[HISTORY:[1] Adopted by the County Commissioners of Caroline County
as indicated in article histories. Amendments noted where applicable.]
[Adopted 8-15-2000 by Bill No. 2000-2]
The Caroline County Government Personnel System is hereby established.
As used in this Article, the following terms shall have the
meanings indicated:
An employee of the government of Caroline County.
The government of Caroline County.
The Caroline County Government Personnel System.
The Personnel System shall provide equitable policies and practices
for managing personnel and regulating the relationship between the
employer and employees. The Personnel System shall provide the means
to attract and retain the services of the best qualified and most
competent persons available to serve the employer.
It is the policy of the Employer to guarantee, and the Personnel
System shall provide for, equal opportunity in employment, promotions,
and working conditions without regard to race, color, creed, gender,
national origin, marital status, political opinion or affiliation,
or disability, unless a disability prevents a person from performing
the essential duties of a position that cannot be accommodated without
undue hardship.
The County Commissioners shall adopt by resolution rules and
regulations in furtherance of this Article.
[Adopted 11-18-2008 by Bill No. 2008-9; amended 1-11-2022 by Bill No. 2021-4]]
In this Article, the following words and phrases have the following
meanings:
A payment made to the Trust Fund by the County.
The Director of Finance.
A person or entity who exercises discretion in the management
of all or a part of the assets of an institutional investor.
The Board of Trustees established under this Article to manage
and invest Trust Fund assets.
An agency eligible to participate in County benefit plans
which elects to participate in any County Retiree Benefit Plan.
Any retiree medical, dental, or vision insurance plan administered
by Caroline County, Maryland.
The other post-employment benefits ("OPEB") trust fund established
to pay all or part of the benefits provided under any retiree benefit
plan.
A.
The County Commissioners shall include the terms of any Retiree Benefit
Plan, including eligibility and benefits, in a plan document. All
benefits shall meet applicable federal or state requirements. The
County Commissioners may amend a plan document at any time. Any Retiree
Benefit Plan may be terminated at any time for any reason. No retiree
benefit is guaranteed, except as expressly provided by a contract
entered into by the County.
B.
Establishment of trust. A trust, known as the "Other Post Employment
Benefits (OPEB) Trust," effective with the effective date of the legislative
bill creating this Article, is established to fund all or a portion
of benefits provided under the County Retiree Benefit Plans. The trust
is intended solely as a funding mechanism to pay for the County's
share of the costs of retiree benefits provided by the County under
the terms of any Retiree Benefit Plan, and does not create any obligation
on the part of the County to provide any benefit listed in any County
Retiree Benefit Plan. Participants in a Retiree Benefit Plan, current
or former County employees, or current or former Participating Agency
employees shall have no right, title, or interest in or to any asset
in the Trust Fund. The Trust Fund may be, but is not required to be,
the sole source of funding for any County Retiree Benefit Plan.
D.
All contributions and all earnings and other additions, less payments,
including payments for the costs of benefits, costs of maintaining
the trust and trust assets, and costs incurred by the OPEB Board,
constitute the assets of the Trust Fund.
E.
The Trust Fund shall be held for the exclusive benefit of participants in Retiree Benefit Plans and eligible dependents, and used only to provide benefits and defray reasonable expenses of administering Retiree Benefit Plans and the trust. Trust Fund assets shall not revert to the County unless the County terminates all Retiree Benefit Plans; provided, however, that funds may partially revert to the County if at least one benefit plan is terminated under § 49-28.
A.
There is an OPEB Board of Trustees which shall manage the Trust Fund. The OPEB Board shall hold legal title to all assets of the Trust Fund but may transfer some incidents of ownership to the agents of the OPEB Board as provided in this Article. The powers and duties of the Board under this Article are not effective until the members have accepted the trust in writing pursuant to Subsection D of this section.
B.
The OPEB Board shall consist of five members: the County Administrator,
who shall be the Chair of the Board and preside at Board Meetings,
the Director of Finance, the Director of Human Resources, the County
Attorney and a member of the Employee Advisory Board selected by the
Employee Advisory Board. The Board shall meet at least once during
each calendar quarter. A quorum for business shall consist of three
members. Each member has one vote.
