NY Ret & SS L § 177 (2021)
2021 New York Laws RSS - Retirement and Social Security Article 4-A - Investments of Public Pension Funds 177 - Eligible Investments.

§  177.  Eligible  investments. In addition to the powers contained in any  other  provision  of  law,  including   the   provisions   of   the administrative  code of the city of New York, the trustee or trustees of a fund shall have the power to invest the moneys  thereof  in:  1.  Such securities in which the trustees of a savings bank may invest the moneys deposited therein as provided by law, subject, however, to the following limitations:  (a)  (i)  Except as provided in sections one hundred seventy-eight and three hundred six of the public housing law,  no  conventional  mortgage may  exceed  sixty  per  centum  of  the appraised value of improved and unencumbered real property or seventy-five per centum of  the  appraised value  thereof  if  such  real  property  is  improved  by a building or buildings, the major portion of which is used,  or  in  the  case  of  a building  under  construction  is to be used, for residential, business, manufacturing  or  agricultural  purposes;  (ii)  the  aggregate  unpaid principal  amount  of  all  conventional mortgages at any time held in a fund shall not exceed thirty per centum of the assets of such fund;  and (iii)  not  more than five per centum of the assets of any fund shall be invested in any one conventional mortgage;  (b) the aggregate unpaid principal amount  of  obligations  issued  or guaranteed  by the international bank for reconstruction and development at any time held in a fund shall not  exceed  five  per  centum  of  the assets of such fund;  (c)  the  aggregate  unpaid principal amount of all obligations of the Dominion of Canada, of any province of the Dominion of  Canada,  and  of any  city of the Dominion of Canada at any time held in a fund shall not exceed five per centum of the assets of such fund;  (d)  the  aggregate  unpaid  principal  amount  of   equipment   trust certificates at any time held in a fund shall not exceed five per centum of the assets of such fund; and  (e)  not  more  than  two and one-half per centum of the assets of any fund shall be invested  in  the  obligations  of  any  one  railroad  or industrial  corporation,  or  any  one  corporation engaged directly and primarily in the production, transportation, distribution,  or  sale  of electricity or gas, or the operations of telephone and telegraph systems or waterworks, or in some combination thereof; and  (f) not more than thirty per centum of the assets of any fund shall be invested  in  bonds  of  electric  and  gas  corporations  as defined in subdivision thirteen of section two hundred thirty-five of  the  banking law,   notwithstanding   the   provisions   of  paragraph  (h)  of  such subdivision.   1-a. Obligations payable in United States funds of the United  States, any  state of the United States, District of Columbia or Commonwealth of Puerto Rico, of any department, agency or political subdivision thereof, or  of  any  corporation,  company  or  other  issuer  of  any  kind  or description created or existing under the laws of the United States, any state  of  the  United  States,  District of Columbia or Commonwealth of Puerto Rico and obligations payable in United States funds of Canada  or any province or city of Canada, provided  (a)  each  such  obligation  at  the time of investment shall be rated investment grade by two nationally recognized rating services or by  one nationally  recognized rating service in the event only one such service rates such obligation; and  (b) the aggregate investment by a fund in the obligations of  any  one issuer  pursuant  to this subdivision (other than the obligations of the United States, or those for which the faith  of  the  United  States  is pledged  to  provide  payment  of  the interest and principal) shall not  exceed two per centum of the assets of such fund or five per  centum  of the direct liabilities of such issuer.   2.  Equity  securities,  and  interest-bearing  obligations payable in United States funds which are convertible into equity securities, of any corporation created or existing under the laws of the United States, any state of the United States, District of  Columbia  and  Commonwealth  of Puerto  Rico,  or  any  investment  company, as defined by, and which is registered under, an act of Congress of the United States, entitled  the "Investment   Company  Act  of  1940",  approved  August  twenty-second, nineteen  hundred  forty,  as  amended,   subject   to   the   following limitations:  (a)  the  maximum  investment  by  a fund in such securities shall not exceed (i) in any one year fifteen per centum  of  the  assets  of  such fund,  or  (ii)  seventy per centum in the aggregate; provided, further, however, that more than fifteen per centum of such assets, but not  more than  twenty  per centum thereof, may be so invested in any one year but only to the extent that the per centum  of  such  investments  over  all prior  years  from  the effective date of this act when added to the per centum of such investments