1504 STANDING COMMITTEES

1504.1 The standing committees of the Board shall be the following:

1. (a) Investment Committee;
2. (b) Operations Committee;
3. (c) Benefits Committee;
4. (d) Legislative Committee;
5. (e) Minority Participation Committee; and
6. (f) Fiduciary Committee.

1504.2 Committee activity is advisory and shall be approved by a majority of the Board before it becomes a Board action or position of the Board. Recommendations and motions shall be reported, as adopted by the Board.

1504.3 The Investment Committee shall be a Committee of the Whole. The Chair of the Investment Committee appointed pursuant to § 1505.1 is authorized, in consultation with the Chairman of the Board, to establish sub-committees to carry out specific assignments within the scope of the Investment Committee's overall responsibilities. The purpose of the Investment Committee shall be to provide general oversight of the investment of the Retirement Funds assets. The general oversight responsibilities shall include the following:

1. (a) Recommending and defining the functions of the master custodian, investment managers, and investment consultants;
2. (b) Recommending investment guidelines and actively monitoring the investment portfolio; and
3. (c) Reviewing the performance of the master custodian, investment managers, and investment consultants and recommending to the Board the retention or dismissal of these managers, as well as recommending the selection of additional managers when appropriate.

1504.4 The functions of the Investment Committee shall include oversight and periodic evaluation of the performance of the investment managers, the master custodian, and the investment consultants. Such oversight shall include review of any request for an increase in fees. The functions shall also include recommending to the Board the following:

1. (a) Overall asset allocations strategy;
2. (b) Long term investment policies; and
3. (c) Suitable investment vehicles.

1504.5 The Investment Committee shall be responsible for ensuring that the Executive Director, staff, investment consultant, master custodian, and investment managers provide the Board with the following:

1. (a) Performance measurements of each manager and of the overall portfolio;

(b) Comparison of overall investment performance with actuarial requirements;

(c) Comparison of each manager's performance with his or her stated investment strategies, and with goals determined by the Board;

(d) Review of all portfolios to ensure compliance with investment guidelines;

(e) Oversight of the master trustee to ensure appropriate settlement of all transactions, accurate record keeping in the investment area, and adequate accounting and auditing safeguards for investments;

(f) Recommendations on execution of all contracts with outside investment advisors after review by the General Counsel; and

(g) Oversight of the review process for selecting outside investment managers; and

(h) Recommend to the Board a final pool of candidates to serve as outside investment.

1504.6 The Fiduciary Committee shall be responsible for reviewing and recommending final action to the Board in circumstances which:

(a) Give rise to a potential or actual breach of fiduciary responsibility by a Board member and/or staff members; or

(b) Result in an actual violation or an appearance of a violation of the Board's conflict of interest guidelines, and Federal and District conflict of interest laws or regulations.

1504.7 The Fiduciary Committee shall be comprised of the Chairman, the General Counsel/ Chief Compliance Officer, and (1) member elected by the Board.

1504.8 Reserved

1504.9 The Operations Committee shall be responsible for the following matters and shall report these matters to the Board for its action:

(a) Researching alternative municipal board organizational structures and presenting options and making recommendations to the Board with regard to the structure and organization of the Board;

(b) Defining and presenting alternative organizational structures for officers of the Board, terms of office, hierarchy, and procedures for succession;

(c) Defining options and recommending overall staff requirements to the Board;

(d) Defining and presenting options to the Board for standing committees of the Board, including responsibilities and authority;

(e) Recommending sources and procedures for obtaining insurance and bonding for Board members;

(f) Planning for the preparation and distribution of required financial reports (such as annual reports, financial statements, and actuarial statements) and estimating costs of preparation and publication;

(g) Review and consider recommendations made in the management letter accompanying the audit report;

