H. B. 2292
(By Delegates Jenkins, Hubbard, Campbell,
Smith, Williams, Hall and Harrison)
[Introduced January 19, 1999; referred to
the Committee on Pensions and Retirement.]
A BILL to amend and reenact sections three and nine-a, article six,
chapter twelve of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to the West Virginia
investment management board and adding references to the
deputy sheriff retirement system.
Be it enacted by the Legislature of West Virginia:
That sections three and nine-a, article six, chapter twelve of
the code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted, all to read as follows:
ARTICLE 6. WEST VIRGINIA INVESTMENT MANAGEMENT BOARD.
§12-6-3. West Virginia investment management board created; body
corporate; board created; trustees; nomination and appointment of trustees, qualifications and terms of appointment, advice and consent; annual and other meetings; designation of representatives and committees; board meetings with committees regarding
investment policy statement required; open meetings,
qualifications.
(a) There is hereby created the West Virginia investment
management board. The board is created as a public body corporate
and established to provide prudent fiscal administration,
investment and management for the pension funds, workers'
compensation and coal-workers' pneumoconiosis funds and other state
funds.
(b) The board shall be governed by a board of trustees,
consisting of thirteen members:
(1) Nominations made to the West Virginia trust fund board and
the West Virginia board of investments shall remain in effect and
are hereby specifically reauthorized and those members shall be
members of the investment management board and shall serve out the
remainder of their respective terms subject to the advice and
consent of the Senate: Provided, That prior appointments which
have been confirmed by the Senate are hereby specifically
reauthorized without further action of the Senate.
(2) Any appointment is effective immediately upon appointment
by the governor with respect to voting, constituting a quorum,
receiving compensation and expenses, and all other rights and
privileges of the trustee position. All appointees must have
experience in pension management, institutional management or financial markets, and one trustee must be an attorney experienced
in finance and investment matters, and one trustee must be a
certified public accountant.
(3) The governor, the state auditor and the state treasurer or
their designees shall serve as members of the board. They shall
serve by virtue of their office and are not entitled to
compensation under the provisions of this article. The governor,
the auditor and the treasurer or their designees shall be subject
to all duties, responsibilities and requirements of the provisions
of this article, including, but not limited to, the provisions of
subsections (e) and (f), section four of this article.
(c)At the end of each trustee's term, the governor may
reappoint or appoint a successor who shall serve for six-year
terms. No more than six of the ten appointed trustees may belong
to the same political party.
(d) In the event of a vacancy among the trustees, an
appointment shall be made by the governor to fill the unexpired
term.
(e) The governor may remove any trustee, other than trustees
who serve by virtue of their elective office, in case of gross
negligence or misfeasance and may declare that position vacant and
may appoint a person for the vacancy as provided in subsection (d)
of this section.
(f) Each trustee, other than those enumerated in subsection (b), subdivision (3) of this section, shall be entitled to receive,
and, at the trustee's option, the board shall pay to the trustee,
compensation in the amount of five thousand dollars per year and
additional compensation in the amount of five hundred dollars per
meeting attended by the trustee in excess of the four quarterly
meetings required by this section. In addition, all trustees shall
receive reasonable and necessary expenses actually incurred in
discharging trustee duties pursuant to this article.
(g) The board shall meet quarterly and may include in its
bylaws procedures for the calling and holding of additional
meetings. For any quarterly or additional meeting in which the
board shall review or modify its securities list or its investment
objectives pursuant to subsection (f), section twelve of this
article, the board shall give ten days notice in writing to the
designated representative of each participant plan selected
pursuant to subdivision (1), subsection (i) of this section, and
the meeting shall be open to the members and beneficiaries of the
participant plans for that portion of the meeting in which the
board undertakes the review or modification.
(h) The board shall hold an annual meeting within forty-five
days after the issuance of the year-end financial report. The
annual meeting may also serve as a quarterly meeting. The annual
meeting shall be open to the public, and the board shall receive
oral and written comments from representatives, members and beneficiaries of the participant plans and from other citizens of
the state. At the annual meeting, the board shall adopt a fee
schedule and a budget reflecting fee structures for the year.
(i) Pursuant to subsection (j) of this section, the board
shall meet with committees representing the participant plans to
discuss the board's drafting, reviewing or modifying the written
investment policy of the trust with respect to that committee's
participant plan pursuant to section twelve of this article.
Representatives and committees shall be designated as follows:
(1) The West Virginia consolidated public retirement board
shall promulgate procedural rules by which each pension system
named in paragraphs (1) through (5) (6), inclusive, subsection (c),
section nine-a of this article, shall designate an individual
representative of each said pension system, and the West Virginia
workers' compensation commission shall promulgate procedural rules
by which the pneumoconiosis fund and the workers' compensation fund
shall designate an individual representative of each said fund.
(2) On or before the first day of June of each year, the
consolidated public retirement board shall submit in writing to the
board the names of the five six designated representatives, and the
workers' compensation commission shall so submit the names of the
two representatives.
(3) Each designated representative shall provide to the board
his or her current address, updated each year on or before the first day of July, to which address the board shall provide notice
of meetings of the board pursuant to subsection (g) of this
section.
(4) Each designated representative shall submit in writing to
the board on or before the first day of July of each year, the
names of no more than three persons comprising a committee
representing the beneficiaries of that representative's participant
plan.
(j) At its annual meeting, the board shall meet with each of
the seven committees, formed pursuant to subdivision (1),
subsection (i) of this section, for the purpose of receiving input
from the committees regarding the board's drafting, reviewing or
modifying its written investment policy statement for investment of
the consolidated pension plan funds. In developing the investment
policy statement, the trustees shall receive each committee's
stated objectives and policies regarding the risk tolerances and
return expectations of each participant plan, with attention to the
factors enumerated in subsection (g), section twelve of this
article, in order to provide for the continuing financial security
of the trust and its participant plans. The board may meet with
the committees or any of them at its quarterly and additional
meetings for the same purpose.
