Expedited Bill No. _----'-'--'-'---_ __
Concerning: Personnel - Other Post
Emplovment Benefits Trust ­
County-funded Agency
Revised: June 27, 2011 Draft No.
L
Introduced:
May 26, 2011
Enacted:
June 28, 2011
Executive: _ _ _ _ _ _ _ __
Effective: _---:-:_ _ _ _ _ _ __
Sunset Date:
....!N~o~n~e
_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President Ervin, Councilmembers Navarro, Floreen, Andrews, Riemer, Rice,
Leventhal, EIrich, and Council Vice President Berliner
AN EXPEDITED ACT
to:
(1)
amend the Retiree Health Benefits Trust to provide a funding mechanism to pay
for other post employment benefits for employees of certain County-funded
agencies; and
(2)
generally amend the law governing post employment benefits.
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Sections 33-158, 33-159, 33-160, 33-161, 33-162,33-165,33-166, and 33-168
By adding
Montgomery County Code
Chapter 33, Personnel and Human Resources
Section 33-169
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
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 bill.
.
.. ..
The County Council for Montgomery County, Maryland approves the following Act:
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EXPEDITED BILL
No. 17-11
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Sec. 1. Sections 33-158, 33-159, 33-160, 33-161, 33-162, 33-165, 33-166,
and 33-168 are amended and Section 33-169 is added as follows:
33-158.
Definitions.
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meamngs:
[(a)]
Board:
The Consolidated Retiree Health Benefits Trust Board [of
Investment Trustees] established under [Article III] Section 33-160.
[(b)]
Contribution:
payment made to the Trust Fund by the County to
l2ID:
benefits for County retiree benefit plans or
!!
County-funded agency retiree
benefit plan.
County:
Montgomery County Government.
County-funded agency:
Montgomery College and Montgomery County
.
In this Article, the following words and phrases have the following
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Public Schools.
[(c)]
Custodian:
The County Director of Finance.
[(d)]
Investment manager:
a person or entity who exercises discretion to
manage all or part of the assets of an institutional investor.
[(e)]
Participating Agency:
an agency eligible to participate in County
benefit plans under Section 20-37(b) which elects to participate in any
County retiree benefit plan.
[(f)]
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Retiree benefit plan:
any retiree medical plan, dental plan, vision plan,
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or life insurance plan maintained
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the County and administered by the
Chief Administrative Officer. Depending on the context,
retiree benefit plan
may also refer to
!!
retiree medical plan, prescription drug plan, dental plan,
vision plan, or life insurance plan established and maintained
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!!
County­
funded agency.
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EXPEDITED BILL
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[(g)]
Trust Fund:
the Consolidated Retiree Health Benefits (RHB) Trust
Fund established to pay all or part of the benefits provided under any retiree
benefit plan.! including
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County-funded agency retiree benefit plan.
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33-159.
(a)
Establishment
of Trust.
County Retiree Benefit Plans.
The Chief Administrative Officer must
include the terms of any County retiree benefit plan, including
eligibility and
benefits,
including those
benefits
collectively
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bargained, in a plan document. All benefits must meet any applicable
Federal or State requirement.
Subject to the County's obligations
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under collective bargaining agreements and the collective bargaining
laws, to the extent applicable, the Chief Administrative Officer may
amend a plan document at any time.
Subject to the County's
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obligations under collective bargaining agreements and the collective
bargaining laws, to the extent applicable, any retiree benefit plan may
be terminated at any time for any reason.
No retiree benefit is
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guaranteed, except as expressly provided by a contract entered into by
the County.
(b)
Establishment of Trust.
An
Other Post Employment Benefits Trust,
known as the Consolidated Retiree Health Benefits (RHB) Trust,
[effective July 1, 2007,] is established to fund all or a portion of
benefits provided under the County retiree benefit plans or
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County­
funded agency retiree benefit plan. The Trust is intended solely as a
funding mechanism to pay for County or County-funded agency
retiree benefits provided under the terms of any applicable retiree
benefit plan, and does not create any obligation by the County to
provide any benefit listed in any County or County-funded agency
retiree benefit plan. Any participant in a retiree benefit plan, any
current or former County or
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County-funded agency employee, or
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EXPEDITED BILL
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any current or former participating agency employee, has no right to
any asset in the Trust fund.
