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PRINTER'S NO. 855
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
779
Session of
2017
INTRODUCED BY McGINNIS, METCALFE, BLOOM, COX, DIAMOND, EVERETT,
GREINER, IRVIN, JAMES, KAUFFMAN, KEEFER, F. KELLER, LAWRENCE,
MILLARD, B. MILLER, MUSTIO, QUIGLEY, ROTHMAN, RYAN, SANKEY,
SCHEMEL, WARD AND ZIMMERMAN, MARCH 9, 2017
REFERRED TO COMMITTEE ON STATE GOVERNMENT, MARCH 9, 2017
AN ACT
Amending Title 71 (State Government) of the Pennsylvania
Consolidated Statutes, providing for a unified retirement
system for employees of the Commonwealth and its political
subdivisions and other employers.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 71 of the Pennsylvania Consolidated
Statutes is amended by adding a part to read:
PART XXVII
UNIFIED CONTRIBUTION PENSION PLAN
Chapter
71. Membership, Contributions and Benefits
CHAPTER 71
MEMBERSHIP, CONTRIBUTIONS AND BENEFITS
Sec.
7101. Declaration of purpose.
7102. Definitions.
7103. Establishment.
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7104. Public Employees' Retirement System Board.
7105. Duties of the board.
7106. Administration and investment options.
7107. Plan structure.
7108. Investments and expenses.
7109. Attachment.
7110. Investments.
7111. Active member contributions.
7112. Employer contributions.
7113. Vesting.
7114. Duties of the board to advise and report to heads of
departments and members.
7115. Duties of heads of departments.
7116. Administration.
7117. Applicability.
§ 7101. Declaration of purpose.
In order to preserve the long-term fiscal stability and
viability of this Commonwealth and its political subdivisions,
the purpose of this chapter is to provide a unified retirement
system for employees of the Commonwealth, its political
subdivisions and all other employers to participate in and to
provide retirement income security through a system of defined
contribution authorized by the United States Internal Revenue
Code, permitting the employees to obtain the advantages inherent
in the plans relative to the income tax treatment of the
contributions and disbursements made under defined contribution
plans.
§ 7102. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
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context clearly indicates otherwise:
" Active member. " A public employee, or a member on leave
without pay, for whom contributions are being made pursuant to
the system established under this chapter.
" Board. " The Public Employees' Retirement System Board.
" Compensation. " The remuneration actually received as a
public employee, excluding any of the following:
(1) Refunds for expenses, contingency and accountable
expense allowances.
(2) Severance payments or payments for unused vacation
or sick leave.
" Employer. " Any governmental entity directly responsible for
the employment and payment of a public employee.
" Fund. " The Public Employees' Retirement Fund.
" Head of department. " Any of the following:
(1) The chief administrative officer of a department.
(2) The chairperson or executive director of an agency,
authority or independent board or commission.
(3) The Court Administrator of Pennsylvania.
(4) The Chief Clerk of the Senate.
(5) The Chief Clerk of the House of Representatives.
(6) A designee of any of the individuals listed under
this definition who otherwise executes duties similar to that
of a chief administrative officer of an employer or a
department of any other employer.
(7) The director or similar person for any entity that
employs a public employee.
" IRC. " The Internal Revenue Code of 1986 (Public Law 99-514,
26 U.S.C. § 1 et seq.). A reference in this part to "IRC § XXX"
shall be deemed to refer to the identically numbered section and
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subsection or other subdivision of the section in 26 U.S.C.
(relating to Internal Revenue Code).
" Lifestyle funds. " An investment fund featuring an asset mix
determined by the level of risk and return that is appropriate
for an individual active member.
" Member contributions. " Regular contributions by members
under section 7111 (relating to active member contributions).
" Municipal employee. " A person holding an office or position
under a municipality or a municipal government association and
paid on a regular salary or per diem basis. The term shall not
include officers and employees paid wholly on a fee basis.
" Municipality. " Any of the following:
(1) A city, borough, town, township, county, county
institution district or a newly created governmental unit.
(2) An authority created solely or jointly by a city,
borough, town, township, county or county institution
district.
(3) An institution supported and maintained by a
municipality or a municipal government association.
(4) An industrial development corporation as defined
under section 2301 of the act of June 29, 1996 (P.L.434, No.
