Session Laws

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

SECTION 1. Section 5C of chapter 10 of the General Laws, as appearing in the 1994 Official Edition, is hereby amended by striking out the first paragraph and inserting in place thereof the following paragraph:-

The state treasurer shall establish with the advice of the council an investment division, under the direction of a deputy state treasurer, for investments, who shall be responsible for the investment of all state funds under the custody of the state treasurer, including without limitation temporary cash investment.

SECTION 2. Chapter 15 of the General Laws is hereby amended by striking out section 18, as so appearing, and inserting in place thereof the following section:-

Section 18. Subject to appropriation, the teachers' retirement board shall appoint and may remove an executive director and shall establish his salary. Subject to appropriation and to the approval of said board, the executive director shall employ other employees, prescribe their duties and fix their compensation; provided, however, that the salaries of said employees shall not exceed the sum annually approved therefore by said board. The provisions of sections nine A, forty-five, forty-six and forty-six C of chapter thirty, chapter thirty-one, and chapter one hundred and fifty E shall not apply to any employee of the board.

SECTION 3. Section 1 of chapter 32 of the General Laws, as so appearing, is hereby amended by striking out the definitions of "PRIM board" and "PRIT Fund" and inserting in place thereof the following two definitions:-

"PRIM board", the pension reserves investment management board established under the provisions of section twenty-three for the purpose of investing the assets of the state employees' and teachers' retirement systems and of other participating and purchasing systems.

"PRIT Fund", the Pension Reserves Investment Trust Fund established under the provisions of subdivision (8) of section twenty-two.

SECTION 4. The first paragraph of section 22 of said chapter 32, as so appearing, is hereby amended by striking out the second sentence and inserting in place thereof the following sentence:- As provided in subdivision (8), all of the assets of the state employees' and teachers' retirement systems and of any other participating system shall be held in the PRIT Fund, as well as such assets of purchasing systems as shall be transferred to the PRIT Fund upon the purchase of shares therein.

SECTION 5. Clause (iii) of paragraph (a) of subdivision (6) of said section 22 of said chapter 32, as so appearing, is hereby amended by striking out the second sentence.

SECTION 6. Subdivision (8) of said section 22 of said chapter 32, as so appearing, is hereby amended by striking out paragraphs (a) and (b) and inserting in place thereof the following two paragraphs:-

(a) There shall be a Pension Reserves Investment Trust Fund administered by the PRIM board established in section twenty-three for the purpose of depositing, investing and disbursing amounts set aside to meet further liabilities of the various systems. The assets of the state employees' and teachers' retirement systems shall be held in the PRIT Fund.

(b) All amounts which the state may appropriate each year subsequent to January first, nineteen hundred and eighty-four pursuant to section twenty-two B to meet unfunded pension liabilities shall be deposited in the PRIT Fund and credited to the account of the state employees' retirement system, the teachers' retirement system and other participating systems as follows: the amount determined for each system shall be proportionate to the amount of assets of each system participating in the PRIT Fund as of July first for each fiscal year beginning on such date; provided, however, that for the purposes of this paragraph the amount of the combined assets of the state employees' and teachers' retirement systems shall be deemed not to exceed eighty percent of the total amount of the assets in the PRIT Fund as of June thirtieth, nineteen hundred and eighty-seven; and provided further, that a system electing to participate in the PRIT Fund after January first, nineteen hundred and eighty-eight shall receive the greater of either the system's share of the state appropriation pursuant to section twenty-two B or the amount the system would receive in an annual pension funding grant pursuant to section twenty-two D. Systems which elected to participate in the PRIT Fund on or before January first, nineteen hundred and eighty-eight and which are eligible to receive an annual pension funding grant from the commonwealth pursuant to section twenty-two D shall receive an amount equal to such system's share of the state appropriation pursuant to section twenty-two B in addition to the amount such system would receive in an annual pension funding grant pursuant to section twenty-two D. The amounts so determined for each participating system and an amount equal to the regular interest on assets in the PRIT Fund shall be credited to the several retirement systems.

SECTION 7. The fourth subparagraph of paragraph (c) of said subdivision (8) of said section 22 of said chapter 32, as so appearing, is hereby amended by striking out, in line 1127, the words "clause (vii) of".

