PRINTER'S NO. 1209

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

964

Session of

2015

INTRODUCED BY McGINNIS, BLOOM, DIAMOND, EVERETT, GABLER,

GILLESPIE, GROVE, JAMES, KAUFFMAN, METCALFE, ROAE, SACCONE,

SAYLOR, TRUITT AND WARD, APRIL 14, 2015

Independent Defined Contribution Retirement Savings Program;

and making editorial changes.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The act of August 31, 1971 (P.L.398, No.96),

known as the County Pension Law, is amended by adding a chapter

heading to read:

CHAPTER 1

Section 2. Section 1 of the act is renumbered to read:

Section 4. Section 2 of the act, amended December 20, 1983

(P.L.282, No.75), November 21, 1990 (P.L.551, No.136) and

December 16, 2003 (P.L.236, No.43), is renumbered and amended to

read:

Section [2] 301. Definitions.--As used in this [act]

chapter:

(1) "Board" means the County Retirement Board created by

this [act] chapter.

(2) "County employe" means any person, whether elected or

appointed, who is employed by the county, the county institution

provided, include any person employed after the effective date

of this [act] chapter on a part-time basis.

(2.1) "Part-time" means employment with the expectation of

completing less than 1000 hours of service during the 12-month

period beginning on the first day of employment and each

succeeding 12-month period thereafter.

(3) "Fund" means the County Employes' Retirement Fund

created by this [act] chapter.

(4) "Accumulated deductions" means the total of pickup

contributions and the amounts deducted from the salary of a

remuneration received as a county employe excluding refunds for

expenses, contingency and accountable expense allowances and

excluding severance payments or payments for unused vacation or

sick leave.

(5) "Contributor" means any person who has accumulated

deductions in the fund standing to the credit of the members'

annuity reserve account.

(6) "Retiree" means any person in receipt of a retirement

allowance under this [act] chapter.

(7) "Prior service" means all service as a county employe

member of the retirement system after the establishment of the

retirement system in said county.

(10) "Superannuation retirement age" means sixty years of

age or upwards, except as applied to a contributor who has

completed twenty years of total service, in which case

superannuation retirement age means fifty-five years of age or

upwards.

(11) "Final salary" means the average annual compensation

received by the contributor for the three highest years of

service in the employment of the county, or in the event a

for member contributions.

(13) "County annuity" means payments for life or during

disability derived from contributions made by the county.

(14) "Member's annuity" means payments for life or during

disability derived from contributions made by the contributor

and from pickup contributions.

(14.1) "Pickup contributions" means regular member

contributions which are made by the county on behalf of county

employes for current service in accordance with section [7(c)]

306(c).

retirement age receive a superannuation retirement allowance.

Section 5. Sections 3 and 4 of the act are renumbered and

amended to read:

Section [3] 302. Applicability.--The provisions of this

[act] chapter shall apply to each county of the second class A,

third class, fourth class, fifth class, sixth class, seventh

class and eighth class which has or hereafter may establish a

county employes' retirement system.

Section [4] 303. County Retirement System; County Retirement

Board.--(a) A retirement system may be established for county

the year succeeding the one in which the resolution of the

county commissioners was adopted.

(b) The system, when established, shall be administered by a

county retirement board, consisting of five members, three of

whom shall be the county commissioners, the county controller

and the county treasurer. In counties having no elected county

controller, the chief clerk of the county shall be a member of

the board. The chairman of the board of county commissioners

shall be chairman of the board. Each member of the board shall

take an oath of office that he will diligently and honestly

expenses necessarily incurred in the performance of their duty.

Three members of the board shall constitute a quorum.

Section 6. Section 5 of the act, amended November 21, 1990

(P.L.551, No.136), is renumbered and amended to read:

Section [5] 304. Personnel; Administrative Expenses.--The

board may appoint and fix the compensation of an actuary. The

county controller or the chief clerk of the county, as the case

may be, shall be the secretary of the board. In counties having

an optional form of government, the board shall appoint a

secretary. The compensation of the secretary shall be fixed by

exclusive of the payment of retirement allowances, shall be paid

by the county by appropriations made on the basis of estimates

submitted by the board. However, such administrative expenses

may from year to year be paid from the fund unless it is

determined by the actuary that such payment will impair the

actuarial soundness of the fund.

Section 7. Section 6 of the act, amended June 22, 1978

(P.L.495, No.74), is renumbered to read:

Section [6] 305. Rules and Regulations; Actuarial Data.--The

board shall, from time to time, establish such rules and

and one-half per cent per year. It shall keep such data as shall

be necessary for actuarial valuation purposes. The actuary of

the board shall (i) periodically make an actuarial investigation

into the mortality and service experience of the contributors to

and beneficiaries of the fund, (ii) adopt for the retirement

system one or more mortality tables, and (iii) certify to the

board annually the amount of appropriation to be made by the

county to the fund to build up and maintain adequate reserves

for the payment of the county's share of the retirement

allowances.

