Sec. 102-294. Trust agreement—Investments.
(a) Acceptance. This trust agreement is made by and between the plan sponsor and the trustee. The trustee accepts the trust created under the plan and agrees to perform the obligations imposed by the trust. All right, title, and interest in and to the trust fund shall at all times be vested exclusively in the trustee. The trustee shall accept its appointment by executing a written acceptance of the office of trustee. If more than two trustees are appointed by the plan sponsor, the decision of a majority of the trustees shall control with respect to any decision regarding the administration or investment of the trust fund.
(b) Receipt of contribution. The trustee shall hold in the trust fund all amounts received by the trustee and designated in writing as contributions to the trust fund. All contributions so received together with any income or other increment realized by the trust fund shall be invested and administered by the trustee in accordance with the terms of this section 102-294. The trustee shall have no responsibility or power with respect to the calculation or collection of any contributions to the plan for the City.
(c) Payments from the trust fund. Payments from the trust fund shall be made by the trustee to such persons, in such manner, at such times, and in such amounts as the plan administrator shall specify in written instructions to the trustee. The plan administrator shall have the sole authority to direct the trustee to make payments from the trust fund. The plan administrator shall act in its good faith discretion pursuant to the powers and duties described in subsection (c) of section 102-293. The trustee shall have no obligation to inquire whether any payee or distributee is entitled to any payment, whether the distribution is proper or within the terms of the plan, or as to the manner of making any payment or distribution.
The trustee may make distribution under the plan in cash or property, or partly in each, at its fair market value as determined by the trustee. The term "property" shall include a nontransferable annuity which satisfies the requirements of code section 401(a)(9). If the trustee distributes an annuity contract, the contract shall be a nontransferable annuity.
If any check in payment of a benefit under the plan which had been mailed by regular U.S. mail to the last address of the payee as furnished to the trustee by the plan administrator is returned unclaimed, the trustee shall so notify the plan administrator and shall discontinue further payments to such payee until it receives further instructions from the plan administrator.
(d) Exclusive benefit. Except to the extent the plan permits the return of city contributions under certain specified circumstances, it shall be impossible at any time prior to the satisfaction of all liabilities with respect to participants and their beneficiaries, for any part of the trust fund to be used for, or diverted to, purposes other than the exclusive benefit of plan participants and their beneficiaries, except that payment of taxes and administrative expenses may be made from the trust fund.
(e) Trustee investment powers. The trustee shall have full discretion and authority with regard to the investment and management of the trust fund, except with respect to a plan asset under the control or direction of an investment manager properly appointed in accordance with subsection (g) or with respect to a plan asset subject to city direction of investment. The trustee shall coordinate its investment policy with plan financial needs as communicated to it by the plan administrator. The trustee is authorized and empowered, without previous application to, or subsequent ratification of, any court, tribunal, or commission, or any federal or state governmental agency, but not by way of limitation:
(1) To invest any part or all of the trust fund in any common or preferred stocks or other securities, open-end or closed-end mutual funds, United States retirement plan bonds, corporate bonds, notes, debentures, convertible debentures, commercial paper, U.S. Treasury bills, U.S. Treasury notes, other direct or indirect obligations of the United States government or its agencies, certificates of deposits or savings accounts in a bank or other savings institution supervised by the United States or a state, improved or unimproved real estate or interests in real estate situated in the United States, limited partnerships, insurance contracts of any type, annuities, endowment contracts, mortgages, notes, or other property of any kind, real or personal, including shares or certificates of participation issued by regulated investment companies or regulated investment trusts, shares or units of participation in qualified common trust funds, in qualified pooled funds, or in pooled investment funds of an insurance company qualified to do business in the state, and to buy or sell options on common stock on a nationally recognized exchange with or without holding the underlying common stock, as a prudent man would do under like circumstances with due regard for the purposes of this plan and any investment made or retained by the trustee in good faith shall be proper but shall be of a kind constituting a diversification considered by law suitable for trust investments;
(2) To retain in cash so much of the trust fund as it may deem advisable to satisfy liquidity needs of the plan and to deposit any cash held in the trust fund in a bank account at reasonable interest, including, if a bank is acting as trustee, specific authority to invest in any type of deposit of the trustee at a reasonable rate of interest or in a common trust fund (the provisions of which govern the investment of such assets and which the plan incorporates by this reference) as described in code section 584 which the trustee (or an affiliate of the trustee, as defined in code section 1504) maintains exclusively for the collective investment of money contributed by the bank (or the affiliate) in its capacity as trustee and which conforms to the rules of the comptroller of the currency;
(3) For collective investment purposes, to combine into one or more trust funds the trust created under this plan with the trust created under any other qualified retirement plan the city maintains. However, the trustee must maintain separate records of account for the assets of each trust in order to reflect properly each participant's accrued benefit under the plan(s) in which he or she is a participant; and
(4) To invest all or any portion of the assets comprising the trust fund in any group trust fund which at the time of the investment provides for the pooling of the assets of plans qualified under code section 401(a). This authorization applies solely to a group trust fund exempt from taxation under code section 501(a) and the trust agreement satisfies the requirements of revenue ruling 81-100.