C.
A member serves on the OPEB Board without additional compensation
from the County and without compensation from any other source for
services rendered on behalf of the Trust Fund. The OPEB Board shall
reimburse any Board member for any expense approved by the OPEB Board.
An OPEB Board member shall not receive reimbursement for any expense
from any other source.
D.
Within 10 days after a new OPEB Board member assumes membership on
the Board, the member shall certify in writing to the County Commissioners
that the member accepts the trust and will administer its affairs
with care, skill, prudence, and diligence.
E.
The OPEB Board shall establish written policies to administer and
invest funds under this Article and transact the trust's business.
F.
The OPEB Board may authorize a member to execute instruments on behalf
of the Board. The authority shall be in writing and specifically describe
each instrument and how the member shall execute the instrument.
G.
The OPEB Board shall keep investment accounts and records, including
separate accounts for Participating Agencies, necessary to calculate
the Trust Fund's value. The Board may designate a person other
than a Board member to maintain those records.
A.
The County may contribute to the Trust Fund those amounts that the
County Commissioners appropriate. The County shall not be required
to make any contribution to the Trust Fund unless a written contract
so requires.
B.
The OPEB Board shall accept all contributions deposited in the Trust
Fund and held by the Custodian as Trust Fund property. The OPEB Board
shall not be responsible for calculating or collecting any contribution,
but shall be responsible only for contributions deposited to the Trust
Fund and amounts held in the Trust Fund.
C.
Payments may be made from the Trust Fund in those amounts directed
by the Chair of the Board only to pay for all or part of the benefits
provided by any County Retiree Benefit Plan, administrative expenses
relating to a Retiree Benefit Plan and expenses of the Trust Fund.
The OPEB Board shall not be liable for any payment directed by the
County Commissioners and is not required to confirm compliance with
any Retiree Benefit Plan.
D.
The OPEB Board shall be reimbursed by the Trust Fund for expenses solely incurred in the administration of the Trust Fund and shall pay from the Trust Fund expenses reasonably incurred by the Board to administer any County Retiree Benefit Plan to the extent that those expenses have not been paid by the County. The OPEB Board may pay expenses incurred under § 49-24H(11) without direction of the County Commissioners.
A.
The OPEB 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 OPEB Board by this Article.
B.
The County's Procurement Law does not apply to the procurement
of goods and services by the OPEB Board for the Trust Fund.
C.
Transfer agents.
(1)
The OPEB Board may register any assets in its own name or in the
name of a nominee. The OPEB Board or its agent shall keep records
that show that the investments are part of the Trust Fund.
(2)
The OPEB Board may designate in writing a trustee to hold or transfer
assets as the Board's nominee.
(3)
The OPEB Board shall provide that any trustee or person that the
Board designates shall act only as agent of the Board. The Board may
set other conditions that the Board finds prudent.
(4)
Any trustee or person that the OPEB Board designates may retain the
services of a bank or other financial institution to conduct business.
(5)
The OPEB Board shall maintain the indicia of ownership of the Trust
Fund's assets within the jurisdiction of the United States Federal
Courts.
D.
Authorized investments.
(1)
The OPEB 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 shall 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 invest, or authorize investments, in pooled
investment vehicles and transition assets from one Investment Manager
to another Investment Manager.
(2)
The OPEB Board or any Investment Manager shall 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 shall not invest more than 10% of its assets in real property
located in the County. This ten-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 ten-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 ten-percent
limit.
(3)
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.
(4)
The OPEB Board and any Investment Manager shall not invest any Trust
Fund asset in any bond, note, or debt instrument issued by:
(a)
The County;
(b)
A political subdivision in the County; or
(c)
An agency supported by bond issues underwritten by the County.
(d)
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.
E.
Pursuant to the provisions of § 49-22E, the OPEB Board shall establish an investment policy and guidelines appropriate for the Trust Fund, and may review and change the policy and guidelines as necessary.
F.
Investment manager.