Section [7] 306. County Employes' Retirement Fund; Transfers

Between Classes.--(a) There is hereby created in each county of

the second class A, third class, fourth class, fifth class,

sixth class, seventh class, and eighth class, in which a

retirement system has been established, a County Employes'

Retirement Fund which shall consist of all moneys arising from

appropriations made by the county, from contributions made by

the members of the County Employes' Retirement System and from

pickup contributions and all interest earned by the investments

of moneys of the fund. The moneys contributed by the county

the amount of the contributor's accumulated deductions in the

members' annuity reserve account shall lose their status as

accumulated contributions and shall be transferred to a retired

members' reserve account. Regular interest shall be credited up

to the date of retirement, death or withdrawal, to the members'

annuity and county annuity and retired members' reserve

accounts. Where a contributor separates from county service with

vesting, regular interest shall be credited to all accumulated

deductions credited to his account in the fund to the date on

which he attains his superannuation retirement age. The actuary

the system is established until the accumulated reserve equals

the present value of said liability. All such contributions

shall be credited to the county annuity reserve account. The

actuary shall also determine the amount which shall be

contributed by the county into the fund periodically for credit

to the county annuity reserve account on account of service of

all new and original members subsequent to the time the

retirement system is established.

(b) Each member of the retirement system shall be required

to contribute to the fund such per cent of his salary determined

(c) The county may elect to contribute on behalf of each

active member for current service the amount required by

subsection (b) beginning the first Monday of January of the year

in which the resolution to do so was adopted by the

commissioners or, in counties operating under a home rule

charter or optional plan, by the governing authority.

Contributions made in accordance with this subsection shall be

deemed "pickup contributions" and shall be treated as the

county's contribution in determining tax treatment under the act

of August 16, 1954, 68A Stat. 5, known as the Internal Revenue

subsection. The county on or before January 31 of each year

shall, at the time when the income and withholding information

required by law is furnished to each county employe, also

furnish the amount of the pickup contribution made on the

employe's behalf. Upon the effective date of the implementation

of this subsection, the county shall pick up the required

contributions by an equal reduction in the compensation of the

member.

(d) Each member may elect to contribute an additional amount

not exceeding ten per cent more than the percentage herein

otherwise designated by the board as applicable to the

retirement system to which the member belongs. Any such election

shall in no way affect the calculation of the county annuity

portion of the member's retirement allowance as provided in

section 14, which county annuity portion shall be calculated as

though the member had not made that election.

(f) All contributions including optional additional payments

by members shall be credited to the members' annuity reserve

account.

(g) The board may at any time, by rule, authorize members of

service under a retirement system administered and wholly or

partially paid for by any other governmental agency.

Section 15. Section 13.1 of the act, added November 3, 1983

(P.L.198, No.54), is renumbered to read:

Section [13.1] 314. Credit for Public School Service.--Any

county employe who, on or after July 1, 1982 is employed by the

county for a period of one month and who, on or immediately

prior to July 1, 1982 was an employe of a public school

district, shall have credited to the employe's employment

record, for retirement benefits, all the time spent by such

amount of employer contributions and the accumulated interest on

such contribution and (iii) that the employe start work with the

county within thirty days after leaving employment with the

public school district. This section shall apply only where the

transfer of employment from the public school district to the

county was not voluntary on the part of the employe.

Section 16. Section 14 of the act, amended December 20, 1983

(P.L.282, No.75), is renumbered to read:

Section [14] 315. Superannuation Retirement Allowance.--(a)

Any contributor who has reached superannuation retirement age

(b) On retirement for superannuation, a retiree shall

receive a retirement allowance which shall consist of: (i) a

member's annuity which shall be the actuarial equivalent of his

accumulated deductions standing to his credits in the members'

annuity reserve account, and (ii) a county annuity equal to one-

one hundred twentieth of his final salary multiplied by each

year of total service, and, in addition thereto in the case of

an original member, one-one hundred twentieth of his final

salary multiplied by each year of prior service. At any time the

board by rule may, by increasing the county annuity, authorize

board shall hereafter by rule authorize the transfer to the one-

eightieth class, to the one-seventieth class or the one-sixtieth

class, the county annuity shall be calculated as follows:

(1) For service prior to the time of transfer, at the one-

one hundred twentieth rate, the one-one hundredth rate, the one-

eightieth rate, the one-seventieth rate or the one-sixtieth rate

as the case may be.

