Whereas, The deferred operation of this act would tend to defeat its purpose, which is to increase forthwith the minimum wage, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.
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. Notwithstanding any general or special law to the contrary, the town of Franklin, acting by and through its town council, may establish a trust fund to be known as the Group Insurance Liability Fund, as set out in sections 2 to 4, inclusive, for the purpose of funding the municipality’s future liabilities for contributions to retired employees’ health insurance premiums.
SECTION 2. As used in this act, the following words shall have the following meanings:-
“Normal cost of post-retirement benefits”, that portion of the actuarial present value of future premium costs or claim costs payable by the town on behalf of or direct payments payable by the town to retired employees, including school teachers, of the town and the eligible surviving spouses or dependents of deceased employees, including school teachers, of the town, under this act which is allocable to a particular fiscal year, as determined by an actuary under section 4.
“Post-retirement benefit liability”, the present value of the town’s obligation for future premium payments and claim costs on behalf of or direct payments to retired and prospectively retired employees of the town and the eligible surviving spouses or dependents of deceased and prospectively deceased employees of the town attributed by the terms of the plan to employee’s service rendered to the date of the measurement under this act, as determined by the actuary, under section 4.
“Unfunded post-retirement benefit liability”, the difference between the post-retirement benefit liability on the measurement date and the actuarial value of the assets of the Group Insurance Liability Fund on the same date, as determined by the actuary.
“Unfunded post-retirement benefit liability amortization payments”, the amount which, when paid into the Group Insurance Liability Fund annually over a period of years together with the normal cost of post-retirement benefits for each year of that period of years, will reduce to zero at the end of that period the unfunded post-retirement benefit liability in existence as of the beginning of the period as determined by the actuary.
SECTION 3. There shall be a trust fund to be known as the Group Insurance Liability Fund. The town treasurer shall manage the fund in consultation with the town administrator. The fund shall be credited with all amounts appropriated or otherwise made available by the town for the purposes of meeting the current and future cost of premiums payable by the town on behalf of or direct payments payable by the town to retired employees of the town and the eligible surviving spouses or dependents of deceased employees of the town under this act. Amounts in the fund, including any earnings or interest accruing from the investment of these amounts, shall be expended only for the payment of these premiums or direct payments, except as otherwise provided in this act, and only in accordance with a schedule of payments developed by the actuary in consultation with the town council. Subject in each instance to the approval of the town administrator, the town treasurer shall invest and reinvest the amounts in the fund not needed for current disbursement consistent with the prudent person rule. The treasurer may employ any qualified bank, trust company, corporation, firm or person to advise it on the investment of the fund and may pay for this advice and other services as determined by the town council.
SECTION 4. An actuary shall determine, as of January 1, 2006 and no less frequently than every second year after that date, the normal cost of post-retirement benefits, the post-retirement benefit liability, and the unfunded post-retirement benefit liability. All these determinations shall be made in accordance with generally accepted actuarial standards, and the actuary shall make a report of these determinations. The report shall, without limitation, detail the demographic and economic actuarial assumptions used in making these determinations, and each report after the first report shall also include an explanation of the changes, if any, in the demographic and economic actuarial assumptions employed and the reasons for any changes, and shall also include a comparison of the actual expenses by the town for premium or direct payments constituting the post-retirement benefit liability during the period since the last determination, and the amount of these expenditures which were predicted under the previous report for that period.
The actuary, in consultation with the town council, shall establish a schedule of annual payments to be made to the Group Insurance Liability Fund designed to reduce to zero the unfunded post-retirement benefit liability. This schedule shall reduce the initial unfunded post-retirement benefit liability over a period of years not to exceed 30. Any additional unfunded liability created after the last such determination by the provision of any new benefit or by any increase in the premium share payable by the town shall be separately amortized over the 15 years following the date of the determination in which the additional liability is first recognized. Each annual payment shall be equal to the sum of the unfunded post-retirement benefit amortization payment required for that year and the payments required to meet the normal cost of post-retirement benefits for the fiscal year.
All payments for the purposes of meeting the town’s share of premium costs for direct payments to retired employees of the town and the surviving spouses or dependents of deceased employees of the town under this act shall be made from the Group Insurance Liability Fund in accordance with a schedule of disbursements established by the actuary.
SECTION 5. This act shall take effect upon its passage.
House of Representatives, July 25, 2006.
This Bill having been returned by His Excellency the Governor with his ob-jections thereto in writing (see House 5186) has been passed by the House of Representatives, notwithstanding said objections, two-thirds of the House (132 yeas to 21 nays) having agreed to pass the same.
Sent to the Senate for its action.
Salvatore F. DiMasi, Speaker.
Steven T. James, Clerk.
Senate, July 26, 2006.
Passed by the Senate, notwithstanding the objections of His Excellency the Governor, two-thirds of the members present (35 yeas to 1 nays) having approved the same.
Robert E. Travaglini, President.
William F. Welch, Clerk.
Approved August 21, 2006.