Bill > H2835

This bill proposes changes to pension funding requirements for the Commonwealth of Massachusetts, focusing on what happens when a pension system's unfunded liability reaches zero. Specifically, in fiscal years when there is no unfunded commonwealth pension liability, the comptroller will be required to transfer from the General Fund an additional amount equal to the "normal cost" of all future benefits (which represents the annual cost of pension benefits earned by employees in that year). Similarly, for local pension systems, if their unfunded pension liability is reduced to zero in a fiscal year, their funding schedule must be designed to require an additional appropriation to the pension reserve fund that matches the normal cost of future benefits. The bill is scheduled to take effect on July 1, 2025, and aims to ensure continued robust funding of pension systems even after unfunded liabilities have been eliminated. This approach helps maintain the long-term financial health of pension systems by requiring ongoing contributions that cover the cost of future pension obligations.

Labor and Employment

https://malegislature.gov/Bills/194/H2835