HomeMy WebLinkAboutPhase II Systems dba Public Agency Retirement Services (PARS); 2023-10-24;I
AGREEMENT FOR ADMINISTRATIVE SERVICES
PUBLIC AGENCY RETIREMENT SERVICES (PARS)
Attachment A
THIS AGREEMENT is made and entered into as of the _' :Z...4:rt( day of De:J , 2~ by and between the City of Carlsbad, California, a
municipal corporation, ("City"), and Phase II Systems, a corporation organized and existing under
the laws of the State of California, doing business as Public Agency Retirement Services and
PARS, ("Contractor").
RECITALS
A. City requires the professional services of a Contractor that is experienced in trust
administration.
B. Contractor has the necessary experience in providing professional services and
advice related to trust administration.
C. Contractor has submitted a proposal to City and has affirmed its willingness and
ability to perform such work.
NOW, THEREFORE, in consideration of these recitals and the mutual covenants
contained herein, City and Contractor agree as follows:
1. SCOPE OF WORK
City retains Contractor to perform, and Contractor agrees to render, those services (the
"Services") that are defined in attached Exhibit "A", which is incorporated by this reference in
accordance with this Agreement's terms and conditions.
2. STANDARD OF PERFORMANCE
While performing the Services, Contractor will exercise the reasonable professional care and skill
customarily exercised by reputable members of Contractor's profession practicing in the
Metropolitan Southern California Area, and will use reasonable diligence and best judgment while
exercising its professional skill and expertise.
3. TERM
The term of this Agreement will be effective for a period of three years from the date first above
written. The City Manager may amend the Agreement to extend it for two additional one-year
periods or parts thereof. Extensions will be based upon a satisfactory review of Contractor's
performance, City needs, and appropriation of funds by the City Council. The parties will prepare
a written amendment indicating the effective date and length of the extended Agreement.
4. TIME IS OF THE ESSENCE
Time is of the essence for each and every provision of this Agreement.
5. COMPENSATION
The total fee payable for the Services to be performed during the initial Agreement term will be
based on the amount of assets held in the Trust as set forth in Exhibit "B" ("Compensation"). No
other compensation for the Services will be allowed except for items covered by subsequent
amendments to this Agreement. Payment for the Services will be remitted directly from Plan
assets unless the City chooses to make payment directly to Contractor. In the event that the City
chooses to make payment directly to the Contractor, it shall be the responsibility of the City to
remit payment directly to the Contractor based upon an invoice prepared by Contractor and
delivered to City.
REV. 09/20/2023
6. STATUS OF CONTRACTOR
Contractor will perform the Services in Contractor's own way as an independent contractor and
in pursuit of Contractor's independent calling, and not as an employee of City. Contractor will be
under control of City only as to the result to be accomplished, but will consult with City as
necessary. The persons used by Contractor to provide services under this Agreement will not be
considered employees of City for any purposes.
The payment made to Contractor pursuant to the Agreement will be the full and complete
compensation to which Contractor is entitled. City will not make any federal or state tax
withholdings on behalf of Contractor or its agents, employees or subcontractors. City will not be
required to pay any workers' compensation insurance or unemployment contributions on behalf
of Contractor or its employees or subcontractors. Contractor agrees to indemnify City within thirty
(30) days for any tax, retirement contribution, social security, overtime payment, unemployment
payment or workers' compensation payment which City may be required to make on behalf of
Contractor or any agent, employee, or subcontractor of Contractor for work done under this
Agreement. At the City's election, City may deduct the indemnification amount from any balance
owing to Contractor.
7. SUBCONTRACTING
Contractor will not subcontract any portion of the Services without prior written approval of City.
If Contractor subcontracts any of the Services, Contractor will be fully responsible to City for the
acts and omissions of Contractor's subcontractor and of the persons either directly or indirectly
employed by the subcontractor, as Contractor is for the acts and omissions of persons directly
employed by Contractor. Nothing contained in this Agreement will create any contractual
relationship between any subcontractor of Contractor and City. Contractor will be responsible for
payment of subcontractors. Contractor will bind every subcontractor and every subcontractor of
a subcontractor by the terms of this Agreement applicable to Contractor's work unless specifically
noted to the contrary in the subcontract and approved in writing by City.
8. OTHER CONTRACTORS
The City reserves the right to employ other Contractors in connection with the Services.
9. INDEMNIFICATION
Contractor and City hereby indemnify each other and hold the other harmless, including their
respective officers, directors, and employees, from any claim, loss, demand, liability, or expense,
including reasonable attorneys' fees and costs, incurred by the other as a consequence of, to the
extent, Contractor's or City's, as the case may be, negligent acts, errors or omissions with respect
to the performance of their respective duties hereunder.
10. INSURANCE
Contractor will obtain and maintain for the duration of the Agreement and any and all
amendments, insurance against claims for injuries to persons or damage to property which may
arise out of or in connection with performance of the services by Contractor or Contractor's
agents, representatives, employees or subcontractors. The insurance will be obtained from an
insurance carrier admitted and authorized to do business in the State of California. The insurance
carrier is required to have a current Best's Key Rating of not less than "A-:VII"; OR with a surplus
line insurer on the State of California's List of Approved Surplus Line Insurers (LASLI) with a rating
in the latest Best's Key Rating Guide of at least "A-:X"; OR an alien non-admitted insurer listed by
the National Association of Insurance Commissioners (NAIC) latest quarterly listings report.
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10.1 Coverage and Limits.
Contractor will maintain the types of coverage and minimum limits indicated below, unless the
Risk Manager or City Manager approves a lower amount. These minimum amounts of coverage
will not constitute any limitations or cap on Contractor's indemnification obligations under this
Agreement. City, its officers, agents and employees make no representation that the limits of the
insurance specified to be carried by Contractor pursuant to this Agreement are adequate to
protect Contractor. If Contractor believes that any required insurance coverage is inadequate,
Contractor will obtain such additional insurance coverage, as Contractor deems adequate, at
Contractor's sole expense. The full limits available to the named insured shall also be available
and applicable to the City as an additional insured.
10.1.1 Commercial General Liability (CGL) Insurance. Insurance written on an
"occurrence" basis, including personal & advertising injury, with limits no less than $2,000,000 per
occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply
separately to this project/location or the general aggregate limit shall be twice the required
occurrence limit. Required limit may be satisfied either by a standalone policy or in combination
with an excess/umbrella policy.
10.1.2 Automobile Liability. (if the use of an automobile is involved for Contractor's work
for City). $2,000,000 combined single-limit per accident for bodily injury and property damage.
10.1.3 Workers' Compensation and Employer's Liability. Workers' Compensation limits as
required by the California Labor Code. Workers' Compensation will not be required if Contractor
has no employees and provides, to City's satisfaction, a declaration stating this.
10.1.4 Professional Liability. Errors and omissions liability appropriate to Contractor's
profession with limits of not less than $1,000,000 per claim. Coverage must be maintained for a
period of five years following the date of completion of the work.
10.2 Additional Provisions. Contractor will ensure that the policies of insurance required under
this Agreement contain, or are endorsed to contain, the following provisions:
10.2.1 The City will be named as an additional insured on Commercial General Liability
which shall provide primary coverage to the City.
10.2.2 Contractor will obtain occurrence coverage, excluding Professional Liability, which
will be written as claims-made coverage.
10.2.3 This insurance will be in force during the life of the Agreement and any extensions
of it and will not be canceled without thirty (30) days (10-day notice of cancellation for non-
payment of premium) prior written notice to City sent by certified mail pursuant to the Notice
provisions of this Agreement.
10.3 Providing Certificates of Insurance and Endorsements. Prior to City's execution of this
Agreement, Contractor will furnish certificates of insurance and endorsements to City.
10.4 Failure to Maintain Coverage. If Contractor fails to maintain any of these insurance
coverages, then City will have the option to declare Contractor in breach, or may purchase
replacement insurance or pay the premiums that are due on existing policies in order to maintain
the required coverages. Contractor is responsible for any payments made by City to obtain or
maintain insurance and City may collect these payments from Contractor or deduct the amount
paid from any sums due Contractor under this Agreement.
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10.5 Submission of Insurance Policies. City reserves the right to require, at any time, complete
and certified copies of any or all required insurance policies and endorsements.
11. BUSINESS LICENSE
Contractor will obtain and maintain a City of Carlsbad Business License for the term of the
Agreement, as may be amended from time-to-time.
12. ACCOUNTING RECORDS
Contractor will maintain complete and accurate records with respect to costs incurred under this
Agreement. All records will be clearly identifiable. Contractor will allow a representative of City
during normal business hours to examine, audit, and make transcripts or copies of records and
any other documents created pursuant to this Agreement. Contractor will allow inspection of all
work, data, documents, proceedings, and activities related to the Agreement for a period of three
(3) years from the date of final payment under this Agreement.
13. OWNERSHIP OF DOCUMENTS
All work product produced by Contractor or its agents, employees, and subcontractors pursuant
to this Agreement is the property of City. In the event this Agreement is terminated, all work
product produced by Contractor or its agents, employees and subcontractors pursuant to this
Agreement will be delivered at once to City. Contractor will have the right to make one (1) copy
of the work product for Contractor's records.
14. COPYRIGHTS
Contractor agrees that all copyrights that arise from the services will be vested in City and
Contractor relinquishes all claims to the copyrights in favor of City.
15. NOTICES
The name of the persons who are authorized to give written notice or to receive written notice on
behalf of City and on behalf of Contractor under this Agreement.
For City
Name Laura Rocha
Deputy City Manager,
Title Administrative Services
Department Finance ----------
City of Carlsbad
1635 Faraday Avenue.
Address Carlsbad, CA 92008
Phone No. 442-339-2415
For Contractor
Name Mr. Daniel Johnson
Title President
4350 Von Karman Avenue, Suite
Address 100 --------------
Newport Beach, CA 92660
Phone No. (800) 540-6369
Email djohnson@pars.org
Each party will notify the other immediately of any changes of address that would require any
notice or delivery to be directed to another address.
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16. CONFLICT OF INTEREST
Contractor shall file a Conflict of Interest Statement with the City Clerk in accordance with the
requirements of the City of Carlsbad Conflict of Interest Code. The Contractor shall report
investments or interests as required in the City of Carlsbad Conflict of Interest Code.
YesD No ■
If yes, list the contact information below for all individuals required to file:
Name Email Phone Number
17. GENERAL COMPLIANCE WITH LAWS
Contractor will keep fully informed of federal, state and local laws and ordinances and regulations
which in any manner affect those employed by Contractor, or in any way affect the performance
of the Services by Contractor. Contractor will at all times observe and comply with these laws,
ordinances, and regulations and will be responsible for the compliance of Contractor's services
with all applicable laws, ordinances and regulations.