The Trust Fund may be, but is not
required to be, the sole source of funding for any County or County­
funded agency retiree benefit plan.
(c)
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Type o/Trust.
The County intends that the Trust Fund:
(1)
be used to perform its essential government function of
providing benefits, including health and life insurance benefits,
to participants and eligible dependents; and
(2)
qualify as a tax exempt trust under Internal Revenue Code
Section lIS.
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(d)
Assets
0/
Trust Fund.
All contributions and all earnings and other
additions, less payments, constitute the assets of the Trust Fund.
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County-funded agency Participation.
A County-funded agency may
participate in the Trust Fund as
benefit plans.
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funding mechanism for its retiree'
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A participant in any County-funded agency retiree
benefit plan, or any current or former employee of
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County-funded
agency, has no
ri.gh!
to the assets in the Trust Fund. The County is not
responsible for establishing, maintaining, or providing any benefit for
any County-funded agency retiree benefit plan.
[(e)]
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Exclusive Benefit.
The Trust Fund must be held for the
exclusive benefit of participants in retiree benefit plans and eligible
dependents, and used only to provide benefits and defray reasonable
expenses of administering retiree benefit plans.
must not revert to the County or
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Trust Fund assets
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County-funded agency unless the
County or the County-funded agency terminates all retiree benefit
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EXPEDITED BILL
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plans. Some funds may partially revert to the County if at least one
benefit plan is terminated under Section 33-166.
33-160.
Board of Trustees.
Establishment.
ill
The Consolidated Retiree Health Trust Board of
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Trustees is established to manage the Trust. The Board has
[ill]]
19
members.
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.au
Membership.
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Each member of the Board of Investment Trustees established
under Section 33-59 is also
f!
member of the Board.
The County Executive must appoint, subject to County Council
confirmation,
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[[111 l
voting [[member]] members nominated
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the Montgomery County Board of Education, who must serve
indefinitely while remaining the designee of the Montgomery
County Board of Education. The members must include:
(Al
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a designee of the Superintendent:
an active employee of the Montgomerv County Public
Schools who is a member of a bargaining unit: and
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all
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!1a
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a retiree of the Montgomerv County Public Schools.
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The County Executive must appoint, subject to County Council
confirmation,
[[1]]
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voting [[memberll members nominated
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the Board of Trustees of Montgomery College, who must serve
indefinitely while remaining the designee of Montgomery
College. The memt>ers must include:
(Al
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a designee of the President;
an active employee of Montgomery College who
member of a bargaining unit: and
IS
all
a
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!1a
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Vacancies.
a retiree of Montgomery College.
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EXPEDITED BILL
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A trustee who is absent from more than 25 percent of the
scheduled meetings of the Board during any 12-month period
has resigned from the Board. Scheduled meetings mean
meetings held at least
1
days after notice of the meeting.
III
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A vacancy on the Board must be filled for the unexpired term in
the same manner as the previous trustee was appointed.
Compensation.
The trustees must serve without compensation from
any source for service rendered to the Board, except that an active
employee trustee may receive administrative leave to serve on the
Board. The Board must reimburse
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trustee for any expense approved
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the Board. A trustee must not receive reimbursement for expenses
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from any other source.
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Written policies.
The Board must establish written policies to
administer and invest the funds created
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this Article and to transact
the business of the Trust Fund.
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Officers.
The Board must select
from the Board's members.
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chair, vice chair, and secretary
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The chair must preside at meetings of the Board and may take
administrative action, including executing an instrument, on
behalf of the Board. A person may rely in good faith on an act
of the chair as legally valid.
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The vice chair must perform the duties and exercise the powers
of the chair when the chair is absent from the County or
disabled, or the Board determines
perform the duties of the chair.
IS
otherwise unable to
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The secretary must record the proceedings and actions of the
Board and may certify
@:
document or action of the Board. A
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ExPEDITED BILL
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person may rely in good faith on the secretary's certification as
proof of the document or action.
(g}
Meetings and actions.
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The Board must meet at least once during each calendar
quarter. The chair, or
[[ID]
10 members of the Board, may call
g meeting of the Board, in the manner and at times and places
provided under the policies of the Board. The Board is
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public
body under the State Open Meetings Act.
