Add S97-llll, St Fin L; add S169, Civ Serv L; add S6-t, amd S6-p, Gen Muni L
 
Authorizes the state and certain local governments to establish other post employment benefits (OPEB) trusts; establishes the other post employment benefits (OPEB) investment fund.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A5525
SPONSOR: Abbate
 
TITLE OF BILL: An act to amend the state finance law, the civil
service law and the general municipal law, in relation to authorizing
the state and certain local governments to establish other post employ-
ment benefits (OPEB) trusts and establishing the other post employment
benefits (OPEB) investment fund
 
PURPOSE:
This legislative proposal would provide express statutory authority for
the creation of OPEB trusts for New York State and its local governments
to provide a mechanism to accumulate funds for OPEB costs, should the
State or local government decide to fund these liabilities.
 
SUMMARY OF PROVISIONS:
Section one of the bill amends the State Finance Law by adding a new
section 97-1111 to establish an OPEB investment fund in the sole custody
of the State Comptroller for the investment of OPEB assets of the State
and participating eligible local governments.
Section two of the bill amends the Civil Service Law by adding a new
section 169 to authorize the establishment of a State OPEB trust in the
custody of the president of the Civil Service Commission. "Other post
employment benefits" would be defined to mean benefits, except pensions
or other benefits funded through a public retirement system. provided
or to be provided by the State to its officers, employees, or their
families or beneficiaries, after service to the government ends, includ-
ing health care benefits. The President of the Civil Service Commission
would be declared to be the trustee.
Section three of the bill amends the General Municipal Law by adding a
new section 6-t authorizing governing boards of local governments, by
resolution. to establish trusts for the purpose of accumulating assets
to fund "other post-employment benefit. The governing board would be
declared to be the trustee, but would be authorized by resolution, to
designate the chief fiscal officer of the local government, with his or
her consent as trustee.
The trusts would be irrevocable before all liabilities for other post
employment benefits have been satisfied and would be dedicated solely
to, and used solely for, providing such benefits and paying appropriate
and reasonable administrative expenses. To the extent allowed by law,
trust assets would not be subject to any claim of creditors of the local
government Bill section three authorizes investment of trust assets in
the "Other Post-Employment Benefits Investment Fund" in the custody of
the State Comptroller, which would be established in section one of the
bill.
The trustee would be required to prepare or cause to be prepared an
annual financial report of assets, liabilities, revenues and expenses of
the trust, and cause the activities of the trust to be audited, either
separately or as part of the overall audit of the reporting entity. The
State Comptroller, in his or her discretion, would be given express
authority to promulgate regulations for the proper operation and manage-
ment of trusts established pursuant to new General Municipal Law § 6-t.
Finally, the bill would expressly make clear that it is intended only to
provide a mechanism to accumulate assets should a local government
choose to fund its liability for other post employment benefits. It
would state that nothing in new section 6-t shall be construed or inter-
preted to (1) create any obligation in, impose any obligation on, or
alter any obligation of any local government to provide other post
employment benefits, (2) limit or restrict the authority of a local
government to modify or eliminate other post employment benefits, (3)
assure or deny other post employment benefits, or (4) require any local
government to fund its liability for other post employment benefits.
Section four of this bill amends Subdivision 9 of Section 6-p of the
General Municipal Law to allow school districts to transfer excess
reserve balances to an "other post-employment benefits" (OPEB) trust
once it is established.
Section five of the bill would ensure the validity of the establishment
and implementation of the New York City Retiree Health Benefit Trust,
established June 12, 2006 by the City of New York as Grantor, and make
clear that neither the operation nor any amendment of such trust would
be subject to General Municipal Law § 6-t. It would further expressly
ratify the establishment of such New York City's trust and its operation
in accordance with its terms.
Section six of the bill provides for an immediate effective date.
