Expedited Bill No.
_~15=--...!..14",--_-:--_
Concerning:
Personnel - Board of
Investment Trustees - Consolidated
Retiree Health Benefits Trust Board
of Trustees - Investments ­
Amendments
Revised: January 16. 2014 Draft No. _1_
Introduced:
February 4. 2014
Enacted:
March 4. 2014
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 ofthe County Executive
AN EXPEDITED ACT
to:
(1)
repeal the requirement that investments made by the Board of Investment
Trustees and the Consolidated Retiree Health Benefits Board of Trustees retain
U.S. indicia of ownership;
(2) repeal the prohibition on investments in County related bonds by the Board of
Investment Trustees and the Consolidated Retiree Health Benefits Board of
Trustees;
(3) repeal the restriction on real estate investment by the Consolidated Retiree Health
Benefits Board of Trustees; and
(4) generally amend the law regarding the Employees' Retirement System,
Retirement Savings Plan, the Deferred Compensation Plan, and 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, 33-160 and 33-162
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Heading or defined term.
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Existing law unaffected by bill.
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The County Council for Montgomery County, Maryland approves the following Act:
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EXPEDITED BILL No. 15-14
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Sec. 1. Sections 33-59, 33-60, 33-125, 33-145, 33-160 and 33-162 are
amended as follows:
33-59.
Board of investment trustees.
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(b)
Membership.
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(4)
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The following 6 trustees must be appointed by the Executive
and confirmed by the Council:
(A)
An
active County employee who is a vested member of
the retirement system and the Merit System, and not a
member of a collective bargaining unit. A 3-year term
for this trustee ends on March 1 of every third year after
the trustee is confrrmed by the Council.
(B)
A retired County employee who is a member of the
retirement system.
Before appointing this trustee, the
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Executive must consider, and should select from, a list of
3 to 5 individuals recommended by the Montgomery
County Retired Employees' Association. The Executive
must notify the Council when nominating an individual
not recommended by the Association. A 3-year term for
this trustee ends on March 1 of every third year after the
trustee is confirmed by the Council.
(C)
Two persons recommended by the Council who are
knowledgeable in pensions, investments, or financial
matters. A 3-year term for these trustees ends on March
1 of every third year after each trustee is confirmed by
the Council.
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EXPEDITED BILL
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(D)
Two individuals knowledgeable in pensions, investments,
or financial matters. Before nominating these trustees, the
Executive must consider, and should select from,
individuals recommended by citizens or countywide
citizens' groups.
An
individual recommended by a
citizens' group need not be a member of the group. The
Executive must notify the Council when nominating an
individual not recommended by a citizens' group. A 3­
year term for these trustees ends on March 1 of every
third year after each trustee is confirmed by the Council.
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(5)
A trustee appointed under paragraph [(3)]
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continues to serve
after the trustee's term ends until the Council confirms a
successor, but the term for each position is not affected by any
holdover. A trustee who, after appointment and before the end
of a term, is no longer qualified for the trustee's position is
removed from the Board by operation of law.
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(1)
In this
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Section, "retirement system" means the Employees'
Retirement System.'). [or] the Retirement Savings Plan.'). or the Deferred
Compensation Plan under Article IX.
33-60.
The board of investment trustees-Powers and duties.
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(b)
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Agents for transfer ofproperty.
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[(6)
Except as authorized by executive regulation adopted under
method (3) that is substantially equivalent to federal ERISA
regulations on maintenance of indicia of ownership of plan
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ExPEDITED BILL
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assets, the board must maintain the indicia of ownership of the
assets of the retirement system within the jurisdiction of the
district courts ofthe United States.]
(c)
Authorized investments.
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[(3)
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The board or an investment manager must not invest any
retirement system asset in any bond, note, or debt instrument
issued by:
(A)
(B)
(C)
The County;
Any political subdivision within the 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
the County.]
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33-125.
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Powers and duties
of the
Board.
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(b)
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Agents for transfer ofproperty.
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[(6)
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The Board must maintain the indicia of ownership of the assets
of the retirement savings plan within the jurisdiction of the
district courts of the United States.]
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33-145.
Powers and duties of the board.
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(c)
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Agents for transfer ofproperty.
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[(6)
The Board must maintain the indicia of ownership of the
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assets of the deferred compensation plan within the jurisdiction
of the district courts of the United States, except as authorized
in regulations adopted under method (3) that are substantially
equivalent to
federal
regulations
under
the
Employee
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Retirement and Income Security Act (ERISA) regarding indicia
of ownership ofplan assets.]
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33-160.
Board of Trustees.
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(f)
from the Board's members.
(1)
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Officers.
The Board must select a 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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(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.
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(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.
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33-162.
Trust Fund management.
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(c)
Transfer Agents.
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[(6)
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The Board must maintain the indicia of ownership of the Trust
Fund's assets within the jurisdiction of the United States federal
courts, except as authorized in regulations that the Executive
adopts under method (2).
Those regulations must be
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substantially equivalent to federal regulations under the
Employee Retirement Income Security Act (ERISA) regarding
indicia of ownership ofplan assets.]
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(d)
Authorized investments.
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[(2)
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The Board or any investment manager must not invest in real
property, including securities based on ownership or other
interests in real property, unless the investment is a pooled
investment in which the Board has no power to manage the real
property. A pooled investment must not invest more than 10
percent of its assets in real property located in the County. This
10 percent limit 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 limit as a result of
market forces, the Board or the investment manager need not sell
an existing equity investment. The Board may obtain valuations
and take appropriate steps to comply with this 10-percent limit.]
[(3)]
[(4)
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The Board and any investment manager must not invest any
Trust Fund asset in any bond, note, or debt instrument issued by:
(A)
the County;
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ExPEDITED BILL
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(B)
(C)
a political subdivision in the County; or
an agency supported by bond issues underwritten by the
County.
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However, the Board or any investment manager may invest plan assets
in bonds, notes, and debt instruments of any of these entities if the
investment is held indirectly through a mutual fund or other pooled,
investment vehicle and complies with any limit in the Internal Revenue
Code.]
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Sec. 2. Expedited 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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Approved:
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Isiah Leggett, County Executive
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This is a correct copy ofCouncil action.
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Linda M. Lauer, Clerk of the Council
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