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HomeMy WebLinkAboutIR 7409 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 409 `M�Mfii wtO '" �bEfoAr�o To the Mayor and Members of the City Council Sentember 12, 1989 Subject: ALTERNATE RETIRE>'ZNT_ORDINANCE AMEI!M12 TS TO PROVIDE FOR FUNDING OF 1989-90 RETIREE HEALTH INSURANCE COSTS At the September 7th budget worksession the Council was advised that the September 12th Council agenda would include for action two Retirement Ordinance amendments to provide alternate methods of providing funds for 1989-90 retiree health insurance costs. The Council requested that prior to this Council meeting they be provided with a staff assessment of the possible positive and negative impact of each of the two amendments. These are as follows: Amendment to Direct Amendment to Reduce Transfer of Funds from City's Contribution Retirement Fund * to Retirement Fund "Pros" _no long-term acturarial impact no apparent basis for legal _consistent with actions of challenge past five years no known threat of legal _supported by Dept. of Law challenge opinion _provides an exact dollar amount for retiree insurance "Cons" _threat of legal action possible legal challenge 'possible unfavorable acturarial report for 1990 _possible additional liability to be recorded by operating funds at 9/30/90 _provides only an estimated dollar amount for retiree insurance The Council also requested a copy of the Department of Law's opinion concerning payment of retirees' health insurance out of Retirement Funds. A copy of this correspondence is attached. Please let me know if you require additional information. * recommended by staff Ilbw Doug lia—s-4&rman City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS OFFICE OF THE CITY ATT011, Y THE CITY OF FORT NVORTH 1000 THROCKMORTON FORTNVORTH,TEXAS 76102 817•870-76vo June 23, 1988 Mr. George K. Nicolaides Retirement Administrator 100U Throckmorton Street Fort Worth, Texas 76102 RE: Fiduciary Responsibility of the board of Trustees for Expenditure of Trust Funds for Retiree health Insurance Premiums Dear Mr . Nicolaides: At its last regular meeting, the board of Trustees of the Employees ' Retirement Fund of the City of Fort Worth requeste,.-1 a legal opinion concerninci the above subject . Tlit� 1,oartl flirther won- dered whether this was an appropriate expenditurc for trust funds and whether the Board could be held liable if this were to result in misapplication of retirement funds. %%W According to the Finance Director, expenses of the Retirement Fund prior to June 7, 19b3 came out of the Finance Department ' s General Fund Departmental Budget. Health insurance for retirees was paid for out of non-departmental funds of the General Fund budget. On and after June 7, 19b3, personnel , supplies and capital outlay expenses of the Board and Administrator were still paid from the Retirement Administration budget appropriation of the General Fund as recommended by the City Manager and approved by the City Council; however, consultant expenses relating to investment management, actuarial services, funds evaluation and brokers ' fees and commis- sions were to be paid from the Retirement Fund upon approval of the Board of Trustees. On November 13, 1984, the ordinance was changed to provide, as it does today, that the Retirement Fund could volun- tarily reimburse the General Fund for all actual administrative expenses or a portion thereof upon a majority vote by the Board of Trustees If such action were actuarially sound. The Finance Director has informed me that the issue of Retirement Fund payment of retiree health insurance premiums was first brought to the Board by the Budget Director on July 23, 1984. The Budget Director recommended that 40% of the health insurance premiums be paid by the Fund; however, at the next meeting on August 27, 1984, the Board voted to pay 10U% of retiree health insurance premiums in support of the City budget as proposed in the memo from the Budget Director which referenced absorption of health Continued, Page 2 'Mr . George K. Nicolaides June 23, 1988 insurance costs over a three year period. There are differing opinions as to whether this was to be a one-time or annual assumption of cost of health insurance for retirees. Under the current Retirement Ordinance, decisions of the Board of Trustees are final and conclusive "in administering the Fund. " Administrative expenses of the Fund are not defined. Rather, the ordinance provides that personnel, supplies and capital outlay expenses necessary for administration of the Fund shall be paid from the Retirement Administration budget appropriation of the General Fund as recommended by the City Manager and approved by the City Council; further, the ordinance provides that the Board may volun- tarily reimburse the General Fund for all actual administrative ex- penses or a portion thereof where such action is actuarially sound. Administrative expenses are not expressly limited to personnel , supplies and capital outlay expenses; rather, these are the only expenses enumerated. Further, the provision as to voluntary reim- bursement of "all actual administrative expenses or a portion there- of" certainly allows for other administrative expenses. (Emphasis added. ) Arguably, personnel, supplies and capital outlay expenses are only some of the enumerated expenses of the board and the Administrator. Currently, the