 
PRIOR LEGISLATIVE HISTORY:
S. 7534 (Passed Senate) and A. 11038 of 2009-2010
S.4279 and A.3636 of 2013-2014
 
JUSTIFICATION:
In June 2004, the Governmental Accounting Standards Board, a national
body that sets the standards for governmental accounting and reporting,
issued a statement known as GASB 45, which established accounting and
reporting standards for "other post-employment benefits" (OPEB) offered
by state and local governments. OPEB are employee benefits except
pensions or other benefits funded through a public retirement system
that are received after service has ended. Generally, GASB 45 applies to
all public entities (including state governments; county, city, town and
village governments; and school districts) that follow GAAP (Generally
Accepted Accounting Principles) in filing their annual financial state-
ments and offer other post-employment benefits. In New York State, about
one-quarter of local governments and most school districts are required
to comply. GASB 45 requires covered state and local governments nation-
wide to report liabilities for OPEB similarly to the way they report
pension liabilities. While GASB 45 does not require governments to fund
these benefits, they must begin to report them in their financial state-
ments.
GASB is in the process of finalizing additional accounting and financial
reporting requirements for OPEB as well as criteria for OPEB trusts that
are scheduled to take effect at the end of 2015. This proposal will
help public employers comply with GASB' s new rules.
More than one million New Yorkers rely on post employment benefits for
their health care. Over time, the "pay-as-you-go" method currently
followed by most public entities will become increasingly expensive.
The State Comptroller, as the chief fiscal officer for the State. has
determined that the fiscally responsible and prudent approach is to
start preparing for the future in order to protect these health care
benefits for New Yorkers. Governments should develop plans to address
these costs, and a government which puts aside funds in a trust estab-
lished for this purpose can substantially cut its long-term OPEB liabil-
ities.
Pursuant to the provisions of the proposal, local government trustees
are authorized to invest OPEB assets in the State-administered invest-
ment fund. The bill makes clear that it establishes no requirement to
fund OPEB liabilities. It merely creates the framework for the creation,
operation and management of OPEB trusts for those governments choosing
to do so. Likewise, the bill makes clear that these new provisions would
not create, modify, limit or restrict any obligation to provide OPEB.
Although GASB does not require the funding of OPEB liabilities, GASB has
indicated that, in order to be considered funded in accordance with
GASB, the employer must transfer assets to a "qualifying trust or equiv-
alent arrangement" in which OPEB assets are held in trust for the exclu-
sive benefit of plan members and their beneficiaries in accordance with
the terms of the OPEB plan. To the extent allowed by law, OPEB plan
assets must be legally protected from creditors of the employer. The
construct of the trusts authorized by this bill is intended to be
consistent with the "staff guidance" provided by GASB in this regard.
The local governing board (or by delegation its chief fiscal officer)
would be the trustee of any locally-established OPEB trust. The Commis-
sioner of Civil Service would be the sole trustee of the State's OPEB
trust. who would be authorized to manage the trust and invest assets in
the OPEB investment fund. The State Comptroller would be the sole custo-
dian of the OPEB investment fund and would manage the assets of the
fund; OSC would be authorized to contract for administrative services of
the fund.
Contributions into OPEB trusts would be made at the option of the State
and local employers and would be irrevocable before all OPEB liabilities
have been satisfied; assets of such trusts could be used only for OPEB
liabilities and proper expenses of the trust. and, to the extent allowed
by law, would be protected from the creditors of the sponsoring govern-
ments. The trusts may be terminated only when all OPEB liabilities have
been satisfied and there is no present or future obligation, contingent
or otherwise, to provide OPEB.
The State-administered OPEB investment fund would be separate and
distinct from the Common Retirement Fund. Assets of the fund would be
invested pursuant to prudent person investment guidelines, and investors
would be provided with several investment options. Separate accounts
would be established for the State and any participating local govern-
ments, but amounts would be commingled for investment purposes. Actuari-
al assumptions and amounts of contributions would be determined by indi-
vidual participating local governments, and withdrawals would be
scheduled,by participating local governments. Administrative costs of
the investment fund We charged against the fund and supported by an
administrative fee charged to participants.
New York City, has already begun funding its OPEB liabilities and the
bill "grandfathers in" the New York City Retiree Health Benefit Trust,
established June 12, 2006. The City and the State would be granted
broader investment authority consistent with their management of their
respective pension funds.
