By Mr. Kaufman of Lexington, petition (accompanied by bill, House, No. 1140) of Jay R. Kaufman and others for legislation to establish retiree health care liability funds for municipalities.  Health Care Financing.

The Commonwealth of Massachusetts

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PETITION OF:

Jay R. Kaufman

Todd M. Smola

John P. Fresolo

James E. Timilty

Bruce E. Tarr

Mary S. Rogeness

Michael R. Knapik

Douglas W. Petersen

William Smitty Pignatelli

John W. Scibak

Paul C. Casey

Louis L. Kafka

James B. Eldridge

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In the Year Two Thousand and Seven.

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An Act to establish retiree health care liability funds for municipalities.  .

    Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

Chapter 32B of the General Laws, as appearing in the 2004 Official Edition, is hereby amended by inserting at the end thereof the following new section:—

Section 20. A town, city, district, or county, if it accepts the provisions of this section, may establish a retiree health care funding schedule. The schedule, and future updates to it, shall be designed, consistent with standards issued by the Governmental Accounting Standards Board, to reduce the unfunded actuarial liability of health care and other post-employment benefits to zero as of an actuarially acceptable period of years and to meet the normal cost of all future such benefits for which the governmental unit is obligated. The schedule, and any future updates thereto, shall be developed by the governmental unit’s chief executive office and approved by the actuary in the division of insurance.  The funding schedule shall be reviewed triennially by the chief executive officer and any future updates to the schedule shall be approved by the actuary.

The legislative body of the governmental unit may appropriate such amounts, as required by the schedule, which shall be credited to a separate fund to be known as the retiree health care liability fund. Any interest or other income shall be added to and become part of the fund. Amounts that a governmental unit receives as a participant in the Retiree Drug Subsidy Program created under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law No. 108-173), may be added to and become part of the fund.

The treasurer of the town, city, district, or county shall be the custodian of the fund. Notwithstanding any general or special law to the contrary, the selectmen in a town, the city council in a city, the governing board in a district, or the county commissioners in a county, may assign responsibility for the investment and reinvestment of the fund to the retirement board of which the employees of the governmental unit are members or may assign responsibility for the investment and reinvestment of the fund to the pension reserves investment management board, in accordance with section 23 of chapter 32.

The provisions of this section may be accepted in a town by vote of the town at a town meeting; in a city having a Plan D or Plan E charter by majority vote of its city council; in any other city by vote of its city council, approved by the mayor; in a district by vote of the governing board of the district; and in a county by vote of the county commissioners.