CHAPTER 25
TRUST FUNDS AND THEIR MANAGEMENT
25.14 State investment fund.
25.15 Board; purpose and standard of responsibility.
25.156 Powers and duties of members of the board.
25.16 Executive director.
25.167 Chief investment officer.
25.17 Powers and duties of board.
25.18 Additional powers of board.
25.183 Certain investments prohibited.
25.185 Minority financial advisers and investment firms.
25.19 Treasurer; bond; deposit of securities; cash management.
25.28 Badger fund; badger board duties.
25.295 Heritage state parks and forests trust fund.
25.30 State building trust fund.
25.35 State capitol restoration fund.
25.36 Veterans trust fund.
25.37 Wisconsin veterans home members fund.
25.40 Transportation fund.
25.41 State housing authority reserve fund.
25.42 Wisconsin election campaign fund.
25.44 Farms for the future fund.
25.45 Waste management fund.
25.46 Environmental fund.
25.465 Agrichemical management fund.
25.47 Petroleum inspection fund.
25.50 Local government pooled-investment fund.
25.60 Budget stabilization fund.
25.61 Information technology investment fund.
25.62 Property tax relief fund.
25.65 County mining investment fund.
25.67 Children's trust fund.
25.70 Historical society trust fund.
25.80 Tuition trust fund.
25.90 Energy efficiency fund.
Ch. 25 Cross-reference
Cross-reference: See definitions in s.
24.01.
25.14
25.14
State investment fund. 25.14(1)
(1) There is created a state investment fund under the jurisdiction and management of the investment board (hereinafter referred to as "board") to be operated as an investment trust for the purpose of managing the securities of all the state's funds consisting of the funds specified in
s. 25.17 (1) except the state life fund, fixed retirement investment trust, variable retirement investment trust, capital improvement fund, bond security and redemption fund, state building trust fund, the state housing authority reserve fund, the children's trust fund, the patients compensation fund, the tuition trust fund, funds which under
article X of the constitution are controlled and invested by the board of commissioners of public lands, funds which are required by specific provision of law to be controlled and invested by any other authority, the university trust funds and the trust funds of the state universities except that the respective authorities controlling the investment of any such excluded fund may authorize the transfer of any temporary cash assets of any such excluded fund to the state investment fund in accordance with
subs. (2) and
(3).
25.14(2)
(2) At such time as the board determines, all of the securities held by any of the state's funds, except those specifically excluded in
sub. (1), shall be transferred, at the market value plus accrued interest as of the date of transfer, to the state investment fund together with such amounts of cash as may be required to provide each contributing fund an equity in the state investment fund which may be expressed in terms of even thousands of dollars. Thereafter, the department of administration shall make such subsequent transfers of money between the individual funds and the state investment fund as in its judgment is advisable and in accordance with cash requirements of the individual funds, such transfer to be made on the basis of even thousands of dollars, and it shall furnish to the board such information with respect to daily balances of individual funds within the investment fund as may be required.
25.14(3)
(3) The department of administration, upon consultation with the investment board, shall distribute all earnings, profits or losses of the state investment fund to each participating fund in the same ratio as each such fund's average daily balance within the state investment fund bears to the total average daily balance of all participating funds, except as provided in
s. 14.58 (19) and except that the department of administration shall credit to the appropriation account under
s. 20.585 (1) (jt) an amount equal to the amount assessed under
s. 25.19 (3) from the earnings or profits of the funds against which an assessment is made. Such distribution shall be made at such times as the department of administration may determine, but must be made at least semiannually in each complete fiscal year of operation.
25.14(4)
(4) The department of administration shall maintain such records as may be required to account for each contributing fund's share in the state investment fund.
25.14 Annotation
The investment board is an independent going concern not protected by sovereign immunity. Bahr v. State v. Investment Bd. 186 W (2d) 379, 521 NW (2d) 152 (Ct. App. 1994).
25.15
25.15
Board; purpose and standard of responsibility. 25.15(1)(1)
Purpose. The purpose of the board is to provide professional investment management of trusts, operating funds and capital funds established by law. It is the intent of the legislature that the board be an independent agency of the state which is to manage money and property for the state, its agencies and trust funds. The goal of board management shall be towards accomplishing the purpose of each trust or fund.
25.15(2)
(2) Standard of responsibility. The standard of responsibility applied to the board when it invests money or property shall be all of the following:
25.15(2)(a)
(a) To invest, sell, reinvest and collect income and rents with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a similar capacity, with the same resources, and familiar with like matters exercises in the conduct of an enterprise of a like character with like aims.