67) , known as the Job Enhancement Act, which has adopted
bylaws and the governing body of the industrial development
corporation is organized and holds regular public meetings.
" Pensionable earnings. " Compensation minus any compensation
received for the performance of overtime or compensation in the
form of a bonus, regardless if the bonus is pro rata, lump sum
or in any other method.
" Public employee. " Any of the following employees that begin
public service after November 30, 2017:
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(1) A State employee.
(2) A school employee.
(3) A municipal employee.
(4) An employee of a political subdivision of the
Commonwealth.
" Public school. " A class or school within this Commonwealth
conducted under the order and superintendence of the Department
of Education, including any of the following:
(1) All educational classes of an employer charged with
the responsibility of public education within this
Commonwealth as well as those classes financed wholly or in
part by the Federal Government.
(2) State-owned colleges and universities, The
Pennsylvania State University and community colleges.
(3) Area vocational-technical schools and intermediate
units.
(4) The State Board of Education.
(5) Thaddeus Stevens College of Technology and the
Pennsylvania Oral School for the Deaf.
" Public service. " The service of a public employee during
which the required member contributions have been made.
" School employee. " A person engaged in work relating to a
public school for any governmental entity and for which work the
person is receiving regular remuneration as an officer,
administrator or employee. The term does not include an
independent contractor or a person compensated on a fee basis.
" State employee. " A person holding a State office or
position under the Commonwealth or employed by the Commonwealth
in any capacity. The term shall not include an independent
contractor, a person compensated on a fee basis or a person paid
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directly by an entity other than a State Employees' Retirement
System employer. The term shall include members of the General
Assembly and any officer or employee of any of the following:
(1) The Pennsylvania Turnpike Commission, the Delaware
River Port Authority, the Port Authority Transit Corporation,
the Philadelphia Regional Port Authority, the Delaware River
Joint Toll Bridge Commission, the State Public School
Building Authority, the General State Authority, the State
Highway and Bridge Authority, the Delaware Valley Regional
Planning Commission and the Susquehanna River Basin
Commission if the commission or authority makes employer
contributions on behalf of employees under section 7112
(relating to employer contributions).
(2) The Interstate Commission of the Delaware River
Basin if the commission contributes to the fund the money
required to build up the reserves necessary for the payment
of the annuities of the officers and employees without any
liability on the part of the Commonwealth to make
appropriations for those purposes.
(3) A separate independent public corporation created by
statute, except for a municipal or quasi-municipal
corporation, if the following apply:
(i) The officer or employee remains an officer or
employee of the public corporation.
(ii) The officer or employee of the public
corporation was an employee of the Commonwealth
immediately prior to employment by the public
corporation.
(iii) The public corporation contributes to the fund
the money required to build up the reserves necessary for
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the payment of the annuities of the officers and
employees without any liability on the part of the
Commonwealth to make appropriations for those purposes.
" System. " The Public Employees' Retirement System.
§ 7103. Establishment.
(a) System establishment.--A public employees' retirement
system is established for public employees.
(b) Fund establishment.--The Public Employees' Retirement
Fund is established.
§ 7104. Public Employees' Retirement System Board.
(a) Establishment.--The Public Employees' Retirement System
Board is established for the purpose of administering and
managing the system.
(b) Status and membership.--The board shall be an
independent administrative board and shall consist of the
following members:
(1) The State Treasurer, who shall be an ex officio
member.
(2) Two members of the Senate or a designee.
(3) Two members of the House of Representatives or a
designee.
(4) The Chairman of the State Employees' Retirement
Board.
(5) The Chairman of the Public School Employees'
Retirement Board.
(6) The Chairman of the Pennsylvania Municipal
Retirement Board.
(7) Three members appointed by the Governor. One of the
members first appointed by the Governor shall be appointed
for a term which shall expire on June 30, 2022, one member
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for a term which shall expire on June 30, 2022, and one
member for a term which shall expire on June 30, 2023.
(c) Terms and qualifications.--Except as provided under
subsection (d), members shall serve for terms of four years.
Members appointed by the Governor may not be or have been a
public employee on or before the effective date of this section,
nor may be a current or former member of the State Employees'
Retirement System, the Public School Employees' Retirement
System, the Pennsylvania Municipal Retirement System or any
other Pennsylvania public retirement system and shall be subject
to confirmation by the Senate.
