Table of Contents
Sec. 7-403a. Loss and retiree benefits reserve fund.
Sec. 7-403a. Loss and retiree benefits reserve fund. (a) Upon the recommendation of the chief executive officer of a municipality and approval of the budget-making
authority of the municipality, the legislative body of any municipality, as defined in
section 7-369, may, by a majority vote, create a loss and retiree benefits reserve fund.
The provisions of subsection (a) of section 7-450, regarding the establishment of postemployment health and life benefit systems, shall not affect the provisions of this section.
(b) Upon the recommendation of the chief executive officer and approval of the
budget-making authority and the legislative body, there shall be paid into such reserve
fund (1) amounts authorized to be transferred thereto from the general fund cash surplus
available at the end of any fiscal year, (2) amounts raised by the annual levy of a tax
for the benefit of such fund, and for no other purpose, provided such tax shall be levied
and collected in the same manner and at the same time as the regular annual taxes of
the municipality, or (3) the proceeds of bonds, notes or other obligations issued pursuant
to subsection (b) of section 7-374b.
(c) The budget-making authority may, from time to time, direct the treasurer to
invest such portion of such reserve fund as in its opinion is advisable, provided: (1) Not
more than forty per cent of the total amount invested shall be invested in equity securities
and (2) not less than fifty per cent of the total amount invested shall be invested in United
States government obligations, United States agency obligations, United States postal
service obligations, certificates of deposit, commercial paper, savings accounts and bank
(d) The treasurer shall submit annually a complete and detailed report of the condition of such fund to the chief executive officer, the budget-making authority and the
legislative body and such report shall be made a part of the annual report of the municipality.
(e) Upon the recommendation of the chief executive officer and the budget-making
authority and approval by the legislative body, any part or the whole of such fund may
be used and appropriated to pay only for property or casualty losses and employee
retirement benefits, and expenses related thereto, including court costs and attorneys'
fees, incurred by the municipality. Any unexpended portion of such appropriation remaining after such payment, together with all interest accruing on the balance in the
fund, shall revert to and be credited to such reserve fund. For the purposes of this section,
"property or casualty losses and employee retirement benefits" shall include, but not
be limited to, (1) motor vehicle liability, physical damage and collision, (2) loss or
damage to, or legal liability for, real or personal property, (3) legal liability for personal
injuries or deaths, including but not limited to, workers' compensation and heart and
hypertension, and (4) retiree health and life benefits.
(f) Such fund may be discontinued, after recommendation by the chief executive
officer and the budget-making authority to the legislative body and upon approval of
such body, and such fund shall be converted into, or added to, a sinking fund to provide
for the retirement of the bonded indebtedness of the municipality. If the municipality
has no bonded indebtedness, such fund shall be transferred to the general fund of the
(P.A. 86-350, S. 25, 28; P.A. 92-172, S. 2; P.A. 93-46, S. 1; P.A. 04-116, S. 1; P.A. 05-202, S. 1.)
History: P.A. 92-172 amended Subsec. (a) renaming the fund the "loss and retiree benefits reserve fund" and amended
Subsec. (e) to allow payments for employee retirement benefits and to define "property or employee losses and employee
retirement benefits" and made technical changes for consistency in Subsecs. (b), (c), (d) and (f); P.A. 93-46 amended
Subsec. (c) to clarify the portion of reserve funds which a municipality may invest in equity securities; P.A. 04-116 amended
Subsec. (c) to increase portion of funds which a municipality may invest in equity securities from thirty-one per cent to
forty per cent, effective May 21, 2004; P.A. 05-202 amended Subsec. (a) by providing that section is not affected by Sec.
7-450(a) re establishment of postemployment health and life benefit systems.