Chap. 519.—An ACT to amend and reenact Section 18 as amended of the Virginia
Retirement Act relating to management of funds. (H 413]

Approved April 5, 1948

Be it enacted by the General Assembly of Virginia:

1. That section eighteen as amended of the Virginia Retirement
Act be amended and reenacted as follows:

Section 18. Management of funds——(a) The Board shall be the
trustee of the several funds created by this act and shall have full power
to invest and reinvest such funds, subject to the limitation that no invest-
ment shall be made except, upon the exercise of bona fide discretion, in
securities which, at the time of making the investment, are, by statute,
permitted for the investment of reserves of domestic life insurance com-
panies. Subject to such limitation, the Board shall have full power to
hold, purchase, sell, assign, transfer, or dispose of, any of the securities
or investments in which any of the funds created herein have been
invested, as well as of the proceeds of such investments and any monies
belonging to said funds. The Board shall have power to borrow money
from time to time in such amounts as may be necessary to discharge cur-
rent obligations under this act whenever in its judgment by so doing it
would be more advantageous than by selling securities held by the Vir-
ginia Retirement System. Any debt so incurred may be evidenced by
notes duly authorized by resolution of the Board, but in no case is the due
date of any note, notes, or other evidence of debt to be beyond the end of
the biennium succeeding the biennium in which such debt is incurred.
Securities held by the Virginia Retirement System may be hypothecated
by the Board as security for the payment of any debt incurred under this
section. The Board may also, in its discretion, invest such trust funds in
bonds, notes and other evidences of debt of the school boards of the
several counties, cities and towns of the State held in the Literary Fund
evidencing loans made from such Literary Fund by the State Board of
Education pursuant to the provisions of sections six hundred and thirty-
two to six hundred and forty-four, both inclusive, of the Code of Virginia,
and the State Board of Education is hereby authorized to assign such
bonds, notes and other evidences of debt to the Board whenever the
Board desires to invest any of such trust funds therein and the State
Board of Education consents thereto; and when such bonds, notes or
other evidences of debt are so acquired by the Board the same may not
be sold or otherwise disposed of except to a State governmental agency.

(b) The State Treasurer shall be the custodian of the several trust
funds of the retirement system. All payments from said funds shall be
made by him on warrants of the Comptroller issued upon vouchers
signed by such person as is designated by the Board. A duly attested copy
of a resolution of the Board designating such person and bearing on
its face the specimen signature of such person shall be filed with the
Comptroller as his authority for issuing warrants upon such vouchers.
No voucher shall be drawn unless it has previously been authorized by
resolution of the Board.

(c) The Board annually shall allow to each fund of the retirement
system regular interest on the average amount credited for the preceding
year to each such fund, with the exception of the expense fund, from
the interest and dividends earned from investments. Any excess earnings
over the amount so credited may be used in reducing the amount of
contribution required of the State during the ensuing years and for
administrative expenses, Any deficiency shall be charged to the State
annuity accumulation fund.

(d) Regular interest shall mean such rate, compounded annually,
as shall be determined by the Board on the basis of the interest earnings
of the system for the preceding year and of the probable earnings to be
made, in the judgment of the Board, during the immediate future, such
rate to be limited to a minimum of two per centum and a maximum of
four per centum, but during the first year of operation of the retirement
system two per centum shall be treated as the regular interest rate.

(e) No member of the Board and no employee of the Board shall
have any interest, direct or indirect, in the gains or profits of any invest-
ment made by the Board, save in so far as any such member may be a
member or beneficiary of the retirement system, and no member of the
Board shall receive, directly or indirectly, any pay or emolument for
his services except as expressly provided in this act. No member of the
Board or employee thereof shall, directly or indirectly, for himself or
as an agent, in any manner use the funds or deposits of the retirement
system, except to make such payments therefrom as are authorized by
the Board; nor shall any member or employee of the Board become an
endorser or surety or in any manner an obligor for monies loaned by or
borrowed from the Board.

(f) For the purpose of meeting disbursements for retirement
allowances and other payments, there may be kept available cash, not
exceeding ten per centum of the total amount in the several funds of
the retirement system, on deposit to the credit of the State Treasurer
in one or more banks or trust companies, located in Virginia, organized
under the laws of Virginia or of the United States, and qualified as
State depositories.