Contractor will be aware of the requirements of the Immigration Reform and Control Act of 1986
and will comply with those requirements, including, but not limited to, verifying the eligibility for
employment of all agents, employees, subcontractors and consultants whose services are
required by this Agreement.
18. DISCRIMINATION AND HARASSMENT PROHIBITED
Contractor will comply with all applicable local, state and federal laws and regulations prohibiting
discrimination and harassment.
19. DISPUTE RESOLUTION
If a dispute should arise regarding the performance of the Services the following procedure will
be used to resolve any questions of fact or interpretation not otherwise settled by agreement
between the parties. Representatives of Contractor or City will reduce such questions, and their
respective views, to writing. A copy of such documented dispute will be forwarded to both parties
involved along with recommended methods • of resolution, which would be of benefit to both
parties. The representative receiving the letter will reply to the letter along with a recommended
method of resolution within ten (10) business days. If the resolution thus obtained is unsatisfactory
to the aggrieved party, a letter outlining the disputes will be forwarded to the City Manager. The
City Manager will consider the facts and solutions recommended by each party and may then opt
to direct a solution to the problem. In such cases, the action of the City Manager will be binding
upon the parties involved, although nothing in this procedure will prohibit the parties from seeking
remedies available to them at law.
20. TERMINATION
In the event of the Contractor's failure to prosecute, deliver, or perform the Services, City may
terminate this Agreement for nonperformance by notifying Contractor by certified mail of the
termination. If City decides to abandon or indefinitely postpone the work or services contemplated
by this Agreement, City may terminate this Agreement upon written notice to Contractor. Upon
notification of termination, Contractor has five (5) business days to deliver any documents owned
by City and all work in progress to City address contained in this Agreement. City will make a
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determination of fact based upon the work product delivered to City and of the percentage of work
that Contractor has performed which is usable and of worth to City in having the Agreement
completed. Based upon that finding City will determine the final payment of the Agreement.
City may terminate this Agreement by tendering thirty (30) days written notice to Contractor.
Contractor may terminate this Agreement by tendering thirty (30) days written notice to City. In
the event of termination of this Agreement by either party and upon request of City, Contractor
will assemble the work product and put it in order for proper filing and closing and deliver it to City .
Contractor will be paid for work performed to the termination date; however, the total will not
exceed the lump sum fee payable under this Agreement. City will make the final determination as
to the portions of tasks completed and the compensation to be made.
21. COVENANTS AGAINST CONTINGENT FEES
Contractor warrants that Contractor has not employed or retained any company or person, other
than a bona fide employee working for Contractor, to solicit or secure this Agreement, and that
Contractor has not paid or agreed to pay any company or person, other than a bona fide
employee, any fee, commission, percentage, brokerage fee, gift, or any other consideration
contingent upon, or resulting from, the award or making of this Agreement. For breach or violation
of this warranty, City will have the right to annul this Agreement without liability, or, in its discretion,
to deduct from the Agreement price or consideration, or otherwise recover, the full amount of the
fee, commission, percentage, brokerage fees, gift, or contingent fee.
22. CLAIMS AND LAWSUITS
By signing this Agreement, Contractor agrees that any Agreement claim submitted to City must
be asserted as part of the Agreement process as set forth in this Agreement and not in anticipation
of litigation or in conjunction with litigation. Contractor acknowledges that if a false claim is
submitted to City, it may be considered fraud and Contractor may be subject to criminal
prosecution. Contractor acknowledges that California Government Code sections 12650 et seq.,
the False Claims Act applies to this Agreement and, provides for civil penalties where a person
knowingly submits a false claim to a public entity. These provisions include false claims made
with deliberate ignorance of the false information or in reckless disregard of the truth or falsity of
information. If City seeks to recover penalties pursuant to the False Claims Act, it is entitled to
recover its litigation costs , including attorney's fees. Contractor acknowledges that the filing of a
false claim may subject Contractor to an administrative debarment proceeding as the result of
which Contractor may be prevented to act as a Contractor on any public work or improvement for
a period of up to five (5) years. Contractor acknowledges debarment by another jurisdiction is
grounds for City to terminate this Agreement.
23. JURISDICTION AND VENUE
Any action at law or in equity brought by either of the parties for the purpose of enforcing a right
or rights provided for by this Agreement will be tried in a court of competent jurisdiction in the
County of San Diego, State of California, and the parties waive all provisions of law providing for
a change of venue in these proceedings to any other county.
24. SUCCESSORS AND ASSIGNS
It is mutually understood and agreed that this Agreement will be binding upon City and Contractor
and their respective successors. Neither this Agreement nor any part of it nor any monies due or
to become due under it may be assigned by Contractor without the prior consent of City, which
shall not be unreasonably withheld.
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25. ENTIRE AGREEMENT
This Agreement, together with any other written document referred to or contemplated by it, along
with the purchase order for this Agreement and its provisions, embody the entire Agreement and
understanding between the parties relating to the subject matter of it. In case of conflict, the terms
of the Agreement supersede the purchase order. Neither this Agreement nor any of its provisions
may be amended, modified, waived or discharged except in a writing signed by both parties .
26. AUTHORITY
The individuals executing this Agreement and the instruments referenced in it on behalf of
Contractor each represent and warrant that they have the legal power, right and actual authority
to bind Contractor to the terms and conditions of this Agreement.
27. INFORMATION FURNISHED TO CONTRACTOR
Contractor will provide the Services contingent upon the City providing Contractor the information
specified in the exhibit attached hereto as Exhibit "C" ("Data Requirements"). It shall be the
responsibility of the City to certify the accuracy, content, and completeness of the Data so that
Contractor may rely on such information without further audit. It shall further be the responsibility
of the City to deliver the Data to Contractor in such a manner that allows for a reasonable amount
of time for the Services to be performed. Unless specified in Exhibit "A", Contractor shall be under
no duty to question Data received from the City, to compute contributions made to the Plan, to
determine or inquire whether contributions are adequate to meet and discharge liabilities under
the Plan, or to determine or inquire whether contributions made to the Plan are in compliance with
the Plan or applicable law. In addition, Contractor shall not be liable for nonperformance of
Services to the extent such nonperformance is caused by or results from erroneous and/or late
delivery of Data from the City. In the event that the City fails to provide Data in a complete,
accurate and timely manner and pursuant to the specifications in Exhibit "C", Contractor reserves
the right, notwithstanding the further provisions of this Agreement, to terminate this Agreement
upon no less than ninety (90) days written notice to the City.
28. FORCE MAJEURE
When a party's nonperformance hereunder was beyond the control and not due to the fault of the
party not performing, a party shall be excused from performing its obligations under this
Agreement during the time and to the extent that its performance is prevented by such cause.
Such cause shall include, but not be limited to: any incidence of fire, flood, acts of God or
unanticipated communicable disease, acts of terrorism or war commandeering of material,
products, plants or facilities by the federal, state or local government, a material act or omission
by the other party or any law, ordinance, rule, guidance or recommendation by the federal, state
or local government, or any agency thereof, which becomes effective after the date of this
Agreement that delays or renders impractical either party's performance under the Agreement.
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CONTRACTOR
Daniel Johnson, President
(print name/title)
By: /() j I/.) ~~ (sign here)
Tod Hammeras, Chief Financial Officer
(print name/title)
Cl RLSBAD, a municipal
cor the State of California
By:
[ ERT TITLE OF PERSON
AUTHORIZED TO SIGN (City Manager or
Mayor or Division Director as authorized
by the City Manager)]
ATTEST:
\J~Rm~
~HERRY FREISINGER
City Clerk
If required by City, proper notarial acknowledgment of execution by contractor must be attached.
If a corporation, Agreement must be signed by one corporate officer from each of the following
two groups.
Group A
Chairman,
President, or
Vice-President
Group B
Secretary,
Assistant Secretary,
CFO or Assistant Treasurer
Otherwise, the corporation must attach a resolution certified by the secretary or assistant
secretary under corporate seal empowering the officer(s) signing to bind the corporation.
APPROVED AS TO FORM:
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EXHIBIT "A"
SCOPE OF SERVICES
Contractor will provide the following services for the City of Carlsbad Public Agencies Post-
Employment Benefits Trust:
1. Plan Installation Services:
(A) Meeting with appropriate City personnel to discuss plan provisions, implementation
timelines, actuarial valuation process, funding strategies, benefit communication
strategies, data reporting, and submission requirements for contributions/reimbursements
/distributions;
(B) Providing the necessary analysis and advisory services to finalize these elements of
the Plan;
(C) Providing the documentation needed to establish the Plan to be reviewed and
approved by City legal counsel. Resulting final Plan documentation must be approved by
the City prior to the commencement of PARS Plan Administration Services outlined in
Exhibit "A", paragraph 2 below.
2. Plan Administration Services:
(A) Monitoring the receipt of Plan contributions made by the City to the trustee of the PARS
Public Agencies Post-Employment Benefits Trust ("Trustee"), based upon information
received from the City and the Trustee;
(B) Performing periodic accounting of Plan assets, reimbursements/distributions, and
investment activity, based upon information received from the City and/or Trustee;
(C) Coordinating the processing of distribution payments pursuant to authorized direction
by the City, and the provisions of the Plan, and, to the extent possible, based upon City-
provided Data;
(D) Coordinating actions with the Trustee as directed by the Plan Administrator within the
scope of this Agreement;
(E) Preparing and submitting a monthly report of Plan activity to the City, unless directed
by the City otherwise;
(F) Preparing and submitting an annual report of Plan activity to the City;
(G) Facilitating actuarial valuation updates and funding modifications for compliance with
the applicable GASB pronouncements and/or statements, if prefunding OPEB obligations;
(H) Coordinating periodic audits of the Trust;
(I) Monitoring Plan and Trust compliance with federal and state laws.
3. Contractor is not licensed to provide and does not offer tax, accounting, legal, investment or
actuarial advice.
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EXHIBIT "B"
COMPENSATION
Contractor will be compensated for performance of Services, as described in Exhibit "A" based
upon the following schedule :
An annual asset fee shall be paid from Plan assets based on the following schedule:
For Plan Assets from:
$1 to $10,000,000
$10,000,001 to $15,000,000
$15,000,001 to $50,000,000
$50,000,001 and above
A nnual Ra te:
0.25%
0.20%
0.15%
0.10%
Annual rates are prorated and paid monthly. The annual asset fee shall be calculated by the
following formula [Annual rate divided by 12 (months of the year) multiplied by the Plan asset
balance at the end of the month]. Trustee and Investment Management Fees are not included.
