POLICY TYPE: Governance Process
POLICY TITLE: Authority, Function and Style
The authority and responsibility for the administration, management and
control of the Retirement System, and for the construing and carrying out the
provisions of the Plan is vested in the Board of Trustees (hereinafter the
"Board.") The Board is responsible for the governance of the system. It is
accountable for establishing policies and for supervising the implementation of
those policies in compliance with all applicable legal mandates.
The function of the Board is to make certain contributions that lead
the Retirement System toward the desired performance and ensure that it occurs.
The Board's specific contributions are unique to its
trusteeship role and necessary for appropriate governance and
management. Board decisions are to be based on facts and expert
opinions.
The Board will approach its task with a style that emphasizes outward
vision rather than an internal preoccupation; encouragement of diversity of
viewpoints; strategic leadership more than administrative detail; clear
distinction of board and staff roles; future rather than past or present; and
proactive rather than reactive.
Consequently, the contributions of the Board shall be:
1. The link between the Retirement System and
its members.1
2. Written governing policies that, at the
broadest levels, address:
a.
Governance Process: Specification of how the Board conceives,
carries out and monitors its own task.
b.
Board-Staff Relationship:
How authority is delegated and its appropriate use is
monitored.
c.
Ends:
Retirement system products, impacts, benefits and outcomes (what good
for which needs at what cost).
d.
Limitations: Constraints on executive authority that establish
the prudence and ethics boundaries within which executive activity, decisions
and organizational matters shall be carried out.
3. The assurance of Executive Director
performance against policies in 2c and 2d above.
POLICY TYPE: Governance Process
POLICY TITLE: Guiding Principles
1. The Board of Trustees is dedicated to the
proposition that its paramount purpose is that of providing an adequate and
equitable retirement plan for the members of the teaching profession; to
protect this group in the event total and permanent disability causes them to
be unable to continue employment in their profession; and to provide in part
for their dependents in case of death.
2. The Board is responsible for the prudent
investment of System funds. The two paramount considerations in fund investment
are safety and yield, with yield being of first importance, provided such
investments comply with legally mandated safeguards.
3. The Board should be fully informed of its
financial liabilities, not only to the retirants and beneficiaries, but also to
active members of the teaching profession; and to make those liabilities known
to members of the state legislature, to other state officials and to
education-related organizations.
4.
The Board should provide all interested citizens with information regarding the
System's procedures for investing system funds, as well as, the budgeting,
control and disbursement of those funds.
5. The Board will actively promote the
enactment of state and federal legislation that may improve the economic
welfare of ATRS members.
6. The
Board endorses programs of counseling and information designed to assist
members who are approaching retirement.
7. The Board should be knowledgeable of the
most current information regarding effective, efficient governance and
operation of state retirement systems, which could augment prudent decisions
for the benefit of members. To this end, Board members are encouraged to
actively participate in regional and national retirement organization programs
that offer such information and training.
POLICY TYPE: Governance Process
POLICY TITLE: Code of Conduct
The Board expects of itself and its member's ethical and business-like
conduct.
1. Board members, as
fiduciaries, shall discharge their duties solely in the best interest of the
system members for the exclusive purpose of providing optimum
benefits.
2. Board members must
avoid any conflict of interest with respect to their fiduciary responsibility.
Board members must not use their positions to obtain favorable treatment for
themselves, family members, or close employees.
3. Board members who desire specific
information from firms employed by the System should make the request through
the Executive Director.
4. Board
members shall not, directly or indirectly, solicit or accept any gift of value
as defined by the Arkansas Ethics Commission.
5. Board members shall decline any offer and
shall not have any contact with anyone associated with a firm that the Board is
considering employing after requests for proposals (RFP's) have been
sent.
6. Board members shall not
attempt to exercise individual authority over the operation of the retirement
system or staff members except as explicitly set forth in Board policies. Board
members' interaction with the staff, public, press or other entities must
recognize the inability of any Board member or Board members to speak for the
Board.
7. The Board will regularly
evaluate its own performance, taking whatever action is necessary to govern
with excellence. The Board will review these policies of conduct at least
annually, discussing the degree to which it complies.
8. Board members shall report violations of
any of these policies of conduct in writing to the Board Chair.
