The policies and limitations set forth in this section shall govern the investment of the funds of city pension and retirement systems; provided, these investment policies shall not constitute a contractual part of any system and may, in the interest of members of the system, be altered by amendment made in the manner provided or authorized by this article.
(1) The aim of the investment policies shall be to preserve the integrity and security of fund principal, to maintain a balanced investment portfolio, and to secure the maximum return on investments that is consonant with safety of principal.
(2) The funds of each system may, subject to the limitations set forth in this section, be deposited in savings banks or federal savings and loan associations up to the amount, as to each bank or association, guaranteed by the United States or an agency thereof, and may be invested in debt securities, including tax sale certificates limited to those of the city of any other municipality within the state, and of Palm Beach County, and in preferred and common stocks and mutual fund shares.
(3) Of the total fund principal in any system, including the amounts deposited in banks or associations, the total amount thereof invested in tax sale certificates shall not exceed thirty (30) per cent; of the total amount thereof invested in preferred stocks and in debt securities other than tax sale certificates may aggregate one hundred (100) per cent; the total amount thereof invested in preferred stocks shall not aggregate more than twenty (20) per cent; and the total amount thereof invested in common stocks and mutual fund shares shall not aggregate more than sixty-five (65) per cent. Percentages shall be based on cost or amortized cost to the fund of all securities purchased.
(4) The following minimum standards shall, as to the funds of each pension and retirement system, govern the eligibility of securities for acquisition as fund investments:
a. All corporate and association securities and mutual fund shares shall be issued by a corporation or other legal person incorporated or otherwise organized within the United States and domiciled therein.
b. Not more than two and one-half (21/2) per cent of the total fund principal or ten thousand dollars ($10,000), whichever is the larger amount, shall be invested in any single security other than obligations of the United States or an agency thereof.
c. All bonds and preferred stocks shall be rated “A” or higher by the investment services published by either Moody's Investors Service or Standard & Poor's Corporation.
d. Bonds and preferred stocks that are convertible into common stock or that include warrants for the purchase of common stock shall not be purchased if any premium price is being paid for the conversion privilege or for the warrants.
e. All common stocks except those of banks and insurance companies and except mutual fund shares must have been listed on the New York Stock Exchange or the American Stock Exchange for a period of at least one (1) year immediately preceding the acquisition thereof.
f. All common stocks and mutual fund shares must have a record of uninterrupted dividend payments throughout the ten-year period immediately preceding the acquisition of the stock as a fund investment.
g. At least nine (90) per cent of the total investments of each mutual fund invested in shall qualify as eligible under the provisions of this section as a direct investment of the pension and retirement system.
(5) All investments of funds of each existing system made prior to the adoption hereof may, in the discretion of its trustees, be retained as investments.
