>>> I tried.@(Pega-RULES:Utilities) cannot be used inside function rule
The syntax for calling a function from within java is much different than the syntax of calling the function from an activity pre or post condition.
If your goal is to call "@(Pega-RULES:Utilities).getSystemSetting()" from a function rule, then first use that syntax in an activity pre or post condition, and after you successfully save the activity, use "action > java" and search for references to that call to getSystemSetting to see what java syntax got generated, and you can copy that syntax into your function definition.
In functions, if we want to use tools, first we need to get the Public API.
Please check the following code for getting the Public API and assign to tools variable.
Then you can use the function tools.getSystemSettings().