The Comptroller urges passage of this legislation.
 
BUDGET IMPLICATIONS:
This bill has no significant fiscal impact.
 
EFFECTIVE DATE:
This bill would take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
5525
2015-2016 Regular Sessions
IN ASSEMBLY
February 26, 2015
___________
Introduced by M. of A. ABBATE -- (at request of the State Comptroller)
-- read once and referred to the Committee on Governmental Employees
AN ACT to amend the state finance law, the civil service law and the
general municipal law, in relation to authorizing the state and
certain local governments to establish other post employment benefits
(OPEB) trusts and establishing the other post employment benefits
(OPEB) investment fund
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The state finance law is amended by adding a new section
2 97-llll to read as follows:
3 § 97-llll. Other post employment benefits ("OPEB") investment fund. 1.
4 There is hereby established in the sole custody of the state comptroller
5 a special investment fund to be known as the other post employment bene-
6 fits investment fund.
7 2. For purposes of this section:
8 (a) "Fund" shall mean the other post employment benefits investment
9 fund created by this section;
10 (b) "Comptroller" shall mean the state comptroller;
11 (c) "State" shall mean the state of New York;
12 (d) "Local government" shall have the same meaning as set forth in
13 paragraph (a) of subdivision one of section six-t of the general munici-
14 pal law;
15 (e) "Other public corporation" shall mean any public corporation other
16 than a local government that is authorized to establish an irrevocable
17 trust; and
18 (f) "Participating trustee" shall mean the trustee for the state, and
19 the trustee for any local government or any other public corporation
20 that invests moneys in the fund pursuant to this section.
21 3. The fund shall consist of all moneys paid to the comptroller by the
22 state pursuant to section one hundred sixty-nine of the civil service
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03005-02-5
A. 5525 2
1 law, by local governments pursuant to section six-t of the general
2 municipal law and by any other public corporation that establishes an
3 other post employment benefits trust. The moneys in the fund shall not
4 be within the state treasury, and shall not be deemed to be state funds
5 for any purpose. Notwithstanding the provisions of section four of this
6 chapter, or any other provision of law, moneys may be disbursed from the
7 fund for any authorized purpose without appropriation.
8 4. Notwithstanding any other provision of law, the moneys in the fund
9 may be invested by the comptroller in accordance with the investment
10 options selected pursuant to the written investment policy developed by
11 each participating trustee in any investments in compliance with the
12 following standards:
13 (a) the comptroller shall exercise such judgment, care, skill,
14 prudence and diligence under the circumstances then prevailing that a
15 knowledgeable and prudent investor acting in a like capacity and famil-
16 iar with such matters would use in the conduct of an enterprise of a
17 like character and with like aims; and
18 (b) the comptroller shall prudently diversify the investment of the
19 fund's portfolio among investment types and within investment types in a
20 manner consistent with the foregoing unless under the circumstances it
21 is clearly prudent not to do so.
22 5. The comptroller shall maintain a separate account for each partic-
23 ipating trustee. However, moneys of participating trustees may be
24 commingled for the comptroller's investment purposes, provided that the
25 money of each participating trustee shall be separately accounted for.
26 6. The comptroller shall, within his or her discretion, establish
27 sub-funds and invest such sub-funds separately to provide participating
28 trustees with a number of options to meet various investment objectives.
29 Such options shall reflect varying levels of risk for such investment.
30 Investment earnings shall be prorated among participating trustees in
31 each sub-fund in proportion to the amount of investments held by partic-
32 ipating trustees.
33 7. The comptroller may hire such officers and employees and contract
34 with such advisors and agents as the comptroller deems necessary for the
35 management and investment of moneys in the fund. Any officers and
36 employees employed by the comptroller for the management and investment
37 of moneys in the fund shall be officers and employees of the comp-
38 troller, provided, however, that any costs associated with the employ-
39 ment of such officers and employees and any advisors or agents shall be
40 charged against the fund. Such charges shall be included in the adminis-
41 trative fee charged to participating trustees in the fund.
