ÑÇÖÞÎÞÂë

Board Policies
Chapter 1 - System Organization and Administration
Section C - Code of Conduct & Ethics

Part 1. Purpose
The Board of Trustees is responsible for oversight of the ÑÇÖÞÎÞÂë Colleges and Universities pension plans administered by ÑÇÖÞÎÞÂë. The board's policy is to administer its plans in accordance with Minn. Stat. Ch. 356A. This policy establishes standards for the board, individual trustees, and employees delegated responsibilities pursuant to this policy, to fulfill their fiduciary responsibilities in the administration of ÑÇÖÞÎÞÂë pension plans.

Part 2. Definitions
For purposes of this policy only, the following terms have the meanings provided.

Fiduciary
Fiduciary includes an individual trustee, the Board of Trustees acting in its official capacity, and an employee delegated responsibility under this policy. A person ineligible for fiduciary status under Minn. Stat. § 356A.03 shall not serve as a fiduciary.

Investment guidelines and objectives
The document approved by the Investment Committee to guide ÑÇÖÞÎÞÂë pension plan investments and administration.

System pension plan.
The Individual Retirement Account Plan (IRAP) established under Minn. Stat. Ch. 354B, the Supplemental Retirement Plan established under Minn. Stat. Ch. 354C, and the Tax-Sheltered Annuity program established under Minn. Stat. § 136F.45.

Part 3. Fiduciary Conduct

Subpart A. Duty owed
Consistent with Minn. Stat. § 356A.04, subd. 1, each fiduciary owes a fiduciary duty to:

1. The active, deferred, and retired members of the ÑÇÖÞÎÞÂë pension plans, who are its beneficiaries;
2. The taxpayers of the state, who help to finance the ÑÇÖÞÎÞÂë pension plans; and
3. The State of Minnesota, which established the ÑÇÖÞÎÞÂë pension plans.

Subpart B. Prudent person standard
Consistent with Minn. Stat. § 356A.04, subd. 2, each fiduciary shall act in good faith and exercise that degree of judgment and care, under the circumstances then prevailing, that persons of prudence, discretion, and intelligence would exercise in the management of their own affairs, not for speculation, considering the probable safety of the plan capital as well as the probable investment return to be derived from the assets.

Subpart C. Applicability
The activities of fiduciaries under this policy must be carried out faithfully, without prejudice, and in a manner consistent with law and ÑÇÖÞÎÞÂë pension plan documents, solely to:

1. Provide authorized benefits to ÑÇÖÞÎÞÂë pension plan participants and beneficiaries;
2. Incur and pay reasonable and necessary administrative expenses; or
3. Manage a ÑÇÖÞÎÞÂë pension plan in accordance with the purposes and intent of the plan document.

Subpart D. Fiduciary activity
A fiduciary must carry out their activities in accordance with the requirements of Minn. Stat. Ch. 356A, other applicable law, and this policy including, but are not limited to:

1. Exercising cofiduciary oversight as required by Minn. Stat. § 356A.10;
2. The investment and reinvestment of ÑÇÖÞÎÞÂë pension plan assets;
3. The determination of benefits;
4. The determination of eligibility for membership or benefits;
5. The determination of the amount or duration of benefits;
6. The determination of funding requirements or the amounts of contributions, to the extent applicable;
7. The maintenance of membership or financial records;
8. The reasonable expenditure of plan assets;
9. The selection of financial institutions and investment products; and
10. Other activities involving the overall management of a ÑÇÖÞÎÞÂë pension plan.

Subpart E. Duty of loyalty
ÑÇÖÞÎÞÂë pension plans are established and must be maintained for the exclusive benefit of the members and the members' beneficiaries. Fiduciaries and advisory committee members are prohibited from receiving any direct or indirect compensation, fee or other item of more than nominal value from any third party in consideration of a system pension plan disbursement. Fiduciaries and advisory committee members are prohibited from personally profiting directly or indirectly as a result of their responsibilities for administration of a system pension plan, as a result of the investment or management of system pension plan assets, except for reimbursement of reasonable, approved expenses associated with their duties under this policy, including membership in or receipt of benefits from a pension plan.

Part 4. Board Duties

Subpart A. Fiduciary responsibility
The board and its individual members are fiduciaries of the ÑÇÖÞÎÞÂë pension plans. The board shall oversee the administration of the ÑÇÖÞÎÞÂë pension plans in accordance with federal and state law and this policy.

Subpart B. Contract approval
The board is responsible for approving the selection of the ÑÇÖÞÎÞÂë pension plan administrator and investment advisor.

Part 5. Investment Committee

Subpart A. Composition
The investment committee shall comprise the vice chancellor for finance and one other vice chancellor delegated by the chancellor. The chancellor may delegate additional employees as advisors to the investment committee regarding the ÑÇÖÞÎÞÂë pension plan and its administration.

