Sec. 31-70. - Board of trustees.

(a)

The fund shall be administered as an irrevocable trust for the exclusive benefit of the members and their beneficiaries by a board of nine (9) trustees.

(1)

Four (4) trustees with the following qualifications shall be appointed by city council:

a.

Each appointee shall be a resident of the city and shall remain a resident of the city throughout the appointee's term of office;

b.

No appointee shall be a city employee or member of the fund.

(2)

Five (5) trustees shall be representatives elected by employees, namely, (i) one member elected by and representing the firefighters and police officers, (ii) one member elected by and representing the waterworks employees, (iii) one member elected by and representing the employees of the department of public works, (iv) one member elected by and representing the employees of the school board, and (v) one member elected at large by and representing all other unrepresented employees.

(b)

In the occupational group herein listed as firefighters and police officers, the trustee shall be elected alternately from each department. The police officers and firefighters shall have the right to vote in all elections for the trustee of this occupational group.

(c)

Every employee trustee shall be actively employed within the group the employee represents.

(d)

The term of office for appointed trustees shall be two (2) years. The term of office for elected trustees shall be five (5) years. Terms of office for all trustees shall be based upon the calendar year so that each trustee's term of office shall begin on January 1st, subsequent to appointment or election, and end on December 31st, two (2) or five (5) years later, as appropriate.

(e)

In case of a vacancy occurring in an appointed trustee position, the city council shall appoint a successor for the unexpired term of the office so vacated; in case of a vacancy occurring in an elected trustee position more than six (6) months prior to the end of the normal term of such trustee, such vacancy shall be filled for the unexpired term by way of a special election to be held among the occupational group of employees represented by such trustee. Such special election shall be called by the board no later than the next monthly meeting following the notification that a vacancy does or will exist.

(f)

The board shall prescribe rules and regulations for the conduct of the annual election of trustees.

(g)

In the case of any trustee being absent from three (3) meetings in one (1) calendar year, such trustee may be removed from the board by city council and replaced in the manner prescribed by this article for filling vacancies.

(h)

The appointed trustees of the board shall be entitled to one hundred dollars ($100.00) per month as compensation for services rendered. All other trustees shall serve without compensation. All trustees shall be reimbursed for any expense incurred in connection with service as trustees of the board.

(Ord. No. 2709-80; Ord. No. 2960-82; Ord. No. 3207-84; Ord. No. 3268-84; Ord. No. 6434-07, § 1)

Sec. 31-71. - Board to administer fund; powers and duties.

(a)

The fund shall be administered by the board of trustees, whose powers and duties include but are not limited to:

(1)

Maintaining records of all of its proceedings and making such records available for inspection by the public in accordance with law.

(2)

Incurring expenditures as it deems necessary for the efficient administration of the fund. The board, subject to applicable rules and regulations, may provide funds for, or contract for, actuarial, medical, professional and other support personnel as may be required for the proper operation of the fund.

(3)

Causing an actuarial investigation to be made of all the experience under the fund at least once in each four-year period. The board shall also cause actuarial gain/loss analyses to be made in conjunction with each actuarial valuation of the fund. Pursuant to such investigations and analyses, the board shall periodically revise the actuarial assumptions used in the computation of participating employer contribution rates.

(4)

Causing an actuarial valuation to be made of the assets and liabilities of the fund with respect to each participating employer. Pursuant to the results of such valuations, the board shall prepare a statement as to the participating employer contribution rates applicable to each participating employer.

(5)

Publishing the results of each actuarial valuation of the assets and liabilities.

(6)

Publishing annual financial statements of the fund or annual reports in accordance with law.

(7)

Promulgating regulations and procedures and making determinations necessary to carry out the provisions of this article.

(8)

Purchasing insurance to insure against losses suffered by the fund if any member of the board or of any advisory committee breaches any standard of care required by law.

(9)

Adopting rules and policies that bring the fund into and kept in compliance with applicable laws or regulations.

(b)

Neither the board nor the various committee members shall incur any liability for any losses suffered by the fund if properly administered under the provisions of this article.

(c)

The board shall elect a chairman and a vice chairman from within its membership at its annual January meeting who will serve in that capacity until December 31st of that calendar year.

(Ord. No. 6434-07, § 1)

Sec. 31-72. - Supplemental plan provisions.

(a)

The provisions of this article may be supplemented periodically by one (1) or more written documents which shall be referred to as supplemental plan provisions, which shall constitute a part of the regulations for the operation of the fund. The board is authorized to adopt such supplemental plan provisions as are required to maintain the fund as a qualified governmental plan under applicable federal and state laws and the regulations promulgated thereunder, as the same may be amended periodically. A current copy of all supplemental plan provisions adopted by the board shall be maintained by the board and be available to all members upon request.

