A. A fiduciary with respect to the retirement system shall not cause the retirement system to engage in a transaction if the fiduciary knows or should know that such transaction constitutes a direct or indirect:

1. Sale or exchange, or leasing of any property from the retirement system to a party in interest for less than adequate consideration or from a party in interest to the retirement system for more than adequate consideration;

2. Lending of money or other extension of credit from the retirement system to a party in interest without the receipt of adequate security and a reasonable rate of interest, or from a party in interest to the retirement system with provision of excessive security or an unreasonably high rate of interest;

3. Furnishing of goods, services or facilities from the retirement system to a party in interest for less than adequate consideration, or from a party in interest to the retirement system for more than adequate consideration; or

4. Transfer to, or use by or for the benefit of, a party in interest of any assets of the retirement system for less than adequate consideration.

B. A fiduciary with respect to the retirement system shall not:

1. Deal with the assets of the retirement system in the fiduciary's own interest or for the fiduciary's own account;

2. In the fiduciary's individual or any other capacity act in any transaction involving the retirement system on behalf of a party whose interests are adverse to the interests of the retirement system or the interests of its participants or beneficiaries; or

3. Receive any consideration for the fiduciary's own personal account from any party dealing with the retirement system in connection with a transaction involving the assets of the retirement system.

C. A fiduciary with respect to the retirement system may:

1. Invest all or part of the assets of the retirement system in deposits which bear a reasonable interest rate in a bank or similar financial institution supervised by the United States or a state, if such bank or other institution is a fiduciary of such plan; or

2. Provide any ancillary service by a bank or similar financial institution supervised by the United States or a state, if such bank or other institution is a fiduciary of such plan.

D. A person or a financial institution is a fiduciary with respect to the retirement system to the extent that the person or the financial institution:

1. Exercises any discretionary authority or discretionary control respecting management of the retirement system or exercises any authority or control respecting management or disposition of the assets of the retirement system;

2. Renders investment advice for a fee or other compensation direct or indirect, with respect to any monies or other property of the retirement system, or has any authority or responsibility to do so; or

3. Has any discretionary authority or discretionary responsibility in the administration of the retirement system.

Added by Laws 1989, c. 124, § 6, eff. July 1, 1989.