SECTION 8. Said subdivision (8) of said section 22 of said chapter 32, as so appearing, is hereby further amended by striking out paragraph (e) and inserting in place thereof the following paragraph:-

(e) There shall be a Commonwealth's Pension Liability Fund which shall be within the PRIT Fund and to which shall be credited all assets of the state employees' and teachers' retirement systems, other than assets credited to the systems' Annuity Savings Funds, Annuity Reserve Funds and expense funds. Except for transfers to and from the Annuity Savings Funds, Annuity Reserve Funds and expense funds of such systems in accordance with the provisions of sections one to twenty-eight, inclusive, all transfers of funds to or from such systems shall be made to or from the Commonwealth's Pension Liability Fund as provided herein. All amounts required by the pension funds, and special funds for military service credit of such systems shall be provided by distribution of such amounts from the Commonwealth's Pension Liability Fund; provided, however, that any such distribution shall be detailed in a written report by the commissioner of administration and filed in advance with the house and senate committees on ways and means. Except as otherwise provided in this subdivision, and subject to the provisions of the operating trust agreement adopted by the PRIM board pursuant to subdivision (2A) of section twenty-three, any such distribution shall be made pursuant to the provisions of sections one to twenty-eight, inclusive.

Amounts in the Commonwealth's Pension Liability Fund shall include, but not be limited to, the following:

(i) all amounts appropriated by the commonwealth to meet its pension liabilities, including amounts appropriated pursuant to clause (a) of the third paragraph of section twenty-one of chapter one hundred and thirty-eight, the state share of amounts appropriated pursuant to section twenty-two B and amounts appropriated pursuant to section twenty-two C; provided, however, that the state treasurer may act as agent of the PRIM board to disburse benefit payments pursuant to any such appropriation;

(ii) all monies recovered for the cost of pension fringe benefits from federal grant funds pursuant to section six B of chapter twenty-nine;

(iii) all monies recovered from federal grant funds pursuant to section five D of chapter forty for the cost of teachers' pension benefits;

(iv) all monies transferred from the Annuity Reserve Funds of the state employees' and teachers' retirement systems pursuant to paragraph (d) of subdivision (2) or from the investment accounts of such systems pursuant to clause (iii) of paragraph (a) of subdivision (6);

(v) all undistributed accumulated total deductions for the state employees' and teachers' retirement systems transferred pursuant to subdivision (3) of section eleven; and

(vi) all assets of the state employees' and teachers' retirement systems except assets credited to such systems' expense funds, Annuity Savings Funds and Annuity Reserve Funds.

SECTION 9. Section 23 of said chapter 32, as so appearing, is hereby amended by striking out subdivision (1) and inserting in place thereof the following subdivision:-

(1) The funds of the state employees' and teachers' retirement systems shall be held in the PRIT Fund. The board of each such system shall annually, on or before May first, file in the office of the commissioner, on a form prescribed by the commissioner, a sworn statement of the financial condition of such system as of December thirty-first of the previous year and of all the financial transactions thereof during the previous year. The commissioner may, for cause shown, extend the time for filing any such statement.

SECTION 10. Paragraph (b) of subdivision (2) of said section 23 of said chapter 32, as appearing in chapter 84 of the acts of 1996, is hereby amended by striking out the introductory paragraph and inserting in place thereof the following paragraph:-

The board of each such system shall invest and reinvest the funds of such system, to the extent not required for current disbursements, in the PRIT Fund pursuant to subdivision (8) of section twenty-two, in the PRIT Fund by purchasing shares of said fund, as provided for in the trust agreement adopted by the PRIM board pursuant to subdivision (2A) or as follows:.

SECTION 11. Paragraph (a) of subdivision (2A) of said section 23 of said chapter 32, as appearing in the 1994 Official Edition, is hereby amended by striking out the second subparagraph and inserting in place thereof the following subparagraph:-

Such board shall consist of nine members as follows: the governor, ex officio, or his designee, the state treasurer, ex officio, or his designee, who shall serve as chairman of the board, a private citizen experienced in the field of investment or financial management appointed by the state treasurer, an employee or retiree who is a member of the state teachers retirement system who shall be elected by the members in or retired from such a system for a term of three years in such a manner as the commissioner shall determine, an employee or retiree who is a member of the state employees' retirement system who shall be elected by the members in or retired from such system for a term of three years in such a manner as the commissioner shall determine, the elected member of the state retirement board, one of the elected members of the teachers' retirement board, who shall be chosen by the members of the teachers' retirement board, a person who is not an employee or official of the commonwealth who shall be appointed by the governor, and a representative of a public safety union who shall be appointed by the governor. The appointed members shall serve for four years. Any vacancy among the appointed members that may occur before the expiration of a term shall be filled by an appointment by the treasurer, or the governor, whoever had the right of making the initial appointment. Any appointed member of the board, including members appointed to fill a vacancy shall be eligible for reappointment. Any appointed member may be removed from his appointment for cause by the treasurer or the governor, whoever had the right of making the original appointment.

