HB 514 – AS AMENDED BY THE HOUSE
11Mar2009… 0512h
2009 SESSION
05/03
HOUSE BILL 514
AN ACT establishing a New Hampshire other post-employment benefits (OPEB) trust and enabling political subdivisions to create or participate in OPEB trusts.
COMMITTEE: Executive Departments and Administration
This bill establishes the New Hampshire other post-employment benefits (OPEB) trust, an irrevocable trust to fund post-employment benefits other than pensions. The bill enables political subdivisions to create or participate in similar OPEB trusts.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
11Mar2009… 0512h
09-0795
05/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nine
AN ACT establishing a New Hampshire other post-employment benefits (OPEB) trust and enabling political subdivisions to create or participate in OPEB trusts.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Statement of Purpose.
I. The Governmental Accounting Standards Board (GASB) has issued Statements 43 and 45, which set forth standards on accounting and reporting for post-employment benefits other than pensions by governments;
II. The new standards will require the state and other political subdivisions to account for such post-employment benefits on an accrual basis during an employee’s career rather than on a pay-as-you-go basis during an employee’s retirement; and
III. The general court has determined that it would be advisable to clearly authorize the state and political subdivisions of the state to create one or more irrevocable trusts to facilitate funding those benefits in advance to address and ultimately offset the accrued liabilities for such benefits.
2 New Chapter; New Hampshire Other Post-Employment Benefits Trust. Amend RSA by inserting after chapter 101-B the following new chapter:
CHAPTER 101-C
NEW HAMPSHIRE OTHER POST-EMPLOYMENT BENEFITS TRUST
101-C:1 New Hampshire OPEB Board Established; Authorization to Establish OPEB Trust.
I. There is hereby established the New Hampshire other post-employment benefits (OPEB) fund board.
(a) The board shall consist of 5 members:
(1) The state treasurer.
(2) The commissioner of the department of administrative services.
(3) One individual appointed by the governor with the approval of the executive council.
(4) One member of the house of representatives appointed by the speaker of the house of representatives.
(5) One senate member appointed by the president of the senate.
(b) Members appointed pursuant to subparagraphs (a)(3)-(5) shall be appointed for a term which ends on January 1 of each odd-numbered year. The members of the board shall serve as the trustees of any trust created pursuant to this section.
II. In this chapter, ‘OPEB trust’ means any trust or equivalent arrangement as defined in RSA 101-C:3.
III. The board, with the approval of governor and council, shall have the power to create one or more OPEB trusts under the laws of this or any other state to receive funds and to pay or provide for post-employment benefits for current and former employees of the state and participating political subdivisions, if any, and their beneficiaries.
101-C:2 Authorization for Political Subdivisions to Establish OPEB Trusts.
I. The legislative body of a political subdivision shall have the power to create one or more OPEB trusts under the laws of this or any other state to receive funds and to pay or provide for post-employment benefits for current and former employees of the political subdivision and other participating political subdivisions, if any, and their beneficiaries.
II. Any OPEB trust created by a political subdivision pursuant to this section for its own purposes shall have a board of trustees composed of at least 3 members who shall include the chief financial officer of the political subdivision, the treasurer of the political subdivision, and at least one other person who shall be a citizen of the state with proven integrity, business ability, and demonstrated experience in cash management and investment of funds. If the political subdivision does not have a chief financial officer, then that position may be filled by the chief administrative officer of the political subdivision, or by a citizen who meets the qualifications set forth in this paragraph. If the political subdivision does not have a treasurer, then that position may be filled by the chairman of the political subdivision’s governing body or by a citizen who meets the qualifications set forth in this paragraph, as determined by the political subdivision. The citizen member shall be appointed initially by the governing body of the political subdivision for a term of 2 years’ and if more than one citizen is appointed to serve on any such board, then the governing body may appoint those citizens for staggered terms of one and 2 years. Subsequent appointments shall be for 2-year terms or to fill the balance of any unexpired term. The board of trustees shall annually elect one of its members as chairman and another as vice-chairman. The board shall meet at least 4 times a year, and a majority of the members shall constitute a quorum.
III. If the legislative body of a political subdivision decides to participate in a multi-employer OPEB trust established by another entity to pay post-employment benefits, except when using the New Hampshire OPEB trust fund established in RSA 101-C:1, such trust shall have a board of trustees of no less than 5 members all of whom shall have proven integrity, business ability, and demonstrated experience in cash management and investment of funds and a majority of the trustees shall represent participating political subdivisions.
101-C:3 Characteristics of OPEB Trusts.
I. An OPEB trust shall be an independent trust fund for the exclusive benefit of retirees and their beneficiaries for post-employment benefits, and shall be segregated from all other funds of the state or the political subdivision. Funds deposited in any OPEB Trust and any earnings on those deposits shall be irrevocable. OPEB trust fund shall be exempt from taxation and execution, attachment, garnishment, or any other process. Neither the general court nor the state, the legislative body of a political subdivision or the political subdivision itself, any public officer, employee, agency, or political subdivision shall divert, use, or authorize the use of OPEB trust funds for any purpose other than to pay or provide for post-employment benefits as provided in this chapter and the administrative costs and expenses relating to trust. An OPEB trust may provide that its assets may be distributed to the state or the participating political subdivisions, as the case may be, only to the extent that the OPEB trust’s obligations have been fulfilled or otherwise provided for.
II. The power of the trustees of an OPEB trust to invest and reinvest the assets of an OPEB trust and types of investments shall not be limited by RSA 6:8. Such trustees shall invest, reinvest, and manage the assets of an OPEB trust with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. Such trustees shall diversify such investments so as to minimize the risk of loss and to maximize the rate of return unless under the circumstances it is clearly prudent not to do so. Such trustees may engage a trust administrator, investment consultants, and other qualified professionals to assist with the administration, management, and investment of the OPEB trust fund and may pay for these services out of the OPEB trust fund. OPEB trustees shall discharge their duties with respect to the OPEB trust solely in the interest of retirees and their beneficiaries and for the exclusive purpose of providing post-employment benefits to retirees and their beneficiaries and paying appropriate and reasonable expenses of administering the OPEB Trust.
III. OPEB trusts may establish or provide for the establishment of separate rights, powers and duties with respect to the funds contributed by the state or political subdivisions and the obligations of the OPEB trust with respect to the post-employment benefits to their current and former employees or their beneficiaries.
IV. OPEB trusts shall be subject to the provisions of RSA 91-A.
V. OPEB trusts shall annually complete and make available, not later than 120 days after the close of each fiscal year, a comprehensive annual financial report concerning the preceding fiscal year in a manner consistent with generally accepted accounting principles. The comprehensive annual financial report shall be audited annually in accordance with generally accepted governmental auditing standards by a qualified independent auditor selected by the trustees.
VI. OPEB trusts may have additional terms and conditions that are not inconsistent with the provisions of this chapter.
3 Effective Date. This act shall take effect July 1, 2009.