Trust official
(5) Reporting requirements and fiduciary standards The following reporting requirements and fiduciary standards shall apply with respect to the Trust: (A) Duties of the Board of Trustees The Trust and each member of the Board of Trustees shall discharge their duties (including the voting of proxies) with respect to the assets of the Trust solely in the interest of the Railroad Retirement Board and through it, the participants and beneficiaries of the programs funded under this subchapter— (i) for the exclusive purpose of— (I) providing benefits to participants and their beneficiaries; and (II) defraying reasonable expenses of administering the functions of the Trust; (ii) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; (iii) by diversifying investments so as to minimize the risk of large losses and to avoid disproportionate influence over a particular industry or firm, unless under the circumstances it is clearly prudent not to do so; and (iv) in accordance with Trust governing documents and instruments insofar as such documents and instruments are consistent with this subchapter. (B) Prohibitions with respect to members of the Board of Trustees No member of the Board of Trustees shall— (i) deal with the assets of the Trust in the Trustee’s own interest or for the Trustee’s own account; (ii) in an individual or in any other capacity act in any transaction involving the assets of the Trust on behalf of a party (or represent a party) whose interests are adverse to the interests of the Trust, the Railroad Retirement Board, or the interests of participants or beneficiaries; or (iii) receive any consideration for the Trustee’s own personal account from any party dealing with the assets of the Trust. (C) Exculpatory provisions and insurance Any provision in an agreement or instrument that purports to relieve a Trustee from responsibility or liability for any responsibility, obligation, or duty under this subchapter shall be void: Provided, however , That nothing shall preclude— (i) the Trust from purchasing insurance for its Trustees or for itself to cover liability or losses occurring by reason of the act or omission of a Trustee, if such insurance permits recourse by the insurer against the Trustee in the case of a breach of a fiduciary obligation by such Trustee; (ii) a Trustee from purchasing insurance to cover liability under this section from and for his own account; or (iii) an employer or an employee organization from purchasing insurance to cover potential liability of one or more Trustees with respect to their fiduciary responsibilities, obligations, and duties under this section. (D) Bonding Every Trustee and every person who handles funds or other property of the Trust (hereafter in this subsection referred to as “Trust official”) shall be bonded. Such bond shall provide protection to the Trust against loss by reason of acts of fraud or dishonesty on the part of any Trust official, directly or through the connivance of others, and shall be in accordance with the following: (i) The amount of such bond shall be fixed at the beginning of each fiscal year of the Trust by the Railroad Retirement Board. Such amount shall not be less than 10 percent of the amount of the funds handled. In no case shall such bond be less than $1,000 nor more than $500,000, except that the Railroad Retirement Board, after consideration of the record, may prescribe an amount in excess of $500,000, subject to the 10 per centum limitation of the preceding sentence. (ii) It shall be unlawful for any Trust official to receive, handle, disburse, or otherwise exercise custody or control of any of the funds or other property of the Trust without being bonded as required by this subsection and it shall be unlawful for any Trust official, or any other person having authority to direct the performance of such functions, to permit such functions, or any of them, to be performed by any Trust official, with respect to whom the requirements of this subsection have not been met. (iii) It shall be unlawful for any person to procure any bond required by this subsection from any surety or other company or through any agent or broker in whose business operations such person has any control or significant financial interest, direct or indirect. (E) Audit and report (i) The Trust shall annually engage an independent qualified public accountant to audit the financial statements of the Trust. (ii) The Trust shall submit an annual management report to the Congress not later than 180 days after the end of the Trust’s fiscal year. A management report under this subsection shall include— (I) a statement of financial position; (II) a statement of operations; (III) a statement of cash flows; (IV) a statement on internal accounting and administrative control systems; (V) the report resulting from an audit of the financial statements of the Trust conducted under clause (i); and (VI) any other comments and information necessary to inform the Congress about the operations and financial condition of the Trust. (iii) The Trust shall provide the President, the Railroad Retirement Board, and the Director of the Office of Management and Budget a copy of the management report when it is submitted to Congress. (F) Enforcement The Railroad Retirement Board may bring a civil action— (i) to enjoin any act or practice by the Trust, its Board of Trustees, or its employees or agents that violates any provision of this subchapter; or (ii) to obtain other appropriate relief to redress such violations, or to enforce any provisions of this subchapter.