MARYLAND STATE RETIREMENT AND
PENSION SYSTEM
GOVERNANCE POLICIES
Adopted by the Board of Trustees
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TABLE OF CONTENTS
Policies Page No.
History of Policy Adoptions and Revisions ..................................................................... 3
Introduction ...................................................................................................................... 5
Board Operations Policy .................................................................................................. 7
Board Communications Policy ...................................................................................... 15
Service Provider Selection Policy .................................................................................. 18
Investment Committee Public Advisor Selection Policy ............................................... 21
Monitoring and Reporting Policy .................................................................................. 23
Code of Conduct and Policy on Gifts and Travel .......................................................... 25
Executive Director Performance Evaluation Policy ...................................................... 28
Chief Investment Officer Performance Evaluation Policy ............................................. 30
Board Education Policy ................................................................................................. 33
Board Performance Evaluation Policy ........................................................................... 36
Board Policy Development Process ............................................................................... 37
Operational Planning Policy .......................................................................................... 38
Appendices ..................................................................................................................... 40
Appendix 1: Modified “Robert’s Rules of Order”....................................... 41
Appendix 2: Routine Reports ...................................................................... 44
Appendix 3: Maryland Public Ethics Law Concerning Gifts ...................... 48
Appendix 4: Specific Pension Related Training Topics .............................. 52
Appendix 5: Trustee Reference Manual ...................................................... 53
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HISTORY OF POLICY ADOPTIONS AND REVISIONS
INDEX
Board Operations Policy
• Adopted December 19, 2003
• Revised and Adopted December 17, 2013
• Revised and Adopted February 21, 2017
• Revised and Adopted May 19, 2020
• Revised and Adopted July 21, 2020
• Revised and Adopted December 15, 2020
• Revised and Adopted February 21, 2023
Board Communications Policy
• Adopted December 19, 2003
• Revised and Adopted December 17, 2013
• Revised and Adopted March 21, 2017
• Revised and Adopted December 15, 2020
Service Provider Selection Policy
• Adopted December 19, 2003
• Revised and Adopted December 17, 2013
• Revised and Adopted February 21, 2017
• Revised and Adopted December 15, 2020
Investment Committee Public Advisor
Selection Policy
• Adopted August 19, 2008
• Revised and Adopted December 17, 2013
• Revised and Adopted February 21, 2017
• Revised and Adopted December 15, 2020
Monitoring, Reporting, and Actuarial Audit
Policy
• Adopted December 19, 2003
• Revised and Adopted December 17, 2013
• Revised and Adopted February 21, 2017
• Revised and Adopted December 15, 2020
Code of Conduct and Policy on Gifts and
Travel
• Adopted December 19, 2003
• Revised and Adopted December 17, 2013
• Revised and Adopted March 21, 2017
• Revised and Adopted December 15, 2020
Executive Director Performance Evaluation
Policy
• Adopted December 19, 2003
• Revised and Adopted December 17, 2013
• Revised and Adopted February 21, 2017
• Revised and Adopted December 15, 2020
Chief Investment Officer Performance
Evaluation Policy
• Adopted June 17, 2008
• Revised and Adopted December 17, 2013
• Revised and Adopted February 21, 2017
• Revised and Adopted December 15, 2020
Board Education Policy
• Adopted December 19, 2003
• Revised and Adopted December 17, 2013
• Revised and Adopted February 21, 2017
• Revised and Adopted December 15, 2020
Board Performance Evaluation Policy
• Adopted December 19, 2003
• Revised and Adopted December 17, 2013
• Revised and Adopted February 21, 2017
• Revised and Adopted December 15, 2020
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Board Policy Development Process
• Adopted December 19, 2003
• Revised and Adopted December 17, 2013
• Revised and Adopted February 21, 2017
• Revised and Adopted December 15, 2020
Operational Planning Policy
• Adopted December 19, 2003
• Revised and Adopted December 17, 2013
• Revised and Adopted February 21, 2017
• Revised and Adopted December 15, 2020
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INTRODUCTION
BACKGROUND
1. The Maryland State Retirement and Pension System (the “system”) is a cost-sharing multiple
employer public employee retirement system composed of two cost-sharing pools, established
under Division II of the State Personnel and Pensions Article, Annotated Code of Maryland (the
“SPP Article”) to provide retirement allowances and other benefits to state employees, teachers,
police, judges and legislators, and employees of participating governmental units. The system
has the powers and privileges of a corporation. (SPP Article §21-101; §21-102)
2. Responsibility for the system’s administration and operation is vested in a 15-member Board of
Trustees (“board”). (SPP Article §21-108)
3. The trustees of the board are fiduciaries, and as such are required to discharge their duties with
respect to the system solely in the interest of, and for the exclusive purpose of providing benefits
to, plan participants. (SPP Article §21-203) Trustees are further expected to discharge their
duties with the utmost honesty and integrity.
PURPOSES
4. The governance policies and charters are intended to:
a. Establish the manner in which the board of the system and its committees shall conduct
themselves so as to allow the board to carry out its responsibilities as effectively and
efficiently as possible, and in accordance with applicable law, including state ethics laws.
b. Facilitate effective communication between and among the trustees, executive director,
chief investment officer, agency staff, system participants, and external parties.
c. Establish guidelines by which service providers shall be selected and retained.
d. Establish board expectations concerning routine reports it is to receive from various
sources.
e. Ensure that all policies adopted by and actions taken by the board are consistent with
applicable law and the fiduciary duties of the board and staff.
f. Establish the responsibilities of the executive director and the process by which the
executive director shall be evaluated.
g. Establish the responsibilities of the chief investment officer and the process by which the
chief investment officer shall be evaluated.
h. Ensure that all trustees are provided with adequate opportunity and assistance to acquire
the knowledge they need to carry out their fiduciary duties.
i. Provide a process whereby the trustees may conduct self-analysis to ensure continuous
improvement in the board’s effectiveness.
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j. Further the objective that the board’s primary focus shall be on setting general direction
and policy and on monitoring its implementation, and the executive director shall be fully
accountable for the operational performance of the agency, except for investment
performance which shall be the responsibility of the chief investment officer.
k. Ensure that the system engages in a long-range strategic and an annual business planning
process to meet the needs of the system and that the resultant long-range strategic and
annual business plans are communicated to all organizational levels.
l. Be subject to review and revision every three years.
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MARYLAND STATE RETIREMENT AND PENSION SYSTEM
BOARD OPERATIONS POLICY
Establish the manner in which the Board of Trustees of the system and its committees will conduct
themselves so as to allow the Board to carry out its responsibilities as effectively and efficiently as
possible, and in accordance with applicable law, including state ethics laws.
POLICY GUIDELINES
Officers
1. The Trustees are required to annually elect from among themselves a Board Chair, a Vice-Chair,
and any other officers as may be necessary for the Board to carry outs its duties and
responsibilities.
2. The Trustees shall elect a Secretary by a majority vote of all Trustees, who may be one of its
members or may be the Executive Director. The Secretary shall have those duties set forth in
paragraph 4(a) of the charter for the Executive Director.
3. The Trustees shall elect the Board officers by secret ballot. Board officers are to be elected at the
last regular meeting held in the fiscal year and shall assume office as of the first regular meeting
held after the election. Board officers will serve for a term of one year.
4. The order of elections shall be as follows: Board Chair, Vice-Chair, Secretary, and any other
officers as may be established.
5. The procedures for the election of an officer are as follows:
a. The Board Chair shall open the floor to the Board for nominations. Trustees may
nominate themselves or another Trustee. Nominations must be seconded by another
Trustee;
b. Trustees who do not expect to attend the meeting may submit nominations in writing to
the Board Chair or the Executive Director prior to the Board meeting at which Board
officer elections are scheduled. The Board Chair or the Executive Director will present
any written nominations to the Board after the floor is opened for nominations;
c. Trustees nominated by a fellow Trustee must formally accept the nomination;
d. Once nominations are closed, the Board Chair will read and confirm the list of nominees.
In the event that the Board Chair is a nominee, the Board Chair shall hand over the duty
to preside over the elections to the Vice-Chair or to another Trustee who is not a nominee
(hereinafter the “Presiding Officer”);
e. Each nominee may address the Board for a maximum of five minutes, in an order to be
determined by the Presiding Officer. The time limit will be enforced by the Presiding
Officer. A written statement may also be distributed;
f. With the exception of the secretary, the election of the officer requires a majority of those
Trustees present and voting. The election of the secretary requires a majority vote of all
of the Trustees. If the office remains unfilled after the first ballot, balloting should be
repeated as many times as necessary to obtain a majority vote for a single nominee. If the
election is not decided by the third ballot, the nominee with the lowest number of votes
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shall be removed from each successive ballot. This rule shall not apply if it would
eliminate all but one nominee from the ballot:
g. Voting shall be by secret ballot. Ballots shall be submitted to the Chief Internal Auditor
for tabulation, the results of which shall be reported to the Presiding Officer;
h. Notwithstanding subparagraph (g) of this paragraph 4, Trustees participating in the Board
meeting by telephone or video conference may submit their votes by a separate telephone
call or e-mail to the Chief Internal Auditor. In the event that an election is held at a
meeting of the Board where all Trustees attend via electronic means, votes may be
submitted to the Chief Internal Auditor using an electronic polling method configured so
that all votes are anonymous and only accessible by the Chief Internal Auditor;
i. Proxy voting is not permitted; and
j. The outcome of the election shall be announced at the meeting and noted in the Board
minutes.
6. Newly elected officers shall assume their respective offices as of the first regular meeting held
after the election.
7. In the event that a vacancy or the absence of the Chair, the Vice-Chair shall assume the duties of
the Chair. In the event that a vacancy shall occur in the position of Vice-Chair or in the positions
of both the Chair and Vice-Chair, for any reason, the Board shall elect a successor for the balance
of the unexpired term at its next regular meeting.
Designees
8. The following trustees, serving ex officio, may appoint a designee to serve on behalf of the ex
officio trustee on the Board:
a. The State Treasurer, who may designate a deputy treasurer;
b. The State Comptroller, who may designate a deputy comptroller; and
c. The Secretary of Budget and Management, who may designate a deputy secretary.
Committees
9. The standing committees of the Board shall be as follows:
a. Investment Committee (SPP Article §21-114)
b. Objective Criteria Committee (SPP Article § 21-122(g))
c. Administrative Committee
d. Audit Committee
e. Corporate Governance and Securities Litigation Committee
10. The Board may also maintain, under the standing committees, standing and/or ad hoc
subcommittees.
11. The Investment Committee shall comprise:
a. A representative of the Employees’ Pension System or the Employees’ Retirement
System;
b. A representative of the Teachers’ Pension System or the Teachers’ Retirement System;
c. A representative of the State Police Retirement System;
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d. Three representatives from the public appointed by the Board, in accordance with the
conditions set out in SPP Article §21-115(b)(2); and
e. Other additional Board members as recommended by the Chair in consultation with the
Vice-Chair and approved by the Board. (SPP Article §21-115)
12. The Objective Criteria Committee shall consist of members appointed in accordance with § 21-
122(g). The Board Chair shall appoint the chair of the committee, which may not be the Board
Chair.