SECTION 12. Said subdivision (2A) of said section 23 of said chapter 32, as so appearing, is hereby further amended by inserting after paragraph (b) the following paragraph:-

(c) The PRIM board may commingle moneys on deposit in the PRIT Fund for purposes of investment; provided, however, that the board shall maintain appropriate records to account for amounts credited to particular accounts or funds. The PRIM board may offer to purchasing systems, and may allocate to the state employees' and teachers' retirement systems, shares in the PRIT Fund which represent undivided interests in specified portions of the assets of the fund rather than undivided interests in the whole.

SECTION 13. Section twenty-three A of said chapter thirty-two is hereby repealed.

SECTION 14. Notwithstanding the provisions of any general or special law to the contrary, including, without limitation, the provisions of paragraph (e) of subdivision (8) of section twenty-two of chapter thirty-two of the General Laws, until such time as the provisions of section ten of this act shall take effect, the state treasurer shall be authorized, with the approval of the investment committee established under paragraph (a) of subdivision (1) of section twenty-three of said chapter thirty-two, to purchase shares in the Pension Reserves Investment Trust Fund established under said subdivision (8) for the account of the Annuity Savings Funds and Annuity Reserve Funds of the state employees' and teachers' retirement systems. Assets transferred to the Pension Reserves Investment Trust Fund pursuant to this section shall be accounted for separately from the Commonwealth's Pension Liability Fund established under said paragraph (e). At such time as all assets of said annuity funds shall have been transferred to the Pension Reserves Investment Trust Fund pursuant to the provisions of this section, the state treasurer, as treasurer-custodian of said systems, and said investment committee shall be relieved of any further responsibility for the investment of such assets pursuant to said subdivision (1), and such responsibility shall be assumed by the pension reserves investment management board established under subdivision (2A) of section twenty-three of said chapter thirty-two; provided, however, that the state treasurer, as treasurer-custodian as hereinbefore provided and on behalf of said investment committee, with the approval of said committee, shall have filed with said pension reserves investment management board an irrevocable statement of intention not to redeem any shares purchased pursuant to this section.

SECTION 15. On December thirty-first, nineteen hundred and ninety-six, title to all assets, revenues and funds, including contract and other rights to receive the same, which are then held in the name of the Annuity Savings Funds or, Annuity Reserve Funds of the state employees' or teachers' retirement systems or in the name of the state treasurer as treasurer-custodian of such systems, or in the name of the Massachusetts State Teachers' and Employees' Retirement Systems Trust shall be transferred to, and shall thereafter be deemed to be held in the name of, the Pension Reserves Investment Trust Fund established under subdivision (8) of section twenty-two of chapter thirty-two of the General Laws, or the pension reserves investment management board established under subdivision (2A) of section twenty-three of said chapter thirty-two, as trustees of such fund; provided, however, that at least thirty days prior to the effective date of said transfer, the state treasurer shall hold at least two public hearings, which shall be held only after at least thirty days advance written notice to all members of the affected retirement systems; provided further, that such notice shall include the date, place and time of said hearings and an explanation of all of the potential implications of consolidation; and provided further, that at least one of said hearings shall be held in Western Massachusetts and one of said hearings shall be held in Eastern Massachusetts. On such date, all books, papers, records, documents, equipment and computer software which are then in the custody of the state treasurer and which relate to the foregoing transferred assets or are maintained for the purpose of the exercise of powers or the performance of duties no longer required or authorized relative to such assets shall be transferred to said pension reserves investment management board. Upon such date, all then existing agreements, contracts and other obligations of the state treasurer, the aforesaid annuity funds or the aforesaid Massachusetts State Teachers' and Employees' Retirement Systems Trust, or to which the state treasurer or said systems, funds or trust is a party, and which are related to the foregoing transferred assets, shall be performed and may be enforced by said pension reserves investment management board. The state treasurer and such other officials of the commonwealth and of the boards of such systems as shall be appropriate shall execute, acknowledge and deliver such confirmatory instruments as may be required by said pension reserves investment management board, but such execution, acknowledgement and delivery thereof shall not be a condition of the transfer, which is made by this act.