(d) Legislative members.--The members of the Senate shall be
appointed by the President pro tempore of the Senate and shall
consist of a majority member and a minority member. One member
of the House of Representatives shall be appointed by the
Majority Leader of the House of Representatives. One member of
the House of Representatives shall be appointed by the Minority
Leader of the House of Representatives. The legislative members
shall serve on the board for the duration of their legislative
terms and shall continue to serve until 30 days after the
convening of the next regular session of the General Assembly
after the expiration of their respective legislative terms or
until a successor is appointed for the new term, whichever
occurs first. A vacancy occurring during the term of an
appointed member shall be filled for the unexpired term by the
appointment and confirmation of a successor in the same manner
as the member's predecessor. Legislative members shall be
precluded from being appointed to the board if they have
previously or are currently serving in a capacity with any other
retirement board or system.
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(e) Oath of office.--Each member of the board shall take an
oath of office that the member will, so far as it devolves upon
the member, diligently and honestly administer the affairs of
the board and will not knowingly violate or willfully permit to
be violated any of the provisions of law applicable to this
chapter. The oath shall be subscribed by the member taking it
and certified by the officer before whom it is taken and shall
be immediately filed in the Office of the Secretary of the
Commonwealth.
(f) Compensation and expenses.--All board members shall be
reimbursed for any necessary expenses and shall not suffer loss
of salary or wages through serving on the board except that if
duties the board has mandated are not executed, no compensation
or reimbursement for necessary expenses of board members shall
be paid or payable during the period in which the duties are not
executed.
(g) Corporate power and legal advisor.--The board shall
possess the powers and privileges of a corporation. The Attorney
General shall be the legal advisor of the board.
§ 7105. Duties of the board.
(a) Employees.--The following shall apply:
(1) The positions of secretary, assistant secretary and
investment professional shall be placed under the
unclassified service provisions of the act of August 5, 1941
(P.L.752, No.286) , known as the Civil Service Act. All other
positions of the board shall be placed in either the
classified or unclassified service according to the
definition of the terms under the Civil Service Act.
(2) Notwithstanding any other provision of law, the
compensation of investment professionals shall be established
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by the board. The compensation of all other officers and
employees of the board who are not covered by a collective
bargaining agreement shall be established by the board
consistent with the standards of compensation established by
the Executive Board of the Commonwealth.
(b) Secretary.--The secretary shall act as chief
administrative officer for the board. In addition to other
powers and duties conferred upon and delegated to the secretary
by the board, the secretary shall do all of the following:
(1) Serve as the administrative agent of the board.
(2) Serve as liaison between the board and applicable
legislative committees, the Treasury Department, the
Department of the Auditor General and between the board and
the investment counsel and the mortgage supervisor in
arranging for investments to secure maximum returns to the
fund.
(3) Review and analyze proposed legislation and
legislative developments affecting the system and present
findings to the board, legislative committees and other
interested groups or individuals.
(4) Direct the maintenance of files and records and
preparations or periodic reports.
(5) Receive inquiries and requests for information
concerning the system from the press, Commonwealth officials,
State employees, the general public, research organizations
and officials and organizations from other states and provide
information as authorized by the board.
(6) Supervise a staff of administrative, technical and
clerical employees engaged in recordkeeping and clerical
processing activities in maintaining files of members,
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accounting for contributions, processing payments to
annuitants, preparing required reports and retirement
counseling.
(c) Specific duties.--In order to establish and administer
the system, the powers and duties of the board shall include the
following:
(1) Providing to active members a defined contribution
retirement plan that is compliant with the IRC and the
requirements of this chapter.
(2) Entering into written agreements with financial or
other organizations to administer the system for an active
member and to invest funds held pursuant to the system. The
system and any written agreement shall comply with the IRC.
(3) Establishing procedures whereby public employees
shall participate in the system and may change their
investment choices on a periodic basis, as determined by the
board, which shall not be less frequently than once per
calendar month.
(4) Arranging for a deduction, from the compensation of
public employees, of employee contributions to the system.
(5) Establishing criteria for selection by the board of
the financial institutions, insurance companies or other
organizations that may be qualified as managers, on behalf of
the board, of funds accumulated under the system on behalf of
any active member.
