§ 13. Management of funds. a. The funds of the retirement system shall
be managed in accordance with this section.

b. The comptroller shall be trustee of the several funds of the
retirement system. Such funds shall be invested by the comptroller in
securities in which he is authorized by law to invest the funds of the
state, except that he may invest in obligations consisting of notes,
bonds, debentures, or equipment trust certificates issued under an
indenture, which are the direct obligations of, or in the case of
equipment trust certificates are secured by direct obligations of, a
railroad or industrial corporation, or a corporation engaged directly
and primarily in the production, transportation, distribution, or sale
of electricity or gas, or the operation of telephone or telegraph
systems or waterworks, or in some combination of them; provided the
obligor corporation is one which is incorporated under the laws of the
United States, or any state thereof, or of the District of Columbia, and
said obligations shall be rated at the time of purchase within the three
highest classifications established by at least two standard rating
services. The maximum amount that the comptroller may invest in such
obligations shall not exceed thirty per centum of the assets of the New
York state employees' retirement system's funds; and provided further
that not more than two and one half per centum of the assets of the New
York state employees' retirement system's funds shall be invested in the
obligations of any one corporation of the highest classification and
subsidiary or subsidiaries thereof, that not more than two per centum of
the assets of the New York state employees' retirement system's funds
shall be invested in the obligations of any one corporation of the
second highest classification and subsidiary or subsidiaries thereof,
that not more than one and one half per centum of the assets of the New
York state employees' retirement system's funds shall be invested in the
obligations of any one corporation of the third highest classification
and subsidiary or subsidiaries thereof. He shall, however, be subject to
all terms, conditions, limitations and restrictions imposed by this
article and by law upon the making of such investments. The comptroller
shall have full power:

1. To hold, purchase, sell, assign, transfer or dispose of any of the
securities or investments, in which any of the funds of the retirement
system shall be invested, including the proceeds of such investments and
any monies belonging to such funds, and

2. In his name as trustee, to foreclose mortgages upon default or to
take title to real property in such proceedings in lieu thereof and to
lease and sell real property so acquired.

c. The comptroller annually shall credit to each of the funds of the
retirement system regular interest on the mean amount therein for the
preceding year.

d. The custody of all funds of the retirement system shall be in the
charge of the head of the division of the treasury of the department of
taxation and finance, subject to the supervision and control of the
commissioner of taxation and finance.

e. Payment of all pensions, annuities and other benefits shall be made
as provided in this article. For the purpose of meeting disbursements
for pensions, annuities and other payments ordered by the comptroller,
the head of such division may keep on deposit an available fund which
shall not exceed ten per centum of the total amount of the several funds
of the retirement system. Every such deposit shall be kept only in a
bank or trust company organized under the laws of this state, or in a
national bank located in this state, which shall furnish adequate
security therefor.

f. The comptroller, however, shall have a fund in his immediate
possession. Such fund shall be used for the immediate payment of:

1. All pensions, annuities and other benefits, and

2. Such expenses as may necessarily be incurred in acquiring,
servicing and foreclosing mortgages and in acquiring, managing and
protecting investments, and

3. Such special expenditures for which the retirement system will be
paid by the state or a participating employer.

Such fund shall be reimbursed from time to time by the head of such
division on the warrant of the comptroller.

g. Neither the comptroller nor any person employed on the work of the
retirement system shall:

1. Except as herein provided, have any interest, direct or indirect,
in the gains or profits of any investment of the retirement system, nor,
in connection therewith, directly or indirectly, receive any pay or
emolument for his services.

