Revision: Jan. 5, 2012, midnight
SB 83-FN – AS INTRODUCED
2011 SESSION
05/03
SENATE BILL 83-FN
AN ACT enabling municipalities to create other post-employment benefits (OPEB) trusts.
SPONSORS: Sen. Merrill, Dist 21; Rep. Watters, Straf 4; Rep. P. Schmidt, Straf 4; Rep. Pelletier, Straf 5; Rep. Andolina, Straf 6; Rep. D. Hooper, Straf 5
COMMITTEE: Public and Municipal Affairs
This bill enables municipalities to create other post-employment benefits (OPEB) trusts.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
11-0994
05/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT enabling municipalities to create other post-employment benefits (OPEB) trusts.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Chapter; Other Post-Employment Benefits Trusts. Amend RSA 31 by inserting after section 19-b the following new section:
31:19-c Authorization for Municipalities to Establish OPEB Trusts.
I. The legislative body of a municipality that creates or has created an actuarial liability to pay other post-employment benefits (OPEB) to employees or officers after their termination of service may establish a trust to pay those benefits. In this section, the term “other post-employment benefits” means employee benefits other than pensions that are received after employment ends, and may include such medical, disability, or other health benefits, as are covered by Statement No. 45 of the Governmental Accounting Standards Board (GASB). The term “trust” means a trust qualified under GASB Statement No. 43.
II. Deposits to any fund under such a trust and any earnings on those deposits shall be irrevocable and shall be held in trust for the exclusive benefit of retirees and their beneficiaries in accordance with the terms of the plans or programs providing other post-employment benefits, except that funds governed by the trust may be withdrawn for other purposes only when an employer’s liability owed to former officers or employees for other post-employment benefits has been satisfied or otherwise eliminated pursuant to subparagraph V(b). The assets of any trust created pursuant to this section or in which a municipality participates pursuant to this section shall be exempt from taxation and execution, attachment, garnishment, or any other process. No public officer, employee, or agency shall divert, use, or authorize the use of such funds for any purpose other than as provided in law for other post-employment benefits covered by the trust and administrative expenses.
III. The trustees of any trust created pursuant to this section shall have the full power to invest, reinvest, and manage the assets of the trust. The trustees shall invest the assets of the trust 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. The trustees shall also diversify such investments so as to minimize the risk of large losses unless under the circumstances it is clearly prudent not to do so. The board of trustees may engage a trust administrator, investment consultants, or other qualified professionals to assist with management and investment of the funds of the trust and may pay for these services out of the funds of the trust.
IV. Trusts created by a municipality pursuant to this section shall have a board of trustees composed of at least 3 members who shall include the chief financial officer of the municipality, the treasurer of the municipality, and at least one other person who shall be a citizen of the state with proven integrity, business ability, and demonstrated experience in cash management and in investments. If the municipality does not have a chief financial officer, then that position may be filled by the chief administrative officer of the municipality, or by a citizen who meets the qualifications set forth in this paragraph. If the municipality does not have a treasurer that position may be filled by the chairman of the municipality’s governing body or by a citizen who meets the qualifications set forth in this paragraph. The citizen member shall be appointed initially by the governing body of the municipality for a term of 2 years and if more than one citizen is appointed to serve on any such board, then the governing body may appoint those citizens for staggered terms of one and 2 years. Subsequent appointments shall be for 2-year terms or to fill the balance of any unexpired term. The board of trustees shall annually elect one of its members as chairman and another as vice-chairman. The board shall meet at least 4 times a year, and a majority of the members shall constitute a quorum.
V. A municipality may withdraw money from the funds of a trust created pursuant to this section only:
(a) As needed to pay other post-employment benefits owed to former officers and employees; or
(b) When all other post-employment benefits liability owed to former officers or employees of the employing entity has been satisfied or otherwise defeased.
2 Effective Date. This act shall take effect July 1, 2011.
LBAO
11-0994
Revised 02/14/11
SB 83 FISCAL NOTE
AN ACT enabling municipalities to create other post-employment benefits (OPEB) trusts.
FISCAL IMPACT:
The New Hampshire Municipal Association states this bill will have no fiscal impact on local revenues or expenditures. There will be no fiscal impact on state and county revenues or expenditures.
METHODOLOGY:
The New Hampshire Municipal Associations states this bill authorizes municipalities to establish other post-employment benefit (OPEB) trusts to account for municipal funds set aside to pay for future OPEB obligations, such as health benefits for retirees. The Association states this bill may significantly reduce a municipality’s long-term liability for OPEB obligations by allowing a pension-like interest rate to be used in the actuarial computation of those liabilities. The Association states there is no fiscal impact as this bill authorizes, not requires, municipalities to establish an OPEB trust.