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Report of the Comptroller, 1997-98
Volume 197, Page 53   View pdf image (33K)
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foreign or domestic banks. The U. S. Treasury and agency obligations and collateral for the repurchase agreements
are held by the enterprise fund's agent in the enterprise fund's name.
As of June 30, 1998, cash and cash equivalents of the Pension Trust Funds' totaled $1,681,093,000, which
represented $64,363,000, cash deposits and $1,616,730,000, cash equivalents. These cash equivalents, which are
investments with original maturities of less than 90 days, consisted of $836,741,000, of commercial paper,
$9,031,000, of repurchase agreements and $770,958,000, in global pooled short-term funds, which are carried at
market. All of the cash equivalents are categorized as category I for investment purposes. Of the $64,363,000,
carrying value of deposits as of June 30, 1998, the amount of $14,058,000, was pooled by the State and the bank
balance of $50,305,000, was uninsured and uncollateralized.
The Pension Trust Funds (Funds), in accordance with State Personnel and Pensions Article Section 21-123 of
the Annotated Code of Maryland, are permitted to make investments subject to the terms, conditions, limitations
and restrictions imposed by the Board of Trustees of the State Retirement and Pension Systems of Maryland. The
law further provides that not more than 25% of the assets that are invested in common stocks may be invested in
non-dividend paying common stocks. The Funds' investments are commingled in four combined investment
accounts. Two investment accounts consist principally of bonds and other fixed income investments, another
consists of pooled real estate funds, real estate investment trusts and directly owned real estate, and the fourth
investment account consists principally of common stocks. Investments of the Funds are stated at fair value which
is based on quoted market prices.
The investments as of June 30, 1998, for the enterprise and pension trust funds of the Primary Government are
as follows (amounts expressed in thousands).



Catppnry




1

2

3

Fair
Value

V. S. Treasury and agency obligations.....................................
Repurchase agreements..............................................................
Bonds.............................................................................................
Corporate equity securities......................................................

$ 929,196
298,350
7,941,824
16,363,232
$25,532,602



$ 929,196
298,350
7,941,824
16,363,232
25,532,602

Annuities and guaranteed investment contracts....................
Mutual funds................................................................................
Real estate.....................................................................................
Total............................................................................................




35,409
2,125,459
474,969
$28,168,439

Under Section 2-603 of the State's Finance and Procurement Article, the State lends U.S. government securities
of the Lottery to broker-dealers and other entities (borrowers). The State's custodial bank manages the securities
lending program and receives U.S. government and agency securities as collateral. The bank is obligated to
indemnify the State against liability for any suits, actions, or claims of any character arising from or relating to the
performance of the bank under the contract, except for liability caused by acts or omissions of the State. The
collateral will be returned for the same securities in the future. The collateral securities cannot be pledged or sold
by the State unless the borrower defaults. Collateral securities are initially pledged at greater than the market value
of the securities lent and additional collateral has to be provided by the next business day if the aggregate value of
the collateral falls to less than 100 percent of the market value of the securities lent. Securities on loan at year-end
are classified in the proceeding schedule of custodial risk according to the category for the collateral received on
the securities lent. As of year end, the State held collateral in excess of the fair value of the loaned securities.
The State did not experience any losses on their securities lending transactions for the year ended June 30,
1998. As of June 30, 1998, the fair value of loaned securities and related collateral were as follows (amounts
expressed in thousands):

Securities Lent
U.S. government and agency securities...................................

Loaned
Securities
$51,747

Fair Value

Collateral
Received
$53,058

Percent
Collateralized
102.5%

The Funds participate in a securities lending program as permitted by its investment policies as approved by
the Board of Trustees. The Funds' custodian lends specified securities to independent brokers, in return for
collateral of greater value. All loaned securities are reported as assets on the combined balance sheet and are
included in the preceding categorization of custodial credit risk.

 
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Report of the Comptroller, 1997-98
Volume 197, Page 53   View pdf image (33K)
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