N.J. Admin. Code § 17:4A-17.1

Current through Register Vol. 56, No. 23, December 2, 2024

Section 17:4A-17.1 - Permissible investments

(a) Subject to the limitations in this subchapter, the Board may invest and reinvest PFRSNJ-managed fund assets in mortgage-backed senior debt securities provided that the issue must be $ 50 million or more in size.

(b) Subject to the limitations in this subchapter, the Board may invest and reinvest PFRSNJ-managed fund assets in mortgage-backed pass-through securities provided that:

1. The issue has been registered with the Securities and Exchange Commission, except that this requirement may be waived by the Board;

2. The sponsor is not in default as to the payment of principal or interest upon any of its outstanding obligations. If, subsequent to purchase, the sponsor defaults, the investment does not have to be sold; and

3. The issue has a credit rating of at least Baa3 or higher by Moody's Investors Service, Inc., BBB- or higher by Standard & Poor's Corporation, and BBB- or higher by Fitch Ratings, except that two of three ratings is sufficient and one of the three ratings is sufficient if only one rating is available. Subsequent to purchase, if the rating falls below the minimum rating for such issue, it does not have to be sold, and the issue may be exchanged with an issue with a credit rating lower than the minimum rating if the issue received in exchange is, on balance, similarly rated.

(c) Notwithstanding the restrictions at (b) above, the Board may invest and reinvest PFRSNJ-managed fund assets in: global debt obligations; state, municipal, and public authority obligations; collateralized notes and mortgages; international government and agency obligations; non-convertible preferred stock; and mortgage-backed pass-through securities that do not meet the minimum credit ratings set forth in this section and at N.J.A.C. 17:4A-6.1, 7.1, 8.1, 9.1, and 15.1, respectively; provided, however, the aggregate market value of such investments shall not exceed eight percent of the total PFRSNJ fund assets.

(d) Notwithstanding the restrictions in this subchapter, the Board may authorize the purchase of mortgage-backed pass-through securities on a case-by-case basis if the Board determines such purchase to be in the financial best interest of the PFRSNJ and its beneficiaries and is consistent with the Board's fiduciary responsibility.

N.J. Admin. Code § 17:4A-17.1

Adopted by 53 N.J.R. 1147(a), effective 7/6/2021

Recodified from 17:4A-17.2 by 56 N.J.R. 795(a) effective 5/6/2024