13. The Administrative Committee shall comprise at least five members.
14. The Audit Committee shall comprise at least five members.
15. The Corporate Governance and Securities Litigation Committee shall comprise at least five
members.
16. Except for the Objective Criteria Committee, the members, chairs and vice-chairs of each
standing committee shall be established annually by Board vote, upon the recommendation of the
Board Chair in consultation with the Vice-Chair, at the first regular meeting following the
election of officers.
17. In making committee appointments, the Board and the Chair shall consider continuity in
committee membership, opportunities for the diversified experience of trustees, and requisite
expertise.
18. The Board may approve the establishment of ad hoc committees in consultation with the
Executive Director and/or the Chief Investment Officer, provided that the responsibilities of the
ad hoc committees do not overlap with those of any standing committee. The Chair shall
recommend to the Board for its approval the members, the chairs, and vice-chairs of each ad hoc
committee.
19. The Executive Director shall prepare for Board approval a charter for each standing committee
that provides a description of the committee’s mandate.
20. The Executive Director shall ensure board committees receive adequate support from staff.
21. In the event that a committee chair is unable to complete his or her term, the committee vice-chair
shall complete the term.
22. All actions taken by committees must be approved by the Board at a board meeting unless the
committee’s charter provides that the committee may take action on specified matters without
board approval.
Board Meetings
23. Board meetings shall generally be held monthly, and according to an annual schedule adopted by
the board and published in the minutes of the board. Timely notice of board meetings shall be
provided to the public, in accordance with the notice provisions of the Open Meetings Act,
General Provisions Article (“GP Article”) §3-302.
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24. The annual schedule may be modified by the Board as necessary, and timely notice of such
changes must be provided to trustees and the public in accordance with GP Article §3-302.
25. Special meetings may be called by the Board Chair or by any five trustees by providing
reasonable advance notice to each trustee and to the public in accordance with GP Article §3-302.
A call for a special meeting must state the business to be considered, and the time, date and place
of the meeting.
Committee Meetings
26. Each standing committee shall establish a projected schedule of meetings for the fiscal year. The
times and locations of such meetings shall be determined by the committee, and timely notice is
to be provided to the public in accordance with GP Article §3-302.
27. A committee chair, in consultation with the Executive Director, may cancel or reschedule a
meeting if it is apparent that there will not be a quorum or if it is deemed that there is insufficient
business to warrant a meeting. Attempts shall be made to provide all committee members and the
public with at least one week’s notice of cancellation of any meeting.
28. If neither the committee chair nor vice-chair is present at a committee meeting, the committee
members may appoint a presiding officer from among those members present for the meeting.
29. Ad hoc committee meetings shall be scheduled, as needed, by the chairman of the committee in
question. Timely notice of the meetings shall be given to the ad hoc committee members, and, if
required under the Open Meetings Act, to the public in accordance with GP Article §3-302.
Electronic Meetings
30. Meetings of the Board and Board Committees may be held using electronic technology, such as
tele-conferencing or video-conferencing.
31. The State Retirement Agency will acquire suitable technology for purposes of conducting an
electronic meeting, and will arrange for alternative methods to conduct an electronic meeting in
the event of any technical difficulties or malfunction.
32. All electronic meetings shall be held in full compliance with the Open Meetings Act, General
Provisions Article (“GP Article”) §3-302 and all other provisions of the Board Operations Policy.
33. Only the following individuals may participate electronically in a Board or Committee meeting:
a. A member of the Board of Trustees or Committee;
b. If approved by the Executive Director, an employee of the State Retirement Agency;
c. Counsel for the Board of Trustees;
d. With respect to an ex-officio trustee or the trustee’s authorized designee, not more than
one employee of the ex-officio trustee’s staff, provided that the ex-officio trustee provides
advance notice to the Executive Director; and
e. If approved by the Executive Director or Board or Committee chair, and to the extent
appropriate to facilitate the conduct of a meeting, a representative of a Board consultant,
System vendor, or other individual who has business before the Board or Committee.
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34. All access codes issued to an electronic meeting participant and needed for participation in an
electronic meeting shall be held in strict confidence and may not be shared with anyone who is
not authorized to attend meetings via electronic means.
35. A meeting location will be designated in advance for an electronic meeting, and trustees and
committee members may attend in person if desired. To the extent practicable, members of the
public who wish to attend an open session of a meeting that is being held electronically will be
required to attend in person if a designated meeting location is available. If a public meeting
location is not available, the Executive Director will provide notice of an alternative method for
public attendance on the Agency’s website as soon as is practicable prior to the meeting.
36. The Executive Director, or the Executive Director’s designee, shall serve as the electronic
“meeting host.” The meeting host is responsible for operating the electronic meeting technology
at the designated meeting location, and will be responsible for:
a. activating the electronic meeting technology prior to the call to order;
b. recording and monitoring both in-person and electronic meeting attendance during an
open session;
c. recording and monitoring both in-person and electronic meeting attendance during a
closed session;
d. advising the Board or Committee chairman regarding the presence of a quorum;
e. recording all voting on Board or Committee action items; and
f. deactivating the technology upon adjournment.
37. The electronic meeting technology shall include features necessary for:
a. The Board or Committee chairman to identify Trustees and Committee members wishing
to be recognized to obtain the floor;
b. Trustees and Committee members to make motions and second motions for Board or
Committee actions;
c. Trustees and Committee members to cast votes on all meeting agenda action items;
d. The Executive Director to determine that a quorum has been established as the meeting is
called to order, continuously monitor attendance at the meeting, and record votes taken
on an action item; and
e. Trustees and Committee members to view presentation materials relevant to the meeting
agenda items.
38. Voting by the Board and Committees at an electronic meeting may be done by voice vote. If
votes taken by voice vote are not unanimous, a roll call vote shall be taken by the Executive
Director at the instruction of the Board or Committee chair.
Agendas and Meeting Materials
39. The Executive Director or his or her designee, in cooperation with the Board Chair and respective
committee chairs, shall prepare and distribute a written agenda for all regular meetings of the
Board and standing committees.
40. To the extent practicable, the agenda and related materials for board and standing committee
meetings shall generally be distributed to trustees at least seven calendar days in advance of the
meeting. The agenda shall be made available to the public before a meeting in accordance with
the Open Meetings Act. Members of the public wishing to obtain copies of the materials may do
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so to the extent and in the manner the materials are available under the Maryland Public
Information Act.
41. Items may be placed on a board meeting agenda, prior to the meeting by:
a. The Board Chair;
b. The Executive Director;
c. Standing or ad hoc committee recommendation;
d. Initiation of any trustee, through the Board Chair; or
e. A motion of a trustee, subsequently approved by the Board.
42. Items may be placed on a committee meeting agenda, prior to the meeting by:
a. The committee chair;
b. The Executive Director;
c. For the Investment Committee or Corporate Governance and Securities Litigation
Committees, the Chief Investment Officer;
d. Initiation of any member of the committee, through the respective committee chair; or
e. A motion of a committee member, subsequently approved by the committee.
Quorum and Voting
43. With respect to board meetings, a majority of the trustees then serving on the Board is a quorum.
With respect to committee meetings, a majority of committee members then serving on the
committee in question represents a quorum. A quorum is required for:
a. The transaction of any business;
b. The exercise of any power; or
c. The performance of any duty authorized or imposed by law. (SPP Article §21-106(b))
44. Each trustee is entitled to one vote on the board. (SPP Article §21-106(a)). Trustees may not
vote by proxy, with the exception of an ex officio trustee who may appoint a designee.
45. Each committee member is entitled to one vote on the committees on which they serve, but may
not vote by proxy, with the exception of an ex officio trustee who may appoint a designee.
46. For purposes of achieving a quorum at a committee meeting, a committee chair, with the consent
of the Board chair, may substitute a different trustee for an absent trustee prior to the meeting.
Attendance
47. Each trustee shall attend at least 80% of the regularly scheduled board meetings. An excused
absence may be granted by any officer of the Board for illness (including a death in the family
consistent with COMAR 17.04.11.06), family emergency, jury duty, or attendance at investment
or fiduciary training, and such absence shall not be considered an absence for purposes of
meeting this requirement. (SPP Article §21-104(e))
48. If a trustee is unable to attend a meeting of the Board or a committee, the trustee shall notify the
Executive Director as soon as possible to help ensure that a quorum will be achieved.
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49. If personal attendance is impractical, a trustee may attend board or committee meetings via
telecommunications.
50. Trustees may attend meetings of committees of the Board as observers, but only committee
members may vote on matters before the committee.
Rules of Order
51. Meetings of the Board and all of its committees shall be governed by a modified form of Robert’s
Rules of Order (see appendix #1).
52. To promote effective and efficient conduct of meetings, the presiding officer and attendees shall
conduct meetings consistently with the Board of Trustees’ Code of Conduct, with decorum and
civility, and in manner that facilitates open and full debate of all matters before the Board or
committee.
Closed Session
53. The Board and its committees may conduct business in closed session for the purpose of 1)
conducting a function enumerated in GP Article §3-103(a), or 2) considering those matters
enumerated in GP Article §3-305(b), and in accordance with the conditions prescribed in GP
Article §3-305(c) – (d), which provides that:
a. A majority of Board or committee members must vote in the affirmative to conduct
business in closed session;
b. Before a public body meets in closed session, the presiding officer shall:
i. Conduct a recorded vote on the closing of the session; and
ii. Make a written statement of the reason for closing the meeting (which written
statement can be included in the written agenda approved by the presiding officer for
the meeting), including a citation of the authority under GP Article §3-305, and a
listing of the topics to be discussed. The written statement shall be a matter of public
record.
c. If a person other than a board member objects in writing to the closing of a session, the
Board shall send a copy of the written statement to the State Open Meetings Law
Compliance Board, in accordance with GP Article §3-305(d)(3).
Public Comment
54. Members of the public may record the meetings in open session, and may videotape, televise,
photograph or broadcast open session meetings subject to and in accordance with the
requirements set forth in the Board’s regulations.
55. The Board shall provide the public an opportunity to address the Board or standing committee at
each open session meeting on any item under its jurisdiction subject to the requirements set forth
in the board’s regulations. Members of the public wishing to address the Board or a committee
shall arrange to do so through the office of the Executive Director at least seven days in advance
of the meeting. The duration of any address by a member of the public shall be limited at the
discretion of the presiding officer. However, the duration of the public comment session for any
one meeting shall not exceed 20 minutes. The Board shall not be required to respond to any
public comment.
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Minutes and Recordings
56. The Secretary or a designee shall prepare the minutes of all board meetings, recording therein the
time and place of each meeting, the names of members present, each item considered, and the
actions of the board giving the ayes, nays and abstentions upon all votes, except where the action
is unanimous, and any other information required under the Open Meetings Act. When
requested, a member’s statement and/or vote on board actions shall be recorded. If the Board
meets in closed session, the minutes for the next open session shall include: (a) a statement of the
time, place, and purpose of the closed session, (b) a record of the vote of each member as to
closing the session, except where the action is unanimous, (c) a citation to the legal authority for
closing the session, and (d) a listing of the topics of discussion, persons present, and each action
taken during the session. The Secretary, generally, shall present the minutes for approval at the
next regular board meeting.
