A07386
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, unless prohibited by any contract that is in effect
on the effective date of this subsection, the board shall
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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 , to the extent
the information is reasonably available .
(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 of
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, based
on industry-approved valuations and informed by the best
practices as recommended by recognized industry
standards, including, but not limited to, such as the
Institutional Limited Partnership Association Fee
Transparency Initiative , and to the extent the
information is reasonably available . 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
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firm authorized to conduct an audit of the system or
the plan by the General Assembly;
(B) the Office of the Auditor General;
(C) auditors hired by the board and referenced
in the board's financial statements filed in
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.
* * *
(r) Additional reporting requirements.--The following shall
apply:
(1) In addition to the requirements set forth in this
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section, unless prohibited by any contract that is in effect
on the effective date of this subsection, 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 calendar
year:
(i) The performance of all investments over the most
recent 1-, 3-, 5-, 10- and 20-year periods , to the extent
the information is reasonably available .
(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 of
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, based
on industry-approved valuations and informed by the best
practices as recommended by recognized industry
standards, including, but not limited to, such as the
Institutional Limited Partnership Association Fee
Transparency Initiative , and to the extent the
information is reasonably available . The board shall
disclose in the report which industry standards were used
and whether any changes to industry standards have been
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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;
(C) auditors hired by the board and referenced
in the board's financial statements filed in
accordance with subsection (n) (M) ; and
(D) (B) an independent certified public
accounting firm specified in subsection (o) (N) .
(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 3. This act shall take effect in 60 days.
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