Bill Text: CT HB05529 | 2012 | General Assembly | Introduced

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Bill Title: An Act Concerning Public Employee's Pensions Solvency.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2012-03-22 - Motion Failed JFCR APP [HB05529 Detail]

Download: Connecticut-2012-HB05529-Introduced.html

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General Assembly		Raised Bill No. 5529
February Session, 2012		LCO No. 2438
		*02438_______CE_*
Referred to Committee on Commerce
Introduced by:
(CE)

AN ACT CONCERNING PUBLIC EMPLOYEE'S PENSIONS SOLVENCY.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective July 1, 2012) (a) There is hereby established and created a body politic and corporate, constituting a public instrumentality and political subdivision of the state of Connecticut established and created for the performance of an essential public and governmental function, to be known as the Public Employee Benefit Solvency Authority. The authority shall not be construed to be a department, institution or agency of the state.

(b) The powers of the authority shall be vested in and exercised by a board of directors, which shall consist of thirteen members. Six members shall be appointed by the Governor, at least four of whom shall be knowledgeable, and have favorable reputations for skill, knowledge and experience, in the insurance industry or public employee pension plans. Three members shall be the Comptroller, the Treasurer and the Commissioner of Administrative Services, who shall serve ex officio and shall have all of the powers and privileges of a member of the board of directors. Each ex-officio member may designate his or her deputy or any member of his or her staff to represent him or her at meetings of the corporation with full power to act and vote on his or her behalf. Four members shall be appointed as follows: One by the president pro tempore of the Senate, one by the minority leader of the Senate, one by the speaker of the House of Representatives and one by the minority leader of the House of Representatives. Each member appointed by the Governor shall serve at the pleasure of the Governor but not longer than the term of office of the Governor or until the member's successor is appointed and qualified, whichever is longer. Each member appointed by a member of the General Assembly shall serve in accordance with the provisions of section 4-1a of the general statutes. A director shall be eligible for reappointment. The Governor shall fill any vacancy for the unexpired term of a member appointed by the Governor. The appropriate legislative appointing authority shall fill any vacancy for the unexpired term of a member appointed by such authority. The chairperson of the board under this subsection shall be appointed by the Governor, with the advice and consent of both houses of the General Assembly, and shall serve at the pleasure of the Governor.

(c) Members of the board of directors may not designate a representative to perform in their absence their respective duties under this section. Any vacancy occurring other than by expiration of term shall be filled in the same manner as the original appointment for the balance of the unexpired term. The appointing authority for any member may remove such member for inefficiency, wilful neglect of duty, misfeasance or malfeasance.

(d) The chairperson shall, with the approval of the members of the board of directors, appoint an executive director of the authority who shall be an employee of the authority and paid a salary prescribed by the members. The executive director shall supervise the administrative affairs and technical activities of the authority in accordance with the directives of the board.

(e) Each member of the board of directors shall be entitled to reimbursement for such member's actual and necessary expenses incurred during the performance of such member's official duties.

(f) Members may engage in private employment or in a profession or business subject to any applicable laws, rules and regulations of the state regarding official ethics or conflict of interest.

(g) Seven members of the board of directors of the authority shall constitute a quorum for the transaction of any business or the exercise of any power of the authority. For the transaction of any business or the exercise of any power of the authority and except as otherwise provided in section 2 of this act, the authority may act by a majority of the members present at any meeting at which a quorum is in attendance.

(h) The authority shall continue as long as it has bonds or other obligations outstanding and until its existence is terminated by law, provided no such termination shall affect any outstanding contractual obligation of the authority and the state shall succeed to the obligations of the authority under any contract. Upon the termination of the existence of the authority, all its rights and properties shall pass to and be vested in the state of Connecticut.

(i) It shall not constitute a conflict of interest for a trustee, director, partner or officer of any person, firm or corporation, or any individual having a financial interest in a person, firm or corporation, to serve as a member of the board of directors of the authority, provided such trustee, director, partner, officer or individual shall comply with all applicable provisions of chapter 10 of the general statutes.