(6) Establishing standards or criteria for the providing
of options to an active member concerning the method of
investing amounts accumulated under the system if the options
include a diversified mix of low-cost investment products
that span the risk-return spectrum.
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(7) Establishing standards or criteria for informing
active members of specific options offered by qualified
managers.
(8) Designing a comprehensive, balanced and impartial
educational program to assist active members in their choice
of investment options under the system, which shall include
retirement planning education and financial planning guidance
on matters such as investment diversification, investment
risks, investment costs and asset allocation.
(9) Establishing standards and criteria for the
disclosure to active members of the anticipated and actual
income attributable to the amounts, property and rights and
all fees, costs and charges to be made against the amounts
accumulated to cover the costs of administering and managing
the funds.
(10) Establishing processes for participation in the
system. The election period shall begin on the date that an
individual becomes a qualified employee and shall end 90 days
from that date.
(11) Performing an annual review of any qualified fund
manager for the purpose of assuring it continues to meet all
standards and criteria established.
(12) Establishing procedures whereby an active member
may do one of the following:
(i) Withdraw accumulated amounts in cases of
financial hardship or separation of an active member from
State service or as otherwise permitted under the IRC.
(ii) Dispose of an active member's account pursuant
to a domestic relations order unless in conflict with the
IRC.
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(13) Administering the system in compliance with the
IRC.
(14) Promulgating regulations necessary to administer
this chapter.
(d) Prohibited interests.--No member or employee of the
board shall have a direct or indirect interest in the gains or
profits of an investment made by the board.
(e) Professional personnel.--The board shall contract for
the services of investment advisors and counselors and any other
professional personnel as it deems advisable. The board may,
with the approval of the Attorney General, contract for legal
services.
(f) Expenses.--The board shall, through the Governor, submit
to the General Assembly annually a budget covering the
administrative expenses of this part. The expenses as approved
by the General Assembly in an appropriation bill shall be paid
in whole or in part from nonvested forfeitures. Concurrently
with its administrative budget, the board shall also submit to
the General Assembly annually a list of proposed expenditures
which the board intends to pay through the use of directed
commissions, together with a list of actual expenditures from
the past year actually paid by the board through the use of
directed commissions. All directed commission expenditures shall
be made by the board for the exclusive benefit of the system and
its members.
(g) Meetings.--The board shall hold at least six regular
public meetings annually and any other public meetings as it may
deem necessary. A majority of the board shall constitute a
quorum for the transaction of business at a public meeting of
the board.
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(h) Records.--The following shall apply:
(1) The board shall keep a record of all its proceedings
which shall be open to inspection by the public.
(2) Any record, material or data received, prepared,
used or retained by the board or its employees, investment
professionals or agents relating to an investment shall not
constitute a public record subject to public inspection under
the act of February 14, 2008 (P.L.6, No.3), known as the
Right-to-Know Law, if, in the reasonable judgment of the
board, the inspection would do one of the following:
(i) In the case of an alternative investment or
alternative investment vehicle, involve the release of
sensitive investment or financial information relating to
the alternative investment or alternative investment
vehicle which the fund was able to obtain only upon
agreeing to maintain its confidentiality.
(ii) Cause substantial competitive harm to the
person from whom sensitive investment or financial
information relating to the investment was received.
(iii) Have a substantial detrimental impact on the
value of an investment to be acquired, held or disposed
of by the fund or would cause a breach of the standard of
care or fiduciary duty set forth under this chapter.
(3) The following shall apply:
(i) The sensitive investment or financial
information excluded from inspection under paragraph (2)
(i), to the extent not otherwise excluded from
inspection, shall constitute a public record subject to
public inspection under the Right-to-Know Law once the
board is no longer required by its agreement to maintain
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confidentiality.
(ii) The sensitive investment or financial
information excluded from inspection under paragraph (2)
(ii), to the extent not otherwise excluded from
inspection, shall constitute a public record subject to
public inspection under the Right-to-Know Law once the
latter of one of the following occurs:
(A) The inspection no longer causes substantial
competitive harm to the person from whom the
information was received.
(B) The entity in which the investment was made
is liquidated.
