09 LC
21 0237
Senate
Bill 122
By:
Senators Goggans of the 7th and Hill of the 4th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Chapter 18 of Title 45 of the Official Code of Georgia Annotated, relating
to employees insurance and benefits plans, so as to divide the Georgia Retiree
Health Benefit Fund into two funds; to define certain terms; to create the
Georgia State Retiree Health Benefit Fund and the Georgia School Retiree Health
Benefit Fund; to repeal the Georgia Retiree Health Benefit Fund; to provide for
applicability; to provide for related matters; to repeal conflicting laws; and
for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Chapter
18 of Title 45 of the Official Code of Georgia Annotated, relating to employees
insurance and benefits plans, is amended by revising Article 6, relating to the
Georgia Retiree Health Benefit Fund, as follows:
"ARTICLE
6
45-18-100.
As
used in this article, the term:
(1)
'Actuarial accrued liability' means that portion, as determined by a particular
actuarial cost method, of the actuarial present value of fund obligations and
administrative expenses which is not provided for by future normal
costs.
(2)
'Actuarial assumptions' means assumptions regarding the occurrence of future
events affecting costs of the
fund
funds
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 such relevant items.
(3)
'Actuarial cost method' means a method for determining the actuarial present
value of the obligations and administrative expenses of the
fund
funds
and for developing an actuarially equivalent allocation of such value to time
periods, usually in the form of a normal cost and an actuarial accrued
liability. Acceptable actuarial methods are the aggregate, attained age, entry
age, frozen attained age, frozen entry age, and projected unit credit
methods.
(4)
'Actuarial present value of total projected benefits' means the present value,
at the valuation date, of the cost to finance benefits payable in the future,
discounted to reflect the expected effects of the time value of money and the
probability of payment.
(5)(4)
'Actuarial valuation' means the determination, as of a valuation date, of the
normal cost, actuarial accrued liability, actuarial value of assets, and related
actuarial present values for the
fund
funds.
(6)(5)
'Actuarially sound' means that calculated contributions to the
fund
funds
are sufficient to pay the full actuarial cost of the
fund
funds.
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.
(7)(6)
'Administrative expenses' means all expenses incurred in the operation of the
fund
funds,
including all investment expenses.
(8)(7)
'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
funds.
(9)(8)
'Board' means the Board of Community Health.
(9.1)(9)
'Commissioner' means the commissioner of community health.
(10)
'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 providers and
premiums incurred with respect to intermediary entities and health care
providers by the health plan.
(11)
'Department' means the Department of Community Health.
(12)
'Eligible to participate' means employees of employers who are participating in
the health plan and those employees of employers who qualify to participate in
the health plan but choose not to do so.
(13)
'Employer' means the State of Georgia; the departments, agencies, or
institutions of the state; and any political subdivision of the state that
employs persons who are eligible to participate in the health plan.
(15)(14)
'Fund beneficiaries' means all persons receiving post-employment health care
benefits as retirees or derivatively through retirees through the health
plan.
(14)(15)
'Fund
Funds'
means the Georgia
State
Retiree Health Benefit Fund
and the
Georgia School Retiree Health Benefit Fund
established under this article.
(16)
'Fund participants' means employees of an employer who are eligible to
participate in the health plan.
(17)(16)
'Health plan' means the state employees' health insurance plan established under
Article 1 of this chapter, the health insurance plan for public school teachers
established under Subpart 1 of Part 6 of Article 17 of Chapter 2 of Title 20
of the
Official Code of Georgia Annotated, and
the health insurance plan for public school employees established under Subpart
2 of Part 6 of Article 17 of Chapter 2 of Title 20
of the
Official Code of Georgia
Annotated.
(18)(17)
'Normal cost' means that portion of the actuarial present value of the fund
obligations and expenses which is allocated to a valuation year by the actuarial
cost method used for the
fund
funds.
(19)(18)
'Obligations' means the administrative expenses of the
fund
funds
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.
(20)
'Retirement plan' means any retirement or pension plan or any other plan or
program which exists on July 1, 2006, or which is created or established on or
after that date, and which is maintained by an employer or maintained pursuant
to law or other authority of an employer for the purpose of paying retirement
benefits to fund beneficiaries. The term shall also include any plan or program
that creates a retired position, including, but not limited to, emeritus
positions, which provides a salary for such position in lieu of a retirement
benefit. The term shall also include a plan that provides for an individual
account for each participant and for benefits determined solely upon the amounts
contributed by the employer and the participant to the participant's account and
any income, expenses, gains, and losses.
(21)(19)
'State plan for other post-employment benefits' means the State of Georgia
fiscal funding plan for retiree post-employment health care benefits as it
relates to Governmental Accounting Standards Board Statement No. 43, or any
subsequent Governmental Accounting Standards Board statements that may be
applicable to the
fund
funds.
(22)(20)
'Unfunded actuarial accrued liability' means for any actuarial valuation the
excess of the actuarial accrued liability over the actuarial value of the assets
of the
fund
funds
under an actuarial cost method utilized by the
fund
funds
for funding purposes.
