Okla. Stat. tit. 11, § 11-50-105.4

Investment managers - Custodial services - Reports.

A. The Oklahoma Police Pension and Retirement Board shall

discharge their duties with respect to the System solely in the

interest of the participants and beneficiaries and:

1. For the exclusive purpose of:

a. providing benefits to participants and their

beneficiaries, and

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b. defraying reasonable expenses of administering the

System;

2. With the care, skill, prudence, and diligence under the

circumstances then prevailing that a prudent person acting in a like

capacity and familiar with such matters would use in the conduct of

an enterprise of a like character and with like aims;

3. By diversifying the investments of the System so as to

minimize the risk of large losses, unless under the circumstances it

is clearly prudent not to do so; and

4. In accordance with the laws, documents and instruments

governing the System.

B. The State Board may procure insurance indemnifying the

members of the State Board from personal loss or accountability from

liability resulting from a member’s action or inaction as a member

of the State Board.

C. The State Board may establish an investment committee. The

investment committee shall be composed of not more than five (5)

members of the State Board appointed by the chairman of the State

Board. The committee shall make recommendations to the full State

Board on all matters related to the choice of custodians and

managers of the assets of the System, on the establishment of

investment and fund management guidelines, and in planning future

investment policy. The committee shall have no authority to act on

behalf of the State Board in any circumstances whatsoever. No

recommendation of the committee shall have effect as an action of

the State Board nor take effect without the approval of the State

Board as provided by law.

D. The State Board shall retain qualified investment managers

to provide for the investment of the monies of the System. The

investment managers shall be chosen by a solicitation of proposals

on a competitive bid basis pursuant to standards set by the State

Board unless the State Board deems it necessary and prudent to do

otherwise to fulfill its fiduciary responsibility. Subject to the

overall investment guidelines set by the State Board, the investment

managers shall have full discretion in the management of those

monies of the System allocated to the investment managers. The

State Board shall manage those monies not specifically allocated to

the investment managers. The monies of the System allocated to the

investment managers shall be actively managed by the investment

managers, which may include selling investments and realizing losses

if such action is considered advantageous to longer term return

maximization. Because of the total return objective, no distinction

shall be made for management and performance evaluation purposes

between realized and unrealized capital gains and losses.

E. Funds and revenues for investment by the investment managers

or the State Board shall be placed with a custodian selected by the

State Board. The custodian shall be a bank or trust company

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offering pension fund master trustee and master custodial services

and any related custodial agreement or trust agreement is

incorporated herein by reference. The custodian shall be chosen by

a solicitation of proposals on a competitive basis pursuant to

standards set by the State Board. In compliance with the investment

policy guidelines of the State Board, the custodian bank or trust

company shall be contractually responsible for ensuring that all

monies of the System are invested in income-producing investment

vehicles at all times. If a custodian bank or trust company has not

received direction from the investment managers of the System as to
dards set by the State Board. In compliance with the investment

policy guidelines of the State Board, the custodian bank or trust

company shall be contractually responsible for ensuring that all

monies of the System are invested in income-producing investment

vehicles at all times. If a custodian bank or trust company has not

received direction from the investment managers of the System as to

the investment of the monies of the System in specific investment

vehicles, the custodian bank or trust company shall be contractually

responsible to the State Board for investing the monies in

appropriately collateralized short-term interest-bearing investment

vehicles. Any assets of the System may be invested in a collective

investment fund or in a group trust that satisfies the requirements

of Rev. Rul. 81-100, as further amended by Rev. Rul. 2004-67, Rev.

Rul. 2008-40, and Rev. Rul. 2011-1, and as subsequently amended by

future guidance. Each such collective investment fund or group

trust is adopted, with respect to any monies invested therein, as

part of the System, its trust, and custodial account and each such

declaration of trust or trust agreement and related adoption,

participation, investment management, subtrust or other agreements,

as amended from time to time, with respect to any monies invested

therein, are incorporated by reference into the System, its trust

agreement(s) or custodial agreement(s), upon approval by the State

Board.

F. By November 1, 1988, and prior to August 1 of each year

thereafter, the State Board shall develop a written investment plan

for the System.

G. After July 1 and before November 1 of each year, the State

Board shall publish widely an annual report presented in simple and

easily understood language pursuant to uniform reporting standards

prescribed by the Oklahoma State Pension Commission for all state

retirement systems. The report shall be submitted to the Governor,

the Speaker of the House of Representatives, the President Pro

Tempore of the Senate, the Oklahoma State Pension Commission and the

members of the System. The annual report shall cover the operation

of the System during the past fiscal year, including income,

disbursements, and the financial condition of the System at the end

of the fiscal year. The annual report shall also contain a summary

of the results of the most recent actuarial valuation to include

total assets, total liabilities, unfunded liability or over funded

status, contributions and any other information deemed relevant by

the State Board. The annual report shall be written in such a

manner as to permit a readily understandable means for analyzing the

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financial condition and performances of the System for the fiscal

year.

H. The State Board shall adopt a cost of living adjustment

actuarial assumption in its annual actuarial valuation report.