Section 13-570. Administration; investment of funds; units and unit values; expenses

a. The retirement board may enter into a contract or contracts  with one or  more  agencies  to  invest  and  otherwise  administer  the
  variable   annuity   funds.   The  retirement  board  shall  retain  the
  responsibility for determination of benefits  and  final  authority  for
  making investments. A contract with any one agency shall be for a period
  not  to  exceed  five years but may be renewed with the same agency. Any
  such contract shall be filed with the New York state  superintendent  of
  insurance  within  thirty  days  prior  to  its  effective  date and the
  operations of  the  contracting  agency,  insofar  as  they  affect  the
  operation   of  the  variable  annuity  program,  shall  be  subject  to
  examination by the superintendent of insurance.
    b. The retirement board as an alternative to entering into a  contract
  or  contracts  as  provided  in  subdivision  a hereof, may, only to the
  extent permitted by the insurance law, enter  into  a  variable  payment
  annuity contract or contracts with insurance companies providing for the
  benefits payable under the variable annuity program.
    c.  The  variable  annuity  funds  shall,  for investment purposes, be
  treated as a single fund but may be invested by more than one agency.
    d. 1. Notwithstanding the provisions of any state or city law  to  the
  contrary,  the  assets  of  each  of  the  variable annuity funds may be
  invested up to one hundred percent in such domestic or foreign  equities
  and  other  securities  as  are  permissible for domestic life insurance
  companies or savings banks, subject only to the following limitations:
    (i) No investment shall be made in the  stock,  shares  or  securities
  convertible  into  stock  or  shares  of  any  one  corporation  and its
  subsidiaries which, at the time such investment is made will  cause  the
  aggregate  market  value of the stock, shares and securities convertible
  into stock or shares of such corporation and its subsidiaries  owned  by
  the  variable  annuity  funds  to  exceed  five percent of the aggregate
  market value of the assets of such funds.
    (ii) Not more than two percent of the issued  and  outstanding  stock,
  shares  or  securities  convertible into stock or shares of any class of
  any one corporation shall be owned by such funds.
    The foregoing provisions shall not limit the investment of the  assets
  of  variable  annuity  funds  in  municipal,  county,  state, federal or
  corporate obligations, not convertible into stock or  shares,  otherwise
  permitted by law.
    2.  In  addition to any investments permitted by paragraph one of this
  subdivision, and notwithstanding any provision of any state or city  law
  to the contrary, the assets of each of the variable annuity funds may be
  invested  in  investments  not  qualifying  under  such  paragraph  one,
  provided:
    (i) the investments made by a fund pursuant to  this  paragraph  shall
  not at any time exceed fifteen percent (or such higher percentage as may
  be  authorized  by  any  other  state or city law) of the assets of such
  fund; and
    (ii) such investments shall  be  for  the  exclusive  benefit  of  the
  participants  and beneficiaries, and the trustee or trustees of the fund
  shall  make  such  investments  with  the  care,  skill,  prudence,  and
  diligence  under the circumstances then prevailing that a prudent person
  acting in a like capacity and familiar with such matters  would  use  in
  the conduct of an enterprise of a like character and with like aims.
    3.  In  the  event  of  any  conflict  or  inconsistency  between  the
  provisions of this subdivision and any provisions of state or  city  law
  setting  forth  the percentage of assets of a fund which may be invested
  in any one type of investment or any  particular  investment,  including
  without  limitation  the  provisions of article four-A of the retirement