45-18-101.
(a)
There is created the Georgia
State
Retiree Health Benefit Fund to provide for the 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 the fund's trustee; and the commissioner
in his or her official capacity shall be its administrator.
(b)
There is
created the Georgia School Retiree Health Benefit Fund to provide for the 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 the fund's
trustee; and the commissioner in his or her official capacity shall be its
administrator.
(c)
On July 1, 2009, the board shall identify the funds held in the Georgia Retiree
Health Benefit Fund by the source of the contributions and shall on that date
transfer such funds to the appropriate fund created by subsections (a) and (b)
of this Code section. The Georgia Retiree Health Benefit Fund shall then cease
to exist and all obligations shall be transferred to the appropriate
fund.
(d)
The
fund
funds
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
the
appropriate 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
funds
excluding
amounts identified in subsection (c) of this Code
section 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 employers.
45-18-102.
(a)
Responsibility for the proper operation of the
fund
funds
is vested in the department.
(b)
The board shall adopt actuarial assumptions as it deems necessary and
prudent.
(c)
Reserved.
(d)
The board may adopt any rules and regulations that it finds necessary to
properly administer the
fund
funds.
(e)(d)
The board shall adopt rules and regulations to account for employer
contributions and other assets separately and by each pension plan
separately.
(f)(e)
The commissioner, as executive officer of the board, shall employ such personnel
as may be needed to carry out the provisions of this article and such personnel
shall be employees of the
Department
of Community Health
department.
The pro rata share of the costs of operating the
Department
of Community Health
department
in the manner prescribed by law shall be a part of the administrative costs of
the
fund
funds.
(g)(f)
The department may employ or contract for the services of actuaries and other
professionals as required to carry out the duties established by this
article.
(h)(g)
The department shall contract with the Division of Investment Services of the
Teachers Retirement System of Georgia and the Employees' Retirement System of
Georgia for any necessary services with respect to fund
investments.
(i)(h)
The department shall maintain all necessary records regarding the
fund
funds
in accordance with generally accepted accounting principles, as applicable to
the
fund
funds.
(j)(i)
The department shall collect all moneys due to the
fund
funds
and shall pay any administrative expenses necessary and appropriate for the
operation of the
fund
funds
from the
fund
funds.
(k)(j)
The department shall prepare an annual report of fund activities for the board,
the House Appropriations Committee, and the Senate Appropriations Committee.
Such reports shall include, but not be limited to, audited financial statements.
The reports shall contain the most recent information reasonably available to
the department reflecting the obligations of the
fund
funds,
earnings on investments, and such other information as the board deems necessary
and appropriate. This report is due September 30 and shall reflect activity on
a state fiscal year basis.
(l)(k)
Notwithstanding any other provision of law to the contrary, the department shall
be entitled to any information that it deems necessary and appropriate from a
retirement system in order that the provisions of Code Section 45-18-103 may be
carried out.
45-18-103.
(a)
The actuary employed or retained by the department shall provide technical
advice to the department and to the board regarding the operation of the
fund
funds.
(b)
Utilizing the actuarial assumptions most recently adopted by the board, the
actuary shall set annual actuarial valuations of normal cost, actuarial
liability, actuarial value of assets, and related actuarial present values for
the state plan for other post-employment benefits.
45-18-104.
(a)
Subject to the supervision of the board, the commissioner shall have control
over the
fund
funds
established by this chapter. The obligations provided for in this chapter and
all administrative expenses shall be paid from the
fund
funds.
The department may expend moneys from the
fund
funds
for any purpose authorized by this chapter.
(b)
Subject to the supervision of the board, the commissioner 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 commissioner 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
funds.
(c)
Except as otherwise provided in this chapter, no member of the board or employee
of the department shall have any personal interest in the gains or profits from
any investment made by the board or use the assets of the
fund
funds
in any manner, directly or indirectly, except to make such payments as may be
authorized by the board or by the commissioner as the executive officer of the
board in accordance with this article.
45-18-105.
(a)
The board shall annually determine the minimum annual required contributions
sufficient to maintain the
fund
funds
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
funds.
(b)
In addition to the employer contributions required to be made to the
fund
funds
for the health plan as determined from fiscal year to fiscal year under Part 6
of Article 17 of Chapter 2 of Title 20 and under Article 1 of this chapter, the
board may annually establish employer contribution rates in accordance with the
state plan for other post-employment benefits.
(c)
It shall be the responsibility of state agencies to make contributions to the
fund
funds,
subject to appropriations, in accordance with the employer contribution rate
established by the board.
(d)
It shall be the responsibility of all other employers to make contributions to
the
fund
funds
in accordance with the employer contribution rates established by the board in
addition to the employer contributions required to be made to the
fund
funds
for the health plan as determined from fiscal year to fiscal year under Part 6
of Article 17 of Chapter 2 of Title 20 and Article 1 of this
chapter."
SECTION
2.
All
laws and parts of laws in conflict with this Act are repealed.