Expedited Bill No. _---"<.54 --'-1.:..0_ _ __
....
Concerning: Retirement - Investments
Revised: November 22,2010 Draft No.
g
Introduced:
October 26, 2010
Enacted:
November 30,2010
Executive:
December 10,2010
Effective:
December 10, 2010
Sunset Date: --!...:N..;::;on:..:..:e=--_-::--_--:-:-:-_
ChI
~l
Laws of Mont. Co. 2010
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the Request of the County Executive
AN EXPEDITED ACT
to:
(1)
require an automatic distribution for account balances of $1,000 or less in the
Guaranteed Retirement Income Plan and the Retirement Savings Plan;
(2)
permit rollover contributions into the Retirement Savings Plan from any eligible
retirement plan;
permit additional investment choices in the Retirement Savings Plan;
(3)
(4)
permit additional investments in the Deferred Compensation Plan; and
(5)
generally amend the law regarding the retirement and deferred compensation
plans.
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Sections 33-44,33-113,33-116,33-120,33-121,33-125 and 33-145
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
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*
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by hill.
The County Council for Montgomery County, Maryland approves the following Act:
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ExPEDITED BILL
No. 54-10
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Sec.
1.
Sections 33-44, 33-113, 33-116, 33-120, 33-121, 33-125 and 33­
145 are amended as follows:
33-44. Pension Payment Options and cost of living adjustments
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*
participants.
*
*
(n)
Required distribution for guaranteed retirement Income plan
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ill
The distribution of a participant's guaranteed retirement income
plan account balance must be made no later than April 1 of the
calendar year after the later of the calendar year in which the
participant attains age 70
liz
or the calendar year in which the
participant terminates employment.
Distributions must be
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made in accordance with subsection (g). If the participant does
not elect a form of distribution, the distribution must be made in
a lump sum. If the participant dies before beginning to receive
benefits, the participant's designated beneficiary under 33-46(h)
must receive a lump sum distribution as soon as practicable
after the participant's death, but not later than the December
31 st of the year containing the fifth anniversary of the
participant's death.
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ill
[[If
f!
participant terminates employment with an]]
less[[~
A
participant's account balance of $1,000 or
the account
balance]] must be automatically distributed in
f!
lump sum as
soon
as
administratively
feasible
after
termination
of
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employment without
f!
request from the participant.
*
33-113. Definitions
*
*
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*
*
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*
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EXPEDITED BILL
No.
54-10
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(r)
Rollover contributions
means that portion of a participant's account
balances in the retirement savings plan that is attributable to any
assets transferred or rolled over to the retirement savings plan from
another [qualified pension or profit sharing plan] eligible retirement
plan as defined in [under] the Internal Revenue Code Section 402(c).
No after-tax contributions may be transferred or rolled over into the
retirement savings plan.
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*
33-116. Participant Contributions
*
*
*
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*
(c)
*
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Participant rollover contributions.
With the Chief Administrative
Officer's written consent, a participant may transfer or rollover to the
retirement savings plan any interest in any other [qualified] eligible
retirement plan [under] as defined in [the] Internal Revenue Code
Section 402(c).
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*
*
(h)
*
*
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Section 33-120. Distribution of Benefit
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46
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Benefit distribution date.
(1)
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The Chief Administrative Officer must pay a participant who
retires by reason of normal, deferred, or disability retirement
the participant's account balances in the retirement savings plan.
The distribution must begin as soon as administratively feasible
after the participant's retirement and after the date elected by
the participant, but no later than April 1 following the later of
the calendar year in which the participant attains age 70Y2, or
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EXPEDITED BILL
No. 54-10
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the calendar year in which the participant's County employment
ends.
(2)
A participant who has a 100% vested interest in the County
contributions account, and whose County employment ends
before the participant's death, disability retirement, or normal
retirement date, may receive the account balances in the County
contribution accounts and the participant contribution accounts
before reaching the normal retirement date only upon filing
written
consent
for
the
distribution
with
the
Chief
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Administrative Officer. The distribution must be made as soon
as administratively feasible after the Chief Administrative
Officer receives the written consent for the distribution.
