Protect Charlotte Firefighters' Ret. System.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 215

Short Title: Protect Charlotte Firefighters' Ret. System. (Local)
Sponsors: Representative Clampitt.
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Pensions and Retirement, if favorable, State and Local Government, if favorable,
Rules, Calendar, and Operations of the House
February 27, 2025
*H215-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO PROTECT PA RTICIPANTS AND BENEF ICIARIES OF THE CHAR LOTTE 2
FIREFIGHTERS' RETIREMENT SYSTEM FROM HAR M RELATED TO BREACHE S 3
OF DATA. 4
The General Assembly of North Carolina enacts: 5
SECTION 1.(a) Section 36 of Title VI of Chapter 506 of the 1987 Session Laws, as 6
amended by Chapter 830 of the 1991 Session Laws, S.L. 1990 -100, and S.L. 2001-22, reads as 7
rewritten: 8
"Sec. 36. Employment of Professional Services. 9
(a) The Board of Trustees shall have t he authority to employ and/or utilize professional 10
and secretarial services and to purchase and maintain such property, equipment and supplies as 11
are deemed necessary for the proper operation of the System. All expenses, fees and/or retainers 12
for the employment of services shall be borne by the System with the singular exception of the 13
employment of the Actuary. All fees and expenses in connection with the employment of a 14
qualified actuary to perform the annual evaluation of the Retirement System's financial condition 15
shall be paid by the City of Charlotte. 16
(a1) Actuary. The Board of Trustees shall annually request the City to employ a qualified 17
Actuary to perform such studies and evaluations of the Charlotte Firefighters' Retirement System 18
as may be necessary and/or desirable by the Board or City in connection with the administration 19
of the System. Within the meaning of this subsection, a qualified Actuary shall be an associate 20
or fellow of the Society of Actuaries and either a member of the Conference of Co nsulting 21
Actuaries or a member of the American Academy of Actuaries. 22
(b) Medical Board. The Board of Trustees shall appoint a Medical Board to be composed 23
of one or more physicians to serve at the pleasure of the Board. The Medical Board shall arrange 24
for and evaluate all medical examinations required under provisions of this act. The Medical 25
Board shall also investigate and evaluate all medical evidence, statements, and certificates 26
submitted by and on behalf of a Member in connection with an application f or disability 27
retirement. The Medical Board shall render its conclusions and recommendations in 2017 28
Act- approved by NC Legislature Page 20 writing to the Board of Trustees in accordance with 29
the provisions of this act. 30
(c) Legal Counsel. The City attorney and staff shall be the legal advisor to the Board of 31
Trustees. The Board may employ separate legal counsel as it deems necessary and beneficial for 32
the operation of the System. 33
General Assembly Of North Carolina Session 2025
Page 2 House Bill 215-First Edition
(d) Auditor. The Board of Trustees shall appoint an Auditor who shall be a ce rtified 1
public accountant. 2
(e) Administrator. The Board of Trustees shall have the authority to appoint an 3
Administrator who shall be responsible for the administration and coordination of all System 4
operations and activities that are not otherwise specified in this act. Such administration shall be 5
in accordance with rules and regulations of this act and the policy and direction of the Board. In 6
the absence of an Administrator, the Secretary of the Board as specified in Section 34(b)(2) shall 7
be responsibl e for the coordination of Board meetings and providing proper notice of such 8
meetings. The Administrator shall be domiciled in this State or otherwise subject to the relevant 9
banking and insurance laws of this State. 10
(f) Insurance. The Board of Trustees may shall purchase and maintain that insurance 11
coverage that is necessary for the proper operation of the System, including worker's 12
compensation, fidelity insurance, and officers' and employees' liability coverage. coverage, and 13
data breach and cyber liability insurance that is for the benefit of the System and Participants and 14
Participants' Beneficiaries. All expenses incurred in purchasing or maintaining this coverage, 15
including fees, and retainers, shall be borne by the System." 16
SECTION 1.(b) Section 45 of Title VII of Chapter 506 of the 1987 Session Laws, 17
