ARTICLE 21
RELATING TO
RETIREE HEALTH CARE TRUST FUND
SECTION
1. Sections 36-12.1-9, 36-12.1-10, 36-12.1-11, 36-12.1-12, 36-12.1-13,
36-12.1-14,
36-12.1-15, 36-12.1-16, 36-12.1-17, 36-12.1-18,
36-12.1-19, 36-12.1-20, 36-12.1-21, 36-12.1-22,
36-12.1-23, 36-12.1-24, 36-12.1-25, 36-12.1-26,
36-12.1-27 and 36-12.1-28 of the General Laws
in Chapter 36-12.1 entitled “Retiree Health Care Trust
Fund” are hereby amended to read as
follows:
36-12.1-9.
Duties of the OPEB board. -- The OPEB Board shall be
responsible for the
administration and operation of the OPEB System, determination of
the amount of annual
contributions, and oversight of OPEB Benefit payments to Retired
Employees and their
dependents. The OPEB Board shall have the power to collect
contributions from the State of
right to research, question, investigate and make
recommendation of findings to the department of
administration to interpret relevant plan documents, to resolve
inconsistencies and ambiguities
contained therein, to decide any claims for benefits and to
resolve disputes.
36-12.1-10. Votes
of board – record of proceedings. -- Each member of the board shall
be entitled to one vote in the board and a majority of
all the votes of the entire board shall be
necessary for a decision of the board. The board shall keep a
record of all the proceedings which
shall be open to public inspection.
36-12.1-11.
Reimbursement of board members. -- Members of the
board shall serve
without compensation but shall be reimbursed for any
necessary expenditures and no employee
shall suffer any loss of salary or wages through serving
upon the board.
36-12.1-12.
Annual report and statement. -- The OPEB Board
shall submit to the
governor for transmittal to the general assembly, on or before
the first day of January October in
each year beginning in 2011, an annual report showing the
financial transactions of the system for
the fiscal year of the state next preceding said date.
The report shall contain, among other things,
a statement of plan net assets, a statement of changes
in plan net assets, a valuation balance sheet
as prepared by the actuary on a schedule in accordance
with generally accepted accounting
principles, and other statistical data as are deemed necessary
for a proper interpretation of the
condition of the system and the results of its operations. The
report shall also embody such other
data as may be of use in the advancement of knowledge
concerning state employee OPEB and
any recommendations of the board for changes in the laws
pertaining to the system. The OPEB
Board shall cause to be published for distribution
among the members of the system a financial
statement summarizing the results of operations for the fiscal
year. All financial statements issued
by the OPEB Board shall conform to the requirements of
GAAP.
36-12.1-13.
Executive officers and secretary. -- (a) The Board
shall elect a Chairperson
and Secretary. Moreover, the State Controller shall serve
as the Treasurer.
(b) Any negotiated
agreement entered into after July 1, 2010, between any state or
municipal agency or department and an employee or employees,
whose conditions are contrary to
the general laws or the rules, regulations, and policies
as adopted and promulgated by the OPEB
Board shall be null and void unless and until
approved by formal action of the OPEB Board for
good cause shown.
36-12.1-14.
Accounts and statistical records – clerical and professional assistance –
disbursements. -- The
State Controller, under the direction and supervision of the OPEB Board,
shall be charged with the establishment and maintenance of
such accounts and statistical records
as the OPEB Board may require and he or she shall employ
such clerical assistance as shall be
necessary to carry out properly the provisions of chapters 12,
12.1 and 12.2 of this title. The
OPEB Board shall secure the services of an actuary who
shall be the actuarial advisor of the
board and who shall make the actuarial computations and
valuations required by chapters 12, 12.1
and 12.2. The state controller is hereby authorized and
directed to draw his or her orders upon the
general treasurer for the payment of such sum or sums as may
from time to time be necessary,
upon receipt by him or her of vouchers for payment of
liabilities.
36-12.1-15.
Payment of administrative expenses of the OPEB board and maintaining
the OPEB system – restricted receipts account. -- (a) There is hereby created within the
general fund a restricted receipt account entitled the “OPEB
system restricted receipt account”,
the proceeds of which shall be used solely to pay the
expenses of the OPEB Board, the cost of
maintaining the OPEB System, and the costs of administering the
OPEB System.
(b) For fiscal years
2011 through 2014, the State Controller is authorized to disburse from
the fund established under subsection (a) above the actual
cost of administration of the fund the
cost of the actuarial valuation, and the allocated share
of investment manager fees incurred by the
State Investment Commission. In
fiscal years, 2015 and thereafter, there shall be transferred to
this restricted receipt account twenty five (25) basis
points or two hundred thousand dollars
($200,000), whichever is greater, where one hundred (100.0) basis points equals one
percent
(1.0%), of the average total investments before
lending activities as reported in the annual report
of the auditor general for the next preceding five
fiscal years. Any non-encumbered funds on June
30 of any fiscal year shall be credited to the OPEB
System.