during that year does not exceed  an  average of  fifteen  per  centum of the assets of such fund over all prior years and the year in which the investment is being made;  (b) not more than two per centum of the assets of any  fund  shall  be invested  in the equity securities of any one corporation and subsidiary or subsidiaries thereof;  (c) not more than five per centum of the total issued and  outstanding equity securities of any one corporation shall be owned by any fund; and  (d)  notwithstanding any other provision of law, the equity securities acquired hereunder must be registered on a national securities exchange, as provided in an act of congress of the  United  States,  entitled  the "Securities Exchange Act of 1934", approved June sixth, nineteen hundred thirty-four,  as  amended,  or otherwise registered pursuant to said act and, if such  equity  securities  are  so  otherwise  registered,  price quotations for such equity securities are furnished through a nationwide automated  quotations  system  approved  by  the National Association of Securities Dealers, Inc.   3. Conventional mortgages guaranteed by a state bank or trust  company having  a net worth in excess of five hundred million dollars, provided, however, that not more than ten per centum of the  assets  of  any  fund shall be invested in any such mortgage so guaranteed.   4. Bonds and notes of any bank, trust company, savings bank or savings and loan association organized under the laws of this state having a net worth  of  at  least ten million dollars, which bonds and notes shall be validly secured at all times to the extent of one hundred  and  ten  per centum  of  the  unpaid  principal  amount  of  such  bonds and notes by mortgages upon real estate insured by the federal housing  administrator or  any  of his successors in office and guaranteed by the United States under the  provisions  of  the  national  housing  act,  as  amended  or supplemented,  and  to  the  extent  of one hundred and thirty-three and one-third per centum of the unpaid principal amount of  such  bonds  and notes  by conventional mortgages, the valuation of which mortgages shall be based upon the unpaid principal amount thereof upon the date  of  the pledge,  assignment  or  transfer thereof to such fund or its trustee or trustees as security for such bonds and notes, such bonds or notes to be amortized in  substantially  equal  annual  or  semiannual  payments  of principal and interest over a period not in excess of twenty-five years, provided  the  aggregate  unpaid  principal  amount  of  bonds and notes secured by conventional mortgages shall not exceed five  per  centum  of the assets of such fund.    5.  The  trustee  or  trustees  shall have the power to participate or co-invest in any whole or part interest in any conventional mortgage  or insured mortgage, or in any whole or part interest in any such mortgage, which  mortgage  is  held  for the benefit of the holder or holders of a whole  interest  or part interests therein, but no such investment shall be made in any part interest which is junior or subordinate to any other part interest therein nor if the aggregate amount of all investments  by the  fund  in  whole  and  part  interests  in such mortgages when added together  will  exceed  the  limitations  set  forth  in  the  foregoing subdivisions   of   this  section  applicable  to  investments  in  such mortgages.   6. Real estate only if acquired  or  used  for  one  or  more  of  the following purposes and in the following manner:  (a)  The  land  and the building thereon in which it has its principal office.  (b) Such as shall be requisite for its convenient accommodation in the transaction of its business.  (c) Such as  shall  have  been  acquired  in  satisfaction  of  loans, mortgages,  liens, judgments, decrees or other debts previously owing to such fund in the course of its business.  (d)  Such  as  shall  have  been  acquired  in  part  payment  of  the consideration  on  the  sale  of real property owned by it, if each such transaction shall have effected a net reduction in the fund's investment in real property.  (e) Such real property, other than property to be used  primarily  for agricultural,  horticultural,  ranch, mining, recreational, amusement or club purposes, as may be acquired, as an investment for  the  production of  income (including capital appreciation), or as may be acquired to be improved or  developed  for  such  investment  purpose  pursuant  to  an existing program therefor, subject to the following limitations: (1) the cost  of each parcel of real property so acquired under the authority of this subdivision, including the  estimated  cost  to  the  fund  of  the improvement or development thereof, when added to the value of all other real  property  then  held by it pursuant to this subdivision, shall not exceed ten per cent of its assets, and (2) the cost of  each  parcel  of real   property  acquired  under  the  authority  of  this  subdivision, including  the  estimated  cost  to  the  fund  of  the  improvement  or development thereof, shall not exceed two per cent of the fund's assets.  (f)  Notwithstanding  any  other  provision  of  this article, for the purposes of this subdivision, an investment in an entity that invests or proposes to invest, directly or indirectly through  one  or  more  other entities,  at least a majority of its assets in (1) any interest in real property of any kind or character as an investment for the production of income (including capital appreciation), or (2) debt instruments secured by any interest in real estate may be considered an investment  in  real estate  pursuant  to this subdivision and included in the assets subject to the ten percent limitation of paragraph (e) of this subdivision.   7. The trustees of a fund shall have the power to  invest  the  moneys thereof  in  limited partnerships, joint ventures, stock of corporations (including subsidiaries of the fund), group trusts, common trust  funds, collective  investment funds, investment companies (as defined by an act of Congress entitled the "Investment Company  Act  of  1940"),  separate accounts  established by a domestic life insurance company in accordance with section forty-two hundred forty  of  the  insurance  law,  separate accounts  of  the kinds authorized for domestic life insurance companies in accordance with section forty-two hundred forty of the insurance  law established  by  life  insurance companies doing business in this state, real estate investment trusts (as defined in section 856 of the Internal  Revenue Code of 1986) or any other similar  investment  entity,  whether owned  in  whole  or in part by the fund, provided that (a) such limited partnership, joint venture, corporation (including a subsidiary  of  the fund),  group  trust,  common  trust  fund, investment company, separate account, collective investment entity, real estate investment  trust  or other  similar  investment  entity  has  been  established  or organized primarily for the purpose of investing in  securities,  real  estate  or other  investments  in  which  the  trustee  or  trustees  of a fund are authorized to invest pursuant to this section; and (b)  each  investment by  a  fund  pursuant  to  this  subdivision  shall  be deemed to be the investment of the fund in such investment entity  (rather  than  in  the assets of such investment entity), except that in calculating the amount of  the  fund's  investment  in  assets  for  purposes of the percentage limitations, if any set forth in this section, there shall  be  included all  assets  held  by any such investment entity in which the fund shall have an investment as of the date of  determination,  but  only  to  the extent of the fund's indirect interest in such assets resulting from its investment in such investment entity.   8.  The  trustees  of a fund shall have the power to invest the moneys thereof in foreign equity securities provided that (a) any  such  equity security is registered on a national securities exchange, as provided in an  act  of  congress  of  the  United  States, entitled the "Securities Exchange  Act  of  1934",  approved   June   sixth,   nineteen   hundred thirty-four,  as  amended,  or otherwise registered pursuant to said act and,  if  such  equity  security  is  so  otherwise  registered,   price quotations   therefor  are  furnished  through  a  nationwide  automated quotation system approved by  the  National  Association  of  Securities Dealers,  Inc.  or  is  registered  on  a foreign exchange organized and regulated pursuant to the laws of the jurisdiction of such exchange  and (b)  the corporation has averaged at least one billion dollars in annual sales for the three consecutive years preceding the year  in  which  the investment  is made or has market capitalization of at least one billion dollars at the time the investment is made. Investments in such  foreign equities  shall  be included together with a fund's investments in other equity securities for purposes of the percentage limitations  set  forth in the foregoing subdivisions of this section, and not more than ten per centum  of  the assets of any fund shall be invested in the aggregate in such foreign equities.   9. Investments, which do not qualify or are not  permitted  under  any other  subdivision  of this section, notwithstanding any other provision of law, provided  (a) the investments by a fund made pursuant to this subdivision  shall not  at  any  time  exceed  twenty-five per centum of the assets of such fund;  (b) such investments  shall  be  for  the  exclusive  benefit  of  the participants  and  beneficiaries,  and the trustee or trustees of a fund shall make such investments 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; and  (c) such investments shall, to the extent reasonably possible, benefit the overall economic health of the state of New York, so long  and  only if such investments satisfy paragraph (b) of this subdivision.   10.  In  calculating  assets of a fund and percentages thereof for the purposes of this section, a fund is authorized to use a market valuation methodology, provided the valuation methodology is used consistently for all such calculations and is in accordance  with  recognized  accounting methodology.