2. Except as provided in section fifty of this article:

(a) Directly or indirectly, for himself or as an agent or partner of
others, borrow any of its funds or deposits or in any manner use the
same except to make such current and necessary payments as are
authorized by the comptroller, or

(b) Become an endorser, surety or an obligor in any manner of monies
loaned by or borrowed of such funds.

h. The retirement system may use a part of its funds, not exceeding
ten per centum of its assets, (1) for purchasing or leasing of land in
the city of Albany and the construction thereon of a suitable office
building or buildings for the transaction of the business of the
retirement system and (2) for purchasing or leasing of land in the
cities of Albany, Syracuse, Buffalo, Binghamton, New York, Rochester and
Utica and the construction thereon of a suitable office building or
buildings for purposes of lease or sale to the state and (3) for
purchasing or leasing of land in the city of Albany on the north and
south sides of Washington avenue commonly known as the "Campus Site"
acquired by the state for a state buildings site pursuant to the
provisions of chapter five hundred seventy-two of the laws of nineteen
hundred forty-seven and the construction thereon of power plants
including service connections, electric substations including service
connections, garages, warehouses and restaurant facilities deemed
necessary for the efficient and economical operation of the office
building or buildings constructed on such land and (4) for purchasing or
leasing of land in the city of Albany acquired by the state for suitable
parking facilities for the use primarily of employees of the state and
persons having business with state departments and state agencies and
the construction thereon of such structures, appurtenances and
facilities deemed necessary for the efficient and economical operation
of the parking facilities constructed on such land and (5) for
purchasing or leasing of land in locations approved by the state
university trustees and the construction, acquisition, reconstruction,
rehabilitation or improvement of suitable buildings or facilities
thereon for purposes of lease or sale to the state university
construction fund, such buildings or facilities to be used by the state
university or by state-operated institutions or statutory or contract
colleges under the jurisdiction of the state university or by the
students, faculty and staff of the state university or of any such
state-operated institution or statutory or contract college, and their
families and (6) for purchasing of lands from the New York state thruway
authority and the construction thereon of an office building or other
buildings for purposes of lease or sale to the thruway authority for its
own use under such terms and conditions, including consideration and
length of term, as shall be agreed upon between the retirement system
and the thruway authority.

The retirement system from time to time may lease to any public agency
any portion of a building constructed for the transaction of its
business which may not be required for such purpose, upon such terms and
conditions as shall be deemed to be for the best interest of the
retirement system.

Real property of the retirement system acquired or constructed
pursuant to this subdivision shall be exempt from taxation.

i. At the close of each fiscal year, the average rate of investment
earnings of the retirement system shall be computed by the actuary and
certified to the comptroller. This rate shall be determined from the
investment earnings during the calendar year which ended three months
prior to the close of the fiscal year. For any year that such average
rate of earnings is in excess of three per centum but not in excess of
four per centum, the comptroller shall declare a rate of special
interest, for members earning regular interest of three per centum,
equal to the difference between such average rate of earnings and three
per centum expressed to the lower one-tenth of one per centum, but not
in excess of one per centum. For any year, commencing with the fiscal
year the first day of which is April first, nineteen hundred seventy,
that such average rate of earnings is in excess of four per centum, the
special rate of interest for members earning regular interest of three
per centum shall be equal to the difference between such average rate of
earnings and three per centum expressed to the lower one-tenth of one
per centum, but not in excess of two per centum, and for members earning
regular interest of four per centum, it shall be the difference between
such average rate of earnings and four per centum, expressed to the
lower one-tenth of one per centum, but not in excess of one per centum.
Special interest at such rates, shall be credited by the comptroller at
the same time that regular interest is credited, to the individual
annuity savings accounts of persons who are members as of the close of
the fiscal year. Special interest shall not be considered in determining
rates of contribution of members. In the case of persons who last became
members on or after July first, nineteen hundred seventy-three, the
provisions of this subdivision shall apply only to the fiscal years
beginning April first, nineteen hundred seventy-two and ending March
thirty-first, nineteen hundred seventy-three.

j. The retirement system may invest, within the limitations authorized
for investments in conventional mortgages, a part of its funds in first
mortgages on real property located anywhere within the boundaries of the
United States and leased to the government of the United States,
provided however, that no such investment shall be made unless the terms
of the mortgage shall provide for amortization payments in an amount
sufficient to completely amortize the loan within the period of the
lease.

k. The funds of the retirement system may be invested in the purchase
of promissory notes or bonds from the farmers home administration issued
in connection with the purchase or improvement of real property and
which are insured by the farmers home administration.