Agenda Item 6
July 31, 2012
Introduction
MEMORANDUM
July 27,2012
TO:
FROM:
County Council
'I
R~bert
H.
Drum~er, Se~ior ~egislative
AttomeyVl
~lke
Faden, Semor LegISlative Attorney
I.
Q
)_
J
SUBJECT:
Introduction:
Bill 24-12, Board of Investment Trustees Consolidated Retiree
Health Trust Board of Trustees - Delegation - Attendance
Bill 24-12, Board of Investment Trustees Consolidated Retiree Health Trust Board of
Trustees Delegation - Attendance, sponsored by the Council President at the request of the
County Executive, is scheduled to be introduced on July 31, 2012. A public hearing is
tentatively scheduled for September 18 at 1:30 p.m.
Bill 24-12 would amend the County's retirement law to allow the Board of Investment
Trustees, which oversees the investment programs for the County's Employee Retirement Plans,
including the Employees' Retirement System, Retirement Savings Plan and the Deferred
Compensation Plan, to delegate certain duties as
it
deems appropriate and consistent with its
fiduciary duties and its written policies and procedures.
This packet contains:
Bill 24-12
Legislative Request Report
Transmittal Memo from County Executive
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Bill No.
'- 24-12
Concerning:
Board of Investment
Trustees - Consolidated Retiree
Health Trust Board of Trustees ­
Delegation - Attendance
Revised: July 16, 2012 Draft No. _1_
Introduced:
July 31. 2012
Expires:
January 31,2014
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _--:-:_ _ _ _ _ _ __
Sunset Date: ...:.N=o""'n=e_---::_ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the Request of the County Executive
AN
ACT to:
(1)
(2)
(3)
(4)
(5)
authorize the Board of Investment Trustees to adopt written policies and
procedures to delegate certain duties;
modify the laws concerning excused absences for a member of the Board of
Investment Trustees;
modify the laws concerning excused absences for a member of the Consolidated
Retiree Health Trust Board of Trustees;
generally amend the law regarding the Employees' Retirement System,
Retirement Savings Plan and Deferred Compensation Plan; and
generally amend the law regarding the Consolidated Retiree Health Benefits Trust
Fund.
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Sections 33-59,33-60,33-125,33-145, and 33-160
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deleted from 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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Bill No. 24-12
1
Sec.
1.
Sections 33-59, 33-60, 33-125, 33-145, and 33-160 are amended
as follows:
33-59.
(c)
2
3
Board
of investment
trustees.
4
5
6
*
Vacancies.
(1)
*
*
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 7 days after notice of the meeting.] may
,
7
8
9
10
11
12
13
14
15
be automatically removed for missing meetings as described in
Section 2-148(b).
*
(t)
*
*
Written policies.
(1)
The Board must establish written policies to administer and
invest the funds created by this Article and to transact the
business of the trust and the retirement system.
(2)
The Board must apply the policies to all members and
beneficiaries of the retirement system and must not discriminate
in favor of or against any member or beneficiary of the
retirement system.
16
17
18
19
20
21
22
23
24
ill
Any delegation of duties
.by
the Board under Sections 33-60,
33-125 or 33-145 must be specified in written policies and
procedures.
(g)
Officers.
The Board must select a chair, vice chair, and secretary
25
from the Board's members.
(1)
The chair must preside at meetings of the Board and may take
administrative action [, including executing an instrument,] on
26
27
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Bill No. 24-12
28
behalf of the Board. [A person may rely in good faith on an act
of the chair as legally valid.]
(2)
The vice chair must perform the duties and exercise the powers
of the chair when the chair is [absent from the County or
disabled] unavailable, or the Board determines is otherwise
unable to perform the duties of the chair.
(3)
The secretary must record the proceedings and actions of the
Board and may certify a document or action of the Board. A
person may rely in good faith on the secretary's certification as
proof of the document or action.
(h)
29
30
31
32
33
34
35
36
37
38
Meetings and actions.
39
40
41
42
43
44
45
*
[(5)
*
*
The Board may authorize a 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.]
*
33-60.
*
*
The board of investment trustees-Powers and duties.
46
47
48
49
50
51
52
53
54
*
ill
Delegation
Q[
duties.
*
~
*
The Board may delegate its duties to the
similarly situated County employee as
i1
Executive Director or
deems appropriate and consistent with its fiduciary duties in
~
written
policy and procedure. If the Board has prudently delegated its duties
and monitored the delegation, the trustees must not be liable for an act
or omission made
Qy
its delegate.
33-125.
Powers and duties of the Board.
*
*
*
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Bill No. 24-12
55
56
57
ill
Delegation
Q[
duties.
Executive Director or
The Board may delegate its duties to the
~
similarly situated County employee as it
deems appropriate and consistent with its fiduciary duties in
~
written
policy and procedure. If the Board has prudently delegated its duties
and monitored the delegation, the trustees must not be liable for an act
or omission made
Qy
its delegate.
58
59
60
61
62
63
64
33-145.
Powers and duties of the board.
*
ill
Delegation
Q[
duties.
Executive Director or
~
*
*
The Board may delegate its duties to the
similarly situated County employee as it
65
deems appropriate and consistent with its fiduciary duties in
~
written
policy and procedure. If the Board has prudently delegated its duties
and monitored the delegation, the trustees must not be liable for an act
or omission made
Qy
its delegate.
66
67
68
69
70
71
33-160.
Board of Trustees
*
(c)
*
*
Vacancies.
