MA
Massachusetts Senate Bill S1796

Massachusetts 2025-2026 Regular Session

Massachusetts Senate Bill S1796 Compare Versions

Only one version of the bill is available at this time.
OldNewDifferences
11 1 of 1
22 SENATE DOCKET, NO. 1512 FILED ON: 1/16/2025
33 SENATE . . . . . . . . . . . . . . No. 1796
44 The Commonwealth of Massachusetts
55 _________________
66 PRESENTED BY:
77 Michael D. Brady
88 _________________
99 To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
1010 Court assembled:
1111 The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
1212 An Act relative to pensions and the best interest of beneficiaries.
1313 _______________
1414 PETITION OF:
1515 NAME:DISTRICT/ADDRESS :Michael D. BradySecond Plymouth and Norfolk 1 of 16
1616 SENATE DOCKET, NO. 1512 FILED ON: 1/16/2025
1717 SENATE . . . . . . . . . . . . . . No. 1796
1818 By Mr. Brady, a petition (accompanied by bill, Senate, No. 1796) of Michael D. Brady for
1919 legislation relative to pensions and the best interest of beneficiaries. Public Service.
2020 The Commonwealth of Massachusetts
2121 _______________
2222 In the One Hundred and Ninety-Fourth General Court
2323 (2025-2026)
2424 _______________
2525 An Act relative to pensions and the best interest of beneficiaries.
2626 Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
2727 of the same, as follows:
2828 1 SECTION 1. Chapter 32 of the General Laws, as appearing in the 2022 Official Edition,
2929 2is hereby amended by striking section 23 in its entirety and inserting the following new section:-
3030 3 Section 23. (1)(a) The funds of the state employees' retirement system and the teachers'
3131 4retirement system and the assets of the Boston retirement system attributable to teachers who are
3232 5members of that system shall be held in the PRIT Fund. The board of each such system shall
3333 6annually, on or before December 31, file in the office of the commissioner, on a form prescribed
3434 7by the commissioner, a sworn statement of the financial condition of the system as of June 30 of
3535 8the prior fiscal year and of all the financial transactions of the system during the previous year.
3636 9The commissioner may, for cause shown, extend the time for filing any such statement.
3737 10 (b) Notwithstanding any general or special law to the contrary, assets of the Boston
3838 11retirement system attributable to teachers who are members of the system shall be invested in the
3939 12PRIT Fund, and for purposes of those assets and the payment of benefits to those teachers and 2 of 16
4040 13their beneficiaries, the Boston retirement system shall be considered a participating system in the
4141 14PRIT Fund, but the system shall not receive a share of any appropriations made under section
4242 1522B or under paragraph (b) of subdivision (8) of section 22, and the board of the system shall not
4343 16be able to revoke this participation.
4444 17 (2) Systems for Counties, Cities and Towns. — (a) The county, city or town treasurer, the
4545 18secretary-treasurer of the Massachusetts Department of Transportation, the treasurer of the
4646 19Massachusetts Bay Transportation Authority, the treasurer of the Massachusetts Housing
4747 20Finance Agency, the secretary-treasurer of the Massachusetts Port Authority, the treasurer of the
4848 21Blue Hills Regional Vocational School system, the treasurer of the Greater Lawrence Sanitary
4949 22District, and the treasurer of the Minuteman Regional Vocational Technical School District shall
5050 23be the treasurer-custodian of the system established under the provisions of sections one to
5151 24twenty-eight, inclusive, or under corresponding provisions of earlier laws, in any county, city or
5252 25town, the Massachusetts Department of Transportation, the Massachusetts Bay Transportation
5353 26Authority, the Massachusetts Housing Finance Agency, the Massachusetts Port Authority, the
5454 27Blue Hills Regional Vocational School system, the Greater Lawrence Sanitary District, or the
5555 28Minuteman Regional Vocational Technical School District, as the case may be, and shall have
5656 29the custody of the funds of any such system. Payments from such funds shall be made by them
5757 30only upon vouchers signed by two persons designated by the board of any such system by a vote
5858 31a duly attested copy of which, bearing upon its face specimen signatures of such persons, shall be
5959 32filed with the treasurer-custodian as their authority for making payments upon vouchers so
6060 33signed. No voucher shall be drawn unless it shall have been previously authorized by vote of the
6161 34board. 3 of 16
6262 35 (b) The board of each system shall invest and reinvest the funds of the system in the
6363 36PRIT Fund under subdivision (8) of section 22, in the PRIT Fund by purchasing shares of the
6464 37fund, as provided for in the trust agreement adopted by the PRIM board under subdivision (2A),
6565 38or under the standards in subdivision (3), provided that: (i) no investment of funds shall be made
6666 39in stocks, securities or other obligations of a company which derives more than 15 per cent of its
6767 40revenues from the sale of tobacco products; (ii) in investing funds the board shall employ an
6868 41investment manager or investment managers who shall invest the funds of the system; and (iii)
6969 42no funds shall be invested directly in mortgages or collateral loans.
