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Senate Co-Sponsorship Memoranda
Senate of Pennsylvania
Session of 2013 - 2014
Regular Session
MEMORANDUM
| Posted: | February 28, 2013 11:20 AM |
|---|---|
| From: | Senator Daylin Leach |
| To: | All Senate members |
| Subject: | Act 44 Amendments |
| In the near future, I am going to be introducing legislation which would amend Act 44, dealing with municipal pension plan management. Currently, Act 44 requires a Request for Proposal (RFP) if a municipality intends to change any professional advisors, if those advisors would be paid from plan assets. This well intentioned measure was put in place to protect plan assets but it has had the unintended effect of locking small municipal pension plans into their existing professional advisors, even if they are unhappy with their advice or service. In order to comply with Act 44 municipalities are being forced to hire law firms at exorbitant fees. Since those fees also cannot be paid out of plan assets, municipalities are unable to find the money in their general fund budgets to go through the RFP process. The end result is that no small municipalities are able to change advisors. This is certainly not the outcome intended by Act 44 and my legislation would fix this unintended consequence by limiting the professional services contracting requirements of Act 44 to municipal pension systems with 100 or more active members. This would exempt those municipalities that can least afford additional payments outside of plan assets and allow pension plans to find the professional advisor who works best for them. |
Introduced as SB742