MISSISSIPPI LEGISLATURE
2015 Regular Session
To: Banking and Financial Services
By: Representatives Zuber, Barton, Busby, Guice, Read, Anderson
AN ACT TO BE KNOWN AS THE PUBLIC PENSION NOTIFICATION ACT; TO REQUIRE CERTAIN PUBLIC RETIREMENT SYSTEMS TO DISCLOSE CERTAIN INFORMATION TO THE PUBLIC AND PROVIDE CERTAIN INFORMATION TO PARTICIPANTS; TO PROVIDE THAT THE ACT APPLIES TO ALL PUBLIC RETIREMENT PROGRAMS AND RETIREMENT SYSTEMS, WITH CERTAIN EXCEPTIONS; TO REQUIRE THE ADMINISTRATOR OF A RETIREMENT SYSTEM TO DISSEMINATE TO THE PUBLIC A SUMMARY PLAN DESCRIPTION, ANNUAL DISCLOSURE OF FINANCIAL AND ACTUARIAL STATUS, AND AN ANNUAL REPORT; TO REQUIRE THE ADMINISTRATOR OF A RETIREMENT SYSTEM TO FURNISH TO EACH PARTICIPANT AND BENEFICIARY WHO IS RECEIVING BENEFITS UNDER A RETIREMENT PROGRAM CERTAIN INFORMATION ABOUT THE PROGRAM; TO REQUIRE THE ADMINISTRATOR OF A RETIREMENT SYSTEM TO FILE CERTAIN INFORMATION WITH THE RETIREMENT SYSTEM; TO AUTHORIZE ENFORCEMENT OF THE PROVISIONS OF THIS ACT BY AN ACTION MAINTAINED BY A PUBLIC EMPLOYER OR BY A PARTICIPANT OR BENEFICIARY; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Short title. This act shall be known and may be cited as the Public Pension Notification Act.
SECTION 2. Definitions. (1) As used in this act:
(a) "Administrator" means the person primarily responsible for the management of a retirement system or, if no person is clearly designated, the trustee of the system who has the ultimate authority to manage the system;
(b) "Agent group of programs" means a group of retirement programs that shares administrative and investment functions but maintains a separate account for each retirement program so that assets accumulated for a particular program may be used to pay benefits only for that program's participants and beneficiaries;
(c) "Appropriate grouping of programs" means:
(i) For defined benefit plans, a cost-sharing program or an agent group of programs; and
(ii) For defined contribution plans, a group of retirement programs which shares administrative and investment functions.
(d) "Beneficiary" means a person, other than the participant, who is designated by a participant or by a retirement program to receive a benefit under the program;
(e) "Code" means the federal Internal Revenue Code of 1986, as amended;
(f) "Cost-sharing program" means a retirement program for the employees of more than one (1) public employer in which all assets accumulated for the payment of benefits may be used to pay benefits to any participants or beneficiaries of the program;
(g) "Defined benefit plan" means a retirement program other than a defined contribution plan;
(h) "Defined contribution plan" means a retirement program that provides for an individual account for each participant and for benefits based solely upon the amount contributed to the participant's account, and any income, expenses, gains and losses credited or charged to the account and any forfeitures of accounts of other participants that may be allocated to the participant's account;
(i) "Employee" includes an officer of a public employer;
(j) "Fair value" means the amount that a willing buyer would pay a willing seller for an asset in a current sale, as determined in good faith by a trustee;
(k) "Furnish" means:
(i) To deliver personally, to mail to the last known place of employment or home address of the intended recipient, or, if reasonable grounds exist to believe that the intended recipient would receive it in ordinary course, to transmit by any other usual means of communication; or
(ii) To provide to the intended recipient's public employer if reasonable grounds exist to believe that the employer will make a good faith effort to deliver personally, by mail, or by other usual means of communication.