(2) For service subsequent to the time of transfer to the

time of retirement, or to the time of a subsequent transfer, at

the rate applicable during such period.

any other rate herein provided for bears to the total time of

contribution.

Section 17. Section 14.1 of the act, added July 7, 1994

(P.L.437, No.71), is renumbered to read:

Section [14.1] 316. Special Early Retirement.--(a) If

authorized by resolution of the commissioners or by council in

counties having an optional form of government or by

commissioners or council in counties having a home rule charter

and approved by the retirement board, a special early retirement

provision may be adopted for active members of the county

must be followed immediately by the special early retirement

period which is not to exceed twelve months.

(b) To be eligible for special early retirement, a member

must meet the specified requirements established in the

provision at the time of retirement during the special early

retirement period. Minimum eligibility for special early

retirement cannot be less than attainment of fifty-five years of

age and ten years of credited service or thirty years of

credited service with no age requirement. A member who is

eligible for the special early retirement shall be credited with

(c) The increase in actuarial accrued liability attributable

to the special early retirement provision shall be determined by

the actuary of the board and shall be amortized by level dollar

amortization payments over the five-year period the end of which

is the end of the fifth retirement system year occurring after

the end of the early retirement period.

(d) No more than one special early retirement provision can

be authorized within a five-year period.

Section 18. Section 15 of the act, amended July 3, 1985

(P.L.132, No.35), is renumbered and amended to read:

involuntary retirement, or he may in any event elect to receive

the actuarial equivalent of his member's and county annuity in a

lesser retirement allowance payable throughout life with

provisions that:

(1) Option One. If he dies before receiving in payments the

present value of his member's annuity and county annuity as it

was at the time of his retirement, the balance shall be paid to

his legal representative or to a person or persons having an

insurable interest in his life, as he shall nominate by written

designation, duly acknowledged and filed with the board at the

shall nominate by written designation, duly acknowledged and

filed with the board at the time of his retirement.

(3) Option Three. Upon his death one-half of his member's

and county annuity shall be continued through the life of and

paid to such person having an insurable interest in his life as

he shall nominate by written designation, duly acknowledged and

filed with the board at the time of his retirement.

Should a retiree, who has not elected to receive in one

payment the full amount of the accumulated deductions standing

to his individual credit in the members' annuity reserve account

his life, as he shall nominate by written designation filed with

the board.

Section 19. Section 15.1 of the act, added July 3, 1985

(P.L.132, No.35), is renumbered to read:

Section [15.1] 318. Option to Withdraw Accumulated

Deductions and Accumulated Interest.--If authorized by action of

the board as an option for its members, any member of the county

retirement system who is eligible to retire and receive a

superannuation retirement allowance, an involuntary retirement

allowance or a voluntary retirement allowance after twenty years

election shall forfeit the member's annuity portion of his

retirement allowance but shall continue to be entitled to the

county annuity portion upon retirement if he is otherwise so

entitled. Any member who exercises the option provided for in

this section may elect to receive his county annuity payable

throughout life or to receive the actuarial equivalent of his

county annuity in a lesser retirement allowance payable

throughout life with provisions that:

(1) Option One. If the member dies before receiving in

payments the present value of his county annuity as it was at

shall be continued through the life of and paid to such person

having an insurable interest in his life, as the member shall

nominate by written designation, duly acknowledged and filed

with the board at the time of his retirement.

(3) Option Three. Upon the member's death, one-half of his

county annuity shall be continued through the life of and paid

to such person having an insurable interest in his life, as the

member shall nominate by written designation, duly acknowledged

and filed with the board at the time of his retirement.

Section 20. Section 16 of the act, amended November 21, 1990

voluntarily, or an elected county officer complete his term of

office and discontinue service after having completed eight

years of total service, or voluntarily after having completed

twenty years of total service but before reaching superannuation

retirement age, except as herein provided for certain

contributors who have completed twenty years of total service,

he shall be paid as he may elect, as follows:

(1) The full amount of the accumulated deduction standing to

his credit in the members' annuity reserve account; or

(2) A member's annuity of equivalent actuarial value to his

retirement age. The same options shall be available to retirees

in case of involuntary retirement as provided herein in the case

of superannuation retirement. In the event a contributor, after

having completed eight or more years of total service,

heretofore has or hereafter shall be discontinued from service

because of appointment or election to the General Assembly of

the Commonwealth or to a position incompatible with his service

as a county employe or officer and such employe or officer has

not reached the superannuation retirement age, such withdrawal

shall be considered involuntary; the accumulated deductions and

been withdrawn under the above circumstances, the employe or

officer shall be permitted to repay into and the county shall be

required to reimburse the fund the amounts paid out, with

interest to the date of repayment, thereby reestablishing the

rights of the contributor in said fund even though

superannuation retirement age has been reached and benefits

shall be paid as if the original severance had been involuntary.

