MMA urges Public Service Committee to support bill to add municipal voices to State Retiree Benefits Trust Fund Board

The Honorable Kenneth I. Gordon, House Chair
The Honorable Michael D. Brady, Senate Chair
Joint Committee on Public Service
State House, Boston

Delivered electronically

Dear Chair Gordon, Chair Brady, and Distinguished Members of the Committee,

On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association is writing testimony in strong support of H. 2629, An Act Relative to the State Retiree Benefits Trust Fund Board of Directors, filed by Leader Alice Peisch. We appreciate the Committee’s consideration of this straight-forward bill to add necessary municipal voices to the State Retiree Benefits Trust Fund (SRBTF) Board.

The seven-member SRBTF Board was established by M.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

Despite the challenges of a pandemic and significant inflationary pressures, municipalities are still taking necessary steps to plan for and fund post-employment benefits for thousands of public employees in retirement. However, the unfunded municipal OPEB liability is twice as large as the Commonwealth’s. Currently, many municipalities utilize the SRBTF for their OPEB trust funds, with millions of local taxpayer dollars invested. As such, it is essential for municipalities to have a voice on the SRBTF Board to offer input into essential administrative and investment oversight decisions. H. 2629 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.

We greatly appreciate your consideration of this bill and respectfully urge you to report H. 2629 out of Committee with a favorable report. If you have any questions, please do not hesitate to have your office contact me or MMA Senior Executive and Legislative Director Dave Koffman at dkoffman@mma.org or 617-426-7272, ext. 122, at any time.

Thank you for your partnership and dedicated support of cities and towns across the Commonwealth.

Sincerely,

Geoffrey C. Beckwith
MMA Executive Director & CEO