25.15(2)(b)
(b) To diversify investments in order to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so, considering each trust's or fund's portfolio as a whole at any point in time.
25.15(2)(c)
(c) To administer assets of each trust or fund solely for the purpose of ensuring the fulfillment of the purpose of each trust or fund at a reasonable cost and not for any other purpose.
25.15(3)
(3) Exemption. Section 881.01 does not apply to investments by the board.
25.15(4)
(4) Investments within standard of responsibility. Investments in reverse annuity mortgages may not be presumed to violate the standard of responsibility under
sub. (2).
25.15(5)
(5) Commissions. All records of commissions paid by the investment board for purchases and sales of investments are open to public inspection.
25.15 History
History: 1983 a. 27;
1989 a. 31,
359.
25.156
25.156
Powers and duties of members of the board. 25.156(1)(1) The members of the board shall be the governing body of the investment board and shall promulgate rules and formulate policies deemed necessary and appropriate to carry out its functions.
25.156(2)
(2) The investment board shall employ an executive director, who shall serve outside the classified service. The executive director shall be qualified by training and prior experience to manage, administer and direct the investment of funds. The investment board shall fix the compensation of the executive director, and may award bonus compensation as authorized under
sub. (6).
25.156(2m)
(2m) The investment board shall employe an internal auditor, who shall serve outside the classified service. The board shall fix the compensation of the internal auditor.
25.156(3)
(3) The members of the board shall appoint an investment director to act as assistant director, except that until the appointment is made by the members of the board, the executive director may temporarily designate the assistant director.
25.156(4)
(4) The members of the board shall promulgate rules restricting the executive director, internal auditor, chief investment officer, investment directors and employes from having financial interest, directly or indirectly, in firms or corporations providing services to the department and governing the receipt of gifts or favors therefrom, and also governing personal investments of all employes including the executive director, internal auditor, chief investment officer and investment directors to prevent conflicts of interest.
25.156(5)
(5) The members of the board shall be the trustees of the state investment fund.
25.156(6)
(6) The investment board may provide a plan of bonus compensation for the executive director and other employes of the board who are appointed in the unclassified service, whereby the employes may qualify for an annual bonus for meritorious performance. No such bonuses awarded by the board for any fiscal year may exceed a total of 10% of the total annualized salaries of all unclassified employes of the board at the beginning of the fiscal year. No bonus awarded by the board to any individual employe for any fiscal year may exceed a total of 25% of the annual salary of the employe at the beginning of the fiscal year. In awarding bonus compensation for a given period, the board shall consider the performance of funds similar to those for which it has managing authority and market indices for the same period. The board shall provide for a portion of the bonus compensation awarded under this subsection to be distributed to an employe over a 3-year period conditioned upon continuation of employment to the time of distribution, except as provided in
sub. (7). Bonus compensation may only be awarded under this subsection pursuant to a plan adopted by the board that specifies all of the following:
25.156(6)(a)
(a) The conditions under which bonus compensation will be awarded.
25.156(6)(b)
(b) The percentage of the total available bonus compensation that will be awarded based upon beneficial investment performance and the percentage of such compensation that will be awarded based upon other meritorious performance.
25.156(6)(c)
(c) The specific criteria that will be employed in considering whether to award bonus compensation to a particular employe.
25.156(7)
(7) If the board awards bonus compensation under
sub. (6) to an employe who, because of the employe's retirement, disability or death, terminates employment with the board less than 3 years after the date on which the bonus compensation is awarded, the board shall distribute any remaining bonus compensation payable to the employe upon termination of the employe if any of the following applies:
25.156(7)(a)
(a) If the employe's termination is because of the employe's retirement or disability, the employe receives a retirement benefit under
s. 40.23 or
40.25 (1) or disability benefit under
s. 40.63 and the benefit received by the employe has an effective date not later than 31 days after the date on which the employe terminated employment with the board.
25.156(7)(b)
(b) If the employe's termination is because of the employe's death, the employe's beneficiary receives a death benefit under
s. 40.71 or
40.73.
25.156(8)
(8) The investment board shall keep full minutes of its proceedings.
25.156(9)
(9) The chairperson of the investment board shall appear at least annually before any committee established in the senate, whose jurisdiction includes financial institutions, if that committee so requests.
