INVESTMENT ADVISOR AGREEMENT
MULTIPLE EMPLOYER OPEB/PENSION 115 TRUST
This agreement (“Agreement”) is entered into between Shuster Advisory Group, LLC (“SHUSTER”), a California limited liability company, and City of Signal Hill, CA (“CITY”) as further identified on Appendix A., as the responsible plan fiduciary for the Plans as further identified in Appendix A, desires to engage Shuster to provide the services described in this Agreement according to the terms of this Agreement.
Fiduciary Authority. The account for which the Shuster is providing investment advisory service is part of a multiple employer trust intended to qualify as a tax-exempt trust of a state or political subdivision thereof for an essential governmental function within the meaning of Section 115 of the Code and any regulations issued thereunder and the CITY has fiduciary authority with respect to the account for the employer.
Term. The term of this Agreement will commence _________, 2022.
Services. Shuster agrees to perform the Fiduciary Services described in Appendix B.
Fees.
The compensation, direct and indirect, of SHUSTER for the performance of the Services is described in Appendix C.
Fiduciary Status: Limitations on Functions. CITY acknowledges that:
In performing the Fiduciary Services, SHUSTER is acting as a fiduciary of the Plan and as a registered investment advisor under the Investment Advisers Act of 1940.
In performing Fiduciary Services, SHUSTER does not act as, nor has SHUSTER agreed to assume the duties of, a trustee or the Plan Administrator, and SHUSTER has no discretion or responsibility to interpret the Plan documents, to determine eligibility or participation under the Plan, or to take any other action with respect to the management, administration or any other aspect of the Plan.
SHUSTER does not provide legal or tax advice.
Investments are subject to various market, political, currency, economic, and business risks, and may not always be profitable. As a result, SHUSTER does not and cannot guarantee financial results.
SHUSTER may, by reason of performing services for other CITYs, from time to time acquire confidential information. CITY acknowledges and agrees that SHUSTER is unable to divulge to the CITY or any other party, or to act upon, any such confidential information with respect to its performance of this Agreement.
SHUSTER is entitled to rely upon all information provided to SHUSTER (whether financial or otherwise) from reputable third parties or by CITY, CITY’s representatives or third-party service providers to CITY, the Plan or the SHUSTER, without independent verification. CITY agrees to promptly notify SHUSTER in writing of any material change in the financial and other information provided to SHUSTER and to promptly provide any such additional information as may be reasonably requested by SHUSTER.
CITY understands that SHUSTER: (i) may perform other services for other clients, (ii) may charge a different fee for other clients, and (iii) may give advice and take action that is different for each client even when retirement plans are similar.
Representations of CITY. CITY represents and warrants as follows:
It is the responsible plan fiduciary for the control and/or management of the assets of the Plan, and for the selection and monitoring of service providers for the Plan. SHUSTER is entitled to rely upon this statement until notified in writing to the contrary.
The person signing the Agreement on behalf of CITY has all necessary authority to do so.
The execution of this Agreement and the performance thereof is within the scope of the investment authority authorized by the governing instrument and/or applicable laws. The signatory on behalf of CITY represents that the execution of the Agreement has been duly authorized by appropriate action and agrees to provide such supporting documentation as may be reasonably required by SHUSTER.
The Plan and related Trust permit payment of fees out of Plan assets. CITY has determined that the fees charged by SHUSTER are reasonable and are the obligation of the Plan; however, if CITY desires, it may pay the fees directly, rather than with Plan assets.
Representation of SHUSTER. SHUSTER represents as follows:
SHUSTER is registered as an investment adviser (“RIA”) under the Investment Advisers Act of 1940.
The person signing this agreement on behalf SHUSTER has the power and authority to enter into and perform this Agreement.