POLICY TYPE: Governance Process
POLICY TITLE: Board Member Development
The Retirement Board is responsible for its own readiness for Board
work and the performance of that work.
1. The Board determines appropriate issues
for Board work and appropriate issues to be addressed, as well as the education
and data required to address those issues wisely.
2. The Board determines the need and
mechanisms for Board development.
a. Among the
mechanisms will be membership in the National Council on Teacher Retirement,
Board-approved consultants, and seminars provided by employees of the
Retirement System.
b. The Board's
annual plan will include expected outcomes, costs and scheduling of the Board
development effort.
c. The Board
will set forth the educational experiences it determines appropriate for a new
Board member.
3. One or
more members appointed by the Board Chair will conduct new member orientation.
The Board Chair will designate one member of the Board to be a mentor for a new
Board member for a period of one year.
4. The Board may enlist assistance from the
Executive Director in any phase of its own development.
POLICY TYPE: Governance Process
POLICY TITLE: Board Meetings
The Board shall hold regular meetings at least quarterly. Additional
meetings may be called by the Chair or scheduled by action of the Board in a
regular meeting. The Board shall adopt its own rules of procedure, which shall
be subject to the following:
1. The
Board shall elect a Chair and Vice Chair from its own membership. The election
will be in the odd numbered years at the first regular meeting after the
beginning of the fiscal year. The Chair and Vice Chair shall be elected for a
term of two years and may be re-elected for one additional two-year term. The
Chair and Vice Chair shall be either an active member or retirant trustee. A
Board member must have served at least one full year as a member of the Board
to be eligible for election to the position of Chair or Vice Chair.
2. In the event a vacancy of the Chair or
Vice Chair occurs for any reason other than completion of a term, the Board
shall fill said vacancy by election from the existing Board members for the
remainder of the unexpired term at its next regular meeting. A trustee elected
to fill an unexpired term of the Chair or Vice Chair shall be eligible for two
additional two-year terms.
3.
Quorum: Eight trustees shall constitute a quorum at any meeting of the
Board.
4. Each trustee shall be
entitled to one vote on each question before the Board, and at least eight
affirmative votes shall be required for a decision by the Board at any
meeting.
5.
Roberts Rules
of Ordershall be followed in the conduct of all meetings except when a
departure from Roberts is authorized by action of the
Board.
6. Agenda: The Board shall
adopt an agenda at the beginning of each meeting. By a majority vote of the
Board, items may be added to the agenda before it is adopted.
a. The Executive Director shall prepare a
tentative agenda and submit it to all trustees at least 30 days prior to a
regularly scheduled meeting. The meeting brochure and agenda will be mailed to
trustees not later than five days before the regularly scheduled
meeting.
b. Trustees who want
item(s) to be considered for the agenda should notify the Executive Director no
later than 20 days prior to a regularly scheduled meeting.
c. Members or individuals, who wish to have
an item placed on the agenda at a regularly scheduled Board meeting, should
submit their request in writing to the Executive Director no later than 20 days
prior to the meeting.
d. Members or
individuals, who wish to make comments during a regularly scheduled Board
meeting, should indicate-on forms provided-the subject on which they intend to
speak.
e. A time limit of five
minutes will be allowed members and individuals for presentation, unless
extended by majority vote of the Board.
7. Minutes: The Board shall keep an official
record of the proceedings of each meeting, the final draft of which must be
approved by the Board and signed by the Chair and the Executive Director. The
Board minutes are to contain only the action of the Board, information required
by case law, and the vote thereon.
8. Public Meetings: All meetings of the Board
shall be public and in compliance with the Freedom of Information Act.
Representatives of the Little Rock news media shall be notified of each
meeting.
POLICY TYPE: Governance Process
POLICY TITLE: Duties of Chair and Vice Chair
The duty of the Chair is to ensure the integrity of the Board's process
and to represent the Board to outside parties.
1. The duty of the Chair is to see that the
Board operates consistent with its own rules and those legitimately imposed on
it from outside the retirement system.
a.
Meeting discussion content will be only those issues that, according to Board
policy, clearly belong to the Board to decide.
b. Deliberation will be timely, fair, orderly
and thorough; but also efficient, limited in time and kept to the
point.