(1)
Except as provided in Subsection D(1), the OPEB Board shall appoint one or more Investment Managers to invest all or part of the OPEB Trust Fund assets consistent with applicable guidelines. If the Board has properly appointed an Investment Manager, the Board shall not be liable for any act or omission of the manager and shall not otherwise be responsible for the investment of funds allocated to the Investment Manager.
(2)
Any investment management contract shall provide that when the Investment
Manager is making individual investment selections, the Investment
Manager shall 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 shall be expenses
of the Trust Fund.
(3)
The OPEB Board shall 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.
The OPEB 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 of the United States, but the amount on deposit in any bank
or trust company shall not exceed 25% of the paid-in capital and surplus
of that bank or trust company.
H.
Except as otherwise provided in this Article, the OPEB 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 § 49-27H(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 proceeding;
(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)
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;
(11)
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;
(12)
Hold, buy, transfer, surrender, and exercise all other incidents
of ownership of any insurance or annuity contract; and
(13)
Do any act that the Board finds necessary and exercise the powers
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 OPEB Board shall not engage in any transaction
between the trust and the County or any entity controlled by the County
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.
A.
The OPEB Board shall discharge its duties with respect to the Trust
Fund:
(1)
Only in the interest of the participants in Retiree Benefit Plans
and eligible dependents;
(2)
Only to provide benefits to participants in Retiree Benefit Plans
and to defray reasonable expenses of administering and operating the
Trust Fund;
(3)
With the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent person acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise
of a like character and with like aims;
(4)
By diversifying the investments of the Trust Fund to minimize the
risk of large losses, unless it is clearly not prudent to diversify
under the circumstances; and
(5)
In accordance with the laws, policies, and instruments governing
the trust.
B.
The OPEB Board shall maintain accurate and detailed accounts of each
investment, receipt, disbursement, and other transaction, including
any specific record required by law, separate accounting for Participating
Agencies, and any additional record it finds necessary. All accounts,
books and records are subject to applicable state laws governing maintenance
and disclosure of public records.
C.
The Trust Fund fiscal year shall be the same as the County fiscal
year. On or before January 1 of each year, the OPEB Board shall file
with the County Commissioners a written account, listing each investment,
receipt, disbursement, and other transaction during the preceding
fiscal year or during the period from the close of the last preceding
fiscal year to any interim date that the Board selects. The account
shall include a list of the Trust Fund assets and the current fair
market value of each asset at the end of that period. The account
shall include the separate accounts of the Participating Agencies.
If a current fair market value is not available for or does not apply
to a particular investment, the Board shall assign a value to that
investment. The Board shall apply the investment valuation method
on a consistent basis. If the Board changes the investment valuation
method, the Board shall notify the County Commissioners of the change.
D.
The OPEB Board shall be subject to the County's Ethics law.
In addition, an OPEB Board member shall not:
(1)
Be party to any transaction engaged in by the Board or an Investment
Manager involving the assets of the Trust Fund;
(2)
Use the gains or profits of the Trust Fund for any purpose except
to make investments or payments authorized by the Board in accordance
with this Article;
(3)
Deal with the assets of the Trust Fund for the member's own
interest or account or that of another not otherwise entitled under
this Article;
(4)
Act in any transaction involving the Trust Fund on behalf of a party
whose interests are adverse to the interests of the Trust Fund or
the interests of participants or beneficiaries of the Trust Fund;
or
(5)
Become an endorser or surety, or in any manner an obligor, for money
loaned to or borrowed from the Board.
A.
The Director of Finance is the custodian of the Trust Fund assets.
The Director of Finance shall give bond with a surety and for a period
and in an amount as the OPEB Board determines. Each payment from the
Trust Fund shall be made by the Director of Finance, the Director
of Finance's designee, or two persons designated by the Board
acting jointly. The Board shall file a copy of its resolution designating
the two persons, with specimen signatures of those persons, with the
Director of Finance to confirm their authority to make payments.
B.
If the OPEB Board approves, the Director of Finance may make written
contracts with banks, trust companies, insurance companies or investment
companies authorized to do business in any state for the safe custody
of investments, banking services, the payment of benefits and expenses,
and any other function necessary to manage and safeguard the assets
of the Trust Fund.
C.
The County's procurement law does not apply to the procurement
of goods and services for the Trust Fund by the Director of Finance.
