invest not more than 15% of the system's assets in...
Section 38.1140e Loan Of Securities By Investment Fiduciary.
(1) An investment fiduciary may loan bonds, stocks, or other securities if at the time the loan is executed, at least 102% of the...
Section 38.1140f Transferring And Holding Securities.
An investment fiduciary may use 1 or more nominees to facilitate transfer of a system's securities and may hold the securities in safekeeping with...
Section 38.1140g Investment In Securities Exempt From Taxes.
Notwithstanding any other provision of this act, investment in securities wholly or partially exempt from income or other taxes levied by the United States...
Section 38.1140h Applicable Law; Retention Of Financial Records; "Financial Records" Defined; Disclosure Of Certain Information; Actuarial Valuation; Supplemental Actuarial Analysis; “proposed Pension Benefit Change” Defined; Availability Of Summary Annual Report.
(1) In addition to the provisions of this act, a system is subject to the applicable accounting, auditing, and reporting requirements contained in the...
Section 38.1140i Repealed. 2000, Act 307, Imd. Eff. Oct. 16, 2000.
Compiler's Notes: The repealed section pertained to guaranteed repayment of loans.
Section 38.1140j Investment In Derivatives.
(1) Subject to qualification elsewhere in this act, an investment fiduciary may invest in any of the following: (a) A derivative that hedges positions...
Section 38.1140k Investment In Global Securities; Prohibited Conduct.
(1) Notwithstanding a percentage of total assets limitation for an investment provided in any other section of this act, an investment fiduciary who is...
Section 38.1140l Financial Or Proprietary Information.
(1) A record or portion of a record, material, or other data received, prepared, used, or retained by an investment fiduciary in connection with...
Section 38.1140m Employer Contribution.
(1) The governing board vested with the general administration, management, and operation of a system or other decision-making body that is responsible for implementation...
Section 38.1141 Removal Of Member Of Board Or Body.
(1) Subject to this section, the governing board vested with the general administration, management, and operation of a system or other decision-making body that...

Last modified: October 10, 2016