Finance Director and Assistant Budget Director inform me that at least the following also constitute direct V%w administrative expenses of the Retirement Fund; salaries of all Retirement Office employees, benefits (retirement contributions, medical insurance, longevity, terminal leave, Workers ' Compensation) of all Retirement Office employees, office supplies, telephone, federal express, postage, copying, Motor Pool or mileage reimburse- ments, inside printing, furniture, minor equipment, computer pur- chases, graphics, temporary clerical help, and travel by the Administrator as well as by various members of the Board of Trustees. These direct administrative expenses will total approxi- mately �150, UUO for next year. An additional administrative expense is retiree health insurance premiums. The Retirement Fund will also incur at least the following indirect costs for next year: space used in City Hall and utilities attributable to such space; data processing assistance in systems development/maintenance and com- puter time usage; accounting assistance for payroll and accounts receivable as well as payable; purchasing assistance depending upon purchasing needs; personnel assistance depending upon turnover; legal assistance; management services assistance with budget matters; finance department and City Manager 's office oversight of Retirement Fund operations; and any building maintenance time used (e.g. , move plugs, etc. ) if necessary. For next year, these indirect administrative expenses will total approximately �5b, 000. Let me give you a brief summary of my attached research con- cerning retaining or deleting retiree health insurance benefits. In %40, the greater number of states, an employee who contributes to a Continued, Page 3 Mr. George K. Nicolaides June 23, 1988 municipal pension system has no legally enforceable rights before or after his pension has been granted as to the terms governing said pension. By accepting a position, a municipal employee agrees to compensation in return for his services and, as an essential part thereof, said employee acquires the right, when eligible, to partic- ipate in a pension system where such a system exists. The employee 's acceptance of employment with its attendant right to participate in a pension system is nevertheless subject to the right of the govern- ing body (i. e. , the State Legislature or the City Council, as the case may be) to amend or repeal the laws or ordinances upon which the pension system is founded. The mere circumstance that an em- ployee contributes to the pension system does not in itself give him a right to a pension superior to the power of the governing body to amend or repeal the ordinances pertaining to the pension system. Therefore, the right to participate in a municipal pension fund is based upon the anticipated continuance of existing pension laws or ordinances which the governing body may modify, amend or repeal as it may see fit. Regardless of whether an employee may allege that he has a contract right to a pension, his "right" to receive pension benefits upon retirement or to continue to receive benefits after retirement rights have accrued is based upon the anticipated continuance of existing laws or ordinances and is subordinate to the right of such governing body to increase, decrease or eliminate said benefits because the very existence of any such right depends upon the statu- tory provisions conferring the pension. The Texas courts have clearly stated that he has no contract right that the existing pension law be continued and any changes in such laws do not violate his alleged contractual rights. No right has been taken away from an employee who has not retired because he only has a mere expectancy that he will retire; he cannot, therefore, complain of any changes to the pension system before he retires. From the inception of his employment, an employee cannot predict whether he will want to spend his entire career in the City 's employment, be fired, be terminated due to budgetary cutbacks or die before reaching retirement age. Because the governing body may amend, modify or repeal the pension law, he can only anticipate what his pension benefit will be based upon continuance of the law as he knows it at that time. A pensioner who has retired from employment under a pension system has a present contractual right to receive pension benefits as they accrue month to month subject to the governing body's right to increase, diminish or eliminate said benefits and so long as there exists a fund from which pension benefits can be paid. Because pension benefits can be decreased or eliminated, it is my opinion that retiree rights to health insurance are no greater than the right to a pension. Indeed, there is no right to health insurance for a retiree as there is no requirement in the Retirement Ordinance that health insurance coverage of any kind shall be given Continued, Page 4 Mr . George K. Nicolaides June 23, 1988 to retirees because the only ordinance reference to health insurance pertains to payment by the retiree of spousal coverage. Spousal health insurance is not guaranteed by the ordinance, nor is it paid by the Fund. A basic tenet of trust law is that a trust creates a fiduciary relationship in which one person holds a property interest subject to the obligation to keep or use that interest for the benefit of another. The Texas Trust Code is