Minnesota Session Laws - 1984, Regular Session

  

                         Laws of Minnesota 1984 

                        CHAPTER 383-H.F.No. 1784 
           An act relating to the state board of investment; 
          establishing combined investment funds; amending 
          Minnesota Statutes 1982, sections 11A.14; and 11A.24, 
          subdivision 2; and Minnesota Statutes 1983 Supplement, 
          section 11A.24, subdivision 1; repealing Minnesota 
          Statutes 1982, section 356.20, subdivision 5. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1982, section 11A.14, is 
amended to read:  
    11A.14 [MINNESOTA COMBINED INVESTMENT FUNDS.] 
    Subdivision 1.  [ESTABLISHMENT.] There is hereby 
established a The Minnesota combined investment fund funds are 
established for the purpose of providing an investment vehicle 
vehicles for assets of the participating funds.  The combined 
fund funds shall consist of the following investment accounts:  
a cash management account and an accounts, equity account 
accounts, fixed income accounts, and any other accounts 
determined appropriate by the state board.  
    Subd. 2.  [ASSETS.] The assets of the combined investment 
fund funds shall consist of the moneys certified to and received 
by the state board from participating retirement plans and funds 
which shall be used to purchase investment shares in the 
appropriate investment accounts.  Each participating fund shall 
own an undivided participation in all the assets of the combined 
fund funds.  As of any date, the total claim of a participating 
fund on the assets in each account shall be equal to the ratio 
of units owned by a fund in each account to the total issued 
units then outstanding.  
    Subd. 3.  [MANAGEMENT.] The combined investment fund funds 
shall be managed by the state board.  
    Subd. 4.  [INVESTMENTS.] The assets of the combined 
investment fund funds shall be invested by the state board 
subject to the provisions of section 11A.24 with the following 
exceptions:  
    (a) The cash management account shall be invested in 
fixed-income obligations with maturities of less than three 
years.  
    (b) The equity account may be completely invested in 
corporate stocks, except that any individual account may be 
completely invested in a single asset class.  
    Subd. 5.  [PARTICIPATING PUBLIC RETIREMENT PLANS OR FUNDS.] 
The following public retirement plans and funds shall 
participate in the Minnesota combined investment fund funds: 
    (1) State employees retirement fund established pursuant to 
chapter 352;  
    (2) Correctional employees retirement plan established 
pursuant to chapter 352;  
    (3) State patrol retirement fund established pursuant to 
chapter 352B;  
    (4) Public employees retirement fund established pursuant 
to chapter 353;  
    (5) Public employees police and fire fund established 
pursuant to chapter 353;  
    (6) Teachers retirement fund established pursuant to 
chapter 354;  
    (7) Judges retirement fund established pursuant to chapter 
490; and 
    (8) Any other fund required by law to participate. 
    Subd. 6.  [INITIAL TRANSFER OF ASSETS.] As of July 1, 1980, 
or a later date as determined by the state board, the 
participating funds shall transfer to the combined investment 
fund funds all appropriate securities then held together with 
cash necessary for the purchase of even units in the combined 
fund accounts.  
    Subd. 7.  [INITIAL VALUATION OF ASSETS AND UNITS.] All 
assets transferred to the Minnesota combined investment fund 
funds shall be valued at their current market value as 
determined by the state board, including accrued interest.  The 
initial value of each account unit shall be $1,000 with each 
participating fund allocated units in the various accounts of 
the Minnesota combined investment fund funds in the same 
proportion as their assets are to the total assets in each 
account.  
    Subd. 8.  [UNREALIZED REALIZED APPRECIATION (DEPRECIATION) 
ACCOUNT.] Any unrealized realized gains or losses in the value 
of investments incurred by a transferring fund shall be recorded 
in an unrealized appreciation (depreciation) account which is 
hereby created.  Any future unrealized gains or losses shall 
also be recorded in this account at the close of each fiscal 
year pursuant to subdivision 7 shall be recognized on the date 
of the transfer.  
    Subd. 9.  [VALUATION OF UNITS.] (1) Valuation of units for 
the equity account accounts in the Minnesota combined investment 
fund funds shall be performed as of the last business day of 
each month, or more frequently should the state board determine 
that additional valuation dates are necessary.  Valuation of 
units for the cash management account in the Minnesota combined 
investment fund shall be performed daily for every business day. 
    (2) The value of a unit for each account shall be 
determined by the following procedure:  