2. The authority
of the Chair consists only in making decisions on behalf of the Board that fall
within and are consistent with Board policies.
a. The Chair is empowered to chair Board
meetings with all the commonly accepted power of that position (e.g., ruling,
recognizing, etc.).
b. The Chair
may also:
i. Convene meetings of the Board, or
committees thereof, as prescribed by law.
ii. Certify actions taken by the
Board.
iii. Serve as the official
spokesperson for the Board.
iv.
Name Board members to committees.
v. Perform other duties specifically
requested by the Board that are deemed necessary and appropriate for the Board
to fulfill its duties and responsibilities under law.
Duties of the Vice Chair
The duties of the Vice Chair are to act as temporary Chair in the
absence of the regular Chair.
POLICY TYPE: Governance Process
POLICY TITLE: Reimbursement of Expenses
The Board, by majority vote of the total membership cast at the first
regularly scheduled meeting of each calendar year, may authorize expense
reimbursement for each trustee for performing official board duties. Official
Board duties are defined as follows:
1. Attending regular and called Board
meetings.
2. Attending committee
meetings of the Board or any specially appointed committee comprised, in whole
or in part, of Board members.
3.
Attending conferences approved by the Board of Trustees.
4. Attending legislative committee meetings
when acting as spokesperson for the Board.
5. Attending legislative sessions at the
request of the Board or Executive Director.
Board members are subject to the same reimbursable expenses as state
employees.
Board officers are authorized payment for personal expenses, not
otherwise reimbursed, incurred in the performance of their ATRS-related duties.
Such reimbursement is to cover (1) any losses in salary or compensation that
would otherwise result from their attendance at Board or committee meetings,
and will be paid to the officer's employer; and (2) the costs of communication
(long-distance telephone calls, postage, etc.) with other trustees or staff
members.
POLICY TYPE: Governance Process
POLICY TITLE: Committee Principles
The Board may establish committees to help carry out its
responsibilities.
1. Board committees
may not speak or act for the Board except when formally given such
authority.
2. Committees ordinarily
will assist the Board by preparing policy alternatives and implications for
Board deliberation.
3. Board
committees may not exercise authority over staff.
4. All members of the Retirement Board shall
be notified as to the time and place of all committee meetings. Any Retirement
Board member may attend any committee meeting, but only committee members may
vote on committee matters.
5.
Appointments to committees shall be for four-year terms unless otherwise noted.
Initial appointments for less than four may be reappointed to one full,
four-year term.
6. A quorum of each
committee and the number of affirmative votes needed for a motion to carry
shall be a majority of the designated size of the committee.
7. Board committees shall elect their own
chair and vice chair unless otherwise indicated by Board policy.
8. The Executive Director shall serve as
secretary and an ex-officio non-voting member of Board committees or shall
delegate another member of the staff to serve in this capacity.
9. Committees shall report to the Board
following each of their meetings.
POLICY TYPE: Governance Process
POLICY TITLE: Investment Committee Charter
1. There shall be an Investment Committee
composed of six members of the Board. The Chair of the Board will appoint four
members. The Chair and Vice-Chair of the Board shall serve as ex-officio voting
members of the Committee.
2. The
Committee shall meet on call by the Chair and/or the Executive Director, but
not less than on a quarterly basis.
3. The purposes of the Committee shall be:
a. To consider investment policies and
procedures for recommendation to the Board for adoption.
b. To consider asset allocations for
recommendation to the Board for adoption.
c. To consider all investment proposals for
approval or rejection, unless they are assigned to other committees by the
Board.
d. To monitor all phases of
the investment program, including the Real Estate Committee and the Real Estate
Screening Committee, and recommend any changes that need to be made to the full
Board.
POLICY TYPE: Governance Process
POLICY TITLE: Legislative Committee Charter
1. There shall be a Legislative Committee
composed of five members of the Board appointed by the Board Chair. The Board
Chair may serve as a voting member of the committee.
2. The Committee shall meet twice monthly, or
more often if needed, during the three-month pre-legislative fall season and
during the General Assembly sessions. At other times, the Committee will meet
on call by either the Committee Chair or the Executive Director.
3. The committee shall recommend to the Board
for approval a spokesperson to present and support the Board's defined and
adopted positions on legislative issues.