57. Minutes of committee meetings shall be similarly prepared by the Executive Director or a
designee and shall generally be submitted to the committee for approval at its next regular
meeting. If a committee is not scheduled to meet for more than two months after a meeting, the
Executive Director or a designee shall submit a draft of the minutes to the committee chair, who
shall be authorized to review and adopt the minutes on the committee’s behalf, subject to
ratification by the committee at its next meeting.
58. The minutes as approved by the Board or committee and signed by the Secretary/Executive
Director or designee shall serve as the official record of the meeting, and shall be retained, posted
on the Agency’s website, and open to public inspection in accordance with the Open Meetings
Act.
59. To the extent practicable, if live video or audio streaming is provided for a meeting of the Board
or a committee, the Executive Director or a designee shall record each portion of the meeting that
is held in open session. No recordings shall be made of any portion of a meeting held in closed
session. A recording of the open session of a Board or committee meeting shall be retained and
open to public inspection in accordance with the Open Meetings Act.
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MARYLAND STATE RETIREMENT AND PENSION SYSTEM
BOARD COMMUNICATIONS POLICY
Facilitate effective communication between and among the trustees, Agency staff, System
participants, and other stakeholders and external parties.
POLICY GUIDELINES
Communication Among Trustees
1. The Board shall carry out its activities in the spirit of open governance and in accordance with
relevant law. The Board may conduct certain business in closed session in accordance with the
provisions of the Open Meetings Act.
2. Members of the Board of Trustees and the Board’s committees, including public members of the
Investment Committee (hereinafter referred to in this policy as “trustees”) shall communicate in
an open, straightforward, timely, civil and constructive manner during meetings of the Board and
committees.
Trustee Communication with System Participants
3. Trustees shall be aware of the risk of communicating inaccurate information to plan participants
and the potential exposure to liability and possible harm to a participant that may result from such
miscommunications. To mitigate this risk, trustees shall refrain from providing specific advice,
counseling or education with respect to the rights or benefits a participant may be entitled to
under the SPP Article.
4. In the event a plan participant requests that a trustee provide explicit advice with respect to
System policy on benefits, the trustee should assist the plan participant by referring the plan
participant to the Executive Director or his or her designee or by having the Executive Director or
his or her designee contact the participant. The trustee shall be informed of the outcome.
5. Trustees shall refrain from any ex parte communications with a party to an administrative appeal
regarding the subject matter of the appeal until after the final conclusion of the matter.
Trustee Communication with the System’s Management
6. The Board or a committee shall request any research, analyses and reports from staff as are
necessary for the Board’s or committee’s effective oversight of the system. Such requests will be
included on the agenda and considered at a regularly scheduled meeting. If approved, the
Executive Director or Chief Investment Officer, as appropriate, will be responsible for
coordinating the completion of the approved report or information within a reasonable time or by
the completion date specified in the board or committee action.
7. Individual trustees shall direct questions regarding any aspect of the System’s operations to the
Executive Director. Any requests for information should only be made in the discharge of the
trustee’s duties as a trustee. Trustees making individual requests for information will be advised
to request that the item be placed on the board meeting agenda unless the information is readily
available, and the Executive Director determines that a response will not require any significant
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commitment of staff time or resources. The Executive Director will ensure that information that
has been requested by an individual trustee is made available to all trustees, as appropriate.
8. Board or committee requests for advice from the Office of the Attorney General, necessary for
the effective oversight of the system, shall generally be requested at a regularly scheduled
meeting, and may be requested in closed session as appropriate. Counsel will provide the advice
requested to the Board or committee. Individual trustees may contact the System’s Principal
Counsel with questions pertaining to the trustee’s participation on the Board or participation in a
matter before the Board or a committee as appropriate. Counsel will ensure that information that
has been requested by an individual trustee is shared with the Executive Director.
9. In the spirit of open communication, individual trustees shall share any information pertinent to
the Agency with the Executive Director in a timely manner. The Executive Director shall
similarly share with the Board any information pertinent to the board in a timely manner.
10. The Executive Director shall ensure that information that has been requested by the Board or by a
trustee is made available to all trustees as appropriate.
11. No trustee or other System Fiduciary (as defined in the Board of Trustees’ Code of Conduct) shall
disclose to any other trustee, Agency employee, or other System representative any confidential
information acquired by the individual from any outside employment or other activities,
including, but not limited to, any material nonpublic information, consistent with the Board of
Trustees’ Material Nonpublic Information and Insider Trading Policy, set forth in the Board’s
Investment Policy Manual.
Trustee Communication with External Parties
12. The Executive Director or the Board Chair or their designee shall serve as the spokesperson for
the System, unless the Board designates another member of the Board to serve as spokesperson
on a specified issue. The following guidelines shall apply with respect to the spokesperson:
a. If time permits, and to the extent permitted by the Open Meetings Act, the spokesperson
shall address sensitive, high profile issues with as many members of the Board as
possible, prior to engaging in external communications. At a minimum, the Chair and
Vice-Chair of the Board shall be contacted.
b. To the extent possible, in situations where board policy concerning an issue has not been
established, the Board or an appropriate committee shall meet to discuss the issue prior to
the spokesperson’s engaging in external communications.
13. When asked to be interviewed or otherwise approached by the media for substantive information
concerning the affairs of the System, trustees should generally refer the matter to the Executive
Director or spokesperson, and shall make no commitments on behalf of the Board or the System.
14. Except for the State Treasurer (ex officio member of the Board), if contacted by a member of the
General Assembly or the member’s staff concerning the affairs of the System, trustees should
refer the legislator or staff member to the Executive Director and shall make no commitments on
behalf of the Board or the System.
15. If contacted by a prospective offeror in connection with a procurement matter involving the
System, Agency, or Board, trustees should refer the prospective offeror to the Executive Director
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or Chief Investment Officer as appropriate, and refrain from communications with the
prospective offeror regarding the matter.
16. If asked to serve on a panel or speak at a meeting or conference involving matters of interest to
the System, a trustee should contact the Executive Director, who shall notify the chair. Trustees
shall observe the guidelines set forth in this communications policy in connection with any
speaking engagement.
17. In their external communications, trustees shall:
a. Speak on behalf of the Board only when explicitly authorized to do so by the Board
Chair;
b. Respectfully indicate (i) when they are representing a personal position, opinion, or
analysis, whether the same or different from a board-approved position, (ii) when their
position, opinion, or analysis does not represent the official position of the Board, and
(iii) when their position is in opposition to the position of the Board;
c. Indicate if they are speaking in a capacity other than that of a member of the Board;
d. Make known to the Executive Director in a timely fashion if a personal position, opinion,
or analysis was publicly communicated, such that it could receive media coverage. The
trustee shall advise as to whom the communication was made and what was discussed;
and
18. Each System Fiduciary (as defined in the Board of Trustees’ Code of Conduct) shall maintain the
confidentiality and security of any privileged, restricted or confidential information acquired in
connection with the individual’s service to the System. This includes, but is not limited to, any
material nonpublic information (as that term is defined under the Board of Trustees’ Material
Nonpublic Information and Insider Trading Policy, set forth in the Board Investment Policy
Manual) or other confidential or proprietary information obtained from the Investment Division.
19. Trustees may indicate publicly that they disagree with a policy or decision of the Board, but shall
do so respectfully and shall abide by the policy or decision to the extent this is consistent with
their fiduciary duties.
20. Communications by trustees, when acting in their capacity as trustees, should be consistent with
their fiduciary duty to represent the interests of all System participants.
21. Written press releases concerning the business of the System shall be the responsibility of the
Executive Director and shall clearly and accurately reflect the provisions of the SPP Article and
the policies of the Board. The Executive Director shall submit to the Board Chair and the Vice-
Chair for approval all press releases of a sensitive or high profile nature, or pertaining to Board
policy. Such press releases shall generally be shared with the Board prior to their release.
22. To ensure the accuracy of materials prepared by trustees for publication or general distribution,
which are related to the affairs of the System, and to ensure that the System is not inadvertently
placed at risk, trustees agree to provide such material in a timely manner to the Executive
Director, or his or her designee, for review prior to distribution or publication.
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MARYLAND STATE RETIREMENT AND PENSION SYSTEM
SERVICE PROVIDER SELECTION POLICY
Establish guidelines by which service providers will be selected and retained.
ROLES AND RESPONSIBILITIES
1. The role of the Board with respect to the selection of service providers is to:
a. Ensure appropriate policies and processes are in place to assist the Board and staff in
making prudent and sound selection decisions in accordance with applicable State
procurement laws;
b. Monitor compliance with such policies and processes; and
c. Select and/or ratify the hiring and termination of the following key service providers:
i. Actuary;
ii. General investment consultant;
iii. Consultants retained in connection with Board or System governance, or for
human resource and other non-investment related matters pertaining to the
Executive Director and Chief Investment Officer;
iv. Actuarial auditor;
v. Optional Retirement Program vendors; and
vi. Custodial bank.
2. Except for investment-related service providers and custodial banking, it is the function of the
Executive Director and staff to:
a. Perform search, evaluation and due diligence activities for the selection of all service
providers, provide a summary of each procurement and recommendations to the Board,
as appropriate, and monitor the work of each service provider; and
b. Appoint and terminate all service providers other than key service providers.
3. With respect to investment-related service providers and custodial banking, it is the function of
the Chief Investment Officer to:
a. Perform search, evaluation and due diligence activities for the selection of all service
providers, provide a summary of each procurement and recommendations to the Board,
as appropriate, and monitor the work of each service provider;
b. Conduct all exempt procurements in accordance with the General Procurement Policies
and Procedures adopted by the Board pursuant to State Finance and Procurement Art., §
12-401, set forth in the Investment Policy Manual; and
c. Appoint and terminate all service providers other than key service providers and
corporate governance consultants selected by the Corporate Governance and Securities
Litigation Committee.
GENERAL GUIDELINES
4. All service providers shall be subject to a level of due diligence that reflects a level of rigor that is
commensurate with the importance and materiality of the service in question.
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5. The Executive Director, Chief Investment Officer or their designee shall consider as broad a
universe of qualified service providers as is practical and reasonable given budgetary, staffing,
time and other relevant constraints in accordance with state procurement law.
KEY SERVICE PROVIDER GUIDELINES
6. Prior to conducting a search for a key service provider, the Executive Director, Chief Investment
Officer, or their designee, as appropriate, shall present a work plan to the Board or a designated
committee of the Board that, at a minimum, contains the following:
a. The type of service provider being sought and why;
b. The objectives to be met and selection criteria to be used and their relative importance;
c. An estimated timeline for completion of the search process; and
d. A brief description of the search methodology.
7. The Executive Director, Chief Investment Officer, or their designee shall provide the Board or a
designated committee of the Board with periodic reports on the status of all search processes
involving key service providers.
