Management of Funds

PURPOSE: This rule provides for the orderly management of deposits, all funds, and their investment in accordance with the provisions of sections 169.020, 169.040, and 169.045, RSMo. (1) The system shall name a depository financial institution(s) in which all moneys received by the retirement office must be deposited and from which all disbursements of system funds must be made. (2) All system funds held by this financial institution(s) must be fully insured by the Federal Deposit Insurance Corporation (FDIC) or secured by collateral held by a third party in the name of the system as provided by section 169.045, RSMo, which shall be available to the system in the event of default by the financial institution(s). (3) The executive director or his/her designated employee(s) shall determine and maintain an appropriate balance of funds to be held in the financial institution(s) to satisfy the current obligations of the system. (4) The portion of the balance held in the financial institution(s) but not needed for immediate settlement of system payments may be invested in collateralized investments. (5) The system shall name a custodial bank to facilitate the investment of funds and safekeeping of securities. (6) Funds held by the depository financial institution(s) in excess of the appropriate balance shall be transferred to the system’s custodial bank and shall be distributed to the system’s investment managers to be invested in accordance with the asset allocation policy of the board of trustees. (7) The board of trustees shall determine annually, on or before June 30, the rate of interest which shall be in effect on July 1 of the following fiscal year and which shall be used to credit interest to members’ accumulated contribution accounts at the end of the following fiscal year. (8) Section 169.040, RSMo, provides the board authority to invest the assets of the system established by sections 169.010 to 169.141, RSMo. Pursuant to such authority, assets of such system may be invested in any collective investment fund, including common and group trust funds that consist exclusively of assets of exempt pension and profit sharing trusts and individual retirement accounts, custodial accounts, retirement income accounts, governmental plans, and tax-exempt trusts under the Internal Revenue Code of 1986 and Rev. Rule 81100, as modified by Rev. Rules 2004-67, 2008-40, and 2011-1. The assets so invested shall be subject to all the provisions of the instruments establishing and governing such funds. Those instruments of group trusts, including any subsequent amendments, are hereby incorporated by reference and made a part of the system established by sections 169.010 to 169.141, RSMo, to the extent of the system’s investment therein. AUTHORITY: section 169.020, RSMo 2016.* Original rule filed Dec. 19, 1975, effective Jan. 1, 1976. Amended: Filed Jan. 17, 1986, effective June 12, 1986. Emergency amendment filed June 20, 1990, effective July 1, 1990, expired Oct. 28, 1990. Amended: Filed June 20, 1990, effective Nov. 30, 1990. Amended: Filed July 31, 1995, effective Feb. 25, 1996. Amended: Filed Aug. 29, 1997, effective Feb. 28, 1998. Amended: Filed April 17, 2012, effective Oct. 30, 2012. Amended: Filed Jan. 4, 2019, effective July 30, 2019. *Original authority: 169.020, RSMo 1945, amended 1951, 1953, 1967, 1973, 1983, 1990, 1995, 1996, 1998, 2005, 2009, 2013.