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2014-HIB-5570

2014-HIB-5570

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Published by WDET 101.9 FM
Bill to create an Investment Committee to oversee pension funds, to restrict pension board members travel and to require reporting of travel-related expenses.
Bill to create an Investment Committee to oversee pension funds, to restrict pension board members travel and to require reporting of travel-related expenses.

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Published by: WDET 101.9 FM on May 09, 2014
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05/09/2014

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05120'14 DAW
   H   O   U   S   E   B   I   L   L   N  o .   5   5   7   0
 O U  S I   o. 5  5  0 
 
HOUSE BILL No. 5570
May 8, 2014, Introduced by Reps. Yonker and Walsh and referred to the Committee on Detroit's Recovery and Michigan's Future.
 A bill to amend 1965 PA 314, entitled "Public employee retirement system investment act," by amending sections 12e and 13 (MCL 38.1132e and 38.1133), section 12e as added by 1996 PA 485 and section 13 as amended by 2012 PA 347, and by adding section 13g.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 12e.
(1) "QUALIFIED SYSTEM" MEANS A SYSTEM CREATED AND 1 ESTABLISHED BY A CITY WITH A POPULATION OF MORE THAN 600,000. 2 (2)
(1) "Small business" means a corporation, partnership,
3
sole proprietorship, or other entity which
THAT
does not meet the
4
specific requirements of investments permitted under this act.
5 (3)
(2) "Small business investment company" means an
6
incorporated body or a limited partnership under section 301 of
7
title III of the small business investment act of 1958, Public Law
8
85-699, 15 U.S.C.
USC
681.
9
 
 2 05120'14 DAW
(4)
(3) "Soft dollar" means brokerage commissions that are
1
used by the system to purchase goods or services.
2 (5)
(4) "Stock" means capital stock, common stock, preferred
3
stock, American depository receipts, or any other evidence of
4
residual ownership of a corporation.
5 (6)
(5) "System" means a public employee retirement system
6
created and established by this state or any political subdivision
7
of this state.
8
Sec. 13. (1) The provisions of this
THIS
act shall supersede
9
any investment authority previously granted to a system under any
10
other law of this state.
11
(2) The assets of a system may be invested, reinvested, held
12
in nominee form, and managed by an investment fiduciary subject to
13
the terms, conditions, and limitations provided in this act. An
14
investment fiduciary of a defined contribution plan may arrange for
15
1 or more investment options to be directed by the participants of
16
the defined contribution plan. The limitations on the percentage of
17
total assets for investments provided in this act do not apply to a
18
defined contribution plan in which a participant directs the
19
investment of the assets in his or her individual account, and that
20
participant is not considered an investment fiduciary under this
21
act.
22
(3) An investment fiduciary shall discharge his or her duties
23
solely in the interest of the participants and the beneficiaries,
24
and shall do all of the following:
25
(a) Act with the same care, skill, prudence, and diligence
26
under the circumstances then prevailing that a prudent person
27
 
 3 05120'14 DAW acting in a similar capacity and familiar with those matters would
1
use in the conduct of a similar enterprise with similar aims.
2
(b) Act with due regard for the management, reputation, and
3
stability of the issuer and the character of the particular
4
investments being considered.
5
(c) Make investments for the exclusive purposes of providing
6
benefits to participants and participants' beneficiaries, and of
7
defraying reasonable expenses of investing the assets of the
8
system.
9
(d) Give appropriate consideration to those facts and
10
circumstances that the investment fiduciary knows or should know
11
are relevant to the particular investment or investment course of
12
action involved, including the role the investment or investment
13
course of action plays in that portion of the system's investments
14
for which the investment fiduciary has responsibility; and act
15
accordingly. For purposes of this subsection, "appropriate
16
consideration" includes, but is not limited to, a determination by
17
the investment fiduciary that a particular investment or investment
18
course of action is reasonably designed, as part of the investments
19
of the system, to further the purposes of the system, taking into
20
consideration the risk of loss and the opportunity for gain or
21
other return associated with the investment or investment course of
22
action; and consideration of the following factors as they relate
23
to the investment or investment course of action:
24
(
i
) The diversification of the investments of the system.
25
(
ii
) The liquidity and current return of the investments of the
26
system relative to the anticipated cash flow requirements of the
27

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