BOSTON INVESTS IN STATE FUND

December 5, 2008: At the December 2 meeting of the Commonwealth’s PRIM Board, it was announced that the City of Boston Retirement Board had voted to transfer 27% of the Boston Retirement System’s assets to the Commonwealth’s Pension Reserves Investment Trust (PRIT) Fund. The 27% transfer equates to the Boston teachers’ pro rata value of the $3.8 billion Boston pension fund. The 3-2 vote by the Boston Board took place at their October 29th meeting. A home rule petition, allowing the transfer, will be filed with the State’s Legislature.

Boston’s teachers, active and retired, unlike other teachers, are not members of the State’s Teachers’ Retirement System. As members of the Boston Retirement System their pension costs are reimbursed to Boston by the state.

The state’s 104 local retirement systems are allowed to invest all or a portion of their funds with the PRIT fund on a voluntary basis. However, last year 12 systems were forced to transfer their funds to PRIT under new legislation. Chapter 68 of the Acts of 2007 established stringent standards on funding levels and investment performance that a retirement system had to satisfy; otherwise, it had to join PRIT. Having exceeded the funding standards, Boston was not one of the systems that was forced into the PRIT Fund.

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