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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 Consolidated Retiree Health Benefits Trust Board.
(2) The Board 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 33-163, 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 Consolidated Retiree Health Benefits Trust Fund.
(d) The Board must adopt guidelines to identify and evaluate qualified emerging investment managers. The guidelines must include procedures for:
(i) identifying possible firms;
(ii) reviewing, evaluating and interviewing emerging investment managers on an ongoing basis; and
(iii) 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) Duty of Care. The Board must discharge its duties with respect to the Trust Fund:
(1) only in the interest of the participants in retiree benefit plans and eligible dependents;
(2) only to provide benefits to participants in retiree benefits plans and to defray reasonable expenses of administering and operating the Trust Fund;
(3) with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims;
(4) by diversifying the investments of the Trust Fund to minimize the risk of large losses, unless it is clearly not prudent to diversity under the circumstances; and
(5) in accordance with the laws, policies, and instruments governing the Trust.
(b) Records. The Board must maintain accurate and detailed accounts of each investment, receipt, disbursement, and other transaction, including any specific record required by law, separate accounting for participating agencies and any additional record it finds necessary. All accounts, books and records are subject to applicable State laws governing maintenance and disclosure of public records.
(c) Annual Accounting. The Trust Fund fiscal year is the same as the County fiscal year. On or before January 1 of each year, the Board must file with the Chief Administrative Officer a written account, listing each investment, receipt, disbursement, and other transaction 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. The account must include a list of the Trust Fund assets and the current fair market value of each asset at the end of that period. The account must include the separate accounts of the participating agencies. If a current fair market value is not available for or does not apply 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 Executive and Council of the change.
(1) be a party to any transaction engaged in by the Board or an investment manager involving the assets of the Trust Fund.
(2) use the gains or profits of the Trust Fund for any purpose except to make investments or payments authorized by the Board;
(3) deal with the assets of the Trust Fund for the member’s own interest or account;
(4) act in any transaction involving the Trust Fund on behalf of a party whose interests are adverse to the interests of the Trust Fund or the interests of participants or beneficiaries of the Trust Fund; or
(5) become an endorser or surety, or in any manner an obligor, for money loaned to or borrowed from the Board. (2008 L.M.C., ch 3, § 1.)
(a) General. The Director of Finance is the custodian of the Trust Fund assets. The Director must give bond with a surety and for a period and in an amount as the Board determines. Each payment from the Trust Fund must be made by the Director, the Director’s designee, or 2 persons designated by the Board acting jointly. The Board must file a copy of its resolution designating the 2 persons, with specimen signatures of those persons, with the Director to confirm their authority to make payments.
(b) Contracts. 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 to manage and safeguard the assets of the Trust Fund.
(c) Procurement. Chapter 11B does not apply to the procurement of goods and services for the Trust Fund by the Director of Finance. (2008 L.M.C., ch 3, § 1.)
(a) General. The County must indemnify each member of the Board who is or may become a party to any legal action, including any administrative or investigative proceeding, because of service as a Board member, subject to the conditions in this Section.
(b) Standards; payments.
(1) The County must indemnify a Board member:
(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 Trust Fund; 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 indemnifies a Board member under this Section, the County must indemnify the member for any expense when the member incurs the expense, including:
(A) reasonable attorney fees;
(B) judgments;
(C) damages;
(D) fines; and
(E) settlements.
(c) Effect of Terminating any legal action. The termination of any legal action does not, by itself, create a presumption that a Board member did not act in good faith and in a manner reasonably believed to be in the best interest of the Trust Fund. The termination of a criminal proceeding does not, by itself, create a presumption that a Board member had reasonable cause to believe that any conduct was unlawful.
(d) Exceptions. The County must not indemnify a Board member if:
(1) the member 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 Trust Fund; or
(2) liability arises from an action that occurred before the date when all Board members accepted the Trust Fund in writing.
(e) Recovery of Payments. If the County Attorney finds that any indemnification payment was made that was outside the scope of the indemnification allowed under this Section, the County Attorney must take appropriate action on behalf of the County to recover that payment.
