(a) The board of trustees is authorized to invest and reinvest funds held by it in any investments which are legal investments under Article 7 of Chapter 20 of this title, the "Public Retirement Systems Investment Authority Law". The board of trustees shall have the discretion to decide the allocation of funds among such investments. The board of trustees is further authorized to purchase, acquire, hold, lease, sell, and convey real and personal property.

(b) The board of trustees is authorized to place funds held by it with banks or trust companies which have corporate trust powers and to authorize any such bank or trust company to invest and reinvest such funds for its account, subject to the investment restrictions of subsection (a) of this Code section. The board of trustees shall prescribe the powers and duties of such banks and trust companies in accordance with this chapter. Funds of the board of trustees on deposit with any one such bank or trust company shall not execute 25 percent of the combined capital and surplus of such bank or trust company. Such bank or trust company shall give bond or pledge sufficient federal or municipal securities to secure the deposits of the board of trustees.

(c) The board of trustees is authorized to place funds held by it with insurance companies authorized to do business in this state for the purpose of investment at guaranteed or anticipated rates of interest.

(d) Notwithstanding the investment restrictions of subsection (a) of this Code section, the board of trustees is authorized, for a consideration, to pledge funds held by it to third parties, including lenders, for the purpose of guaranteeing the contract obligations of municipal corporations and other public bodies of this state, providing surety obligations in connection with such contracts, and obligating it to assume any such contracts in the event that the municipal corporation or other public body fails to renew such contract for its full stated term. Such guaranties, sureties, or assumptions shall constitute activities and services that the board of trustees and the contracting municipal corporations or other public bodies are authorized to undertake and provide, and shall be undertaken pursuant to Article IX, Section III, Paragraph I of the Constitution, provided that the full faith and credit of the municipal corporation or other public body receiving the benefit of such guaranty, surety, or assumption is pledged to repay any amounts required to be paid by the board of trustees as a result of such guaranty, surety, or assumption.