    (a) As of the close of business on the valuation date the 
state board shall determine the fair market value of each asset 
in each account, using the references, pricing services, 
consultants, or other methods as the state board deems 
appropriate.  
    (b) The sum total of the market value of all securities 
plus cash, less the value of undistributed income in each 
account, shall be divided by the number of units issued and 
outstanding for the account to determine the value per account 
unit.  
    Subd. 10.  [PURCHASE AND REDEMPTION OF UNITS.] Purchase and 
redemption of units shall be on the first business day following 
the valuation date.  All transactions shall be at the unit value 
as established on the immediately preceding valuation date.  
Except for the initial purchase of units by an authorized 
participant, all purchases and redemptions shall be made in cash 
unless the state board determines that an exception is necessary.
    Subd. 11.  [EARNINGS DEFINED.] Investment earnings shall be 
the sum total of the following of each account:  
    (1) Dividends receivable on securities trading ex-dividend 
up to and including the valuation date.  
    (2) Cash dividends received to and including the valuation 
date that were not accounted for on a previous valuation date.  
    (3) Accrued interest to and including the valuation date.  
    (4) Interest received which had not been accrued and 
accounted for on a prior valuation date.  
    (5) Income from the sale of options, rights, warrants, or 
security lending.  
    (6) Other income received to and including the valuation 
date.  
    Subd. 12.  [DISTRIBUTION OF EARNINGS.] At least once each 
month year the state board shall distribute to each participant 
net earnings determined proportionately in accordance with their 
average unit holdings in each account during the period.  Unless 
otherwise directed by the participating fund, any distributions 
shall be used to purchase additional units in the accounts.  
    Subd. 13.  [RECORDS REQUIRED.] The executive director of 
the state board shall keep accounting records.  The records 
shall reflect the number of units in the Minnesota combined 
investment fund funds owned by each participating fund.  No 
certificates or other evidence of ownership shall be required.  
    Subd. 14.  [REPORTS REQUIRED.] As of each valuation date, 
or as often as the state board determines, each participant 
shall be informed of the number of units owned and the current 
value of the units.  Annually, the state board shall provide to 
each participant, financial statements prepared in accordance 
with generally accepted accounting principles.  
    Sec. 2.  Minnesota Statutes 1983 Supplement, section 
11A.24, subdivision 1, is amended to read: 
    Subdivision 1.  [SECURITIES GENERALLY.] The state board 
shall have the authority to purchase, sell, lend or exchange the 
following securities for funds or accounts specifically made 
subject to this section including puts and call options and 
future contracts traded on a contract market designated and 
regulated by a federal agency.  
    Sec. 3.  Minnesota Statutes 1982, section 11A.24, 
subdivision 2, is amended to read: 
    Subd. 2.  [GOVERNMENT OBLIGATIONS.] The state board may 
invest funds in governmental bonds, notes, bills, mortgages and 
other fixed obligations, including guaranteed or insured issues 
of (a) the United States, its agencies or its instrumentalities, 
including financial contracts traded upon a contract market 
designated and regulated by a federal agency; (b) Canada and its 
provinces, provided the principal and interest is payable in 
United States dollars; (c) the states and their municipalities, 
political subdivisions, agencies or instrumentalities, where 
backed by the state's full faith and credit or if the issuer has 
not been in default in payments of principal or interest within 
the past ten years or in the case of revenue bonds the obligor 
has been completely self-supporting for the five prior years; 
(d) the International Bank for Reconstruction and Development, 
the Inter-American Development Bank, the Asian Development Bank, 
or any other United States Government sponsored organization of 
which the United States is a member, provided the principal and 
interest is payable in United States dollars and the issues are 
rated in the highest quality category by a nationally recognized 
rating agency. 
     Sec. 4.  [UNAMORTIZED BALANCES IN DEFERRED YIELD ADJUSTMENT 
ACCOUNTS.] 
     Any unamortized balances in the deferred yield adjustment 
accounts of the various retirement funds covered by Minnesota 
Statutes, section 356.20, subdivision 5, shall be offset against 
the income earned by these funds during the current fiscal year. 
     Sec. 5.  [REPEALER.] 
     Minnesota Statutes 1982, section 356.20, subdivision 5, is 
repealed. 
     Sec. 6.  [EFFECTIVE DATE.] 
     This act is effective the day following final enactment. 
    Approved April 16, 1984