(b) Any contributor who has completed twenty years of total

service and who has reached the superannuation retirement age

shall be entitled to the superannuation retirement allowance

ten years of total service, or by reason of having reached

superannuation retirement age may file with the board a written

application for retirement in the form required for such

application, but requesting that such retirement shall become

effective as of the time of his death, electing Option One or

Option Two provided in section [15] 317 and nominating a

beneficiary under the option.

In all such cases, the application shall be held by the board

until the contributor shall file a later application in the

usual manner for retirement, or until the death of the

Section [18] 321. Retirement While in County Service.--Any

contributor who is or was entitled to a retirement allowance

because of being involuntarily retired after having completed

ten years of total service or by reason of having reached

superannuation retirement age and who shall die while in county

service before filing with the board a written application for

retirement, or has died and whose payments into the fund have

not been withdrawn, shall be considered as having elected Option

One as of the date of his death. In such event, payment under

Option One shall be made to the beneficiary designated in the

retired employes insurance or other similar benefits that the

county has granted to other county employes.

Section [20] 323. Total Disability Retirement Allowance.--If

a contributor after five years of service as a county employe

and before reaching superannuation retirement age is disabled

while in service and is unable to continue as a county employe,

as shown by medical examination, he shall be paid a retirement

allowance consisting of a county annuity of twenty-five per cent

of his final salary which shall include the member's annuity

calculated in accordance with section [14] 315.

reserve account at the time of retirement, there shall be paid

to his estate or beneficiary the difference between such credit

and the total payments received.

Section [22] 325. Monthly Payments of Retirement

Allowances.--The retirement allowances granted under the

provisions of this [act] chapter shall be paid in equal monthly

installments and shall not be increased, decreased, revoked or

repealed, except as otherwise provided in this [act] chapter.

This section shall not be construed to prohibit the board from

granting to retired employes insurance or other similar benefits

contributor in the members' annuity reserve account shall be

paid to him or his estate or to the person or persons named in

any beneficiary certificate filed by the contributor with the

board. When a contributor or a beneficiary has died and there

shall be due to the estate of such contributor or beneficiary a

sum less than one hundred dollars ($100), and letters

testamentary or of administration have not been taken out on the

estate of such contributor or beneficiary within six months of

death, the board may pay the amount due on the claim of the

undertaker or to any person or persons or political subdivision

Retirement System and Fund under Chapter 3;

after January 1, 2017, by the county, the county institution

district, the county prison or in another institution

maintained by the county from county funds or is employed by

a county or State official and paid by the official from

funds appropriated by the county for such purpose; and

periodic installments or from fees collected by the person's

account for each participant and for benefits based solely on

the amount contributed to the participant's account and any

income, expenses, gains and losses.

" Participant. " An employee participating in the Independent

Defined Contribution Retirement Savings Program.

"Part-time." Employment with the expectation of completing

less than 1000 hours of service during the 12-month period

beginning on the first day of employment and each succeeding 12-

month period.

" Qualified third party administrator. " An independent,

program through administration and compliance procedures;

standards;

individual-specific retirement and investment educational

services;

participants;

the participant's investment choices on a periodic basis;

administrative, management and investment fees.

Section 502. Establishment.

A county shall provide an independent defined contribution

retirement savings program for the county's employees through

contract with a qualified third party administrator. The

affected counties shall have one year from the effective date of

this chapter to identify and contract with a qualified third

party administrator. A county shall begin making required

contributions to the individual retirement accounts of

approved by the county employer.

Section 504. Contributions.

(a) Requirements.--Beginning January 1, 2017, and every year

thereafter, the employer shall make mandatory contributions for

each participant equal to 5% of the participant's compensation

to the respective participant's individual investment account. A

participant shall make mandatory contributions through payroll

deductions to the participant's individual investment account

equal to 5% of compensation for current county service. The

employer shall cause the required employer and participant

Section 30. Sections 32 and 33 of the act are renumbered to

read:

Section [32] 2101. Repeals.--The following acts and parts of

acts are repealed absolutely:

(1) The act of June 4, 1937 (P.L.1625), entitled "An act

providing for the creation, maintenance and operation of a

county employes retirement system in counties of the third

class; and imposing certain charges on counties."

operation of a county employes' retirement system in counties of

the fifth, sixth, seventh and eighth class; imposing certain

charges on counties, and prescribing penalties."

(4) Section 1717, act of July 28, 1953 (P.L.723), known as

the "Second Class County Code."

Section [33] 2102. Effective Date.--This act shall take

effect immediately.

Section 31. This act shall take effect in 60 days.