(f) Insurance Provided. The County must provide insurance for each Board member against any liability asserted against or incurred by the member with respect to service on the Board. Assets of the Trust Fund must not be used to pay any premium. The County may self-insure, wholly or partly, for this purpose. If the County does not provide adequate insurance coverage or indemnification under this Section, a Board member 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 defenses of governmental immunity, and any other available defense, in any legal action arising out of the actions of the Board.
(h) County Attorney.
(1) The County Attorney must determine whether a Board member is eligible for indemnification with respect to any matter and the reasonableness of any fee, expense, or settlement.
(2) Unless the County Attorney approves the settlement, a Board member cannot settle a claim against another Board member using:
(A) County funds;
(B) funds of a Participating agency;
(C) County-funded agency funds;
(D) funds provided by a self-insurance program of the County; or
(E) funds provided under a policy the County has with an insurance company. (2008 L.M.C., ch 3, § 1; 2011 L.M.C., ch. 14, § 1.)
(a) Termination. Except on termination, no part of the Trust Fund may revert to the County or a participating agency or be used for any purpose other than the exclusive benefit of participants of a retiree benefit plan. If all County retiree benefit plans are terminated and all benefit claims and expenses are paid, any remaining assets in the Trust Fund relating to contributions made by the County and participating agencies must revert to the County and the participating agencies. The Trust Fund must terminate in its entirety on the earlier of the termination of all County retiree benefit plans or the depletion of the Trust Fund. Funds may partially revert to the County or participating agencies if one or more retiree benefit plans is terminated. When a County or a County-funded agency retiree benefit plan is terminated, the assets in the Trust Fund attributable to that plan after expenses and benefits have been paid must revert to the County and the participating agencies as provided in the adoption agreement. If the County terminates all of its retiree benefit plans and a County-funded agency continues to maintain at least one retiree benefit plan, the assets attributable to each County-funded agency retiree benefit plan must be transferred to a trust which meets the requirements of Internal Revenue Code Section 115.
(b) Amendments. Any provision of this Article may be amended at any time. No amendment may:
(1) authorize any part of the Trust Fund to be used for any purpose other than the exclusive benefit of participants of retiree benefit plans and eligible dependents; or
(c) Compliance with Applicable Law. The Council may amend the Trust at any time, retroactively if required, if found necessary to conform to any requirement of State law, the Internal Revenue Code or any similar act or any amendments or corresponding regulations or applicable guidance. (2008 L.M.C., ch 3, § 1; 2011 L.M.C., ch. 14, § 1.)
(a) Participating Agencies. An agency permitted to participate in County benefit plans under Section 20-37(b) which chooses to participate in a retiree benefit plan must participate in the Trust Fund. However, a participating agency must be eligible to participate under Internal Revenue Code Section 115. Each participating agency in the Trust Fund must execute an adoption agreement in a form satisfactory to the Chief Administrative Officer and must submit any information the Chief Administrative Officer requires. Except for any obligation to refund assets under subsection (b), legal liability must not accrue to the County by including any participating agency in the Trust Fund. Each participating agency must be fully responsible for its pro rata cost of coverage, including any required annual contribution to the County and its share of administrative expenses.
(b) Termination of Participating Agency. If a participating agency decides to terminate participation in a retiree benefit plan and the Trust Fund, the agency must notify the Chief Administrative Officer in writing. The Chief Administrative Officer and the participating agency must agree on a date to end the agency’s participation. Any tranfer of assets from the Trust Fund resulting from the termination of an agency’s participation must comply with the Internal Revenue Code and the adoption agreement between the County and the participating agency. (2008 L.M.C., ch 3, § 1.)
Any asset held by the Trust Fund is not subject to any creditor of the County or a County-funded agency and is exempt from execution, attachment, prior assignment, or any other judicial relief or order for the benefit of any creditor or third person. (2008 L.M.C., ch 3, § 1; 2011 L.M.C., ch. 14, § 1.)
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