ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM MEMORANDUM

Transcription

1 ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM MEMORANDUM DATE: November 6, 2014 TO: Members, Board of Retirement FROM: Steve Delaney, Chief Executive Officer SUBJECT: Oath of Office Recommendation: Approve an oath of office procedure for the OCERS Board of Retirement Background: During the September 2014 OCERS Board s Strategic Planning workshop, I recommended the Board look into initiating an Oath of Office process, in conjunction with our planned review of the OCERS mission statement. An Oath of Office would be intended to serve as a Board Member s acknowledgement and commitment to carry out his/her duties and responsibilities as a Trustee. Discussion: Trustee s duties and responsibilities as OCERS Board Members are grounded in the provisions of the County Employees Retirement Law of 1937 ( 1937 Act ) and Article XVI, Section 17 of the California Constitution which states: Notwithstanding any other provisions of law or this Constitution to the contrary, the retirement board of a public pension or retirement system shall have plenary authority and fiduciary responsibility for investment of moneys and administration of the system, subject to all of the following: (a) The retirement board of a public pension or retirement system shall have the sole and exclusive fiduciary responsibility over the assets of the public pension or retirement system. The retirement board shall also have sole and exclusive responsibility to administer the system in a manner that will assure prompt delivery of benefits and related services to the participants and their beneficiaries. The assets of a public pension or retirement system are trust funds and shall be held for the exclusive purposes of providing benefits to participants in the pension or retirement system and their beneficiaries and defraying reasonable expenses of administering the system. (b) The members of the retirement board of a public pension or retirement system shall I-7 OATH OF OFFICE Page 1 of 3 Regular Board Meeting, November 17, 2014

2 discharge their duties with respect to the system solely in the interest of, and for the exclusive purposes of providing benefits to, participants and their beneficiaries, minimizing employer contributions thereto, and defraying reasonable expenses of administering the system. A retirement board's duty to its participants and their beneficiaries shall take precedence over any other duty. (c) The members of the retirement board of a public pension or retirement system shall discharge their duties with respect to the system 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. (d) The members of the retirement board of a public pension or retirement system shall diversify the investments of the system so as to minimize the risk of loss and to maximize the rate of return, unless under the circumstances it is clearly not prudent to do so. (e) The retirement board of a public pension or retirement system, consistent with the exclusive fiduciary responsibilities vested in it, shall have the sole and exclusive power to provide for actuarial services in order to assure the competency of the assets of the public pension or retirement system. (f) With regard to the retirement board of a public pension or retirement system which includes in its composition elected employee members, the number, terms, and method of selection or removal of members of the retirement board which were required by law or otherwise in effect on July 1, 1991; shall not be changed, amended, or modified by the Legislature unless the change, amendment, or modification enacted by the Legislature is ratified by a majority vote of the electors of the jurisdiction in which the participants of the system are or were, prior to retirement, employed. (g) The Legislature may by statute continue to prohibit certain investments by a retirement board where it is in the public interest to do so, and provided that the prohibition satisfies the standards of fiduciary care and loyalty required of a retirement board pursuant to this section. (h) As used in this section, the term "retirement board" shall mean the board of administration, board of trustees, board of directors, or other governing body or board of a public employees' pension or retirement system; provided, however, that the term "retirement board" shall not be interpreted to mean or include a governing body or board created after July 1, 1991 which does not administer pension or retirement benefits, or the elected legislative body of a jurisdiction which employs participants in a public employees' pension or retirement system. OCERS Board Members are also subject to numerous other legal requirements intended to ensure ethical conduct, compliance with fiduciary responsibilities, and to prevent conflicts of interest. Finally, in discharging their duties and responsibilities, Trustees are governed by various policies, practices and procedures utilized by OCERS. I-7 OATH OF OFFICE Page 2 of 3 Regular Board Meeting, November 17, 2014

3 None of the aforementioned laws, regulations or policies require that a Board Member take an Oath of Office or formally attest that he/she accepts the responsibilities incumbent on a Trustee. That being said, in light of the important decisions made by Trustees in the performance of their duties, and that public trust in the integrity of OCERS is paramount, it is appropriate that a Trustee formally declare his/her commitment to act in accordance with the highest fiduciary standards and in compliance with the laws, regulations and policies applicable to the retirement system. A survey of other public pension systems within California shows a mixture of those who incorporate an Oath of Office in their procedures, and others who have not. A matrix of the system responses received is attached. Of those systems that do have an Oath of Office procedure, a few shared the actual Oath language, which is also attached, following the response matrix. What might an OCERS Oath of Office look like? Mr. David Lantzer opines that Article XVI, Section 17 lays out what the retirement system and its Board should be all about. It enumerates the fiduciary duties of the Board and sets Board priorities better than any other statute or provision in California law. This section could easily be the basis for an oath taken by OCERS Board members. Of the sample oaths attached, by far the most detailed is that used by the Sacramento County system, which includes not just an Oath, but an affirmation of duties as well. That of San Mateo County is a shorter, more direct statement and could serve as the initial Oath of Office template for OCERS, with the opportunity to modify or expand always being an option at a later date. If the Board concurs, your staff recommends an Oath of Office procedure be implemented with execution when a Board Member takes office. Submitted by: Steve Delaney Chief Executive Officer I-7 OATH OF OFFICE Page 3 of 3 Regular Board Meeting, November 17, 2014