4. The purposes of the Legislative Committee
shall be:
a. To preview legislative proposals
that will impact the Retirement System and its members.
b. To suggest and develop legislative
proposals for the benefit of the Retirement System and its members.
c. To make recommendations to the Board for
initiating or supporting legislative proposals or for opposing proposed
legislation.
d. To review and
monitor enacted legislation relating to the Retirement System and its members.
It shall be the ongoing responsibility of the Legislative Committee:
i. To see that such legislation is properly
incorporated into Retirement System policies and procedures, and
ii. To monitor the effect of such legislation
as it relates to current and future retirees.
e. To monitor meetings of the Legislative
Council and the Committee on Social Security and Retirement.
POLICY TYPE: Governance Process
POLICY TITLE: Policies Committee Charter
1. There shall be a Policies Committee
composed of five members of the Board. The Board Chair will appoint four
trustees to the Committee and will serve as an ex-officio voting member of the
Committee.
2. The Committee shall
meet bi-monthly, or on call by either the Chair or the Executive
Director.
3. The primary purpose of
the Policies Committee is to receive and consider proposals for the adoption of
new policy and the revision or deletion of existing policy. The Committee is
responsible for recommending the adoption or rejection of any such policy
proposals to the Board.
4.
Recommendations or suggestions for initiating or changing Board policy must be
submitted in writing to the Board Chair, the Chair of the Policies Committee
and the Executive Director seven days prior to the next meeting of the Policies
Committee.
POLICY TYPE: Governance Process
POLICY TITLE: Real Estate Committee Charter
1. There shall be a Real Estate Committee
composed of five members-including three members selected from the business
community, the Arkansas Banking Commissioner, and the ATRS Real Estate
Investment Manager.
a. The Board shall select
six business community members from a list compiled by the Executive Director
and the Board. The business community members shall be appointed for one-year
terms and may be reappointed. Three members will be selected by the Committee
Chair to serve at a particular meeting.
b. The six members from the business
community shall be knowledgeable about real estate matters. A person will be
deemed to be "knowledgeable with respect to real estate matters" if that person
is a present or former lending officer for a federally-insured financial
institution, or is a licensed Arkansas real estate broker with five years or
more experience as such, or is an Arkansas licensed real estate appraiser
(state certified general appraiser or MAI designation).
c. The Real Estate Investment Manager will be
employed by the Board to review, monitor and advise on all aspects of the real
estate portfolio including management contracts. This will include advice on
assets and loans currently in the portfolio as well as future loans and
acquisitions. The Real Estate Investment Manager shall have a minimum of ten
years experience as a commercial real estate broker, property developer,
appraiser, counselor, lender or a combination thereof.
2. No member of the Committee may do business
with ATRS while serving on the committee or for a period of three years
thereafter.
3. The Real Estate
Investment Manager shall serve as Chair of the Committee.
4. The Committee shall operate under
guidelines and procedures approved by the Board.
5. The purpose of the Committee shall be to
consider and approve or disapprove all real estate investments submitted by the
Real Estate Screening Committee. ATRS Legal Counsel must review all such
proposals prior to final approval by the Committee.
6. The Committee shall have the authority to
renew loans that have matured and performed according to loan documents. This
shall include, but not be limited to raising and lowering interest rates,
substituting or requiring more collateral and making adjustments in life
insurance premiums.
7. Total real
estate investments shall not exceed the system's approved asset allocation as
determined by the Board at the beginning of each fiscal year. Should the real
estate allocation be exceeded, no additional real estate investments shall be
entered into until the asset allocation exceeds the total real estate
investments.
8. Minutes of each
meeting will be maintained and reports of all actions taken by the Committee
will be presented at the following Investment Committee meeting and Board
meeting.
POLICY TYPE: Governance Process
POLICY TITLE: Real Estate Screening Committee
Charter
1. There shall be a
Real Estate Screening Committee composed of four members-including the
Investment Committee Chair, one other Board member appointed by the Board
Chair, the Retirement Fund Investment Supervisor, and the Associate
Director-Investments.
2. The
Investments Supervisor shall serve as Chair.
3. The Chief Fiscal Officer and the Real
Estate Investment Manager shall serve as non-voting advisors to the
Committee.
4. The primary purpose
of the Committee shall be to consider all real estate loans and acquisition
proposals for preliminary approval. Proposals approved by the Committee will be
submitted for "due diligence" study by underwriters selected by the Real Estate
Committee.
