CHAPTER 390 AN ACT TO PERMIT COUNTIES, CITIES, AND TOWNS TO PROVIDE OLD AGE SECURITY FOR OLD AND INCA- PACITATED LOCAL GOVERNMENT EMPLOYEES, TO PROVIDE FOR THE CREATION OF A RETIREMENT FUND THROUGH THE JOINT CONTRIBUTIONS OF EM- PLOYERS AND EMPLOYEES, AND TO PROVIDE MA- CHINERY FOR THE PROPER ADMINISTRATION OF THIS ACT. The General Assembly of North Carolina do enact:
Section 9. The board of trustees shal] be the trustee of the several funds created by this Act as provided in Section ten, and shall have full power to invest and reinvest such funds, subject to all the terms, conditions, limitations and restrictions imposed by the laws of North Carolina upon domestic life insurance companies in the making and disposing of their investment; and subject to like terms, conditions, limitations and restrictions, said trustee shall have full power to hold, purchase, sell, assign, transfer and dispose of any of the securities and investments in which any of the funds created herein shall have been invested, as well as the proceeds of said investments and any monies belonging to said funds. -2 The board of trustees annually shall allow regular interest on the mean amount for the preceding year in each of the funds with the exception of the expense fund. The amounts so allowed shall be due and payable to said funds, and shall be annually credited thereto by the board of trustees from interest and other earnings on the monies of the Retirement System. Any additional amount required to meet the interest on the funds of the Retirement System shall be paid from the pension accumulation fund, and any excess of earnings over such amount required shall be paid to the pension accumulation fund. Regular interest shall mean such percentum rate to be compounded annually as shall be determined by the board of trustees 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. -3 The secretary-treasurer of the board of trustees shall be the custodian of the several funds. All payments from said funds shall be made by him only upon vouchers signed by two persons designated by the board of trustees. The secretary-treasurer of the board of trustees shall furnish said board a surety bond in a company authorized to do business in North Carolina in such an amount as shall be required by the board, the premium to be paid from the expense fund. -4 For the purpose of meeting disbursements for pensions, annuities and other payments there may be kept available cash, not exceeding ten percentum of the total amount in the several funds of the Retirement System, on deposit in one or more banks or trust companies of the State of North Carolina, organized under the laws of the State of North Carolina, or of the United States: Provided, that the sum on deposit in any one bank or trust company shall not exceed twenty-five percentum of the paid up capital and surplus of such bank or trust company. -5 The board of trustees shall select a bank or banks for the deposits of the funds and securities of the Retirement System in the same manner as such banks are selected by the Treasurer of the State of North Carolina. Such banks selected shall be required to conform to the law governing banks selected by the State. The funds and properties of the North Carolina Governmental Employees Retirement System held in any bank of the State shall be safeguarded by a fidelity and surety bond, the amount to be determined by the board of trustees. -6 Except as otherwise herein provided, no trustee and no employee of the board of trustees shall have any direct interest in the gains or profits of any investment made by the board of trustees, nor as such receive any pay or emolument for this service. No trustee or employee of the board shall, directly or indirectly, for himself or as an agent in any manner use the same, except to make such current and necessary payments as are authorized by the board of trustees; nor shall any trustee or employee of the board of trustees become an endorser or surety or in any manner an obligor for monies loaned or borrowed from the board of trustees. METHOD OF FINANCING