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A.
B.
C.
[[Eight]] Ten trustees constitute
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quorum.
Each trustee has one vote.
[[Eight]] Ten trustees must agree for the Board to act.
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The Board may act without g meeting. All of the trustees must
concur in writing for the Board to approve any action the Board
takes without g meeting.
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The Board may adopt procedures consistent with this Section.
The Board may authorize g trustee to execute instruments on
behalf of the Board. The authority must be in writing and
specifically describe the instrument and how the trustee must
execute the instrument.
{hl
Records.
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The Board must keep investment accounts and records
necessary to calculate the value of each retiree health benefit
trust fund and evaluate the experience and performance of the
Trust Fund.
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The Board may designate
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person to maintain the records.
Accounts and records are subject to State law on public records.
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Removal
g.f
trustee.
With the Council's approval. the County
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Executive may remove
good cause.
trustee for violating this Article or other
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{k}
Legal adviser.
The County Attorney is the legal adviser to the Board.
Management.
[The Board of Investment Trustees established under
Section 33-59 is responsible for managing the Trust Fund.]
The
Board must hold legal title to all assets of the Trust Fund, but may
transfer some incidents of ownership to the Board's agents as
provided in this Article. The powers and duties of the Board under
this Article are not effective until the Board members have accepted
the Trust Fund in writing. Within 10 days after the Council confirms
a Board member, the member must certify in writing to the Chief
Administrative Officer that the member accepts the Trust Fund and
will administer its affairs with care, skill, prudence, and diligence.
33-161.
Contributions and payments.
(a)
County Contributions.
The County may contribute to the Trust Fund
those amounts that the Council appropriates.
The County is not
required to make any contribution to the Trust Fund unless a written
contract with one or more beneficiaries so requires.
(b)
County-funded Agency Contributions.
The County may contribute to
the Trust Fund, on behalf of
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County-funded agency, those amounts
that the County Council appropriates. A County-funded agency may
also make contributions to the Trust Fund in its discretion.
Notwithstanding the preceding sentence, the County must make any
contribution necessary to 00
£!
County-funded agency's pro rata cost
of the expenses of the Trust Fund. Contributions to the Trust Fund
made on behalf of
£!
County-funded agency or
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County-funded
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agency must be attributed to the County-funded agency for actuarial
valuati on and financial reporting.
[(b)]
{£}
Acceptance of Contributions.
The Board must accept all
contributions deposited in the Trust Fund and held by the custodian as
Trust Fund property. The Board is not responsible for calculating or
collecting any contribution, but is only responsible for contributions
deposited to the Trust Fund and amounts held in the Trust Fund. The
Board must separately account for any contribution made on behalf of
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County-funded agency and earnings and expenses attributable to
that contribution.
[(c)]
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Payments.
Payments for County Retiree Benefit Plans.
Payments may be
made from the Trust Fund attributable to the County in those
amounts directed by the Chief Administrative Officer only to
pay for all or part of the benefits provided by any County retiree
benefit plan, administrative expenses relating to a retiree benefit
plan.1 and expenses of the Trust Fund. The Board is not liable
for any payment directed by the Chief Administrative Officer
and is not required to confirm compliance with any retiree
benefit plan.
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Payments for
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County-funded Agency Retiree Benefit Plan.
The Chief Administrative Officer may direct that payments be
made from the Trust Fund attributable to
agency as authorized
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County-funded
County Council appropriation
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resolution. Payments from the Trust Fund must be used to
lli!Y
for all or part of the benefits provided
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County-funded
agency retiree benefit plan and expenses of any County-funded
agency retiree benefit plan. The Board is not liable for any
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payment made under the direction of the Chief Administrative
Officer and has no responsibility to confirm compliance with
any retiree benefit plan.
[(d)]
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Expenses.
The Board must be reimbursed for expenses solely
incurred in the administration of the Trust Fund and must pay from
the Trust Fund expenses reasonably incurred by the Chief
Administrative Officer to administer any County retiree benefit plan
to the extent that those expenses have not been paid by the County.