(l) "Governing law" means state and local laws establishing or authorizing the creation of a retirement program or system and the principal state and local laws and regulations governing the management of a retirement program or system or assets of either;
(m) "Guaranteed benefit policy" means an insurance policy or contract to the extent the policy or contract provides for benefits in a guaranteed amount. The term includes any surplus in a separate account, but excludes any other portion of a separate account;
(n) "Insurer" means a company, service, or organization qualified to engage in the business of insurance in this state;
(o) "Nonforfeitable benefit" means an immediate or deferred benefit that arises from a participant's service, is unconditional, and is enforceable against the retirement system;
(p) "Participant" means an individual who is or has been an employee enrolled in a retirement program and who is or may become eligible to receive or is currently receiving a benefit under the program, or whose beneficiaries are or may become eligible to receive a benefit. The term does not include an individual who is no longer an employee of a public employer and has not accrued any nonforfeitable benefits under that employer's retirement program;
(q) "Public employer" means this state or any political subdivision, or any agency or instrumentality of this state or any political subdivision, whose employees are participants in a retirement program;
(r) "Qualified public accountant" means:
(i) An auditing agency of this state or a political subdivision of this state that has no direct relationship with the functions or activities of a retirement system or its fiduciaries other than:
1. Functions relating to this act; or
2. A relationship between the system and the agency's employees as participants or beneficiaries on the same basis as other participants and beneficiaries; or
(ii) A person who is an independent certified public accountant, certified or licensed by a regulatory authority of a state;
(s) "Related person" of an individual means:
(i) The individual's spouse or a parent or sibling of the spouse;
(ii) The individual's descendant, sibling or parent, or the spouse of the individual's descendant, sibling or parent;
(iii) Another individual residing in the same household as the individual;
(iv) A trust or estate in which an individual described in subparagraph (i), (ii) or (iii) of this paragraph has a substantial interest;
(v) A trust or estate for which the individual has fiduciary responsibilities; or
(vi) An incompetent, ward or minor for whom the individual has fiduciary responsibilities;
(t) "Retirement program" means a program of rights and obligations which a public employer establishes or maintains and which, by its express terms or as a result of surrounding circumstances:
(i) Provides retirement income to employees; or
(ii) Results in a deferral of income by employees for periods extending to the termination of covered employment or beyond;
(u) "Retirement system" means an entity established or maintained by a public employer to manage one (1) or more retirement programs, or to invest or manage the assets of one (1) or more retirement programs;
(v) "Trustee" means a person who has ultimate authority to manage a retirement system or to invest or manage its assets.
SECTION 3. Scope. This act applies to all retirement programs and retirement systems, except:
(a) A retirement system, program or plan that is administered by the Board of Trustees of the Public Employees' Retirement System;
(b) A retirement program that is unfunded and is maintained by a public employer solely for the purpose of providing deferred compensation for a select group of management employees or employees who rank in the top five percent (5%) of employees of that employer based on compensation;
(c) A severance-pay arrangement under which:
(i) Payments are made solely on account of the termination of an employee's service and are not contingent upon the employee's retiring;
(ii) The total amount of the payments does not exceed the equivalent of twice the employee's total earnings from the public employer during the year immediately preceding the termination of service; and
(iii) All payments are completed within twenty-four (24) months after the termination of service.
(d) An arrangement or payment made on behalf of an employee because the employee is covered by Title II of the federal Social Security Act, as amended (42 USC Section 401 et seq.);
(e) A qualified governmental excess benefit arrangement within the meaning of Section 415(m) of the code;
(f) An individual retirement account or individual retirement annuity within the meaning of Section 408 of the code;
(g) A retirement program consisting solely of annuity contracts or custodial accounts satisfying the requirements of Section 403(b) of the code; or
(h) A program maintained solely for the purpose of complying with workers' compensation laws or disability insurance laws.