8. For those key service provider procurements exempt from State procurement law, the Executive
Director or Chief Investment Officer shall attempt to submit at least two candidates to the Board
for consideration and possible interviews.
9. When candidates are submitted to the Board for consideration, the Executive Director or his or
her designee shall provide a report to the Board or a designated committee of the Board,
containing at a minimum:
a. The recommended service provider(s) and the rationale for the recommendation;
b. Confirmation that the Executive Director, Chief Investment Officer, or their designee
complied with the work plan or an explanation of any deviations from the work plan;
c. A summary of the findings; and
d. Identification of the contract monitor.
CONTRACTS, MONITORING AND REPORTING
10. The Executive Director, Chief Investment Officer, or their designee, as appropriate, shall
negotiate all agreements in connection with service providers retained by or on behalf of the
System.
11. The Executive Director, or the Executive Director’s designee as permitted by § 21-118(e) of the
State Personnel and Pensions Article, shall execute all agreements in connection with service
providers retained by or on behalf of the System. All contracts shall be reviewed by counsel as to
form and legal sufficiency prior to execution, as required by law. The Executive Director shall
inform the Board of all major contracts, including those that require Board of Public Works
approval.
12. All service providers shall be subject to regular monitoring of performance and periodic reviews,
as appropriate, throughout the term of their contracts by the assigned contract monitor. Criteria
for review may include, among others, performance expectations, service quality, and timeliness
of deliverables.
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13. The Executive Director or Chief Investment Officer, as appropriate, shall report regularly to the
Board any material issues regarding contract performance or a change in key personnel with
respect to key service providers.
14. All reporting and monitoring provisions contained in this policy serve as minimum requirements.
If more stringent requirements have been established, either by applicable law or within other
policies of the Agency, such requirements shall prevail.
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MARYLAND STATE RETIREMENT AND PENSION SYSTEM
INVESTMENT COMMITTEE PUBLIC ADVISOR SELECTION POLICY
BACKGROUND
1. State Personnel and Pensions Article, §21-115(b)(2) provides that the Investment Committee
(“committee”) shall include “three representatives from the public appointed by the Board of
Trustees with the approval of the Board of Public Works for staggered three-year terms.” These
public members may not be members, retirees, or beneficiaries under any of the several systems,
must have had experience in the management and control of large investments, and must have at
least 10 years of substantial experience as any one of the following or combination of the
following:
a. A portfolio manager acting in a fiduciary capacity,
b. An employee or principal of a trust institution, investment organization, or endowment fund
acting in either a management or investment related capacity,
c. A chartered financial analyst in good standing, or
d. A professional engaged in a public or private financial or investment field that is comparable
to the above-listed fields.
2. One of the staggered three-year public advisor terms ends on June 30 of each year. In order to
facilitate the efficient nomination and transition of new public advisors, the board and its
committee will utilize the following selection policy.
Call for Nominations
3. By January 31, the chairs of the committee and the Board each shall make a call for nominations
by members of the Board and committee for the public advisor position, for the term that begins
July 1 of that year. The deadline for nominations shall be March 1.
4. The Executive Director and the Chief Investment Officer shall develop and carry out a plan for
identifying possible nominees for the public advisor position. This plan shall include an outreach
strategy that ensures a broad and inclusive reach into the Maryland investment community and its
professional associations.
5. The chair of the committee shall determine the interest of the incumbent public advisor in being
considered for another three-year term.
6. In making nominations, trustees and incumbent public advisors shall take into account the
statutory requirements of a public advisor, as well as the Board’s interest in achieving and
maintaining diversity throughout the System, including Board committees.
7. Trustees and incumbent public advisors, on behalf of their nominees, shall submit a brief
biography and resume that clearly demonstrate the qualifications of the nominees to the
respective chairs by the deadline indicated above. Additionally, each nominee shall be required
to submit four (4) professional references.
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Public Advisor Candidate Review
8. The Executive Director and the Chief Investment Officer shall hold an informational meeting
with each nominee between the close of nominations and the May meeting of the committee.
These meetings are for the purpose of explaining the System, its investment program, the function
of the committee, and the duties and responsibilities of the public advisor. This meeting will also
serve to determine the nominee’s background, experience, perspective on investment
management, and other relevant issues as well as the nominee’s interest in being considered.
9. From the pool of candidates, the Executive Director and the Chief Investment Officer shall
identify up to three candidates whose names and background information shall be submitted to
the committee for interviews.
10. The chair of the committee, the Executive Director, and the Chief Investment Officer shall
develop the set of questions for the interview of nominees by the committee.
Public Advisor Candidate Interviews
11. Prior to the May committee meeting, the Executive Director and the Chief Investment Officer
shall prepare a summary report on each nominee that provides the results of the public advisor
candidate review. These summary reports shall be regarded as confidential documents pursuant
to General Provisions Article § 4-311 and shall be made available to trustees and the two
incumbent public advisors whose terms are not ending. All discussions pertaining to these
documents shall be held in closed session pursuant to General Provisions § 3-305(b)(1).
12. To determine whether the nominees meet the statutory requirements for a public advisor, the
Executive Director shall coordinate a thorough review of the public record for each nominee and
information available through internet searches. The outcome of this review shall be reported as
part of the summary report referenced in paragraph 1 above.
13. At its May meeting, the committee shall interview each nominee. The committee chair shall lead
the interviews. A set of questions shall be asked of each nominee; however, the committee shall
not be limited to those questions.
Public Advisor Selection
14. By a majority vote, the committee shall select, from the pool of public advisor nominees, one
individual whom the committee shall then recommend to the Board for approval at the May
meeting of the Board.
15. With the Board’s approval, the nominee’s name shall be submitted to the Board of Public Works
for appointment during the month of June. Prior to submission of the nominee’s name to the
Board of Public Works, the Executive Director shall coordinate the completion of a background
check and reference checks.
Unexpected Openings
16. In the event a public advisor position becomes open unexpectedly between terms, the Board and
committee shall adjust the search schedule set forth in this policy as needed to both follow the
procedures described in the policy and fill the position within a reasonable amount of time.
23
MARYLAND STATE RETIREMENT AND PENSION SYSTEM
MONITORING, REPORTING, AND ACTUARIAL AUDIT POLICY
Establishes Board expectations concerning routine reports it is to receive from various sources.
POLICY GUIDELINES
General
1. A system of routine reporting shall be developed to address the performance of the System and
compliance with policies and other requirements of the System.
Benchmarks
2. Performance benchmarks and success criteria should be specified in advance.
3. Performance benchmarks established to assess the performance of the Agency should be:
a. Objective and unambiguous;
b. Measurable; and
c. Achievable.
4. Performance of the investment program should be assessed in accordance with policies contained
in the Investment Policy Manual.
5. Subject to the availability of appropriations, a performance assessment of the Agency’s benefits
administration function shall be conducted periodically by an independent third party.
Routine Reporting
6. Subject to the availability of appropriations, the Board shall be provided the routine reports as
outlined in Appendix 2.
7. Amendments to Appendix 2 shall require Board approval.
Actuarial Audits
8. To ensure that the costs of the benefits are properly measured and reported, an audit of the
System’s actuarial valuations shall be performed by an independent actuary in accordance with
generally accepted actuarial principles and practices. The purpose of such an audit is to provide
an independent critique of the reasonableness of the actuarial methods and assumptions in use and
the validity of the resulting actuarially computed liabilities and required contributions. An
independent actuarial audit shall be performed as follows:
a. A partial audit shall be conducted at least once every five years. The audit shall
include an appropriate sampling of “test lives,” sufficient to research a conclusion on
the validity of the actuarially computed liabilities of each plan and the required
contributions.
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b. In any year in which a new consulting actuary is hired, a full replication actuarial
audit of the System shall be performed concurrently with the first annual actuarial
valuation performed by the new consulting actuary.
c. In any year in which the actuarial assumptions are changed, actuarial funding
methods are changed, significant plan changes are made, or actuarial errors occur,
based upon the magnitude of the change(s) or errors, and at the discretion of the
Board, a partial (sampling of “test lives”) or full replication actuarial audit of the
System may be performed.
d. Notwithstanding any other independent actuarial audit, a full replication actuarial
audit of the System’s liabilities and contributions shall be performed at least once
every ten (10) years.
25
MARYLAND STATE RETIREMENT AND PENSION SYSTEM
CODE OF CONDUCT AND POLICY ON GIFTS AND TRAVEL
Help ensure that all policies adopted by and actions taken by the Board of Trustees and other
fiduciaries of the System are consistent with applicable law and the fiduciary duties of the Board
and staff.
DEFINITION
1. In this policy, “System Fiduciary” means: (a) each member of the Board of Trustees (including
designees); (b) each member of a committee of the Board, (c) each employee of the Agency
whose position involves the exercise of discretionary authority or control over (i) the
management or administration of the System, or (ii) the management or disposition of the
System’s assets. (SPP § 21-201).
POLICY GUIDELINES
2. Each System Fiduciary shall:
a. Act honestly and in good faith and in the best interest of the System’s participants;
b. Conduct himself or herself with decorum, civility, integrity, and professionalism in all
aspects of his or her duties and relationships with the Board Chair and Vice-Chair,
committee chairs, trustees, staff, service providers, and other constituents;
c. Exercise care, skill, prudence and diligence in all aspects of his or her decision making;
d. Actively prepare for each meeting by thoroughly reading all meeting materials in
advance;
e. Deal fairly, objectively, and impartially with all participants and beneficiaries;
f. Maintain independence and objectivity by, among other actions, avoiding conflicts of
interest, refraining from self-dealing, and ensuring that he or she does not obtain or
receive, directly or indirectly, a personal profit, gain or other monetary benefit as a result
of his or her relationship with the System;
g. Disclose any actual or potential conflict of interest that prevents his or her participation in
a matter before the Board or involving the System; and
h. Abide by all other policies of the Board.
3. Each System Fiduciary agrees to abide by the laws and regulations pertaining to the System and
the Board, particularly the:
a. System’s governing legislation (State Personnel and Pensions Article);
b. Regulations promulgated by the board (Code of Maryland Regulations, Title 22);
c. Open Meetings Act (General Provisions Article, Title 3);
d. Maryland Public Ethics Law (General Provisions Article, Title 5);
e. Public Information Act (General Provisions Article, Title 4);
f. State procurement laws (State Finance and Procurement Article, Division II);
g. Maryland Whistleblower Law in the Executive Branch of Statement Government (State
Personnel Article, Title 5, Subtitle 3); and
h. State standard travel regulations.
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Gifts
4. The Maryland Public Ethics Law prohibits a System Fiduciary from soliciting any gift.
Moreover, aside from a few limited exceptions, System Fiduciaries are prohibited from accepting
any gifts from a controlled donor (individuals or entities that do or seek to do any business with
the System, are regulated by the System, have private interests that can be impacted by an
official’s performance of duties, or are regulated lobbyists). Even if the gift falls within one of
the limited exceptions, such as a meal or beverage consumed in the presence of the donor, a gift
with a value of more than $50 ($20 for a State employee or official), or two or more gifts totaling
$100 or more, must be reported as a gift on the trustee’s annual Financial Disclosure forms
submitted to the State Ethics Commission. (See Appendix 3 for the statutory provisions.)
