§ 3.87.030. Retiree medical funding program trust and program administration.

A retiree medical funding program trust is established by Trust Agreement entered into as of November 13, 1995 to administer the police and fire retiree medical funding program, and all amounts held by the trust are to be used to administer and fulfill the obligations arising under the retiree medical funding program. The responsibilities and operation of the trust are as follows:

A.

Administration. The trust shall be administered by an eight-person board of trustees.

B.

Board of trustees.

1.

The board of trustees shall administer the trust in accordance with the Trust Agreement entered into as of November 13, 1995.

2.

Three of the trustees shall be appointed by the APDEA, and three by the IAFF, Local 1264. The trustees appointed by the APDEA and the IAFF shall be either program members or potential members and shall be determined only by the vote of the members and potential members of the funding program. Two nonvoting trustees shall be appointed by the mayor. Assembly confirmation is required of all appointees. All appointments of member trustees shall be for three-year terms except that the initial terms of the member trustees shall be set at one-year, two-year and three-year terms. The nonvoting trustees appointed by the mayor shall serve at the pleasure of the mayor, subject to assembly confirmation. There shall be no limitation to the number of terms to which a trustee may be appointed.

3.

The board of trustees shall meet at least quarterly and shall adopt regular rules of order and rules of procedure governing its meetings and hearings for the administration of this program.

4.

Trustees shall serve without compensation from the trust for the performance of trust duties.

C.

Powers and duties of the board of trustees. The board of trustees shall maintain and administer the police and fire retiree medical funding program set forth in this chapter and shall be the final authority in all matters pertaining to the program. The board of trustees shall have the following powers and responsibilities:

1.

The responsibility to appoint a trustee pursuant to a trust agreement to manage and operate a trust fund and to receive, hold, invest and reinvest contributions received from the municipality, together with interest and other income, and to pay benefits provided under the program. The board of trustees shall determine the form and terms of the trust agreement and may modify or terminate such agreement from time to time and may remove any trustee and select a successor trustee. The board of trustees may request that the retirement board established under section 3.85.040 for the police and fire retirement system amend its trustee and investment management contracts to provide that the system's trustee and investment manager, invest and operate the program trust funds.

2.

The authority to engage the services of one or more investment managers and direct the trustee to apportion the trust funds among them for investment purposes.

3.

The duty to credit contributions to a health reimbursement account for each eligible member.

4.

The duty to allocate trust earnings, losses and expenses and forfeitures arising under section 3.87.060 among the members' accounts, in such a manner as the board of trustees shall deem appropriate, including a non-pro rata allocation.

5.

The duty to maintain and administer the HRA for the members, including the maintenance of HRA accounts and the processing, substantiation, and payment of all eligible covered expenses and premium payments.

6.

The duty to pay or reimburse members for medical expenses eligible for reimbursement under Section 213 of the Internal Revenue Code and the Program.

7.

The authority to design and solicit benefit plans for members, including selection of the pricing structure. The decision to offer or not to offer these additional benefit plans would be at the sole discretion of the board of trustees. The board of trustees shall be responsible for ensuring that any coverages offered qualify for tax-favored treatment and do not jeopardize the nontaxable benefits offered by the medical funding program. The premium charged for participation in trust-offered programs would be determined by the board of trustees and/or the insurance company underwriting the coverage.

8.

The authority to refuse to offer or to cease to offer a benefit plan should the board of trustees determine that the coverage or benefits under such plan constitutes taxable income to the recipient.

9.

The authority to report payments made that are determined by the trust to be taxable income to the recipient of payments.

10.

The authority to engage the services of qualified professionals (including third party administrators and legal counsel) to assist in the administration and operation of the trust, and the trust program, including the HRA accounts. All expenses of such services shall be borne by the trust program assets.

11.

The authority to pay any costs reasonably incurred in connection with the administration of the program in accordance with this chapter.

12.

The authority to determine staffing and scheduling of personnel based on the needs of the trust program.

13.

All powers available to a trust under AS 13.36.010 et seq. and the trust agreement entitled the Municipality of Anchorage Retiree Medical Funding Program Trust for Police Officers and Firefighters.

D.

Program administration. The board of trustees shall maintain and administer the police and fire retiree medical funding program set forth in this chapter and shall be the final authority in all matters pertaining to the program. The board of trustees shall have the following responsibilities:

1.

Staff. The board may select, compensate and retain trust program staff to handle such executive and administrative functions that are required by the board in executing duties under the trust agreement.

a.

The municipality's contribution to program staff is limited to an annual payment to the Trust of an amount equivalent to the salary and benefits of a Non-Rep level 15 municipal employee.

b.

The board shall determine the working title and compensation of the trust program staff, provided that compensation and costs in excess of the municipality's contribution shall be borne by the trust program assets.

c.

The board shall enter into an agreement with the municipality to provide for full payroll and employee benefit services for the trust program staff. The trust program staff administrator shall be considered an exempt executive employee of the municipality, at a range to be determined by the board of trustees in consultation with the employment and classification division.

2.

Budget. The board shall annually submit the trust program annual budget and prior year's expenditures to the assembly and the administration by assembly information memorandum.

3.

Ethics Code: The Board of Trustees and staff shall follow the provisions of AMC chapter 1.15, unless more restrictive fiduciary duties apply.

4.

The board of trustees shall follow municipal code provisions except where the board adopts procurement and other provisions in current code applicable to the police and fire retirement system under AMC chapter 3.85 for comparable board of trustee administration. Additional provisions may be provided for by ordinance adopted by the assembly.

5.

Fiduciary liability insurance. The provisions of Title 7 notwithstanding, the board shall have the authority to acquire policies of insurance at the expense of the trust assets for fiduciary liability, independent of municipal risk management insurance services.

E.

Federal tax treatment. The income of the trust is intended to be exempt from taxation under section 115(1) of the United States Internal Revenue Code.

F.

Termination. The trust shall terminate after payment of all members has been made. After payment of any final administrative expenses of the trust has been made, any amounts remaining in the trust shall revert to the municipality to be used for any lawful purpose.

(AO No. 94-222(S-1), § 1, 12-28-94; AO No. 95-183, 9-12-95; AO No. 2001-106, § 1, 6-5-01; AO No. 2003-141, § 1, 10-21-03; AO No. 2015-29, § 4, 4-14-15 )