US - Legislators in Massachusetts have reportedly approved a bill allowing the state to seize the assets of 19 underperforming local government pension funds.
Under the provisions of the pension bill, it is understood that poorly performing local systems would be required to hand over their funds to the state Pensions Reserves Management Board.
The legislation also reportedly called for the state to take over pension funds that trailed the state fund’s average rate of return over the previous ten years by at least 2%. These local systems must also be less than 65% fully funded to qualify for a takeover, according to reports.
In response to earlier criticism, legislators reportedly changed the pensions bill to establish an appeals process for local boards whose money would be seized by the state.
Furthermore, if a pension’s system rate of return was reduced by “extenuating circumstances” it is believed that a system could be exempted from a takeover.
Benjamin Downing, a senator believed to be a key author in the pensions bill, reportedly said the goal of the legislation was to promote retirement security and reduce pressure on property taxes.
At one stage, if original legislation filed by Governor Deval Patrick had been agreed, it is thought that as many as 52 funds would have been brought under the state's control
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Kate Smith has been named head of master trust at Aegon following the acquisition of BlackRock's defined contribution (DC) businesses.
Andy Palmer says trustees and employers should prepare for a no deal, which could pose big risks to sponsor covenants