(a) A governmental entity may adopt an ordinance, bylaw, or resolution allowing for the establishment of a trust, or for the establishment of participation in a multiple-employer trust with other governmental entities, for the sole purpose of funding post-employment benefit obligations. The governmental entity may adopt such ordinance, bylaw, or resolution through voting procedures and requirements currently utilized by the governmental entity which are in accordance with state law.
(b) Any trusts created pursuant to this chapter shall be evidenced by a written trust instrument, the terms and conditions of which shall be determined by and between the governmental entity or entities and the applicable trustee, so long as such terms and conditions do not conflict with this chapter. Each trust shall be managed and controlled by its respective governmental entity or entities and trustee pursuant to the terms of the written trust agreement.
(c) All assets and income of any trusts shall be exempt from taxation by the state or any political subdivision thereof. Distributions from the trusts will not be taxable income to the retired employees or their dependents under state law or other local law. The assets of the trusts will not be subject to the claims of creditors of the governmental entities, trustees, plan administrators, employees, retired employees, or dependents, and will not be subject to execution, attachment, garnishment, the operation of bankruptcy, the insolvency laws, or other process whatsoever, nor shall any assignment thereof be enforceable in any court.
(d) A trust created pursuant to this chapter shall not be deemed to be invalid by reason of any indefiniteness or uncertainty of the persons designated as beneficiaries in the agreements creating the trusts, nor shall they be deemed to be invalid as violating any existing law against perpetuities or against suspension of the power of alienation of title to property or against trusts for the purpose of the accumulation of income; but each trust may continue for such time as may be necessary to accomplish the purpose for which it was created.
(e) A single-employer trust may be terminated by the governmental entity if the governmental entity's plans or programs providing post-employment benefits for which the trust is established are repealed or terminated, and there is no future obligation of the governmental entity to provide such post-employment benefits. A multiple-employer trust may be terminated, or a governmental entity may terminate its affiliation with a multiple-employer trust, under the aforementioned circumstances pursuant to the terms of the written trust agreement. Also, any trust may be terminated if GASB adopts new requirements that eliminate or alter the funding of post-employment benefits.