(3)
(A)
If a participant's County employment ends before the
participant has
a vested interest in the County
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contributions and the participant properly completes and
submits an application for distribution of the participant's
contribution account, the County must distribute the
participant's
contribution
account
as
soon
as
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administratively feasible.
(B)
If
a participant does not properly complete and submit an
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application for a distribution, the County must distribute
the participant's contribution account under the time
limits described in this Section.
(4)
Notwithstanding any other provision of this subsection, [[if
~
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participant terminates employment with an]] a participant's
account balance of $1000 or less[L the account balance]] must
be automatically distributed in
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~
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lump sum as soon as
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EXPEDITED BILL
No.
54-10
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administratively feasible after termination of employment
without
£!:
request from the participant.
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*
(a)
Investment [funds] options.
*
*
33-121. .Investment of contributions to the retirement savings plan.
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(1)
A participant must direct that contributions allocated to the
participant's retirement accounts be invested in one or more of
the investment [funds] options selected by the Board.
The
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investment [fund] options selected by the Board must conform
to all applicable requirements of the Internal Revenue Code.
(2)
A participant must allocate contributions among the investment
[funds] options only in percentages of the value of the account
balances of the participant, as determined by the Board.
(3)
A participant's direction of investment must remain in effect
until the participant changes the direction. If a participant does
not provide a valid direction of investment, the account
balances of the participant, to the extent they are not governed
by a valid direction of investment, must be invested
appropriate investment option selected by the Board.
(b)
Change ofallocation.
III
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an
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(1)
A participant or former participant may change the allocation of
the participant's account balances among the investment [funds]
options [by giving written notice of the requested change at a
time] in accordance with procedures set by the Board. The
changes [will] must take effect on the date or dates set by the
Board.
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EXPEDITED BILL
No. 54-10
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(2)
A participant or former participant may designate that the
change of the allocation among investment [funds] options is
effective as to one or both of:
(A)
the participant's or former participant's account balances
on the effective date of the change; and
(B)
the participant's contributions and County contributions
made after the effective date of the change.
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III
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(c)
Gains and losses.
The Board must maintain [pro rata accounts of a
commingled fund or] separate and distinct accounts for each
participant. [If the Board establishes pro rata accounts, the Board may
allocate realized and unrealized gains and losses, using the ratio that
the portion of the account balance of a participant allocated to an
investment fund bears to the portion of the account balances of all
participants allocated to the investment fund as of the previous
valuation date. If the Board establishes separate and distinct accounts,
the] The Board must determine the value of an individual account
solely with respect to the activity within each participant's account and
unrealized gains to a participant's account. [The Chief Administrative
Officer may deduct operating expenses from the realized and
unrealized gains before allocation.]
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33-125. Powers and duties under the retirement savings plan.
*
(a)
*
*
General
*
(2)
The Board must invest and reinvest, or cause to be invested or
reinvested, the principal and income of the retirement savings
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No. 54-10
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plan and keep the same invested without distinction between
principal and income. The Board has the exclusive authority to
manage the assets of the retirement savings plan, but must, to
the extent directed by participants, invest each participant's
accounts in the manner directed by the participant. [The Board
may make or permit an investment manager to make individual
investment selections with respect to any investments described
in this section.]
The Board may select mutual funds,
commingled funds, or any combination of [funds] other
investments [to provide] as investment options for the
retirement savings plan.
*
(c)
Authorized investments.
*
*
(1)
The Board may select or remove any investment option for the
retirement savings plan that the Board finds prudent under the
policies set
J2y
the Board. [The Board may invest or permit an
investment manager to invest the assets of the retirement
savings plan in any investment it considers prudent within the
policies set by the Board. The Board must use an investment
manager except when making an investment in any pooled
investment vehicle, including any combined, common or
commingled trust fund, retirement or annuity contract, mutual
fund, investment company, association, or business trust. The
Board also may authorize the Executive Director to make
investments in pooled investment vehicles and transition assets
from one investment manager to another investment manager as
the Board specifies.]
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EXPEDITED BILL
No. 54-10
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(2)
If an investment through any combined, common, or
commingled trust fund exists, the declaration of trust of that
fund is a part of the retirement savings plan trust.