The Board may pay expenses incurred under Section 33-162(h)(Il)
without direction of the Chief Administrative Officer.
The Chief
Administrative Officer may direct the Board to
ru!Y
expenses
reasonably incurred
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retiree benefit plans.
33-162.
Trust Fund management.
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County-funded agency to administer its
*
(i)
Prohibited Transactions.
*
*
The Board must not engage in any
transaction between the Trust and the County or any entity controlled
by the County, including
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County-funded agency, or a participating
agency in which the Board:
(1)
lends any part of its mcome or corpus without recelvmg
adequate security and a reasonable rate of interest;
(2)
pays any compensation more than a reasonable allowance for
salaries or other compensation or services actually rendered;
(3)
(4)
makes any service available on a preferential basis;
makes any substantial purchase of securities or other property
for more than adequate consideration;
(5)
sells any substantial part of its securities or other property for
less than adequate consideration; or
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(h)
(6)
engages
In
any transaction which results in a substantial
diversion of its income or corpus.
U)
To comply with Section 315 of the County Charter, a firm of certified
public accountants, under contract with the Council, must complete an
annual independent audit of the Trust Fund. The complete audit must
be filed with the Council and each County-funded agency, and copies
made available for public inspection.
33-165.
Indemnification of Board Members.
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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
usmg:
(A)
(B)
County funds;
funds of a participating agency;
County-funded agency funds;
[(C)] (D) funds provided by a self-insurance program of the
County; or
[(D)]
llil
funds provided under a policy the County has with an
msurance company.
33-166.
Amendment and Termination.
(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
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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 [entirely] 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
£!
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
£!
County-funded agency continues to maintain at least one retiree
benefit plan, the assets attributable to each County-funded agency
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,
;
retiree benefit plan must be transferred to
f!
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
(2)
cause or allow any part of the Trust Fund to revert to or become
the property of the County or
£!
County-funded agency, except
as provided in Sections
33-166(a)~
[or]
33-167~
or 33-169.
*
33-168.
Protection from Creditors.
*
*
Any asset held by the Trust Fund is not subject to any creditor of the County
or
£!
County-funded agency and is exempt from execution, attachment, prior
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ExPEDITED BILL
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assignment, or any other judicial relief or order for the benefit of any creditor or
third person.
33-169.
(ill
County-funded Agency Participation.
County Liability.
Except for any obligation to refund or transfer
assets under subsection
(hl
or
{£1
no legal liability for benefits must
accrue to the County
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including
Trust Fund.
(hl
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County-funded agency in the
Termination
if
Participation
fu!.
f!.
County-funded Agency.
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Any Trust
Fund assets must not revert to
County-funded agency. Assets may
partially revert to the County if
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County-funded agency terminates at
least one retiree benefit plan.
Only funds attributable to the
terminated retiree benefit plan, after benefits and expenses have been
paid, may revert to the County.
(£)
Transfer
if
Trust Fund:
If the County decides to terminate
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County­
funded agency's participation in the Trust Fund, the County must
notify the County-funded agency in writing. If the County-funded
agency continues to maintain
transferred to
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retiree benefit plan, assets must be
trust which meets the requirements of Internal
Revenue Code Section 115. Any transfer of assets from the Trust
Fund resulting from the termination of participation in the Trust Fund
must comply with the Internal Revenue Code.
Sec. 2.
Transition.
The Consolidated Health Benefits Trust Fund mentioned in County Code
§33-159, as amended by Section 1 of this Act, does not create a new trust. The
Trust Fund is the same legal entity first created in County Code §33-159 and
inserted by Chapter 3, Laws of Montgomery County 2008. Any reference to the
Retiree Health Benefits Trust in any document produced before the effective date
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of this Act must be treated as referring to the Consolidated Retiree Health Benefit
Trust referenced in County Code §33-159, as amended by Section 1 of this Act.
Sec. 3.
Expedited Effective Date.
The Council declares that this legislation is necessary for the immediate
protection of the public interest. This Act takes effect on July 1, 2011.
Approved:
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Valerie Ervin, President, County Council
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JZSate
~
,
Approved:
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Isiah Leggett, County Executive
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Date
This is a correct copy o/Council action.
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Linda M. Lauer, Clerk of the Council
Date
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