SECTION 4. Disclosure to public. (1) An administrator of a retirement system shall prepare and disseminate:
(a) A summary plan description of each retirement program;
(b) A summary description of any material modification in the terms of the program and any material change in the information required to be contained in the summary plan description, to the extent the modification or change has not been integrated into an updated summary plan description;
(c) An annual disclosure of financial and actuarial status; and
(d) An annual report.
(2) An administrator shall make available for public examination in the principal office of the administrator and in other places if necessary to make the information reasonably available to participants:
(a) The governing law of the retirement program and system;
(b) The most recent summary plan description;
(c) Summary descriptions of modifications or changes described in subsection (1)(b) of this section that have been provided to participants and beneficiaries but not yet integrated into the summary plan description;
(d) The most recent annual disclosure of financial and actuarial status; and
(e) The most recent annual report.
(3) Upon written request by a participant, beneficiary or member of the public, the administrator shall provide a copy of any publication described in subsection (2) of this section. Except as otherwise provided in Section 5(1) of this act, the administrator may charge a reasonable fee to cover the cost of providing copies and shall provide the copies within thirty (30) days after receiving payment.
SECTION 5. Disclosure to participants and beneficiaries.
(1) An administrator shall furnish to each participant and to each beneficiary who is receiving benefits under a retirement program:
(a) A copy of the most recent summary plan description, along with any summary descriptions of modifications or changes described in Section 4(1)(b) of this act, within three (3) months after a person becomes a participant or, in the case of a beneficiary, within three (3) months after a person first receives benefits, or, if later, within four (4) months after the retirement program becomes subject to this act;
(b) The summary description of any modifications or changes described in Section 4(1)(b) of this act, within seven (7) months after the end of the fiscal year in which a modification or change has been made;
(c) A copy of an updated summary plan description that integrates all modifications and changes at intervals not exceeding five (5) years; and
(d) The annual report within seven (7) months after the end of each fiscal year.
(2) An administrator shall provide to a participant or beneficiary a statement containing information that would permit the participant or beneficiary to estimate projected benefits reasonably, to the extent the information is regularly maintained by the retirement system. The information shall be provided with the annual report or upon written request of the participant or beneficiary. The information need not be provided to a participant or beneficiary who is currently receiving benefits.
(3) A participant who is not currently receiving benefits is entitled without charge to one (1) statement under subsection (2) of this section during any fiscal year. The administrator may charge a reasonable fee to cover the cost of providing other statements. The administrator shall provide the statements within thirty (30) days after the participant or beneficiary's request or, if a fee is charged, within thirty (30) days after receiving payment.
SECTION 6. Reports to retirement system. An administrator shall file with the retirement system a copy of:
(a) The governing law of the retirement program and system within four (4) months after the system becomes subject to this act and an updated copy at least once every year thereafter;
(b) The summary plan description within four (4) months after the system becomes subject to this act and of updated summary plan descriptions at the same time they are first furnished to any participant or beneficiary under Section 5(1)(c) of this act;
(c) Any summary description of modifications or changes within seven (7) months after the end of the fiscal year in which a modification or change has been made; and
(d) The annual disclosure of financial and actuarial status and annual report within seven (7) months after the end of each fiscal year.
SECTION 7. Summary plan description. (1) A summary plan description and a summary description of modifications or changes under Section 4(1)(b) of this act shall be written in a manner calculated to be understood by the average participant and be accurate and sufficiently comprehensive reasonably to inform the participants and beneficiaries of their rights and obligations under the retirement program.
(2) A summary plan description shall contain:
(a) The name of the retirement program and system and type of administration;
(b) The name and business address of the administrator;
(c) The name and business address of each agent for service of process;
(d) Citations to the governing law of the retirement program and system;
(e) A description of the program's requirements respecting eligibility for participation and benefits;
(f) A description of the program's provisions providing for nonforfeitable benefits;
(g) A description of circumstances that may result in disqualification, ineligibility or denial or loss of benefits;
(h) A description of the benefits provided by the program, including the manner of calculating benefits and any benefits provided for spouses and survivors;
(i) The source of financing of the program;
(j) The identity of any organization through which benefits are provided;
(k) The date the fiscal year ends;
(l) The procedures to claim benefits under the program and the administrative procedures available under the program for the redress of claims that are denied in whole or in part; and
(m) Notice of the availability of additional information under Sections 4(2) and (3), 5(2) and (3) and 6 of this act.
