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ACT NO. 67
Uniform Prudent Investor Act
This act adopts the uniform prudent investor act to govern the management of trust assets by trustees. This default rule requires that the trustee's investment strategy, taken as a whole, be prudent. A trustee is allowed to invest in any kind of property or type of investment, including the securities of an investment company, so long as such investment is consistent with the requirements of the trust. A trustee may delegate investment and management functions.
A trustee must make reasonable efforts to ensure that the investments are safe under the then current economic conditions. A trustee is required to diversify unless the purposes of the trust so prevent. A trustee is required to review the trust's assets upon accepting the trust and would owe a continuing duty of loyalty and impartiality toward the beneficiaries.
This act also creates new standards for the management of the teachers' retirement fund and the state employees' retirement funds. The members of the respective retirement boards are to be considered the trustees of the several retirement funds and may investsuch funds in any prudent manner. Trustees are prohibited from accepting any gifts from vendors of investment services.
Effective Date: July 1, 1998