42 8. The comptroller shall enter into an agreement with each participat-
43 ing trustee. Each such agreement shall include, but not be limited to,
44 the following terms:
45 (a) a statement that the comptroller shall be under no obligation to
46 review or verify the estimated costs of benefits to be funded with money
47 contributed to the fund;
48 (b) a provision that the participating trustee shall determine the
49 amounts of money to be contributed to the fund and designate the sub-
50 funds in which the moneys shall be invested. The comptroller shall
51 accept such amounts and his or her only responsibility shall be to
52 invest the moneys in the sub-funds directed by the participating trustee
53 and to report the contributions, withdrawals, balances and earnings, to
54 the participating trustee on a regular basis to be set forth in the
55 agreement, but no less frequently than annually;
A. 5525 3
1 (c) a statement that it shall be the responsibility of the participat-
2 ing trustee to determine costs eligible to be funded from moneys in the
3 fund and the comptroller's only obligation shall be to make payments on
4 the dates and in the amounts requested by the participating trustee;
5 (d) a requirement that the participating trustee shall annually, on a
6 date provided in the agreement, provide the comptroller with a schedule
7 or amended schedule of moneys expected to be contributed to the fund and
8 withdrawals expected to be made from its account. Such schedule shall be
9 binding on the participating trustee;
10 (e) a provision that the money in the fund shall be paid to the
11 participating trustee or its designee upon requisition as provided in
12 the agreement;
13 (f) a provision for the assessment of administrative costs, investment
14 fees and other charges, including any penalties to be imposed for early
15 or excessive withdrawals, and for the deduction of such fees and charges
16 from investment earnings;
17 (g) a statement by the participating trustee relating to its consider-
18 ation of the risks involved in the investment sub-funds to which it is
19 allocating its moneys and its understanding of its responsibility for
20 any losses resulting from such risks;
21 (h) a statement that neither the comptroller nor any officer, employ-
22 ee, agent or advisor of the comptroller shall be liable for any loss or
23 expense suffered by the fund in the absence of bad faith, willful
24 misconduct or intentional wrongdoing; and
25 (i) a provision for the termination of the participating trustee's
26 inclusion in the fund, including the disposition and/or transfer of
27 accumulated assets.
28 § 2. The civil service law is amended by adding a new section 169 to
29 read as follows:
30 § 169. Other post employment benefits ("OPEB") trust. 1. For purposes
31 of this section:
32 (a) "President" shall mean the president of the civil service commis-
33 sion as head of the department of civil service;
34 (b) "State" shall mean the state of New York;
35 (c) "Fund" shall mean the other post employment benefits investment
36 fund created by section ninety-seven-llll of the state finance law; and
37 (d) "Other post employment benefits" shall mean benefits, except
38 pensions or other benefits funded through a public retirement system,
39 provided or to be provided by the state as compensation, whether pursu-
40 ant to statute, contract or other lawful authority, to its current or
41 former officers or employees, or their families or beneficiaries, after
42 service to the state has ended, including, but not limited to, health
43 care benefits. The term "other post employment benefits" shall not
44 include cash payments for the monetary value of sick leave, vacation or
45 other similar accruals, retirement incentive or separation payments, or
46 benefits provided pursuant to the consolidated omnibus budget reconcil-
47 iation act of 1985 (Public Law 99-272), as amended.
48 2. The president may establish a trust in his or her custody for the
49 purpose of accumulating assets to fund the cost of providing other post
50 employment benefits. Contributions to such trust may be made by state
51 appropriation.
52 3. The president is hereby declared to be the trustee of the trust
53 established pursuant to this section. As trustee the president shall be
54 responsible for the operation and management of the trust, including the
55 investment of trust assets, and shall be subject to all the duties and
A. 5525 4
1 responsibilities imposed by law on trustees, except to the extent incon-
2 sistent with this section.