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EXHIBIT "C"
DATA REQUIREMENTS
Contractor will provide the Services under this Agreement contingent upon receiving the following
information. City is solely responsible for ensuring that all information and documentation provided to
Contractor is true, correct, and authorized:
1. Executed Legal Documents:
(A) Certified Resolution
(8) Adoption Agreement to the Public Agencies Post-Employment Benefits Trust
(C) Trustee Investment Forms
2. Contribution -completed Contribution Transmittal Form signed by the Plan Administrator (or
authorized Designee) which contains the following information:
(A) City name
(B) Contribution amount
(C) Contribution date
(D) Contribution method (Check, ACH, Wire)
3. Distribution -completed Payment Reimbursement/Distribution Form signed by the Plan
Administrator (or authorized Designee) which contains the following information:
(A) City name
(B) Payment reimbursement/distribution amount
(C) Applicable statement date
(D) Copy of applicable premium, claim, statement, warrant, and/or administrative expense
evidencing payment
(E) Signed certification of reimbursement/distribution from the Plan Administrator (or
authorized Designee)
4. Other information pertinent to the Services as reasonably requested by Contractor and
Actuarial Provider.
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115 TRUST PARS EMPLOYER PORTAL
OPT-IN ADDENDUM TO THE AGREEMENT FOR ADMINISTRATIVE SERVICES
WHEREAS, PARS has expanded the scope of its Services to allow designated Agency personnel to access and
view the Agency's PARS Public Agencies Post-Employment Benefits Trust information on a read-only basis
through a web-based p01ial available at https://employer.pars.org (the "Employer Portal"); and
WHEREAS , Agency wishes to allow designated Agency personnel the ability to access and use the Employer
Portal.
NOW THEREFORE, the parties hereby agree that:
1. Agency is opting-in to allow PARS to provide designated Agency personnel with the right to access and
use the Employer P01ial, subject to terms and conditions herein and the applicable Agency's acceptance
of, and compliance with, the Employer Portal's Terms of Service and Privacy Policy located at
https :/ /employer.pars.org.
2. Agency shall add and remove access to the Employer Portal for designated Agency personnel as appropriate
by notifying PARS in writing of any such changes.
This Addendum is executed by an authorized representative of each paiiy and shall become effective on the
latter oft d es signed below by the parties.
Phase II Systems dba Public Agency
By:
Retirem~:'7rd PARS
By: / tlj)<-
Name: N ame: Tod Hammeras
Title: City Manager Title: Chief Financial Officer
Date: Date:
ADOPTION AGREEMENT
for the
POST-EMPLOYMENT SECTION 115 TRUST
A.1.1. Trust agreement with U.S. Bank National Association (the "Bank") (the "Trust Agreement"):
Post-Employment Section 115 Trust. Public Agencies Post-Employment Benefits-Trust
Agreement, effective November 5, 2014
A.1.2. OPEB Plan:
A.1.3 . Pension Plan:
A.1.4. Pension Plan's
effective date:
A.2.1. Employer:
Name:
U.S. mail address:
Phone number:
EIN:
Fiscal year end:
A.2.2. Plan Administrator:
Public Agencies Post-Employment Health Care Plan
The plan document for the OPEB Plan is the Public Agencies Post-
Employment Health Care Plan-Master Plan Document, effective as of
November 5, 2014 (the "Plan Document").
C G\\\\QC'{\0
~ Vv...ic\,c.. (~\~we.s ~~<e~\: )½~~
□ (Check if applicable) Additional Pension Plans (and their respective
effective dates) are listed on an exhibit attached hereto.
City of Carlsbad
1200 Carlsbad Village Drive, Carlsbad, CA 92008
(442) 339-2820
95-6004793
June 30
Position at Employer: ~C~ity~M=an=a=ga-ce.~r ______________ _
Incumbent: =S-=-co=tt'-'--=C=h=ad=w-'-'--'-'ic=k'----------------
U.S. mail address: 1200 Carlsbad Village Drive, Carlsbad, CA 92008
Phone number: .,__( 4~4=2.,__) ~33~9--2~8=2~1 _____________ _
Email address: scott.chadwick@carlsbadca.gov
Page I of 4
EXHIBIT "A" TO PUBLIC AGENCIES POST-EMPLOYMENT BENEFITS TRUST AGREEMENT
A.3.1 Adoption. The Employer hereby:
A.3.1.1.Adopts the Trust Agreement as pait of the (Check one or both of thefollowh1g boxes.):
□ OPEB Plan
Ft Pension Plan
(each such plan separately, the "Plan") and agrees to be bound by the Trust Agreement's terms, effective
as of the Employer's signature date below and subject to the investment approach selected below.
A.3. l.2.The following provisions apply if and only if the OPEB Plan box above is checked: (i)
Adopts the Plan Document and agrees to be bound by the Plan Document's terms, effective as of the
Employer's signature date below and (ii) acknowledges that the determination of Eligible Employees and
Eligible Beneficiaries is finally and conclusively made by the Employer according to the Employer's
applicable policies and collective bargaining agreements and without reference to the Trust Agreement.
A.3.1.3.Ratifies, affirms, and approves Employer's appointment of Phase TI Systems as Trust
Administrator and represents and warrants that attached hereto is a fully-executed original of Employer's
Agreement for Administrative Services with Phase TI Systems, d/b/a Public Agency Retirement Services
(PARS).
A.3 .1 .4.Agrees that capitalized terms used herein but not defined herein shall have the same
meaning attributed to them as in the Trust Agreement or Plan Document, as the case may be.
A.4.1. The Employer hereby represents and warrants that:
A.4.1.1. Authorizing Law. Employer has reviewed with its legal counsel and has
determined that Employer is authorized to establish and maintain the Plan and to establish a financial-
institution trust (separate and apait from the state) for the Plan, including the authority to adopt the Trust
Agreement.
A.4.1.2. Authorizing Resolution. Attached hereto is a ce1tified copy of a resolution of
the Employer's governing body authorizing the adoption of the Trust Agreement as pait of the Plan and
authorizing the appointment of the Plan Administrator designated by position of employment at the
Employer to act on the Employer's behalf in all matters relating to the trust.
A.4.1.3. Tax Status. The Plan is a "governmental plan" as defined in Section 414( d) of
the Internal Revenue Code of 1986, as amended; is a "Section 401(a)(24) governmental plan" as defined
in Revenue Ruling 2011-1; and is not subject to Federal income taxation. The Plan's governing
document expressly provides that it is irrevocably impossible for any pait of the corpus or income of the
Plan to be used for, or diverted to, purposes other than for the exclusive benefit of the Plan pa1ticipants
and their beneficiaries. The Pension Plan is a qualified plan under Code Section 401 (a). (In addition, the
Employer hereby acknowledges that the Plan is prohibited from assigning any pait of its equity or interest
in the trust.)
Page 2 of 4
EXHIBIT "A" TO PUBLIC AGENCIES POST-EMPLOYMENT BENEFITS TRUST AGREEMENT
A.4.2. Investment Approach.
A.4.2.l.The following provisions apply if and only if the OPEB Plan box above is checked:
OPEB Account. OPEB Account assets are invested in the discretion of ( check one and only one of the
following boxes):
Discretionaiy investment approach:
□ The Bank, subject to Exhibit A (Investment Strategy Selection and Disclosure Form)
hereto.
Directed investment approach:
□ The Plan Administrator.
□ The following registered investment adviser, bank (other than the Bank), or insurance
company (a "Third-Party Manager"):
Vanguard Advisers, Inc. . The Employer
hereby represents and warrants that attached hereto is an executed copy of the agreement
with the above appointed Third Party Manager.
A.4.2.2.The following provisions apply if and only if the Pension Plan box above is checked:
Pension Account. Pension Account assets are invested in the discretion of (check one and only one of
the following boxes):
Discretionary investment approach:
□ The Bank, subject to Exhibit A (Investment Strategy Selection and Disclosure Form)
hereto.
Directed investment approach:
□ The Plan Administrator.
ii The following registered investment adviser, bank (other than the Bank), or insurance
company (a "Third-Party Manager"):
Vanguard Advisers, Inc . The Employer
hereby represents and warrants that attached hereto is an executed copy of the agreement
with the above appointed Third Party Manager.
A.4.3. It is intended that any references to GASB pronouncements and/or statements in the Public
Agencies Post-Employment Health Care Plan and Trust Agreement shall incorporate any applicable
successor pronouncements and/or statements.
{signature page follows]
Page 3 of 4
EXHIBIT "A" TO PUBLIC AGENCIES POST-EMPLOYMENT BENEFITS TRUST AGREEMENT
Accepted by:
Its: City Manager
Date: ZA,~
PHASE II SYSTEMS, DBA PUBLIC AGENCY
RETIREMENT SERVICES (PARS)
Byn~fih~
Its: Presid.-=-en=t'---------------
Date: _I_I /_fl>_/ _3 ________ _
U.S. BANK NATIONAL ASSOCIATION
By: ~
Susan M. Hug~
Its: Vice President and Relationship Manager
Date: __ [_l _( l_(p---;· /~'J._O_~_-?;? _____ _
Page 4 of 4
EXHIBIT "A" TO PUBLIC AGENCIES POST-EMPLOYMENT BENEFITS TRUST AGREEMENT
PUBLIC AGENCIES
POST-EMPLOYMENT BENEFITS
TRUST AGREEMENT
(Effective November 5, 2014)
··"'
For Your Review
& Files
ARTICLE I
DEFINITIONS
1.1 "Adoption Agreement" shall have the meaning given to such term in Section 2.3.
1.2 "Agency Account" shall have the meaning given to such term in Section 2.4.
1.3 "Agreement for Administrative Services" shall mean the agreement executed
between the Employer and the Trust Administrator which authorizes the Trust
Administrator to perfonn specific duties of administering the Agency Account of
the Employer.
1.4 "Assets" shall have the meaning given to such te1m in Section 2.5.
1.5 "Code" shall mean the Internal Revenue Code of 1986 as amended from time to
time.
1.6 "Delegatee" shall mean an individual or entity, appointed by the Plan
Administrator or Employer to act in such matters as are specified in the
appointment.
1. 7 "Effective Date" shall mean the date first written above, the date the Trust was
established, and with respect to each Employer, the Effective Date shall be the
date on which the Employer executes the Adoption Agreement.
