07 LC 21
9499S
The
House Committee on Retirement offers the following substitute to SB
156:
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Title 47 of the Official Code of Georgia Annotated, relating to retirement
and pensions, so as to provide that counties, municipal corporations, and other
political subdivisions may provide post-employment benefits other than
retirement or pension benefits; to define certain terms; to provide that such
plans may be prefunded to comply with certain financial reporting, disclosure,
and actuarial requirements; to provide that such funds shall be held in trust
for the intended purpose; to provide that such funds are declared to be public
property exempt from state and local taxation; to create the Board of Regents
Retiree Health Benefit Fund; to provide for a trust fund to provide for retiree
post-employment health care benefits; to define certain terms; to provide for
the powers and duties of the Board of Regents of the University System of
Georgia; to provide for actuarial services; to provide for related matters; to
repeal conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Title
47 of the Official Code of Georgia Annotated, relating to retirement and
pensions, is amended by revising subsection (h) of Code Section 47-20-10,
relating to minimum annual employer contributions, as follows:
"(h)
The minimum funding requirements of this Code section shall not apply to
prefunding, in whole or in part, of anticipated future costs of providing
health care
benefits and related expenses including, without limitation, provision of all or
part of the cost of health insurance coverage and health maintenance
organization participation costs
other
post-employment benefits as defined by Governmental Accounting Standards Board
Statements Number 43 and Number 45 for
retired employees of a political subdivision including those presently retired
and those anticipated to retire in the
future, as
provided in Code Section 47-20-10.1. Such
prefunding may be maintained as part of the same investment pool as the fund
receiving employer and employee contributions to pay the cost of providing
retirement benefits under any retirement system maintained by the political
subdivision for its employees so long as such funds are separately accounted for
and separate records are maintained with respect to each fund. Funds maintained
by a political subdivision for the purpose of prefunding
health
care
other
post-employment benefits for retired
employees may be invested and reinvested in accordance with the provisions of
Code Section 47-1-12,
or Article 7
of Chapter 20 of this title, as
applicable, and, for the purposes of that
Code section
or
article and the home rule provisions of
the laws and the Constitution of the State of Georgia
only,
such funds shall be
considered
treated in the
same manner as retirement
funds."
SECTION
2.
Said
title is further amended by inserting after Code Section 47-20-10 a new Code
section to read as follows:
"47-20-10.1.
(a)
Political subdivisions are authorized to establish plans to provide for payment
of other post-employment benefits, as defined by Governmental Accounting
Standards Board Statements Number 43 and Number 45 for their eligible present
and future retirees and other related expenses as described herein. Such
benefits may be prefunded by irrevocable trusts or other authorized funding
mechanisms subject to the financial reporting, disclosure, and actuarial
requirements of Governmental Accounting Standards Board Statements Number 43 and
Number 45 or any subsequent Governmental Accounting Standards Board updates or
statements that may be applicable. Except as otherwise provided under
subsection (c) of this Code section, the plan and assets of any trust or fund so
established may 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; provided, however, that the assets of any other
post-retirement benefit plan, trust, or fund shall be separately accounted for
and separate records shall be maintained. The prefunded amounts shall be
available without fiscal year limitations for other post-employment benefits, as
defined by Governmental Accounting Standards Board Statements Number 43 and
Number 45, and administration costs. 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.
The amounts remaining in such trust or fund, if any, after other post-employment
benefit expenses and administration costs have been paid in any year shall be
retained in such trust or fund for future payments until the satisfaction of all
plan liabilities under the trust or fund for other post-employment benefits.
All prefunded amounts shall be used solely for the payment of plan benefits and
administrative costs and for no other purpose.
(b)
Prefunded assets of whatever kind or nature of any other post-employment benefit
plan or trust, and the earnings or proceeds derived from such investments or
assets, are limited to paying other post-employment benefits and administrative
costs and are declared to be public property and exempt from taxation by this
state, or by any political subdivision of this state, and exempt from levy and
sale, garnishment, attachment, or any other process whatsoever.
(c)
Employers who are eligible to participate in the Georgia Municipal Employees
Benefit System created by Chapter 5 of this title 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, notwithstanding any provision of this Code section or
Code Section 47-20-10 to the contrary. The assets of any such plan, trust, or
fund under the governance and investment authority of the board of trustees of
the Georgia Municipal Employees Benefit System may be maintained as part of the
same investment pool as the system retirement fund and invested pursuant to the
applicable provisions of Article 7 of Chapter 20 of Title 47, notwithstanding
any provision of subsection (c) of Code Section 47-5-28 to the contrary, so long
as the assets of the plan, trust, or fund and the Georgia Municipal Employees
Benefit System retirement fund are separately accounted for and separate records
are maintained for the plan, trust, or fund and the Georgia Municipal Employees
Benefit System retirement fund."
SECTION
3.
Said
title is further amended by revising Chapter 21, the "Regents Retirement Plan
Act," by designating the existing provisions of said chapter as Article 1 and by
adding a new article to read as follows:
"ARTICLE
2
47-21-20.
As
used in this article, the term:
(1)
'Actuarial assumptions' means assumptions regarding the occurrence of future
events affecting costs of the fund such as mortality, withdrawal, disability,
and retirement; changes in compensation and offered post-employment benefits;
rates of investment earnings and asset appreciation or depreciation; procedures
used to determine the actuarial value of assets; and other relevant
items.
