1. (a) The department may:

   1. (1) establish and operate an actuarially sound pension plan governed by a pension trust; and
   2. (2) make the necessary annual contribution in order to prevent any deterioration in the actuarial status of the trust fund.
2. (b) The department shall make contributions to the trust fund. An employee beneficiary shall make contributions to the trust fund through authorized monthly deductions from wages.

3. (c) The trust fund:

   1. (1) may not be commingled with any other funds; and

   2. (2) shall be invested only in accordance with state laws for the investment of trust funds, together with other investments as are specifically designated in the pension trust.

      Subject to the terms of the pension trust, the trustee, with the approval of the department and the pension advisory board, may establish investment guidelines and limits on all types of investments, including stocks and bonds, and take other action necessary to fulfill its duty as a fiduciary for the trust fund.

4. (d) The trustee shall invest the trust fund assets with the same care, skill, prudence, and diligence that a prudent person acting in a like capacity and familiar with these matters would use in the conduct of an enterprise of a similar character with similar aims.
5. (e) The trustee shall diversify the trust fund's investments in accordance with prudent investment standards. The investment of the trust fund is subject to section 3 of this chapter.
6. (f) The trustee shall receive and hold as trustee for the uses and purposes set forth in the pension trust the funds paid by the department, the employee beneficiaries, or any other person or persons.
7. (g) The trustee shall engage pension consultants to supervise and assist in the technical operation of the pension plan so that there is no deterioration in the actuarial status of the plan.

8. (h) Before October 1 of each year, the trustee, with the aid of the pension consultants, shall prepare and file a report with the department and the state board of accounts. The report must include the following with respect to the fiscal year ending on the preceding June 30:

   SCHEDULE I. Receipts and disbursements.

   SCHEDULE II. Assets of the pension trust, listing investments as to book value and current market value at the end of the fiscal year.

   SCHEDULE III. List of terminations, showing cause and amount of refund.

   SCHEDULE IV. The application of actuarially computed "reserve factors" to the payroll data, properly classified for the purpose of computing the reserve liability of the trust fund as of the end of the fiscal year.

   SCHEDULE V. The application of actuarially computed "current liability factors" to the payroll data, properly classified for the purpose of computing the liability of the trust fund for the end of the fiscal year.

   SCHEDULE VI. An actuarial computation of the pension liability for all employees retired before the close of the fiscal year.

9. (i) The minimum annual contribution by the department must be of sufficient amount, as determined by the pension consultants, to prevent any deterioration in the actuarial status of the pension plan during that year. If the department fails to make the minimum contribution for five
10. (5) successive years, the pension trust terminates and the trust fund shall be liquidated.

11. (j) Except as provided by applicable federal law, in the event of liquidation, the department shall take the following actions:

    1. (1) All expenses of the pension trust must be paid.
    2. (2) Adequate provision must be made for continuing pension payments to retired persons.
    3. (3) Each employee beneficiary must receive the net amount paid into the trust fund from the employee beneficiary's wages.

    4. (4) Any amount remaining in the pension trust after the department makes the payments described in subdivisions (1) through (3) must be equitably divided among the employee beneficiaries in proportion to the net amount paid from each employee beneficiary's wages into the trust fund.

       [Pre-2003 Recodification Citation: 10-1-2-2.]

As added by P.L.2-2003, SEC.3.