(k) All meetings of the board shall be open to the
representatives of the participant plans as appointed pursuant to subdivision (1), subsection (i) of this section. The
representatives shall be subject to any rules, bylaws, guidelines,
requirements and standards promulgated by the board. The
representatives shall observe standards of decorum established by
the board. The representatives shall be subject to the same code
of conduct applicable to the trustees and shall be subject to all
board rules and bylaws. The representatives shall also be subject
to any requirements of confidentiality applicable to the trustees.
Each representative shall be liable for any act which he or she
undertakes which violates any rule, bylaw or statute governing
ethical standards, confidentiality or other standard of conduct
imposed upon the trustees or the representatives. Any meeting of
the board may be closed, upon adoption of a motion by any trustee,
when necessary to preserve the attorney-client privilege, to
protect the privacy interests of individuals, to review personnel
matters or to maintain confidentiality when confidentiality is in
the best interest of the beneficiaries of the trust.
§12-6-9a. Trust indenture.
On the effective date of this section, all assets of the
irrevocable trust entered into by the governor on the first day of
July, one thousand nine hundred ninety-six, with the West Virginia
trust fund, inc., acting as the trustee shall constitute the corpus
of an irrevocable trust with the board as its trustee: Provided,
That the trust shall continue to be subject to the following provisions:
(a) The Legislature hereby reserves the following rights and
powers:
(1) The right by supplemental agreement to amend, modify or
alter the terms of this trust without consent of the trustee, or
any beneficiary; and
(2) The right to request and receive additional information
from the trustee at any time.
(b) The trustee shall establish a trust for the participant
plans specified by this article with the earnings and losses
accounted for and charged individually to each participant plan,
including, but not limited to, the following:
(1) The public employees retirement system;
(2) The teachers retirement system;
(3) The West Virginia state police retirement system;
(4) The death, disability and retirement fund of the
department of public safety;
(5) The judges' retirement system;
(6) The deputy sheriff retirement system;
(6) (7) The pneumoconiosis fund; and
(7) (8) The workers' compensation fund.
(c) In the administration of the trust created by the trust
indenture, the trustee has the following powers:
(1) To purchase, retain, hold, transfer and exchange, and to sell, at public or private sale, the whole or any part of the trust
estate upon such terms and conditions as it considers advisable;
(2) To invest and reinvest the trust estate or any part
thereof, in any kind of property, real or personal, including, but
not limited to, mortgage or mortgage participations, common stocks,
preferred stocks, common trust funds, bonds, notes or other
securities, notwithstanding the provisions of articles five and
six, chapter forty-four of this code: Provided, That
notwithstanding the provisions of this article to the contrary,
the board shall not become a stockholder or owner of any company or
association for any purpose whatsoever unless and until the
provisions of section six, article X of the constitution of West
Virginia are amended to permit those investments;
(3) To carry the securities and other property held under the
trust indenture either in the name of the trustee or in the name of
its nominee;
(4) To vote, in person or by proxy, all securities held under
the trust indenture, to join in or to dissent from and oppose the
reorganization, recapitalization, consolidation, merger,
liquidation or sale of corporations or property; to exchange
securities for other securities issued in connection with or
resulting from any transaction; to pay any assessment or expense
which the trustee considers advisable for the protection of its
interest as holder of any such securities; to deposit securities in any voting trust or with any protective or like committee, or with
a trustee depository; to exercise any option appurtenant to any
securities for the conversion of any securities into other
securities; and to exercise or sell any rights issued upon or with
respect to the securities of any corporation, all upon terms the
trustee considers advisable;
(5) To prosecute, defend, compromise, arbitrate or otherwise
adjust or settle claims in favor of or against the trustee or other
trust estate;
(6) To employ and pay from the trust estate legal and
investment counsel, brokers and such other assistants and agents as
the trustee considers advisable; and
(7) To develop, implement and modify an asset allocation plan
for each participant plan. The asset allocation plans shall be
implemented within the management and investment of the trust fund.
(d) All trust income shall be free from anticipation,
alienation, assignment or pledge by, and free from attachment,
execution, appropriation or control by or on behalf of, any and all
creditors of any beneficiary by any proceeding at law, in equity,
in bankruptcy or insolvency.
(e) The trustee may receive any other property, real or
personal, tangible or intangible, of any kind whatsoever, that may
be granted, conveyed, assigned, transferred, devised, bequeathed or
made payable to it by the state, or by any other person or entity, for the purposes of the trust created by the trust indenture, and
all such properties shall be held, managed, invested and
administered by the trustee as provided in the trust indenture and
in the "West Virginia Investment Management Act".
(f) The trustee shall promptly cause to be paid to the state
the amounts certified by the governor as necessary for the monthly
payment of benefits to the beneficiaries of the trust.
(g) The trustee shall render an annual accounting to the
governor not more than one hundred twenty days following the close
of the fiscal year of the trust.
(h) The trust will not be invalid by reason of any existing
law or rule against perpetuities or against accumulations or
against restraints upon the power of alienation, but the trust may
continue for such time as necessary to accomplish the purposes for
which it is established.
(i) If any provision of the trust indenture is void, invalid
or unenforceable, the remaining provisions are nevertheless valid
and shall be carried into effect.
NOTE: The purpose of this bill is to update references in the
West Virginia Investment Management Board to include the Deputy
Sheriff Retirement System.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.