(iii) The sensitive investment or financial
information excluded from inspection under paragraph (2)
(iii), to the extent not otherwise excluded from
inspection, shall constitute a public record subject to
public inspection under the Right-to-Know Law once the
latter of one of the following occurs:
(A) The inspection no longer has a substantial
detrimental impact on the value of an investment of
the fund and would not cause a breach of the standard
of care or fiduciary duty under this chapter.
(B) The entity in which the investment was made
is liquidated.
(i) Functions.--The board shall perform any other functions
as are required for the execution of the provisions of this
chapter.
(j) Performance of departmental duties.--If the head of
department fails to comply with the procedures mandated under
section 7115 (relating to duties of heads of departments), the
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board shall perform the duties and bill the department for the
cost of the same.
(k) Regulations and procedures.--The board shall, with the
advice of the Attorney General, adopt and promulgate rules and
regulations for the uniform administration of the system.
(l) Annual financial statement.--The board shall prepare and
have published, on or before July 1 of each year, a financial
statement as of the calendar year ending December 31 of the
previous year showing the condition of the fund and the various
accounts, including the board's accrual and expenditure of
directed commissions, and setting forth any other facts,
recommendations and data as may be of use in the advancement of
knowledge concerning annuities and other benefits provided under
this chapter. The board shall submit the financial statement to
the Governor and the General Assembly and shall file copies with
the head of each department for the use of the State employees
and the public.
(m) Independent audit.--The board shall provide for an
annual audit of the system by an independent certified public
accountant, which shall include the board's accrual and
expenditure of directed commissions.
§ 7106. Administration and investment options.
(a) Administration.--The board shall administer the system
as a defined contribution retirement system under the IRC under
which benefits will be provided for active members. The benefits
to be provided for or on behalf of active members in the system
shall be provided through active member-directed investments in
accordance with IRC § 401(a)(relating to qualified pension,
profit-sharing, and stock bonus plans). Active members and
employers shall contribute to the system in accordance with
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sections 7111 (relating to active member contributions) and 7112
(relating to employer contributions).
(b) Investment options.--The system shall provide a variety
of investment options. The investment options shall include
lifestyle funds that are based upon age and projected
retirement.
(c) Additional investment options.--The system shall make
available investment options that represent a broad cross
section of asset classes and risk profiles. To the extent
practical, a composite fund may be offered to participants which
represents the entire portfolio return under management within
the Public School Employees' Retirement System or the State
Employees' Retirement System.
(d) Default investment option.--The system shall provide a
default investment option to an active member who does not
affirmatively elect a specific investment option. The default
investment option shall be the lifestyle fund which most closely
represents the current demographic of the active member and the
projected retirement of the active member. The active member
contribution in the default investment option shall be 5% of the
active member's total pensionable earnings.
(e) Investment guidance.--The system shall make available
investment guidance in accordance with pension industry
standards.
(f) Membership.--Membership in the system shall consist of
public employees occupying permanent positions with an employer.
§ 7107. Plan structure.
(a) Duties.--In developing and making available the system,
the board shall do all of the following:
(1) Implement competitive bidding practices for
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processes that govern the daily operations of the system.
(2) Provide consistency in the plan for all active
members.
(3) Effectively leverage the existing administrative and
financial capabilities of the State Employees' Retirement
System and the Public School Employees' Retirement System,
provided that this requirement shall not implicitly preclude
the board from contracting with or utilizing the services of
existing entities providing retirement or financial services.
(4) Provide participants with a broad range of low-cost
investment alternatives.
(5) Allow for online administration and daily
valuations.
(6) Allow for rollovers into this plan from plans of
other public employers.
(7) Provide active members with the necessary financial
planning resources to allow active members to make adequate
portfolio allocation decisions.
(8) Allow an active member who is no longer a public
employee to maintain their account within the system.
(9) Benchmark the system continually against the best
demonstrated practices within the entire industry.
(b) Prohibitions.--In developing and making available the
system, the board shall not do any of the following:
(1) Provide any additional benefit beyond that provided
under this chapter that results in an increased cost to any
taxpayer of this Commonwealth.
(2) Implement or administer any loan provisions unless
required by law.
(c) Costs.--Any administrative costs, overhead costs or
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nonrecurring, start-up costs shall be paid by the board with an
annual appropriation to the board for administrative costs. Any
other costs may be charged against participant accounts.
§ 7108. Investments and expenses.