(f) Trustee powers, rights and duties. Except as otherwise required by law, no party dealing with the trustee shall have any obligation to inquire into the authority of the trustee or into the application by the trustee of any funds or other property transferred to the trustee. The decisions of the trustee in the exercise of any of its powers or the carrying out of any of its responsibilities shall be final and conclusive as to all persons for all purposes, to the extent permitted by law. The trustee shall have all the powers necessary or advisable to carry out the provisions of the trust and all inherent, implied, and statutory powers now or subsequently provided by law, including, but not by way of limitation, the power and right to:
(1) Cause any securities or other property to be registered and held in its name as trustee, or in the name of one or more of its nominees, without disclosing the fiduciary capacity, or to keep the same in unregistered form payable to bearer;
(2) Manage, sell, contract to sell, grant options to purchase, convey, exchange, pledge, transfer, abandon, improve, repair, insure, lease for any term even though commencing in the future or extending beyond the term of the trust, encumber, mortgage, deed in trust, or use any other form of hypothecation, or otherwise deal with the whole or any part of the trust fund on such terms and for such property or cash, or part cash and credit, as it may deem best; to retain, hold, maintain, or continue any securities or investments that it may hold as part of the trust fund for such length of time as it may deem advisable; and generally, in all respects, to do all things and exercise each and every right, power, and privilege in connection with and in relation to the trust fund as could be done, exercised, or executed by an individual holding and owning such property in absolute and unconditional ownership;
(3) Abandon, compromise, contest, and arbitrate claims and demands; to institute, compromise, and defend actions at law (but without obligation to do so unless indemnified to the trustee's satisfaction);
(4) Vote in person or by proxy any shares of stock held in the trust fund; to participate in or to exchange securities or other property in reorganization, liquidation, or dissolution of any corporation, the securities of which are held in the trust fund;
(5) Borrow money and to pay any amount due on any loan or advance made to the trust fund, to charge against and pay from the trust fund all taxes of any nature levied, assessed, or imposed upon the trust fund;
(6) Execute the application for any insurance contract to be applied for under the plan; to pay from the trust fund premiums, assessments, dues, charges, and interest to acquire or maintain any insurance contracts held in the trust fund; to collect and receive all dividends or payments of any kind payable under any insurance contracts held in the trust fund or to leave the same with the issuing insurance company; and to exercise any other power or take any other action permitted under any insurance contract held in the trust fund;
(7) Lease for oil, gas, and other mineral purposes and to create mineral severances by grant or reservation; to pool or unitize interests in oil, gas, and other minerals; and to enter into operating agreements and to execute division and transfer orders;
(8) Perform any and all other acts in its judgment necessary or appropriate for the proper and advantageous management, investment, and distribution of the trust; and
(9) Retain any funds or property subject to any dispute without liability for the payment of interest, and to decline to make payment or delivery of the funds or property until final adjudication is made by a court of competent jurisdiction.