5. The Maryland Public Ethics Law prohibits a System Fiduciary from soliciting any gift.
Moreover, aside from a few limited exceptions, System Fiduciaries are prohibited from accepting
any gifts from a controlled donor (individuals or entities that do or seek to do any business with
the System, are regulated by the System, have private interests that can be impacted by an
official’s performance of duties, or are regulated lobbyists). Even if the gift falls within one of
the limited exceptions, such as a meal or beverage consumed in the presence of the donor, a gift
with a value of more than $50 ($20 for a State employee or official), or two or more gifts totaling
$100 or more, must be reported as a gift on the trustee’s annual Financial Disclosure forms
submitted to the State Ethics Commission. (See Appendix 3 for the statutory provisions.)
Travel
6. An entity’s payment of conference expenses for a System Fiduciary is a gift to the System
Fiduciary. Therefore, aside from a few limited exceptions, a System Fiduciary shall not permit an
entity that does or seeks to do any business of any kind within the Maryland State Retirement and
Pension System to pay the System Fiduciary’s expenses associated with attending the conference.
Even if the gift falls within one of the limited exceptions, such as a meal or beverage consumed in
the presence of the donor, such a gift with a value of more than $50 ($20 for a State employee or
official), or two or more gifts totaling $100 or more, must be reported as a gift on the System
Fiduciary’s annual Financial Disclosure forms submitted to the State Ethics Commission. (See
Appendix 3 for the statutory provisions.)
It is possible that attendance at an educational conference with no registration fee for any
attendees may not be considered a gift to the System Fiduciary. In addition, reasonable expenses
for food, travel, lodging in return for participation on a panel or a speaking engagement at a
meeting may also be permitted. It is important to note that the Maryland Public Ethics Laws
apply to expenses paid by a controlled donor in connection with conference attendance regardless
of whether a trustee’s attendance was arranged by staff of the agency. Before attending an
educational conference sponsored by a controlled donor with no registration fee, or accepting
payment of expenses in connection with attendance, a System Fiduciary should consult with the
State Ethics Commission or the Executive Director to discuss whether an exception is available.
ENFORCEMENT PROVISIONS
5. The Board Chair, in presiding over meetings of the Board, shall enforce and attempt to rectify any
breaches of the Code of Conduct that may occur during meetings of the Board. Similarly,
committee chairs, including ad hoc committees, shall do the same during meetings of the
committee.
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6. A System Fiduciary who is aware of any possible breach of this Code of Conduct by a trustee,
committee member, Executive Director, or Chief Investment Officer, shall promptly disclose the
information regarding the breach to the Board Chair and Vice-Chair in a signed written statement.
In no event shall the disclosure of this information be made more than thirty days from the day on
which the System Fiduciary knew of the breach. The Board Chair and Vice-Chair, in
consultation with the Maryland Attorney General’s Office, shall consider the disclosure and take
whatever action they determine to be appropriate under the law and circumstances of the
disclosure.
7. In the case of disclosure of any alleged breach of this Code of Conduct involving the Board
Chair, the report should be made to the and the Executive Director. In the case of disclosure of
any alleged breach involving Vice-Chair the Vice-Chair, the report should be made to the Chair
and the Executive Director. The same procedures should be followed as set forth in Paragraph 6
above.
8. A System Fiduciary who is aware of any possible breach of this Code of Conduct by a System
Fiduciary who is an Agency employee (other than the Executive Director or Chief Investment
Officer) shall promptly disclose the information regarding the breach to: (a) the Chief Internal
Auditor, and (b) the Executive Director, or, in the case of an Investment Division employee, the
Chief Investment Officer. In no event shall the disclosure of this information be made more than
thirty days from the day on which the Fiduciary knew of the breach. The Executive Director or
the Chief Investment Officer, as appropriate, in consultation with the Chief Internal Auditor and
the Maryland Attorney General’s Office, shall consider the disclosure and take whatever action
the individual determines to be appropriate under the law and circumstances of the disclosure.
9. In the event that a violation of this Code of Conduct and Policy on Gifts and Travel also
constitutes a violation of another law or policy, this Code of Conduct does not limit or prevent the
assessment of sanctions under the sanctions regime of such other law or policy.
28
MARYLAND STATE RETIREMENT AND PENSION SYSTEM
EXECUTIVE DIRECTOR PERFORMANCE EVALUATION POLICY
Establish the responsibilities of the Executive Director and the process by which the Executive
Director will be evaluated.
PRINCIPLES
1. The primary responsibility of the Executive Director is the effective and efficient management of
the operations of the System. Accordingly, the performance of the operations constitutes the
most relevant measure of his or her performance, and should weigh heavily in his or her
performance evaluation.
2. The Executive Director is responsible for the performance of all senior executives and the staff of
the Agency.
3. The Executive Director’s evaluation process and its results should be shared with all trustees and
the Executive Director.
POLICY GUIDELINES
Administrative Committee
4. The Administrative Committee (“committee”) shall facilitate the evaluation of the performance of
the executive director, in accordance with this policy.
Evaluation Criteria and Forms
5. Prior to the close of each calendar year, the Executive Director shall recommend to the committee
for approval a set of criteria and/or objectives to be used in evaluating the Executive Director’s
performance. In order to assist the Board in assessing the performance of the Executive Director
relative to the evaluation criteria, the Executive Director shall annually recommend to the
committee a performance evaluation form including specific questions and guidelines, as well as
sufficient space for trustees to provide general comments. In addition, the committee shall be
provided with a performance evaluation form to be completed by Agency senior staff who report
directly to the Executive Director. Both the form for trustee use and the form for Agency staff
use shall be approved by the committee.
6. In considering the proposed criteria, the committee shall:
a. Ensure that the criteria are objective in nature and, for the most part, measurable; and
b. Ensure that the criteria pertain to outcomes over which the Executive Director has a
reasonable degree of control.
7. The performance evaluation criteria shall fall into one of four broad categories:
a. Achievement of performance targets established for the Agency as a whole;
b. Implementation of the long-term strategic and annual business plans;
c. Leadership and related qualities; and
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d. Other criteria that reflect special events or circumstances that may arise in a given year.
8. The committee, in consultation with the executive director, shall assign a weight to each of the
evaluation criteria established.
Performance Assessment
9. At the beginning of the calendar year, all trustees shall be provided copies of the performance
criteria and objectives and the evaluation form pertaining to the evaluation of the Executive
Director’s performance in the prior year. To assist trustees in completing the evaluation form, the
Executive Director shall provide the Board with an Executive Director self-assessment containing
a review of his or her own performance and any supporting data or background information. The
self-assessment shall address those criteria and objectives agreed to by the committee. The self-
assessment may also cover additional accomplishments achieved and difficulties during the year.
10. All senior Agency staff who report to the Executive Director shall be asked to complete an
evaluation of the executive director, using the approved form.
11. Trustees shall be allowed sufficient time, as determined by the Board Chair, to complete and
return the evaluation form directly to the committee chair or a designated third party.
12. The committee chair shall ensure that the results of all evaluation forms are tabulated and
summarized on a confidential basis.
13. The committee shall discuss the self-assessment, the results of the evaluation forms, and any
other related matters with the Executive Director. The committee may request additional
information from the senior staff. The committee may discuss the self-assessment and the results
of the evaluation forms with the Executive Director present. This meeting shall be held in closed
session.
14. The committee chair shall prepare a performance report, summarizing the committee’s
assessment and providing specific guidance for the Executive Director concerning improvement
opportunities.
15. Annually at a regularly scheduled board meeting, the committee chair shall present the Board a
summary of the performance report for review, discussion, and approval. The Executive Director
shall be asked to participate in the meeting and be presented with the results of the performance
report.
16. Both the committee and the Board may discuss the summary of the performance report in closed
session and without the Executive Director present prior to their meetings in which the Executive
Director’s participation is required.
Evaluation Results and Materials
17. A copy of the summary of the performance report shall be maintained in the Executive Director’s
personnel file. The completed evaluation forms shall be destroyed within sixty calendar days of
the completion of the evaluation process.
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MARYLAND STATE RETIREMENT AND PENSION SYSTEM
CHIEF INVESTMENT OFFICER PERFORMANCE EVALUATION POLICY
Establish the process by which the Chief Investment Officer will be evaluated.
PRINCIPLES
1. The primary responsibilities of the Chief Investment Officer are investment performance, and the
effective and efficient management of the operations of the Investment Division.
2. The Chief Investment Officer’s evaluation process and its results should be shared with all
trustees and the Chief Investment Officer.
POLICY GUIDELINES
3. The Executive Director and the Investment Committee (“committee”) shall facilitate the
evaluation of the performance of the Chief Investment Officer, in accordance with this policy.
EVALUATION CRITERIA
4. The process for evaluating the performance of the Chief Investment Officer shall be carried out in
accordance with the provisions of the State Personnel and Pensions Article. The Executive
Director and the Committee may recommend to the board changes to the base salary as well as
the criteria for awarding financial incentives to the Chief Investment Officer, along with any
documentation that may be necessary.
5. Prior to the close of the first quarter of the fiscal year, the Executive Director shall recommend to
the committee for approval a set of criteria and/or objectives to be used in evaluating the Chief
Investment Officer’s performance. In order to assist the Board in assessing the performance of
the Chief Investment Officer relative to the evaluation criteria, the Executive Director shall
annually recommend to the committee a performance evaluation form including specific
questions and guidelines, as well as sufficient space for trustees to provide general comments. In
addition, the committee shall be provided with a performance evaluation form to be completed by
investment division senior staff who report directly to the Chief Investment Officer. Both the
form for trustee use and the form for investment staff use shall be approved by the committee.
6. In considering the proposed criteria, the committee shall ensure that the criteria:
a. Are objective in nature and, for the most part, measurable; and
b. Pertain to outcomes over which the chief investment officer has a reasonable degree of
control.
7. The performance evaluation criteria shall fall into one of four broad categories:
a. Achievement of performance targets established for the investment program;
b. Implementation of the system’s asset allocation;
c. Leadership and related qualities; and
d. Other criteria that reflect special events or circumstances that may arise in a given year.
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8. The committee, in consultation with the Executive Director, shall assign a weight to each of the
evaluation criteria established.
Performance Assessment
9. Prior to October 1, all committee members shall be provided copies of the performance criteria
and objectives and the evaluation form pertaining to the evaluation of the Chief Investment
Officer’s performance in the prior fiscal year. To assist committee members in completing the
evaluation form, the Chief Investment Officer shall provide the Board with a chief investment
officer self-assessment containing a review of his or her own performance and any supporting
data or background information. The self-assessment shall address those criteria and objectives
agreed to by the committee. The self-assessment may also cover additional accomplishments
achieved and difficulties during the year.
10. All senior investment division staff who report to the Chief Investment Officer shall be asked to
complete an evaluation of the Chief Investment Officer, using the approved form.