(b)

The board is a public body pursuant to the Virginia Freedom of Information Act and is subject to the provisions thereof.

(Ord. No. 51, § 29; Code 1961, § 32-35; Ord. No. 2709-80; Ord. No. 5092-98; Ord. No. 6434-07, § 1)

Sec. 31-73. - Changes or errors in records resulting in erroneous calculations or payments.

(a)

If any change or error in calculations or records results in any recipient receiving payments either more or less than they would have been entitled to receive from the fund had the calculations or records been correct, the board shall correct the error and adjust subsequent payments.

(b)

If the board determines that a recipient has been erroneously underpaid by the fund, the fund shall pay the recipient an amount equal to the difference between what was paid and what should have been paid.

(c)

If the board determines that a recipient has been erroneously overpaid, such recipient shall repay the erroneous overpayment to the fund.

(Ord. No. 6434-07, § 1)

Sec. 31-74. - Division of pensions in the department of finance.

(a)

For the purposes of administering the fund in accordance with the terms of this article and to execute the orders and directions of the board and the committee on investments, there is hereby created, in the city's department of finance, a division of pensions.

(b)

The director of finance shall be the administrative head of this division, which shall be subject to all the laws, rules and regulations governing all departments, divisions and bureaus of the city government.

(Ord. No. 51, § 25; Code 1961, § 32-31; Ord. No. 2297; Ord. No. 2709-80; Ord. No. 6434-07, § 1)

Sec. 31-75. - Duties of the director of finance as secretary of board.

The city's director of finance shall be ex officio secretary of the board and shall be in charge of the books, records, accounts, files and all papers and documents belonging to the board, other than those in the possession or under the control of the city treasurer; shall record all payments made to the fund and deposit funds with the city treasurer; shall, together with the city treasurer, sign checks for payment of sums due from the fund in accordance with authorization of the board; and shall perform such other duties as may be assigned to such director by the board. A corporate surety bond acceptable to the board shall be furnished by the secretary of the board in such amount as the board may determine.

(Ord. No. 51, § 25; Code 1961, § 32-31; Ord. No. 2297; Ord. No. 2709-80; Ord. No. 6434-07, § 1)

Sec. 31-76. - Advisors to the board.

(a)

The city attorney shall be legal advisor to the board.

(b)

The director of the city's department of internal audit shall be an advisor to the board.

(c)

One (1) retired member of the fund may be appointed by the city council for a two-year term to be an advisor to the board. There shall be no limitation on terms of service as a retired member advisor.

(Ord. No. 51, § 25; Code 1961, § 32-31; Ord. No. 2297; Ord. No. 2709-80; Ord. No. 3266-84; Ord. No. 4489-93; Ord. No. 6434-07, § 1)

Sec. 31-77. - Custodian of fund.

(a)

The city treasurer shall be ex officio treasurer of the fund and shall be the official custodian of all cash and securities belonging to the fund, which shall be maintained in a special irrevocable trust fund for the account of the City of Newport News Employees' Retirement Fund. The treasurer shall receive all money and securities for the account of the fund and shall, together with the director of finance, sign checks for payments by the fund in accordance with authorization of the board. A corporate surety bond acceptable to the board shall be furnished by the treasurer, in such amount as the board shall determine.

(b)

Notwithstanding the provisions of subsection (a) above, in the alternative the board may, at its option, select a professional custodian and trustee for any part or all of its funds and securities and have such securities registered in the custodian's nominee name.

(Ord. No. 2709-80; Ord. No. 6434-07, § 1)

Sec. 31-78. - Deposit of funds.

Assets of the fund shall be deposited in an account or accounts established pursuant to section 31-77 for the account of the City of Newport News Employees' Retirement Fund and shall be subject to the laws and regulations applicable to trusts maintained in conjunction with plans satisfying the requirements of IRC section 401(a) and exempt from tax under IRC section 501(a). Once deposited into the fund's account, such assets may not be used for or diverted to purposes other than for the exclusive benefit of members or their beneficiaries and other purposes allowed by law at least until all liabilities arising hereunder have been satisfied, at which time such funds shall revert to the city.

(Ord. No. 51, § 22; Code 1961, § 32-28; Ord. No. 2297; Ord. No. 2709-80; Ord. No. 6434-07, § 1)

Sec. 31-79. - Investment of reserves.

(a)

The board shall have full power, in its sole discretion, to invest and reinvest all funds and property of the fund pursuant to the provisions of this article.

(b)

The board is hereby delegated the power and authority to enter into an agreement with one (1) or more persons or qualified institutions under which the investment responsibilities of the board shall be delegated to such person or institution. Such agreement shall be executed by the chairman of the board.

