Contributory retirement system funds; recovery of pension costs
Section 5D. In order to offset the anticipated costs for funding the contributory retirement systems, cities, towns, counties and districts may appropriate in any year an amount not exceeding five per cent of the amount raised in the preceding year by taxation of real estate and tangible personal property. Such amounts shall be credited to the Pension Reserve Fund provided for in section twenty-two of chapter thirty-two. The aggregate amount in such fund at any time shall not exceed ten per cent of the equalized valuation of the city or town as defined in section one of chapter forty-four. Any interest shall be added to and become part of such fund. In any city, town or district which belongs to a city, town or district retirement system, all amounts appropriated pursuant to this section shall be transferred to and credited to the Pension Reserve Fund provided for in section twenty-two of chapter thirty-two. In any city, town or district which belongs to a county retirement system, all amounts appropriated pursuant to this section shall be held by the city, town or district treasurer pursuant to subdivision (9) of section twenty-two of chapter thirty-two.
All sums in such fund shall be appropriated and used only for the purpose of offsetting the anticipated future cost of funding the contributory retirement system of such city, town or district.
The treasurer of the city, town or district shall be the custodian of such fund and may deposit the proceeds in national banks or invest the proceeds by deposit in savings banks, cooperative banks or trust companies organized under the laws of the commonwealth, or invest the same in such securities as are legal for the investment of funds of savings banks under the laws of the commonwealth or in federal savings and loan associations situated in the commonwealth or may participate in the PRIT Fund in accordance with clause (8) of section twenty-two of chapter thirty-two.
Such fund may be appropriated for such purposes in a town at an annual town meeting by a majority vote, in a district at an annual district meeting by a majority vote, and in a city by a majority vote of the city council.
The commissioner of revenue shall establish rules, regulations and procedures requiring counties, cities, towns, and districts to recover employee pension costs from federal grant monies. Each spending agency of said counties, cities, towns and districts shall, at such time and in the manner as said commissioner shall prescribe, authorize and direct the treasurer to initiate such procedures as said commissioner shall establish to transfer to the pension reserve fund for the system of which such federally funded employee is a member, an amount equal to the employer's normal cost of retirement benefits, as determined by the actuary pursuant to chapter thirty-two, which are incurred as a result of said federal grant. Expenditures for the payment of salaries to be made from any federal grant shall not be made until the full amount of such pension costs are recovered in accordance with such procedures as said commissioner shall establish. The commissioner of administration shall develop a schedule phasing in the full assessment of such normal costs, provided that full normal costs shall be assessed against all federal grant payrolls not later than October first, nineteen hundred and eighty-eight. If any federal granting authority refuses to allow the pension cost recovery provided for in this paragraph, the amount of any such recovery so refused, upon final adjudication of said refusal, shall be transferred from the pension reserve fund back to the spending agency.