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New Trustee Training. November 11, 2008 SACRS Fall Conference Costa Mesa, California. Welcome. SACRS. The Euro Star From Paris to London. SACRS. Looking out the window at 210 miles per hour! Note to New Trustees: Get in! Sit down! Hang on!. - PowerPoint PPT Presentation
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New Trustee TrainingNew Trustee Training
November 11, 2008SACRS Fall Conference
Costa Mesa, California
November 11, 2008SACRS Fall Conference
Costa Mesa, California
WelcomeWelcome
SACRSSACRS
The Euro Star
From Paris to London
The Euro Star
From Paris to London
SACRSSACRS
Looking out the window at 210 miles per hour!Note to New Trustees:
Get in! Sit down! Hang on!
Looking out the window at 210 miles per hour!Note to New Trustees:
Get in! Sit down! Hang on!
New Trustee TrainingNew Trustee Training
Trustee’s Role In An Organization
A Short History of SACRS Fiduciary Responsibilities Additional Trustee Training Opportunities
Trustee’s Role In An Organization
A Short History of SACRS Fiduciary Responsibilities Additional Trustee Training Opportunities
VeniceVenice
Trustee’s Role Trustee’s Role
ORGANIZATIONAL ROLESORGANIZATIONAL ROLES
BOARD OF TRUSTEES EXECUTIVE OFFICER OPERATIONS STAFF
Purpose of Organization
Mission
Goals and Objectives
Policy Setting
Monitor Performance
Policy Implementation
Direction
Motivate
Accountable
Delegate Decision Making
Delegated Authority
Delegated Accountability
BuranoBurano
A Short HistoryA Short History
The State Association of County Retirement Systems
(SACRS)
The State Association of County Retirement Systems
(SACRS)
HistoryHistory
1889 First Public Pension in California
San Francisco Firefighters (30 Years longevity with a fixed benefit)
1889 First Public Pension in California
San Francisco Firefighters (30 Years longevity with a fixed benefit)
HistoryHistory
1935
Social Security Begins
1935
Social Security Begins
1929
The Great Depression
1929
The Great Depression
Architects of the ‘37 Act
Architects of the ‘37 Act
Howard Byram, L.A. County Treasurer
Judge Deasy, L.A. County Counsel
Edward “Ned” Gaylord, L.A. Deputy County Counsel
Howard Byram, L.A. County Treasurer
Judge Deasy, L.A. County Counsel
Edward “Ned” Gaylord, L.A. Deputy County Counsel
AthensAthens
1937 Retirement Act1937 Retirement Act
Implementation began with Los Angeles County in 1938
Nineteen other counties followed in the 1940’s and 50’s
All 20 systems operate under the County Employees Retirement Law of 1937 (CERL)
(An annual “must-read” for all CERL trustees)
Implementation began with Los Angeles County in 1938
Nineteen other counties followed in the 1940’s and 50’s
All 20 systems operate under the County Employees Retirement Law of 1937 (CERL)
(An annual “must-read” for all CERL trustees)
Board of TrusteesBoard of Trustees
Originally Five Members: Two elected employees Two members of the general public
County Treasurer Served as custodian and administrator
Originally Five Members: Two elected employees Two members of the general public
County Treasurer Served as custodian and administrator
SACRS.. Mid 1940’sSACRS.. Mid 1940’s
County Treasurers met in their capacity as Pension Administrators
Began in the cafeteria of L.A. County
Described as “shirt-sleeve” working sessions
County Treasurers met in their capacity as Pension Administrators
Began in the cafeteria of L.A. County
Described as “shirt-sleeve” working sessions
SACRS… 1947SACRS… 1947
Major re-write of the 1937 Act to establish Defined Benefit Retirement Plans
Major re-write of the 1937 Act to establish Defined Benefit Retirement Plans
SACRS…. 1950’sSACRS…. 1950’s
Harold Ostly, L.A. Treasurer Moved the group to become politically active
Became the lobbyist for the group
Wrote legislative bill analysis for the CERL systems
Harold Ostly, L.A. Treasurer Moved the group to become politically active
Became the lobbyist for the group
Wrote legislative bill analysis for the CERL systems
CERL ….the 1960’sCERL ….the 1960’s
Local safety members began to sponsor benefit enhancements
Pressed for an alternative safety member of the Board of Retirement
Legislature also added a public member, appointed by the Board of Supervisors
Local safety members began to sponsor benefit enhancements
Pressed for an alternative safety member of the Board of Retirement
Legislature also added a public member, appointed by the Board of Supervisors
1966 Constitutional Amendment
1966 Constitutional Amendment
Allowed public pensions in California to invest up to 25% in stocks
Led to stock brokers and investment advisors attending CERL conferences
Allowed public pensions in California to invest up to 25% in stocks
Led to stock brokers and investment advisors attending CERL conferences
SACRS… 1969/1970SACRS… 1969/1970
First Constitution for the organization was developed
First Constitution for the organization was developed
CERL… 1970’sCERL… 1970’s
Legislation provided representation for retirees on the Board of Retirement
An additional public member was added
This brought the Retirement Boards to nine members plus one alternate