(g) Investment manager. The plan sponsor may appoint an investment manager to manage the investment of all or a portion of the trust fund. The investment manager shall be a fiduciary other than the trustee:
(1) Who has the power to manage, acquire, or dispose of any assets of the plan;
(2) Who is (a) registered as an investment adviser under the Investment Advisers Act of 1940; (b) a bank, as defined in the Investment Advisors Act of 1940; or (c) an insurance company qualified to perform services described in paragraph (1) under the laws of more than one state; and
(3) Who has acknowledged in writing that as investment manager, the person is a fiduciary with respect to the plan.
If the plan sponsor appoints an investment manager, the investment manager shall have the exclusive responsibility for directing the investment and management of the assets of the trust fund to which its appointment applies. If more than one investment manager is appointed, each investment manager shall have exclusive responsibility for directing the investment and management of a specified portion of the assets of the trust fund as the plan sponsor shall determine. The trustee shall not be liable for the acts or omissions of any investment manager appointed by the plan sponsor, nor shall the trustee be under any obligation to invest or otherwise manage any asset of the plan which is subject to the management of a properly appointed investment manager. The trustee shall have no obligation to question any written investment direction by a properly appointed investment manager. The trustee shall comply as promptly as possible with any investment direction given by an investment manager.
(h) Plan sponsor direction of investment. The plan sponsor has the right to direct the trustee with respect to the investment and reinvestment of assets comprising the trust fund only if the trustee consents in writing to permit such direction. If the trustee consents to plan sponsor direction of investment, the trustee and the plan sponsor shall execute an agreement as a part of this plan containing such conditions, limitations, and other provisions they deem appropriate before the trustee shall follow any plan sponsor direction as respects the investment or reinvestment of any part of the trust fund.
(i) Valuation of the trust fund. The trustee shall value the trust fund as of the last day of each plan year to determine the current fair market value of the trust fund assets. The trustee shall value the trust fund on such other dates as directed by the plan administrator.
(j) Tax returns. The trustee shall file all tax returns required of the trustee.
(k) Fees and expenses. A trustee shall be entitled to receive reasonable compensation for services rendered or for the reimbursement of expenses properly and actually incurred in the performance of its duties under the trust. However, no trustee who already receives full-time pay from the city shall receive compensation from the plan, except for reimbursement of expenses properly and actually incurred. All compensation and expenses shall be paid by the plan, unless the City, in its discretion, elects to pay all or any part of trustee compensation or recurring administrative or overhead expenses. The plan administrator shall not treat any fee or expense properly paid, directly or indirectly, by the City as a city contribution.
(l) Change of trustee. A trustee may be removed by the plan sponsor at any time upon 30 days' written notice to the trustee, or on such shorter notice as may be agreed to by the plan sponsor and the trustee. A trustee may resign at any time upon 30 days' written notice to the plan sponsor, or on such shorter notice as may be agreed to by the plan sponsor and the trustee.
Upon such removal or resignation, the plan sponsor shall appoint a successor trustee and the successor trustee shall have the same powers and duties as those conferred upon the predecessor trustee. If the plan sponsor fails to appoint a successor trustee within 60 days of removal or resignation of the trustee, the plan sponsor shall be treated as having appointed itself as trustee and as having executed its acceptance of appointment. Each successor trustee shall succeed to the title of the trust fund vested in its predecessor upon the successor trustee's written acceptance of the office of trustee. The resigning or removed trustee, upon receipt of acceptance in writing by the successor trustee, shall execute all documents and do all acts necessary to vest the title of record in the successor trustee. No successor trustee shall be liable for the acts or omissions of any prior trustee which occurred prior to the successor trustee's acceptance of office, or be obliged to examine the accounts, records, or acts of any prior trustee.
In the event that any corporate trustee hereunder shall be converted into, shall merge or consolidate with, or shall sell or transfer substantially all of its assets and business to another corporation, state or federal, the corporation resulting from such conversion, merger, or consolidation, or the corporation to which such sale or transfer shall be made, shall thereupon become and be the trustee under this section 102-294 with the same effect as though originally so named. (Ord. No. 2001-70, § 10, 11-19-2001)