7070 43 (c) No investment of funds shall take place until the board has received from the
7171 44commission an acknowledgement of receipt of the following: (i) certification that, in making the
7272 45selection, the board has complied with the process established in section 23B; (ii) a copy of the
7373 46vendor certification required under section 23B; (iii) copies of disclosure forms submitted by the
7474 47selected vendor; (iv) a certification that the investment is not a prohibited investment as set forth
7575 48in regulations of the commission; (v) if the board has retained a consultant, a copy of the
7676 49consultant reports pertaining to the investment and the selected vendor; and (F) a copy of the
7777 50board certification required under section 23B.
7878 51 The commission may withhold the acknowledgement if it determines that it is in the best
7979 52interest of the retirement system; provided, however, that it must so notify the board within 10
8080 53days of receipt of completed documents as required by this section.
8181 54 (d) Prior to the retention of an investment consultant the board shall have received from
8282 55the commission an acknowledgement of receipt of the following: (i) certification that, in making
8383 56the selection, the board has complied with the process established in section 23B; (ii) copy of the 4 of 16
8484 57vendor certification required under section 23B; (iii) copies of disclosure forms submitted by the
8585 58selected consultant; and (iv) copy of the board certification required under section 23B.
8686 59 (e) The board of each such system shall designate one or more banks or trust companies,
8787 60organized under the laws of the commonwealth or of the United States, in which the treasurer-
8888 61custodian shall keep on deposit such sums as may be required for current disbursements;
8989 62provided, that any such sum on deposit in any one bank or trust company shall not exceed ten per
9090 63cent of the amount of the paid-up capital and surplus thereof. The board shall also designate one
9191 64or more such banks or trust companies in which the securities of the system shall be kept under
9292 65the name of the retirement system in one or more safe deposit boxes. The board, subject to rules
9393 66promulgated by the commission, may deposit such securities in a securities depository registered
9494 67with the Securities and Exchange Commission of the United States. Such securities may be kept
9595 68under the joint custody of the treasurer-custodian and a member of the board other than the
9696 69treasurer-custodian, who shall be designated by the board, or such securities may be kept by a
9797 70custodian who shall be designated by the board, which custodian shall be a bank or trust
9898 71company, organized under the laws of the commonwealth or of the United States. The board may
9999 72cause any stock, bond or other security, or cash, of any such system to be registered and held, or
100100 73deposited and held, in the name of one or more nominees appointed by him for the purpose of
101101 74facilitating security trading, money management and certificate delivery. The board shall
102102 75designate the members of any such nominee only from among the following individuals: the
103103 76assistant treasurers of the respective county, city, or town; any employee of a custodian that is
104104 77authorized pursuant to this paragraph to have custody of securities or cash of a system; and the
105105 78treasurer-custodian himself. Each individual so designated shall be covered with respect to their
106106 79service on behalf of any such nominee by a fidelity bond, in such form and amount as the public 5 of 16
107107 80employee retirement administration commission may determine, which coverage may be by
108108 81separate bond or by incorporation in a bond otherwise required by section three of chapter 35e,
109109 82section 35 of chapter 41, section 39 A of chapter 41 or other applicable law or practice. Such
110110 83custodian shall collect the interest and dividends on all securities deposited with it, shall collect
111111 84all called and matured securities deposited with it, and shall deposit the same in a bank or trust
112112 85company as directed by the board; shall advise the board of all such deposits, of all stock
113113 86dividends, rights, calls and maturities of all securities deposited with it; shall purchase, sell,
114114 87deliver, and receive securities on the order of the board; and shall prepare and deliver to the
115115 88board a list, at such time as the board may require, of all securities held by it with their current
116116 89market values. Such custodian may make a reasonable charge for such services.