1.8 "Eligible Beneficiary" shall mean any person who, due to his or her relationship
to an Eligible Employee, is entitled to post-employment benefits pursuant to the
Employer's Pension Plan or OPEB Plan, including but not limited to the Eligible
Employee's current or former spouse or domestic partner, child, dependent, or
survivor.
1.9 "Eligible Employee" shall mean any employee of an Employer who is entitled to
post-employment benefits pursuant to the Employer's Pension Plan or OPEB
Plan. Unless the context otherwise requires, the term "Eligible Employee" as
used herein shall include any Eligible Beneficiaries.
1.10 "Employer" shall mean a public agency that executes the Adoption Agreement,
thereby adopting the provisions of this Trust Agreement, provided that such
agency is a state, a political subdivision of a state, or an entity the income of
which is exclu<lible from gross income under Section 115 of the Code.
1.11 "GASB" shall mean the Governmental Accounting Standards Board.
1.12 "Omnibus Account" shall mean an account, established for record keeping
purposes only, to aggregate the balances of the Assets credited to the Agency
Accounts. The Trust Administrator shall maintain and reconcile, at the Agency
Account level (and subaccount level), the investments of the Agency Accounts
Page 1 of 25
and will provide reports to the Plan Administrator with respect to such
investments. The Trnstee will maintain a record of the aggregate balance
(principal and earnings) for all Agency Accounts. The Trust Administrator will in
the ordinary course of business maintain a record of the name, address, taxpayer
identification number, account number and amount of funds, including earnings,
of each Employer. On periodic valuation dates (no less frequently than monthly)
to be established by the Trust Administrator, the Trustee and Trust Administrator
will reconcile the aggregate balance infonnation maintained by the Trustee with
the Agency Account level records maintained by the Trust Administrator pursuant
to this Trust Agreement.
1.13 "OPEB" shall mean "other post-employment benefits," such as medical, dental,
vision, life insurance, long-term care and other similar benefits provided to
retirees, other than pension benefits.
1.14 "OPEB Obligation" shall mean an Employer's obligation to provide OPEB to its
Eligible Employees in accordance with the Employer's OPEB Plan.
1.15 "OPEB Plan" shall mean the Public Agencies Post-Employment Health Care
Plan, as adopted by the Employer under the Adoption Agreement.
1.16 "Pension Obligation" shall mean an Employer's obligation to contribute to the
Pension Plan's Qualified Trust and shall not, for example, mean an Employer's
Obligation to provide retirement benefits under the Pension Plan to the
Employer's Eligible Employees.
'·
1.17 "Pension Plan" shall mean an Employer's defined-benefit pension plan or plans,
each of which is (i) qualified under Section 401(a) of the Code, (ii) sponsored by
the Employer in order to provide retirement benefits to its Eligible Employees,
and (iii) partly or wholly funded by the Employer's contributions to a Qualified
Trust.
1.18 "Plan Administrator" shall mean the individual designated by position of
employment at the Employer to act on its behalf in all matters relating to the
Employer's paiticipation in the Trust.
1.19 "Qualified Trust" shall mean a trust which (i) is separate and apart from the
Trust, (ii) constitutes a qualified trust under Code Section 401 (a), and (iii) funds
retirement benefits provided under an Employer's Pension Plan to the Employer's
Eligible Employees.
1.20 "Trust" shall mean the Public Agencies Post-Employment Benefits trust
arrangement.
1.21 "Trust Administrator" shall mean Public Agency Retirement Services or any
successor bust administrator appointed by the Employers as provided herein. The
Trust Administrator shall serve as trust administrator to the Trust established
Page 2 of25
pursuant to this Trnst Agreement until such Trnst Administrator resigns or is
removed as provided in Article III.
1.22 "Trust Agreement" shall mean this Public Agencies Post-Employment Benefits
hust document adopted by each Employer upon execution of an Adoption
Agreement, as amended from time to time.
1.23 "Trustee" shall mean U.S. Bank National Association, or any successor trnstee
appointed by the Employers as provided herein. The Trustee sha11 serve as trustee
of the Trust established pursuant to the provisions of this Trnst Agreement until
such Trustee resigns or is removed as provided in Article III.
ARTICLE II
THE TRUST
2.1 · Multiple Employer Trust
The Trust is a multiple employer trust arrangement established to provide
economies of scale and efficiency of administration to public agencies that adopt
it to hold the asset~ used to fund the agency's OPEB Obligation or Pension
Obligation or both. The Trust is divided into Agency Accounts to hold the Assets
of each Employer as described in Section 2.4.
2.2 Purpose
The Trust is established with the intention that it qualify as a tax-exempt trust
perf01ming an essential governmental function within the meaning of Section 115
of the Code and any regulations issued thereunder and as a tax-exempt trust under
the provisions of the relevant state's statutory provisions of each Employer. This
Trnst Agreement shall be constrned and the Trnst shall be administered in a
manner consistent with such intention. The fundamental purpose of the Trnst is to
fund the Employer's OPEB Obligation or Pension Obligation or both. It is
intended that adopting Employers retain an interest in the underlying securities
held in the Trnst on their behalf, rather than in the Trust itself.
The Employer hereby represents and wanants that the assets held hereunder
(including the Assets) are not assets of any qualified plan under Code Section
401 (a), regardless of the character of such assets once distributed. The Employer
hereby acknowledges that the Trust does not constitute a qualified trust under
Code Section 401(a).
2.3 Employers
Any public agency may, by action of its governing body in w1iting accepted by
the Trnstee, adopt the provisions of the Trust Agreement. Executing an adoption
instrnment for the Trust ("Adoption Agreement"), in the fonn attached hereto as
Exhibit "A" (or such other f01m as may be approved by the Trnstee), shall
Page 3 of25
constitute such adoption, unless the Trustee requires additional evidence of
adoption. In order for such adoption to be effective, the public agency must also
execute an Agreement for Administrative Services with Public Agency
Retirement Services, the Trust Administrator, pursuant to Section 3.6 of this Trust
Agreement. Such adopting Employer shall then become an Employer of the
Trust.
Each such Employer shall, at a minimum, furnish the Trust Administrator with the
following documents to support its adoption of the Trnst:
(a) a ce1tified copy of the resolution(s) of the governing body of the Employer
authorizing the adoption of the Trust Agreement and the appointment of the Plan
Administrator for such Employer;
(b) an 01iginal of the Adoption Agreement executed by the Plan Administrator
or other duly authorized Employer employee;
(c) an original of the Agreement for Administrative Services with Public
Agency Retirement Services executed by the Plan Administrator or other duly
authorized Employer employee and Public Agency Retirement Services;
( d) an address notice; and
( e) such other documents as the Trustee may reasonably request.
(f) Any action taken by the Plan Administrator for an Employer shall be
deemed to have been taken by such Employer. Any notice given to or delivered
by the Plan Administrator for an Employer shall be deemed to have been given to
or delivered by such Employer.
2.4 Agency Accounts
(a) Upon an Employer's adopting the Trust Agreement, as provided in
Section 2.3, a separate "Agency Account" shall be established under the Trust for
that Employer, and all Assets of the Trust attributable to that Employer shall be
held in that Employer's Agency Account.
(b) An Employer's Agency Account comprises three subaccounts: a "Pension
Account'', an "OPEB Account", and a "Suspense Account". The Assets of the
Trust that are held in the Employer's Pension Account will be available only to
fund the Employer's Pension Obligation and defray the reasonable expenses
associated with the same. The Assets of the Trust that are held in the Employer's
OPEB Account will be available only to fund the Employer's OPEB Obligation
and defray the reasonable expenses associated with the same.
( c) The Assets of the Trust that are held in an Employer's Agency Account
shall not be available to pay any obligations incuned by any other Employer as
provided in Section 2.8 .
Page 4 of25
(d) All contributions and transfers received by the Trust on behalf of the
Employer will be held in the Employer's Agency Account and will be allocated to
the subaccounts under the Agency Account as follows:
(1) If the Employer maintains a Pension Account or OPEB Account
(and not both a Pension Account and an OPEB Account), all contributions
and transfers received by the Trust on the Employer's behalf will be
allocated to that subaccount.
(2) If the Employer maintains both a Pension Account and an OPEB
Account, contributions and transfers received by the Trust on the
Employer's behalf will be allocated to either the Pension Account or
OPEB Account, as directed by the Plan Administrator. To the extent the
Plan Administrator does not provide such direction, the Employer hereby
directs the Trustee to allocate such conttibutions and transfers to the
Suspense Account and to use the assets of the Suspense Account to
purchase a position in the sweep vehicle identified on an exhibit hereto or,
if none is identified, to hold such assets Un-invested. The Plan
Administrator may at any time direct the reallocation of cash from the
Suspense Account to either the Pension Account or the OPEB Account.
(3) Once allocated to the Pension Account or the OPEB Account,
amounts under the Trust may not subsequently be transferred to the other
subaccount.
2.5 Assets of Agency Account
The assets held in an Agency Account shall consist of all contributions and
transfers received by the Trust on behalf of the Employer,· together with the
income and earnings from such contributions and transfers, and any increments
accruing to the Agency Account, net of any investment losses, benefits, expenses
or other costs ("Assets"). All contributions or transfers shall be received by the
Trustee in cash or in other property acceptable to the Trustee. The Trustee shall
manage and administer the Assets held in Agency Accounts without distinction
between principal and income. The Trustee and the Trust Administrator shall
have no duty to compute any amount to be transfened or paid to the Agency
Account by the Employer, and the Trustee and the Trust Administrator shall not
be responsible for the collection of any contributions or transfers to the Agency
Account.
2.6 Aggregate Balance fo1· Investment and Administration
The balances of the Assets of more than one Agency Account may be aggregated
by the Trnstee in one or more Omnibus Accounts for investment and
administrative purposes, to provide economies of scale and efficiency of
administration to the Agency Accounts. The responsibility for Agency Account
level accounting (including subaccount-level accounting within each Agency
Account) within this Omnibus Account(s) shall be that of the Trust Administrator.
Page 5 of25
2.7 Trustee Accounting
The Trustee shall be responsible only for maintaining records and maintaining
accounts for the aggregate assets of the Trust. The responsibility for accounting
and subaccounting for each Agency Account, based upon the Omnibus
Account(s), shall be that of the Trnst Administrator.
2.8 No Diversion of Assets
The Assets in each Employer's Agency Account shall be held in trust for the
exclusive purpose of funding the Employer's OPEB Obligation or Pension
Obligation or both and defraying the reasonable expenses associated with the
same. The Assets in each Agency Account shall not be used for or diverted to,
any other purpose, including, but not limited to, the satisfaction of any other
Employer's Pension Obligation or OPEB Obligation.
