Researcher: JS Page 1 3/17/21
OLR Bill Analysis
SB 867
AN ACT CONCERNING INVESTMENT OF CERTAIN MUNICIPAL
FUNDS.
SUMMARY
This bill allows a municipality that does not participate in the
Connecticut Municipal Employees Retirement System (CMERS) to
invest its retirement system’s assets with the state’s combined
retirement plans and trust funds that are administered, held, or
invested by the state treasurer (i.e., the Connecticut Retirement Plans
and Trust Funds).
The bill authorizes the treasurer to adopt regulations to allow for
the funds’ investment. The investment and management of the trust’s
assets must comply with the prudent investor standard, as existing law
requires for municipalities managing their own pension, retirement, or
other postemployment health and life benefit systems.
The bill places these retirement systems’ trust funds under the same
oversight and requirements established in the trust statutes for funds
that include the Teachers' Pension Fund, the State Employee
Retirement Fund, and the Connecticut Municipal
Employees' Retirement Fund. As this change applies to all such
retirement systems’ trust funds, and not only those that are invested
by the treasurer pursuant to the bill, it is unclear what effect, if any, it
will have.
The bill also makes technical and conforming changes.
EFFECTIVE DATE: Upon passage
BACKGROUND
Connecticut Municipal Employees Retirement System (CMERS)
CMERS is the optional municipal retirement system administered 2021SB-00867-R000081-BA.DOCX
Researcher: JS Page 2 3/17/21
by the State Retirement Commission and the state treasurer is
responsible for its investment (CGS chapter 113). Membership includes
over 200 employee groups from more than 80 municipalities (e.g., a
single town may have separate groups for police officers, firefighters,
general town employees, and housing authority employees).
Prudent Investor Standard
Under Connecticut law, trustees must follow certain standards
when investing and managing trust assets when the trust provisions
are not explicit. For example, trustees must invest and manage assets
as “prudent investors” would and use any special skills or expertise
they have (CGS § 45a-541 et seq.).
COMMITTEE ACTION
Planning and Development Committee
Joint Favorable
Yea 26 Nay 0 (03/02/2021)