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July 6, 1990
TO: PENSION COMMITTEE NO. 14-90
RE: TULARE COUNTY CALIFORNIA HOLD HARMLESS AGREEMENTS
__________________________________________________________
As you recall, the Institute is attempting to negotiate
with California public school systems on a county-wide basis to
change their hold-harmless and minimum exclusion allowance
calculation requirements for 403(b) accounts. (See Institute
Memorandum to Pension Committee No. 9-90, dated April 27, 1990).
Attached in this regard is a copy of the Institute's letter dated
June 12, 1990 to the Tulare Country Department of Education
requesting clarification of provisions in that county's
Attachment No. 6.1, Company Qualification Agreement to Sell and
Service Tax-Sheltered Custodial Accounts for Regulated Investment
Company Stock.
Specifically, we requested clarification that the mutual
fund is not required to calculate the maximum exclusion allowance
for employees of school districts which have adopted Attachment
6.1. We also requested clarification regarding the scope of the
hold-harmless clause in the agreement.
In response to our inquiry, we received a copy of the
attached memorandum dated September 15, 1989 from John Wilborn,
Auditor/Accounting Officer of the Tulare County Department of
Education. The memorandum confirms that Attachment 6.1 relieves
the mutual fund from responsibility for making maximum exclusion
allowance calculations.
With regard to the hold-harmless provision, the Tulare
County Counsel was unable to confirm or reject the Institute's
interpretation of the scope of the contract.
We will keep you informed of further developments.
W. Richard Mason
Assistant General Counsel
Attachments