Legislation provided representation for retirees on the Board of Retirement
An additional public member was added
This brought the Retirement Boards to nine members plus one alternate
CERL …. 1970’sCERL …. 1970’s
Legislation was passed to allow ‘37 Act systems to establish independent budgets and directly appoint the Retirement Administrator
Passage of Proposition 13 in 1978 sped up the process toward more independent retirement systems
Legislation was passed to allow ‘37 Act systems to establish independent budgets and directly appoint the Retirement Administrator
Passage of Proposition 13 in 1978 sped up the process toward more independent retirement systems
SACRS… 1970’sSACRS… 1970’s
Deavan Dickerson, San Diego Treasurer was the first to involve the financial community in hosting conference dinners and other entertainment
Deavan Dickerson, San Diego Treasurer was the first to involve the financial community in hosting conference dinners and other entertainment
CERL… 1980’sCERL… 1980’s
Collective bargaining led to employee non-contribution options
Benefit enhancements were sought from the state legislature and incorporated into the CERL
In turn, collective bargaining for benefit enhancement was negotiated at the local level
Collective bargaining led to employee non-contribution options
Benefit enhancements were sought from the state legislature and incorporated into the CERL
In turn, collective bargaining for benefit enhancement was negotiated at the local level
1984 Prudent Man LawProposition 21
1984 Prudent Man LawProposition 21
For all public pensions in California
Led to greater vendor participation in the activities of SACRS
For all public pensions in California
Led to greater vendor participation in the activities of SACRS
SACRS … 1990’sSACRS … 1990’s
Voting process was changed from County Treasurers having their own vote to one vote for each system in the SACRS organization
Voting process was changed from County Treasurers having their own vote to one vote for each system in the SACRS organization
CERL… 2000CERL… 2000
Alternate Retiree Member created
Each Board of Retirement to decide whether or not to add the position.
Duties and responsibilities to be defined
Alternate Retiree Member created
Each Board of Retirement to decide whether or not to add the position.
Duties and responsibilities to be defined
EphesusEphesus
Fiduciary Responsibilities
Fiduciary Responsibilities
Fiduciary Responsibilities
Fiduciary Responsibilities
Under ERISA, a fiduciary must discharge his or her duties solely in the interest of the participants and beneficiaries and for the exclusive purpose of providing benefits, while defraying reasonable expenses of the plan. The conduct of a fiduciary will be governed by the Prudent man or Prudent person standard……
Under ERISA, a fiduciary must discharge his or her duties solely in the interest of the participants and beneficiaries and for the exclusive purpose of providing benefits, while defraying reasonable expenses of the plan. The conduct of a fiduciary will be governed by the Prudent man or Prudent person standard……
Prudent Person Standard
Prudent Person Standard
The members of the board of retirement of a public pension or retirement system shall discharge their duties 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 like aims
The members of the board of retirement of a public pension or retirement system shall discharge their duties 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 like aims
RhodesRhodes
How to Stay Out of Trouble:
How to Stay Out of Trouble:
Do things right Monitor everything Communicate everything Keep good records If conflicted, Disqualify yourself No self-dealing or other dealing Find Fiduciary Liability Insurance
Do things right Monitor everything Communicate everything Keep good records If conflicted, Disqualify yourself No self-dealing or other dealing Find Fiduciary Liability Insurance
Conflict of InterestConflict of Interest
CERL requires that trustees receive bi-annual training on “Conflict of Interest”
SACRS provides the necessary training and certification at the conferences
CERL requires that trustees receive bi-annual training on “Conflict of Interest”
SACRS provides the necessary training and certification at the conferences
RomeRome
Trustee Training Opportunities
Trustee Training Opportunities
Additional Training Additional Training
SACRS Semi-Annual Conferences CALAPRS/Stanford
“Principles of Pension Management”
Wharton School/ University of Pennsylvania
“Investment Strategies & Portfolio Management”
SACRS/UC Berkeley “Public Pension Investment Management Program
CALAPRS Annual General Assembly
SACRS Semi-Annual Conferences CALAPRS/Stanford
“Principles of Pension Management”
Wharton School/ University of Pennsylvania
“Investment Strategies & Portfolio Management”
SACRS/UC Berkeley “Public Pension Investment Management Program
CALAPRS Annual General Assembly
MykonosMykonos
Front row seat at Delos Theatre
Front row seat at Delos Theatre
On Behalf of the SACRS Executive
Board
On Behalf of the SACRS Executive
Board Welcome to SACRS Welcome to SACRS
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