Administration of Public Funds

ORS 293.726
Standard of judgment and care in investments

  • investment in corporate stock

(1)

The investment funds shall be invested and the investments of those funds managed as a prudent investor would do, under the circumstances then prevailing and in light of the purposes, terms, distribution requirements and laws governing each investment fund.

(2)

The standard stated in subsection (1) of this section requires the exercise of reasonable care, skill and caution, and is to be applied to investments not in isolation but in the context of each investment fund’s investment portfolio and as a part of an overall investment strategy, which should incorporate risk and return objectives reasonably suitable to the particular investment fund.

(3)

In making and implementing investment decisions, the Oregon Investment Council and the investment officer have a duty to diversify the investments of the investment funds unless, under the circumstances, it is not prudent to do so.

(4)

In addition to the duties stated in subsection (3) of this section, the council and the investment officer must:

(a)

Conform to the fundamental fiduciary duties of loyalty and impartiality;

(b)

Act with prudence in deciding whether and how to delegate authority and in the selection and supervision of agents; and

(c)

Incur only costs that are reasonable in amount and appropriate to the investment responsibilities imposed by law.

(5)

The duties of the council and the investment officer under this section are subject to contrary provisions of privately created public trusts the assets of which by law are made investment funds. Within the limitations of the standard stated in subsection (1) of this section and subject to subsection (6) of this section, there may be acquired, retained, managed and disposed of as investments of the investment funds every kind of investment which persons of prudence, discretion and intelligence acquire, retain, manage and dispose of for their own account.

(6)

Notwithstanding subsection (1) of this section, not more than 50 percent of the moneys contributed to the Public Employees Retirement Fund or the Industrial Accident Fund may be invested in common stock, and not more than 65 percent of the moneys contributed to the other trust and endowment funds managed by the Oregon Investment Council or the State Treasurer may be invested in common stock.

(7)

Subject to the standards set forth in this section, moneys held in the Deferred Compensation Fund may be invested in the stock of any company, association or corporation, including but not limited to shares of a mutual fund. Investment of moneys in the Deferred Compensation Fund is not subject to the limitation imposed by subsection (6) of this section. [1967 c.335 §7; 1971 c.53 §1; 1973 c.385 §1; 1981 c.880 §12; 1983 c.456 §1; 1983 c.466 §1; 1987 c.759 §1; 1993 c.18 §59; 1993 c.75 §1; 1997 c.129 §2; 1997 c.179 §22; 1997 c.804 §5; 2005 c.294 §1]

Atty. Gen. Opinions

"Prudent man" rule as applied to divestiture of stocks in companies doing business in Southern Africa, (1978) Vol 38, p 2017; public official entering into standby or forward commitments to purchase securities, (1980) Vol 40, p 295; local governments investing deferred compensation in guaranteed annuity contracts, (1980) Vol 40, p 333; time deposits in mutual savings bank or state or federal savings and loan association of state moneys from Oregon Excess Fund, (1980) Vol 40, p 495

Law Review Citations

74 OLR 1031 (1995)

§§ 293.701 to 293.776

Atty. Gen. Opinions

Effect of Board of Higher Education order directing divestiture of stock in companies doing business in Southern Africa, (1978) Vol 38, p 2017; State Treasurer authority to enter into reverse repurchase agreements, (1979) Vol 39, p 569; real estate holdings through investment for Oregon Public Employes' Retirement Fund, (1981) Vol 41, p 503; Statutory and fiduciary duties of treasurer and Or. Investment Council to PERF, (1993) Vol 46, p 506

Chapter 293

Atty. Gen. Opinions

Duty or authority of Secretary of State to conduct performance audits, (1985) Vol. 44, p 381

Source

Last accessed
Jun. 26, 2021

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