2.9 Type and Nature of Trust
Neither the full faith and credit nor the taxing power of each Employer is pledged
to the distribution of amounts hereunder. Except for contributions and other
amounts hereunder, no other amounts are pledged to the distribution of benefits
hereunder. Distributions of benefits are neither general nor special obligations of
any Employer, but are payable solely from the Assets held in such Employer's
Agency Account, as more fully described herein. No employee of any Employer
or beneficiary may compel the exercise of the taxing power by any Employer.
Distributions of Assets from any Agency Account are not debts of any Employer
within the meaning of any constitutional or statutory limitation or restriction.
Such distributions are not legal or equitable pledges, charges, liens or
encumbrances, upon any of an Employer's property, or upon any of its income,
receipts, or revenues, except amounts in the accounts which are, under the te1ms
of each Plan and the Trust set aside for distributions. Neither the members of the
governing body of any Employer nor its officers, employees, agents or volunteers
are liable hereunder.
2.10 Loss of Tax-Exempt Status as to Any Employer
If any Employer pmticipating in the Trust receives notice from the Internal
Revenue Service that the Trust as to such Employer fails to satisfy the
requirements of Section 115 of the Code, or if any Employer consents to the
Internal Revenue Service's determination that the Trust fails to meet such
requirements, Assets having a value equal to the funds then held in such
Employer's Agency Account shall be segregated and placed in a separate trust by
the Trustee for the exclusive benefit of such Employer's Eligible Employees
within a reasonable time after the Trnst Administrator notifies the Trustee of the
Internal Revenue Service's determination. Each Employer pmticipating in the
Trnst agrees to immediately notify the Trust Administrator upon receiving such
Page 6 of25
notice or giving such consent. T11e separate trust provided for in this Section 2.10
shall thereafter be considered as a separate trust containing all of the provisions of
this Trnst Agreement until te1minated as provided in this Trust Agreement.
ARTICLE III
ADMINISTRATIVE MATTERS
3.1 Appointment of Trustee
The Employers may, with the approval of two-thirds (2/3) or more of the
Employers then participating in the Trnst, act to appoint a bank, trust company,
retirement board, insurer, committee or such other entity as permitted by law, to
serve as the trustee of this Trnst. Such action must be in writing. Upon the
written acceptance of such entity it shall become the Trnstee of the Trust. If the
Trustee is removed or resigns pursuant to Section 3 .2, the Employers shall appoint
a successor Trustee in accordance with the voting requirements set forth in this
Section 3.1.
3.2 Resignation or Removal of Trustee
The Employers may act to remove the Trustee, provided that such action must
satisfy the voting requirements set forth in Section 3 .1 and notice of such action
must be promptly delivered to the Trust Administrator, the Trustee and each Plan
Administrator. The Trustee may also resign at any time by giving at least ninety
(90) days prior written notice to the Trust Administrator and to the Plan
Administrator of each Employer that has adopted the Trust Agreement and not
te1minated its participation in the Trust; provided, however, that the Trustee may
resign immediately upon the earlier of the approval date or the effective date of
any amendment of the Trust Agreement by the Employers that would change or
modify the duties, powers or liabilities of the Trnstee hereunder without the
Trustee's consent. The Trustee shall, upon the appointment and acceptance of a
successor trustee, transfer and deliver the Assets and all records relating to the
Trust to the successor, after reserving such reasonable amount as it shall deem
necessary to provide for its fees and expenses and any sums chargeable against
the Trust for which it may be liable. The Trustee shall do all acts necessary to
vest title of record in the successor trustee.
3.3 Withdrawal of Employer
An Employer may elect to withdraw from the Trust by giving at least thirty (30)
days prior written notice to the Trustee and the Trust Administrator. If an
Employer so elects to withdraw, Assets having a value equal to the funds held in
such Employer's Agency Account shall be segregated by the Trustee and, as soon
as practicable, shall be transferred to one or more trusts maintained by the
Employer, provided that (i) for Assets transferred from the OPEB Account, any
such trust shall satisfy the requirements of Section 115 of the Code, (ii) for Assets
Page 7 of25
transferred from the Pension Account, any such trust shall satisfy the
requirements of either Section 115 or 401(a) of the Code, and (iii) all assets held
by any such trust and previously held in the Employer's Pension Account or
OPEB Account shall qualify as "plan assets" within the meaning of GASB
Statement No. 68 (Accounting and Financial Reporting for Pensions-An
Amendment of GASB Statement No. 27) or GASB Statement No. 45 (Accounting
and Financial Repo1iing by Employers for Postemployment Benefits Other Than
Pensions), respectively, in each case as reasonably determined by the Employer
and certified in w1iting by the Employer to the Trust Administrator. The
Employer shall appoint a trustee for such Employer's separate trust and, upon the
trnstee's acceptance of that appointment, the trustee will be vested with title to the
transfen-ed Assets.
3.4 The Plan Administrator
The governing body of each Employer shall have plenary authority for the
administration and investment of such Employer's Agency Account pursuant to
any applicable state laws and applicable federal laws and regulations. Each
Employer shall by resolution designate a Plan Administrator. Unless otherwise
specified in the instrument the Plan Administrator shall be deemed to have
authority to act on behalf of the Employer in all matters pertaining to the
Employer's pa1iicipation in the Trust and in regard to the Agency Account of the
Employer. Such appointment of a Plan Administrator shall be effective upon
receipt and acknowledgment by the Trnstee and the Trnst Administrator and shall
be effective until the Trustee and the Trust Administrator are furnished with a
resolution of the Employer that the appointment has been modified or terminated.
3.5 Failure to Appoint Plan Administrator
If a Plan Administrator is not appointed, or such appointment lapses, the
Employer shall be deemed to be the Plan Administrator. As used in this
document the term "Plan Administrator" shall be deemed to mean "Employer"
when a Plan Administrator has not been appointed for such Employer.
3.6 Delegatee
The Plan Administrator, acting on behalf of the Employer, may delegate certain
authority, powers and duties to a Delegatee to act in those matters specified in the
delegation. Any such delegation must be in a writing that names and identifies
the Delegatee, states the effective date of the delegation, specifies the authority
and duties delegated, is executed by the Plan Administrator, is acknowledged in
writing by the Delegatee, and is certified as required in Section 3.7 to the Trust
Administrator. Such delegation shall be effective until the Trustee and the Trust
Adminish·ator are directed in writing by the Plan Administrator that the delegation
has been rescinded or modified.
Page 8 of25
3.7 Certification to Trustee
The governing body of each Employer, or other duly authorized official, shall
certify in writing to the Trnstee and the Trust Administrator the names and
specimen signatures of the Plan Administrator and Delegatee, if any, and all
others authorized to act on behalf of the Employer whose names and specimen
signatures shall be kept accurate by the Employer acting through a duly
authorized officer or governing body of the Employer. The Trustee and the Trust
Administrator shall have no liability if they act upon the direction of a Plan
Administrator or Delegatee that has been duly authorized, as provided in Section
3 .6, if that Plan Administrator or Delegatee is no longer authorized to act, unless
the Employer has informed the Trustee and the Trust Administrator of such
change.
3.8 Directions to Trustee
All directions to the Trustee from the Plan Administrator or Delegatee must be in
writing and must be signed by the Plan Administrator or Delegatee, as the case
may be. For all purposes of this Trnst Agreement, direction shall include any
certification, notice, authorization, application or instruction of the Plan
Administrator, Delegatee or Trustee approp1iately communicated. The above
notwithstanding, direction may be implied if the Plan Administrator or Delegatee
has knowledge of the Trustee's intentions and fails to file written objection.
The Trustee shall have the power and di1ty to comply promptly with all proper
directions of the Plan Administrator or Delegatee, appointed in accordance with
the provisions of this Trust Agreement. In the case of any direction deemed by
the Trustee to be unclear or ambiguous the Trustee may seek written instructions
from the Plan Administrator, the Employer or the Delegatee on such matter and
await their written instructions without incurring any liability. If at any time the
Plan Administrator or the Delegatee should fail to give directions to the Trustee,
the Trustee may act in the manner that in its discretion seems advisable under the
circumstances for canying out the purposes of the Trust and/or the applicable
Agency Account which may include not taking any action. The Trustee may
request directions or claiification of directions received and may delay acting
until clarification is received. In the absence of timely direction or clarification,
or if the Trustee considers any direction to be a violation of the Trust Agreement
or any applicable law, the Trustee shall in its sole discretion take appropriate
action, or refuse to act upon a direction.
3.9 Appointment of Trust Administrator
The Employers may, with the approval of two-thirds (2/3) or more of the
Employers then participating in the Trust, act to appoint a bank, trust company,
retirement board, insurer, committee or such other entity as permitted by law, to
serve as Trnst Administrator of the Trust. Such action must be in writing. Upon
the w1itten acceptance of such entity it shall become the Trust Administrator of
Page 9 of25
the Trnst. If the Trust Administrator is removed or resigns pursuant to Section
3 .13, the Employers shall appoint a successor Trust Administrator in accordance
with the voting requirements set forth in this Section 3.9.
3.10 Trust Administrator
The Trust Administrator's duties involve the performance of the following
services pursuant to the provisions of this Trust Agreement and the Agreement for
Administrative Services:
(a) Performing periodic accounting of each Agency Account (including
subaccount-level accounting within each Agency Account) and reconciling such
Agency Account balances with the Trust/Omnibus Account;
(b) Directing the Trnstee to make distributions from the appropriate
subaccount under an Agency Account in accordance with Section 5.9.
( c) Allocating contributions, earnings and expenses to each Agency Account
and the underlying subaccounts;
( d) Directing the Trustee to pay the fees of the Trust Administrator and to do
such other acts as shall be appropriate to catTy out the intent of the Trust;
(e) Such other services as the Employer and the Trust Administrator may
agree in the Agreement for Administrative Services pursuant to Section 2.3.
The Trust Administrator shall be entitled to rely on, and shall be under no duty to
question, any direction and/or data received from the Plan Administrator, or other
duly authorized entity, in order to perform its authorized duties under this Trust
Agreement. The Trust Administrator shall not have any duty to compute
contributions made to the Trust, determine or inquire whether conhibutions made
to the Trust by the Plan Administrator or other duly authorized entity are adequate
to meet an Employer's Pension Obligation or OPEB Obligation as may be
detennined under any applicable GASB pronouncement; or determine or inquire
whether contributions made to the Trust are in compliance with the Employer's
OPEB Plan or Pension Plan. The Trust Administrator shall not be liable for
nonperformance of duties if such nonperformance is directly caused by erroneous,
and/or late delivery of, directions or data from the Plan Administrator, or other
duly authorized entity.