The board shall not be responsible for an investment loss
incurred in the system or for failure of an investment to earn
any specific or expected return or to earn as much as any other
investment opportunity, whether or not the other investment
opportunity was offered to active members in the system. The
board shall bear the expenses arising from allowing public
employees to elect to participate in the system and active
members to choose a fund manager which are deducted from
compensation amounts contributed under the system and
transferred to the fund manager. All other expenses arising from
the administration of the system shall be assessed against the
accounts created on behalf of active members either by the fund
managers or by the board.
§ 7109. Attachment.
Notwithstanding any other provision of law, a benefit or
interest available under the system, a right to receive or
direct payments under the system or a distribution of payment
made under the system shall not, except as expressly specified
by the system, be subject to assignment, alienation,
garnishment, attachment, transfer, anticipation, sale, mortgage,
pledge, hypothecation, commutation, execution or levy, whether
by voluntary or involuntary act of an interested person.
§ 7110. Investments.
Investment of contributions by a corporation, institution,
insurance company or custodial bank that the board has approved
shall not be unreasonably delayed, and in no case shall the
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investment of contributions be delayed more than 30 days from
the date of payroll deduction to the date that funds are
invested. An interest earned on the funds pending investment
shall be allocated to the Commonwealth and credited to the
accounts of active members who are then participating in the
system unless the interest is used to defray administrative
costs and fees that would otherwise be required to be borne by
active members who are then participating in the system.
§ 7111. Active member contributions.
Regular active member contributions shall be made to the
system on behalf of each active member for current service in an
amount equal to a percentage of the active member's pensionable
earnings. The employer shall cause active member contributions
for current service to be made and deducted from each payroll.
Active members may elect to contribute to the system on their
behalf to the extent permitted by law.
§ 7112. Employer contributions.
(a) Contributions.--The Commonwealth or any other employer
shall make payments to the trust fund on behalf of the active
member. The amount of the payments shall match the contribution
made by an active member dollar for dollar under section 7111
(relating to active member contributions) but shall not exceed
5% of the active member's pensionable earnings.
(b) Disability.--In the event an active member becomes
totally and permanently disabled, the employer shall continue to
make employer contributions in the same amount as the employer's
previous contribution on behalf of the active member as provided
under subsection (a) until the active member has attained 65
years of age. A contribution under this subsection shall be made
regardless of the level of the active member's contributions or
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the absence thereof.
§ 7113. Vesting.
(a) Forfeiture.--The following shall apply:
(1) Except as provided under paragraph (2), an active
member shall be vested after completing three years of
service during which the person is an active member in the
system with respect to employer contributions paid on behalf
of the active member to the system plus interest and earnings
on the employer contributions but minus investment fees and
administrative charges.
(2) An active member that is considered part time shall
only be vested if the member is compensated for at least
1,000 hours per year.
(b) Forfeiture.--The following shall apply:
(1) If an active member or a beneficiary entitled to a
payment cannot be located, the related accounts shall be
forfeited as of the date the active member or the beneficiary
cannot be located. The active member's vested account balance
that is so forfeited shall be restored to the active member's
account if the active member or beneficiary entitled to the
payment later submits a written election of method of
payment.
(2) An unvested portion of an active member's accounts
shall be forfeited and may be applied as provided under
section 7105(f) (relating to duties of the board) upon the
death or other termination of public service of the active
member.
§ 7114. Duties of the board to advise and report to heads of
departments and members.
(a) Manual of regulations.--The board shall, with the advice
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of the Attorney General, prepare and provide, within 90 days of
the effective date of this section, a manual incorporating rules
and regulations consistent with the provisions of this chapter
to the heads of departments who shall provide the information to
newly hired public employees who are active members and shall
make the information contained in the manual available to the
general membership. The board shall thereafter advise the heads
of departments within 90 days of any changes in the rules and
regulations due to changes in the law or due to changes in
administrative policies.
(b) Member status statements and certifications.--The board
shall furnish annually to the head of each department, on or
before April 1, a statement for each member employed in the
department showing the total accumulated deductions standing to
his credit as of December 31 of the previous year and requesting
the member to make any necessary corrections or revisions
regarding his designated beneficiary. In addition, for each
member employed in a department and for whom the department has
furnished the necessary information, the board shall certify the
number of years and fractional part of a year of credited
service.
§ 7115. Duties of heads of departments.