117117 90 (f) Any person who assists any board or member thereof in the purchase, sale, investment
118118 91or reinvestment of the funds of any such system, without the written consent of the public
119119 92employee retirement administration commission after notice in writing by him to such board or
120120 93member to desist therefrom as provided for in subdivision (4) shall be punished as provided for
121121 94in section 24.
122122 95 (g) The board of each such system shall annually, on or before May first, file in the office
123123 96of the public employee retirement administration commission, on a form prescribed by him, a
124124 97sworn statement of the financial condition of such system as of December 31 of the previous
125125 98year and of all the financial transactions thereof during the previous year. The commission may
126126 99for cause shown extend the time for filing any such statement.
127127 100 (h) The board may employ any qualified bank, trust company, corporation, firm, or
128128 101person to advise it on the investment of the fund and may pay for such advice. 6 of 16
129129 102 (i) (i) Clauses (i) to (vii), inclusive, of paragraph (b) shall not apply to the board of any
130130 103local retirement system which upon application is determined by the commission to have a
131131 104record of investment management which merits broader investment powers, provided that:—no
132132 105funds are to be invested directly in mortgages or in collateral loans;
133133 106 (ii) no new investment of funds shall be made in the stocks, securities or other obligations
134134 107of any company that:
135135 108 (A) acts in a manner that diminishes the economic opportunities available to workers in
136136 109the commonwealth;
137137 110 (B) refuses to uphold worker's rights including the recognition of representative unions
138138 111and their rights to bargain collectively, to strike, to picket peacefully, the establishment of a
139139 112policy that strike breakers will not be hired;(iii) subsequent to the date of such determination no
140140 113new investment of funds shall be made in stocks, securities or other obligations of any company
141141 114which derives more than 15 per cent of its revenues from the sale of tobacco products;
142142 115 (j) Clauses (i), (ii), and (iii) of paragraph (i) shall apply to any retirement system named
143143 116in paragraph (a).
144144 117 (2A) Pension Reserves Investment Management Board. — (a) There shall be an unpaid
145145 118pension reserves investment management board which shall have general supervision of the
146146 119investment and reinvestment of the PRIT Fund established under the provisions of subdivision
147147 120(8) of section 22.
148148 121 Such board shall consist of nine members as follows: the governor, ex officio, or their
149149 122designee, the state treasurer, ex officio, or their designee, who shall serve as chair of the board, a 7 of 16
150150 123private citizen experienced in the field of investment or financial management appointed by the
151151 124state treasurer, an employee or retiree who is a member of the state teachers retirement system
152152 125who shall be elected by the members in or retired from such a system for a term of three years in
153153 126such a manner as the board shall determine, an employee or retiree who is a member of the state
154154 127employees' retirement system who shall be elected by the members in or retired from such
155155 128system for a term of three years in such a manner as the board shall determine, the elected
156156 129member of the state retirement board, one of the elected members of the teachers' retirement
157157 130board, who shall be chosen by the members of the teachers' retirement board, a person who is not
158158 131an employee or official of the commonwealth who shall be appointed by the governor, and a
159159 132representative of a public safety union who shall be appointed by the governor. The appointed
160160 133members shall serve for four years. Any vacancy among the appointed members that may occur
161161 134before the expiration of a term shall be filled by an appointment by the treasurer, or the governor,
162162 135whoever had the right of making the initial appointment. Any appointed member of the board,
163163 136including members appointed to fill a vacancy shall be eligible for reappointment. Any appointed
164164 137member may be removed from their appointment for cause by the treasurer or the governor,
165165 138whoever had the right of making the original appointment.
166166 139 (b) Five members of the board shall constitute a quorum. The members of the board shall
167167 140not receive a salary but shall be reimbursed for actual and necessary expenses. The provisions of
168168 141chapter 268A shall apply to all members of the board; provided, however, that the board may
169169 142make investments in which a member has an interest or involvement if, however, such interest or
170170 143involvement is disclosed in advance to the other members of the board and contemporaneously
171171 144recorded in the minutes of the board; and provided, further, that no member having such an 8 of 16
172172 145interest or involvement may participate in any particular matter, as defined in section one of
173173 146chapter 268 A, relating to such investment.
