Investment Management of Retirement System Assets; Prudent Investor Rule.
Ann Arbor City Code § 1:624
in effect1:624. - Investment Management of Retirement System Assets; Prudent Investor Rule.
(1) Board of Trustees.
[(a)] The Board of Trustees of the Retirement System shall serve as the Trustee of the Trust Fund and the "investment fiduciary" thereof, as defined at Michigan P.A. 314 of 1965 (as amended) Section 12c(1) ("P.A. 314."). The Board shall have full power to invest and reinvest the assets of the Trust Fund subject to the terms, conditions, limitations, and restrictions imposed by P.A. 314 and subject to Dual Retirement Plan Members' investment directions with respect to their Accounts.
[(b)] The Board shall have the right to employ suitable agents and counsel, and to pay their reasonable compensation and expenses. The Board shall not be liable for any neglect, omission or wrongdoing of any such agent or counsel, and shall not be deemed imprudent by reason of its acting or refraining from acting in reliance on advice of counsel, provided that reasonable care shall have been exercised in selecting such agent or counsel for such employment, and thereafter in monitoring such agent or counsel.
(2) Investment Manager. The Board shall have the right to name and delegate investment authority and duty to an Investment Manager. Upon such action by the Board the Investment Manager shall assume from the Board the authority and duty to direct the investment and management of all or a portion of the Trust Fund; provided that:
(a) A written acknowledgment by the Investment Manager shall be delivered to the Board whereupon the Investment Manager shall be the investment fiduciary with respect to the investment and management of the Trust Fund (or designated portion thereof) and the Board shall have no responsibility therefor.
(b) Any transfer of investment and management authority to an Investment Manager may be revoked by the Board, or by written resignation of the Investment Manager upon receipt by the Board of same.
(c) The appointment, selection and retention of a qualified Investment Manager shall be solely the responsibility of the Board.
For purposes of this section, the term "Investment Manager" means any investment fiduciary (other than the Board or any other person named herein as a fiduciary) who: (a) has the power to manage, acquire or dispose of any property of the trust; (b) is (i) registered as an investment adviser under either the Investment Advisers Act of 1940 or the Uniform Securities Act as set forth in Public Acts of 1964, No. 265, being Sections 451.501 and 457.818 of Michigan Compiled Laws; (ii) a bank as defined under the Investment Advisers Act of 1940; or (iii) an insurance company qualified to perform Services described in clause (a) under the laws of more than 1 state; and (c) has acknowledged in writing that he/she/it is an investment fiduciary with respect to the assets of the Retirement System.
(3) Unless otherwise delegated to an Investment Manager as described in subsection [(2)] above, the Board shall have full power to hold, purchase, sell, assign, transfer, and dispose of any of the securities and investments in which any of the assets of the Retirement System have been invested, as well as the proceed of the investments and any moneys belonging to the Retirement System. There shall be kept on deposit sufficient cash to meet payments and liquidity needs. All assets of the Retirement System shall be held for the sole purpose of meeting disbursements for Pensions, Annuities, and other payments authorized by the provisions of this chapter, and shall be used for no other purpose.
(Ord. No. 16-28, § 1, 1-3-17)
Source: City of Ann Arbor, Michigan, Code (Municode Library, library.municode.com)URL: https://library.municode.com/mi/ann_arbor/codes/code_of_ordinances?nodeId=TITIAD_CH18EMRESY_1_624INMARESYASPRINRUFetched: 11/8/2026