A.
The County shall indemnify each member of the OPEB Board who is or
may become a party to any legal action, including any administrative
or investigative proceeding, because of service as a Board member,
subject to the conditions in this section.
C.
The termination of any legal action shall not, of itself, create
a presumption that a Board member did not act in good faith and in
a manner reasonably believed to be in the best interest of the Trust
Fund. The termination of a criminal proceeding shall not, of itself,
create a presumption that a Board member had reasonable cause to believe
that any conduct was unlawful.
D.
The County shall not indemnify a Board member if:
E.
If an attorney selected by the Commissioners to be fiduciary counsel
finds that any indemnification payment was made that was outside the
scope of the indemnification allowed under this section, the Commissioners
shall take appropriate action on behalf of the County to recover that
payment.
F.
The County shall provide insurance for each Board member against
any liability asserted against or incurred by the member with respect
to service on the Board. Assets of the Trust Fund shall not be used
to pay any premium. The County may self-insure, wholly or partly,
for this purpose. If the County does not provide adequate insurance
coverage or indemnification under this section, a Board member need
not pay any amount attributable to liability incurred by serving on
the Board and the County shall pay any amount due.
G.
The County may assert the defense of governmental immunity, and any
other available defense, in any legal action arising out of the actions
of the Board.
H.
Fiduciary counsel.
(1)
Fiduciary counsel shall determine whether a Board member is eligible
for indemnification with respect to any matter and the reasonableness
of any fee, expense, or settlement.
(2)
Unless fiduciary counsel approves the settlement, a Board member
shall not settle a claim against another Board member using:
A.
Except on termination, no part of the Trust Fund may revert to the
County or a Participating Agency or be used for any purpose other
than the exclusive benefit of participants of a Retiree Benefit Plan.
If all County Retiree Benefit Plans are terminated and all benefit
claims and expenses are paid, any remaining assets in the Trust Fund
relating to contributions made by the County and Participating Agencies
shall revert to the County and the Participating Agencies. The Trust
Fund shall terminate in its entirety on the earlier of the termination
of all County Retiree Benefit Plans or the depletion of the Trust
Fund. Funds may partially revert to the County or Participating Agencies
if one or more Retiree Benefit Plans is terminated. When a County
Retiree Benefit Plan is terminated, the assets in the Trust Fund attributable
to that plan after expenses and benefits have been paid shall revert
to the County and the Participating Agencies as provided in the adoption
agreement.
B.
Any provision of this Article may be amended at any time. No amendment
may:
(1)
Authorize any part of the Trust Fund to be used for any purpose other
than the exclusive benefit of participants of Retiree Benefit Plans
and eligible dependents; or
C.
The County Commissioners may amend the trust at any time, retroactively
if required, if found prudent or necessary to conform to any requirement
of applicable law, the Internal Revenue Code, or any similar act or
any amendments or corresponding regulations or applicable guidance.
A.
An agency permitted to participate in County benefit plans which chooses to participate in a County Retiree Benefit Plan shall participate in the Trust Fund. However, a Participating Agency must be eligible to participate under § 115 of the Internal Revenue Code. Each Participating Agency in the Trust Fund shall execute an adoption agreement in a form satisfactory to the Chair of the Board and shall submit any information the Board requires. Except for any obligation to refund assets under Subsection B, legal liability shall not accrue to the County by including any Participating Agency in the Trust Fund. Each Participating Agency shall be fully responsible for its pro rata cost of coverage, including any required annual contribution to the County and such Participating Agency's share of administrative expenses.
B.
If a Participating Agency decides to terminate participation in a
Retiree Benefit Plan and the Trust Fund, the agency shall notify the
Chair of the Board in writing. The Board and the Participating Agency
shall agree on a date to end the agency's participation. Any
transfer of assets from the Trust Fund resulting from the termination
of an agency's participation shall comply with the Internal Revenue
Code and the adoption agreement between the County and the Participating
Agency.
Any asset held by the Trust Fund shall not be subject to any
creditor of the County and is exempt from execution, attachment, prior
assignment, or any other judicial relief or order for the benefit
of any creditor or third person.