SHUSTER agrees to take reasonable steps to protect Private Participant Information and Plan Investment Data in its possession; SHUSTER is not responsible for the assessment of systems and procedures of third parties for the protection of plan and participant data; SHUSTER is not responsible for the actions by or the failure to act by CRPD, by other service providers, or by Plan participants to protect Data; SHUSTER shall have no liability in the event of a Data breach or a violation of participant privacy rights (under the California Consumer Privacy Act or otherwise) unless said breach is the direct result of negligence, recklessness, or willful misconduct of an employee of SHUSTER.
Standard of Care. SHUSTER will perform the Fiduciary Services described in Appendix B to the Plan in accordance with the standard of care of the prudent man rule set forth in ERISA Section 404(a)(1)(B).
Termination. Either party may terminate this Agreement upon 30 days prior written notice to the other party. Such termination will not, however, affect the liabilities or obligations of the parties arising from transactions initiated prior to such termination, and such liabilities and obligations (together with the provisions of section 8, 17, and 18) shall survive any expiration or termination of this Agreement. Upon termination, SHUSTER will have no further obligation under this Agreement to act or advise CITY with respect to services under this Agreement.
Receipt of Disclosure and Consent to Electronic Delivery. CITY acknowledges receipt and undertakes to review and consider the disclosures made by SHUSTER (including in this Agreement, the Form ADV Part 2 and SHUSTER Privacy Policy), in particular the portions related to services, compensation, and potential conflicts of interest, as well as the remainder of the disclosures concerning, among other matters, background information such as educational and business history, business practices such as the types of advisory services provided, the methods of securities analysis used, and the like.
Further, CITY consents to electronic delivery (via email or other generally accepted method) of current and future distributions of SHUSTER’s Form ADV Part 2 and Privacy Policy. Consent to electronic delivery may be canceled at any time by sending a written request to SHUSTER.
Notices. Any and all notices required or permitted under this Agreement shall be in writing and shall be sufficient in all respects if (i) delivered personally, (ii) mailed by registered or certified mail, return receipt requested and postage prepaid, or (iii) sent via a nationally recognized overnight courier service to the CITY’s address listed on Appendix A and SHUSTER’s address, 225 S. Lake Ave, Ste. 600, Pasadena, CA 91101, or such other address as any party shall have designed by notice in writing to the other party.
Assignability. This Agreement is not assignable by either Party hereto without the prior written consent of the other Party.
Effect. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, successors, survivors, administrators and assigns.
Entire Understanding and Modification. This Agreement constitutes and contains the entire understanding between the parties and supersedes all prior oral or written statements dealing with the subject matter herein. This Agreement can be amended or modified by the written consent of the Parties.
Severability. If any one or more of the provisions of this Agreement shall, for any reason, be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Agreement and this Agreement shall be enforced as if such illegal or invalid provision had not been contained herein.
Headings. All headings used herein are for ease of reference only and in no way shall be construed as interpreting, decreasing or enlarging the provisions of this Agreement.
Applicable Law; Forum. The laws of the State of California shall govern this Agreement in all respects, including but not limited to the construction and enforcement thereof, unless otherwise preempted or superseded by federal law.
Arbitration Agreement. To the extent permitted by law, all controversies between CITY and SHUSTER, which may arise out of or relate to any of the services provided by SHUSTER under this Agreement, or the construction, performance or breach of this or any other Agreement between SHUSTER and CITY, whether entered into prior to, on or subsequent to the date hereof, shall be settled by binding arbitration in Pasadena, Los Angeles County, California, under the Commercial Arbitration Rules of the American Arbitration Association. Judgment upon any award rendered by the arbitrator(s) shall be final, and may be entered into any court having jurisdiction.
Amendment Process. The Agreement may be modified, by written agreement of both CITY and SHUSTER.
Waiver of Limitation. Nothing in this Agreement shall in any way constitute a waiver or limitation of any rights which CITY or Plan or any other party may have under federal or state securities laws.
This Agreement constitutes both an agreement between the parties and a disclosure statement. The Parties have caused this Agreement to be executed by their duly authorized officers as of the date set forth above. This Agreement shall not be binding on SHUSTER or the CITY until each has accepted it, in writing, as indicated by their signatures below.
