Budget Amendment ID: FY2018-S3-14

OTH 14

Post Employment Benefits Review Commission

Messrs. Tarr, O'Connor and Ross moved that the proposed new text be amended by inserting after section __ the following new section:-

 

“SECTION_. Chapter 32 of the General Laws is hereby amended by inserting after section 21A the following new section:-

Section 21B. The following definitions shall apply to this section:

“Current employee”, any employee of the Commonwealth or its political subdivisions as of the effective date of this act.

“Post-employment benefits”, any defined benefit to be paid to an employee as a result of their service to the Commonwealth or its political subdivisions in accordance with chapters 32, 32A, 32B or any other general or special law that contains provisions for said benefits.

“Retiree”, any retired former employee of the Commonwealth or its political subdivisions as of the effective date of this act in receipt of post-employment benefits in accordance with chapters 32, 32A, 32B or any other general or special law that contains provisions for said benefits.

“Vested”, any current employee of the Commonwealth or its political subdivisions as of the effective date of this act that is entitled to post-employment benefits at a future date by virtue of and in accordance with the provisions of chapters 32, 32A, 32B or any other general or special law that contains provisions for said benefits.

(a) Notwithstanding any general or special law to the contrary, there shall be established a post-employment benefits Commission that shall perform a comprehensive review and evaluation of the various post-employment benefits provided in the Commonwealth contained in chapters 32, 32A, 32B or any other general or special law that contains provisions for post-employment benefits provided to employees or retirees of any secretariat, board, Commission, authority, municipality, school district or other political subdivision in the Commonwealth.  The Commission shall make recommendations to the Governor, House and Senate on improving the efficiency, effectiveness and operations of all existing post-employment benefit systems in the Commonwealth, without exception.    The Commission shall focus on changes that should be made to all post-employment benefit systems in the Commonwealth for current and future employees, rather than retirees.

(b) The Commission shall be non-partisan and shall be comprised of the President of the Senate, the Minority Leader of the Senate, the Speaker of the House, the Minority Leader of the House, the Secretary of Administration and Finance, or his designee,  the Treasurer and Receiver-General or her designee, the Executive Director of the Massachusetts Municipal Association or their designee, the Executive Director of the Public Employee Retirement Assurance Commission or their designee, the Executive Director of the Group Insurance Commission, or their designee.  The Executive Director of the Pension Reserves Investment Management Board, or their designee, The Executive Director of the State Retirement Board, or their designee, the Executive Director of the Massachusetts Teachers’ Retirement System, or their designee and a member of any union with employees that are members of any of the aforementioned Boards or Commissions.   There shall be two public members, one who shall be an actuary not currently contracted with any of the aforementioned Boards or Commissions, a certified public accountant who is knowledgeable about Governmental Accounting Standards Board standards related to post-employment benefits and other systems nationwide and not currently contracted with any of the aforementioned Boards or Commissions, both of whom named by the State Comptroller.   The Commission shall use the services of the State Comptroller and the Office of the State Comptroller’s general counsel as advisors.  The State Comptroller will provide administration and meeting space.   At the Commission’s first meeting, which shall take place no more than 15 business days after the effective date of this section, the Commissioners shall elect a chair, a vice chair who shall serve if the chair is absent at a meeting and a secretary who shall be responsible for minutes of the Commission.

(c) The Commission shall be charged with reviewing the current structure of post-employment benefits in the Commonwealth offered to current employees, including, but not limited to, defined benefit pensions, defined benefit healthcare, the administration of all public employee retirement and retiree healthcare systems with a goal of recommending to the Legislature changes necessary to provide for a more efficient, effective and productive system of post-employment benefits.  The Commission may consider consolidation of all existing systems into either a single entity or an entity for non-teacher employees and an entity for teachers.  Each entity that may be created as a recommendation of the Commission shall be separate irrevocable trusts but using shared actuarial, investment, eligibility determination, receipt, disbursement and administrative functions.  Employers that are members of said entity or entities shall proportionately share costs, benefits and any net pension or other post-employment benefit liability in a manner that is actuarially sound. The Commission may consider converting all future employees of public entities in the Commonwealth to a defined contribution plan that would take effect as of a date of the Commission’s recommendation, including a matching contribution by the Commonwealth or a municipality.  The Commission may consider changing the structures for current employees who are not vested a of a date of the Commission’s recommendation, including transferring previous contributions to the various systems made by said non-vested employees into defined contribution arrangements.   The Commission may also consider an administrative cap on the management of post-employment benefits as a percentage of fiduciary net position of the single entity or the entity for non-teacher employees and for teachers.

(d) The Commission shall meet at least monthly and provide approved minutes to the public within seven business days after approval.

(e) The Commission shall report to the Governor and the Clerks of the House and Senate, no later than December 31, 2015.  The report shall consist of an executive summary of the Commission’s work, members, meetings and minutes, an analysis of the current structure of post-employment benefits in the Commonwealth, the structure of post-employment benefits in other States, findings and recommendations and appendices containing draft legislation and any other exhibits that the Commission deems necessary for the Governor and the members of the House and Senate for their knowledge.   The Commission then shall work with the members of the House and Senate to pass any recommended legislative changes during the 2016 session.   Upon the approval of any General or Special Law related to any of the contents of the Commission’s report, the Commission shall have outreach through the Massachusetts Municipal Association to municipal systems to implement any approved legislation on a timely basis.

(f) Line item 1000-0001 shall be increased by $250,000 each fiscal year for the operations of the Commission while the Commission is empanelled, including the costs of hiring consultants, meeting space in the Office of the State Comptroller, the Office of the State Comptroller’s general counsel and administration of the Commission and shall not revert while the Commission is empanelled.

(g) The Commission shall disband not later than 2 years after the effective date of the approval of any General or Special Law related to any of the contents of the Commission’s report.  Any unspent funds as a result of Section 6 of this Act shall revert to the General Fund upon disbanding."