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
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
to interpret relevant plan documents, to resolve
inconsistencies and ambiguities contained therein, to decide any claims for benefits and to
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.
Periodic actuarial investigations and valuations. --
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
§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
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
(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,
SECTION 2. Title 36 of the General Laws entitled "Public Officers and Employees" is
hereby amended by adding thereto the following chapter:
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.