Regular Session 2017-2018 House Bill 1460 P.N. 2810

PRIOR PRINTER'S NOS. 1865, 2595, 2745

PRINTER'S NO. 2810

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1460

Session of

2017

INTRODUCED BY B. MILLER, GREINER, WARD, MILLARD, MILNE, RADER,

LAWRENCE, WHEELAND, BLOOM, GROVE, ZIMMERMAN, MOUL, BARRAR,

KEEFER, MAHER, CALTAGIRONE, HANNA, IRVIN, GILLEN, RYAN AND

KORTZ, MAY 31, 2017

AS REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF

REPRESENTATIVES, AS AMENDED, DECEMBER 11, 2017

AN ACT

Amending Titles 24 (Education) and 71 (State Government) of the

Pennsylvania Consolidated Statutes, in administration and

miscellaneous provisions regarding administration of the

Public School Employees' Retirement Fund, further providing

for administrative duties of board; and, in administration,

funds, accounts and general provisions regarding

administration of the State Employees' Retirement Fund,

further providing for administrative duties of the board.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 8502 of Title 24 of the Pennsylvania

Consolidated Statutes is amended by adding a subsection to read:

§ 8502. Administrative duties of board.

* * *

(s) Additional reporting requirements.--The following shall

apply:

(1) In addition to the requirements set forth in this

section, the board shall prepare and have published on its

publicly accessible Internet website, and electronically

submit copies to all members of the General Assembly, the

following information within six months after the end of the

system's fiscal year:

(i) The performance of all investments over the most

recent 1-, 3-, 5-, 10- and 20-year periods.

(ii) The performance of all investments by asset

class over each time horizon, both gross and net of fees

being reported commencing prospectively from the

effective date of this subsection and WITH THE GROSS FEES

retroactively for the 5-year period and, to the extent

the information is available, retroactively for the 10-

year period REASONABLY AVAILABLE .

(iii) An itemized listing of the fees paid to all

investment managers for the applicable reporting years,

separated by base management fee and profit share,

including performance fees, carried interest and

incentive fees, including the basis of valuation, and

informed by the best practices as recommended by

recognized industry standards, including, but not limited

to, the Institutional Limited Partnership Association Fee

Transparency Initiative. The board shall disclose in the

report which industry standards were used and whether any

changes to industry standards have been made.

(iv) Management letters prepared by:

(A) any independent certified public accounting

firm authorized to conduct an audit of the system or

the plan by the General Assembly;

(B) the Office of the Auditor General;

in the board's financial statements filed in

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accordance with subsection (n); and

(D) (B) an independent certified public

accounting firm specified in subsection (o).

(2) As used in this subsection, the following words and

phrases shall have the meanings given to them in this

paragraph unless the context clearly indicates otherwise:

"Carried interest." Any share of profits from an

alternative investment vehicle that is distributed to a fund

manager, general partner or related party, including

allocations of alternative investment vehicle profits

received by a fund manager in consideration of having waived

fees that the fund manager might otherwise have been entitled

to receive.

"Institutional Limited Partnership Association Fee

Transparency Initiative." An initiative created by the

Institutional Limited Partnership Association to establish

guidelines for reporting fees, expenses and compliance

disclosures regarding investments.

Section 2. Section 5902 of Title 71 is amended by adding a

subsection to read:

§ 5902. Administrative duties of the board.