Colorado § 24-51-315 - Termination of affiliation - reserves requirement.

§ 24-51-315. Termination of affiliation - reserves requirement.

(1) The board has the authority to determine the amount of reserves required as of the effective date of termination of affiliation to:

(a) Maintain current benefits payable by the association to benefit recipients and to preserve the vested rights of inactive members; and

(b) Fully fund the liability for benefits payable by the association from the health care trust fund created by section 24-51-1201(1) to current and future benefit recipients pursuant to part 12 of this article 51.

(2) The amount of reserves required under subsections (1)(a) and (1)(b) of this section shall be determined by the board utilizing certified actuarial reports prepared by the actuary. The actuarial study shall be conducted using assumptions approved by the board. The actuarial report shall also certify that the termination of affiliation shall not have an adverse financial impact on the actuarial soundness of the local government division trust fund. If the actuary determines, in accordance with accepted actuarial principles, that the termination of affiliation shall have an adverse financial impact on the actuarial soundness of the local government division trust fund, the applicant shall not be permitted to terminate affiliation. On the effective date of termination of affiliation, the actuarial reports prepared pursuant to this subsection (2) shall be updated to finalize the amount of reserves required for the purposes specified in this subsection (2). The employer making the application and the employees of such employer who are members shall not be required to make any contributions to the association subsequent to the effective date of termination.

(3) The expenses incurred by the board for the actuarial reports prepared as a result of an application for termination of affiliation shall be paid by the employer making such application.

(4) The board shall provide any information contained in such actuarial reports upon request of the employer making the application for termination of affiliation.

(5) The discount rate used for determining the amount of reserves in subsection (1) of this section shall be the actuarial investment assumption rate as set by the board pursuant to sections 24-51-101 (2) and 24-51-204 (5) minus two hundred basis points.

(6) Determinations made by the board in this section and sections 24-51-313 and 24-51-316 shall be appealed through the administrative review procedures set forth in the board rules. Such final decision by the board shall be subject only to review by proper court action.

Source: L. 88: Entire section added, p. 966, § 1, effective April 28. L. 2004: (1) amended, p. 1941, § 13, effective January 1, 2006. L. 2018: (1) and (2) amended and (5) and (6) added, (SB 18-200), ch. 370, p. 2239, § 7, effective June 4.

Cross references: For the legislative declaration in SB 18-200, see section 1 of chapter 370, Session Laws of Colorado 2018.