Subpart B. Duties
The investment committee is responsible for the preparation and submission of ÑÇÖÞÎÞÂë pension plan documents and amendments to the Internal Revenue Service or other regulatory bodies, negotiation of contracts for the plan administrator selected by the board, obtaining expert consultation, selecting investment options available to ÑÇÖÞÎÞÂë pension plan participants, and other duties related to the proper administration of ÑÇÖÞÎÞÂë pension plans. All ÑÇÖÞÎÞÂë pension plan investment and administrative decisions made by the investment committee and the ÑÇÖÞÎÞÂë pension plan administrator must comply with the ÑÇÖÞÎÞÂë Investment Policy and state laws relating to investment of pension funds.

Part 6. Advisory Committee

Subpart A. Composition
The composition of the advisory committee must be as follows:

1. Up to ten active members consisting of no more than two representatives from each affected bargaining group, appointed by the exclusive representative for the bargaining unit.
2. Up to three retired or deferred members, or additional active members representing affected personnel plans may be appointed by the chancellor/vice chancellor for human resources.
3. Each affected exclusive representative may select one staff person to participate in an ex-officio capacity.
4. The chancellor/vice chancellor for human resources may appoint such staff as they deem appropriate to chair and provide other support services to the committee.
5. Terms of each non-staff member must be three years. To the extent possible, terms must be staggered to ensure continuity. No non-staff advisory committee member may serve more than two consecutive terms, except by written authorization of the chancellor/vice-chancellor for human resources.

Subpart B. Role
The advisory committee advises the investment committee on the structure and operation of ÑÇÖÞÎÞÂë pension plans; consults with industry experts on the selection of financial institutions and types of investment products offered by the plan; and advises the chancellor or designee and the investment committee on the administration of the ÑÇÖÞÎÞÂë pension plans, including selection of a third-party administrator.

Part 7. Continuing Fiduciary Education Plan
Each fiduciary and advisory committee member shall make reasonable efforts to obtain the knowledge and skills needed to adequately perform their respective responsibilities under this policy.

The chancellor annually shall provide continuing education opportunities to fiduciaries and advisory committee members designed to provide the knowledge and skills needed to adequately perform their responsibilities for ÑÇÖÞÎÞÂë pension plans. The training must include:

1. Review of ÑÇÖÞÎÞÂë pension plans, the related statutory authority, and related IRS plan documents.
2. Review of ÑÇÖÞÎÞÂë pension plan fiduciary responsibilities as provided by state law and this policy.
3. Periodic briefings on the duties and performance history of ÑÇÖÞÎÞÂë's contracted pension plan administrator.
4. Annual review of ÑÇÖÞÎÞÂë's statement of investment guidelines and objectives, including investment option selection criteria.
5. Briefings as needed on topics of special interest or concern.

Part 8. Indemnification; Reporting

Subpart A. Indemnification
Every fiduciary, advisory committee member or other employee with responsibilities delegated pursuant to this policy is entitled to indemnification from liability for fiduciary breach related to ÑÇÖÞÎÞÂë pension plan decisions or oversight and held harmless from reasonable costs or expenses incurred as a result of any actual or threatened litigation or other proceedings, subject to the standards and procedures for representation and indemnification under Minn. Stat. § 3.736, as determined by the board.

Subpart B. Reports to the Board

1. Compliance. The chancellor shall report in a timely manner to the board any legal, policy compliance, or other significant issues affecting ÑÇÖÞÎÞÂë pension plan administration.
2. Annual report. The chancellor annually shall provide to the board a plan performance review, and a report on substantive administrative or plan changes and fiduciary education provided.

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Related Documents:

• Board Policy 1A.1 ÑÇÖÞÎÞÂë Colleges and Universities Organization and Administration

To view any of the related statutes, go to the . You can conduct a search from this site by typing in the statute number.

• Minn. Stat. § 3.736 Tort Claims
• Minn. Stat. Ch. 354B Higher Education Individual Retirement Accounts
• Minn. Stat. Ch. 356A Public Pension Fiduciary Responsibility
• Minn. Stat. § 356A.03 Prohibition of Certain Persons From Fiduciary Status
• Minn. Stat. § 356A.04 General Standard of Fiduciary Conduct, subd. 2 Prudent person standard.
• Minn. Stat. § 356A.10 Cofiduciary Responsibility and Liability

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Policy History:

Date of Adoption: 06/20/12
Date of Implementation: 06/20/12
Date of Last Review: 05/20/26

Date & Subject of Amendments:

05/20/26 – Full five-year review. Policy was amended to conform with writing and formatting standards. Part 6 Advisory Committee, Subpart A. Composition was updated.