I.The members of the board of trustees shall be the trustees of the several funds created hereby and shall set the investment policy relative to those funds. The independent investment committee shall have full power to invest and reinvest such funds in accordance with the policy set by the board. The board of trustees and the members of the independent investment committee shall have the powers, privileges, and immunities of a corporation. The independent investment committee shall have full power to hold, purchase, sell, assign, transfer, and dispose of any of the securities and investments in which any of the funds created hereby have been invested, as well as the proceeds of such investments in accordance with the policy set by the board. All of the assets and proceeds, and income the
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I. The members of the board of trustees shall be the trustees of the several funds created hereby and shall set the investment policy relative to those funds. The independent investment committee shall have full power to invest and reinvest such funds in accordance with the policy set by the board. The board of trustees and the members of the independent investment committee shall have the powers, privileges, and immunities of a corporation. The independent investment committee shall have full power to hold, purchase, sell, assign, transfer, and dispose of any of the securities and investments in which any of the funds created hereby have been invested, as well as the proceeds of such investments in accordance with the policy set by the board. All of the assets and proceeds, and income therefrom, of the New Hampshire retirement system, and all contributions and payments made thereto, shall be held, invested, or disbursed in trust.
I-a. (a) A trustee, independent investment committee member, or other fiduciary shall discharge duties with respect to the retirement system:
(1) Solely in the interest of the participants and beneficiaries;
(2) For the exclusive purpose of providing benefits to participants and beneficiaries and paying reasonable expenses of administering the system;
(3) With the care, skill, and caution under the circumstances then prevailing which a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an activity of like character and purpose;
(4) Impartially, taking into account any differing interests of participants and beneficiaries;
(5) Incurring only costs that are appropriate and reasonable; and
(6) In accordance with a good-faith interpretation of the law governing the retirement system.
(b) In investing and managing assets of the retirement system pursuant to subparagraph (a), a trustee or independent investment committee member with authority to invest and manage assets:
(1) Shall consider among other circumstances:
(A) General economic conditions;
(B) The possible effect of inflation or deflation;
(C) The role that each investment or course of action plays within the overall portfolio of the retirement system;
(D) The expected total return from income and the appreciation of capital;
(E) Needs for liquidity, regularity of income, and preservation or appreciation of capital; and
(F) The adequacy of funding for the system based on reasonable actuarial factors;
(2) Shall diversify the investments of the retirement system unless the trustee or independent investment committee member reasonably determines that, because of special circumstances, it is clearly prudent not to do so;
(3) Shall make a reasonable effort to verify facts relevant to the investment and management of assets of a retirement system; and
(4) May invest in any kind of property or type of investment consistent with this section.
(c) The board of trustees shall adopt a statement of investment objectives and policy for the retirement system as provided in subparagraph VII(c).
I-b. Paragraph I-a shall apply to all board members, independent investment committee members, and other fiduciaries, as well as staff and vendors to the extent they exercise any discretionary authority or discretionary control respecting management of the retirement system or exercise any authority or control respecting management or disposition of its assets, or they render investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of the retirement system, or have any authority or responsibility to do so, or they have any discretionary authority or discretionary responsibility in the administration of the retirement system.
I-c. The fiduciary obligations of the members of the board of trustees and the independent investment committee are paramount to any other interest a trustee or independent investment committee member may have arising from another role or position that he or she holds, including the position which qualified the person for appointment to the board of trustees or independent investment committee.
II. The board of trustees shall:
(a) Have the authority to hire actuarial services. The compensation for actuarial services required by the board of trustees shall be a charge upon the funds of the New Hampshire retirement system.
(b) Have the full power and authority to delegate to any agent providing services to the New Hampshire retirement system, within or without the state, the power and discretion to make any necessary decisions and to take any action necessary to effect decisions with the same legal effect as if performed by the board of trustees. The payment for these services shall be a charge upon the funds of the New Hampshire retirement system.
(c) Have the authority to hire investment consultants. The compensation for investment consultant services shall be a charge upon the funds of the New Hampshire retirement system.
II-a. The independent investment committee shall:
(a) Appoint and employ a custodian of the several funds of the retirement system, and such custodian, as an agent of the independent investment committee, shall be compensated and such compensation shall be a charge upon the funds of the retirement system.
(b) Have the full power and authority to delegate to any agent, within or without the state, the power and discretion to make any necessary decisions with regard to the purchase or sale of any legal object of investment and to take any action necessary to effect decisions by or on behalf of the New Hampshire retirement system with the same legal effect as if performed by the independent investment committee. The independent investment committee shall have the power to authorize the payment of compensation to an agent or agents for investment management services.
