Regular Session 2015-2016 House Bill 1837 P.N. 2837

PRINTER'S NO. 2837

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1837

Session of

2015

INTRODUCED BY TOBASH, FEBRUARY 9, 2016

REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, FEBRUARY 9, 2016

AN ACT

Amending the act of December 18, 1984 (P.L.1005, No.205),

entitled, as amended, "An act mandating actuarial funding

standards for all municipal pension systems; establishing a

recovery program for municipal pension systems determined to

be financially distressed; providing for the distribution of

the tax on the premiums of foreign fire insurance companies;

and making repeals," in municipal pension plan actuarial

reporting, further providing for requirement to file

actuarial valuation report or experience investigation and

for contents of actuarial valuation report; in minimum

funding standard for municipal pension plans, further

providing for municipal pension plan minimum funding standard

and application and general provisions; in revisions

applicable to municipal pension fund financing, further

providing for revision of financing from State revenue

sources and General Municipal Pension System State Aid

Program; and, in standards for municipal pension systems,

further providing for procurement for professional services

contracts.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Sections 201(a), 202(e)(1), 301(b) and 402(b) of

the act of December 18, 1984 (P.L.1005, No.205), known as the

Municipal Pension Plan Funding Standard and Recovery Act, are

amended to read:

Section 201. Requirement to file actuarial valuation report or

experience investigation.

(a) Actuarial valuation report required.--Each municipality

which has established or maintains a pension plan for its

employees, including any municipality which participates in the

Pennsylvania Municipal Retirement System, shall cause to be made

actuarial valuation reports. Actuarial valuation reports shall

be made biennially[, unless the applicable municipality is

applying or has previously applied for supplemental State

assistance pursuant to section 603, whereupon actuarial

valuation reports shall be made annually]. Each municipality

which has established or maintains a pension plan for its

employees and has an active, vested inactive and benefit

recipient membership equal to or greater than 1,000 shall also

cause experience investigations to be made. Experience

investigations shall be made quadrennially.

* * *

Section 202. Contents of actuarial valuation report.

* * *

(e) Contents of financial exhibits.--Each financial exhibit

shall be prepared in a manner which is consistent with the other

financial exhibits contained in the actuarial valuation report

and the financial exhibits contained in the most recent prior

actuarial report. The accounting basis for the financial

exhibits shall be disclosed. The financial exhibits shall be

prepared in a fashion which is reasonably calculated to fairly

and accurately disclose the financial condition and affairs of

the pension plan. In the event that there is implemented a

change in the manner in which the financial exhibits are

prepared, the financial exhibits prepared for inclusion in the

actuarial valuation report for the year in which the change is

implemented shall be prepared in accordance with both the change

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and the manner previously employed. The actuarial valuation

report shall include the following financial exhibits:

(1) An exhibit of the assets of the pension plan at

their fair market value and valued pursuant to rules and

regulations issued by the commission, which shall reflect

variations in asset mix and reduce the impact of market

fluctuations. A municipality that submits an actuarial

valuation report that reflects the initiation of a new method

for determining the actuarial value of the assets of the

pension plan under this subsection shall use that method in

at least the next two required actuarial reports.

* * *

Section 301. Municipal pension plan minimum funding standard;

application and general provisions.

* * *

(b) Disclosure of noncompliance.--In the event that any

municipality or pension plan fails in a material way to comply

with any applicable provision of this chapter, the commission

shall notify the Governor and the General Assembly of that

noncompliance in a public report issued [annually] biennially

for this purpose.

Section 402. Revision of financing from State revenue sources;

General Municipal Pension System State Aid Program.

* * *

(b) Financing of the General Municipal Pension System State

Aid Program.--

(1) Except as otherwise provided in this section, the

General Municipal Pension System State Aid Program shall

allocate the entire proceeds of the insurance premium tax on

foreign casualty insurance companies, which shall be placed

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into a revenue account, and any investment income earned on

those proceeds, and the portion of the proceeds of the

insurance premium tax on foreign fire insurance companies

which represents the amount of the distributions applicable

to paid firefighters pursuant to section 706 and any

investment income earned on the amount of those

distributions.

(2) Beginning fiscal year 2013-2014 and each fiscal year

thereafter, up to 0.25% of the amount allocated and deposited

into the revenue account may be paid to the Public Employee

Retirement Commission as specifically appropriated by the

General Assembly to provide for the costs and expenses

directly related to the commission's duties pursuant to this

act.

* * *

Section 2. Section 702-A(a) of the act, added September 18,

2009 (P.L.396, No.44), is amended to read:

Section 702-A. Procurement for professional services contracts.

(a) Procedures.--Each municipal pension system having no

fewer than 100 active members, including the Pennsylvania

Municipal Retirement System, shall develop procedures to select

the most qualified person to enter into a professional services

contract. The procedures shall ensure that the availability of a

professional services contract is advertised to potential

participants in a timely and efficient manner. Procedures shall

include applications and disclosure forms to be used to submit a

proposal for review and to receive the award of a professional

services contract.

* * *

Section 3. This act shall take effect immediately.

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