(a) General. The Board has the exclusive authority to manage the Trust Fund’s assets. All powers and duties required to manage the Trust Fund are vested in the Board by this Article.
(b) Procurement. Chapter 11B does not apply to the procurement of goods and services by the Board for the Trust Fund. (1) The Board may register any assets in its own name or in the name of a nominee. The Board or its agent must keep records that show that the investments are part of the Trust Fund.
(2) The Board may form a partnership under State law to hold or transfer assets as the Board’s nominee.
(3) The Board may designate in writing a trustee to hold or transfer assets as the Board’s nominee.
(4) The Board must provide that any trustee or partnership that the Board designates must act only as agent of the Board. The Board may set other conditions that the Board finds prudent.
(5) Any trustee or partnership that the Board designates may retain the services of a bank or other financial institution to conduct business.
(d) Authorized investments.
(1) The Board may invest or permit an investment manager to invest the assets of the Trust Fund in any investment it considers prudent within the Board’s policies, except as otherwise prohibited in this Section. The Board must use an investment manager except when making an investment in any type of 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 Board staff to make investments in pooled investment vehicles and transition assets from one investment manager to another investment manager.
(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 Trust Fund.
(e) Written Policies. The Board must establish an investment policy and guidelines appropriate for the Trust Fund, and may review and change the policy and guidelines as necessary. The Board must establish such other written policies to administer and invest funds under this Article and transact the Trust’s business.
(1) Except as provided in subsection (d)(1), the Board must appoint one or more investment managers to invest all or part of the RHB trust fund assets consistent with applicable guidelines. If the Board has properly appointed an investment manager, the Board is not liable for any act or omission of the manager and is not otherwise responsible for the investment of funds allocated to the investment manager.
(2) Any investment management contract must provide that when the investment manager is making individual investment selections, the investment manager must make individual investment selections subject to applicable Board policies. In any contract, the Board may limit the investment of a specified portion of the Trust Fund to a certain type of property. In any contract, the Board may delegate to the investment manager any power or discretion conferred on the Board under this Article and may assign to the investment manager custody and control of certain Trust Fund assets. The fees charged by any manager are expenses of the Trust Fund.
(3) The Board must monitor the performance of each investment manager and may terminate any appointment. Monitoring may include any tests or analyses that the Board finds prudent in the circumstances to assure the Trust Fund’s stability and growth.
(g) Available Cash. The Board may keep cash available in an amount it finds prudent to pay benefits and expenses. The Board may keep cash on deposit in one or more banks or trust companies organized under the laws of any state or the United States, but the amount on deposit in any bank or trust company must not exceed 25% of the paid-in capital and surplus of that bank or trust company.
(h) Board Powers. Except as otherwise provided in this Article, the Board may:
(1) buy or subscribe for any investment with any cash, at a premium or discount, and retain the investment;
(2) sell, exchange, convey, transfer, lease for any period, pledge, mortgage, grant options, contract with respect to, or otherwise encumber or dispose, at public or private sale, for cash or credit or both, any part of the Trust Fund;
(3) subject to Section
33-165(h)(2), sue, defend, compromise, arbitrate, compound, and settle any debt, obligation, claim, suit, or legal proceeding involving the Trust Fund, and reduce the rate of interest on, extend or otherwise modify, foreclose upon default, or otherwise enforce any debt, obligation, or claim;
(4) retain a part of the Trust Fund assets uninvested in preparation for distributions;
(5) exercise any option on any investment for conversion into another investment, exercise any right to subscribe for additional investments, and make all necessary payments;
(6) join in, consent to, dissent from, oppose, or deposit in connection with the reorganization, recapitalization, consolidation, sale, merger, foreclosure, or readjustment of the finances of any corporation or property in which the assets of the Trust Fund are invested, or the sale, mortgage, pledge or lease of that property or the property of any such corporation on any terms that the Board finds prudent; exercise any options, make any agreements or subscriptions, pay any expenses, assessments, or subscriptions, and take any other action in connection with these transactions that the Board finds prudent; and accept and hold any investment issued in or as a result of any such proceedings;
(7) vote, in person or by proxy, at any election of any corporation in whose stock the assets of the Trust Fund are invested, and exercise, personally or by any power of attorney, any right appurtenant to any investment held in the Trust Fund, and give general or specific proxies or powers of attorney with or without power of substitution.
(8) sell at a public or private sale, enter into an option to sell, mortgage, lease, partition, or exchange any real property at prices and for terms that the Board finds prudent. The Board may execute and deliver deeds of conveyance and all assignments, transfers, and other legal instruments to pass ownership to a buyer, free and discharged of all liens;
(9) renew or extend any mortgage, on any terms that the Board finds prudent, and increase or reduce the rate of interest on any mortgage or modify the terms of any mortgage or of any guarantee as the Board finds prudent to protect the Trust Fund or preserve the value of the investment; waive any default or enforce any default in a manner that the Board finds prudent; exercise and enforce any right of foreclosure, bid on property in foreclosure, take a deed in lieu of foreclosure with or without paying a consideration, and release the obligation on the bond secured by the mortgage; and exercise and enforce in any legal action any right or remedy regarding any mortgage or guarantee;
(10) form a corporation or partnership under the laws of any jurisdiction, or acquire an interest in or otherwise make use of any corporation or partnership already formed to invest in and hold title to any property;
(11) incur and pay expenses for agents, financial advisors, actuaries, accountants, and legal counsel, if those expenses are incurred solely to perform the Board’s duties under the Trust;
(12) borrow, raise or lend money for the purpose of the Trust Fund, in any amounts and on any terms and conditions as the Board in its discretion finds prudent; for any money borrowed, issue a promissory note and secure the repayment of this note by pledging or mortgaging all or part of the Trust Fund;
(13) hold, buy, transfer, surrender, and exercise all other incidents of ownership of any insurance or annuity contract;
(14) pool all or any of the assets of the trust, from time to time, with assets belonging to any retirement plan trust or other retiree health benefit trust created by the County, and commingle such assets and make joint or common investments and carry joint accounts on behalf of this trust and such other trust or trusts, allocating undivided shares or interests in such investments or accounts or in any pooled assets to the two or more trusts in accordance with their respective interests. Consistent with the authority granted in this Article, the Board may also buy or sell any assets or undivided interests in this trust or in any other trust with which the assets of this trust may be pooled, to or from this trust or such other trusts at such prices or valuations as the Board may determine; and
(15) do any act that the Board finds necessary and exercise the power of this Article to manage the Trust Fund. The Board may exercise all powers to manage the assets that an individual could exercise to manage property owned by that individual.
(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 a County-funded agency, or a participating agency in which the Board:
(1) lends any part of its income or corpus without receiving 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) makes any service available on a preferential basis;
(4) 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
(6) engages in any transaction which results in a substantial diversion of its income or corpus.
(j) 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.
(k) Delegation of Duties. The Board may delegate its duties to the Executive Director or a similarly situated County employee as it deems appropriate and consistent with its fiduciary duties in a 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 by its delegate. (, § 1; , § 1; , § 1; , § 1; , §1; , §1.)
