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Chair Gephart turned the floor over to Ms. Treadwell-Rubin who offered the Board the option of either discussion with counsel in open session or executive session. All Board members wished to remain in open session. Ms. Treadwell-Rubin began her review of agenda item two by informing the Board that the PSPRS Board of Trustees are meeting December 22, 2021, to determine which version of the draft Model Rules to adopt. This follows the comment period which was open from October through November 10.
With regard to HB 2381, although there are new provisions in this bill, it also makes certain things more clear and gives structure to things that were already the law. Additionally, this bill is intended to ensure Local Board operations are consistent between agencies and throughout the state. One of the major changes in this law is how claims are handled and what Local Boards will now have jurisdiction over. Local Boards will maintain jurisdiction over membership, pre-existing condition determinations for new members, disability retirements and line of duty death claims. All other aspects, such as normal retirements, DROP entrance/exit, and survivor benefits will no longer be voted on by Local Boards. However, Local Board are still able to assist members upon request with their applications and must send the information to PSPRS upon completion within 10 days. Another area remaining within the Local Board's jurisdiction is questions of whether a particular benefit or activity is consistent with PSPRS law.
The bill is also intended to provide more structure and clarity concerning the authority of the Public Safety Retirement System to step in and address problems, to enforce compliance among Local Boards, and to step in and assume control of Local Board operations until such problems are resolved. The bill also clarifies the ability of PSPRS to investigate complaints against Local Boards and provides additional structure. Ms. Treadwell-Rubin further explained her role in assisting the Local Board with such matters including taking a proactive risk management approach. A compliance requirement of importance is the Board's obligation to report any Board Member changes and/or staff changes (including vacancies) within 10 days to PSPRS.
Although it remains to be determined how it will be offered, PSPRS will be developing mandatory training for Board Members and Secretaries appointed or elected on or after January 1, 2022. The training will include familiar items such as open meeting laws and ethics, but will also include a new component addressing fiduciary duties of Local Boards. Training must be completed within 180 days of appointment or election.
The final highlight of law changes is in the area of rehearings. The System now "requires" rehearings instead of "requesting" them. It is still the law that a member requesting a rehearing will still have 60 days to make such a request, however the System may request a rehearing without a deadline if the Board's decision appears to violate IRS plan qualification. The law further clarifies the Board's obligation to grant a rehearing when demanded by the System.
Another aspect of uniformity relates to the Model Rules. Although Local Boards may have their own Rules, they are now required to incorporate the PSPRS Model Rules into their own rules and are further required to read the PSPRS Model Rules and certify they have done so. That is why the Board Members have been presented with a Resolution today certifying they have read and will comply with the PSPRS Model Rules.
Ms. Treadwell-Rubin concluded her presentation to the Board and asked if there were any questions. Both Member Trevizo and Member Beck asked if the Board was expected to sign the Resolution today and inquired about the Model Rules still being in draft version. Ms. Treadwell-Rubin explained the way in which the Resolution is worded allows for automatic updates as the Model Rules are adopted and finalized by the PSPRS Board of Trustees. Currently, the draft version is all that is available, but the Resolution will cover the Board's obligation to read and comply with both current and future versions.
Ms. Treadwell-Rubin further explained when the newly adopted PSPRS Model Rules are available, those would be presented to the Board and the Board may engage in a conversation about adopting updated Rules specific to this Local Board, which would remain in full compliance with the PSPRS Model Rules. Another area the Board may consider is its procedure in reviewing disability claim census data, and its option to require those members to undergo an annual medical review. There are advantages and disadvantages to both, and the decision remains optional to Local Boards.
Board Members continued their discussion, and Chair Gephart recapped his understanding of the process in signing the Resolution at this meeting. Ms. Treadwell-Rubin confirmed Chair Gephart's understanding and provided final clarification to the Board that the Resolution simply certifies the Board has read the rules. The Board can adopt its own rules based on counsel's recommendations at a future date. |