Kansas 2025-2026 Regular Session

Kansas Senate Bill SB232 Compare Versions

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1	1	Session of 2025
2	2	SENATE BILL No. 232
3	3	By Committee on Federal and State Affairs
4	4	2-6
5	5	AN ACT concerning retirement and pensions; relating to management and
6	6	investment by the board of trustees of the Kansas public employees
7	7	retirement system of moneys certified by the state treasurer as
8	8	equivalent to the aggregate net amount received for unclaimed
9	9	property; modifying investment standards; authorizing investments in
10	10	certain foreign governments; amending K.S.A. 2024 Supp. 75-2263
11	11	and repealing the existing section.
12	12	Be it enacted by the Legislature of the State of Kansas:
13	13	Section 1. K.S.A. 2024 Supp. 75-2263 is hereby amended to read as
14	14	follows: 75-2263. (a) (1) The state treasurer shall certify to the board of
15	15	trustees a portion of state moneys available for investment by the pooled
16	16	money investment board that is equivalent to the aggregate net amount
17	17	received for unclaimed property. The state treasurer may transfer the
18	18	amount certified to the board of trustees. All such moneys shall be
19	19	considered moneys in the state treasury for purposes of K.S.A. 75-6704,
20	20	and amendments thereto.
21	21	(2) Subject to the provisions of subsection (h), the board of trustees is
22	22	responsible for the management and investment of that portion of state
23	23	moneys available for investment by the pooled money investment board
24	24	that is certified by the state treasurer to the board of trustees as being
25	25	equivalent to the aggregate net amount received for unclaimed property
26	26	and shall discharge the board's duties with respect to such moneys solely
27	27	in the interests of the state general fund and shall invest and reinvest such
28	28	moneys and acquire, retain, manage, including the exercise of any voting
29	29	rights and disposal of investments of such moneys within the limitations
30	30	and according to the powers, duties and purposes as prescribed by this
31	31	section.
32	32	(b) Moneys specified in subsection (a) shall be invested and
33	33	reinvested to achieve the investment objective, which is preservation of
34	34	such moneys and accordingly providing that the moneys are as productive
35	35	as possible, subject to the standards set forth in this section. No such
36	36	moneys shall be invested or reinvested if the sole or primary investment
37	37	objective is for economic development or social purposes or objectives.
38	38	(c) In investing and reinvesting moneys specified in subsection (a)
39	39	and in acquiring, retaining, managing and disposing of investments of the
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76	76	moneys, the board of trustees shall exercise the judgment, care, skill,
77	77	prudence and diligence under the circumstances then prevailing that
78	78	persons of prudence, discretion and intelligence acting in a like capacity
79	79	and familiar with such matters would use in the conduct of an enterprise of
80	80	like character and with like aims by diversifying the investments of the
81	81	moneys so as to minimize the risk of large losses, unless under the
82	82	circumstances it is clearly prudent not to do so, and not in regard to
83	83	speculation but in regard to the permanent disposition of similar moneys,
84	84	considering the probable income as well as the probable safety of their
85	85	capital.
86	86	(d) In the discharge of such management and investment
87	87	responsibilities the board of trustees may:
88	88	(1) Contract for the services of one or more professional investment
89	89	advisors or other consultants in the management and investment of such
90	90	moneys and otherwise in the performance of the duties of the board of
91	91	trustees under this section; and
92	92	(2) arrange for the custody of such moneys as the board of trustees
93	93	considers advisable with one or more member banks or trust companies of
94	94	the federal reserve system or with one or more banks in the state of
95	95	Kansas, or both, to be held in safekeeping by the banks or trust companies
96	96	for the collection of the principal and interest or other income or of the
97	97	proceeds of sale; and
98	98	(3) invest in bonds, notes, debentures or other similar obligations of
99	99	a foreign government that the international monetary fund lists as an
100	100	industrial country and for which the full faith and credit of such nation has
101	101	been pledged for the payment of principal and interest so long as such
102	102	security shall be rated at least A- or better by Standard and Poor's
103	103	corporation or A3 or better by Moody's investors service or an equivalent
104	104	investment grade by a securities rating organization accepted by the
105	105	national association of insurance commissioners. The investment in such
106	106	foreign securities at any one time shall not exceed 5% of the cash
107	107	available for investment that may be invested pursuant to this section.
