CHAPTER 219

SB 83-FN – FINAL VERSION

01/18/12 0219s

11Apr2012… 1513h

17May2012… 2049h

06/06/12 2469EBA

2012 SESSION

11-0994

05/03

SENATE BILL 83-FN

AN ACT enabling municipalities and school districts to create other post-employment benefits (OPEB) trusts.

SPONSORS: Sen. Merrill, Dist 21; Rep. Watters, Straf 4; Rep. P. Schmidt, Straf 4; Rep. Pelletier, Straf 5; Rep. Andolina, Straf 6; Rep. D. Hooper, Straf 5

COMMITTEE: Public and Municipal Affairs

AMENDED ANALYSIS

This bill enables municipalities and school districts to create other post-employment benefits (OPEB) trusts provided that the actuarial liability for the benefit was created on or before January 1, 2012.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

01/18/12 0219s

11Apr2012… 1513h

17May2012… 2049h

06/06/12 2469EBA

11-0994

05/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT enabling municipalities and school districts to create other post-employment benefits (OPEB) trusts.

Be it Enacted by the Senate and House of Representatives in General Court convened:

219:1 New Section; Other Post-Employment Benefits Trusts. Amend RSA 31 by inserting after section 19-b the following new section:

31:19-c Authorization for Municipalities to Establish OPEB Trusts.

I. The legislative body of a municipality that created, on or before January 1, 2012, an actuarial liability to pay other post-employment benefits (OPEB) to employees or officers after their termination of service may establish an irrevocable trust to pay those benefits. In this section, the term “other post-employment benefits” means employee benefits other than pensions that are received after employment ends, and may include such medical, disability, or other health benefits, as are covered by Statement No. 45 of the Governmental Accounting Standards Board (GASB). The term “trust” means a trust qualified under GASB Statement No. 43.

II. Deposits to any fund under such a trust and any earnings on those deposits shall be irrevocable and shall be held in trust for the exclusive benefit of retirees and their beneficiaries in accordance with the terms of the plans or programs providing other post-employment benefits, except that funds governed by the trust may be withdrawn for other purposes only when an employer’s liability owed to former officers or employees for other post-employment benefits has been satisfied or otherwise eliminated pursuant to subparagraph V(b). The assets of any trust created pursuant to this section or in which a municipality participates pursuant to this section shall be exempt from taxation and execution, attachment, garnishment, or any other process. No public officer, employee, or agency shall divert, use, or authorize the use of such funds for any purpose other than as provided in law for other post-employment benefits covered by the trust and administrative expenses.

III. The trustees of any trust created pursuant to this section shall have the full power to invest, reinvest, and manage the assets of the trust. The trustees shall invest the assets of the 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. The trustees shall also diversify such investments so as to minimize the risk of large losses unless under the circumstances it is clearly prudent not to do so. The board of trustees may engage a trust administrator, investment consultants, or other qualified professionals to assist with management and investment of the funds of the trust and may pay for these services out of the funds of the trust.

IV. Trusts created by a municipality pursuant to this section shall by administered by the board of trustees established by the municipality pursuant to RSA 31:22. The accounts of the trustees shall be subject to the auditing and reporting requirements of RSA 31:33. Other provisions of RSA 31:19 through 31:38-a governing trusts shall also apply unless they are contrary to this section.

V. The municipality may withdraw money from the funds of a trust created pursuant to this section only:

(a) As needed to pay other post-employment benefits owed to former officers and employees; or

(b) When all other post-employment benefits liability owed to former officers or employees of the employing entity has been satisfied or otherwise defeased.

219:2 Trust Funds Created for the Purpose of Maintaining Health Insurance Funds; Reference Added. Amend RSA 198:20-c, III to read as follows:

III. A trust fund created under the provisions of this section that is established for the purpose of maintaining health insurance funds for the benefit of employees and retired employees of any school district, including an OPEB trust established pursuant to paragraph VII, shall be exempt from the provisions of paragraph II, and when so established, the school district may name its own trustees who may expend any funds in the trust for the payment of health claims or health insurance premiums for the benefit of any employees or retired employees of the school district. An annual accounting and report of the activities of the trust shall be presented to the school board of the district and published in the annual report.

219:3 New Paragraph; School Money; Trust Funds Created for Specific Purposes; OPEB Trusts. Amend RSA 198:20-c by inserting after paragraph VI the following new paragraph:

VII.(a) A school district that created, on or before January 1, 2012, an actuarial liability to pay other post-employment benefits (OPEB) to employees or officers after their termination of service may establish an irrevocable trust to pay those benefits. In this paragraph, the term “other post-employment benefits” means employee benefits other than pensions that are received after employment ends, and may include such medical, disability, or other health benefits, as are covered by Statement No. 45 of the Governmental Accounting Standards Board (GASB). The term “trust” means a trust qualified under GASB Statement No. 43.

(b) Deposits to any fund under such a trust and any earnings on those deposits shall be irrevocable and shall be held in trust for the exclusive benefit of retirees and their beneficiaries in accordance with the terms of the plans or programs providing other post-employment benefits, except that funds governed by the trust may be withdrawn for other purposes only when an employer’s liability owed to former officers or employees for other post-employment benefits has been satisfied or otherwise eliminated pursuant to subparagraph (d)(2). The assets of any trust created pursuant to this paragraph or in which a school district participates pursuant to this paragraph shall be exempt from taxation and execution, attachment, garnishment, or any other process. No public officer, employee, or agency shall divert, use, or authorize the use of such funds for any purpose other than as provided in law for other post-employment benefits covered by the trust and administrative expenses.

(c) The trustees of any trust created pursuant to this paragraph shall have the full power to invest, reinvest, and manage the assets of the trust. The trustees shall invest the assets of the 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. The trustees shall also diversify such investments so as to minimize the risk of large losses unless under the circumstances it is clearly prudent not to do so. The trustees may engage a trust administrator, investment consultants, or other qualified professionals to assist with management and investment of the funds of the trust and may pay for these services out of the funds of the trust.

(d) The school district may withdraw money from the funds of a trust created pursuant to this paragraph only:

(1) As needed to pay other post-employment benefits owed to former officers and employees; or

(2) When all other post-employment benefits liability owed to former officers or employees of the employing entity has been satisfied or otherwise defeased.

219:4 Effective Date. This act shall take effect July 1, 2012.

Approved: June 13, 2012

Effective Date: July 1, 2012