3.11 Additional Trust Administrator Services
The Plan Administrator may at any time retain the Trust AdministratOT as its
agent to perfo1m any act, keep any records or accounts and make any
computations which are required of the Employer or the Plan Administrator by
this Trnst Agreement or by the Employer's policies and/or applicable collective
bargaining agreements. The Trust Administrator shall be separately compensated
Page 10 of25
for such service and such services shall not be deemed to be contrary to the Trnst
Agreement.
3.12 Trust Administrator's Compensation
As may be agreed upon from time to time by the Employer and Trust
Administrator, the Trust Administrator will be paid reasonable compensation for
services rendered or reimbursed for expenses properly and actually incuned in the
pe1fonnance of duties with respect to such Employer's Agency Account and to
the Trust
3.13 Resignation or Removal of Trust Administrator
The Employers may act to remove the Trust Administrator, provided that such
action must satisfy the voting requirements set forth in Section 3.9 and notice of
such action must be promptly delivered to the Trust Administrator, the Trustee
and each Plan Administrator. The Trust Administrator may also resign at any
time by giving at least one hundred and twenty (120) days prior written notice to
the Trustee and to the Plan Administrator of each Employer that has adopted the
Trust Agreement and not terminated its participation in the Trust; provided,
however, that the Trust Administrator may resign immediately upon the earlier of
the approval date or the effective date of any amendment of the Trnst Agreement
by the Employers that would change or modify the duties, powers or liabilities of
the Trust Administrator hereunder without the Trust Administrator's consent.
The Trnst Administrator shall, upon the appointment and acceptance of a
successor trnst administrator, transfer all records relating to the Trust to the
successor.
ARTICLE IV
THE TRUSTEE
4.1 Powers and Duties of the Trustee
Except as otherwise provided in Article V and subject to Article VI, the Trustee
shall have full power and authority with respect to property held in the Trnst to do
all such acts, take all proceedings, and exercise all such rights and privileges,
whether specifically referred to or not in this document, as could be done, taken or
exercised by the absolute owner, including, without limitation, the following:
(a) To invest and reinvest the Assets or any part hereof in any one or more
kind, type, class, item or parcel of propeiiy, real, personal or mixed, tangible or
intangible; or in any one or more kind, type, class, item or issue of investment or
security; or in any one or more kind, type, class or item of obligation, secured or
unsecured; or in any combination of them (including those issued by the Trustee
of any of its affiliates, to the extent pennitted by applicable law), and to retain the
property for the period of time that the Trustee deems appropriate;
Page 11 of 25
(b) To acquire and sell options to buy securities ("call" options) and to acquire
and sell options to sell securities ("put" options);
( c) To buy, sell, assign, transfer, acquire, loan, lease (for any purpose,
including mineral leases), exchange and in any other manner to acquire, manage,
deal with and dispose of all or any part of the Trust prope11y, for cash or credit
and upon any reasonable te1ms and conditions;
(d) To make deposits, with any bank or savings and loan institution, including
any such facility of the Trustee or an affiliate thereof provided that the deposit
bears a reasonable rate of interest;
(e) To invest and reinvest the Assets, or any pai1 thereof in any one or more
collective investment trust funds, including common and group trust funds that
consist exclusively of assets of exempt pension and profit sharing trusts and
individual retirement accounts qualified and tax exempt under the Code, that are
maintained by the Trustee or an affiliate thereof. The declaration of trust or plan
of operations for any such common or collective fund is hereby incorporated
herein and adopted into this Trust Agreement by this reference. The combining of
money and other assets of the Trust with money and other assets of other non-
qualified trusts in such fund or funds is specifically authorized. Notwithstanding
anything to the contrary in this Trust Agreement, the Trustee shall have full
investment responsibility over Assets of the Trust invested in such commingled
funds. If the plan and trust for any reason lose their tax exempt status, and the
Assets have been commingled with assets of other tax exempt trnsts in Trustee's
collective investment funds, the Trustee shall within 3 0 days of notice of such loss
of tax exempt status, liquidate the Trust's units of the collective investment
fund(s) and invest the proceeds in a money market fund pending investment or
other instructions from the Plan Adminisfrator. The Trustee shall not be liable for
any loss or gain or taxes, if any, resulting from said liquidation;
(f) To place uninvested cash and cash awaiting distribution in one or more
mutual funds and/or commingled investment funds maintained by or made
available by the Trustee or any of its affiliates, and to receive compensation from
the sponsor of such fund(s) for services rendered, separate and apai1 from any
Trustee's fees hereunder. The Trnstee or its affiliate may also be compensated for
providing investment advisory services to any mutual fund or commingled
investment funds;
(g) To borrow money for the purposes of the Trust from any source with or
without giving security; to pay interest; to issue promissory notes and to secure
the repayment thereof by pledging all or any pait of the Assets;
(h) To take all of the following actions: to vote proxies of any stocks, bonds
or other securities; to give general or special proxies or powers of attorney with or
Page 12 of 25
without power of substitution; to exercise any conversion privileges, subsc1iption
tights or other options, and to make any payments incidental thereto; to consent to
or otherwise participate in corporate reorganizations or other changes affecting
corporate secmities and to delegate discretionary powers and to pay any
assessments or charges in connection therewith; and generally to exercise any of
the powers of an owner with respect to stocks, bonds, secmities or other prope1ty
held in the Trust;
(i) To make, execute, acknowledge and deliver any and all documents of
transfer and conveyance and any and all other instruments that may be necessary
or appropriate to carry out the powers herein granted;
(i) To raze or move existing buildings; to make ordinary or extraordinary
repairs, alterations or additions in and to buildings; to construct buildings and
other strnctures and to install fixtures and equipment therein;
(k) To pay or cause to be paid from the Trust any and all real or personal
property taxes, income taxes or other taxes or assessments of any or all kinds
levied or assessed upon or with respect to the Trnst;
O) To exercise all the further 1ights, powers, options and privileges granted,
provided for, or vested in trustees generally under applicable federal or state laws,
as amended from time to time, it being intended that, except as herein otherwise
provided, the powers confen-ed upon the Trustee herein shall not be constrned as
being in limitation of any authority confen-ed by law, but shall be construed as
consistent or in addition thereto.
4.2 Additional Trustee Powers
In addition to the other powers enumerated above, the Trnstee in any and all
events is authorized and empowered:
(a) To invest funds pending required directions in any type of interest-bearing
account, including, without limitation, time ce1tificates of deposit or interest-
bearing accounts issued by the Trustee, or any mutual fund or short tetm
investment fund ("Fund"), whether sponsored or advised by the Trnstee or any
affiliate thereof); the Trnstee or its affiliates may be compensated for providing
such investment advice and providing other service to such Fund, in addition to
any Trustee's fees received pursuant to this Trnst Agreement;
(b) To cause all or any part of the Trust to be held in the name of the Trustee
(which in such instance need not disclose its fiduciary capacity) or, as pe1mitted
by law, in the name of any nominee, and to acquire for the Trnst any investment
in bearer form, but the books and records of the Trust shall at all times show that
all such investments are a part of the Trust and the Trustee shall hold evidences of
title to all such investments;
Page 13 of 25
( c) To serve as custodian with respect to the Trust Assets;
(d) To employ such custodians, agents and counsel as may be reasonably
necessary in managing and protecting the Assets and to pay them reasonable
compensation from the Trust; to employ any broker-dealer or other agent,
including any broker-dealer or other agent affiliated with the Trustee, and pay to
such broker-dealer or other agent, at the expense of the Trust, its standard
commissions or compensation; to settle, compromise or abandon all claims and
demands in favor of or against the Trust; and to charge any premium on bonds
purchased at par value to the principal of the Trust without amortization from the
Trust, regardless of any law relating thereto;
( e) In addition to the powers listed herein, to do all other acts necessary or
desirable for the proper administration of the Trust, as though the absolute owner
thereof;
(f) To prosecute, compromise and defend lawsuits, but without obligation to
do so, all at the risk and expense of the Trust; and to tender its defense to the
Employer in any legal proceeding where the interests of the Trustee and the
Employer are not adverse;
(g) To exercise and perform any and all of the other powers and duties
specified in this Trust Agreement or the Plan;
(h) To permit such inspections of documents at the principal office of the
Trustee as are required by law, subpoena or demand by a United States agency;
(i) To comply with all requirements imposed by applicable provisions oflaw;
(j) To seek written instructions from the Plan Administrator or other fiduciary
on any matter and await their written instructions without incurring any liability.
If at any time the Plan Administrator or the fiduciary should fail to give directions
to the Trustee, the Trustee may act in the manner that in its discretion seems
advisable under the circumstances for carrying out the purposes of the Trust;
(k) To compensate such executive, consultant, actuarial, accounting,
investment, appraisal, administrative, clerical, secretarial, medical, custodial,
depository and legal firms, personnel and other employees or assistants as are
engaged by the Plan Administrator in connection with funding the Employer's
OPEB Obligation or Pension Obligation or both and to pay from the Trust the
necessary expenses of such finns, personnel and assistants, to the extent not paid
by the Plan Administrator;
Page 14 of25
(1) To act upon proper written directions of the Plan Administrator or
Delegatee, including directions given by photostatic transmissions using facsimile
signature, and such other forms of directions as the patties shall agree;
(m) To pay from the Trnst the expenses reasonably incurred m the
administration of the Trnst;
(n) To maintain insurance for such purposes, in such amounts and with such
companies as the Plan Administrator shall elect, including insurance to cover
liability or losses occuning by reason of the acts or omissions of fiduciaries but
only if such insurance permits recourse by the insurer against the fiduciary in the
case of a breach of a fiduciary obligation by such fiduciary.
ARTICLEV
INVESTMENTS
5.1 Discretionary Vei-sus Directed Investment
For the Pension Account and the OPEB Account under the Agency Account, the
Employer shall elect either a discretionary or directed investment approach. The
Employer may elect the same or different investment approaches for those two
subaccounts. The Employer hereby elects a directed approach for the Suspense
Account. If the Employer elects a discretionary investment approach for a
subaccount, the Employer shall further elect between the various investment
strategies offered and the Trustee, in accordance with Atticle IV, shall have
absolute discretion over the investment of the Assets held in such subaccount
under the Employer's Agency Account. If the Employer elects a directed
investment approach for a subaccount, the Trustee shall direct the investment of
the Assets of such subaccount under the Employer's Agency Account in
accordance with the direction provided by such Employer.