Sec. 2. (NEW) (Effective July 1, 2012) (a) The purposes of the Public Employee Benefit Solvency Authority shall be to contract with an insurance company licensed to do business in the state to provide individual universal life insurance policies on state employees pursuant to subsection (b) of this section, and for such purposes the authority is authorized and empowered to:

(1) Have perpetual succession as a body politic and corporate and to adopt bylaws for the regulation of its affairs and the conduct of its business;

(2) Adopt an official seal and alter the same at pleasure;

(3) Maintain an office at such place or places as it may designate;

(4) Sue and be sued in its own name, and plead and be impleaded;

(5) (A) Employ such assistants, agents and other employees as may be necessary or desirable who shall not be employees, as defined in subsection (b) of section 5-270 of the general statutes; (B) establish all necessary or appropriate personnel practices and policies, including those relating to hiring, promotion, compensation, retirement and collective bargaining, which need not be in accordance with chapter 68 of the general statutes, and the authority shall not be an employer as defined in subsection (a) of section 5-270 of the general statutes; and (C) engage consultants, attorneys and appraisers as may be necessary or desirable to carry out its purposes in accordance with this section;

(6) Issue bonds, bond anticipation notes and other obligations of the authority for any of its corporate purposes, and to fund or refund the same, all as provided in this section;

(7) Receive and accept aid or contributions from any source of money, property, labor or other things of value, to be held, used and applied to carry out the purposes of this section subject to such conditions upon which such grants and contributions may be made, including, but not limited to, gifts or grants from any department, agency or instrumentality of the United States or this state for any purpose consistent with this section;

(8) Borrow money for the purpose of obtaining working capital;

(9) Make and enter into all contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers under this section, including contracts and agreements for such professional services as the authority deems necessary, including, but not limited to, financial consultants, bond counsel, underwriters and technical specialists;

(10) Acquire, lease, purchase, own, manage, hold and dispose of personal property, and lease, convey or deal in or enter into agreements with respect to such property on any terms necessary or incidental to the carrying out of these purposes;

(11) Invest in, acquire, lease, purchase, own, manage, hold and dispose of real property and lease, convey or deal in or enter into agreements with respect to such property on any terms necessary or incidental to carrying out the purposes of this section, provided such transactions shall not be subject to approval, review or regulation by any state agency pursuant to title 4b of the general statutes or any other provision of the general statutes;

(12) Procure insurance against any liability or loss in connection with its property and other assets, in such amounts and from such insurers as it deems desirable and to procure insurance for employees;

(13) Account for and audit funds of the authority and funds of any recipients of funds from the authority; and

(14) Do all acts and things necessary or convenient to carry out the purposes of and the powers expressly granted by this section.

(b) Any insurance policy contracted for by the authority pursuant to subsection (a) of this section shall designate the state as the sole beneficiary. All proceeds paid to the state as beneficiary of any such insurance policy shall be paid to the Treasurer for deposit in the State Employees Retirement Fund.

(c) Any state employee or retired state employee for which a contract for life insurance is issued pursuant to this section shall be notified in writing, not later than ten days after the issuance of such policy, (1) that such policy has been issued and the name and address of the insurer issuing the policy, (2) that such state employee or retired state employee has the right to object to the issuance of such policy, and (3) of the procedure for objecting in writing to the insurer issuing the policy not later than ten days after receipt of such notice. If the state employee or retired state employee objects to the issuance of such policy in accordance with subdivision (3) of this subsection, the policy shall be immediately void.

Sec. 3. (NEW) (Effective July 1, 2012) The members of the board of directors of the Public Employee Benefit Solvency Authority shall adopt written procedures, in accordance with the provisions of section 1-121 of the general statutes, for: (1) Adopting an annual budget and plan of operations, including a requirement of board approval before the budget or plan may take effect; (2) hiring, dismissing, promoting and compensating employees of the authority, including an affirmative action policy and a requirement of board approval before a position may be created or a vacancy filled; (3) acquiring real and personal property and personal services, including a requirement of board approval for any nonbudgeted expenditure in excess of an amount to be determined by the board; (4) contracting for financial, legal, bond underwriting and other professional services, including a requirement that the authority solicit proposals at least once every three years for each such service which it uses; (5) issuing and retiring bonds, bond anticipation notes and other obligations of the authority; (6) awarding loans, grants and other financial assistance, including eligibility criteria, the application process and the role played by the authority's staff and board of directors; and (7) the use of surplus funds to the extent authorized under this section or other provisions of the general statutes.

