Okla. Stat. tit. 74, § 74-909.1

Investment managers - Custodial services - Reports.

Oklahoma Statutes - Title 74. State Government Page 624

A. The Oklahoma Public Employees Retirement System Board of

Trustees 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

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 Board of Trustees may procure insurance indemnifying the

members of the Board of Trustees from personal loss or

accountability from liability resulting from a member's action or

inaction as a member of the Board of Trustees.

C. The Board of Trustees may establish an investment committee.

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

members of the Board of Trustees appointed by the chairman of the

Board of Trustees. The committee shall make recommendations to the

full Board of Trustees 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 Board of Trustees in any

circumstances whatsoever. No recommendation of the committee shall

have effect as an action of the Board of Trustees nor take effect

without the approval of the Board of Trustees as provided by law.

D. The Board of Trustees 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 Board of Trustees. Subject to the overall investment guidelines

set by the Board of Trustees, the investment managers shall have

full discretion in the management of those monies of the System

allocated to the investment managers. The Board of Trustees shall

manage those monies not specifically allocated to the investment

managers. The monies of the System allocated to the investment

managers shall be 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

Oklahoma Statutes - Title 74. State Government Page 625

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 Board of Trustees shall be placed with a custodian selected

by the Board of Trustees. The custodian shall be a bank or trust

company offering pension fund master trustee and master custodial

services. The custodian shall be chosen by a solicitation of

proposals on a competitive basis pursuant to standards set by the

Board of Trustees. In compliance with the investment policy

guidelines of the Board of Trustees, 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
uidelines of the Board of Trustees, 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 Board of Trustees for investing the monies in

appropriately collateralized short-term interest-bearing investment

vehicles.

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

thereafter, the Board of Trustees shall develop a written investment

plan for the System.

G. The Board of Trustees shall compile a quarterly financial

report of all the funds of the System on a fiscal year basis. The

report shall be compiled pursuant to uniform reporting standards

prescribed by the Oklahoma State Pension Commission for all state

retirement systems. The report shall include several relevant

measures of investment value, including acquisition cost and current

fair market value with appropriate summaries of total holdings and

returns. The report shall contain combined and individual rate of

returns of the investment managers by category of investment, over

periods of time. The Board of Trustees shall include in the

quarterly reports all commissions, fees or payments for investment

services performed on behalf of the Board. The report shall be

distributed to the Governor, the Oklahoma State Pension Commission,

the Speaker of the House of Representatives and the President Pro

Tempore of the Senate. In lieu of compiling and distributing the

quarterly report, the Board may provide the Pension Commission with

direct access to the same data from the custodian bank for the

System.

H. After July 1 and before December 1 of each year, the Board

of Trustees 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

Oklahoma Statutes - Title 74. State Government Page 626

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

the information issued in the quarterly reports required pursuant to

subsection G of this section as well as 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 Board of Trustees.

The annual report shall be written in such a manner as to permit a

readily understandable means for analyzing the financial condition

and performance of the System for the fiscal year.

I. The Board shall distribute the corpus and income of the

System to the members and their beneficiaries in accordance with the

System's laws and rules and regulations. At no time prior to the

satisfaction of all liabilities with respect to members and their

beneficiaries shall any part of the corpus and income be used for,

or diverted to, purposes other than the exclusive benefit of the

members and their beneficiaries.