3 4. Contributions to the trust, and any interest or other income or
4 earnings on contributions, shall be irrevocable before all liabilities
5 of the state government for other post employment benefits have been
6 satisfied and shall be solely dedicated to, and used solely for, provid-
7 ing other post employment benefits and paying appropriate and reasonable
8 expenses of administering the trust. No assets, income, earnings or
9 distributions of the trust shall be subject to any claim of creditors of
10 the state, or to assignment or execution, attachment or any other claim
11 enforcement process initiated by or on behalf of such creditors. Except
12 as otherwise provided in subdivision nine of this section, the president
13 shall not be responsible for the adequacy of the assets of the trust to
14 meet any other post employment benefit. The president shall not be
15 responsible for taking any action to enforce the payment of any appro-
16 priation into the trust. The trust may be terminated only when all
17 liabilities of the state for other post employment benefits have been
18 satisfied and there is no present or future obligation, contingent or
19 otherwise, of the state to provide such other post employment benefits.
20 Upon such termination, any remaining trust assets, after any proper
21 expenses of the trust have been paid, shall revert to the state.
22 5. Withdrawals from the trust shall be made for the sole purpose of
23 providing funds for the costs of other post employment benefits current-
24 ly due and payable by the state.
25 6. The president may contract to obtain services necessary for the
26 management and operation of the trust, including the professional
27 services necessary to carry out his or her responsibilities as trustee.
28 Contracts for such services shall be let pursuant to the provisions of
29 the state finance law applicable to state contracts.
30 7. The president shall manage the assets of the trust in a careful and
31 prudent manner. The president may invest assets of the trust only by
32 payment to the fund in accordance with section ninety-seven-llll of the
33 state finance law. Any interest or other income or earnings resulting
34 from the investment of assets of the trust shall accrue to and become
35 part of the assets of the trust.
36 8. The president shall develop, in consultation with the state health
37 insurance council, a written investment policy for selecting among the
38 investment options offered by the state comptroller pursuant to section
39 ninety-seven-llll of the state finance law so that the comptroller may
40 be able to invest fund monies in accordance with such policy. Such
41 policy shall include a statement of investment objectives addressing, in
42 the following order of priority, the ability to timely meet disbursement
43 requests without forced sale of assets, safety of principal and attain-
44 ment of market rates of return.
45 9. Neither the state nor the president shall be liable for any loss or
46 expense suffered by the trust in the absence of bad faith, willful
47 misconduct or intentional wrongdoing. The president shall be considered
48 to be acting as an officer of the state for purposes of section seven-
49 teen of the public officers law, provided, however, that the costs of
50 any defense or indemnification of the president arising from the exer-
51 cise of the functions of trustee shall be payable from the assets of the
52 trust.
53 10. The president shall prepare or cause to be prepared an annual
54 financial report of assets, liabilities, revenues and expenses of the
55 trust in accordance with generally accepted accounting principles. The
56 president shall cause the activities undertaken in connection with the
A. 5525 5
1 trust, including the annual financial report, to be audited annually, in
2 accordance with generally accepted auditing standards, by an independent
3 certified public accountant engaged in a manner consistent with the
4 applicable provisions of the state finance law. The audit shall be
5 completed within one hundred twenty days from the close of the state's
6 fiscal year. A copy of the annual financial report and the report of
7 such audit shall be provided to the governor, the state comptroller and
8 the chairs of the legislative fiscal committees.
9 11. Nothing contained in this section shall be interpreted or
10 construed to:
11 (a) create any obligation in, impose any obligation on, or alter any
12 obligation of the state to provide other post employment benefits;
13 (b) limit or restrict the authority of the state to modify or elimi-
14 nate other post employment benefits;
15 (c) assure or deny other post employment benefits; or
16 (d) require the state to fund its liability for other post employment
17 benefits.
18 § 3. The general municipal law is amended by adding a new section 6-t
19 to read as follows:
20 § 6-t. Other post employment benefits (OPEB) trust. 1. For purposes of
21 this section:
22 (a) "Local government" shall mean a municipal corporation, school
23 district, board of cooperative educational services, district corpo-
24 ration, special improvement district governed by a separate board of
25 commissioners, community college or public library that provides other
26 post employment benefits.