(a) Status of members.--The head of department shall, at the
end of each pay period, notify the board in a manner prescribed
by the board of salary changes effective during that period for
any members of the department, the date of all removals from the
payroll and the type of leave of any members of the department
who have been removed from the payroll for any time during that
period. The following shall apply:
(1) If the removal is due to leave without pay, the head
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of department shall furnish the board with the date of
beginning of leave and of return to service and the reason
for leave.
(2) If the removal is due to a transfer to another
department, the head of department shall furnish the
department and the board with a complete public service
record, including past public service.
(3) If the removal is due to termination of public
service, the head of department shall furnish the board with
a complete public service record. The following shall apply:
(i) In the case of death of the member, the head of
department shall notify the board.
(ii) In the case of a service connected disability,
the head of department shall, to the best of his or her
ability, investigate the circumstances surrounding the
disablement of the member and submit in writing to the
board information which shall include the date, place and
time of disablement to the extent ascertainable, the
nature of duties being performed at the time and whether
or not the duties being performed were authorized and
included among the member's regular duties. The head of
department shall furnish in writing to the board any
other information as may be related to the member's
disablement.
(b) Records and information.--At any time at the request of
the board and at termination of service of a member, the head of
department shall furnish service and compensation records and
any other information as the board may require and shall
maintain and preserve the records as the board may direct for
the expeditious discharge of its duties.
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(c) Employer contributions.--The head of department shall
cause the required employer contributions to be made and
deducted under section 7110 (relating to investments). The head
of department shall certify to the State Treasurer the amounts
deducted and shall send the total amount picked up and deducted,
together with a duplicate of the voucher, to the secretary of
the board every pay period. On or before January 31, 2018, and
on or before each January 31 thereafter, the head of department
shall, at the time when the income and withholding information
required by law is furnished to each member, also furnish the
amount of employer contributions made on his behalf.
(d) Mandatory membership.--Each public employee who enters
into public service for the first time after November 30, 2017,
shall be subject to mandatory membership in the system. Upon the
assumption of public service of each new public employee whose
membership in the system is mandatory, the head of department
shall cause an application for membership and a nomination of
beneficiary to be made by the public employee and filed with the
board and shall make employer contributions from the effective
date of public service.
(e) Annual statement to active members.--Annually, upon
receipt from the board, the head of department shall furnish to
each active member the statement specified under section 7114(b)
(relating to duties of the board to advise and report to heads
of departments and members).
(f) Termination of service.--The head of department shall,
in the case of an active member terminating public service who
is ineligible for an annuity before attainment of superannuation
age, advise the member in writing of any benefits to which the
member may be entitled under this chapter and shall have the
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member prepare, on or before the date of termination of public
service, an application for the return of total accumulated
deductions.
(g) Date of application for benefits.--An application
properly executed and filed under subsection (f) with the
department and not filed with the board within 30 days shall be
deemed to have been filed with the board on the date filed with
the department, and in such case all required data shall be
furnished to the board immediately.
§ 7116. Administration.
For purposes of administering the system, an individual
account shall be maintained in the name of each public employee.
§ 7117. Applicability.
(1) Except as provided in paragraph (2), this chapter
shall apply to public employees entering into public service
after November 30, 2017, or upon the expiration of a
collective bargaining agreement an employer has entered
providing retirement benefits to a public employee, whichever
is later, and shall not be construed to affect a person who
is a public school employee, State employee or municipal
employee on or before November 30, 2017.
(2) This chapter shall apply to a person who is a public
school employee, State employee or municipal employee before
November 30, 2017, and who is not a public employee on
November 30, 2017, but reenters public service after November
30, 2017.
Section 2. The following shall apply:
(1) The provisions of the act of February 1, 1974 (P.L.
34, No.15), known as the Pennsylvania Municipal Retirement
Law, shall not apply to municipal employees employed after
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November 30, 2017.
(2) The provisions of 24 Pa.C.S. Pt. IV shall not apply
to public school employees employed after November 30, 2017.
(3) The provisions of 71 Pa.C.S. Pt. XXV shall not apply
to State employees employed after November 30, 2017.
(4) The provisions of any statute that provides for
local retirement benefits shall not apply to a public
employee employed after November 30, 2017.
Section 3. This act shall take effect in 60 days.
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