Section 40. The by-laws of every such association shall be approved by the public employee retirement administration commission, and shall prescribe the manner in which and the officers and agents by whom the association may be conducted and the manner in which its funds may be invested and paid out. Such association shall be deemed to be formed when its by-laws have been approved and agreed to by the employer and by the employees by vote of two-thirds of all employees present and voting at a meeting called by the employer for the purpose, and have been approved by said public employee retirement administration commission. Such association shall annually, on or before March first, report to the commission such statements of its membership and financial transactions for the year ending on the preceding thirty-first day of December as the commission may consider necessary to show its business and standing. Said commission may verify such statement by an examination of the books and papers of the association; and whoever, having charge or custody of said books and papers, neglects to comply with this section shall be punished by a fine of not more than five hundred dollars.