§ 7. Finances and fund management.

1.

As part of the system there is hereby established the fund, into which shall be deposited all of the contributions and assets whatsoever attributable to the system, including the assets transferred from the New York Life Group Annuity Contract Number GA-893 as well as all Town, and State, and Member contributions.

2.

The actual custody and supervision of the fund (and assets thereof) shall be vested in the Board of Trustees. Payment of benefits and disbursements from the fund shall be made by the disbursing agent but only upon written authorization from the Board.

3.

The Board shall be required to appoint a national or state bank with trust powers for the purpose of serving as custodian of the fund and all assets of the fund shall be promptly and continually deposited therewith. In order to fulfill its investment responsibilities as set forth herein, the Board shall be required to retain the services of the custodian bank, an investment advisor registered under Investment Advisors Act of 1940, an insurance company, or a combination of these, for purposes of investment decisions and management. Such investment manager shall have full discretion in the investment of assets subject to limitation of this agreement and any guidelines as prescribed by the Board.

4.

All funds and securities of the system may be commingled in the fund, provided that accurate records are maintained at all times reflecting the financial composition of the fund, including accurate current accounts and entries as regards the following:

A.

Any amounts awaiting transfer from New York Life Group Annuity Contract Number GA-893, and

B.

Receipts and disbursements, and

C.

Benefit payments, and

D.

Current amounts clearly reflecting all monies, funds and assets whatsoever attributable to contributions and deposits from the Town, and

E.

All interest, dividends and gains (or losses) whatsoever, and

F.

Such other entries as may be properly required so as to reflect a clear and complete financial report of the fund.

5.

The Board of Trustees shall have the following investment powers and authority:

A.

The Board of Trustees shall be vested with full legal title to said fund, subject, however, and in any event to the authority and power of the Town Council to amend or terminate this trust, provided that no amendment or fund termination shall ever result in the use of any assets of this fund except for the payment of regular expenses and benefits under this system. All contributions from time to time paid into the fund, and the income thereof, without distinction between principal and income, shall be held and administered by the Board or its agent in the fund and the Board shall not be required to segregate or invest separately any portion of the fund.

B.

The fund may be invested and reinvested in such securities or property, real or personal, wherever situated and whatever kind, as shall be approved by the Board of Trustees, including, but not limited to, stocks, common or preferred, bonds, and other evidences of indebtedness or ownership. Provided, however, that no more than seventy (70) percent of the total market value of assets of the fund shall at any time be invested in common and/or preferred stocks nor shall the aggregate investment in any one issuing company exceed one percent of the outstanding capital stock of that company. Provided further, the fund may invest in corporate bonds which are rated investment grade or better by a major rating service. The fund may be invested in foreign stocks up to the limits permitted by Florida Statutes § 185.06(1)(b).

Notwithstanding anything else in this subsection and as provided in Florida Statutes § 215.473, the board of trustees must identify and publicly report any direct or indirect holdings it may have in any scrutinized company, as defined in that section. Beginning January 1, 2010, the Board must proceed to sell, redeem, divest, or withdraw all publicly traded securities it may have directly in that company. The divestiture of any such security must be completed by September 10, 2010. The board and its named officers or investment advisors may not be deemed to have breached their fiduciary duty in any action taken to dispose of any such security, and the board shall have satisfactorily discharged the fiduciary duties of loyalty, prudence, and sole and exclusive benefit to the participants of the pension fund and their beneficiaries if the actions it takes are consistent with the duties imposed by Florida Statutes § 215.473, as provided for in Florida Statute[s] § 185.06(7) and the manner of the disposition, if any, is reasonable as to the means chosen. For purposes of determining which companies are scrutinized companies, the Board may utilize the list of scrutinized companies as developed by the Florida State Board of Administration. No person may bring any civil, criminal, or administrative action against the board of trustees or any employee, officer, director, or advisor of such pension fund based upon the divestiture of any security pursuant to this subsection.

C.

The Board of Trustees may retain in cash and keep unproductive of income such amount of the fund as it may deem advisable, having regard for the cash requirements of the system.

D.

No person or entity shall be liable for the making, retention or sale of any investment or reinvestment made as herein provided, nor for any loss or diminishment of the fund, except that due to his or its own negligence, willful misconduct or lack of good faith.

E.

The Board may cause any investment in securities held by it to be registered in or transferred into its name as trustee or into the name of such nominee as it may direct, or it may retain them unregistered and in form permitting transferability, but the books and records shall at all times show that all investments are part of the trust fund.

F.

The Board is empowered, but is not required, to vote upon any stocks, bonds, or securities of any corporation, association, or trust and to give general or specific proxies of power of attorney with or without power of substitutions; to participate in mergers, reorganizations, recapitalizations, consolidations, and similar transactions with respect to such securities; to deposit such stock or other securities in any voting trust or any protective or like committee with the Trustees or with depositories designated thereby; to amortize or fail to amortize any part or all of the premium or discount resulting from the acquisition or disposition of assets; and generally to exercise any of the power of an owner with respect to stocks, bonds, or other investments comprising the fund which it may deem to be the best interest of the fund to exercise.

G.

The Board shall not be required to make any inventory or appraisal or report to any court, nor to secure any order of court for the exercise of any power herein contained.

H.

Where any action which the Board is required to take or any duty or function which it is required to perform, either under the terms herein or under the general law applicable to it as trustee under this ordinance, can reasonably be taken or performed only after receipt by it from a Member, the Town, or any other entity, of specific information, certification, direction or instructions, the Board shall be free of liability in failing to take such action or perform such duty or function until such information, certification, direction or instruction has been received by it.

I.

Any overpayments or underpayments from the fund to a Member or beneficiary caused by errors of computation shall be adjusted with interest at a rate per annum approved by the Board. Overpayments shall be charged against payments next succeeding the correction. Underpayment shall be made up from the trust fund.

J.

The Board shall sustain no liability whatsoever for the sufficiency of the fund to meet the payments and benefits herein provided for.

K.

In any application to or proceeding or action in the courts, only the Town and the Board shall be necessary parties, and no Member or other person having an interest in the fund shall be entitled to any notice of service of process. Any judgment entered in such a proceeding or action shall be conclusive upon all persons.

6.

Any foregoing powers and functions reposed in the Board may be performed or carried out by the Board through duly authorized agents, provided that the Board at all times maintains continuous supervision over the acts of any such agent; provided further, that legal title to said fund shall always remain in the Board of Trustees.

7.

The Board shall continue the administration of those assets transferred from the New York Life Group Annuity Contract Number GA-893 which could have been retained under said contract to assure continued payment of benefits to anyone retired prior to the said transfer and effective date of Ordinance No. 28-82 of the Town.

(Ord. No. 30-85, § 1, 11-5-1985; Ord. No. 8-87, § 4, 4-7-1987; Ord. No. 10-03, 9-16-2003; Ord. No. 06-10, 5-18-2010)