5.2 Trustee Fees
As may be agreed upon, in writing, between the Plan Administrator and Trnstee,
the Trustee will be paid reasonable compensation for services rendered or
reimbursed for expenses properly and actually incuned in the performance of
duties with respect to the applicable Agency Account or the Trust.
5.3 Contributions
Eligible Employees are not permitted to make contributions to the Trust. The
Plan Administrator shall, on behalf of the Employer, make all contributions to the
Trustee. Such contributions shall be in cash unless the Trustee agrees to accept a
contribution that is not in cash. All contributions shall be paid to the Trustee for
investment and reinvestment pursuant to the terms of this Trnst Agreement. The
Trnstee shall not have any duty to determine or inquire whether any contributions
Page l 5 of25
to the Trust made to the Trustee by any Plan Administrator are in compliance with
the Employer's Pension Plan or OPEB Plan; nor shall the Trustee have any duty
or authority to compute any amount to be paid to the Trustee by any Plan
Administrator; nor shall the Trustee be responsible for the collection or adequacy
of the conhibutions to meet an Employer's Pension Obligation or OPEB
Obligation. The conhibutions received by the Trnstee from each Employer shall
be held and administered pursuant to the te1ms hereof without distinction between
income and principal.
5.4 Records
(a) The Trustee shall maintain accurate records and detailed accounts of all
investments, receipts, disbursements and other transactions hereunder at the Trust
level. Such records shall be available at all reasonable times for inspection by the
Trust Administrator. The Trustee shall, at the direction of the Trnst
Administrator, submit such valuations, reports or other information as the Trust
Administrator may reasonably require.
(b) The Assets of the Trust shall be valued at their fair market value on the
date of valuation, as determined by the Trustee based upon such sources of
information as it may deem reliable; provided, however, that the Plan
Administrator shall instruct the Trustee as to valuation of assets which are not
readily determinable on an established market. The Trustee may rely
conclusively on such valuations provided by the Plan Administrator and shall be
indemnified and held harmless by the Employer with respect to such reliance. If
the Plan Administrator fails to provide such values, the Trnstee may take
whatever action it deems reasonable, including employment of attorneys,
appraisers or other professionals, the expense of which will be an expense of
administration of the Trust. Transactions in the account involving such hard to
value assets may be postponed until appropriate valuations have been received
and Trustee shall have no liability therefore.
5.5 Statements
(a) Periodically as specified, and within sixty days after December 31, or the
end of the Trust's fiscal year if different, Trnstee shall render to the Trust
Administrator as directed, a written account showing in reasonable summary the
investments, receipts, disbursements and other transactions engaged in by the
Trustee during the preceding fiscal year or period with respect to the Trust. Such
account shall set forth the assets and liabilities of the Trust valued as of the end of
the accounting pe1iod.
(b) The Trust Administrator may approve such statements either by written
notice or by failure to express objections to such statements by written notice
delivered to the Trustee within 90 days from the date the statement is delivered to
the Trust Administrator. Upon approval, the Trustee shall be released and
discharged as to all matters and items set folih in such statement as if such
Page 16 of25
account had been settled and allowed by a decree from a court of competent
jurisdiction.
5.6 Wire Transfers
The Trnstee shall follow the Plan Administrator's, Delegatee's, or Trust
Administrator's wire transfer instructions in compliance with the written security
procedures provided by the party providing the wire transfers . The Trustee shall
perform a telephonic verification to the Plan Administrator, Trust Administrator,
or Delegatee, or such other security procedure as selected by the pa1ty providing
wire transfer directions, prior to wiring funds or following facsimile directions as
Trustee may require. The Plan Administrator assumes the risk of delay of transfer
if Trustee is unable to reach the Plan Administrator, or in the event of delay as a
result of attempts to comply with any other security procedure selected by the
directing party.
5.7 Exclusive Benefit
The Assets of an Employer's Agency Account shall be held in trust for the
exclusive purpose of funding the Employer's OPEB Obligation or Pension
Obligation or both and defraying the reasonable expenses associated with the
same and shall not be used for or diverted to any other purpose. No party shall
have authority to use or divert the Assets of an Agency Account of an Employer
for the satisfaction of any other Employer's Pension Obligation or OPEB
Obligation or any other Employer's expenses.
5.8 Delegation of Duties
The Plan Administrator, Delegatee, or Trnst Administrator, may at any time retain
the Trustee as its agent to perf01m any act, keep any records or accounts and make
any computations that are required of the Plan Administrator, Delegatee or Trust
Adminish·ator by this Trust Agreement or by the Plan. The Trustee may be
compensated for such retention and such retention shall not be deemed to be
contrary to this Trust Agreement.
5.9 Distributions
(a) The Trustee shall, from time to time, upon the written direction of the Plan
Administrator or Delegatee, make distributions from the Assets of the Trust under
the OPEB Account to the insurers, third party administrators, service providers or
other entities providing benefits or services under the OPEB Plan, or to Eligible
Employees and Eligible Beneficia1ies for reimbursement of OPEB Plan premiums
(or other payments for OPEB Plan benefits) paid by the Eligible Employee or
Eligible Beneficiary, or to the Employer for reimbursement of OPEB Plan
benefits and expenses paid by the Employer, in such manner in such form(s), in
such amounts and for such purposes as may be specified in such directions.
Page 17 of25
(b) In addition, the Trnstee.shall, from time to time, upon the w1itten direction
of the Plan Administrator or Delegatee, make distiibutions from the Assets of the
Trust under the Pension Account directly to (i) the Qualified Trust as employer
contributions, (ii) any insurers, third party administrators, service providers or
other entities providing services in connection with determining the Employer's
Pension Obligation, or (iii) the Employer as reimbursement for the Employer's
payment of amounts described in this Section 5.9(b )(i) and (ii).
(c) In no event shall the Trustee have any responsibility respecting the
application of distributions from the Assets of the Trust, or for <letennining or
inquiring into whether such distributions are in accordance with the Employer's
OPEB Plan, Pension Plan, policies, or applicable collective bargaining
agreements.
ARTICLE VI
FIDUCIARY RESPONSIDILITIBS
6.1 More Than One Fiduciary Capacity
Any one or more of the fiduciaries with respect to the Trust Agreement or the
Trust may, to the extent required thereby or as directed by the Plan Administrator
pursuant to this Trust Agreement, serve in more than one fiduciary capacity with
respect to the Trnst Agreement and the Trust.
6.2 Fiduciary Discharge of Duties
Except as othe1wise provided by applicable law, each fiduciary shall discharge
such fiduciary's duties with respect to the Trust Agreement and the Trnst:
(a) solely in the interest of the Eligible Employees and for the exclusive
purpose of funding the Employer's OPEB Obligation or Pension Obligation or
both and defraying the reasonable expenses associated with the same; and
(b) with the care, skill, prudence, and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterp1ise of like character and with like
aims.
6.3 Limitations on Fiduciary Responsibility
To the extent allowed by the Jaws of the state of each Employer:
No fiduciary shall be liable with respect to a breach of fiduciary duty by any other
fiduciary if such breach was committed before such pmty became a fiduciary or
after such patty ceased to be a fiduciary.
Page 18 of25
No fiduciary shall be liable for a breach by another fiduciary except as provided
by law.
No fiduciary shall be liable for carrying out a proper direction from another
fiduciary, including refraining from taking an action in the absence of a proper
direction from the other fiduciary possessing the authority and responsibility to
make such a direction, which direction the fiduciary in good faith believes to be
authorized and appropriate.
6.4 Indemnification of Trustee by Employer
The Trustee shall not be liable for, and Employer shall (to the extent allowed by
the laws of the state of each Employer) indemnify, defend (as set out in Section
6.8 of this Trust Agreement), and bold the Trnstee (including its officers, agents,
employees and attorneys) and other Employers harmless from and against any
claims, demands, loss, costs, expense or liability imposed on the indemnified
party, including reasonable attorneys' fees and costs incuned by the indemnified
party, arising as a result of Employer's active or passive negligent act or omission
or willful misconduct in the execution or performance of its duties under this
Trnst Agreement.
6.5 Indemnification of Employer by Trustee
The Employer shall not be liable for, and Trustee shall (to the extent allowed by
the laws of the state of each Employer) indemnify, defend (as set out in Section
6.8 of this Trnst Agreement), and hold the Employer (including its officers,
agents, employees and attorneys) and other Employers harmless from and against
any claims, demands, loss, costs, expense or liability imposed on the indemnified
party, including reasonable attorneys' fees and costs incurred by the indemnified
pa1ty, aiising as a result ofTrnstee's active or passive negligent act or omission or
willful misconduct in the execution or performance of its duties under this Trust
Agreement.
6.6 Indemnification of Trustee by Trust Administrator
The Trustee shall not be liable for, and Trust Administrator shall (to the extent
al1owed by the laws of the state of each Employer) indemnify and hold the
Trustee (including its officers, agents, employees and attorneys) harmless from
and against any claims, demands, loss, costs, expense or liability imposed on the
indemnified party, including reasonable attorneys' fees and costs incurred by the
indemnified party, arising as a result of Trust Administrator's active or passive
negligent act or omission or willful misconduct in the execution or performance
of its duties under this Trust Agreement.
6.7 Indemnification of TI·ust Administrator by Trustee
The Trnst Administrator shall not be liable for, and Trustee shall (to the extent
allowed by the laws of the state of each Employer) indemnify and hold the Trust
Page 19 of25
Administrator (including its officers, agents, employees and attorneys) harmless
from and against any claims, demands, loss, costs, expense or liability imposed on
the indemnified party, including reasonable attorneys' fees and costs incurred by
the indemnified paity, arising as a result of Tmstee's active or passive negligent
act or omission or willful misconduct in the execution or performance of its duties
under this Trust Agreement.
6.8 Indemnification Procedures
Promptly after receipt by an indemnified party of notice or receipt of a claim or
the commencement of any action for which indemnification may be sought, the
indemnified pmty will notify the indemnifying party in writing of the receipt or
commencement thereof. When the indemnifying paity has agreed to provide a
defense as set out above that party shall assume the defense of such action
(including the employment of counsel, who shall be counsel reasonably
satisfactory to such i.ndemnitee) and the payment of expenses, insofar as such
action shall relate to any alleged liability in respect of which indemnity may be
sought against the indemnifying party. Any indemnified party shall have the right
to employ separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall not be at the expense of
the indemnifying party unless (i) the employment of such counsel has been
specifically authorized by the indemnifying party or (ii) the named parties to any
such action (including any impleaded parties) include both the indemnifying party
and the indemnified paity and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interest between them.
