INVESTMENT OF SEATTLE EMPLOYEES' PENSION FUNDS IN VETERANS' BONUS BONDS

INVESTMENT OF SEATTLE EMPLOYEES' PENSION FUNDS IN VETERANS' BONUS BONDS

Funds of the Employees' Pension of the City of Seattle may be invested in the bonds issued under chapter 180, Laws of 1949.

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                                                                  January 9, 1950

Honorable Cliff Yelle
State Auditor
Legislative Building
Olympia, Washington                                                                                                              Cite as:  AGO 49-51 No. 190

Dear Sir:

            Receipt is acknowledged of your letter requesting our opinion as to whether the funds of the City of Seattle employees' pension fund may be invested in bonds issued under chapter 180, Laws of 1949 (World War II Veterans' Bonus Law).

            It is our conclusion that the funds of the Seattle Employees' Pension System may be invested in the bonds authorized by chapter 180, Laws of 1949.

                                                                     ANALYSIS

            The Seattle Employees' Pension System is operated pursuant to chapter 207, Laws of 1939 [Rem. Rev. Stat. Supp. 9592-101, et seq.].  § 9 (c) of that act provides:

            "The investment of all or any part of the retirement fund shall be subject to the terms, conditions, limitations and restrictions imposed by the laws of the State of Washington upon the making of investments by savings banks: * * *"

            Chapter 74, Laws of 1929 [Rem. Rev. Stat. 3381-1 et seq.] governs the investments to be made by the mutual savings bank.  This is the only type of savings bank concerning which there is a specific statute regulating investments.  The savings and loan associations are not savings  [[Orig. Op. Page 2]] banks, and consequently those statutes which regulate the type of investments for savings and loan associations are not material here.  The statute, therefore, that regulates the investments of mutual savings banks is, in our opinion, the one which governs investments of the funds of the pension systems of first class cities.  Section 4, chapter 74, Laws of 1929 [Rem. Rev. Stat. 3381-4] provides:

            "A mutual savings bank may invest its funds in the bonds or interest bearing obligations of this state issued pursuant to the authority of any law of this state."

            Chapter 180, Laws of 1949, specifically authorizes the issuance of limited obligation bonds of the State of Washington in the sum of eighty million dollars.  It will be noted that the law relative to the investments of mutual savings banks does not specify that the state bonds be general obligations of the state.  It is, therefore, our opinion that the limited obligation bonds authorized by section 7, chapter 180, Laws of 1949, are proper investments for the funds of the Seattle Employees' Pension System.

Yours very truly,

SMITH TROY
Attorney General

LYLE L. IVERSEN
Assistant Attorney General