27 (b) "Other post employment benefits" shall mean benefits, except
28 pensions or other benefits funded through a public retirement system,
29 provided or to be provided as compensation by the local government,
30 whether pursuant to state statute, local enactment, contract or other
31 lawful authority, to its former or current officers or employees, or
32 their families or beneficiaries, after service to the local government
33 has ended, including, but not limited to, health care benefits. The term
34 "other post employment benefits" shall not include cash payments for the
35 monetary value of sick leave, vacation or other similar accruals,
36 retirement incentive or separation payments, or benefits provided pursu-
37 ant to the consolidated omnibus budget reconciliation act of 1985
38 (Public Law 99-272), as amended.
39 2. The governing body of a local government, by resolution, may estab-
40 lish a trust in the custody of the chief fiscal officer of the local
41 government, for the purpose of accumulating assets to fund the cost to
42 the local government of providing other post employment benefits.
43 Contributions to such trust may be made by the local government by budg-
44 etary appropriation or transfer in accordance with the provisions of
45 subdivision nine of section six-p of this article.
46 3. The governing board of the local government is hereby declared to
47 be the trustee of any trust established pursuant to this section,
48 provided, however, that the governing board, by resolution, may desig-
49 nate the chief fiscal officer of the local government as trustee,
50 subject to acceptance of such position by the chief fiscal officer and,
51 in the case of a city with a population of one million or more, the city
52 comptroller shall be the trustee. The trustee shall be responsible for
53 the operation and management of the trust, including the deposit and
54 securing of trust assets in the same manner as provided in section ten
55 of this article, and the investment of trust assets, and shall be
56 subject to all the duties and responsibilities imposed by law on trus-
A. 5525 6
1 tees, except to the extent inconsistent with this section. The trustee
2 shall execute and file with the clerk of the local government an appro-
3 priate undertaking, separate from and in addition to any other undertak-
4 ing required of the trustee in any other capacity, in an amount suffi-
5 cient to cover trust assets. In lieu thereof, such coverage may be
6 included in a blanket undertaking in accordance with section eleven of
7 the public officers law. The cost of the undertaking shall be consid-
8 ered to be a reasonable expense of administering the trust.
9 4. Contributions to the trust, and any interest or other income or
10 earnings on contributions, shall be irrevocable before all liabilities
11 of the local government for other post employment benefits have been
12 satisfied, and shall be solely dedicated to, and used solely for,
13 providing other post employment benefits and paying appropriate and
14 reasonable expenses of administering the trust. No assets, income, earn-
15 ings or distributions of the trust shall be subject to any claim of
16 creditors of the local government or of any person or entity administer-
17 ing a plan for the provision of other post employment benefits or to
18 assignment or execution, attachment or any other claim enforcement proc-
19 ess initiated by or on behalf of such creditors. Except as otherwise
20 provided in subdivision seven of this section, the trustee shall not be
21 responsible for the adequacy of the assets of the trust to meet any
22 other post employment benefit. The trustee shall not be responsible for
23 taking any action to enforce the payment of any appropriation into the
24 trust. The assets of the trust, including all interest or other income
25 or earnings on contributions to the trust, shall be exempt from all
26 state and local taxes. The trust may be terminated only when all
27 liabilities of the local government for other post employment benefits
28 have been satisfied and there is no present or future obligation,
29 contingent or otherwise, of the local government to provide such other
30 post employment benefits. Upon such termination, any remaining trust
31 assets, after any proper expenses of the trust have been paid, shall
32 revert to the local government to be paid into one or more reserve
33 funds, duly established pursuant to this article or other state statute,
34 in such amounts as determined by the governing board of the local
35 government.
36 5. Disbursements from the trust shall be made only upon a duly author-
37 ized request pursuant to resolution of the governing board of the local
38 government stating the amount of the requested disbursement and deter-
39 mining that the disbursement is for the sole purpose of providing funds
40 for the costs of other post employment benefits currently due and paya-
41 ble by the local government.