(1)
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
72
73
74
75
76
77
meetings held at least 7 days after notice of the meeting.] may
be automatically removed for missing meetings as described in
Section 2-148(b ).
78
79
*
*
*
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LEGISLATIVE REQUEST
REPORT
Expedited Bill 24 -12
Board ofInvestment Trustees Consolidated Retiree Health Trust Board ofTrustees
Delegation
-
Attendance
DESCRIPTION:
The Bill amends the County's retirement law to allow the Board of
Investment Trustees, which oversees the investment programs for
the County's Employee Retirement Plans, including the
Employees' Retirement System, Retirement Savings Plan and the
Deferred Compensation Plan, to delegate certain duties as it deems
appropriate and consistent with its fiduciary duties and its written
policies and procedures.
The Bill also amends the attendance provisions of the Board of
Investment Trustees, and the Board of Trustees overseeing the
Consolidated Retiree Health Benefits Trust, to make them
consistent with those that currently apply under County Code
Section 2-148 to all other Boards, Commissions and Committees
and bases attendance on the number of missed meetings.
PROBLEM:
The Bill would permit the Board of Investment Trustees to delegate
certain duties, such as the execution of contracts, if it deems it
appropriate and consistent with its fiduciary duties, resulting in a
better alignment of the roles and responsibilities of the Board and its
Staff in the oversight of the investment programs and to further
enhance the efficiency of the operation of the programs.
Section 33-59 (which governs the Board of Investment Trustees)
and Section 33-160 (which governs the Board of Trustees for the
Consolidated Retiree Health Trust provides that a trustee has
resigned for missing more than 25% of scheduled meetings in a 12
month period. While the County Code only requires that the
Boards meet four times a year, both Boards currently meet six
times a year. The Boards would like to amend the attendance
requirements to the provision in County Code Section 2-148 which
bases removal on the number of missed meetings.
GOALS AND
OBJECTIVES:
The goal of the Bill is to provide the Boards with the necessary
authority to meet its fiduciary duties in overseeing the investment
programs for the County's retirement plans, and the Consolidated
Retiree Health Benefits Trust, in the appropriate manner.
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COORDINATION:
The Board of Investment Trustees, the Board of Trustees, and the
County Attorney's Office have reviewed this Bill.
FISCAL IMPACT:
Office of Management and Budget
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
Office of Management and Budget
N/A
Numerous other retirement plans, including the Maryland State
Retirement and Pension
System, currently provide for the Boards,
overseeing the investment of retirement trust fund assets, to delegate
certain functions to the Executive Director, or other staff, if such
delegation is established in policies and procedures. The County's
Chief Administrative Officer, in his role as Plan Administrator,
currently has the authority within the Code to delegate his duties.
SOURCE OF
INFORMATION:
Linda Herman, Board ofInvestment Trustees, Board of Trustees
Amy Moskowitz, Office of the County Attorney
Morgan Lewis, outside legal counsel for the Board of Investment
Trustees
APPLICATION
WITHIN
MUNICIPALITIES:NIA
PENAL TIES:
NI
A
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OFFICE OF THE COlJNTY EXECCTIVE
ROCKV1LLE, MARYLAND 20850
Isiah Leggett
County Executive
July 5,2012
069243
TO:
Roger Berliner, President
County Council
IsiahLeggett
County Executive
FROM:
-p~
~
f(T
v-­
I
\.,;,
SUBJECT:
Expedited Legislation - Board of Investment Trustees and Board of
r~~s
for
the Consolidated Retiree Health Trust
:::
go
~
t:-;> .
I am attaching for the Council's consideration a bill that would amend the County't:
I
retirement law to allow the Board of Investment Trustees, which oversees the investment programs for the
County's Employee Retirement Plans, including the Employees' Retirement System, Retirement Savings
Plan and the Deferred Compensation Plan, to delegate certain duties as it deems appropriate and
consistent with its fiduciary duties and its written policies and procedures.
The County Code establishes the Board of Investment Trustees in Section 33-59 and
provides the Board the power to invest the assets of the retirement system, authority to direct the payment
of benefits, and describes other actions to be taken in Sections 33-60 and 33-61. The Board has been
advised by its legal counsel that the delegation of its duties is permitted under common law. However,
the Board's legal counsel has advised it that the delegation authority should be provided in its governing
document, the County Code. Numerous retirement plans, including the Maryland State Retirement and
Pension System, currently provide for the Boards overseeing the investment of retirement trust fund
assets to delegate certain functions to staff. This bill would allow for a similar delegation of duties as the
Board deems appropriate and consistent with its fiduciary duties and its written policies and procedures.
The bill also changes the attendance requirements for both the Board of Investmynt
Trustees and the Board of Trustees which oversees the assets of the Consolidated Retiree Health Benefits
Trust to make them consistent with those that currently apply under County Code Section 2-148 to all
other County Boards, Commissions and Committees.
Section 33-59 (which governs the Board of Investment Trustees) and Section 33-160
(which governs the Board of Trustees) provide that a trustee has automatically resigned when the trustee
misses more than 25% of the scheduled meetings. While the County Code only requires that the Boards
meet four times a year, each Board currently meets six times a year. The Boards would like to amend the
attendance requirements to mirror the provision in County Code Section 2-148 which applies to all other
County Boards, Commissions and Committees and bases attendance on the number of missed meetings.
Thank you for your prompt consideration of this bill.
Attachments
-:1
montgomerycountymd.gov/31l
~'31l1"
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240-773-3556 TTY