COMMITTEE SUBSTITUTE
FOR
H. B. 2638
(By
Delegates Swartzmiller, Manchin, Stemple,
Pethtel, Varner, Kominar and Ennis
)
(Originating in the Committee on Finance)
[February 21, 2006]
A BILL
to amend and reenact §8-22-22a of the Code of West Virginia,
1931, as amended, relating to restrictions on investments by
municipal policemen's and firemen's pension and relief funds
by increasing the amount which may be invested in equities.
Be it enacted by the Legislature of West Virginia:
That §8-22-22a of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 22. RETIREMENT BENEFITS GENERALLY; POLICEMEN'S PENSION
AND RELIEF FUND; FIREMEN'S PENSION AND RELIEF
FUND; PENSION PLANS FOR EMPLOYEES OF WATERWORKS
SYSTEM, SEWERAGE SYSTEM OR COMBINED WATERWORKS AND
SEWERAGE SYSTEM.
§8-22-22a. Restrictions on investments.
Moneys invested as permitted by section twenty-two of this
article are subject to the following restrictions and condition
contained in this section:
(a) Fixed income securities shall at no time exceed ten percent of the total assets of the pension fund, which are issued
by one issuer, other than the United States government or agencies
thereof, whereas this limit shall not apply;
(b) At no time shall the equity portion of the portfolio
exceed
fifty sixty percent of the total portfolio. Furthermore,
the debit or equity securities of any one company or association
shall not exceed five percent with a maximum of fifteen percent in
any one industry;
(c) Notwithstanding any other provisions of this article, any
investments in equities under subsections (g) and (h), section
twenty-two of this article shall be subject to the following
additional guidelines:
(1) Equity mutual funds shall be no sales load (front or back)
and no contingent deferred sales charges shall be allowed. The
total annual operating expense ratio shall not exceed one and
three-quarter percent for any mutual fund;
(2) The stated investment policy requires one hundred percent
of the equities of the portfolio be that of securities which are
listed on the New York Stock Exchange, the American Stock Exchange,
or the NASDAQ National Market;
(3) Equity mutual funds may be only of the following fund
description stated purpose: growth funds, growth and income funds,
equity income funds, index funds; utilities, funds, balanced funds
and flexible portfolio funds;
and
(4) The equity value of investments shall not exceed
twenty-five sixty percent of the total portfolio
. for the first twelve months from enactment of these articles; thereafter no No
more than five percent of the total portfolio
may be
invested
acquired in equity securities per calendar quarter up to the
maximum of
fifty sixty percent.
(d) The board of trustees of each fund shall obtain an
independent performance evaluation of the funds at least annually
and such evaluation shall consist of comparisons with other funds
having similar investment objectives for performance results with
appropriate market indices;
(e) Each entity conducting business for each pension fund,
shall fully disclose all fees and costs of transactions conducted
on a quarterly basis. Entities conducting business in mutual funds
for and on behalf of each pension fund, shall timely file revised
prospectus and normal quarterly and annual Securities Exchange
Commission reporting documents with the board of trustees of each
pension fund.