This chapter of the Codified Ordinances for the City of Harrisburg
shall be known and may be cited as the Harrisburg OPEB Trust.
The City of Harrisburg authorizes the chartering and initial
funding of a trust fund to be created for the sole purpose of financially
assisting with the long-term costs of obligations for its beneficiaries,
who shall be City retirees and family members, if any, entitled to
receive other post-employment benefits (OPEB) from the City.
There is hereby established a Board of Trustees to be known
as the Board of Trustees of the Other Post-Employment Benefit Trust
Fund, otherwise referenced as the OPEB Trust.
Upon formation, the Board of Trustees is empowered to establish
the OPEB Trust with such funds as the City shall cause to be transferred
for that purpose and to invest and otherwise manage the assets of
the Fund in accordance with the requirements of this ordinance.
The OPEB Trust is an entity separate from the City for the exclusive
benefit of the beneficiaries and not of the City. Ownership of OPEB
Trust assets shall be held by a Trustee at all times and, except as
provided in the OPEB Trust agreement or any amendment thereto with
respect to distribution of assets upon OPEB Trust termination, the
OPEB Trust assets shall not be considered funds or assets of the City
for any purpose.
The Trustees will have the following duties and responsibilities:
A. The principal of the OPEB Trust, together with any earnings thereon,
shall be held by Trustees separate and apart from any assets of the
City. All OPEB Trust assets and all income thereon are irrevocably
dedicated to, and shall be used for the exclusive purpose of, making
payments of benefits to or for the benefit of beneficiaries and for
paying expenses of administering the OPEB Trust. At no time will any
OPEB Trust assets be used for, or diverted to, any other purposes,
other than the administrative expenses of operation and investment
of the OPEB Trust.
B. Investments.
(1)
The Trustees shall oversee a regular selection process for service
providers to the OPEB Trust including the option to empower a financial
institution to serve as a professional Trustee, and shall otherwise
select an investment advisor, custodian, and legal counsel, as deemed
necessary.
(2)
The Trustees will oversee the activities of the OPEB Trust Investment
Advisor ensuring that investments are made:
(a)
Solely in the interest of, and for the exclusive purposes of
providing for funding of benefits for participants and their beneficiaries,
minimizing employer contributions thereto, and to defray reasonable
expenses of administering the OPEB Trust;
(b)
With the care, skill, prudence, and diligence under the circumstances
then prevailing that a prudent person acting in a like capacity and
familiar with these matters would use in the conduct of an enterprise
of a like character and with like aims; and
(c)
By diversifying the investments of the OPEB Trust to minimize
the risk of loss and to maximize the rate of return, unless under
the circumstances it is clearly prudent not to do so.
(3)
The Trustees will establish a written statement of investment
policy. At least annually, the Trustees will evaluate the appropriateness
of the policy and, based on such evaluation, either confirm the terms
of the policy as then in effect, or amend the investment policy as
appropriate. The investment policy will achieve the following:
(a)
Document investment objectives, performance expectations and
investment guidelines for assets under the OPEB Trust;
(b)
Establish an appropriate investment strategy for managing all
assets under the OPEB Trust, including an investment time horizon,
risk tolerance ranges and asset allocation to provide sufficient diversification
and overall return over the long-term time horizon of the OPEB Trust;
(c)
Establish investment guidelines to control overall risk liquidity;
(d)
Establish periodic performance reporting requirements that will
effectively monitor investment results and ensure that the investment
policy is being followed; and
(e) Comply with all fiduciary, prudence, due diligence, and legal requirements
for the investment of assets under the OPEB Trust and as otherwise
may arise under federal or state law.
C. The Trustees shall determine the amount of benefits payable and shall
have exclusive authority and responsibility to determine the amount
of such benefits to be paid out of the assets of the Trust and the
amount which shall be paid to each beneficiary and/or to any insurer
or other provider of benefits. The Trustees are authorized to disburse
amounts in respect of benefits from the Trust to one or more benefit
administrator(s) for subsequent distribution to or for the benefit
of beneficiaries, to or for the benefit of beneficiaries, or to the
City for reimbursement of documented benefits paid from City assets,
or for related premium expenses to provide stop loss, catastrophic
or other insurance coverages that provide for qualified retiree healthcare
related needs.
D. The Trustees will take all other actions deemed prudent in their
capacity as a fiduciary and in the furtherance of the duties and responsibilities
delegated under this chapter. In addition, the Trustees may perform
any activities consistent with this chapter and governing law, as
the Trustees deem necessary and appropriate.
To the extent reasonable and appropriate:
A. Expenses are reimbursable in accordance with City policy and state
law.
B. The Trustees will have access to City resources, including but not
limited to internal advisors within the City, to assist the Trustees
in carrying out their fiduciary duties and responsibilities to the
Trust.
C. The Trustees may engage any service providers to assist in the performance
of their duties and responsibilities, including but not limited to
consultants, legal counsel or other providers.
D. The Trustee may utilize funds under the OPEB Trust to pay reasonable
expenses of the OPEB Trust, including but not limited to compensation
of any service provider to the OPEB Trust appointed by Trustees or
the City, unless such expenses are paid directly by the City.
E. The Trustees are authorized to accept additional funds for deposit
in the Trust from the City, the Commonwealth of Pennsylvania or a
labor organization that has exclusive bargaining rights with the City,
which must be subject to the same obligations for the initial OPEB
Trust funds, and as otherwise provided by law.
F. The City Solicitor shall furnish the Board of Trustees with a charter
for the OPEB Trust and related trust agreement, subject to such approvals
and execution of as required by law at the time of delivery.
At least annually, the Trustees will do the following:
A. Monitor compliance with the investment policy for the OPEB Trust.
B. Review and assess the performance of any service providers appointed
by the Trustees of the City to perform services related to the OPEB
Trust; and
C. Deliver a report to the Mayor, City Council and City Controller setting
out the results of the Trustees' evaluation of the two preceding
items.
A Trustee shall not engage in any employment, activity or enterprise
for compensation which is inconsistent, incompatible, in conflict
with or inimical to his or her fiduciary duties, functions or responsibilities
to the OPEB Trust. A Trustee shall not perform any work, service or
counsel for compensation outside of his or her OPEB Trust responsibilities
where any part of his or her efforts will be subject to approval by
the Trustees. Notwithstanding the foregoing, unless otherwise prohibited
by law, City officials and employees are authorized to serve as a
Trustee.