HOUSE Amended 2nd Reading January 14, 2004Second Regular Session Sixty-fourth General Assembly STATE OF COLORADO ENGROSSED This Version Includes All Amendments Adopted on Second Reading in the House of Introduction LLS NO. 04-0207.01 Gregg Fraser HOUSE BILL 04-1007 HOUSE SPONSORSHIP Williams T., Coleman, and Rhodes SENATE SPONSORSHIP Takis, Anderson, Taylor, and Tupa House Committees Senate Committees Education A BILL FOR AN ACT Concerning the obligations of a governing body of an institution of higher education that establishes an optional retirement plan. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Legislative Audit Committee. Requires each governing board of a state college or university that establishes an optional retirement plan to establish a formal process for selecting companies to act as fund sponsors from which participants in the plan may select investment alternatives. Specifies that the selection process shall include requirements governing the following:  Participant access to investment alternatives;  Monitoring of the fund sponsor's contractual obligations;  Periodic review of the viability and attractiveness of combining plans; and  Periodic review of the fund sponsor's performance. Specifies that a governing board shall be deemed to have met its responsibilities and fiduciary duties, and limits the liability of the board and specified individuals, as long as the board complies with the requirements. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Article 54.5 of title 24, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 24-54.5-104.5. Selection of fund sponsors - responsibilities and fiduciary duties of a governing board. (1) Each governing board that establishes an optional retirement plan pursuant to this article shall establish a formal process for selecting companies to act as fund sponsors from which participants in the plan may select investment alternatives. The selection process shall include the following requirements: (a) Participants in the plan shall have access to investment alternatives having a range of risk, benefits, and cost. (b) The governing body shall have the ability to monitor the fund sponsor's performance of obligations under any contract related to the plan, including but not limited to the returns earned on each investment alternative or pool and the total fees and expenses charged. (c) The governing board shall conduct a periodic review of the financial viability and attractiveness of combining any optional retirement plan established by the governing board with the plans of other governing boards established pursuant to this article. (d) The governing board shall periodically review each fund sponsor from which participants may select investment alternatives and compare the sponsor's performance to other sponsors of optional retirement plans available to public employees in the state. Periodic reviews of a fund sponsor may be conducted by a standing committee of a governing board, institutional committee or personnel, or external auditors or benefits consultants as determined by each governing board. A full report by any such committee shall be provided to each member of the governing board. Nothing in this subsection (1) shall prohibit a periodic review from being conducted independently or in cooperation with others. (2) As long as a governing board complies with the requirements set forth in subsection (1) of this section, it shall be deemed to have met its responsibilities and fiduciary duties with respect to any optional retirement plan it has established, and the governing board, its members, agents, employees, and plan administrators shall have no liability whatsoever to participants in the plan. (3) The requirements set forth in this section shall constitute the appropriate standard for each governing board that establishes an optional retirement plan for purposes of section 15-1.1-115, C.R.S., and shall supersede the provisions of article 1.1 of title 15, C.R.S. SECTION 2. Effective date. This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution (August 4, 2004, if adjournment sine die is on May 5, 2004); except that, if a referendum petition is filed against this act or an item, section, or part of this act within such period, then the act, item, section, or part, if approved by the people, shall take effect on the date of the official declaration of the vote thereon by proclamation of the governor.