incorporated by reference for all purposes into our Retirement Ordinance as if set out verbatim in the ordinance. The Texas Trust Code provides that ordinary expenses incurred in the administration, management or preservation of trust property, including premiums on insurance on the interests of an income beneficiary, may be paid by the trustee and charged against income of the trust. State law, also provides with regard to adminis- trative requirements for public retirement systems (such as our Fund) that the assets of a public retirement system must be held in trust for the benefit of the members and retirees of the systea, and their beneficiaries. Further in that regard, State law mandates that in making and supervising investments of the Fund of a public retirement system, its governing body shall discharge its duties solely for the exclusive Purpose of providing benefits to partici- pants and their beneficiaries and of "defraying reasonable expenses of administering the system. " In summary, it is my opinion that there is no legal prohibition against payment of retiree health insurance premiums by our Retire- ment Fund. State law specifically authorizes such an expenditure of trust funds. Our ordinance does not specifically address the payment of retiree insurance premiums by the Fund and only provides for the deduction of spousal insurance premiums, i.e. , for the deduction from the monthly pension check of the premium required to be paid by the retiree for spousal insurance coverage. Since there is no legal prohibition against payment of retiree insurance and no legal pro- hibition against the use of pension trust funds for the payment of retiree health insurance premiums, it is the province of the Retire- ment Board to decide whether or not to voluntarily reimburse the City for part or all of the cost of retiree health insurance. Cer- tainly, retiree health insurance coverage is a basic element of planning for financial security in retirement against unforseeable future medical needs which can reach catastrophic proportions. If the Board decides to continue this reimbursement practice for one (1 ) year, five (5) years in phasing out such payments or indefi- nitely, it might be wise to amend the retirement ordinance to reflect same, particularly since the ordinance already provides for deduction of spousal insurance premiums from the pension check of a retiree. I feel that it might well be wise for the Retirement Adminis- �w trator to canvass other cities to see how the issue of payment of Continued, Page 5 Mr. •George K. Nicolaides June 23, 1988 retiree health insurance premiums is handled before an ordinance amendment is drafted. I do not feel that the substance of this amendment must be decided before the Board of Trustees votes whether or not to pay such premiums for the forthcoming budget as this is a decision to be made by the Board for the reasons set forth herein. I have been told that the City of Dallas Employee Retirement Fund only began paying for retiree health insurance premiums in April 1987 because the retirees found that much of their pension check was being devoted to health insurance premiums; spousal coverage is not given so as not to discriminate against retirees without spouses. Previously, retirees had to pay for their own health insurance as well as spousal coverage. The Dallas ordinance, which terms I have not seen in writing, allegedly states that the payment of retiree health insurance premiums is a supplement which may be decreased, increased or eliminated on an annual basis. Thus, this supplement allows for medical insurance assistance to retirees depending upon the financial condition of the Dallas retirement fund. I trust the foregoing has been of some assistance to the mem- bers of the Board of Trustees in making their decision. Very truly yours, Sarah n Grace Assistant City Attorney SOG: lb cc: The Members of the Board of Trustees of the Employees ' Retirement Fund of the City of Fort Worth Mr. Wade Adkins, City Attorney Mr. Charles R. Boswell, Management Services Director Mr. A. Judson Bailiff, Finance Director Ms . Kay W. Cecil, Assistant Finance Director Mr. bill Herrington, Risk Manager DISCUSSION AND AUTHORITIES PERTAINING TO FIDUCIARY RESPONSIBILITY OF THE BOAkD OF TRUSTEES FOR EXPENDITURE OF TRUST FUNDS FOR RETIREE HEALTH INSURANCE PREMIUMS A trust may be defined as a fiduciary relationship in which one person holds a property interest subject to the obligation to keep or use that interest for the benefit of another . Wichita Royalty Co. v. City National Bank of Wichita Falls, 127 Tex. 158, b9 S.W.2d '394 (Tex. 1935) ; Rippstein v. Unthank, 380 S.W. 2d 155 (Tex. Civ. App. -- Amarillo, 1935) ; reversed on other grounds, 38b S.W.2d 134 (1964) . The State Legislature has similarly provided in Title IIUB "Public Retirement Systems", Chapter 12 "Administrative Require- ments", in Section 12.2U1 that trust assets shall be handled as follows : "§12.201 . Assets In Trust "The governing body of a public retirement system shall hold or cause to be held in trust the assets appro- priated or dedicated to the system, for the benefit of the members and retirees of the system and their benefi- ciaries. " The Texas Trust Code is specifically incorporated into our Retirement Ordinance by reference for all purposes as if set forth verbatim and governs to the obligations of the Board of Trustees. The Code sets