§ 24-2-618 - Delegation of investment and management functions.
24-2-618. Delegation of investment and management functions.
(a) Trustees may delegate investment and management functions that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustees shall exercise reasonable care, skill, and caution in:
(1) Selecting an agent;
(2) Establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and
(3) Reviewing periodically the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation.
(b) In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.
(c) Trustees who complied with the requirements of subsection (a) of this section are not liable to the beneficiaries or to the trust for the decisions or actions of the agent to whom the function was delegated.
(d) By accepting the delegation of a trust function from the trustees of a trust that is subject to the law of this state, an agent submits to the jurisdiction of the courts of this state.
(e) Single agent or exclusive agency delegations by the trustees shall be discouraged. Trustees shall delegate investment and management functions to a single agent or an exclusive agency arrangement only after the trustee has determined that the exclusive agency arrangement is in the best interest of the trust, has exercised extraordinary care and caution in selecting the exclusive agent, and has arranged to periodically review in detail the agent's actions to monitor the agent's performance and compliance with the terms of the delegation.
(f) (1) Notwithstanding the Arkansas Procurement Law, 19-11-201 et seq., the boards of trustees of the respective state retirement systems shall promptly implement their investment directives consistent with the duty of care required of a fiduciary under the prudent investor rules in this chapter.
(2) If in the capacity as fiduciary, the trustees deem it appropriate to immediately retain an investment manager or to alter the terms of an existing agreement with an investment manager, the trustees shall:
(A) Pass a resolution stating the reason for the immediate retention of the investment manager;
(B) State the anticipated date of implementation; and
(C) Provide the Office of State Procurement and the staff of the Legislative Review Committee the information contained in subdivisions (f)(2)(A) and (B) of this section within five (5) business days.
(3) As required by the Legislative Review Committee, a member of the board of trustees or the director of the respective retirement system fund shall appear before the next occurring meeting of that body to explain the details of the professional services contracts in question.