174174 147 (c) The PRIM board may commingle moneys on deposit in the PRIT Fund for purposes
175175 148of investment; provided, however, that the board shall maintain appropriate records to account
176176 149for amounts credited to particular accounts or funds. The PRIM board may offer to purchasing
177177 150systems, and may allocate to the state employees' and teachers' retirement systems, shares in the
178178 151PRIT Fund which represent undivided interests in specified portions of the assets of the fund
179179 152rather than undivided interests in the whole.
180180 153 (d) The PRIM board shall annually on or before May first, file with the clerk of the house
181181 154of representatives and with the secretary of the retirement board of each system which is a
182182 155participant in said fund, on a form prescribed by the commission, a sworn statement of the
183183 156financial condition of said fund as of December 31 the previous year. The commission may for
184184 157cause shown extend the time for filing any such statement.
185185 158 (e) The PRIM board shall:
186186 159 (i) act as trustees for each participating retirement system for which it invests or manages
187187 160monies in accordance with the standard of care set forth in subdivision (3); provided, however,
188188 161that the duties and obligations of the PRIM board and of participating or purchasing systems
189189 162shall be set forth in a declaration of trust adopted by the PRIM board; and provided, further, that
190190 163any declaration of trust and any amendments thereto adopted by said board shall be subject to the
191191 164approval of the joint committee on public service; and provided, further, that if said committee
192192 165takes no final action relative thereto within 45 days of the date of the filing thereof with the clerk 9 of 16
193193 166of the house of representatives and the senate, such declarations of trust and such amendments
194194 167thereto shall be deemed to be approved;
195195 168 (ii) employ an executive director as provided in paragraph (f);
196196 169 (iii) employ investment advisors, legal counsel, and consultants as it deems necessary;
197197 170 (iv) establish a formula to measure the value of the shares in said fund purchased by or
198198 171held by participating retirement systems and other purchasing retirement systems;
199199 172 (v) determine and allocate annually to participating and other purchasing retirement
200200 173systems earnings on shares owned by said systems;
201201 174 (vi) adopt an annual budget and supplemental budgets as deemed necessary by the board
202202 175subject to the approval of the house and senate committees on ways and means; provided,
203203 176however, that if the said committees has taken no final action to disapprove any such budget,
204204 177within 60 days of its being filed with said general court it shall be deemed to be approved; and
205205 178provided, further, that if the general court disapproves any such budget within such 60 days, said
206206 179board shall operate under the annualized budgetary level most recently approved pending the
207207 180filing and subsequent approval of any other such annual or supplemental request;
208208 181 (vii) approve or ratify decisions of the executive director;
209209 182 (viii) formulate policies and procedures deemed necessary and appropriate to carry out its
210210 183function;
211211 184 (ix) maintain a record of its proceedings; 10 of 16
212212 185 (x) undertake any other activities necessary to implement the duties and powers set forth
213213 186herein.
214214 187 (xi) File quarterly, on or before March first, June first, September first, and December
215215 188first of each year, with the house and senate committee on ways and means and with the joint
216216 189committee on public service a report detailing brokerage transactions, fees paid to investment
217217 190consultants and managers, master trustee and custody fees, a detailed investment portfolio
218218 191analysis describing all holdings in the PRIT Fund, and a budget status report detailing expenses
219219 192by month; provided, however, that said analysis and said reports shall be made available on the
220220 193first day of each month upon the request of the chairman of any said committees.
221221 194 (xii) Assess fees to participating and other purchasing retirement systems for the
222222 195reasonable and necessary expenses incurred by the board in managing the PRIT Fund, which
223223 196shall be paid by the board from earnings of the PRIT Fund without appropriation and in
224224 197conformance with the budgetary levels established pursuant to clause (vi).
225225 198 (xiii) acts as treasurer-custodian of the PRIT Fund and shall have the custody of the funds
226226 199and securities of said fund.
227227 200 (xiv) put a mechanism in place to monitor current market conditions to detect and
228228 201immediately notify the board of potential high-risk corporate investments, so that the board can
229229 202take action, when possible, to prevent investment losses.