36-12.1-16.
Collection of actuarial and experience data. -- The General Treasurer
and
the state Retirement System, shall collect and keep in
convenient form such data as shall be
necessary for the preparation of the mortality and service
tables and for the compilation of such
other information as shall be required for the actuarial
valuation of the assets and liabilities of the
OPEB System and to comply with the
requirements of GASB 43 and 45.
36-12.1-17.
Actuarial investigations authorized by board. --
Immediately after his or
her selection, the actuary shall make such investigation
of the mortality, service, and
compensation experience of the members as the OPEB Board shall
authorize for the purpose of
determining the proper tables to be prepared and submitted to the
OPEB Board for adoption.
36-12.1-18.
Periodic actuarial investigations and valuations. --
Every two year years
beginning with fiscal year 2012 on a schedule in accordance
with generally accepted accounting
principles, the actuary shall make an actuarial investigation
into the mortality, service, and
compensation experience of the members and beneficiaries of the
OPEB System, and shall make
a valuation of the assets and liabilities of the
system, and, taking into account the result of the
investigation and valuation, the OPEB Board shall:
(1) Adopt for the OPEB
System, such mortality, service, and other tables as shall be
deemed necessary in the OPEB System; and
(2) Certify the levels
of contribution payable by the state of
provisions of chapters 12, 12.1, and 12.2 of this title.
(3) Certify the levels
of contribution payable by the Board of Governors for Higher
Education to carry out the
provisions of chapter 17.1 of title 16.
On the basis of such
tables as the OPEB Board shall adopt, the actuary shall make a
valuation of the liabilities of the funds of the system created
by this chapter and the investment
advisor or investment manager appointed by the OPEB Board
shall make a valuation of the assets
of the OPEB System.
36-12.1-19.
State contributions. -- (a) The State of Rhode
Island shall make its
contribution for the maintenance of the system, including the
proper and timely payment of
benefits, by annually appropriating an amount equal to a
percentage of the total compensation
paid to the active membership and teacher payroll base.
The percentage shall be computed by the
actuary employed by the OPEB Board and shall be certified by
the OPEB Board to the director of
administration on or before the fifteenth day of October in each
year, beginning in 2011. In
arriving at the yearly employer contribution the actuary shall
determine the value of:
(1) The contributions
made by the members;
(2) Income on
investments; and
(3) Other income of the
system.
(b) The Actuary shall
thereupon compute the yearly employer contribution that will:
(1) Pay the actuarial
estimate of the normal cost for the next succeeding fiscal year;
(2) Amortize the
unfunded liability of the system as of June 30, 2006 utilizing a time
period not to exceed thirty (30) years.
(c) The State of
the contribution for state employees, state police,
legislators, and judges on a payroll frequency
basis, and for teachers in a manner consistent with sound
accounting and actuarial practice.
(d) The Board of
Governors for Higher Education shall remit to the general treasurer that
employer’s share of the contribution for its non-classified employees,
and those of the University
of
§16-17.1-1 et seq., and in a manner consistent with
sound accounting and actuarial practice.
36-12.1-20.
Establishment of OPEB trust funds. -- The OPEB
Board shall establish
one or more trust funds and/or sub trusts to hold the
assets of the OPEB System, to be known as
the
System shall be in the name of the Rhode Island OPEB
System Trust. The OPEB Board, or its
delegate is authorized to execute one or more trust
instruments to effectuate the purposes of this
section. However, such trust instruments shall require that:
a) all funds held by such trusts shall
be used solely to pay benefits pursuant to the OPEB
System, and reasonable and legitimate
administrative expenses associated therewith; b) no asset of the
OPEB System or contribution
made by the State of
Board has certified all liabilities of the System have
been satisfied; and c) at no time shall the
assets of the Rhode Island OPEB System Trust shall be
subject to the claims of the creditors of
the State of
36-12.1-21.
Custody and investment of funds. -- (a) All money immediately required
for the payment of OPEB Benefits shall be invested only
in accordance with the written
objectives and guidelines established by the state investment
commission pursuant to the
provisions of chapter 10 of title 35 and other applicable law.
(b) All money not
immediately required for the payment of OPEB Benefits shall be
invested in accordance with the provisions of chapter 10 of
title 35 and other applicable law and
shall be held in a custodial or trust account in accordance
with § 36-12.1-5. The trust and
custodial account established under this section shall be
maintained pursuant to written
documents which expressly provide that it shall be impossible
at any time prior to the satisfaction
of all liabilities with respect to employees and their
beneficiaries for any part of the corpus or
income to be used for or diverted to purposes other than the
payment of OPEB Benefits to
employees and their beneficiaries (except as otherwise
permitted by § 36-12.1).
