Repository: UIHistories Project: Board of Trustees Minutes - 1942 [PAGE 447]

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444

BOARD OF TRUSTEES

[August 5

substantial part of its property, which corporation shall not have defaulted in payment of interest or principal on any of its obligations outstanding in the hands of the public during the period of five years preceding the date of purchase. T h e term "first mortgage bonds" shall include bonds issued in whole or at least fifty percent in part to refund first mortgage bonds eligible for investment hereunder at the time of refunding. No investment shall be made in securities specified in paragraphs (c) and ( d ) of this Section which will make the then total book value of all assets invested in such securities exceed sixty (60) percent of the total book value of all assets of the System at the time, and no investments shall be made in the securities of any corporation engaged primarily in operating real estate. Any limitations herein set forth shall be applicable only at the time of purchase and shall not require the liquidation of any investment at any time. All investments shall be clearly marked to indicate ownership by the System and to the extent possible shall be registered in the name of the System. All investments shall be carried at a book value such that the yield, computed as a uniform interest rate compounded annually or semiannually, as the case may be, will remain uniform to maturity. No adjustments shall be made in investment valuations for ordinary current market price fluctuations; but reserves may be provided for anticipated losses upon redemption as determined by the Board. All additions to assets received as income, interest, and dividends from deposits and investments authorized by this Act shall be added to other assets and used to pay benefits in accordance with the provisions of this Act. Except as otherwise herein provided, no member or employee of the Board shall have any direct interest in the income, gains, or profits of any investments made by the Board, nor shall any such person receive any pay or emolument for services in connection with any investment. No member or employee of the Board shall become an endorser or surety, or in any manner an obligor for money loaned or borrowed from the System. Proof that any such person shall have violated any of these restrictions shall make such person guilty of a misdemeanor or larceny as the case may be, and such person shall be punishable therefor as provided by law.

ARTICLE 7. MISCELLANEOUS

Sec. 7.1 Authorizations: Each Participating Employee shall, by virtue of the payment of the Normal Contributions required to be paid to this System, receive a vested interest in the Normal and Additional Annuities, Death Benefits excluding Additional Death Benefits, and Separation Benefits provided in Article 6, and each such Employee in consideration of such vested interest shall be deemed to have authorized and agreed to the deductions from the payments of salary of all contributions payable by such Employee to this System in accordance with this Act. Payment of salary as prescribed by law or as contracted by an Employer less the amounts of contributions provided in this Act shall, together with the specified vested rights in the benefits provided by this System, be a full and complete discharge of all claims of payments for service rendered by an Employee during the period covered by any such payment, and payments of Employer Contributions to this System or of benefits from this System shall not be considered as a violation of Section 9 (3) of "An Act in relation to State Finance," approved June 10, 1919, as amended. Sec. 7.2 Violation of Contract: T h e provisions of this Act, however, shall not apply to any person who on the Effective Date hereof has a contract of employment with an Employer which would be violated by the requirement of participation as specified in Section 3.2 unless such person elects to participate herein. Each such person who shall have had Contributions deducted under this System or who shall have been notified of the creation of this System, shall be deemed to have elected to participate unless such person files with the Board prior to December I, 1941, a written notice of election not to participate. Any person so electing not to participate shall forever thereafter be precluded from participating in this System.