§ 116-209.25. Parental Savings Trust Fund.
§ 116‑209.25. Parental Savings Trust Fund.
(a) Policy. The General Assembly of North Carolina herebyfinds and declares that encouraging parents and other interested parties tosave for the postsecondary education expenses of eligible students is fully consistentwith and furthers the long‑established policy of the State to encourage,promote, and assist education as more fully set forth in G.S. 116‑201(a).
(b) Parental Savings Trust Fund. There is established aparental savings trust fund to be administered by the State EducationAssistance Authority to enable qualified parents to save funds to meet thecosts of the postsecondary education expenses of eligible students.
(c) Contributions to the Trust Funds. The Authority isauthorized to accept, hold, invest, and disburse contributions, and interestearned on such contributions, from qualified parents and other interestedparties as trustee of the Parental Savings Trust Fund. The Authority shall holdall contributions to the Parental Savings Trust Fund, and any earnings thereon,in a separate trust fund and shall invest the contributions in accordance withthis section. The assets of the Parental Savings Trust Fund shall at all timesbe preserved, invested, and expended solely for the purposes of the trust fundand shall be held in trust for the parents and other interested parties andtheir designated beneficiaries. Nothing in this Article shall be construed toprohibit the Authority from accepting, holding, and investing contributionsfrom persons who reside outside of North Carolina. Neither the contributions tothe Parental Savings Trust Fund, nor the earnings thereon, shall be consideredState moneys, assets of the State, or State revenue for any purpose.
(c1) Investments. The Authority shall determine an appropriateinvestment strategy for the Parental Savings Trust Fund. The strategy mayinclude a combination of fixed income assets and preferred or common stocksissued by any company incorporated, or otherwise located within or without theUnited States, or other appropriate investment instruments to achieve long‑termreturn through a combination of capital appreciation and current income. TheAuthority may deposit all or any portion of the Parental Savings Trust Fund forinvestment either with the State Treasurer, or in the individual, common, orcollective trust funds of an investment manager or managers that meet therequirements of this subsection. Contributions to the Parental Savings TrustFund on deposit with the State Treasurer shall be invested by the StateTreasurer as authorized in G.S. 147‑69.2(b)(1) through (6) and theapplicable provisions of G.S. 147‑69.3. Contributions to the ParentalSavings Trust Fund may be invested in the individual, common, or collectivetrust funds of an investment manager provided that the investment manager meetsboth of the following conditions:
(1) The investment manager has assets under management of atleast one hundred million dollars ($100,000,000) at all times.
(2) The investment manager is subject to the jurisdiction andregulation of the United States Securities and Exchange Commission.
(d) Administration of the Trust Fund. The Authority isauthorized to develop and perform all functions necessary and desirable toadminister the Parental Savings Trust Fund and to provide such other servicesas the Authority shall deem necessary to facilitate participation in theParental Savings Trust Fund. The Authority is further authorized to obtain theservices of such investment advisors or program managers as may be necessaryfor the proper administration and marketing and investment strategy for theParental Savings Trust Fund.
(e) Loan Program. The Authority is authorized to develop andadminister a loan program in conjunction with the Parental Savings Trust Fundto provide loan assistance to qualified parents and interested parties in orderto facilitate the postsecondary education of eligible students. All fundsappropriated to, or otherwise received by the Authority for loans under thissection, all funds received as repayment of such loans, and all interest earnedon these funds shall be placed in an institutional trust fund. Thisinstitutional trust fund may be used only for loans made to qualified parentsand interested parties who contributed to the Parental Savings Trust Fund andadministrative costs associated with the recovery of funds advanced under thisloan program.
(f) Limitations. Nothing in this section shall be construedto create any obligation of the Authority, the State Treasurer, the State, orany agency or instrumentality of the State to guarantee for the benefit of anyparent, other interested party, or designated beneficiary the rate of return orother return for any contribution to the Parental Savings Trust Fund and thepayment of interest or other return on any contribution to the Parental SavingsTrust Fund. (1996, 2nd Ex. Sess., c.18, s. 16.7; 2000‑177, s. 11; 2001‑243, s. 1; 2002‑159, s.19.)