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House creates trust fund to meet GASB-45 obligations for retiree benefits
Summary
Representative Grover’s bill to establish a trust fund for post-retirement health benefits (GASB-45 compliance) passed the House; the floor cited an actuary estimate of $488 million in unfunded liability and an ARC of $47 million, and the bill sets up trustees and transfers appropriations into the trust.
Representative Grover presented First Substitute House Bill 7 to create a trust fund meeting Governmental Accounting Standards Board (GASB) Statement 45 requirements for other post-retirement benefits. He said the state’s unfunded liability, per the actuary, is approximately $488,000,000 and that the annual required contribution (ARC) is $47,000,000; the ARC had already been appropriated for the current fiscal year.
The bill establishes a board of trustees that includes the state treasurer, director of finance and the director of the governor’s office of planning and budget, and sets investment criteria for the state treasurer. It directs the Division of Finance to transfer FY2007 appropriations into the trust fund so the liability need not be recognized on the state balance sheet.
Floor action recorded the vote as 70 yes, 2 no, and 3 absent; the House passed the bill and will refer it to the Senate for further consideration.
What happens next: If enacted, the trust fund would be established and funded per the bill, affecting state accounting and the management of post-retirement health benefits.