11. Committee members shall be allowed sufficient time, as determined by the committee chair, to
complete and return the evaluation form directly to the chair of the committee or the Executive
Director.
12. The chair of the committee shall ensure that the results of all evaluation forms are tabulated and
summarized on a confidential basis.
13. The committee shall discuss the self-assessment, the results of the evaluation forms, and any
other related matters with the chief investment officer. The committee may request additional
information from the senior investment staff. The committee may discuss the self-assessment and
the results of the evaluation forms with the Chief Investment Officer present. This meeting shall
be held in closed session.
14. The committee chair shall prepare a performance report, summarizing the committee’s
assessment and providing specific guidance for the Chief Investment Officer concerning
improvement opportunities.
15. During the first quarter of the fiscal year and at a regularly scheduled board meeting, the
committee chair shall present the board a summary of the performance report for review,
discussion, and approval. The Chief Investment Officer shall be asked to participate in the
meeting and be presented with the results of the performance report.
16. Both the committee and the Board may discuss the summary of the performance report in closed
session and without the Chief Investment Officer present prior to their meetings in which the
Chief Investment Officer’s participation is required.
17. On or before October 1 of each year, the Executive Director shall provide the committee with an
analysis of the Chief Investment Officer’s performance for the fiscal year based on the
performance evaluation criteria approved by the Board and a recommendation as to any incentive
pay to be awarded.
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18. Portfolio performance data used in assessing the Chief Investment Officer’s performance may be
obtained from the general investment consultant, custodian, other independent performance
measurement advisors, and others as appropriate.
19. Portfolio performance shall be determined as of and for the period ending June 30 of each fiscal
year.
20. The committee and Executive Director shall meet with the Chief Investment Officer in closed
session to review the results of the evaluation. Additional meetings may be held if it is deemed
that additional information or discussion is needed.
RECORDS AND REPORTING
21. A record of the Chief Investment Officer’s performance evaluation shall be maintained in the
Chief Investment Officer’s personnel file.
22. On or before September 1 of each year, the board shall submit to the Joint Committee on
Pensions a copy of the most recent criteria and any incentives that were awarded for the previous
fiscal year to the Chief Investment Officer.
33
MARYLAND STATE RETIREMENT AND PENSION SYSTEM
BOARD EDUCATION POLICY
Ensure that all trustees are provided with adequate opportunity and assistance to acquire the
knowledge they need to carry out their duties.
POLICY GUIDELINES
General Provisions
1. Trustees agree to develop and maintain an adequate level of knowledge and understanding of
relevant issues pertaining to the administration of the system throughout their terms on the Board.
2. Trustees agree to pursue appropriate education across a range of pension-related areas, rather than
limiting their education to particular areas. In consultation with the Chief Investment Officer, the
Executive Director shall annually prepare and submit to the Board an education plan which shall
be approved by the Chair. (SPP Article § 21-108). The general topic areas to be pursued may
include, but are not limited to:
a. Governance and fiduciary duty;
b. Investment policy and asset allocation;
c. Benefits administration;
d. Actuarial policies and funding;
e. Technology;
f. Regulatory and legal issues; and
g. Financial and accounting standards and practices.
Specific topics within these general areas are identified in Appendix 4, for reference purposes.
3. Trustees shall meet the following minimum goals:
a. Secure, over time, a meaningful level of understanding in each of the topic areas listed in
paragraph 2 above and other pertinent topics through presentations made at regular
meetings of the board, training programs provided to the board as well as through
attendance at conferences. Trustees are encouraged to attend conferences, on occasion,
that address pension-related topics other than investments.
b. Annually participate in at least eight hours of investment and fiduciary training, including
training on fiduciary conduct and board governance, within the State, conducted by an
entity not affiliated with any external investment manager for the System. (SPP Article §
21-108(a)(3)). The Executive Director shall canvass the Board to identify topics of
interest. The seminar may be appended to a regular board meeting or organized as a
stand-alone session.
34
Orientation Program
4. A formal orientation program, covering the general topic areas outlined in Paragraph 2 above as
well as any other pertinent topics, shall be developed by the Executive Director for the benefit of
new trustees.
5. Prior to attending their first meeting of the Board as a trustee and to the extent practicable, new
trustees shall be invited by the Chair or Executive Director to attend a meeting of the Board or a
standing committee as an observer.
6. New trustees shall, as soon as possible, and under the direction of the Executive Director, be:
a. Briefed on the history and background of the system and the agency;
b. Briefed on current issues before the board;
c. Introduced to senior management;
d. Provided a tour of the system’s offices;
e. Briefed on their fiduciary duties, conflict of interest guidelines, financial disclosure
requirements and other pertinent laws and regulations; and
f. Provided with:
i. A Trustee Reference Manual (listed in Appendix 5);
ii. A copy of the Investment Policy Manual;
iii. A listing of upcoming, recommended educational opportunities; and
iv. Other relevant information and documentation deemed appropriate by the
executive director or the chairman.
7. The Executive Director shall periodically review and, if necessary, update all orientation material
and supply each trustee with those updates. A master copy of the Trustee Reference Manual shall
be available for use by trustees at the Agency’s headquarters.
Attendance at Conferences, Association Meetings & Courses
8. The Executive Director shall maintain a list of recommended conferences and association
meetings, based on the feedback of trustees and staff who have attended the conferences.
9. As part of the operating budget, the Executive Director shall make every effort to ensure the
availability of resources for trustee education and equitable availability of conferences to all
trustees.
10. A trustee, who wants to attend a conference or association meeting that is not on the
recommended list of conferences and association meetings or take a related education course and
wishes to be reimbursed by the Agency for the tuition and related expenses of the meeting or
course, must file a written request with the Chair and the Executive Director. If the request is
approved, all travel arrangements shall be made by the Executive Director’s designee in
accordance with State policies set forth by the Department of Budget and Management.
Reimbursement for tuition and related expenses shall be paid in accordance with the State
policies set forth by the Department of Budget and Management.
a. The request must be submitted within a reasonable time before the scheduled conference,
meeting or course for a decision to be made, preferably 30 business days in advance, and
should include a copy of the program or syllabus, justification, duration and estimated
35
costs as well as the benefits to board participation.
b. On receipt of each request, the Executive Director shall review the request to determine
whether sufficient funds are available to support the request. If the request enables the
trustee to better conduct the business of the Board, better enables the trustee to perform
his or her fiduciary duties and funds are available, the request shall be approved.
Trustees may attend up to two conferences outside of Maryland or Washington, D.C.
each year. Trustees may attend one university-sponsored or similar certified educational
course per term of office. The request shall be submitted to the chair for approval. (SPP
Article § 21-108(3)(ii))
c. If the chair denies a request for training submitted by a trustee, the Executive Director
shall submit a report to the Administrative Committee that includes information on the
basis for the Chair’s denial of the request.
Reporting
11. Attendees shall provide a brief assessment on the quality and relevance of each conference
attended within thirty (30) calendar days of attendance and shall present the assessment to the
Board.
12. On a semi-annual basis, the Executive Director shall submit a report to the Department of
Legislative Services on the required educational activities of the trustees.
36
MARYLAND STATE RETIREMENT AND PENSION SYSTEM
BOARD PERFORMANCE EVALUATION POLICY
Provide a process whereby the trustees may conduct self-analysis to ensure continuous
improvement of the Board’s effectiveness.
POLICY GUIDELINES
Roles and Responsibilities
1. The Administrative Committee (“committee”) shall oversee the implementation of this policy,
including the approval of the Discussion Guide for the Performance Evaluation of the Board, and
shall make recommendations to the Board for addressing issues arising out of the evaluation
process.
Procedures
2. The board performance evaluation shall be initiated by the committee at least every other year, or
sooner, if circumstances warrant.
3. When a board performance evaluation is undertaken, the committee shall review the Discussion
Guide and make modifications, as appropriate. The purpose of the Discussion Guide shall be to
provide trustees with a framework for evaluating the performance of the Board and for
confidentially raising any concerns or suggestions trustees may have. The Discussion Guide must
allow trustees to provide written comments or suggestions.
4. Copies of the Discussion Guide shall generally be distributed to each trustee in the second
calendar quarter of the evaluation year.
5. Trustees shall be asked to complete the Discussion Guide and return it to the chairman of the
committee or designated third party within two weeks of receipt of the Guide.
6. The committee chair or designated third party shall prepare and present the summary report to the
committee by the close of the second calendar quarter of the evaluation year and shall facilitate
discussion of the report by the committee. The meeting may be held in closed session.
7. At the next regularly scheduled meeting of the Board, the committee chair or designated third
party shall report to the Board, in closed session, on the conclusions and recommendations of the
committee.
8. The results of any board discussions and resulting actions on the part of the Board shall be
recorded in the minutes of the board meeting.
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MARYLAND STATE RETIREMENT AND PENSION SYSTEM
BOARD POLICY DEVELOPMENT PROCESS
Further the objective that the Board’s primary focus will be on setting direction and broad policy
and on monitoring its implementation, and the Executive Director shall be fully accountable for the
operational performance of the Agency.
GUIDELINES
Policy Development
1. The process of developing a board policy shall be initiated by the Executive Director or by an
action of the Board.
2. In determining whether a particular issue warrants a board policy, the Board shall consider
whether the issue satisfies the following criteria:
a. The issue may have a significant impact on the System’s ability to meet its mission;
b. The issue is expected to recur or continue indefinitely; and
c. The issue is an operational issue and, hence, the responsibility of the Executive Director.
3. The Board shall not adopt any policy without first ensuring that the policy has been thoroughly
analyzed by staff and appropriate advisors and the analysis has been explained to the Board.
4. Board policies should be written in a format consistent with all other policies in effect.
5. Where a committee has been assigned responsibility for developing a board policy, it shall
consider the Executive Director’s proposed policy, and provide a recommendation to the Board
for approval.
6. Governance policies, board regulations and the Investment Policy Manual shall be maintained in
up-to-date form in a single volume or series of volumes within the Agency’s offices, and shall be
accessible to trustees, staff and members of the public, in print and electronic form.
Policy Compliance
7. As a general rule, the Board shall comply with all board policies. Should the Board take an
action contrary to an approved policy, it shall record in the board minutes the specific rationale
for deviating from the policy. At such time, the Board shall also request that the Executive
Director review the need to amend the policy.
Policy Review
8. All policies shall be formally reviewed on a regularly scheduled basis; however, if a trustee,
board committee, advisor or the executive director believes that a particular policy requires
review in advance of the scheduled review, they may recommend to the Board that such a review
be initiated.
38
MARYLAND STATE RETIREMENT AND PENSION SYSTEM
OPERATIONAL PLANNING POLICY
Ensure that the System engages in a planning process to meet the needs of the System and
communicates the Agency’s resultant business plan throughout the organization.
POLICY GUIDELINES
Roles and Responsibilities
1. The Executive Director shall:
a. Identify business risks, opportunities, and needs;
b. Identify and prioritize business plan initiatives; and
c. Recommend to the Board the mission and long-range strategic and annual business plans
and any amendments thereto.
