Louisiana § RS 11:3363.1 - Fiduciary and investment responsibilities

§ RS 11:3363.1. Fiduciary and investment responsibilities

A.  The following persons shall be deemed to be in a fiduciary relationship with the fund:

(1)  Any person who exercises any discretionary authority or discretionary control with respect to the management of system funds or assets.

(2)  Any person who renders investment advice or services for compensation, direct or indirect, with respect to system funds or assets.

B.  Legislators, state officials, system attorneys, accountants, and actuaries shall not be considered fiduciaries unless they exercise discretionary control over the management or administration of the system or some authority or control over system assets.

C.  Any person who has been convicted of a felony offense shall be restricted from serving as a system fiduciary for a period of five years after the conviction or after the end of imprisonment, whichever is later.

D.  The basic duty of a fiduciary is to discharge his duties with respect to the system in the exclusive interest of the members and beneficiaries.

E.  A fiduciary must discharge his duties solely in the interest of system members and beneficiaries for the exclusive purpose of providing benefits to participants and beneficiaries, and paying the expenses of administering the plan.

F.(1)  Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this Part shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary.

(2)  No fiduciary shall be liable with respect to a breach of fiduciary duty under this Part if such breach was committed before he became a fiduciary or after he ceased to be a fiduciary.

G.(1)  Any fiduciary who participates in a breach committed by a cofiduciary, or who tries to conceal a cofiduciary's breach, shall be held liable jointly for breach of fiduciary duty.  Cofiduciary liability also results from a fiduciary's failure to use reasonable care to prevent a cofiduciary from committing a breach.

(2)  Any fiduciary who has knowledge of a cofiduciary's breach has a duty to remedy the breach.

H.(1)  A member, beneficiary, or survivor who can demonstrate a personal interest in this retirement system may bring civil action to enforce the proceedings of this Section.  In any enforcement proceeding the plaintiff may seek and the court may grant any or all of the following forms of relief:

(a)  A writ of mandamus.

(b)  An injunction.

(c)  A declaratory judgment.

(d)  A judgment rendering certain actions of the board of trustees as void.

(e)  A judgment awarding civil damages.

(2)  Exclusive original jurisdiction for proceeding under this Section shall be in the Civil District Court for the Parish of Orleans.  In any enforcement proceeding the court has jurisdiction and authority to issue all necessary orders to require compliance with, or to prevent noncompliance with, or to declare the rights of parties under the provisions of this Section.  Any noncompliance with the orders of the court may be punished as contempt of court.

(3)  If a person who brings an enforcement proceeding prevails, he shall be awarded reasonable attorney fees and other costs of litigation.  If such person prevails in part, the court may award him reasonable attorney fees or an appropriate portion thereof.  If the court finds that the proceeding was of a frivolous nature and was brought with no substantial justification, it may award reasonable attorney fees to the prevailing party.

I.  The system may not submit a proposed regulation, or approve any internal policy, to relieve a fiduciary from responsibility for breach of fiduciary duty.  However, the system may purchase insurance to cover liability or losses due to acts or omissions of fiduciaries.  Any such insurance shall maintain the insurance company's right of subrogation.  A fiduciary may purchase insurance to cover his own liability without condition.

J.  The board of trustees is hereby authorized, in requesting proposals for investment advisory services, to require that fees shall be quoted as a fixed fee, a fee based on market value of assets, a fee based commission recapture arrangement, or a performance fee.

Acts 1993, No. 449, §1, eff. June 9, 1993; Acts 1997, No. 502, §1.