PERAC Memo #21 - 2023: Updated Travel and Expense Regulations (840 CMR 2.00)

840 Mass. Code Regs. 2.01 General Provisions (Code of Massachusetts Regulations (2021 Edition))

2.01. General Provisions

(1) 840 CMR 2.00 is the standard rule for travel and travel related expenditures by rRetirement bBoard mMembers and rRetirement bBoard staff members. The Public Employee Retirement Administration Commission PERAC recognizes that rRetirement bBoard mMembers and the rRetirement bBoard staff must perform their fiduciary duties in an efficient, effective, and informed manner. All travel related expenses that are to be paid for by the bBoard shall be related to the purpose of the authorized travel and shall be cost-effective.

(2) The CommissionPERAC recognizes the importance of continuing education; the need for informed decision making by rRetirement bBoard mMembers; and the need for a broader public pension perspective, gained through association with other rRetirement bBoards and administrators, both within the Commonwealth of Massachusetts and throughout the nation, whether virtually or in-person.

(3) Except as otherwise provided by the CommissionPERAC or by supplementary rules of a particular rRetirement bBoard approved by the CommissionPERAC pursuant to 840 CMR 14.02 all travel by rRetirement bBoard mMembers and bBoard staff shall comply with 840 CMR 2.00.

(4) Any Retirement Board supplementary regulation approved by the CommissionPERAC prior to June 6, 2003 shall be deemed to be consistent with 840 CMR 2.00. Retirement bBoards may adopt supplementary regulations to supplement and expand upon the regulations contained in 840 CMR 2.00. Any such bBoard regulations are to be submitted to the CommissionPERAC for review and approval as required by the provisions of G.L. c. 7, § 50 and c. 32, § 21(4).

840 Mass. Code Regs. 2.02 Meaning of Terms (Code of Massachusetts Regulations (2021 Edition))

2.02. Meaning of Terms

Terms common to these regulations and G.L. c. 268A shall have the meaning ascribed to them by G.L. c. 268A and rulings issued pursuant to that law. The regulations contained in 840 CMR 2.00 are in addition to, and, in some respects, more stringent than the provisions of G.L. c. 268A. Unless otherwise defined by the provisions of G.L. c. 32 or regulations promulgated by the CommissionPERAC or by G.L. c. 268A and rulings issued pursuant to that law, the usual and customary definitions for terms used in these regulations shall apply.

840 Mass. Code Regs. 2.03 Board Authorization of Travel and

Travel Related Expenditures (Code of Massachusetts Regulations (2021 Edition)) 2.03. Board Authorization of Travel and Travel Related Expenditures

The rRetirement bBoard shall pay for or make reimbursement to Board Members and the staff of the rRetirement bBoard for all travel and lodging expenses except as specifically authorized pursuant to 840 CMR 2.13 for expenses related to legitimate speaking engagements.

1. Travel and related expenses are to be approved by the bBoard in advance of the travel.

2. Requests for travel by bBoard mMembers and the rRetirement bBoard Executive Director/Administrator shall be placed on a bBoard meeting agenda, discussed in open session, and approved by a majority vote of the mMembers of the bBoard present and voting. The meeting minutes shall reflect the bBoard's action, and the extent of the authorization, and supporting information addressing the nature of the travel and its purpose.

3. A board may authorize the Executive Director/Board Administrator to approve travel for other members of the board's staff. The board should establish policies and procedures for staff travel. Such policies and procedures shall be consistent with 840 CMR 2.00.

5. The nature of the travel, its purpose and estimated cost shall be outlined on a travel authorization form. Brochures for seminars or other presentations should accompany the request for travel where available.

6. A statement describing the presentation, conference, or seminar should be entered into the minutes of the meeting following the travel.

7. A Board may authorize the Executive Director/Board Administrator to approve travel for other members of the Board's staff. The Board should establish policies and procedures for staff travel. Such policies and procedures shall be consistent with 840 CMR 2.00.

6.5. Boards are encouraged to seek and negotiate toshall obtain the most cost- effective means of travel and travel related expenses, pursuant to these regulations and the board’s approved supplementary regulations.

840 Mass. Code Regs. 2.04 Required Documentation for

Reimbursement (Code of Massachusetts Regulations (2021 Edition)) 2.04. Required Documentation for Reimbursement

1. The bBoard shall develop a form to be used in connection with any requests for reimbursement, requiring that the traveler certify that the expenses were incurred and were necessary and incidental to the approved travel.