230230 203 (f) The PRIM board shall select an executive director who shall serve at the pleasure of
231231 204the board. The provisions of sections 9 A, 45, 46 and 46 C of chapter thirty, chapter 31, and
232232 205chapter 150 E shall not apply to the executive director or any other employees of the board. 11 of 16
233233 206 (g) The executive director, shall with the approval of the board:
234234 207 (i) plan, direct, coordinate and execute administrative and investment functions in
235235 208conformity with the policies and directives of the board;
236236 209 (ii) employ professional and clerical staff as necessary.
237237 210 (iii) report to the board on all operations under his control and supervision;
238238 211 (iv) require state officials from any department or officials from any participating
239239 212retirement system to produce and provide access to any financial documents the board deems
240240 213necessary in the conduct of its investment activities;
241241 214 (v) undertake any other activities necessary to implement the powers and duties set forth
242242 215herein.
243243 216 (h) (i) Subject to the approval or ratification of the PRIM board, the executive director
244244 217shall invest and reinvest such funds held by such board to the extent not required for current
245245 218disbursements
246246 219 (A). as much as reasonably possible to benefit and expand the economic climate within
247247 220the commonwealth;
248248 221 (B). as much as reasonably possible to benefit the best interests of members and
249249 222beneficiaries and the financial and social welfare of workers within the commonwealth
250250 223including, but not limited to, consideration of potential long-term consequences of an investment
251251 224to members ’wages and job security. 12 of 16
252252 225 (C). as much as reasonably possible ensure that funds are invested in banks or financial
253253 226institutions which directly or through any subsidiary may make loans to small businesses, as
254254 227defined in clause (a) of subdivision (7), and that when electing to make such investments the
255255 228board shall review the guidelines for investing in small businesses contained in said subdivision
256256 229(7) and monies shall be invested as much as reasonably possible in such banks, financial
257257 230institutions or companies which provide capital to small businesses under those guidelines so
258258 231long as such use is consistent with sound investment policy in accordance with the procedures
259259 232and processes employed to oversee the allocation of traditional investment of funds, and the
260260 233other requirements of this section.
261261 234 (ii) (A) No public pension funds under this subdivision shall remain invested in the
262262 235stocks, securities, or other obligations of any company which derives more than 15 per cent of its
263263 236revenues from the sale of tobacco products; provided, however, that if sound investment policy
264264 237so requires, the PRIM board may vote to spread the sale of such stocks, securities or other
265265 238obligations of such company over no more than three years, so that no less than one-third the
266266 239value of said investment is sold in any one year.
267267 240 (B) So long as any funds remain invested in any stocks, securities, or other obligations of
268268 241any such company, the PRIM board shall annually, on or before January 31, file with the clerk of
269269 242the senate and the clerk of the house of representatives a report listing all such related
270270 243investments held by the fund and their book value as of the preceding December first. The
271271 244investment and fund management policies adopted by the PRIM board shall not be subject to any
272272 245rules or regulations promulgated by the public employee retirement administration commission
273273 246governing the investment of funds by the retirement boards. 13 of 16
274274 247 (i) at least two members of the PRIT board shall be minority people, as set forth in the
275275 248definition of ''Minority'' contained in section forty C of chapter seven of the General Laws, as
276276 249added by section seven of chapter five hundred and seventy-nine of the acts of nineteen hundred
277277 250and eighty.
278278 251 (j) The PRIM board shall be subject to the provisions of sections 39A and sections 40(E)
279279 252to 40 (J), inclusive, of chapter seven.
280280 253 (3) Fiduciary Standards. — A fiduciary as defined in section one shall:
281281 254 (a) discharge their duties for the exclusive purpose of providing benefits to members and
282282 255their beneficiaries with the care, skill, prudence and diligence under the circumstances then
283283 256prevailing that a prudent person acting in a like capacity and familiar with such matters would
284284 257use in the conduct of an enterprise of a like character and with like aims and by diversifying the
285285 258investments of the system so as to minimize the risk of large losses unless under the
286286 259circumstances it is clearly prudent not to do so.
287287 260 (b) Discharge their duties in the best interests of members and their beneficiaries by
288288 261equally considering investment returns, employer contributions to the fund, and employee
289289 262contributions to the fund.