The indemnifying party shall not be liable to indemnify any person for any
settlement of any such action effected whhout the indemnifying pruty's consent.
The indemnification procedures of this Trust Agreement shall survive the
termination of the Trust, any Employer's participation in the Trust and/or this
Trust Agreement.
6.9 No Joint and Several Liability
This document is not intended to and does not create any joint powers agreement
or any joint and several liability. No Employer shall be responsible for any
contributions, costs or distributions of any other Employer.
ARTICLE VII
AMENDMENT, TERMINATION AND MERGER
7.1 No Contractual Obligation
An Employer's participation in the Trust does not create, and is not intended to
create, any contractual obligation to Eligible Employees. Therefore, no Employer
is contractually obligated to Eligible Employees solely due to its paiticipation in
Page 20 of25
the Trust to continue providing benefits under its Pension Plan or OPEB Plan or
to make contributions to the Trust.
7.2 Amendment of Trust
(a) The Trust Agreement may be amended only by the approval of two-thirds
(2/3) or more of the Employers then participating in the Trnst. Any such
amendment by the Employers shall be set fmih in an instrument in writing and
shall be delivered to the Trnstee, the Trnst Administrator and all Plan
Administrators not less than one hundred and eighty (180) days before the
effective date of such amendment; provided, however, that any party may waive
in writing such 180-day requirement with respect to any amendment (and such
waiver shall not constitute a waiver with respect to any other amendment); and
provided, further, that a waiver in w1iting of such 180-day requirement by two-
thirds (2/3) or more of the Plan Administrators of the Employers participating in
the Trust as of the date the amendment is adopted shall constitute a waiver of such
180-day requirement by all of the Employers then participating in the Trnst. In
addition, the Trust Administrator or the Trustee shall have the right to amend this
Trnst Agreement from time to time (without the requirement of a vote of
Employers) solely for the purpose of keeping the Trust Agreement in compliance
with the Code and applicable state law. Any such amendment by the Trust
Administrator or the Trustee shall be set forth in an instrument in writing and
shall be delivered to the Trustee, the Trust Administrator and all Plan
Administrators promptly as each is made.
(b) Any amendment of the Trust Agreement may be current, retroactive or
prospective, provided, however, that no amendment shall:
(1) Cause the Assets of any Agency Account to be used for or diverted
to purposes other than for the exclusive purpose of funding the
Employer's OPEB Obligation or Pension Obligation or both and defraying
the reasonable expenses associated with the same.
(2) Permit the Assets of any Agency Account to be used for the benefit
of any other Employer.
7.3 Termination of Employer's Obligation to Provide Pension Benefits or OPEB
A termination of the Employer's obligation to provide benefits under the
Employer's Pension Plan or OPEB Plan for which the Employer's Agency
Account was established shall not, in itself, effect a termination of the Agency
Account. Upon a termination of the Employer's obligation to provide benefits
under its Pension Plan or OPEB Plan, the Assets of the Employer's Pension
Account or OPEB Account, as applicable, will be disttibuted by the Trustee when
directed by the Plan Administrator in accordance with this Section 7.3. From and
after the date of such termination and until final dishibution of all Assets under
the Employer's Agency Account, the Trustee shall continue to have all the powers
Page 21 of25
provided herein as are necessary or expedient for the orderly liquidation and
distiibution of such Assets, and the Agency Account shall continue until the
Assets have been completely distributed. Any Assets remaining in the Pension
Account or OPEB Account will be used first to satisfy any remaining Pension
Obligation or OPEB Obligation, respectively, pursuant to the Employer's Pension
Plan or OPEB Plan (to the extent that such distiibution constitutes the exercise of
an "essential governmental function" within the meaning of Section 115 of the
Code) and to satisfy any of such Employer's obligations under this Trust
Agreement. Any Assets remaining in the Employer's Pension Account or OPEB
Account (as applicable) after giving effect to the preceding sentence will be paid
to the Employer to the extent pe1mitted by law and consistent with the
requirements of Section 115 of the Code.
7 .4 Fund Recove1·y Based on Mistake of Fact
Except as hereinafter provided or in accordance with Section 7.3, the Assets of
the Trust shall never inure to the benefit of the Employer. The Assets shall be
held for the exclusive purpose of funding the Employer's OPEB Obligation or
Pension Obligation or both and defraying the reasonable expenses associated with
the same. However, in the case of a contribution which is made by an Employer
because of a mistake of fact, that portion of the conhibution relating to the
mistake of fact ( exclusive of any earnings or losses attributable thereto) may be
returned to the Employer, provided such return occurs within two (2) years after
discovery by the Employer of the mistake. If any repayment is payable to the
Employer, then, as a condition to such repayment, and only if requested by
Trustee, the Employer shall execute, acknowledge and deliver to the Trustee its
written undertaking, in a form satisfactory to the Trustee, to indemnify, defend
and hold the Trustee harmless from all claims, actions, demands or liabilities
arising in connection with such repayment.
7.5 Termination of Trust
(a) The Trnst and this Trust Agreement may be terminated by the unanimous
agreement of all Employers, which action must be in writing and delivered to the
Trustee and Trust Administrator. Upon termination of the Trust under this Section
7.5(a), the Assets of each Employer's Pension Account or OPEB Account, as
applicable, will be distributed by the Trustee when directed by the Plan
Administrator in accordance with this Section 7.5(a). From and after the date of
such termination and until final distribution of all Assets under each Employer's
Agency Account, the Trustee shall continue to have all the powers provided
herein as are necessary or expedient for the orderly liquidation and dishibution of
such Assets, and the Agency Account shall continue until the Assets have been
completely dishibuted. Any Assets remaining in the Pension Account or OPEB
Account will be used first to satisfy any remaining Pension Obligation or OPEB
Obligation, respectively, pursuant to the Employer's Pension Plan and OPEB Plan
(to the extent that such distribution constitutes the exercise of an "essential
govermnental function" within the meaning of Section 115 of the Code) and to
Page 22 of25
satisfy any of such Employer's obligations under this Trust Agreement. Any
Assets remaining in the Employer's Pension Account or OPEB Account (as
applicable) after giving effect to the preceding sentence will be paid to the
Employer to the extent permitted by law and consistent with the requirements of
Section 115 of the Code.
(b) Contributions to the Trust are conditioned on initial qualification of the
Trust under Section 115 of the Code. If the Trust receives an adverse
determination with respect to its initial qualification, then the Trust and this Tmst
Agreement will automatically terminate without any action by any Employer or
other parties. After such termination, the Assets of each Employer's Pension
Account or OPEB Account, as applicable, will be returned by the Trustee to the
Employer as directed by the Plan Administrator in accordance with this Section
7.5(6) to the extent pe1mitted by law and consistent with the requirements of
Section 115 of the Code. This Section 7 .5(b) will cease to apply upon the Trust's
receipt of a favorable determination with respect to its initial qualification.
(c) The Trust and this Trust Agreement may be terminated only as described
in this Section 7.5. In no case will the assets of the Trust be distributed on
termination to an entity that is not a state, a political subdivision of a state or an
entity the income of which is excluded from gross income under Section 115 of
the Code.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.l Non alienation
Eligible Employees do not have an interest in the Trust. Accordingly, the Trust
shall not in any way be liable to attachment, garnishment, assignment or other
process, or be seized, taken, appropriated or applied by any legal or equitable
process, to pay any debt or liability of an Eligible Employee or any other party.
Trust Assets shall not be subject to the claims of any Employer or the claims of its
creditors.
8.2 Saving Clause
In the event any provision of this Trust Agreement is held illegal or invalid for
any reason, said illegality or invalidity shall not affect the remaining parts of the
Trust Agreement, but this instrument shall be construed and enforced as if said
provision had never been included.
8.3 Applicable Law
This Trust Agreement and the Trust shall be construed, administered and
governed under the Code and the law of the State of California. To the extent any
Page 23 of25
of the provisions of this Trust Agreement are inconsistent with the Code or
applicable state law, the provisions of the Code or state law shall control. In the
event, however, that any provision is susceptible to more than one interpretation,
such interpretation shall be given thereto as is consistent with the Trust
Agreement being a tax-exempt hust within the meaning of the Code.
8.4 Joinder of Parties
In any action or other judicial proceedings affecting this Trust Agreement, it shall
be necessary to join as parties only the Trustee, the Plan Administrator or
Delegatee. No participant or other persons having an interest in the Trust or any
Agency Account shall be entitled to any notice or service of process unless
otherwise required by law. Any judgment entered in such a proceeding or action
shall be binding on all persons claiming under this Trust Agreement; provided,
however, that nothing in this Trust Agreement shall be constrned as to deprive a
participant of such participant's right to seek adjudication of such participant's
rights under applicable law.
8.5 Employment of Counsel
The Trustee may consult with legal counsel (who may be counsel for the Trnstee,
the Trust Administrator or any Employer) with respect to the interpretation of this
Agreement or the Trnstee's duties hereunder or with respect to any legal
proceedings or any questions of law and shall be entitled to take action or not to
take action in good faith reliance on the advice of such counsel and charge the
Trust and, as applicable, one or more Agency Accounts.
8.6 Gender and Number
Words used in the masculine, feminine or neuter gender shall each be deemed to
refer to the other whenever the context so requires; and words used in the singular
or plural number shall each be deemed to refer to the other whenever the context
so requrres.
8.7 Headings
Headings used in this Trnst Agreement are inserted for convenience of reference
only and any conflict between such headings and the text shall be resolved in
favor of the text.
8.8 Counterparts
This Trust Agreement may be executed in an original and any number of
counterpatts by the Plan Administrator ( executing an Adoption Agreement), the
Trnst Administrator and the Trnstee, each of which shall be deemed tc be an
original of the one and the same instrnment.
Page 24 of25
IN WITNESS WHEREOF, the Plan Administrator {by executing the Adoption
Agreement), the Trustee and the Trust Administrator have executed, this Tr~st Agteernent hy:
their duly authorized agents oh the Effective Date:
U.S. :BANK NATIONAL ASSOClAtibN
Sus mt M. Hughes
Typ~Q or.printed name
Its:-Vice.President &Rdat1onship Maiiager
PUBLIC AGENCY
RETIREMENT SERVICES
''Tn~
_By:~
Daniel Johnson
Typed._ot pfo1ted nan1e
Its:·Ptesident . . .
Page 25 of25