class=”articlegraf”> Patrick proposed the measure in February as a way to help bolster some of the state’s lagging municipal pension funds (See MA Governor Proposes Handing Local Pension Fund Management to the State ), and lawmakers approved the legislation in June (See MA Legislature Approves Measure to Give State Control on Ailing Local Pensions ).
So far, 25 funds will be forced to hand over control to the state Pension Reserves Management Board, which runs a retirement program for state employees and retirees. However, final legislation included a way for a fund to appeal the seizure of its assets to a four-member panel. To win an appeal, at least three of the four members would need to vote in favor.
According to the measure, funds can be seized if their rate of return is below that of the state fund, which has a current 10-year rate of return of about 10.51% and has less than 65% of its pension obligations fully funded through 2028.
class=”articlegraf”> The Middlesex Retirement System voted in November to hand the management of nearly all of its $700 million in assets to the state, with the thought that shifting the money would trim investment costs (See MA Retirement System Turns Over Assets Control to State ).