Sec. 4. Subsection (l) of section 1-79 of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):

(l) "Quasi-public agency" means the Public Employee Benefit Solvency Authority, Connecticut Development Authority, Connecticut Innovations, Incorporated, Connecticut Health and Education Facilities Authority, Connecticut Higher Education Supplemental Loan Authority, Connecticut Housing Finance Authority, Connecticut Housing Authority, Connecticut Resources Recovery Authority, Lower Fairfield County Convention Center Authority, Capital City Economic Development Authority, Connecticut Lottery Corporation, Connecticut Airport Authority, Health Information Technology Exchange of Connecticut and Connecticut Health Insurance Exchange.

Sec. 5. Section 1-120 of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):

As used in sections 1-120 to 1-123, inclusive:

(1) "Quasi-public agency" means the Public Employee Benefit Solvency Authority, Connecticut Development Authority, Connecticut Innovations, Incorporated, Connecticut Health and Educational Facilities Authority, Connecticut Higher Education Supplemental Loan Authority, Connecticut Housing Finance Authority, Connecticut Housing Authority, Connecticut Resources Recovery Authority, Capital City Economic Development Authority, Connecticut Lottery Corporation, Connecticut Airport Authority, Health Information Technology Exchange of Connecticut and Connecticut Health Insurance Exchange.

(2) "Procedure" means each statement, by a quasi-public agency, of general applicability, without regard to its designation, that implements, interprets or prescribes law or policy, or describes the organization or procedure of any such agency. The term includes the amendment or repeal of a prior regulation, but does not include, unless otherwise provided by any provision of the general statutes, (A) statements concerning only the internal management of any agency and not affecting procedures available to the public, and (B) intra-agency memoranda.

(3) "Proposed procedure" means a proposal by a quasi-public agency under the provisions of section 1-121 for a new procedure or for a change in, addition to or repeal of an existing procedure.

Sec. 6. Section 1-124 of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):

(a) The Public Employee Benefit Solvency Authority, Connecticut Development Authority, the Connecticut Health and Educational Facilities Authority, the Connecticut Higher Education Supplemental Loan Authority, the Connecticut Housing Finance Authority, the Connecticut Housing Authority, the Connecticut Resources Recovery Authority, the Health Information Technology Exchange of Connecticut, the Connecticut Airport Authority, the Capital City Economic Development Authority and the Connecticut Health Insurance Exchange shall not borrow any money or issue any bonds or notes which are guaranteed by the state of Connecticut or for which there is a capital reserve fund of any kind which is in any way contributed to or guaranteed by the state of Connecticut until and unless such borrowing or issuance is approved by the State Treasurer or the Deputy State Treasurer appointed pursuant to section 3-12. The approval of the State Treasurer or said deputy shall be based on documentation provided by the authority that it has sufficient revenues to (1) pay the principal of and interest on the bonds and notes issued, (2) establish, increase and maintain any reserves deemed by the authority to be advisable to secure the payment of the principal of and interest on such bonds and notes, (3) pay the cost of maintaining, servicing and properly insuring the purpose for which the proceeds of the bonds and notes have been issued, if applicable, and (4) pay such other costs as may be required.

(b) To the extent the Public Employee Benefit Solvency Authority, Connecticut Development Authority, Connecticut Innovations, Incorporated, Connecticut Higher Education Supplemental Loan Authority, Connecticut Housing Finance Authority, Connecticut Housing Authority, Connecticut Resources Recovery Authority, Connecticut Health and Educational Facilities Authority, the Health Information Technology Exchange of Connecticut, the Connecticut Airport Authority, the Capital City Economic Development Authority or the Connecticut Health Insurance Exchange is permitted by statute and determines to exercise any power to moderate interest rate fluctuations or enter into any investment or program of investment or contract respecting interest rates, currency, cash flow or other similar agreement, including, but not limited to, interest rate or currency swap agreements, the effect of which is to subject a capital reserve fund which is in any way contributed to or guaranteed by the state of Connecticut, to potential liability, such determination shall not be effective until and unless the State Treasurer or his or her deputy appointed pursuant to section 3-12 has approved such agreement or agreements. The approval of the State Treasurer or his or her deputy shall be based on documentation provided by the authority that it has sufficient revenues to meet the financial obligations associated with the agreement or agreements.