forth a standard for trust management and investments which is applicable to our Trustees and provides as follows : '1113.056. Standard for Trust Management and Investment " (a) Unless the terms of the trust instrument provide otherwise, in acquiring, investing, reinvesting, exchang- ing , retaining, selling, supervising, and managing trust property a trustee shall exercise the judgment and care under the current circumstances that persons of ordinary prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to specula- tion but in regard to the permanent disposition of their funds, considering the probable income from as well as the probable increase in value and the safety of their capital. (b ) Within the limitations of Subsection (a) of this section, a trustee may acquire and retain every kind of property and every kind of investment, including bonds, debentures, and other corporate obligations, preferred or common stock, and interests in investment trusts and -1- mutual funds, that persons of ordinary prudence, discre- tion, and intelligence acquire or retain for their own account. (c ) Within the limitations of Subsection (a) of this section, a trustee may indefinitely retain property ac- quired under this section without regard to its suitabil- ity for original purchase. (d) Within the limitations of Subsection (a) of this section, whenever the instrument directs, requires, autho- rizes, or permits investment in obligations of the United States government, the Trustee may invest in and hold such obligations either directly or in the form of interests in an open-end management type investment company or invest- ment trust registered under the Investment Company Act of 1940, 15 U .S . C.80a-1 et seq. , or in an investment vehicle authorized for the collective investment of trust funds pursuant to Part 9, Title 12 of the Code of Federal Regulations, so long as the portfolio of such investment company, investment trust, or collective investment vehicle is limited to such obligations and to repurchase agreements fully collateralized by such obligations. " Please note that the Trust Code ' s standard of fiduciary responsibil- ity has been similarly reiterated in pertinent part by the State Legislature under Title 110B "Public Retirement Systems, " Chapter 12 "Administrative Requirements" in Section 12. 03 as follows: " §12.203 . Fiduciary Responsibility (a) In making and supervising investments of the reserve fund of a public retirement system, an investment manager or the governing body shall discharge its duties solely in the interest of the participants and beneficiaries: (1 ) for the exclusive purposes of: (A) providing benefits to participants and their beneficiaries; and (B) defraying reasonable expenses of administer- ing the system; (2 ) with the care, skill, prudence, and diligence under the prevailing circumstances that a prudent person _ acting in a like capacity and familiar with matters of the type would use in the conduct of an enterprise with a like character and like aims; -2- (3 ) by diversifying the investments of the system to minimize the risk of large losses, unless under the cir- cumstances it is clearly prudent not to do so; and (4) in accordance with the documents and instruments governing the system to the extent that the documents and instruments are consistent with this subchapter. " Not only does State law address fiduciary responsibility fQr invest- ments, but it also specifically provides that investments should be made for the exclusive purpose of defraying reasonable expenses of administering the system. The Texas Trust Code further provides for charging trust ex- penses against trust income. The State Legislature has specifically provided in pertinent part that insurance premiums on the interest of an income beneficiary may be charged against 'trust fund income as follows : "§113.111 . Charges against Income and Principal " (a) The following charges shall be made against income : " M ordinary expenses incurred in the adminis- tration, management, or preservation of the trust prop- erty, including regularly recurring taxes assessed against any portion of the principal, water rates, premiums on insurance on the interests of an income beneficiary, remainderman, or trustee, interest paid by the trustee, and ordinary repairs,- " It has long been settled in Texas that a public employee has no vested rights in a statutory pension. The leading case on this issue is City of Dallas v. Trammell, 129 Tex. 150, 101 S.W.2d IU09 (Tex. 1937 ) . The Texas Supreme Court held there that employees contribut- ing to and participating in a municipal pension system did so in contemplation of the reserved right of the Legislature to amend or to repeal the laws on which the pension systems are ' founded. The Court felt that there was no contract on behalf of the State to continue the payment of a pension benefit, and a change in the law affecting such benefit does not impair the obligation of an alleged contract or deprive a person of property without due process of law within the meaning of the constitutional provisions invoked. Al- though some courts view pensions as gratuities or bounties while other courts r-*arceive them as arising from contract as an essential part of the agreed compensation of the employee, the Texas Supreme Court found this to be irrelevant because the existence of a vested right depends upon the statutory