Opinion No. ( 1981 )

OPINION — AG — ** TEACHERS' RETIREMENT SYSTEM — INVESTMENT ** (1) THE TEACHERS' RETIREMENT SYSTEM IS 'NOT' STATUTORILY PROHIBITED FROM INVESTING IN "MORTGAGE PASS THROUGH CERTIFICATES" NOR FROM CONDITIONING SUCH AN INVESTMENT UPON AN ALLOCATION OF A SPECIFIED PORTION OF THE INVESTED FUNDS TO HOME MORTGAGE LOANS FOR TEACHERS; BUT ANY INVESTMENT IN SUCH CERTIFICATES IS LIMITED BY THE "PRUDENT MAN RULE" CODIFIED AT 70 Ohio St. 17-107 [70-17-107] (2) IN DETERMINING WHETHER THE TEACHERS' RETIREMENT SYSTEM MAY INVEST IN "MORTGAGE PASS THROUGH CERTIFICATES", THE TRUSTEES OF THE SYSTEM MUST BALANCE THE POTENTIAL EARNINGS AND RISKS OF THE "MORTGAGE PASS THROUGH CERTIFICATES" AGAINST THE FUNDING DIVERSIFICATION, AND LIQUIDITY NEEDS OF THE SYSTEM AT THE TIME OF THE PROPOSED INVESTMENT. (SCHOOLS, INVESTMENT OF FUNDS, UNREGISTERED SECURITIES) CITE: 70 Ohio St. 17-102 [70-17-102], 70 Ohio St. 17-107 [70-17-107], 70 Ohio St. 17-107 [70-17-107](1) 70 Ohio St. 17-107 [70-17-107](3), 15 U.S.C.A. 77(D) (FLOYD W. TAYLOR)