2. The Board shall:
a. Provide management with input on the mission and long-range strategic and annual
business plans;
b. Approve the mission and long-range strategic and annual business plans and request that
adequate resources are in place to support them; and
c. Monitor the implementation of the long-range strategic and annual business plans.
The Planning Process
3. During the fourth quarter of each fiscal year, the Executive Director shall complete a business
planning analysis of the Agency and shall by the close of the fiscal year, submit to the Board a
report on this analysis. At a minimum, the analysis and report shall include:
a. A review of the progress made in implementing the previous year’s business plan.
b. An analysis of the continued appropriateness of the mission, which shall include a
consideration of the following issues:
i. The Agency’s constituents and their relative priority;
ii. The alignment between the Agency’s current operations and capabilities and
potential changes in benefit design;
iii. The level of service excellence the Agency aims to provide to participants; and
iv. The role the Agency shall play in communicating with the governor and state
legislature in their decisions regarding plan design.
c. An assessment as to whether the Agency is positioned to achieve its mission, including
an assessment of issues such as:
i. Investments and funding;
ii. Member services and benefits administration;
iii. Human resources;
iv. Information systems;
v. Financial operations;
39
vi. Governance; and
vii. Communications.
d. Confirmation of the need to continue addressing existing business plan initiatives and
identification of any new business plan initiatives to be undertaken.
e. Recommended new business initiatives, including at a minimum:
i. Rationale for undertaking the initiative, including benefits, impact, and
consequences of not undertaking the initiative;
ii. Timelines for completion;
iii. Assignment of responsibilities for implementation;
iv. Budget implications;
v. Affirmation that the initiatives are aligned with the long-range strategic plan; and
vi. Provisions for reporting to the Board.
4. The Executive Director shall conduct a long-range strategic planning process with the full
engagement of the trustees and staff of the Agency. This process shall result in a plan which sets
forth an analysis of the environment in which the Agency operates, including the Agency’s
strengths, weaknesses, opportunities and threats. The plan shall set forth long-range goals for the
Agency, as well as the objectives that must be achieved in meeting those goals. The plan shall
identify the assignment of responsibilities, methods for reporting progress against the plan, and
timeframes for the completion of each goal. The Executive Director and trustees shall review
progress against the long-range strategic plan by the close of the fiscal year and simultaneous
with the analysis of the previous year’s annual business plan. Modifications to the long-range
plan shall, if necessary, be made at that time, thus maintaining a perpetually long-range
perspective of agency development.
Planning Sessions
5. In approving the long-range strategic and annual business plans, the Board shall be satisfied that
the plans are reasonable and support the strategic direction of the system. Agency staff shall
receive copies of the plans.
6. Once the long-range strategic and annual business plans are approved, the Board shall refrain
from adding additional initiatives for either plan unless the necessary additional management time
and budget requirements can be made available.
7. Should management determine that changing circumstances shall not allow it to meet a particular
initiative, the Board shall be informed in a timely manner and the business plan shall be adjusted
accordingly.
40
MARYLAND STATE RETIREMENT GOVERNANCE POLICIES
APPENDICES
APPENDIX
REFERENCE LOCATION
TITLE
Appendix 1
Board Operations Policy
• Modified “Robert’s Rules of
Order”
Appendix 2
Monitoring and Reporting
Policy
• Routine Reports
Appendix 3
Code of Conduct
• Maryland Public Ethics Law
Concerning Gifts
Appendix 4
Board Education Policy
• Specific Pension-Related
Training Topics
Appendix 5
Board Education Policy
• Trustee Reference Manual
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APPENDIX 1
MODIFIED “ROBERT’S RULES OF ORDER”
What is parliamentary procedure? It is a set of rules for conduct at meetings that allows everyone to be
heard and to make decisions without confusion.
Why is parliamentary procedure important? Because it’s a time-tested method of conducting business at
meetings and public gatherings. It can be adapted to fit the needs of any organization. Today, Robert’s
Rules of Order newly revised is the basic handbook of operation for most clubs, organizations and other
groups. So it’s important that everyone know these basic rules!
Organizations using parliamentary procedure usually follow a fixed order of business. Below is a typical
example:
1. Call to order.
2. Roll call of members present.
3. Reading of minutes of last meeting.
4. Officers’ reports.
5. Committee reports.
6. Special orders--Important business previously designated for consideration at this meeting.
7. Unfinished business.
8. New business.
9. Announcements.
10. Adjournment.
The method used by members to express themselves is in the form of moving motions. A motion is a
proposal that the entire membership take action or a stand on an issue. Individual members can:
a) Call to order.
b) Second motions.
c) Debate motions.
d) Vote on motions.
There are four basic types of motions:
Main Motions: The purpose of a main motion is to introduce items to the membership for their
consideration. They cannot be made when any other motion is on the floor, and yield to privileged,
subsidiary, and incidental motions.
Subsidiary Motions: Their purpose is to change or affect how a main motion is handled, and is voted
on before a main motion.
Privileged Motions: Their purpose is to bring up items that are urgent about special or important
matters unrelated to pending business.
Incidental Motions: Their purpose is to provide a means of questioning procedure concerning other
motions and must be considered before the other motion.
42
How are motions presented?
• Obtain the floor.
• Wait until the last speaker has finished.
• Rise and address the chairman by saying, “Mr. Chairman, or Mr. President.”
• Wait until the chairman recognizes you.
• Make your motion. Speak in a clear and concise manner. Always state a motion affirmatively.
Say, “I move that we …” rather than, “I move that we do not….” Avoid personalities and stay
on your subject.
• Wait for someone to second your motion. Another member will second your motion or the
chairman will call for a second. If there is no second to your motion it is lost.
• The chairman states your motion. The chairman will say, “It has been moved and seconded that
we…” thus placing your motion before the membership for consideration and action. The
membership then either debates your motion, or may move directly to a vote.
• Once your motion is presented to the membership by the chairman it becomes “assembly
property,” and cannot be changed by you without the consent of the members.
Expanding on your motion
The time for you to speak in favor of your motion is at this point in time, rather than at the time you
present it. The mover is always allowed to speak first. All comments and debate must be directed to
the chairman. Keep to the time limit for speaking that has been established. The mover may speak
again only after other speakers are finished, unless called upon by the chairman.
Putting the question to the membership
The chairman asks, “Are you ready to vote on the question?” If there is no more discussion, a vote is
taken. On a motion to move the previous question may be adapted.
Voting on a motion
The method of vote on any motion depends on the situation and the by-laws of policy of your
organization. There are five methods used to vote by most organizations, they are:
1. By Voice – The chairman asks those in favor to say, “aye,” those opposed to say “no.” Any
member may move for an exact count.
2. By Roll Call – Each member answers “yes” or “no” as his or her name is called. This method is
used when a record of each person’s vote is required.
3. By General Consent – When a motion is not likely to be opposed, the chairman says, “If there is
no objection…” The membership shows agreement by their silence, however if one member
says, “I object,” the item must be put to a vote.
4. By Division – This is a slight verification of a voice vote. It does not require a count unless the
chairman so desires. Members raise their hands or stand.
5. By Ballot – Members write their vote on a slip of paper. This method is used when secrecy is
desired.
43
There are two other motions that are commonly used that relate to voting:
6. Motion to Table – This motion is often used in the attempt to “kill” a motion. The option is
always present, however, to “take from the table,” for reconsideration by the membership.
7. Motion to Postpone Indefinitely – This is often used as a means of parliamentary strategy and
allows opponents of motion to test their strength without an actual vote being taken. Also, debate
is once again open on the main motion.
Reconsidering a motion
Motion to reconsider a board action may only be brought by a board member who voted on the
prevailing side when the matter was first considered by the board. A board member who cannot
move to reconsider can briefly state reasons for wishing that a reconsideration should be moved,
provided no debate ensues. The request for reconsideration of previous board action must include in
detail any information not previously considered. The motion may be seconded by any board
member.
Conclusion
Parliamentary procedure is the best way to get things done at your meetings, but it will only work if
you use it properly. To summarize:
• Allow motions that are in order.
• Have members obtain the floor properly.
• Speak clearly and concisely.
• Obey the rules of debate.
• Most importantly, be courteous.
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APPENDIX 2
ROUTINE REPORTS
GOVERNANCE REPORTS
Report Name
Frequency
Presented By
Description and Purpose of Report
1. Board Performance
Evaluation
Every other year
Administrative
Committee
Summarizes the results of the
board’s performance self-evaluation,
including follow-up actions.
2. Executive Director
Evaluation
Annually
Administrative
Committee
Summarizes the performance
assessment of the executive director.
3. Governance Report
Triennially
Executive Director
A summary confirmation of
compliance with charters and
policies of the board.
4. Trustee Education
Report
Semi-annually
Executive Director
Summarizes the activities of the
board with respect to education
pursuant to SPP § 21-108.
5. Summary Report on
Filing of State Ethics
Disclosure Forms
Annually
Trustees
Summarizes affirmation by trustees
that they have filed appropriate
reports.
45
INVESTMENT & FUNDING REPORTS
Report Name
Frequency
Presented By
Description and Purpose of Report
6. Investment
Performance
Quarterly
Staff and Investment
Consultant
Report on investment performance
for total fund, for each asset class,
and by investment manager.
Provides analysis based on return
over various periods (3 months, 1
year, 5 year, etc.), and using
attribution analysis.
7. Report on Brokerage
Commissions
Quarterly (by
law)
Staff
Reports the costs of the system’s
trading activities.
8. Proxy Voting
Annually
Staff
Confirms compliance with the
board’s proxy voting policy, and
summarizes how the system
exercised its voting rights in public
companies.
9. Actuarial Valuation
Annually
Actuary
Summarizes the results of the
actuarial valuation for the plan,
together with any recommendations.
10. Asset Liability
Study
At least every
three years
Staff, Investment
Consultant, and
Actuary
A study of the relationship between
the system’s assets and liabilities to
determine the appropriateness of the
system’s asset allocation policy.
11. Actuarial Experience
Study
At least every
five years
Actuary
Reviews the appropriate long-term
economic assumptions such as
investment return and wage and
price inflation, and demographic
assumptions such as disability rates
and mortality rates.
12. Actuarial Audit
At least every
five years and
always with the
first valuation
completed by a
newly hired
actuary
Actuarial Auditor
An independent review of the
validity of the analyses and
methodologies used in preparing the
system’s actuarial valuation.
46
ADMINISTRATION AND OPERATIONS REPORTS
Report Name
Frequency
Presented By
Description and Purpose of Report
13. Annual Business
Plan Status Report
Mid-year
Staff
Summarizes the status of the annual
business plan.
14. Administrative
Expense Report
Quarterly
Administrative
Committee
Meeting
Staff
Summarizes the actual spending
against the operating budget,
including explanations for material
variances.
15. Financial Audit
Annually
Audit Committee
Reports the financial status of the
system, in accordance with generally
accepted government accounting
principles.
16. Comprehensive
Annual Financial
Report
Annually
Staff
Reports on the operations and
activities of the plan during the last
fiscal year. The financial statements
shall be part of the annual report and
indicate the financial position of the
plan.
