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(a) Legislative findings.
(1) Emerging investment managers, including businesses owned by women, minorities and disabled individuals, should receive an equal opportunity to provide investment management services to the Board of Investment Trustees.
(2) The Board of Investment Trustees has adopted a policy requiring its staff to identify qualified emerging investment managers to participate in an investment manager search, including regular monitoring of investment managers.
(3) Expanding opportunities for emerging investment managers will increase competition.
(b) Definitions.
As used in this Section:
Assets means total client assets managed by an investment manager.
Emerging investment manager means:
(1) an investment manager with assets or product assets below the 75th percentile of their respective peer group; or
(2) a new or developing investment manager.
New or developing investment manager means an investment manager:
(1) raising its first or second private institutional investment fund; or
(2) creating its first institutional product.
Product Assets means client assets managed by an investment manager in a single strategy.
(c) Consistent with the fiduciary duties established in Section 33-61C, the Board must make a good faith effort to remove any barriers that limit participation by qualified emerging investment managers to manage funds for the Employees’ Retirement System.
(d) The Board must adopt guidelines to identify and evaluate qualified emerging investment managers. The guidelines must include procedures for:
(1) identifying possible firms;
(2) reviewing, evaluating and interviewing emerging investment managers on an ongoing basis; and
(3) maintaining research files on emerging investment managers.
(e) The Board must report annually to the Council and the Executive on compliance with this Section on or before September 1 for the prior fiscal year. The report must:
(1) identify each emerging investment manager used during the fiscal year;
(2) list the percentage and dollar value of the assets of the trust fund, by investment sector, managed by each emerging investment manager; and
(3) describe the good faith effort made to include qualified emerging investment managers in the procurement process during the fiscal year. (2012 L.M.C., ch.; 3, § 1.)
(a) The director of finance is the custodian of the retirement system assets. The director must give bond with such surety and for such periods and in such amount as the board determines. All payments from the retirement system assets must be made by (i) the director of finance, (ii) a designee of the director of finance, or (iii) two (2) persons designated by the board, acting jointly. The board must file a duly attested copy of the resolution of the board designating the two (2) persons, with specimen signatures of those persons, with the director of finance to indicate their authority for making payments.
(b) If the board approves, the director of finance may make written contracts with banks, trust companies, insurance companies or investment companies authorized to do business in any state for the safe custody of investments, banking services, the payment of benefits and expenses and any other function necessary for the management and safeguarding of the assets of the retirement system. The contract may provide that a bank, trust company, insurance company, or investment company may invest assets of the retirement system in:
(1) Money market funds;
(2) A short-term investment fund of a bank, trust company, or insurance company; or
(3) Their substantial equivalent. As soon as possible after all members of the board have accepted the trust, the board must approve a written contract for the investment purposes described in this subsection.
(c) If the board approves, the director of finance may direct the payment of benefits and expenses from a trust account of the board.
(d) Chapter 11B does not apply to the procurement of goods and services for the retirement system by the director of finance. (1987 L.M.C., ch. 29, § 11.)
(a) Authorized. The County must indemnify every member of the Board who is or may become a party to any action, suit, or proceeding, including administrative and investigative proceedings, because of service as a member of the Board, including any action taken to comply with Section 33-60A, subject to the conditions stated in this section.
(b) Standards for indemnification.
(1) The county must indemnify a member of the board:
a. With respect to civil matters, if the member acted in good faith and in a manner that the member reasonably believed to be in the best interest of the retirement system; and
b. With respect to criminal matters, if the member had no reasonable cause to believe that the member's conduct was unlawful.
(2) If the county must indemnify a member of the board under this article, the county must indemnify the member for expenses when the member incurs the expense, including but not limited to:
a. Reasonably attorney fees;
b. Judgments;
c. Damages;
d. Fines; and
e. Settlements.
(c) Effect of termination of any suit or proceeding. The termination of any suit or proceeding does not, by itself, create a presumption that a trustee did not act in good faith and in a manner reasonably believed to be in the best interest of the retirement system. The termination of a criminal action or proceeding does not, by itself, create a presumption that a trustee had reasonable cause to believe that the conduct was unlawful.