290290 263 Each member of a retirement board established under this chapter shall upon the
291291 264commencement of the member's term file with the commission a statement acknowledging the
292292 265member is aware of and will comply with the standards set forth in chapter 268A, this chapter
293293 266and rules and regulations promulgated under this chapter. 14 of 16
294294 267 (4) Orders to protect the system. — If the commission determines after a hearing that the
295295 268investment or record keeping practices of any board are not being conducted with reasonable
296296 269care, skill, prudence or diligence, he may order such board to take or desist from any action that
297297 270in his judgment is necessary to preserve the integrity of the system. If the commission has reason
298298 271to believe that the investment and record keeping practices of any board are not being conducted
299299 272with reasonable care, skill, prudence or diligence, he may issue a temporary order which shall
300300 273remain in effect until an investigation, hearing and determination can be made. Violation of any
301301 274such order shall be punished as provided for in section 24.
302302 275 (5) Confidentiality of certain records. Any documentary material or data made or
303303 276received by a member of the PRIM board which consists of trade secrets or commercial or
304304 277financial information that relates to the investment of public trust or retirement funds, shall not
305305 278be disclosed to the public if disclosure is likely to impair the government's ability to obtain such
306306 279information in the future or is likely to cause substantial harm to the competitive position of the
307307 280person or entity from whom the information was obtained. The provisions of the open meeting
308308 281law shall not apply to the PRIM board when it is discussing the information described in this
309309 282subdivision. This subdivision shall apply to any request for information covered by this
310310 283subdivision for which no disclosure has been made by the effective date of this subdivision.
311311 284 (6) The guidelines for investing in small businesses with a principal place of business in
312312 285the commonwealth shall be:
313313 286 (a) For the purposes of this section small business shall be a business entity, including its
314314 287affiliates, that: (i) is independently owned and operated; (ii) has a principal place of business in
315315 288the commonwealth; and (iii) would be defined as a ''small business'' under applicable federal law, 15 of 16
316316 289as established in the United States Code and promulgated from time to time by the United States
317317 290Small Business Administration.
318318 291 (b) Investments shall be made by banks or financial institutions with demonstrated
319319 292experience making capital available to small businesses with good management, which are fast
320320 293growing and identify the potential to use increased capital to create jobs and which are
321321 294experiencing difficulty in accessing capital.
322322 295 (c) Capital shall be provided to small businesses in a variety of financial instruments,
323323 296including but not limited to: working capital and expansion loans to businesses, both secured and
324324 297non-secured; provide lines of credit; capital expenditure loans; term loans; project finance loans;
325325 298grants; loan guarantees; and mezzanine and structured finance loans.
326326 299 (d) Capital shall not be provided unless financial and managerial advisory services are
327327 300also provided to the business that is served.
328328 301 (7)(a) It shall be the policy of the PRIM board to use minority investment managers to
329329 302manage PRIT Fund assets, encompassing all asset classes, and to increase the racial, ethnic, and
330330 303gender diversity of PRIT Fund investments to the greatest extent feasible, consistent with sound
331331 304investment policy. The PRIM board and the executive director shall take affirmative steps to
332332 305remove any barriers to the full participation of minority investment managers in investment
333333 306opportunities. Such affirmative steps shall include, but not be limited to, consideration of
334334 307whether current investment policy discourages the use of minority investment managers through
335335 308quantitative or qualitative restrictions, including, but not limited to, number of years track record
336336 309and minimum assets under management. 16 of 16
337337 310 (b) It shall be the goal of the PRIM board that not less than 20 per cent of investment
338338 311managers be minorities, females and persons with disabilities. It shall further be the goal of the
339339 312PRIM board to utilize businesses owned by minorities, females and persons with disabilities for
340340 313not less than 20 per cent of total contracts awarded pursuant to section 23B.
341341 314 (c) Annually, not later than January 15 of each year, the PRIM board shall file with the
342342 315house and senate committee on ways and means and with the joint committee on public service a
343343 316report detailing its progress toward implementing the policies and goals outlined above. Such
344344 317report shall include documentation related to all minority investment managers considered for
345345 318investment, including documentation, where applicable, of the reasons for declining any such
346346 319investment.