CITY: City of Signal Hill Shuster Advisory Group, LLC
Signature: _____________________________ Signature: ____________________________ Name: Name: Mark Shuster
Title: Title: Managing Member
Date: Date:_______________________________ *The CITY is signing this Agreement both as the employer that sponsors the Plan and as the fiduciary responsible for selecting the Plan’s investments and engaging its service providers.
APPENDIX A – CITY/PLAN SPONSOR - PLAN INFORMATION
CITY/Plan Sponsor
City of Signal Hill
Tax ID#
95-6000797
Plan Name 1
City of Signal Hill OPEB Trust Account
Type of Plan
☒OPEB Plan ☐Pension Plan
☐Other:
Plan Name 2
Type of Plan
☐OPEB Plan ☐Pension Plan
☐Other:
Plan Name 3
Type of Plan
☐OPEB Plan ☐Pension Plan
☐Other:
Plan Name 4
Type of Plan
☐OPEB Plan ☐Pension Plan
☐Other:
Plan Name 5
Type of Plan
☐OPEB Plan ☐Pension Plan
☐Other:
Mailing Address
2175 Cherry Avenue
City
Signal Hill
State
CA
Zip Code
90755
Phone
562-989-7300
Email (for purposes of notice/electronic delivery)
[email protected]
Legal Address (☒Same as Mailing Address)
City
State
Zip Code
APPENDIX B – FIDUCIARY SERVICES
SHUSTER will perform the following fiduciary services:
Development of an Investment Policy Statement (IPS). The IPS establishes the investment policies and objectives for the Plan(s) as well as the criteria and standards for selecting and monitoring the investments. The CITY shall have the ultimate responsibility and authority to establish such policies and objectives and to adopt the investment policy statement.
Consistent with the Investment Policy Statement, SHUSTER will select the initial investment options within the Plan(s).
SHUSTER will periodically review the investments within the Plan(s) and shall be responsible for making additions/deletions thereto.
SHUSTER will provide periodic investment advisory reports that document consistency of fund management and performance to the guidelines set forth in the IPS, and to make recommendations to maintain, or remove and replace investment options. Reports to include: Market Overview, In-Depth Portfolio Summary, Plan Asset Allocation Analysis and Fund Performance Comparison to the Index.
Meet with CITY on a periodic basis to discuss reports and recommendations.
Annually review the IPS with the CITY to ensure it continues to meet the CITY’s needs.
Limitations on Fiduciary Services
SHUSTER shall not be responsible or liable for the recommendations of or services rendered by anyone other than SHUSTER. The ability to perform the above services is contingent upon the rules, policies, processes, and responsiveness to our requests for information of City, Plan Sponsor, Custodian and Trustee.
APPENDIX C - FEE SCHEDULE
SHUSTER will not receive any other compensation, direct or indirect, for its services under this agreement. If SHUSTER receives any other compensation for Services, SHUSTER will disclose the amount of such compensation, the services provided for such compensation, the payer of such compensation, and a description of SHUSTER’s arrangement with the payer to the CITY and will offset that compensation against its stated fees.
All fees are billed in arrears.
The initial fee will be the amount, prorated for the number of days included in the initial billing period from the effective payment start date.
If this Agreement is terminated prior to the end of a billing period, SHUSTER shall be entitled to a fee, prorated for the number of days in the billing period prior to the effective date of termination.
All fees will be due and payable within 30 days and are payable to “Shuster Advisory Group, LLC” The annual fee for services shall be as follows:
Beginning with the effective date of this Agreement, the annual fee for service shall be 0.20% (20 basis points) per annum, charged as 0.01667% monthly to all assets in each Plan as of the date of the calculation. Fees will be deducted from Plan assets and will be paid to SHUSTER by the Trust/Custodian for the Plans.
At SHUSTER’s discretion the billing period described above may be adjusted to quarterly. 16 Error! Unknown document property name..Error! Unknown document property name.
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