Sec. 7. Section 1-125 of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):

The directors, officers and employees of the Public Employee Benefit Solvency Authority, Connecticut Development Authority, Connecticut Innovations, Incorporated, Connecticut Higher Education Supplemental Loan Authority, Connecticut Housing Finance Authority, Connecticut Housing Authority, Connecticut Resources Recovery Authority, including ad hoc members of the Connecticut Resources Recovery Authority, Connecticut Health and Educational Facilities Authority, Capital City Economic Development Authority, the Health Information Technology Exchange of Connecticut, Connecticut Airport Authority, Connecticut Lottery Corporation and Connecticut Health Insurance Exchange and any person executing the bonds or notes of the agency shall not be liable personally on such bonds or notes or be subject to any personal liability or accountability by reason of the issuance thereof, nor shall any director or employee of the agency, including ad hoc members of the Connecticut Resources Recovery Authority, be personally liable for damage or injury, not wanton, reckless, wilful or malicious, caused in the performance of his or her duties and within the scope of his or her employment or appointment as such director, officer or employee, including ad hoc members of the Connecticut Resources Recovery Authority. The agency shall protect, save harmless and indemnify its directors, officers or employees, including ad hoc members of the Connecticut Resources Recovery Authority, from financial loss and expense, including legal fees and costs, if any, arising out of any claim, demand, suit or judgment by reason of alleged negligence or alleged deprivation of any person's civil rights or any other act or omission resulting in damage or injury, if the director, officer or employee, including ad hoc members of the Connecticut Resources Recovery Authority, is found to have been acting in the discharge of his or her duties or within the scope of his or her employment and such act or omission is found not to have been wanton, reckless, wilful or malicious.

Sec. 8. Subdivision (1) of subsection (a) of section 38a-291 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):

(a) (1) (A) The trustee of any voluntary employees' beneficiary association trust, as defined in Section 501(c)(9) of the Internal Revenue Code of 1986, as from time to time amended, to provide life, health or similar benefits to employees or retired employees and acting in a fiduciary capacity with respect to those employees or retired employees may procure insurance on the lives of those employees or retired employees; (B) an employer or a trustee of a trust, other than a voluntary employees' beneficiary association trust, providing life, health, disability, retirement or similar benefits to the employer's employees or retired employees may procure insurance on the lives of those employees or retired employees; [and] (C) a public employer, including, but not limited to, such employer's pension or retirement system, providing life, health, disability, retirement or similar benefits to such public employer's employees or retired employees may procure insurance on the lives of those employees or retired employees; and (D) prior to procuring insurance on the lives of employees or retired employees pursuant to subparagraph (A), [or] (B) or (C) of this subdivision, the employer or trustee shall obtain the written consent of each employee or retired employee proposed for coverage, and such consent shall include an acknowledgment from the employee that the employer or trustee may maintain the life insurance coverage after the employee's employment has terminated.

This act shall take effect as follows and shall amend the following sections:
Section 1	July 1, 2012	New section
Sec. 2	July 1, 2012	New section
Sec. 3	July 1, 2012	New section
Sec. 4	July 1, 2012	1-79(l)
Sec. 5	July 1, 2012	1-120
Sec. 6	July 1, 2012	1-124
Sec. 7	July 1, 2012	1-125
Sec. 8	July 1, 2012	38a-291(a)(1)

Statement of Purpose:

To establish a special purpose quasi-public entity to create a mechanism for funding the state's pension obligations by allowing such entity to use pension fund moneys to buy certain insurance premiums, the benefits of which shall return to the pension fund.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]