AZ Rev Stat § 38-848.04 (2021)
2021 Arizona Revised Statutes|Title 38 - Public Officers and Employees|§ 38-848.04 - Board fiduciary obligations and duties; enforcement; definitions

38-848.04.  Board fiduciary obligations and duties;  enforcement;  definitions A. The board and any other fiduciary of the system shall discharge their duties: 1. Solely in the interest of the members and beneficiaries. 2. For the exclusive purpose of providing benefits to members and beneficiaries and paying reasonable expenses in administering the plans and systems administered by the board. 3. With the care,  skill and caution under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an activity of like character and purpose. 4. Impartially,  taking into account any differing interests of members and beneficiaries. 5. Incurring only costs that are appropriate and reasonable. 6. Pursuant to a good faith interpretation of the law governing the retirement plans and systems administered by the board. B. In investing and managing assets of the retirement plans and systems administered by the board,  a trustee with authority to invest and manage assets: 1. Shall consider at least the following: (a) The general economic conditions. (b) The possible effect of inflation or deflation. (c) The role that each investment or course of action plays within the overall portfolio of the retirement plans and systems administered by the board or appropriate grouping of plans or systems. (d) The expected total return from income and the appreciation of capital. (e) The needs for liquidity,  regularity of income and preservation or appreciation of capital. (f) For defined benefit plans,  the adequacy of funding for the plan based on reasonable actuarial factors. 2. Shall diversify the investments of the retirement plans and systems administered by the board or appropriate grouping of plans or systems unless the trustee reasonably determines that,  because of special circumstances,  it is clearly prudent not to do so. 3. Shall make a reasonable effort to verify facts relevant to the investment and management of assets of a retirement plan or system. 4. May invest in any kind of property or type of investment consistent with this article. 5. May consider benefits created by an investment in addition to investment return only if the trustee determines that the investment providing these collateral benefits would be prudent even without the collateral benefits. C. A trustee with authority to invest and manage assets of a retirement plan or system shall adopt a statement of investment objectives and policies for each retirement plan and system administered by the board or appropriate grouping of plans or systems. The statement must include the desired rate of return on assets overall,  the desired rates of return and acceptable levels of risk for each asset class,  asset-allocation goals,  guidelines for the delegation of authority and information on the types of reports to be used to evaluate investment performance. At least annually,  the trustee shall review the statement and change or reaffirm it.  D. In evaluating the performance of a trustee or any other fiduciary of the plan or system: 1. Compliance with this section must be determined in light of the facts and circumstances existing at the time of the trustee's or fiduciary's decision or action and not by hindsight. 2. The trustee's investment and management decisions must be evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the retirement plans and systems administered by the board or appropriate grouping of plans or systems. E. An employer,  member,  beneficiary or fiduciary may maintain an action in which the court may award reasonable attorney fees and costs to either party: 1. To enjoin an act,  practice or omission that violates this section. 2. For appropriate equitable relief to redress the violation of or to enforce this section. F. For the purposes of this section: 1. " Fiduciary"  means a person who does any of the following: (a) Exercises any discretionary authority to manage a retirement plan or system administered by the board. (b) Exercises any authority to invest or manage assets of a retirement plan or system administered by the board. (c) Provides investment advice for a fee or other direct or indirect compensation with respect to assets of the system or has any authority or responsibility to do so. (d) Serves as a trustee or member of the board. 2. " Trustee"  means a person who has ultimate authority to manage a retirement system or plan or to invest or manage its assets.