47
OTHER REPORTS
Report Name
Frequency
Presented By
Description and Purpose of Report
17. Executive Director’s
Each Board
meeting
Executive Director
Updates the board on significant
matters.
18. Market and Portfolio
Update
Each Board
meeting
Investment
Committee
Chairman
Updates the board on significant
investment matters.
19. Legislative Update
As needed
Staff
Updates the board on significant
legislative development, proposals,
or changes affecting the system.
20. Litigation Report
As needed
Staff
Updates the board on significant
legal development affecting the
system, and on ongoing litigation.
21. Benefits Division
As needed
Staff
Review of significant issues
regarding activity within the Benefits
Division.
48
APPENDIX 3
MARYLAND PUBLIC ETHICS LAW CONCERNING GIFTS
Maryland Code Ann., General Provisions Art., § 5-505 Gifts or honoraria.
(Formerly cited as Maryland Code Ann., State Government Art., § 15-505)
Gift solicitation prohibited
(a) (1) An official or employee may not solicit any gift.
(2) An official may not directly solicit or facilitate the solicitation of a gift, on behalf of another
person, from an individual regulated lobbyist described in § 5-701(a)(1) of this title.
Gift acceptance prohibited
(b) (1) In this subsection, “entity” does not include a governmental unit.
(2) Except as provided in subsection (c) of this section, an official or employee may not
knowingly accept a gift, directly or indirectly, from an entity that the official or employee knows or has
reason to know:
(i) does or seeks to do any business of any kind, regardless of amount, with the official's
or employee's governmental unit;
(ii) engages in an activity that is regulated or controlled by the official's or employee's
governmental unit;
(iii) has a financial interest that may be affected substantially and materially, in a manner
distinguishable from the public generally, by the performance or nonperformance of the official's or
employee's official duties; or
(iv) is a regulated lobbyist with respect to matters within the jurisdiction of the official or
employee.
Exceptions
(c) (1) Notwithstanding subsection (b) of this section, an official or employee may accept a gift listed
in paragraph (2) of this subsection unless:
(i) the gift would tend to impair the impartiality and independent judgment of the official
or employee; or
(ii) as to a gift of significant value:
1. the gift would give the appearance of impairing the impartiality and
independent judgment of the official or employee; or
2. the official or employee believes or has reason to believe that the gift is
designed to impair the impartiality and independent judgment of the official or employee.
(2) Subject to paragraph (1) of this subsection, subsection (b) of this section does not apply to:
(i) 1. except for officials of the Legislative Branch, meals or beverages received and
consumed by the official or employee in the presence of the donor or sponsoring entity;
2. for officials of the Legislative Branch, food or beverages received and
consumed by the official in the presence of the donor or sponsoring entity as part of a meal or reception to
which all members of a legislative unit were invited;
49
3. for a member of the General Assembly, food or beverages received from a
donor or sponsoring entity, other than an individual regulated lobbyist described in § 5-701(a)(1) of this
title, during a period when the General Assembly is not in session, at a location that is within a county
that contains the member's district, provided that the donor or sponsoring entity is located within a county
that contains the member's district; or
4. for a member of the General Assembly, food or beverages received at the time
and geographic location of a meeting of a legislative organization for which the member's presiding
officer has approved the member's attendance at State expense;
(ii) ceremonial gifts or awards of insignificant monetary value;
(iii) except for a State official of the Executive Branch or Legislative Branch, unsolicited
gifts of nominal value;
(iv) for a State official of the Executive Branch or Legislative Branch, unsolicited gifts
from a regulated lobbyist that are not meals or alcoholic beverages and that do not exceed $20 in cost;
(v) trivial gifts of informational value;
(vi) in return for participation on a panel or a speaking engagement at a meeting,
reasonable expenses for food, travel, lodging, or scheduled entertainment of the official or employee if the
expenses are associated with the meeting, except that, if such expenses for a State official of the
Legislative Branch or Executive Branch are to be paid by a regulated lobbyist and are anticipated to
exceed $500, the official shall notify the appropriate advisory body before attending the meeting;
(vii) for a member of the General Assembly, reasonable expenses for food, travel,
lodging, or scheduled entertainment to attend a legislative conference that has been approved by the
member's presiding officer;
(viii) tickets or free admission extended to an elected constitutional officer from the
person sponsoring or conducting the event, as a courtesy or ceremony to the office, to attend a charitable,
cultural, or political event;
(ix) a specific gift or class of gifts exempted from subsection (b) of this section by the
Ethics Commission on a written finding that:
1. acceptance of the gift or class of gifts would not be detrimental to the impartial
conduct of government; and
2. the gift is purely personal and private in nature;
(x) a gift from:
1. an individual related to the official or employee by blood or marriage; or
2. any other individual who is a member of the household of the official or
employee; or
(xi) to the extent provided in subsection (d) of this section, honoraria.
Honoraria
(d) (1) Except as provided in subsection (c)(2)(vi) of this section, a member or member-elect of the
General Assembly may not accept an honorarium.
(2) Subject to subsection (c)(1) of this section, an official or employee who is not a member or
member-elect of the General Assembly may accept an honorarium if:
50
(i) the honorarium is limited to reasonable expenses for the official's meals, travel, and
lodging, and reasonable and verifiable expenses for care of a child or dependent adult, that are actually
incurred;
(ii) the honorarium consists of gifts described in subsection (c)(2)(ii) through (iv) of this
section; or
(iii) the official or employee is a faculty member of a State institution of higher education
who does not hold another position as an official that precludes receiving the honorarium.
(3) Other than as allowed by paragraph (2) of this subsection, an honorarium may not be
accepted, even if allowed by subsection (c)(1) of this section, if:
(i) the payor of the honorarium has an interest that may be affected substantially and
materially, in a manner distinguishable from the public generally, by the performance or nonperformance
of the official's or employee's official duties; and
(ii) the offering of the honorarium is related in any way to the official's or employee's
official position.
Gifts prohibited under State Finance and Procurement Article
(e) An official or employee may not accept a gift that is prohibited under § 13-211 of the State Finance
and Procurement Article.
Further exemptions
(f) By regulation, the Ethics Commission may define further exemptions from this section as may be
necessary.
Maryland Code Ann., General Provisions Art., § 5-607(e)
Content of Financial Disclosure Statements - Gifts
* * *
(e) (1) This subsection does not apply to a gift received from a member of the immediate family,
another child, or a parent of the individual.
(2) The statement shall include a schedule of each gift, specified in paragraph (3) of this
subsection, received during the applicable period:
(i) by the individual or by another entity at the direction of the individual; and
(ii) directly or indirectly, from or on behalf of an entity that is:
1. a regulated lobbyist;
2. regulated by the State; or
3. otherwise an entity doing business with the State.
(3) (i) Except as provided in subparagraph (ii) of this paragraph, the schedule shall include
each gift with a value of more than $20 and each of two or more gifts with a cumulative value of $100 or
more received from one entity during the applicable period.
(ii) The statement need not include as a gift:
1. food or beverages received and consumed by an official of the Legislative
Branch in the presence of the donor or sponsoring entity as part of a meal or reception to which all
members of a legislative unit were invited;
2. food or beverages received by a member of the General Assembly at the time
and geographic location of a meeting of a legislative organization for which the member's presiding
officer has approved the member's attendance at State expense; or
3. except as provided in subparagraph (iii) of this paragraph, a ticket or free
admission extended to a member of the General Assembly by the person sponsoring or conducting the
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event as a courtesy or ceremony to the office to attend a charitable, cultural, or political event to which all
members of a legislative unit were invited.
(iii) The statement shall include the acceptance of each of two or more tickets or free
admissions, extended to a member of the General Assembly by the person sponsoring or conducting the
event, with a cumulative value of $100 or more received from one entity during the applicable period.
(4) For each gift subject to this subsection, the schedule shall include:
(i) the nature and value of the gift; and
(ii) the identity of the entity from which the gift was received, whether directly or
indirectly.
(5) This subsection does not authorize acceptance of a gift not otherwise allowed by law.
* * *
CODE OF MARYLAND REGULATIONS
Title 19A STATE ETHICS COMMISSION
Subtitle 03 FINANCIAL DISCLOSURE
Chapter 01 Disclosure Required by Members of Boards and Commissions
* * *
.04 Financial Disclosure Requirements.
B. Contents of Financial Disclosure Statements.
(5) Gifts.
(a) Except as provided in §B(5)(b) of this regulation, an individual shall disclose the information specified
in General Provisions Article, §5-607€, Annotated Code of Maryland, for a gift in excess of $50 in value
and for any series of gifts totaling over $100 in value in the reporting period from any person doing
business with, regulated by, or registered as a lobbyist before the individual’s board or commission.
(b) This subsection does not require an individual to report gifts from the individual’s immediate family
members, parents, or children.
* * *
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APPENDIX 4
SPECIFIC PENSION-RELATED TRAINING TOPICS
The following is a list of pension-related education topics that relate to each of the general topic areas
listed in paragraph 2 of the Education Policy.
The list is intended to provide guidance to trustees in identifying appropriate topics for the development
of their knowledge and understanding of pension matters. The list is intended as a guideline only, and is
not exhaustive:
Regulatory and Legal Issues Investment Policy and Asset Allocation
System Governing Legislation Asset classes and their characteristics
State Ethics Laws Historical risk and returns
State Open Meetings Act Investment risk management
Tax law and plan qualification features Diversification and asset allocation
Non-tax legal requirements Active versus passive management
Performance measurement
Governance and Fiduciary Duty
Fiduciary duty Financial and Accounting Standards and
Roles of the sponsor, administrator, Practice
Management and service providers
Basics of trust law
Effective decision-making
Robert’s Rules of Order
Benefits Design and Administration
Defined benefit plan features
Risks inherent in Benefits Administration
Basic administrative operations and processes
Disability issues
Actuarial Policies and Funding
Role of the actuary
Actuarial process
Funding policy
Asset/liability management
Technology
Management Information Systems
Technology risk
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APPENDIX 5
TRUSTEE REFERENCE MANUAL
A Trustee Reference Manual shall include the following materials:
a) Relevant sections of:
1. The system’s governing legislation, State Personnel and Pension Article (“SPP”), Title
21, subtitles 1 and 2,
2. Legislation regarding the Optional Retirement Program, SPP §§ 30-201 – 30-204 and 30-
208, and
3. Legislation regarding the Postretirement Health Benefits Trust Fund, SPP § 34-101,
b) Relevant sections of the state ethics laws and the state Open Meetings Act,
c) Copies of board governance policies and charters,
d) Organizational chart,
e) Names phone numbers, and email addresses of trustees, the executive director, and senior
executives,
f) Listing of current committee assignments,
g) Listing of current service providers,
h) Glossary of key pension administration terms and definitions, and
i) Most recent Comprehensive Annual Financial Report.
It is the responsibility of trustees to maintain their Trustee Reference Manuals, by ensuring that they
contain the most up-to-date materials. A master copy of the Trustee Reference Manual will be available
for use by trustees at the agency’s offices and on the Board Portal.