provisions conferring the pension. Therefore, even if a pension were to be regarded as arising from a -3- contract of employment as an essential part of the agreed compensa- tion of the employee, such alleged contract between the City and the employee is made subject to the reserved right of the legislature to amend, modify or repeal the law upon which the pension system is erected, and this necessarily constitutes a qualification upon the anticipated pension and a reserved right to terminate or diminish it. 1d, at p. 1014. Further, pensions are not based upon contract, but are mere expectancies based upon the anticipated continuance of existing law, and future installments of pensions are not vested property rights. In other words, the right to receive payments from a pension fund, after retirement or after his right to participate in the fund has accrued, was "Predicated upon the anticipatqd con- tinuance of existing laws, and is subordinate to the right of the Legislature to abolish the pension system, or to diminish the accrued benefits of pensioners thereunder. " Id. , at page 1013. This F_ proposition has been more succinctly explained as follows in 52 A.L.R. 2d 437, 478 (1957) : "To the same effect as the Dallas case, supra, see Woods v. Reilly, (1948, Tex. Civ. App. T211 S.W. 2d 591 , rev'd on other grounds 147 Tex . 586, 218 S.W.2d 437, and Howerton v. Fort Worth, (1950, Tex. Civ. App. ) 231 S.W. 2d 993, rev 'd on other grounds 149 Tex . 614, 236 S.W. 2d 615. In both of these cases the courts reiterated the rule that there is no vested right or interest in a municipally established pension system for public employees which will prevent the legislature from repealing the law upon which the system is founded, or modifying the law in such a way as to diminish the amount of future pensions. . . . " The power of the Legislature to amend or repeal the laws upon which a pension system is founded has been cited most recently with approval in Board of Managers of the Harris County hospital District v. Pension Board of the Pension System for the City of Houston, 449 S.W.2d 33, 37 (Tex. 19693 ; Lack v. Lack, 584 S.W. 2d d9b (Tex. Civ. App. -- Dallas 1979, writ ref n.r .e. ) ; Tex. Att 'y Gen. Op. No. JM-910 (1988) . Let us consider the issue of retroactivity. A retroactive law is one which is intended to act on things that are past. Aetna Insurance Company v. Richardelle, 528 S.W.2d 280, 284 (Tex. Civ. App. -- Corpus Christi 1975, writ refd n.r.e. ) . A statute which takes away or impairs vested rights acquired under existing laws, or creates new obligations, imposes new duties, or adopts new disabil- ities in respect to t . anspctions or considerations already past, cannot be upheld. McCa:*,n v. Yost, 155 Tex. 174, 284 S.W.2d 896 (Tex. 1955 ) . Retroactive laws are condemned where a change destroys a vested right. Texas Water Rights Commission v. Wright, 464 S.W. 2d -4- 642, 64d (Tex. 1971 ) . In summary concerning the vested rights issue, the following quotation controls the position of this department: "Unless otherwise inhibited by either the State or Federal Constitutions, the Legislature may change existing laws, both statutory or common, at its pleasure, but in so doing, it may not deprive a person of a property right theretofore acquired under existing law. Those rights are designated as vested rights, and to be vested, a right must be more than a mere expectation based upon an antici- pation of the continuance of an existing law; it must have become a title, legal or equitable, to the present pr future enforcement of a demand, or a legal exemption from the demand of another. If, before a right becomes vested in a person, the law upon which it is based is repealed, that particular person no longer has a remedy to enforce his claim, and if final relief has not beeh granted to him on the enforcement of a demand before such repeal, then no relief can be granted on his demand after the effective date of the repeal. " Aetna Insurance Company v. Ricardelle, supra; 12 Tex. Jur. 3d Constitutional Law, " 178-179 (1981T.— Until an employee under the law has a statutory right of refund or a right to receive a pension therefrom, his right in the fund is 4- only an expectancy based upon, not only his continued employment for the required number of years, but also the continued existence of the law which is subject to revision, modification or complete abrogation by the Legislature. Creps v. Board of Firemen' s Relief & Retirement Fund Trustees of Amarillo, Texas, 45b S.W.2d 434 (Tex. Civ. App. -- Amarillo 1970, writ ref'd n.r.e. ) . The member has no contract right that the existing laws be continued, and change(s) in the laws relating to the pension system consequently do not violate his contractual rights. Texas Municipal Retirement System v. Roark, 401 S.W. 2d 913, 920 (Tex. Civ. App. -- Austin 1966, writ ref 'd n.r.e. ) . That court elaborated as follows: "The cases of Cit of Dallas v. Trammell, 129 Tex. 15U, 101 S.W.2d 100-9, 11-1-2 A.L.R. 997 (1-9-3-77 and Woods v. ReillX, 147 Tex. 586, 216 S.W.2d 437 (1949) . . .stand for the proposition that a person who is included within a pension system established by statute does not, at least so far as future payments are concerned, have a vested contractual right to receive a pension as authorized by existing laws. His rights : re 'predicated upon the antic- ipated continuance of existing laws ' and