108	108	Under no circumstances shall investments be made in bonds, notes,
109	109	debentures or any similar obligations of a foreign government that is:
110	110	(A) Identified as a state sponsor of terrorism by the United States
111	111	department of state; or
112	112	(B) an authoritarian or totalitarian government the sovereign powers
113	113	of which are exercised through a single person or group of persons who
114	114	are not elected by any form of legitimate popular voting.
115	115	(e) The board of trustees shall require that each person contracted
116	116	with under subsection (d)(1) or (2) to provide services shall obtain
117	117	commercial insurance that provides for errors and omissions coverage for
118	118	such person in an amount to be specified by the board of trustees. The
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162	162	amount of such coverage specified by the board of trustees shall be at least
163	163	the greater of $500,000 or 1% of the funds entrusted to such person up to a
164	164	maximum of $10,000,000. The board of trustees shall require a person
165	165	contracted with under subsection (d) to provide services to give a fidelity
166	166	bond in a penal sum as may be fixed by law or, if not so fixed, as may be
167	167	fixed by the board of trustees, with corporate surety authorized to do
168	168	business in this state. Such persons contracted with the board of trustees
169	169	pursuant to subsection (d) and any persons contracted with such persons to
170	170	perform the functions specified in subsection (b) shall be deemed to be
171	171	fiduciary agents of the board of trustees in the performance of contractual
172	172	obligations.
173	173	(f) (1) Subject to the objective set forth in subsection (b) and the
174	174	standards set forth in subsection (c), the board of trustees shall formulate
175	175	and adopt policies and objectives for the investment and reinvestment of
176	176	such moneys and the acquisition, retention, management and disposition of
177	177	investments of the moneys. Such policies and objectives shall be in writing
178	178	and shall include:
179	179	(A) Specific asset allocation standards and objectives;
180	180	(B) establishment of criteria for evaluating the risk versus the
181	181	potential return on a particular investment; and
182	182	(C) a requirement that all investment advisors, and any managers or
183	183	others with similar duties and responsibilities as investment advisors, shall
184	184	immediately report all instances of default on investments to the board of
185	185	trustees and provide such board of trustees with recommendations and
186	186	options, including, but not limited to, curing the default or withdrawal
187	187	from the investment.
188	188	(2) The board of trustees shall review such policies and objectives,
189	189	make changes considered necessary or desirable and readopt such policies
190	190	and objectives on an annual basis.
191	191	(g) All interest or other income of the investments of the moneys
192	192	invested under this section, after payment of any management fees, shall
193	193	be deposited in the state treasury to the credit of the state general fund.
194	194	(h) The state treasurer shall maintain the discretionary authority to
195	195	liquidate some or a portion of such moneys transferred to the board of
196	196	trustees pursuant to subsection (a) for:
197	197	(1) Investment by the pooled money investment board; or
198	198	(2) necessary payments to owners as defined in K.S.A. 58-3934(m),
199	199	and amendments thereto.
200	200	(i) As used in this section:
201	201	(1) "Board of trustees" means the board of trustees of the Kansas
202	202	public employees retirement system established by K.S.A. 74-4905, and
203	203	amendments thereto.
204	204	(2) "Fiduciary" means a person who, with respect to the moneys
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248	248	invested under this section:
249	249	(A) Exercises any discretionary authority with respect to
250	250	administration of the moneys;
251	251	(B) exercises any authority to invest or manage such moneys or has
252	252	any authority or responsibility to do so;
253	253	(C) provides investment advice for a fee or other direct or indirect
254	254	compensation with respect to such moneys or has any authority or
255	255	responsibility to do so;
256	256	(D) provides actuarial, accounting, auditing, consulting, legal or other
257	257	professional services for a fee or other direct or indirect compensation with
258	258	respect to such moneys or has any authority or responsibility to do so; or
259	259	(E) is a member of the board of trustees or of the staff of the board of
260	260	trustees.
261	261	(3) "Pooled money investment board" means the pooled money
262	262	investment board established by K.S.A. 75-4221a, and amendments
263	263	thereto.
264	264	Sec. 2. K.S.A. 2024 Supp. 75-2263 is hereby repealed.
265	265	Sec. 3. This act shall take effect and be in force from and after its
266	266	publication in the statute book.
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