[(3)
The board or any investment manager must not invest any
retirement savings plan asset in any bond, note, or debt
instrument issued by:
(A)
(B)
(C)
Montgomery County;
any political subdivision within Montgomery County;
any agency supported or financed wholly or partly by
taxes levied by the County Council; or
(D)
any agency supported by bond issues underwritten by
Montgomery County.
However, the Board and any investment manager may invest plan
assets in such bonds, notes, and debt instruments if held indirectly ,
through a mutual fund, subject to any limit in the Internal Revenue
Code.]
*
(f)
(1)
*
*
[Investment management agreements.
The Board may appoint investment managers to manage,
acquire, or dispose of all or some of the assets of the retirement
savings plan. The Board may dismiss any manager the Board
appoints. The fees charged by any manager are expenses of the
retirement savings plan.
(2)
In any contract with an investment manager, the Board must
identify the assets that are subject to the contract. The Board
may give an investment manager the right to invest the assets of
the retirement savings plan specified in the contract without
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EXPEDITED BILL
No. 54-10
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prior notice to or approval by the Board. The Board may limit
the investment of a specified portion of the retirement savings
plan to a certain type of property. If a contract with an
investment manager only applies to a portion of the assets of
the retirement savings plan and specifies the type of property to
be invested in, the manager must achieve diversification within
the specified category of property, but is not responsible for
diversification of investments of the entire retirement savings
plan. The Board may delegate to the investment manager any
power or discretion conferred on the Board under this Division
and may provide that the investment manager must have
custody and control of certain assets of the retirement savings
plan.
(3)
The Board must monitor the performance of any investment
manager. Monitoring may include any tests or analyses that the
Board considers prudent in the circumstances.]
The Board must monitor the performance of investment options.
Monitoring may include any tests or analyses that the Board finds
prudent.
33-145. Powers and duties
of
the
board.
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*
(d)
Authorized investments.
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*
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( 1)
The Board must invest each participant's account in one or
more of the Board-designated investment options in the manner
directed by the participant.
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(2)
The Board may select or remove any investment options for the
deferred compensation plan that the Board [considers] finds
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ExPEDITED BILL
No. 54-10
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prudent [within] under the policies set by the Board [, except
real property investments described in this subsection].
(3) [The Board must not invest in real property unless the
investment is a pooled investment in which the Board has no
power or right to manage the real estate property. The pooled
investment must not invest more than 10 percent of its assets in
real property located in Montgomery County. The 10-percent
limitation applies to the market value of the total assets on the
preceding June 30. If the market value of investments in real
property in the County exceeds the 10-percent limitation as a
result of market forces, the Board, or the investment manager
without direction from the Board, is not required to sell an
existing equity investment. The Board may obtain valuations
and take appropriate steps to comply with the 10-percent
limitation.]
[(4)] If an investment through any combined, common, or
commingled trust fund exists, the declaration of trust of that
fund is a part of the deferred compensation plan trust.
[(5) The Board and any investment manager must not invest the
deferred compensation plan assets in any bonds, notes, or debt
instruments issued by:
(A) Montgomery County;
(B)
a political subdivision in Montgomery County;
(C) an agency that receives support or funds from taxes
levied by the County Council; or
(D) an agency supported by bond Issues underwritten by
Montgomery County.
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EXPEDITED BILL
No. 54-10
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The Board and any investment manager may invest plan assets in
bonds, notes, and debt instruments of these entities if the investment is
held indirectly through a mutual fund and complies with any limit in
the Internal Revenue Code.]
*
(g)
*
*
[Investment management agreements. Section 33-60(g) (Investment
management agreements) applies to the Board with respect to its
responsibilities under the deferred compensation plan.]
The Board
must monitor the performance of each investment option. Monitoring
may include any tests or analyses that the Board finds prudent.
*
Sec. 2. Effective Date.
*
*
The Council declares that this legislation is necessary for the immediate
protection of the public interest. This Act takes effect on the date on which
it
becomes law.
Approved:
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Nancy Floreen, Presi
Date
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Approved:
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This is a correct copy o/Council action.
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Linda M. Lauer, Clerk of the Council
Date
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