Tenn. Code § 49-1536
The board of trustees shall be the trustee of the several funds created by this chapter as provided in § 49-1519, and shall have full power to invest and reinvest such funds, provided that such funds shall be invested only in general obligations of the United States government, in general obligations of the state of Tennessee, or in general direct obligations of Tennessee counties and municipalities that have not been in default on either principal or interest on their obligations within five (5) full years next preceding the date of the investment; provided, further, that, subject to like limitations, said trustees shall have full power to hold, purchase, sell, transfer, and dispose of any of the securities and investments in which any of the funds created herein shall have been invested, as well as the proceeds of said investments and any moneys belonging to said funds. Provided, however, that the board of trustees is hereby authorized to delegate the herein mentioned powers to purchase, sell, transfer or dispose of any of the securities and investments to the state treasurer.
The board may also invest its funds in revenue bonds of municipalities, where the aggregate earnings of the utility against which such revenue bonds be issued, available for debt service, for the twelve (12) months immediately preceding such purchase, have been at least one and one-third (11/3) times the maximum annual requirement for such debt service.
The board may also invest its funds in corporate bonds and debentures rated "A" or higher by two (2) nationally recognized statistical services approved by the board of trustees, or in corporate bonds and debentures approved by the Tennessee department of insurance and banking.
The board may also invest its funds in common and preferred stocks rated "A" or higher by a nationally recognized statistical service approved by the board of trustees, provided that the new investments in such stocks in any fiscal year shall be not more than four per cent (4%) of the total value of all investments at the beginning of that fiscal year, and further provided that when the total book value of the investment in stock shall have reached twenty per cent (20%) of the total value of all investments, no further investment in such stocks shall be made until the ratio of the value of stocks to the total value of all investments shall fall below twenty per cent (20%). The board may also invest funds in securities which at the time of making the investment are, by statute, permitted for the investment of reserves of any domestic life insurance companies.
T.C.A. § 49-1536