DEPARTMENT
OF
AUDITS
AND
ACCOUNTS
270 Washington Street, S.W., Suite 1-156
Atlanta, Georgia 30334-8400
270 Washington Street, S.W., Suite 1-156
Atlanta, Georgia 30334-8400
Russell W.
Hinton
State Auditor
(404) 656-2174
State Auditor
(404) 656-2174
April
10, 2007
The Honorable Ben
Bridges
State Representative
State Capitol, Room 402
Atlanta, Georgia 30334
State Representative
State Capitol, Room 402
Atlanta, Georgia 30334
SUBJECT: State
Auditor’s
Certification
Substitute to Senate Bill 156
(LC 21 9499S)
Substitute to Senate Bill 156
(LC 21 9499S)
Dear Representative
Bridges:
This
substitute bill would amend provisions relating to minimum funding standards for
public retirement systems. Specifically, this bill would authorize political
subdivisions to establish plans to provide for the payment of other
post-employment benefits, as defined by Governmental Accounting Standards Board
Statements Number 43 and Number 45 for eligible present and future retirees, and
for other related expenses. Other than the exception specified in this bill,
the plan and assets of any trust or fund would be under the governance and
investment authority of a retirement system maintained by the political
subdivision or other board of trustees established for such purpose. All
employer contributions, plan participant contributions, appropriations,
earnings, and reserves for the payment of obligations under the plan shall be
credited to such trust or fund. Any funds that remain after covered other
post-employment benefit expenses and administrative costs have been paid shall
be retained in such trust or fund for future payments until all plan liabilities
under the trust or fund for other post-employment benefits are satisfied. This
bill also provides that prefunded assets of whatever kind or nature of any other
post-employment benefit plan or trust, and the earnings derived from such
investments, must be used to fund covered other post-employment benefits and
administrative costs. Such assets are declared to be public property and are
exempt from taxation, levy and sale, garnishment, attachment, or any other
process.
This
substitute bill also provides that employers who are eligible to participate in
the Georgia Municipal Employees Benefit System may establish or participate in
an other post-employment benefit plan, trust, or fund under the governance and
investment authority of the board of trustees of the Georgia Municipal Employees
Benefit System. The assets of any such plan, trust, or fund may be maintained
as part of the same investment pool as the system retirement fund. However,
such assets must be accounted for and recorded separately.
Finally,
this substitute bill would create the Board of Regents Retiree Health Benefit
Fund to provide for the employer costs of retiree post-employment health
insurance benefits. The Chancellor of the Board of Regents would be the
administrator of the Fund, and the Board of Regents would be the trustee. This
bill outlines the responsibilities of the Board, which include adopting
actuarial assumptions, determining the minimum annual required contributions and
employer contribution rates, maintaining records in accordance with generally
accepted accounting principles, collecting all money due to the Fund, and paying
the necessary administrative costs. The provisions of this bill specify that
all employer and retiree contributions, appropriations, earnings, and reserves
for the payment of obligations shall be credited to the Fund and shall be
dedicated to paying covered health care expenses and administrative costs. The
amounts remaining in the Fund, if any, shall be retained as a special reserve
for covered health care expenses and administrative expenses.
This
is to certify that this substitute bill is a nonfiscal retirement bill as
defined in the Public Retirement Systems Standards Law.
Respectfully,
/s/ Russell W.
Hinton
State Auditor
State Auditor