consequently are subject to the power of the Legislature to change, without vi6lation of any contract rights. That is, the member has -5- no contract rights that the existing laws be continued, and change[s] in the laws relating to the pension system consequently do not violate his contractual rights. " Our retirement system was established pursuant to Article 111, §51-e of the Texas Constitution, which authorized the City of Fort Worth to establish a pension system independent of the Texas Legis- lature; the City of Fort Worth voters accepted the Constitution' s offer and created the Employees ' Retirement Fund thereunder. Where rights have been fixed under a constitutional provision, the Texas Legislature is without power to destroy or impair such rights; furthermore, the State Legislature does not have power to enjct any law contrary to a provision of the Texas Constitution, and if any law, or part thereof, undertakes to nullify the protection furnished by the Constitution, such law, or a part thereof, that conflicts with the Constitution is void. City of Fort Worth v. Howerton, 149 Tex . 614, 236 S.W. 2d 615 (Tex. 1951 ) . Any statute created by the Legislature purporting to change the City of Fort Worth' s retirement system, without the consent of the City of Fort Worth, is not autho- rized and any part of such law which undertook to do so would be inoperative as against the City of Fort Worth. Id. This limitation forbidding the Legislature from changing our retirement system with- out the consent of the City of Fort Worth is an implied limitation. Texas Municipal Retirement System v. Roark, supra. Note that the City of Fort Worth is a home rule city whose powers of local self-government are such that it may do all things not prohibited by its charter which the Legislature could have authorized, not in violation of the Constitution or general laws . Davis v. City of Taylor, 123 Tex. 39, 67 S.W. 2d 1033 (1934 ) . In other words, a home rule city in Texas has the power to govern itself by its own laws and can adopt any law that a state legisla- ture can unless preempted or prohibited by state law, federal law and the state as well as federal constitution. Therefore, the City of Fort Worth pension system is predicated upon the anticipated continuance of existing ordinance provisions, and is subordinate to the right of the City Council of the City of Fort Worth by ordinance to abolish the pension system or to diminish the accrued benefits of pensioners thereunder, in keeping with the holding in City of Dallas v. Trammell, supra, and its progeny. Historically, our Retirement Ordinances have always contained a provision that the governing body of the City shall include in the budget sufficient funds to pay the cost of administration of the Retirement Fund, which appropriation shall be in addition to the City' s contribution to the Fund on behal.i_ of each employee. Further, expenses of the Board or the Administrator necessary for the opera- tion of the Fund were mandated to be paid from the Retirement Administration budget appropriation, as recommended by the City Manager and approved by the City Council . -6- These provisions were first amended on June 7, 1983 under Ordinance No. 8843 as hereinafter set forth. The reference in Section V as to budget appropriation to pay the cost of adminis- tration of the Fund was made subject to the provisions of Section XVI-D. In lieu of providing in Section XVI-D that expenses of the Board or the administrator necessary for the operation of the Fund would be paid from the Retirement Administration budget appro- priation as recommended by the City Manager and approved by City Council, this new ordinance provided that personnel, supQlies and capital outlay expenses of the Board and Administrator necessary for the operation of the Fund must be paid from the Retirement Adminis- tration budget appropriation of the General Fund as recommended by the City Manager and approved by the City Council. Further, consul- tant expenses for such things as investment management, actuarial services, funds evaluation and brokers' fees and commissions, neces- sary for the operation of the Fund, must be paid by the Retirement Fund upon approval by the Board of Trustees. On November 13, 1984 under Ordinance No. 9247, Section V remained unchanged. One sentence was added to Section XVI-D as follows : "However, no provision of this ordinance shall preclude the retirement fund from voluntarily reimbursing the General Fund for all actual administrative expenses or a portion thereof upon a majority vote approval by the Board of Trustees where an actuary determines that such action is sound. " Our retirement ordinance only refers to insurance premiums in Section XXVII which is entitled "Exemption of Benefits from Judicial Process" . That section specifically exempts the Fund from execution, attachment, garnishment, assignment or the like for payment or satisfaction of any debt, damage, claim, demand or judgment against a beneficiary of the Fund; "provided that nothing [t3herein shall prevent the deduction of the spouse's insurance premiums from the Fund for the purpose of paying same, on behalf of the spouse to the health and life insurance carrier for the city only. " Hence, the Retirement Ordinance does not require that health insurance for retirees -- much less spouses of retirees -- shall be' paid for by the Retirement Fund. -7-