2. All requests for reimbursement shall be completed and properly approved after incurring any travel, transportation or meal or other travel related expenses and before reimbursement takes place. The rRetirement bBoards shall require that requests for reimbursement be submitted within a reasonable time after the expenses are incurred, but in no event longer than 60 days after the expenses were incurred. If expenses for a single event were incurred over a number of days, requests for reimbursement shall be submitted no later than 60 days from the last day that expenses were incurred

3. Original iItemized receipts must be submitted for all expenses including transportation, lodging, and other expenses incidental to travel.

4. Travel-related expenses that are under $10 (such as gratuities) should be fully described and reimbursed based on the traveler's certification that the expenses were necessary and incidental to the approved travel.

5. The board should use due diligence in reviewing and approving reimbursement requests. Any travel related expenditures which have not been properly documented or approved or are not in conformity with these 840 CMR 2.00 must be rejected or adjusted.

6. Reimbursement shall only be made to the person who actually made payment for the expense.

7. The reimbursement request form must be signed by the person seeking reimbursement and signed under the pains and penalties of perjury.

840 Mass. Code Regs. 2.05 Travel Arrangements (Code of Massachusetts Regulations (2021 Edition))

2.05. Travel Arrangements

1. The bBoard may should designate a bBoard staff member to be responsible for making all travel arrangements and for assisting bBoard mMembers and Bboard staff in completing authorization and reimbursement forms. If a bBoard mMember or bBoard staff member elects to make his or her own travel arrangements, the provisions of 840 CMR 2.00 shall apply.

2. When making travel arrangements, government rates, business rates, or the most cost- effective rate shallwill be secured. The Bboard must be satisfied that the rate is fair and reasonable before reimbursement is approved.

3. The bBoard may authorize an extended stay if the net cost to the bBoard will be lower. For example, if airline fare is lowered by staying an extra day and the cost of accommodations and meals for that extra day results in a net savings to the bBoard, an extended stay can be authorized.

840 Mass. Code Regs. 2.06 Transportation (Code of Massachusetts Regulations (2021 Edition))

2.06. Transportation

1. Cost effective means of transportation public conveyances, (airline, train, bus, automobile rental, taxi, or other form of transportation) shall be utilized.

2. All travel should be at the lowest fare available, generally economy/coach fare. The bBoard may, by supplementary regulation, submitted and approved by the CommissionPERAC, establish routing criteria, for example, requiring no more than one interim stop each way; not requiring more than one scheduled airplane transfer each way; and or allowing for reasonable departure and arrival times.

3. A rRetirement bBoard shall not make payment or reimbursement for airline club memberships.

4. If a rRetirement bBoard authorizes the use of rental cars, the bBoard may, by supplementary regulation, submitted to and approved by the CommissionPERAC, establish that the source of such cars shall be a national rental agency, and that the rental cars shall be "standard class". It is the traveler's responsibility to verify that the rate charged is the rate negotiated.

5. The rRetirement bBoard shall determine whether optional insurance coverage for rental carstravel will be required.

6. Any motor vehicle accidents, which occur while using a rental car while on bBoard-approved travel, are to be reported as soon as practicable, in writing to the appropriate authorities, with copies of all such reports provided to the bBoard.

7. No reimbursements shall be made for fines or other expenses incurred as a result of traffic violations while on bBoard-approved travel. The traveler is personally responsible for such expenses.

8. The rRetirement bBoard shall, by supplementary regulation, submitted and approved by the CommissionPERAC, establish the allowable rate of reimbursement for use of personal motor vehicle. The per mile rate of reimbursement shall not exceed the amount allowed by the Internal Revenue Service. If the board does not submit a supplementary regulation, then the Internal Revenue Service rate shall be used. Parking fees and toll charges may be reimbursed, subject to proper documentation.

840 Mass. Code Regs. 2.07 Lodging (Code of Massachusetts Regulations (2021 Edition))

2.07. Lodging

1. All reservations for accommodations should be made in advance. It is the traveler's responsibility to verify that the rate charged is the rate negotiated. Reimbursement for accommodations shall not exceed the amount charged for "standard" accommodations. If accommodations are included as a part of a registration fee, the bBoard must be satisfied that the rate for such accommodations is fair and reasonable before reimbursement or payment is approved.

