Pooled Money Investment Account

Program Description

Through the Pooled Money Investment Account (PMIA), the State Treasurer invests taxpayers’ money to manage the State’s cash flow and strengthen the financial security of local governmental entities. PMIA policy sets as primary investment objectives safety, liquidity and yield.

The Investment Division of the State Treasurer’s Office manages the PMIA under statutory authority granted by California Government Code sections 16430 and 16480.4. The Pooled Money Investment Board governs the PMIA. The State Treasurer chairs the Board, which also includes the State Controller and the State Director of Finance.

The PMIA has three primary sources of funds: the State general fund; special funds held by State agencies; and moneys deposited by cities, counties and other entities into the Local Agency Investment Fund (LAIF). At the end of August 2014, the PMIA portfolio totaled $55 billion. The daily investment activity in August 2014 averaged $763 million.

Investment Division staff invest PMIA funds in a wide range of securities, using more than 100 brokers, dealers, banks and direct issuers of commercial paper and corporate debt. By law, PMIA moneys can be invested only in the following categories: U.S. government securities, securities of federally-sponsored agencies, domestic corporate bonds, interest-bearing time deposits in California banks, savings and loan associations and credit unions, prime-rated commercial paper, repurchase and reverse repurchase agreements, security loans, banker's acceptances, negotiable certificates of deposit and loans to various bond funds.

Through the PMIA, the Investment Division manages two programs of particular note: the LAIF and time deposits.

The LAIF allows cities, counties and special districts to place money in a major portfolio and, at no additional costs to taxpayers, use the expertise of Investment Division staff. Participating agencies can withdraw their funds from the LAIF at any time. At the end of August 2014, the LAIF had 2,531 participating agencies and a balance of $19.8 billion.

Under the time deposit program, the PMIA provides money to community banks at competitive rates. Eligible institutions are commercial banks, savings banks and credit unions that are federally insured and licensed to accept deposits in the State of California. Banks which receive time deposit funds can use the money to expand economic opportunity and create jobs in the communities they serve. At the end of August 2014, the PMIA had 219 time deposits totaling $5.0 billion in 67 institutions.

Pooled Money Investment Account

Fast Facts – August 2014

Ending Portfolio

$55 billion

Average Workday Investment Activity

$763 million

Average Effective Yield

0.260 percent

Average Investment Life

233 days

Local Agency Investment Fund Ending Portfolio

$19.8 billion

Time Deposits Ending Portfolio

$5.0 billion, 219 deposits, 67 institutions