42 6. The trustee shall invest the assets of the trust in the other post
43 employment benefits investment fund in the custody of the state comp-
44 troller, in accordance with section ninety-seven-llll of the state
45 finance law. Any interest or other income or earnings resulting from the
46 investment of assets of the trust shall accrue to and become part of the
47 assets of the trust. The trustee shall develop a written investment
48 policy for selecting among the investment options offered by the state
49 comptroller pursuant to section ninety-seven-llll of the state finance
50 law which, at a minimum, shall include a statement of investment objec-
51 tives addressing, in the following order of priority, compliance with
52 all legal requirements, the ability to timely meet disbursement requests
53 without forced sale of assets, safety of principal and attainment of
54 market rates of return.
55 7. Neither the local government nor the trustee shall be liable for
56 any loss or expense suffered by the trust in the absence of bad faith,
A. 5525 7
1 willful misconduct or intentional wrongdoing. The trustee shall be
2 considered to be an employee of the local government for purposes of
3 section eighteen of the public officers law, provided, however, that the
4 costs of any defense or indemnification of the trustee arising from the
5 exercise of the functions of trustee shall be payable from the assets of
6 the trust.
7 8. The trustee shall prepare or cause to be prepared an annual finan-
8 cial report of assets, liabilities, revenues and expenses of the trust
9 in accordance with generally accepted accounting principles. The trustee
10 shall cause the activities undertaken in connection with the trust,
11 including the annual financial report, to be audited annually, either
12 separately or as part of the overall audit of the reporting entity, in
13 accordance with generally accepted auditing standards, by an independent
14 certified public accountant engaged in a manner consistent with the
15 procurement policies and procedures adopted by the local government
16 pursuant to section one hundred four-b of this chapter and shall be
17 subject to a request for proposals process at least every five years.
18 The audit shall be completed within one hundred twenty days from the
19 close of the fiscal year of the local government. A copy of the annual
20 financial report and the report of such audit shall be provided to the
21 state comptroller, the trustee and the governing board of the local
22 government and shall be publicly available and posted on the website of
23 the local government, if such a website is maintained.
24 9. The state comptroller may make, amend and repeal such rules and
25 regulations as the state comptroller may deem appropriate for the proper
26 operation and management of trusts established pursuant to this section.
27 10. Nothing contained in this section shall be interpreted or
28 construed to:
29 (a) create any obligation in, impose any obligation on, or alter any
30 obligation of any local government to provide other post employment
31 benefits;
32 (b) limit or restrict the authority of a local government to modify or
33 eliminate other post employment benefits;
34 (c) assure or deny other post employment benefits; or
35 (d) require any local government to fund its liability for other post
36 employment benefits.
37 § 4. Subdivision 9 of section 6-p of the general municipal law, as
38 added by chapter 518 of the laws of 1996, is amended to read as follows:
39 9. If, after the establishment of such fund, the municipality deter-
40 mines that such fund is no longer needed, the moneys remaining in such
41 fund may be transferred to any other reserve fund or any other post
42 employment benefits trust of the municipal corporation authorized by
43 this chapter that is comprised of moneys which were raised on the same
44 tax base as the moneys in the reserve fund established under this
45 section or to a reserve fund established pursuant to section thirty-six
46 hundred fifty-one of the education law, only to the extent that the
47 moneys in this fund shall exceed the sum sufficient to pay all liabil-
48 ities incurred or accrued against it. Prior to the discontinuance of
49 such fund, the fiscal and legal officers of such municipal corporation
50 shall certify to the governing board thereof the amount that may be
51 necessary to retain in such fund to satisfy all liabilities incurred or
52 accrued against it and such sum shall be retained in the fund for
53 payment of such amounts or until later certified that such funds are no
54 longer needed.
55 § 5. The provisions of section 6-t of the general municipal law, as
56 added by section three of this act, shall not affect the validity of the
A. 5525 8
1 establishment or implementation of the New York City Retiree Health
2 Benefit Trust, established June 12, 2006 by the City of New York as
3 Grantor, and neither the operation nor any amendment of such trust shall
4 be subject to the provisions of such section. The establishment of such
5 trust and its operation in accordance with its terms is hereby ratified
6 and approved.
7 § 6. This act shall take effect immediately.