as amended by Chapter 830 of the 1991 Session Laws, S.L. 1990 -100, and S.L. 2001-22, reads 18
as rewritten: 19
"Sec. 45. Annual Report to City Council. An annual report of the financial and actua rial 20
condition of the System, as of the preceding June 30, shall be prepared and forwarded to the City 21
Council in the quarter after receipt of the System's audit report from the Auditor. Such report 22
shall contain but shall not be limited to the Auditor's o pinion, such statements contained in the 23
Auditor's report, a summary of the annual actuarial valuation and the actuary's valuation 24
certification. The annual report shall also include any instances of a data breach or other 25
cybersecurity incident imp acting Participants and Participants ' Beneficiaries, the cost of the 26
incident, and the steps taken in response to the incident." 27
SECTION 1.(c) Section 49 of Title VIII of Chapter 506 of the 1987 Session Laws, 28
as amended by Chapter 830 of the 1991 Session Laws, S .L. 1990-100, and S.L. 2001-22, reads 29
as rewritten: 30
"Sec. 49. Custody of System Assets. The Treasurer of the Retirement System shall be the 31
custodian and responsible for the safekeeping of all funds paid into the Charlotte Firefighters' 32
Retirement System. The Treasurer shall deposit said funds in a bank or banks otherwise subject 33
to the relevant banking and insurance laws of this State, as designated by the Board of Trustees. 34
The Treasurer may, with Board concurrence, use one or more nominees to facilitate transfer of 35
the System's securities and may hold the securities in safekeeping with the Federal Reserve 36
System, a clearing corporation, or a custodian bank which is a member of the Federal Reserve 37
System. All payments from said funds shall be authorized by the Treasurer only upon the signed, 38
written request of the Administrator, or the Secretary of the Board in the absence of an 39
administrator. The Treasurer shall furnish such bond as shall be required by the Board of Trustees 40
and premium for said bond shall be paid out of the funds of the System." 41
SECTION 1.(d) Section 50 of Title VIII of Chapter 506 of the 1987 Session Laws, 42
as amended by Chapter 830 of the 1991 Session Laws, S.L. 1990 -100, and S.L. 2001-22, reads 43
as rewritten: 44
"Sec. 50. Investment/Reinvestment of Funds and Assets. The Board of Trustees shall be 45
vested with the authority and responsibility and shall have full power to hold, purchase, sell, 46
assign, transfer, lend and dispose of any of the securities and investments in which the System 47
shall have been invested, as well as the proceeds of said investments and any monies belonging 48
to the System. The Board of Trustees as fiduciaries shall: 49
(1) Discharge its duties solely in the interest of the Participants and the 50
Beneficiaries; 51
General Assembly Of North Carolina Session 2025
House Bill 215-First Edition Page 3
(2) Act with the same care, skill, prudence and diligence under the circumstances 1
then prevailing, that a prudent person acting in a similar capacity and familiar 2
with those matters would use in the conduct of a similar enterprise with similar 3
aims; 4
(3) Act with due regard for the management, reputation and stability of the issuer 5
and the character of the particular investments being considered; 6
(4) Make investments for the exclusive purpose of providing benefits to 7
Participants and Participants' Beneficiaries; 8
(5) Give appropriate consideration to those facts and circumstances the Board of 9
Trustees knows or should know are relevant to the particular investment or 10
investment course of action involved, including the role the investment or 11
investment course of action plays in that portion of the System 's investments 12
for which the Board of Trustees has responsibility, and shall act accordingly. 13
Appropriate consideration shall include, but is not limited to, a determination 14
by the Board of Trustees that a particular investment or investment course of 15
action is reasonably designed as part of the investments of the System to 16
further the purposes of the System taking into consideration the risk of loss 17
and the opportunity for gain or other return associated with the investment or 18
investment course of action; and consideration of the following factors as they 19
relate to the investment or the investment course of action: a. The 20
diversification of the investments of the System; b. The liquidity and current 21
