Section 287.788 - Contract with professional fund manager; investment plan1. The board of trustees may contract with a professional fund manager if the assets of the trust fund are invested: (a) In an investment which is authorized for a local government pursuant to subparagraph (2) of paragraph (g) of subsection 2 of NRS NRS 287.017; or(b) Pursuant to subsection 2 of NAC 287.790.2. Unless all the assets of the trust fund will only be deposited in the Retirement Benefits Investment Fund pursuant to subparagraph (1) of paragraph (g) of subsection 2 of NRS 287.017, or invested in any investments authorized pursuant to NRS 355.170, the board of trustees shall develop an investment plan for the trust fund in consultation with a professional fund manager, if the board has entered into a contract with such a person pursuant to subsection 1, or with any other investment management advisor retained by the board of trustees. The investment plan must be approved as to its conformity with subsection 3 by the Committee on Local Government Finance before the investment of any assets of the trust fund if: (a) The assets of the trust fund qualify to be invested pursuant to NAC 287.790; and (b) The board of trustees desires to invest outside the Retirement Benefits Investment Fund in any stocks or other equity securities or bonds or other debt securities which meet the requirements of subparagraph (3) of paragraph (g) of subsection 2 of NRS NRS 287.017.3. An investment plan developed pursuant to subsection 2 must: (a) Include formal investment policies consistent with the requirements of NRS NRS 287.017 and NAC 287.760 to 287.792, inclusive, including, without limitation, policies governing acceptable risks, diversification requirements and the fundamental processes for regulating the investment of the assets of the trust fund.(b) Include processes governing the selection and monitoring of the staff and any professional fund manager or other investment management advisor assisting the board of trustees in the administration of the trust fund that are sufficient to ensure such staff, professional fund managers and other advisors have appropriate expertise and exhibit appropriate fiduciary behavior for such positions.(c) Include appropriate investment training for members of the board of trustees and staff to ensure that they are knowledgeable in the prevailing investment practices.(d) Include travel policies for participation in investment training for members of the board of trustees and staff that support the need for training and are defensible in the context of the interests of the public and the beneficiaries of the trust fund.(e) Include an organizational plan for the selection and retention of competent investment expertise among the staff and in professional fund managers and other advisors, and incorporate a competitive process for the selection of both staff and professional fund managers and advisors.(f) Provide for the development of and annual review by the board of trustees of the asset allocation strategy of the investment plan and the positioning of classes of assets in the investment portfolio of the trust fund in light of general market trends and valuations.(g) Provide, on at least an annual basis, for a formal evaluation of the role or potential role of passive or indexed investment strategies applicable to the investment portfolio of the trust fund, and of appropriate strategies to minimize the costs of the administration of the trust fund, including, without limitation, the costs of transactions, professional fund managers and other advisors and investment training.(h) Provide for a periodic review of investment-related practices, including, without limitation, services provided by brokers and unconventional investment strategies, in the context of fiduciary standards and the interests of economy.(i) Establish formal benchmarks for the performance of the portfolio and managed accounts that are specific to the assigned role of the manager of the portfolio or account.(j) Provide for the regular evaluation of the performance of the portfolio using consistent, documented and reliable disciplines, and establish clear criteria and procedures for selection and termination of investments by managers.(k) Provide for regular communications on investment results to the governing body in a clear and intelligible format.4. Approval by the Committee on Local Government Finance of the investment plan , if required pursuant to subsection 2 , does not create or establish any fiduciary responsibility between the Committee on Local Government Finance and the trust fund or its beneficiaries.Nev. Admin. Code § 287.788
Added to NAC by Com. on Local Gov't Finance by R089-08, eff. 9-18-2008; A by R078-15, eff. 4/4/2016