2. Reimbursement is prohibited if lodging is included in the cost of registration for a conference or seminar.

840 Mass. Code Regs. 2.08 Meals (Code of Massachusetts Regulations (2021 Edition))

2.08. Meals

1. rRetirement bBoards must, by supplementary regulation, submitted and approved by the CommissionPERAC, establish and identify the maximum daily reimbursable amount for the cost of meals while on bBoard authorized travel. The bBoard may, by supplementary regulation, submitted and approved by the CommissionPERAC, allow for reimbursement in excess of the allowable amount for travel to high-cost locations.

2. Reimbursement is prohibited if meals are included in the cost of registration for a conference or seminar. If the bBoard determines that special circumstances require a bBoard member or bBoard staff member to take meals other than those included in the cost of registration, reimbursement may be made provided that all provisions of 840 CMR 2.00 are met. The special circumstances must be discussed in a bBoard meeting and the bBoard's determination must be reflected in the minutes of the bBoard.

3. If reimbursement is sought for meal expenses for others, those individuals are to be identified along with their affiliation and a description of the purpose of the meeting. Reimbursement shall be made only for meetings that are for business purposes.

4. Reimbursement shall be made only for meetings that are for business purposes.

5. Retirement boards shall never reimburse for the cost of alcoholic beverages.

840 Mass. Code Regs. 2.09 Other Reimbursable and Non-

Reimbursable Expenses (Code of Massachusetts Regulations (2021 Edition)) 2.09. Other Reimbursable and Non-Reimbursable Expenses

1. Retirement bBoards may reimburse bBoard mMembers or bBoard staff members for the following items:

a) gratuities paid in accordance with local custom;

b) telephone expenses limited to bBoard or business related calls;

c) internet connections charges;

d) costs for faxing related to Board business; or

e) costs for necessary copying related to bBoard business; or.

e)f) Mandatory resort or hotel fees.

2. Retirement bBoards shall not reimburse bBoard mMembers or bBoard staff members for the following items: Other Reimbursable and Non- Reimbursable Expenses

a) personal expenses, for example, in-room movies, mini-bar charges, gym fees, entertainment or recreational expenses, laundry and dry cleaning, spa visits, or payments for alcoholic beverages.;

b) any payments for personal services; orgenerally, resort fees should not be reimbursed; however, if the resort fee includes internet connection such as wi-fi, that portion of the resort fee can be reimbursed.

c) payments for alcoholic beverageThis list of prohibited reimbursements is not exhaustive.

840 Mass. Code Regs. 2.10 Cash Advances (Code of Massachusetts

Regulations (2021 Edition))

2.10. Cash Advances

Retirement bBoards shall not make cash advances to bBoard mMembers or Board staff members. in connection with anticipated expenses.

840 Mass. Code Regs. 2.11 Board Credit Cards (Code of Massachusetts Regulations (2021 Edition))

2.11. ReservedBoard Credit Cards

1. Retirement Boards may, by supplementary regulation, submitted and approved by the Commission, authorize usage of credit cards issued to the Board. If usage of such credit cards is allowed, any personal use of credit cards issued to the Board is prohibited. The credit card billings shall be issued to the Board office and that card user shall be required to provide receipts for all expenses included in the statement. If receipts are not provided, the user will immediately reimburse the Board for those items that appear on the credit card billing.

2. Credit cards issued to the Board are not to be used to purchase supplies or other items that the Board, the Board Members or the Board's staff use on a regular basis and which can be readily anticipated and purchased by way of a competitive process

840 Mass. Code Regs. 2.12 Personal Travel Combined with Board

Related Travel (Code of Massachusetts Regulations (2021 Edition)) 2.12. Personal Travel Combined with Board Related Travel

If personal travel is combined with bBoard related travel, the personal portion of the travel and related expenses will be clearly identified and paid for by the traveler. Travel expenses or any other expenses incurred by a spouse, relative, friend, or other individual accompanying a bBoard mMember or bBoard staff member will be considered to be personal travel and will, in no event, be a proper expense of the rRetirement bBoard.

