§ 54-53. Finances and fund management.

(a)

As part of the system there is hereby established a trust fund, into which shall be deposited all of the contributions and assets whatsoever attributable to the system.

(b)

The actual custody and supervision of the fund, and assets thereof, shall be vested in the trustee. Payment of benefits and disbursements from the fund shall be made by the trustee or other disbursing agent but only upon written authorization from the board.

(c)

The pension board may elect to serve as trustee or, in its sole discretion, appoint a national or state bank with trust powers for the purpose of serving as trustee of the fund. The assets of the fund shall be deposited with the trustee. In order to fulfill its investment responsibilities as set forth herein, the pension board may retain the services of a corporate trustee/investment advisor, an investment advisor registered under the Investment Advisors Act of 1940, an insurance company, or a combination thereof, for purposes of investment decisions and management. Such investment advisor shall have discretion, subject to any pension board guidelines as determined by the pension board in that capacity, in the investment of all fund assets.

If the pension board elects to serve as trustee, it shall serve without compensation, but members may be reimbursed from the fund for all necessary expenses which they may incur in serving as trustee.

(d)

All funds and securities of the system may be commingled in the fund, provided that accurate records are maintained at all times reflecting the financial composition of the fund, including accurate current accounts and entries as regards the following:

(1)

Current amounts of member contributions, on an individual basis;

(2)

Receipts and disbursements;

(3)

Benefit payments;

(4)

Current amounts clearly reflecting all monies, funds and assets whatsoever attributable to contributions and deposits from the city;

(5)

All interest, dividends and gains (or losses) whatsoever; and

(6)

Such other entries as may be properly required so as to reflect a clear and complete financial report of the fund.

A certified audit and report shall be performed, not less frequently than once every three years, by an accounting firm chosen by the board. Such report shall reflect a complete valuation of assets on both a cost and market basis, as well as other items normally included in a certified audit.

(e)

The trustee and/or other investment advisor(s) or insurance company, as the case may be, shall have the following investment powers and authority:

(1)

The trustee shall be vested with full legal title to the fund, subject however, and in any event to the authority and power of the city to amend or terminate this trust, provided that no amendment or fund termination shall ever result in the use of any assets of this fund except for the payment of regular expenses and benefits under this system. All contributions from time to time paid into the fund, and the income thereof, without distinction between principal and income, shall be held and administered by the trustee and the trustee shall not be required to segregate or invest separately any portion of the fund; provided, however, that upon direction by the board, a portion of the fund may be held for investment purposes by an insurance company.

(2)

The fund may be invested and reinvested in such securities or property, real or personal, wherever situated and of whatever kind, as shall be determined by the trustee, including but not limited to stocks, common or preferred, common trust funds, bonds, and other evidences of indebtedness or ownership.

(3)

The trustee may retain in cash and keep unproductive of income such amount of the fund as it may deem advisable, having regard for the cash requirements of the system.

(4)

No person or entity shall be liable for the making, retention or sale of any investment or reinvestment made as herein provided, nor for any loss or diminishment of the fund, except that due to his or its own negligence, willful misconduct or lack of good faith.

(5)

The trustee may cause any investment in securities held by it to be registered in or transferred into its name as trustee or into the name of such nominee as it may direct, or it may retain them unregistered and in form permitting transferability, but the books and records shall at all times show that all investments are part of the trust fund.

(6)

The trustee is empowered, but is not required, to vote upon any stocks, bonds, or securities of any corporation, association, or trust and to give general or specific proxies or powers of attorney with or without power of substitution; to participate in mergers, reorganizations, recapitalizations, consolidations, and similar transactions with respect to such securities; to deposit such stock or other securities in any voting trust or any protective or like committee with the trustee or with depositories designated thereby; to amortize or fail to amortize any part or all of the premium or discount resulting from the acquisition or disposition of assets; and generally, to exercise any of the power of an owner with respect to stocks, bonds, or other investments comprising the fund which it may deem to be the best interest of the fund to exercise.

(7)

The trustee shall not be required to make any inventory or appraisal or report to any court, nor to secure any order of court for the exercise of any power herein contained.

(8)

Where any action which the trustee is required to take or any duty or function which it is required to perform either under the terms herein or under the general law applicable to it as trustee under this article, can reasonably be taken or performed only after receipt by it from a member, the city, or any other entity, of specific information, certification, direction or instructions, the trustee shall be free of liability in failing to take such action or perform such duty or function until such information, certification, direction or instruction has been received by it.

(9)

Any overpayments or underpayments from the fund to a member or beneficiary caused by errors of computation shall be adjusted with interest at a rate per annum approved by the board. Overpayments shall be charged against payments next succeeding the correction. Underpayments shall be made up from the trust fund.

(10)

The trustee shall sustain no liability whatsoever for the sufficiency of the fund to meet the payments and benefits herein provided.

(11)

In any application to or proceeding or action in the courts, only the city, the board, and the trustee shall be necessary parties, and no member or other person having an interest in the fund shall be entitled to any notice of service of process. Any judgment entered in such a proceeding or action shall be conclusive upon all persons.

(f)

Any of the foregoing powers and functions reposed in the trustee may be performed or carried out by the trustee through duly authorized agents, provided that the trustee at all times maintains continuous supervision over the acts of any such agent; provided further, that legal title to the fund shall always remain with the trustee.

(Code 1981, § 15-27; Ord. No. 1989-33, § 4, 10-17-89)