MMA asks Public Service Committee to support bill to add municipal voices to Retiree Trust Fund Board

The Honorable Michael Brady, Senate Chair
The Honorable Jerald Parisella, House Chair
Joint Committee on Public Service
State House, Boston

Dear Chair Brady, Chair Parisella, and Members of the Committee,

On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association is writing to submit testimony in support of H. 2347, An Act relative to the State Retiree Benefits Trust Fund (SRBTF) Board of Directors, filed by Rep. Alice Peisch. We appreciate the Committee’s consideration of this straight-forward bill to add a municipal voice to the SRBTF Board of Directors.

The seven-member SRBTF Board was established by G.L. Chapter 32A, Section 24 and is responsible for the administration and investment oversight of the Commonwealth’s other post-employment benefits (OPEB) liability fund. The Board serves the Commonwealth, municipalities and other governmental entities that invest funds for retiree health insurance costs with the Pension Reserves Investment Management (PRIM) Board. The current SRBTF Board of Directors includes:

• The Secretary of Administration and Finance or a designee
• The Executive Director of the Group Insurance Commission or a designee
• The Executive Director of the Public Employee Administration Commission (PERAC) or a designee
• The State Treasurer or a designee
• The Comptroller or a designee
• An appointee of the Governor, and
• An appointee of the State Treasurer

The unfunded municipal OPEB liability is twice as large as the state’s. Municipalities are taking steps to plan for and fund post-employment benefits for thousands of public employees in retirement. Currently, 68 municipalities invest their OPEB trust funds in the SRBTF, with millions of local taxpayer dollars invested. As such, municipalities should have a voice on the SRBTF Board in order to offer input into administrative and investment oversight decisions. H. 2347 would add two municipal seats – one for a municipal representative submitted by the Massachusetts Municipal Association and one for a municipal representative submitted by the Massachusetts Association of School Committees.

If you have any questions or need additional information, please do not hesitate to contact me or Senior Legislative Analyst Lisa Adams at 617-426-7272 at any time.

Thank you very much for your consideration of this important legislation.

Sincerely,

Geoffrey C. Beckwith
Executive Director & CEO