840 Mass. Code Regs. 2.13 Payments or Reimbursements for Expenses by Third Parties (Code of Massachusetts Regulations (2021 Edition))

2.13. Payments or Reimbursements for Expenses by Third Parties

1. Providing to or receipt by a bBoard mMember or staff member of anything of substantial value from any person, firm, partnership, or other entity, either directly or indirectly, as outlined and discussed in G.L. c. 268A, is strictly prohibited. which may be reasonably expected to seek to do business with or is seeking to do business with or presently is doing business with a Retirement Board or any person, firm or other entity that solicits or makes referrals or which may be reasonably expected to solicit or make referrals of any client on behalf of such a person, firm, partnership or other entity is strictly prohibited. Providing to and the receipt of anything of substantial value from such a person, firm, partnership or other entity indirectly through any person, firm, association, organization or other entity is strictly prohibited.

2. In instances where a rRetirement bBoard mMember or bBoard staff member participates in a legitimate speaking engagement, the bBoard shall pay all costs and expenses related to such speaking engagement, provided, that the bBoard mMember or bBoard staff member complies with all of the bBoard's travel regulations. The bBoard may accept reimbursement for such travel related expenses of a bBoard mMember or a member of the bBoard's staff from the third party, only under the following limited circumstances:

a) A bBoard mMember or a bBoard staff member may participate in legitimate speaking engagements in connection with their positions on the rRetirement bBoard or as a member of the bBoard's staff and the bBoard may accept reimbursements from third parties necessary to cover travel related costs for such engagements.

b) Acceptance of an honorarium or any other form of compensation is strictly prohibited.

c) To be considered a legitimate speaking engagement, the presentation must be formally scheduled on the agenda of a convention or conference.

d) The speaking engagement must be scheduled in advance of the bBoard mMember's or bBoard staff member's arrival at the event.

e) The presentation must be before an organization that would normally have outside speakers address them at such an event.

f) The presentation cannot be perfunctory, but should

840 Mass. Code Regs. 2.13 Payments or Reimbursements for Expenses by Third Parties (Code of Massachusetts Regulations (2021 Edition))

significantly contribute to the event, taking ointo account such factors as the length of the speech or presentation, the size of the audience, and the extent to which the speaker is providing substantive or unique information or viewpoints.

g) The rRetirement bBoard can be reimbursed by a third party for expenses only to the extent necessary for making the speech or presentation. h) Under no circumstances can a bBoard mMember or bBoard staff member receive reimbursement or any other payment or compensation from a third party.

3. In instances where a rRetirement bBoard mMember or bBoard staff member participates in a non-profit professional organization related to public pension or public retirement, the rRetirement bBoard may be reimbursed by the organization for the expenses related to such participation. The travel or participation must be approved by the bBoard in advance of any expenditures, and the minutes of the bBoard must note this action. No organization, association, or group of any sort that is comprised of or supported by any person, firm, partnership, or other entity, either directly or indirectly, as outlined and discussed in G.L. c. 268A, shall reimburse a retirement board for any expenses of a board member or board staff member to participate in any activities of that organization. which may be reasonably expected to seek to do business with or is seeking to do business with or presently is doing business with a Retirement Board shall reimburse a Retirement Board for any expenses of a Board Member or Board staff member to participate in any activities of that organization. Likewise, no organization, association or group of any sort that is comprised of or supported by any person, firm or other entity that solicits or makes referrals or which may be reasonably expected to solicit or make referrals to a Retirement Board of any client on behalf of such a person, firm, partnership or other entity shall reimburse a Retirement Board for any expenses of a Board Member or Board staff member to participate in any activities of that organization.

Board Travel Supplementary Regulations (Code of Massachusetts Regulations (2021 Edition)) 2.14. Violation of These Regulations or Board Travel Supplementary Regulations

In addition to any remedies available pursuant to any statute or any regulation, aAny person or entity that violates 840 CMR 2.00 or any rRetirement bBoard supplementary regulation approved by the CommissionPERAC prior to the effective date of 840 CMR 2.00 shall be deemed to have violated the provisions of 840 CMR 17.00 and shall be subject to removal as an a qualified investment manager or consultant. pursuant to 840 CMR 17.04(10). In addition, the Commission shall not grant an exemption pursuant to 840 CMR 19.02 or a qualification pursuant to 840 CMR 26.04 if any person or entity that has violated 840 CMR 2.00 or any Retirement Board supplementary regulation approved by the Commission prior to the effective date of 840 CMR 2.00 is the subject of the filing pursuant to those provisions.