(c)

The reserve of the fund shall be invested only in:

(1)

Interest-bearing bonds or other obligations of the United States or the state;

(2)

General obligation bonds and revenue bonds of the state or of any political subdivision within the state;

(3)

Corporate bonds rated "A" or higher by two (2) out of three (3) nationally known security rating concerns, provided, however, that no more than one (1) percent of the fund may be invested in corporate bonds rated less than "A" but not less than "BBB";

(4)

Federally insured mortgages and mortgage pass throughs on a to-be-announced (TBA) basis as long as funds are set aside to purchase the mortgage on settlement date so as not to leverage the fund;

(5)

Equities;

(6)

Certificates of deposit;

(7)

Guaranteed investment contracts;

(8)

Real estate; and

(9)

Standing timber and timber rights.

The investments in equities, excluding equities in real estate investment trusts, shall not exceed sixty-five (65) percent of the market value of the assets of the fund as reported on a calendar quarterly basis. To the extent such percentage limitation is exceeded as of the end of any quarter, the board shall take such action as may be necessary to reduce the equity allocation to the required percentage as soon as practicable.

(Ord. No. 51, § 23; Ord. No. 1151, § 1; Code 1961, § 32-29; Ord. No. 2297; Ord. No. 2709-80; Ord. No. 3325-85; Ord. No. 3821-89; Ord. No. 4408-92; Ord. No. 5004-97; Ord. No. 5077-97; Ord. No. 6093-05; Ord. No. 6434-07, § 1)

Sec. 31-80. - Committee on investments; consultants for investments.

(a)

The board shall nominate, for the approval of the city council, a committee on investments, consisting of seven (7) members, one (1) of whom shall be the city manager or an employee of the city designated by the city manager, and two (2) of whom shall be members of the board. The remaining four (4) members need not necessarily be members of the board but shall preferably be persons with financial, real estate, or investment backgrounds. The function of this committee shall be to make recommendations to the board for the investments of the reserve or the sale of the securities of the fund. The board shall not make any investment nor sell any securities of the fund unless recommended in writing by the committee on investments.

(b)

The city manager or designee member of the committee and the two (2) committee members from the board shall be appointed annually. For the calendar year beginning January 1, 2011, two (2) of the four (4) remaining committee members shall be appointed for a one-year term, and two (2) committee members shall be appointed for a two-year term. Thereafter, the appointments of these four (4) committee members shall be for two-year terms.

(c)

Members of the committee on investments who are not city employees, officers or officials shall receive compensation in the amount of one hundred dollars ($100.00) for each month in which the committee has met; city employees, officers or officials shall serve without compensation. All members of the committee shall be reimbursed for any expenses incurred while serving as members of the committee.

(d)

Notwithstanding the foregoing, in the alternative, the board may, at its option, select one (1) or more consultants for portfolio management for the purposes of making investments of the reserve and/or sales of the securities of the fund.

(Ord. No. 51, § 24; Ord. No. 2148, § 1; Code 1961, § 32-30; Ord. No. 2709-80; Ord. No. 3267-84; Ord. No. 3523-86; Ord. No. 4836-95; Ord. No. 6434-07, § 1; Ord. No. 6546-08; Ord. No. 6717-10)

Sec. 31-81. - Payment of costs and administration.

All costs and expenses incurred in the administration of the fund shall be paid by the fund from the assets of the fund, and no part of such expenses shall be charged to or paid by the city.

(Ord. No. 2709-80; Ord. No. 6434-07, § 1)

Sec. 31-82. - Records and accounts; annual audit.

Proper and adequate records and accounts shall be established and maintained which will give full effect to the requirements of this article. An annual audit of the books, accounts and records of the fund shall be made by the director of the city's department of internal audit or a certified public accountant.

(Ord. No. 51, § 27; Code 1961, § 32-33; Ord. No. 2709-80; Ord. No. 6434-07, § 1)

Sec. 31-83. - Annual report.

As of the close of each fiscal year, the board shall cause an annual report to be prepared for inclusion in the city's comprehensive annual financial report for submission to the city council, showing the assets and liabilities of the fund at the end of such year and the income and expenditures for the year and other data pertinent to the operation of the fund.

(Ord. No. 51, § 28; Ord. No. 991, § 1; Code 1961, § 32-34; Ord. No. 2709-80; Ord. No. 4408-92; Ord. No. 6434-07, § 1)

Sec. 31-84. - Right to amend or terminate.

Subject to section 31-21(b), the city council retains the right to amend or terminate the benefits provided under this article at any time for any reason in any manner not prohibited by law.

(Ord. No. 6434-07, § 1)

Secs. 31-85—31-89. - Reserved.