Governor Deval Patrick's Budget Recommendation - House 1 Fiscal Year 2008

Governor's Budget Recommendation FY2008

Public Employee Retirement Administration Commission


Suggestions Awards Board

SECTION 5.   Section 31A of chapter 7 of the General Laws, as so appearing, is hereby amended by striking out, in line 19, the words "subject to appropriation, expend sums" and inserting in place thereof the following words:- retain a portion of new revenues received or savings generated in other items of appropriation and may expend these retained amounts without further appropriation.

 

Establish State Retiree Benefits Trust Fund

SECTION 14.   Chapter 32A of the General Laws is hereby amended by adding the following section:-

          Section 24. (a) There shall be a State Retiree Benefits Trust Fund, in this section called the fund, for the purpose of depositing, investing and disbursing amounts set aside solely to meet liabilities of the state retirement system for health care and other non-pension benefits for retired members of the system. The trust shall be revocable only when all such benefits, current and future, under this chapter 32A have been paid or defeased.
          (b) The PRIM board established by section 23 of chapter 32, in this section called the board, shall be the trustee of and shall administer the fund, and for the purposes of this section the secretary of administration and finance and the executive director of the group insurance commission, or their designees, shall be members of the board. Except as otherwise provided in this section, said section 23 shall apply to the management of the fund.
          (c) Ninety per cent of the monies received in any fiscal year as a result of any claim or action undertaken by the attorney general against a manufacturer of cigarettes to recover the amount of medical assistance provided pursuant to chapter 118E or any other claim or action undertaken by the attorney general against a manufacturer of cigarettes including, but not limited to, the action known as Commonwealth of Massachusetts v. Philip Morris, Inc., et al., Middlesex Superior Court, No. 95-7378, shall be deposited in the fund. The remaining 10 per cent of these monies shall be deposited in the General Fund, to be used subject to appropriation for tobacco control programs.
          (d) The board may expend amounts in the fund without further appropriation to pay the costs of health care and other non-pension benefits for retired members of the state retirement system, at the request of the group insurance commission.
          (e) The group insurance commission shall remain responsible for administering the payment of and determining eligibility for health care and other non-pension benefits for retired members of the state retirement system.
          (f) Any other retirement system of the commonwealth may participate in the fund, using the same procedures as participation in the PRIT Fund under section 22 of chapter 32, if the board decides to allow such participation.

 

Pension Cost of Living Adjustment

SECTION 40.   The amounts transferred under paragraph (1) of section 22C of chapter 32 of the General Laws shall be made available for the commonwealth's Pension Liability Fund established under section 22 of said chapter 32. The amounts transferred under said paragraph (1) of said section 22C of said chapter 32 shall meet the commonwealth's obligations under said section 22C of said chapter 32, including retirement benefits payable by the state employees' and the state teachers' retirement systems, for the costs associated with a 3 per cent cost-of-living adjustment under section 102 of said chapter 32, the reimbursement of local retirement systems for previously authorized cost-of-living adjustments under said section 102 of said chapter 32, and for the costs of increased survivor benefits under chapter 389 of the acts of 1984. The state board of retirement and each city, town, county and district shall verify these costs , subject to the rules adopted by the treasurer. The treasurer may make payments upon a transfer of funds to reimburse certain cities and towns for pensions to retired teachers, including any other obligations which the commonwealth has assumed on behalf of any retirement system other than the state employees' or state teachers' retirement systems and also including the commonwealth's share of the amounts to be transferred under section 22B of said chapter 32 and the amounts to be transferred under clause (a) of the last paragraph of section 21 of chapter 138 of the General Laws. All payments for the purposes described in this section shall be made only pursuant to distribution of monies from the fund, and any distribution and the payments for which distributions are required shall be detailed in a written report filed quarterly by the commissioner of administration with the house and senate committees on ways and means and the joint committee on public service in advance of this distribution. Distributions shall not be made in advance of the date on which a payment is actually to be made. The state board of retirement may expend an amount for the purposes of the board of higher education's optional retirement program under section 40 of chapter 15A of the General Laws. To the extent that the amount transferred under paragraph (1) of section 22C of said chapter 32 exceeds the amount necessary to adequately fund the annual pension obligations, the excess amount shall be credited to the Pension Reserves Investment Trust Fund of the commonwealth for the purpose of reducing the unfunded pension liability of the commonwealth.

 

Phase-in Deposit of Tobacco Litigation Proceeds

SECTION 41.   Notwithstanding subsection (c) of section 24 of chapter 32A of the General Laws, inserted by section 14, for fiscal years 2008 to 2011, inclusive, of the 90 per cent of the monies received in that fiscal year as a result of any claim or action undertaken by the attorney general against a manufacturer of cigarettes to recover the amount of medical assistance provided pursuant to chapter 118E or any other claim or action undertaken by the attorney general against a manufacturer of cigarettes including, but not limited to, the action known as Commonwealth of Massachusetts v. Philip Morris, Inc., et al., Middlesex Superior Court, No. 95-7378, the following portions shall not be deposited in the State Retiree Benefits Trust Fund but rather shall be deposited in the General Fund:
          (a) for fiscal year 2008, all of the 90 per cent of those monies;
          (b) for fiscal year 2009, 3/4 of the 90 per cent of those monies;
          (c) for fiscal year 2010, half of the 90 per cent of those monies;
          (d) for fiscal year 2011, 1/4 of the 90 per cent of those monies.
In each such fiscal year, the remainder of the 90 per cent of those monies shall be deposited in the State Retiree Benefits Trust Fund.

 

Transfer Fund Balances

SECTION 44.   (a) Beginning July 1, 2007, the comptroller shall transfer $380,520,000 from the General Fund to the State Retiree Benefits Trust Fund established by section 24 of chapter 32A of the General Laws, according to a schedule developed in consultation with the state treasurer and the secretary of administration and finance.
          (b) As of June 30, 2007, the comptroller shall transfer to the General Fund the balance in the Health Care Quality Improvement Trust Fund, established by section 2EEE of chapter 29 of the General Laws.
          (c) As of July 1, 2007, the comptroller shall transfer $50,000,000 from the Health Care Security Trust to the General Fund, to be used subject to appropriation for the following programs of the department of public health: substance abuse services, public health promotion and disease prevention, and universal immunization.
          (d) As of January 1, 2008, the comptroller shall transfer the balance in the Health Care Security Trust to the State Retiree Benefits Trust Fund.