POLICY TYPE: Governance Process
POLICY TITLE: Board Self-Evaluation
The Board will regularly evaluate its own performance, taking whatever
action is necessary to govern with excellence. The Board will review these
policies of conduct at least annually and discuss the degree to which it
complies.
POLICY TYPE: Board-Executive Director Relationship
POLICY TITLE: Delegation to the Executive Director
Authority for implementing policy and the development of supporting
procedures is delegated to the Executive Director
1. All Board authority delegated to staff is
delegated through the Executive Director, so that all authority and
accountability of staff is considered to be within the authority and
accountability of the Executive Director.
2.
Ends policies direct the
Executive Director to achieve certain results; Executive Director
Limitations policies constrain the Executive Director to act within
Board adopted policies, legal requirements and acceptable boundaries of
prudence and ethics. With respect to Ends and
Executive Director Limitations, the Executive Director is
authorized to establish further procedures, make decisions, and take actions
provided they are consistent with Board policies.
3. The Board may change its policies, thereby
shifting the boundary between the Board and the Executive Director domains. The
Board and Executive Director will respect and support the parameters of
delegation as they exist and as they may be changed in the future.
POLICY TYPE: Board-Executive Director's
Relationship
POLICY TITLE: Executive Director's Job Description
The Executive Director is the Board's official link to the operation of
the Retirement System. The Executive Director is accountable for all
organizational performance and entitled to exercise all authority delegated by
official Board action.
The Executive Director's job description may be stated as performance
in these areas:
1. Organizational
accomplishment of the provisions of Board policies on
Ends.
2.
Organizational operation within the boundaries of prudence and ethics
established in Board policies on Executive Director
Limitations.
3. Serving as
Secretary to the Retirement Board and an ex-officio non-voting member of its
committees and maintaining an accurate record of the proceedings.
POLICY TYPE: Board-Executive Director's
Relationship
POLICY TITLE: Monitoring Executive Performance
Monitoring executive performance is synonymous with monitoring
organizational performance against Board policies on Ends and
Executive Director Limitations. Any evaluation of Executive
Director performance, formal or informal, may be derived only from these
monitoring data.
1. The purpose of
monitoring is simply to determine the degree to which Board policies are being
fulfilled. Information that does not meet this purpose will not be considered
to be monitoring. Monitoring will be as automatic as possible, using a minimum
of Board time so that meetings can be used to create the future rather than to
review the past.
2. A given policy
may be monitored in one or more of three ways:
a. Internal report: Compliance information
prepared by the Executive Director for the Board.
b. External report: Compliance information
prepared by a disinterested, external auditor, inspector or consultant who is
selected by and reports directly to the Board. Such reports must assess
executive performance only against policies of the Board, not those of the
external party unless the Board has previously indicated that party's opinion
to be the standard.
c. Direct Board
inspection: Compliance information prepared by a Board member, a committee or
the Board as a whole. This is a Board inspection of documents, activities or
circumstances directed by the Board that allows a "prudent person" test of
policy compliance.
3.
Upon the choice of the Board, any policy may be monitored by any method at any
time. For regular monitoring, however, each
Ends and
Executive Director Limitations policy will be classified by
the Board according to the following frequency and method:
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* Every five years another independent actuary will review the
actuarial soundness of the system. (The last actuarial audit was conducted for
FY XXXX.)
POLICY TYPE: Board-Executive Director Relationship
POLICY TITLE: Employment of Executive Director
Employment of the Executive Director will be by the Board.
1. Employment will be based on the Board's
judgment that a candidate's knowledge, skill and character would indicate
reasonable assurance of excellent performance.
2. Criteria will be based on:
a. General characteristics set forth by the
Board to predict successful Executive Director performance, and
b. Specific characteristics set forth by the
Board to predict successful Executive Director performance in view of the
Retirement System's strategic challenges in the future.
3. Prior to selecting an Executive Director,
the Board will make explicit provisions for:
a. Providing notice of the vacancy,
b. Screening nominations or applications,
and
c. The selection process.
Authority: Act 427 of 1973
Adopted:February 12, 2002
Amended:
_______________________
11 "Members" as used in the Board Policies document means members of
the Arkansas Teacher Retirement System, benefit recipients and their
beneficiaries when the sense requires it.
