(a)  Except as otherwise provided in this chapter, any money not immediately required shall be invested for the benefit of the several funds in any security or investment in which deposits of savings banks and participation deposits in banks and trust companies may be legally invested; provided, that investments shall be made in securities as would be acquired by prudent persons of discretion and intelligence in these matters, who are seeking a reasonable income and the preservation of their capital.

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(b)  Notwithstanding subsection (a), the commission is authorized and empowered to execute the disposition and investment of the funds which are within its control in accordance with the prudent person standard as defined in this subsection. The commission shall adopt a statement of investment objectives and policies consistent with the prudent person standard. Management and professional expenses incurred by the commission in the furtherance of this section shall be paid from the funds in an amount required for these expenses. For purposes of this subsection, the prudent person standard shall be that standard of care employed solely in the interest of the participants and beneficiaries of the funds and:

(1)  For the exclusive purpose of:

(i)  Providing benefits to participants and their beneficiaries; and

(ii)  Defraying reasonable expenses of administering the funds;

(2)  With the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with these matters would use in the conduct of an enterprise of a like character and with like aims; and

(3)  By diversifying the investments of the fund so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so.

(c)  The state controller is authorized and directed to draw his or her orders upon the general treasurer for the purchase of investments, upon receipt by him or her of properly authenticated vouchers signed by the chairperson, or a deputy treasurer in the event of the chairperson’s absence or illness, and by the secretary of the commission. The proceeds from the sale of investments shall be paid to the general treasurer for the benefit of the several funds on the forms prescribed and duly signed by the chairperson and secretary of the commission.