return of the investments of the System relative to the an ticipated cash flow 22
requirements of the System; and c. The projected return of the investments of 23
the System relative to the funding 2017 Act- approved by NC Legislature Page 24
23 objectives of the System; 25
(6) Give appropriate consideration to investments wh ich would enhance the 26
general welfare of the City and its citizens if those investments offer the safety 27
and rate of return comparable to other investments held by the System and 28
available to the Board of Trustees at the time the investment decision is made; 29
(7) May use a portion of income of the System to defray the cost of investing, 30
managing and protecting the assets of the System; and System, including data 31
breach and cyber liability insurance, and making whole a Participant or 32
Participant's Beneficiary who was a victim of a System data breach or other 33
cybersecurity incident. 34
(8) May utilize the services of Investment Fiduciaries to manage the assets of the 35
System. These Investment Fiduciaries shall be subject to the terms, conditions, 36
and limitations provided in this section and any limitations as set forth by the 37
Board of Trustees." 38
SECTION 1.(e) Title VIII of Chapter 506 of the 1987 Session Laws, as amended by 39
Chapter 1033 of the 1987 Session Laws, Chapter 248 of the 1989 Session Laws, Chapter 830 of 40
the 1991 Session Laws, S.L. 1990 -100, and S.L. 2001-22, is amended by adding a new section 41
to read: 42
"Sec. 55.1. Participants and Beneficiary Protection Against Cybersecurity Incidents. In 43
addition to maintaining data breach and cyber liability insurance, the Board of Trustees shall 44
have the duty to do all of the following to protect Participants and Beneficiaries of the System , 45
which may be delegated to the Administrator or other contracted entity: 46
(1) Set up a reporting mechanism and grievance procedure for Participants and 47
Beneficiaries who may be victims of a System data breach or other 48
cybersecurity incident. 49
(2) Investigate all reported System data breaches or other cybersecurity incidents, 50
regardless of the source of the report. 51
General Assembly Of North Carolina Session 2025
Page 4 House Bill 215-First Edition
(3) Provide resources for Participants and Beneficiaries who may be victims of a 1
System data breach or other cybersecurity incident that include actionable 2
steps that Participants and Beneficiaries may take to protect their funds and 3
assets from any threats re lated to the System data breach or other 4
cybersecurity incident that has occurred or that may occur. 5
(4) If a System data breach or other cybersecurity incident is found to have 6
occurred, make whole the Participant s or Beneficiaries who were victims of 7
that System data breach or other cybersecurity incident." 8
SECTION 2.(a) As soon as practicable, including after assessing whether the current 9
administrator has failed to meet its obligations under the existing contract, the Board of Trustees 10
of the Charlotte Firefighters' Retirement System (Board of Trustees) shall contract with an 11
administrator for the Charlotte Firefighters' Retirement System (System) that meets all of the 12
requirements under this act. 13
SECTION 2.(b) Within 60 days of this act becoming effective, the Board of Trustees 14
shall enter into a contract for data bre ach and cyber liability insurance in accordance with this 15
act. 16
SECTION 2.(c) Within 60 days of this act becoming effective, the Board of Trustees 17
shall set up the reporting mechanism and grievance procedure for Participants and Beneficiaries 18
who may have been victims of a System data breach or other cybersecurity incident required 19
under this act. 20
SECTION 2.(d) The Board of Trustees shall investigate any System data breaches 21
or other cybersecurity incidents that have been reported within a year prior to th e effective date 22
of this act or after and provide the resources required under this act to Participants and 23
Beneficiaries if any are found to have occurred on or after that date. 24
SECTION 2.(e) The requirement under this act to make whole a Participant or 25
Beneficiary who is a victim of a System data breach or other cybersecurity incident shall apply 26
to incidents occurring on or after the effective date of this act. 27
SECTION 3. This act applies only to the City of Charlotte. 28
SECTION 4. This act is effective when it becomes law. 29