SECTION 8. Annual disclosure of financial and actuarial
status. An annual disclosure of financial and actuarial
status shall contain:
(a) The name of the retirement system and identification of each retirement program and, when programs are in an appropriate grouping of programs, of each appropriate grouping of programs;
(b) The name and business address of the administrator;
(c) The name and business address of each trustee and each member of a trustee board and a brief description of how the trustee or member was selected;
(d) The name and business address of each agent for the service of process;
(e) The number of employees covered by each retirement program not in an appropriate grouping of programs, or by each appropriate grouping of programs, or both;
(f) Financial statements and notes to the financial statements in conformity with generally accepted accounting principles;
(g) An opinion on the financial statements by a qualified public accountant in conformity with generally accepted auditing standards;
(h) In the case of a defined benefit plan, actuarial schedules and notes to the actuarial schedules in conformity with generally accepted actuarial principles and practices for measuring pension obligations;
(i) In the case of a defined benefit plan, an opinion by a qualified actuary that the actuarial schedules are complete and accurate to the best of the actuary's knowledge, that each assumption and method used in preparing the schedules is reasonable, that the assumptions and methods in the aggregate are reasonable, and that the assumptions and methods in combination offer the actuary's best estimate of anticipated experience;
(j) A description of any material interest, other than the interest in the retirement program itself, held by any public employer participating in the system or any employee organization representing employees covered by the system in any material transaction with the system within the last three (3) years or proposed to be effected;
(k) A description of any material interest held by any trustee, administrator or employee who is a fiduciary with respect to the investment and management of assets of the system, or by a related person, in any material transaction with the system within the last three (3) years or proposed to be effected;
(l) A schedule of the rates of return, net of total investment expense, on assets of the system overall and on assets aggregated by category over the most recent one (1), three (3), five (5) and ten (10) year periods, to the extent available, and the rates of return on appropriate benchmarks for assets of the system overall and for each category over each period;
(m) A schedule of the sum of total investment expense and total general administrative expense for the fiscal year expressed as a percentage of the fair value of assets of the system on the last day of the fiscal year, and an equivalent percentage for the preceding five (5) fiscal years; and
(n) A schedule of all assets held for investment purposes on the last day of the fiscal year aggregated and identified by issuer, borrower, lessor or similar party to the transaction stating, if relevant, the asset's maturity date, rate of interest, par or maturity value, number of shares, cost and fair value and identifying any asset that is in default or classified as uncollectible.
SECTION 9. Annual report. (1) An annual report shall contain:
(a) The name and business address of each trustee and each member of a trustee board;
(b) The financial statements, but not the notes, required by Section 8(h) of this act;
(c) For defined benefit plans, the actuarial schedules, but not the notes, required by Section 8(j) of this act;
(d) The schedules described in Section 8(n) and (o) of this act;
(e) A brief description of and information about how to interpret the statements and schedules;
(f) Other material necessary to summarize fairly and accurately the annual disclosure of financial and actuarial status; and
(g) Notice of the availability of additional information pursuant to Sections 4(2) and (3), 5(2) and (3) and 6 of this act.
SECTION 10. Enforcement. (1) An action may be maintained by:
(a) A public employer, participant or beneficiary:
(i) To enjoin an act, practice or omission that violates this act; or
(ii) For other appropriate equitable relief to redress the violation of or to enforce this act; or
(b) The retirement system to enjoin any violation of Section 6 of this act.
(2) In an action under this section by a participant or beneficiary, the court may award reasonable attorney fees and costs to either party.
SECTION 11. This act shall take effect and be in force from and after its passage.