(d) Exceptions to indemnification. The county must not indemnify any member of the board if:
(1) The member of the board is found by a court or other tribunal to be liable for gross negligence or willful and wanton misconduct in the performance of a duty to the retirement system; or
(2) Liability arises from action that occurred before the date on which all the trustees have accepted the trust in writing.
(e) Recovery of payments. If the county attorney determines that indemnification payments have been made that are outside the scope of indemnification, the county attorney must take appropriate action, on behalf of the county, to recover the payments.
(f) Insurance provided. The county must provide insurance for each member of the board against any liability asserted against or incurred by the member of the board with respect to service on the board. Premiums for any insurance must not be paid with assets of the retirement system. The county may self-insure for this purpose, wholly or partly. If the county does not provide adequate insurance coverage or indemnification under this section, a member of the board need not pay any amount attributable to liability incurred by serving on the board, and the county must pay any amount due.
(g) Defenses. The county may assert the defense of governmental immunity, or any other defense available to the county, in suits or other actions brought against the county.
(h) County attorney.
(1) The county attorney must make the final determination of eligibility of a member of the board for indemnification with respect to a matter, and of the reasonableness of all fees, expenses, and settlements.
(2) Unless the county attorney approves the settlement, a trustee must not use:
a. County funds;
b. Funds provided by a self-insurance program of the county; or
c. Funds provided under a policy the county has with an insurance company; to settle a claim against the trustee. (1987 L.M.C., ch. 29, § 11; 2008 L.M.C., ch. 2, § 2.)
Editor’s note—See County Attorney opinion dated 11/14/11 regarding the County’s liability for errors in the administration of the pension and retirement funds of employees.
(a) Maintenance of records and accounts. The board must keep accurate and detailed accounts of all investments, receipts, disbursements, and other transactions, including any specific records that are required by law and any additional records it considers necessary. All accounts, books and records are subject to state law on public records.
(b) Annual accounting by board. The fiscal year of the retirement system is the same as the fiscal year of the county. On or before January 1 of each year, the board must file with the chief administrative officer a written account, listing all investments, receipts, disbursements, and other transactions during the preceding fiscal year or during the period from the close of the last preceding fiscal year to any interim date that the board selects. This account must describe all securities and investments bought and sold, with the cost or net proceeds of each purchase or sale, and must list all cash, securities, and other property held at the end of that period. The account must include a list of the retirement system assets and the current fair market value of each asset at the end of that period. If a current fair market value is not available for a particular investment or is not applicable to a particular investment, the board must assign a value to that investment. The board must apply the investment valuation method on a consistent basis. If the board changes the investment valuation method, the board must notify the council of the change.
(c) Reporting and disclosure. The board must prepare for the chief administrative officer any documents required by law. (1987 L.M.C., ch. 29, § 11.)
Editor’s note—See County Attorney Opinion dated 1/7/98 discussing the parameters within which the Board of Investment Trustees may disclose certain employee data to companies providing deferred compensation plans.
A fiduciary must discharge the fiduciary’s duties regarding the retirement systems:
(a) only in the best interest of the participants and their beneficiaries;
(b) only to provide benefits to the participants and their beneficiaries, and defray reasonable expenses of administering the retirement systems;
(c) with the care, skill, prudence, and diligence under the circumstances that a prudent person acting in a similar capacity and familiar with the same matters would use to conduct a similar enterprise with similar purposes;
(d) by diversifying the investments of the retirement systems to minimize the risk of large losses, unless it is clearly not prudent to diversify under the circumstances;
(e) according to a good faith interpretation of the law governing the retirement systems;
(f) according to a good faith interpretation of the documents and instruments governing the retirement systems, if they comply with this Article. (1987 L.M.C., ch. 29, § 11; 1998 L.M.C., ch. 27, § 1.)
Editor’s note—See County Attorney opinion dated 11/14/11 regarding the County’s liability for errors in the administration of the pension and retirement funds of employees.
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