A.  A temporary pilot program is hereby created for the purpose of obtaining empirical evidence.  The program authorizes this fully funded, statewide public retirement system to prudently exceed the fifty-five percent equity limit which is applicable to all other such systems.  The program contains certain mandatory safeguards and automatically phases out after July 1, 2003, with a one-year portfolio transition period following that date.  All laws of this system regarding retirement eligibility criteria, benefits and the payment thereof, and all service and service credit remain unchanged by the implementation of this program.

B.(1)(a)  The board of trustees of this system shall cause to be invested an amount equal to at least ten percent of the system’s total equity portfolio in one or more index funds which seek to replicate the performance of the chosen index or indices.

(b)(i)  The board of trustees may divest the system of the system’s indexed funds if the Standard and Poor’s 500 Composite Index, including dividend reinvestment, declines by an amount exceeding ten percent during the twelve-month period immediately preceding such divestment and further provided that the board furnishes written notice of such divestment to the House Retirement Committee and the Senate Retirement Committee within ten days following the board’s decision to divest.

(ii)  If the board divests the system of the system’s indexed funds under the authority of this Subparagraph, and if the Standard and Poor’s 500 Composite Index, including dividend reinvestment, increases by an amount exceeding ten percent, as compared to such index on the date that the board took official action causing such divestment, then the board shall reindex equity assets in accordance with the provisions of this Subsection.

(2)  The indexing strategy set forth in Paragraph (1) of this Subsection may be phased in over a period of time, provided that the indexing strategy shall be in full compliance with the provisions of this Section on or before July 1, 2000.

(3)  For purposes of this Section, the term “equity” shall mean ownership of a corporation represented by shares that are publicly traded on a recognized exchange, including the National Association of Securities Dealers Automated Quotation (NASDAQ).

(4)  The provisions of this Subsection shall be implemented without regard to Subsection C of this Section.

C.  Notwithstanding any other provision of law to the contrary, and specifically La. Rev. Stat. 11:263(E), the board of trustees may invest up to sixty-five percent of the system’s total portfolio in equity securities, as that term is defined in Paragraph B(3) of this Section.

D.  On and after July 1, 2003, the board of trustees shall no longer be authorized to invest up to sixty-five percent of the system’s total portfolio in equity securities as set forth in Subsection B of this Section, and the board shall have from July 1, 2003 to July 1, 2004, to reallocate such assets so as to bring the system’s portfolio into compliance with the provisions of La. Rev. Stat. 11:263(E).

E.  Upon request of either the House Retirement Committee or the Senate Retirement Committee, the board shall furnish a comprehensive written report to the requesting entity setting forth the actuarial and fiscal experience related to this pilot program.

Acts 1999, No. 379, §1, eff. July 1, 1999.