(2)
'Actuarially sound' means that calculated contributions to the fund are
sufficient to pay the full actuarial cost of the fund. The full actuarial cost
includes both the normal cost of providing for fund obligations as they accrue
in the future and the cost of amortizing the unfunded actuarial accrued
liability over a period of no more than 30 years.
(3)
'Administrative expenses' means all expenses incurred in the operation of the
fund, including all investment expenses.
(4)
'Annual required contribution' means the amount determined in accordance with
requirements of Governmental Accounting Standards Board Statement No. 43, or any
subsequent Governmental Accounting Standards Board statements that may be
applicable to the fund.
(5)
'Board' means the Board of Regents of the University System of
Georgia.
(6)
'Covered health care expenses' means all actual health care expenses incurred by
the health plan with respect to fund beneficiaries. Actual health care expenses
include claims incurred with respect to fund beneficiaries and premiums incurred
with respect to intermediary entities and health care providers by the health
plan.
(7)
'Employer' means the Board of Regents of the University System of Georgia and
any department or institution of thereof that employs persons who are eligible
to participate in the health plan.
(8)
'Fund' means the Board of Regents Retiree Health Benefit Fund established under
this article.
(9)
'Health plan' means the board's health insurance plans established pursuant to
authority granted to the board pursuant to Code Sections 20-3-31 and
20-3-51.
(10)
'Obligations' means the administrative expenses of the fund and the cost of
covered health care expenses incurred on behalf of fund beneficiaries less any
amounts received by or on behalf of fund beneficiaries.
47-21-21.
(a)
There is created the Board of Regents Retiree Health Benefit Fund to provide for
the employer costs of retiree post-employment health insurance benefits. The
fund shall be a trust fund of public funds. The board in its official capacity
shall be its trustee and the Chancellor in his or her official capacity shall be
its administrator.
(b)
The fund shall be available and dedicated without fiscal year limitations for
covered health care expenses and administration costs. All employer and retiree
contributions, appropriations, earnings, and reserves for the payment of
obligations under this article shall be irrevocably credited to such fund. The
amounts remaining in such fund, if any, after such health care expenses and
administration costs have been paid shall be retained in such fund as a special
reserve for covered health care expenses and administration costs. The board
shall determine the time and amounts of distributions from the special reserve
for covered health care expenses and administration costs. All assets of the
fund shall be used solely for the payment of fund obligations and for no other
purpose and shall be protected from creditors of the state and the
board.
47-21-22.
(a)
Responsibility for the proper operation of the fund is vested in the
board.
(b)
The board shall:
(1)
Adopt actuarial assumptions as necessary and prudent;
(2)
Employ such personnel as may be needed to carry out the provisions of this
article and such personnel shall be employees of the board. The pro rata share
of the costs of operating the board in the manner prescribed by law shall be a
part of the administrative costs of the fund;
(3)
Maintain all necessary records regarding the fund in accordance with generally
accepted accounting principles, as applied to the fund;
(4)
Collect all moneys due to the fund and shall pay any administrative expenses
necessary and appropriate for the operation of the fund from the fund;
and
(5)
Cause to be prepared an annual report of fund activities. Such report shall
include, but not be limited to, audited financial statements.
(c)
The board may:
(1)
Adopt any rules and regulations that it finds necessary to properly administer
the fund;
(2)
Employ or contract for the services of actuaries and other professionals as
required to carry out the duties established by this article; and
(3)
Contract with the Division of Investment Services of the Teachers Retirement
System of Georgia or such other investment advisors as deemed appropriate and
prudent by the board for any necessary services with respect to fund
investments.
(d)
Notwithstanding any other provision of law to the contrary, the board shall be
entitled to any information that it deems necessary and appropriate from a
university employee retirement system in order that the provisions of this
article may be carried out.
47-21-23.
(a)
The actuary employed or retained by the board shall provide technical advice to
the board regarding the operation of the fund.
(b)
Utilizing the actuarial assumptions most recently adopted by the board, the
actuary shall set the annual actuarial present values for the state plan for
other post-employment benefits.
47-21-24.
(a)
The board shall have control over the fund established by this article. The
provisions provided for in this article and all administrative expenses shall be
paid from the fund. The board may expend moneys from the fund for any purpose
authorized by this article.
(b)
The board shall have full power to invest and reinvest its assets, subject to
all of the terms, conditions, limitations, and restrictions imposed by Article 7
of Chapter 20 of Title 47, the 'Public Retirement Systems Investment Authority
Law.' Subject to such terms, conditions, limitations, and restrictions, the
board shall have full power to hold, purchase, sell, assign, transfer, and
dispose of any securities and investments in which any of the moneys are
invested, including the proceeds of any investments and other moneys belonging
to the fund.
(c)
Except as otherwise provided in this chapter, no member or employee of the board
shall have any personal interest in the gains or profits from any investment
made by the board or use the assets of the fund in any manner, directly or
indirectly, except to make such payments as may be authorized by the board in
accordance with this article.
47-21-25.
(a)
The board shall annually determine the minimum annual required contributions
sufficient to maintain the fund in an actuarially sound manner in accordance
with Governmental Accounting Standards Board Statement No. 43, or any subsequent
Governmental Accounting Standards Board statements that may be applicable to the
fund.
(b)
The board may annually establish employer contribution rates for the purpose of
establishing the health plan from fiscal year to fiscal year and additional
employer contribution rates in accordance with the health plan for other
post-employments benefits.
(c)
It shall be the responsibility of employers to make contributions to the fund in
accordance with the employer contribution rates established by the
board."
SECTION
4.
All
laws and parts of laws in conflict with this Act are repealed.