4 CERA Oath? Y/N Comments Copy of Oath? Y/N Contra Costa Yes Contra Costa swears in Board members anytime a new term begins, this includes new and returning Board members. The process includes the designated Deputy Clerk and the Board member. The Oath of Allegiance form (attached) is read out loud by the Board member to the Deputy Clerk and then is signed and notarized. Once completed the Oath of Allegiance is submitted to the County Clerk-Recorder s office where it is maintained on file as a public record, in our office by our Administration Manager. She is considered the Deputy Clerk to the Board. Yes (A) Fresno No FCERA does not conduct a swearing-in ceremony at this time. I administer the oath in my office at the time the Trustee completes their New Trustee paperwork. This usually occurs a few days before their first meeting. No

5 Los Angeles City Yes Our City Clerk swears our Board Members in. The appointed members get sworn in at the City Clerk s Office right after their City Council confirmation. Elected Board Members get sworn in at a Board meeting. They take the same oath that all City commissioners take - which says nothing about fiduciary duty. Mendocino No Mendocino hasn't done a swearing-in for our elected members, although we are planning to do a public swearing in this time around. The appointed members have been included in a swearing in ceremony that has been conducted by the Board of Supervisors for all of their appointees. We'll likely include our appointed members in our ceremony as well. As to a description of what occurs --- we don't have one but would be interested in learning what the others are doing. We'll likely have a County official preside. No No

6 Sacramento Yes We implemented a Trustee Oath of Office and Affirmation of Duties last year. It is executed when the Board Member takes office and then re-executed annually thereafter. Yes (B) San Bernardino Yes Attached is the oath used by San Bernardino. It swears in during the public meeting in January when new trustees' are seated. Generally, an elected official [Treasurer, or Board of Supervisor member does the duty although no reason the CEO cannot]. No ceremony. We swear in at first public meeting they sit. San Diego No Historically we have not had a swearing in ceremony. However, our newest board member requested we do so and we did swear her in at the beginning of her first Board meeting. Yes (C) No

7 San Francisco Yes San Francisco swears in during the public meeting in January when new trustees' are seated. Generally, an elected official [Treasurer, of BOS member does the duty although no reason the CEO cannot]. San Francisco's oath contained all of this (San Bernardino s oath) and a little bit more flourish, which that City is want to do in many respects. No San Joaquin Yes At the start of new terms, whether appointed or elected, San Joaquin's trustees take the Oath of Office before the official meeting begins. Many/most trustees are present. I am a Deputy Clerk so I administer the oaths. Raise right hand and either repeat after me (usually works out fine) or they read it and we both sign it. We don't frame it. Original signed oath goes to Clerk of the Board, copies at SJCERA and to the trustee. No

8 San Mateo Yes At the start of their new terms, San Mateo always makes the first item on the board agenda the swearing in of elected and appointed members. I hesitate to call it a "ceremony," but it does include raising of the right hand and administration of the Trustee Oath by an official authorized to swear in public officials. For us, this is often a sheriff's deputy, since we have a deputy providing security at our meetings. The first time a trustee is sworn in we put the signed oath in a nice frame for the trustee. Our oath is attached. Word to the Wise: It works best for us to have the person who conducts the swearing in just read the whole oath out loud and have the trustee say, "I so swear," or just sign the document. Having the trustee "repeat after me," phrase by phrase, like when the U.S. President is sworn in, is always a near disaster for us. Santa Barbara Yes Santa Barbara swears in during the public meeting in January when new trustees' are seated. Generally, an elected official [Treasurer, or Board of Supervisors member does the duty although no reason the CEO cannot]. No ceremony. We swear in at first public meeting they sit. Yes (D) No

9 Sonoma Yes Yes, we do conduct a swearing in. We have the Clerk from the Registrar of Voters attend one of our Board meetings and she swears them in at the beginning of the meeting. She has an oath of office they repeat and then they sign something for her. Sometimes, the Board members go down to the Registrar to get sworn in and then we conduct a ceremonial swearing in at the next following Board meeting, depending on the timing of events. No Tulare Yes We do not have a formal swearing in of our Trustees at the beginning of their terms. We do have an oath of office that we have them sign (see attached) which is given to them by a member of our staff. Yes (E)

10

11

12

13

14

15

16