1. (h) Developing and recommending bylaws and operating procedures;
2. (i) Developing and recommending an annual plan and operating budget, including oversight mechanisms for staff, expenses and related matters, and determining the Board's authority for expenditures under the approved budget;
3. (j) Acting as liaison to and overseeing procedures used by the District government for payments;
4. (k) Oversight of election of representatives for the Teachers, and Police and Firefighters participant groups;
5. (l) Periodic evaluation of the performance of the Executive Director, with recommendations to the Board;
6. (m) Oversight and periodic evaluation of the performance of the accountants, the auditor, the actuaries, and the outside general counsel(s) including oversight of any request for an increase in fees;
7. (n) Determining requirements for office space, equipment, location, and estimating cost, presenting alternatives, and making recommendations on these matters;
8. (o) Researching alternatives for securing office space, such as renting, borrowing space from the District, and contracting for sale/leaseback;
9. (p) Determining alternatives and making recommendations to the Board regarding record keeping requirements, procedures, and filing systems;
10. (q) Arranging for all meetings to be recorded on tape and for minutes to be prepared;
11. (r) Developing procedures for Board members time, expense, and reimbursement reporting to the District government;
12. (s) Developing procedures to reconcile and satisfy amounts payable to the Board's vendors for reporting to the District government;
13. (t) Defining function of outside contractors (including but not limited to master custodian, investment consultant, accountants, auditor, general counsel, and actuary, but excluding investment managers selected by the Investment Committee), and describing requirements, such as experience and certifications;
14. (u) Defining criteria and procedures for qualifying, interviewing, recommending, and selecting candidates to be outside contractors;
15. (v) Defining functions and responsibilities of the Executive Director, and describing requirements, such as experience and certifications, and recommending salary range;
16. (w) Evaluating and recommending methods of recruiting the Executive Director and outside vendors;
17. (x) Identifying contractors who might be considered affiliated parties to the Fund, and recommending guidelines for their Association with the Fund; and
18. (y) Managing the process of selecting and hiring the Executive Director and outside vendors, and recommending candidates for these positions.

1504.10 The Benefits Committee shall be responsible for the following matters and shall report these matters to the Board for its action:

(a) Identifying major groups with an interest in the Fund (such as participants, beneficiaries, the Mayor and Council of the District of Columbia, and the Congress), and summarizing and reporting on relationships among those groups;

(b) Defining communications channels for Board and staff and specifying the appropriate respondent to benefits inquires from various sources;

(c) Identifying sources of mailing lists containing various constituencies (such as participants and beneficiaries of the plans, Council members, key Congressional members and staffs, press, and media) and determining availability and cost of the lists;

(d) Preparing a communications plan for each constituency, determining appropriate tone and style of communications and required communications channels, and specifying the plan and schedule of action;

(e) Developing, recommending and implementing examinations to be conducted by outside vendors to verify adequacy of the District's current interpretation and administration of the benefits system;

(f) Determining and specifying the Board's responsibility for reporting to employees and beneficiaries;

(g) Preparing and recommending to the Board statements of participants' rights, including alternatives for availability and distribution of the statements, and providing estimated annual costs of providing statements;

(h) Recommending a system for informing participants of the level of each participant's accrued benefits on an individual basis, providing cost estimates for the system, and implementing decisions of the Board with respect to the systems;

(i) Overseeing count of the current population of the plan participants and projecting beneficiaries benefits, and administrative costs in future years; and

(j) Coordinating the Board's efforts to determine which District agency has the ultimate responsibility for current benefits, including conducting research and reporting on the functional responsibility for Fund management, benefit administration and reporting, as currently accomplished by the District Government, and recommending a plan for future operations and relationships.

1504.11 The Legislative Committee shall serve as liaison between the Board and the District government and between the Board and the Congress on all legislative matters involving the Board. Positions taken by the Legislative Committee, that purport to be positions of the Board, shall be approved by the Board. This liaison role shall include the following responsibilities:

(a) Supervising the drafting and presentation of testimony before the Council and the Congress;

(b) Participating in negotiations and deliberations with the District's Executive and Legislative branches and with the Congress on matters involving the Board and its responsibilities; and

(c) Performing all other duties assigned to it by the Board which involve relationships between the Board and other governmental bodies.

1504.12 The Minority Participation Committee shall be responsible for monitoring all aspects of the Board's activities to insure Board recognition of the District's affirmative action objectives; and shall make recommendations to the Board on actions needed for purposes of compliance. The specific responsibilities of the Minority Participation Committee shall include:

1. (a) Acting independently of the Investment Committee in the identification, selection and allocation of funds to minority investment managers provided that such action must be consistent with the Board's investment guidelines and the Board's overall asset allocation structure;
2. (b) Participating in conjunction with the Investment Committee, in the overall monitoring and evaluation of the minority investment managers hired by the Board;
3. (c) Identifying and selecting arm Team Investment Managers for recommendation to the Board;
4. (d) Developing criteria to select and to monitor minority broker dealers; and
5. (e) Performing periodic reviews of the Board's affirmative action programs and recommending changes as needed.

1504.13 For purposes of this subsection the term "minority" includes African Americans, Asian Americans, Hispanic Americans and women, who by virtue of being members of the foregoing groups, have been deemed economically and socially disadvantaged because of historical discrimination practiced against these groups by investment management firms and other financial institutions within the United States of America.

SOURCE: Notice of Final Rulemaking published at 49 DCR 10795-10800 (November 29, 2002).