Section 32A. In order to offset the anticipated costs for funding for the contributory retirement systems, upon the recommendation of the county retirement board advisory council, a county may appropriate in any year an amount not exceeding five per cent of the amount of county taxes raised in the preceding year by assessment pursuant to paragraph (c) of subdivision (7) of section twenty-two of chapter thirty-two upon the several governmental units participating in the county retirement system. Such amount shall be in addition to that assessed in said section and shall be credited to the Pension Reserve Fund provided for in section twenty-two of said chapter thirty-two. The aggregate amount in such fund at any time shall not exceed ten per cent of the total equalized valuation of such participating cities and towns in the county. Any interest shall be added to and become part of such fund.

All sums in such fund shall be appropriated and used only for the purpose of offsetting the anticipated future cost of funding the contributory retirement system of such county.

The treasurer of the county shall be the custodian of such fund and may deposit the proceeds in national banks or invest the proceeds by deposit in savings banks, co-operative banks or trust companies organized under the laws of the commonwealth, or invest the same in such securities as are legal for the investment of funds of savings banks under the laws of the commonwealth or in federal savings and loan associations situated in the commonwealth or may participate in the PRIT Fund in accordance with clause (8) of section twenty-two of said chapter thirty-two.

Counties shall establish procedures for the recovery of employee pension costs from federal grant monies. Each spending agency of counties shall, at the commencement of each fiscal year, and no later than July thirty-first, authorize the treasurer to initiate such procedures to transfer to such fund an amount equal to the future pension costs which are incurred because of the federal grant. The cost of the future pension cost liability must be recovered in cash. Expenditures for the payment of salaries to be made from any federal grant shall not be allowed until the full amount of such pension costs are recovered.