N.J. Admin. Code § 17:4A-6.1

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

Section 17:4A-6.1 - Permissible investments

(a) Subject to the limitations in this subchapter, the Board may invest and reinvest PFRSNJ-managed fund assets in global debt obligations provided that:

1. The obligor:

i. Is not in default as to the payment of principal or interest upon any of its outstanding obligations; and

ii. Has a market capitalization or contributed capital of at least $ 100 million. Subsequent to purchase, if the obligor defaults, the obligations do not have to be sold and, subsequent to purchase, if market capitalization or contributed capital falls below $ 100 million, the investment does not have to be sold; and

2. The obligations have credit ratings 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 the three ratings is sufficient and one of the three ratings is sufficient if only one rating is available. If a rating for the obligations has not been obtained from the above services, the obligations may be purchased if the issuer rating meets the minimum rating criteria. Subsequent to purchase, if the ratings fall below the minimum rating for such obligations, the obligations do not have to be sold, and they may be exchanged with obligations with credit ratings lower than the minimum rating if the obligations received in exchange are, on balance, similarly rated.

(b) Notwithstanding the restrictions at (a) 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, 15.1, and 17.1, respectively; provided, however, the aggregate market value of such investments shall not exceed eight percent of the total PFRSNJ fund assets.

(c) Notwithstanding the restrictions at (a) above, the Board may invest and reinvest the moneys of the PFRSNJ-managed fund assets in global debt obligations and non-convertible preferred stock of companies that do not meet the minimum market capitalization or contributed capital set forth in this section and at N.J.A.C. 17:4A-15.1, respectively; provided, however, that the market value of such investments shall not exceed one percent of the total PFRSNJ fund assets.

(d) In addition to making the investments described at (a) above, the Board may:

1. Exercise the rights and conversion privileges of any security acquired pursuant to this subchapter; and

2. Retain any distribution received as a result of a corporate action, even if such distribution does not meet the requirements of this subchapter.

(e) Notwithstanding the restrictions in this subchapter, the Board may approve the purchase of global debt obligations 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-6.1

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

Recodified from 17:4A-6.2 by 56 N.J.R. 795(a) effective 5/6/2024