36-12.1-22.
Disposition of investment earnings. -- The OPEB
Board shall credit all
earned investment income from interest and dividends on
investments and bank deposits during
any fiscal year to the Rhode Island OPEB System Trust.
36-12.1-23. Improper interest in investments of board. -- Except
as herein provided,
no member of the OPEB Board and no employee of the OPEB
Board shall have any interest,
direct or indirect, in the gains or profits of any
investment made by the OPEB Board, nor as such
directly or indirectly receive any pay or emolument for his or
her services. No member of the
OPEB Board or employee of the OPEB Board shall,
directly or indirectly, for himself or herself
or as an agent, in any manner use the gains or profits,
except to make such current and necessary
payments as are authorized by the OPEB Board; nor shall any
member or employee of the OPEB
Board become an endorser or surety or become in any
manner an obligor for money loaned or
borrowed from the OPEB Board. No member of the OPEB Board
shall permit the OPEB System
to engage in a transaction that constitutes a sale or
exchange, or leasing, of any property between
the OPEB System and a party in interest; a lending of
money or other extension of credit between
the OPEB System and a party in interest; furnishing of
goods, services, or facilities between the
OPEB System and a party in interest; transfer to, or
use by or for the benefit of, a party in interest,
of any assets of the OPEB System.
36-12.1-24.
Payment of OPEB benefits. -- All OPEB Benefits
shall be paid from the
Rhode Island OPEB System Trust, subject to the
oversight and approval of the OPEB Board.
36-12.1-25.
Annual audits. -- The auditor general shall
conduct upon the request of the
OPEB Board a separate annual performance audit of the
OPEB System which shall include a
report on the actuarial valuation of the assets and
liabilities of the OPEB System. The auditor
general may examine all records, files, and other documents,
and evaluate all policies and
procedures for purposes of conducting the audit. The
aforementioned performance audit shall be
in addition to the annual audit conducted by the auditor
general of the financial statements of the
OPEB System. A copy of the report shall be given to the governor
and the OPEB Board.
36-12.1-26. Internal revenue code qualification. -- (a) Intent. It is intended
that the
OPEB System and the Rhode Island OPEB System Trust
satisfy the requirements of §115 or
§501(c)(9) of the Internal
Revenue Code of 1986 as amended from time to time, 26 U.S.C. §§
115, 501(c)(9) -
,(hereinafter referred to as the "Code"), in form and operation, to
the extent that
those requirements apply to a governmental use trust under
§115 or a voluntary employee benefit
association under §501(c)(9) of the Code. To this end, the following
provisions shall be
applicable, administered, and interpreted in a manner consistent
with maintaining the tax
qualification of the OPEB System, and shall supersede any
conflicting provisions of chapters 12,
12.1 and 12.2 of this title,
[of chapter 16 of title 16, or of chapter 21 of title 45].
(b) Exclusive benefit.
All funds of the OPEB System shall be held in one or more trusts
as provided in §36-12.1-21 or if permitted, in
accordance with § 401(f) of the code, in one or
more custodial accounts treated as trusts or a combination
thereof. Under any trust or custodial
account, it shall be impossible at any time prior to the
satisfaction of all liabilities with respect to
employees and their beneficiaries, for any part of the corpus
or income to be used for, or diverted
to, purposes other than the payment of OPEB allowances
and other post employment benefits to
Retired Employees and their
beneficiaries.
36-12.1-27.
Severability. -- (a) If any provision of this
chapter 36-12.1 of this title, any
rule, or regulation made thereunder,
or the application thereof to any person or circumstance is
held invalid by a court of competent jurisdiction the
remainder of this chapter, rules, or
regulations and the application of those provisions to other
persons or circumstances shall not be
affected thereby.
(b) The invalidity of
any section or sections or parts of any section or sections of those
chapters shall not affect the validity of the remainder of
this chapter.
36-12.1-28.
Implementation. -- Notwithstanding any law to the
contrary, the provisions
of Chapter 36-12.1 entitled “Retiree Health Care Trust
Fund” shall be implemented by July 1,
2010.
SECTION 2. Title 36 of the General Laws entitled "Public
Officers and Employees" is
hereby amended by adding thereto the following chapter:
CHAPTER
12.2
MEDICARE
ENROLLMENT
36-12.2-1.
Medicare enrollment. – As a condition of
receiving or continuing to receive
access to post-employment benefits offered by the state,
anyone entitled to this benefit shall
enroll in Medicare as soon as he or she is eligible,
notwithstanding the provisions of any other
general law or public law to the contrary.
SECTION 3. This Article shall take effect upon passage.