  and social security  law,  the  provisions  of  this  subdivision  shall
  govern.
    e.  Investment  income and appreciation and depreciation of the assets
  shall be allocated  to  the  individual  variable  annuity  funds  on  a
  proportionate basis as of the end of each month.
    f.  Sections 13-535, 13-536 and 13-537 of this chapter shall not apply
  to the variable annuity funds.
    g. Deposits and transfers to the variable annuity savings fund and the
  variable pension accumulation fund pursuant to section  13-568  of  this
  chapter shall be converted at once into units of equal value. At the end
  of each month, the number of units in the accounts of each individual in
  each  such fund shall be increased by 0.3274 per cent, the percentage by
  which a sum of money is  increased  in  one  month  if  invested  at  an
  effective rate of interest of four per cent per year. Residual fractions
  of a unit shall be determined to the nearest hundreth of a unit.
    h. The value of a unit for January, nineteen hundred sixty-eight shall
  be  ten  dollars.  For  any  month  thereafter it shall be determined in
  accordance with paragraphs one, two and three following:
    1. For any month preceding the month in which the method set forth  in
  paragraph two below is applicable, the value of a unit shall be equal to
  the  combined  assets  of  the  variable  annuity  savings  fund and the
  variable pension accumulation fund  at  the  beginning  of  such  month,
  divided  by the total number of units then in the individual accounts in
  such funds.
    2. The retirement board shall establish the first month for which  the
  method  set  forth  in this paragraph applies. For such first month, and
  for any month thereafter, the value of a unit  shall  be  equal  to  the
  value of a unit for the preceding month, multiplied by a factor which is
  equal to the ratio of (i) the amount resulting from ten thousand dollars
  invested  for  one  month  at  a  rate  equal to (I) the average rate of
  investment results (including market  value  changes)  in  the  variable
  annuity  funds  during  the preceding month, less (II) the rate at which
  expenses are charged against such  funds  during  such  preceding  month
  pursuant  to  subdivision  j of this section, and less (III) the rate at
  which expenses and transfers for such preceding months  are  charged  or
  deducted  from  the  variable  annuity  funds,  other  than the variable
  contingency reserve fund, pursuant to subdivision k of this section,  to
  (ii)  ten thousand thirty-two dollars and seventy-four cents, the amount
  of ten thousand dollars invested for one month at an effective  rate  of
  interest  of  four  per  cent  per year. Such average rate of investment
  results, net of such  expense  charges  and  such  transfers,  shall  be
  determined  in  accordance  with rules and procedures established by the
  retirement board.
    3. Unit values shall be determined to the nearest tenth of a cent.
    i. The retirement board shall:
    1. Publish, or provide for the publication of, an annual report of the
  operations of the variable annuity funds.
    2. Furnish, or provide for the furnishing of, to each contributor  who
  has  units  credited to him in the variable annuity savings fund and the
  variable pension accumulation fund an annual statement  showing,  as  of
  the beginning of the current year, the value of a unit in such funds and
  the number of units credited to him in each fund.
    j.  Expenses  incurred  in  the  operation  and  administration of the
  variable annuity funds shall be charged against such funds.
    k. The retirement board  shall  prepare  an  annual  estimate  of  the
  additional  expenses,  if  any, it has incurred that are attributable to
  the variable  annuity  program.  An  amount  equal  to  such  additional
  expenses  shall be charged to and accounted for on a proportionate basis

  and transferred from the variable annuity funds other than the  variable
  contingency  reserve  fund  to  the expense fund. Such transfer shall be
  made in twelve equal  monthly  installments  immediately  following  the
  month  in  which  such  estimate  is made, except that the transfer with
  respect to additional expenses incurred before January  first,  nineteen
  hundred  sixty-eight,  and  the  transfer with respect to the additional
  expenses incurred before the new  start  date  in  connection  with  the
  establishment of the B funds shall be made in from twelve to sixty equal
  monthly installments, at the discretion of the retirement board.
    l.  Assets shall be valued at their market value or, in the absence of
  a readily available market  value,  then  at  a  fair  market  value  as
  determined in accordance with accepted practices.
    m. The value of a unit in the B funds for the month beginning with the
  new  start  date  shall  be ten dollars, and for any month thereafter it
  shall be determined in accordance with paragraphs one, two and three  of
  subdivision h of this section.