(c) Report to the board of trustees at least quarterly on the management, investment, and reinvestment activities of the independent investment committee. The report shall include a description of all fees incurred due to investment transactions.
III. Except as otherwise provided in this section, no trustee, independent investment committee member, and no employee of the board of trustees shall have any personal interest in the gains or profits of any investment made by the board; nor shall any trustee, independent investment committee member, or employee of the board, directly or indirectly, for himself or herself or as an agent, in any manner use the same except to make such current and necessary payments as are authorized by the board; nor shall any trustee, independent investment committee member, or employee of the board become an endorser or surety, or in any manner an obligor, for money loaned to or borrowed from the board.
IV. The board of trustees is authorized to engage the services of legal counsel. The payment for services provided in this paragraph shall be a charge upon the funds of the New Hampshire retirement system.
V. The board of trustees shall adopt rules pursuant to RSA 541-A relative to procedures to be followed in establishing and modifying investment objectives and guidelines. The investment policy shall not be subject to rulemaking under RSA 541-A.
VI. (a) The board of trustees shall complete, not later than 120 days after the close of each fiscal year, an annual comprehensive financial report concerning the preceding fiscal year in a manner consistent with generally accepted accounting principles. The system's comprehensive annual financial report shall be audited annually in accordance with generally accepted governmental auditing standards by a qualified independent auditor selected by the audit committee. The auditor shall present the audited financial report and resulting findings to the audit committee for its approval and acceptance by December 31 of each year unless the board of trustees for good cause shall extend such period.
(b) The audit committee may select a qualified independent auditor to conduct performance audits in accordance with generally accepted governmental auditing standards. The scope and timing of any such performance audits shall be at the discretion of the audit committee.
(c) All audits performed pursuant to subparagraphs (a) and (b) shall be filed with the governor, speaker of the house, president of the senate and commissioner of administrative services within 5 days of being issued. The cost of all audits shall be a charge upon funds available to the retirement system.
VII. The independent investment committee shall prepare for board review and approval a comprehensive annual investment report. The board shall approve the comprehensive annual investment report at the same time that it approves the annual financial report under paragraph VI. The investment report shall be submitted to the president of the senate, the speaker of the house, and the governor. The report shall include, but shall not be limited to:
(a) A description of the independent investment committee's philosophy for investing the assets of the system, including an analysis of any significant changes in philosophy which have occurred from the prior annual report.
(b) An analysis of the return on investment, by investment category.
(c) An annual investment policy statement which shall incorporate the following:
(1) A clear statement of investment objectives including the adoption of a reasonable and sound expected rate of return the retirement system is attempting to earn. The expected rate of return utilized for the statement of investment objectives shall bear some reasonable relationship to the assumed rate of return set by the trustees for the biennial actuarial calculation. The retirement system's actuaries shall issue a written opinion in regard to the reasonableness of the assumed rate of return that shall address any difference between the assumed rate of return and the expected rate of return.
(2) A detailed breakdown of the asset structure most likely to enable the fund to reach its long range objective within appropriate risk parameters. The details should include all relevant subcategories among equities, debt, and alternative investments and identify the appropriate benchmarks for each performance analysis. The policy should establish an acceptable range for each allocation as well as a specific target allocation.
(3) Identification of how outcomes are measured and benchmarks are developed and who is responsible for the various decision levels in the investment process between the board of trustees, the investment committee, the retirement system's staff, investment consultants, and portfolio managers. The policy statement should specify the minimum frequency to review outcomes and responsibilities, in order to determine whether decisions as to asset mix and manager selection added value to the fund. Investment managers should be under frequent review by the investment committee and the retirement system.
(d) Any suggested changes in legislation which the board may seek in order to better serve the members of the system. This is not intended to preclude the board of trustees from seeking additional legislation as needs arise between annual reports.
VIII. (a) The management, investment, and reinvestment practices for the assets held in trust by the board pursuant to this section shall be subject to review by the legislature.
(b) The independent investment committee and the board of trustees shall report on a quarterly basis to the office of legislative budget assistant regarding compliance with the duty to make all investment decisions solely in the interest of the participants and beneficiaries of the state retirement system. The report shall note the existence of any investment funds that may have mixed, rather than sole, interest investment motivations.
IX. The non-trustee members of the independent investment committee shall be afforded the same liability insurance, indemnification, and statutory protections as board members.
X. The quarterly report of the independent investment committee under subparagraph II(c) and the annual comprehensive financial report under paragraph VI shall be made available for public inspection on the retirement system's Internet website.