N.J. Admin. Code § 17:4A-8.1

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

Section 17:4A-8.1 - Permissible investments

(a) Subject to the limitations in this subchapter, the Board may invest or reinvest PFRSNJ-managed fund assets in collateralized notes and mortgages, provided that:

1. The obligor is not in default as to the payment of principal or interest upon any of its outstanding obligations. Subsequent to purchase, if the obligor defaults, the obligations do not have to be sold;

2. The collateral must be fully maintained and not under the direct control of the originator of the collateral underlying the obligation, but under the control of a trustee, special purpose vehicle, or other independent entity incorporated in the United States; and

3. The issue must be rated at least: Baa3 or higher by Moody's Investor 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. Subsequent to purchase, if the rating falls below the minimum rating for such issue, the issue does not have to be sold, and it may be exchanged with issues with credit ratings lower than the minimum rating if the issues received in exchange are, on balance, similarly rated.

(b) Notwithstanding the restrictions at (a) above, the Board may invest and reinvest the 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, 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 in this subchapter, the Board may authorize the purchase of collateralized notes and mortgages 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-8.1

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

Recodified from 17:4A-8.2 by 56 N.J.R. 795(a) effective 5/6/2024