Regular Session 2015-2016 House Bill 1929 P.N. 3043

PRINTER'S NO. 3043

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1929

Session of

2015

INTRODUCED BY BENNINGHOFF, REED, ADOLPH, BARRAR, BLOOM, CAUSER,

CUTLER, DELOZIER, EVERETT, GABLER, GILLESPIE, GINGRICH,

GROVE, A. HARRIS, HICKERNELL, IRVIN, KAUFFMAN, M. K. KELLER,

KILLION, KNOWLES, LAWRENCE, MAJOR, MALONEY, MARSICO,

METCALFE, MILLARD, MILNE, MOUL, MUSTIO, O'NEILL, PEIFER,

PETRI, PICKETT, PYLE, QUINN, SAYLOR, SONNEY, STAATS, TALLMAN,

TAYLOR, THOMAS, TOBASH, WARD, WATSON AND ZIMMERMAN,

APRIL 1, 2016

REFERRED TO COMMITTEE ON STATE GOVERNMENT, APRIL 1, 2016

AN ACT

Amending Title 71 (State Government) of the Pennsylvania

Consolidated Statutes, in Independent Fiscal Office, further

providing for scope of chapter, for definitions and for

duties of office; providing for actuarial notes; further

providing for selection and organization committee and for

appointment; abolishing the Public Employee Retirement

Commission; and making a related repeal.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 4101 of Title 71 of the Pennsylvania

Consolidated Statutes is amended to read:

§ 4101. Scope of chapter.

This chapter relates to:

(1) The preparation of independent fiscal estimates.

(2) The review and analysis of legislation affecting

public employee retirement plans.

(3) The examination on a continuing basis of public

employee pension and retirement policy as implemented at both

the State and local level, the interrelationships of the

several public employee retirement plans and their actuarial

soundness and cost.

Section 2. Section 4102 of Title 71 is amended by adding

definitions to read:

§ 4102. Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Actuarially sound plan." A plan operated under supervision

of an actuary and which is being funded annually at a level not

lower than the normal cost of the plan plus amortization of the

unfunded accrued liability within an established period of time

after the effective date of the act creating the public employee

retirement plan.

* * *

"Public employee retirement plan." Any of the following:

(1) The State Employees' Retirement System created

pursuant to Part XXV (relating to retirement for State

employees and officers).

(2) The Public School Employees' Retirement System

created pursuant to 24 Pa.C.S. Part IV (relating to

retirement for school employees).

(3) The Municipal Retirement System created pursuant to

the act of February 1, 1974 (P.L.34, No.15), known as the

Pennsylvania Municipal Retirement Law.

(4) Any other independent pension or retirement plan for

public officers and employees in this Commonwealth.

(5) Pension or retirement plans created pursuant to the

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act of June 23, 1931 (P.L.932, No.317), known as The Third

Class City Code.

(6) Pension or retirement plans created pursuant to the

act of May 29, 1956 (1955 P.L.1804, No.600), referred to as

the Municipal Police Pension Law.

Section 3. Section 4104(a) of Title 71 is amended by adding

paragraphs to read:

§ 4104. Duties of office.

(a) Mandatory.--The office shall:

* * *

(8) Study generally the subject of retirement, income

after retirement, disability and death benefits and the

retirement needs of public employees, with the

responsibility to formulate principles and objectives

applicable thereto and to recommend any new legislation

deemed advisable.

(9) Analyze on its own or upon request from either

the legislative or executive branch any bill relating to

public employee retirement or pension policy and issue a

report thereto in a timely fashion. The report shall be

submitted to the Governor and the General Assembly and shall

include an assessment of the actuarial soundness, feasibility

and cost of the legislation.

(10) Establish and review plans for actuarial

soundness for each public employee retirement plan.

(11) Issue subpoenas in order to compel testimony or

receive any information reasonably necessary in the process

of carrying out its mandated responsibilities.

(12) Cooperate with the several State and municipal

retirement and pension boards on matters of mutual concern.

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(13) Hire appropriate staff, such as actuaries, legal

counsel, research analysts and secretarial assistance, and

contract for consultant services as may be within the limits

of the appropriations available.

(14) Monitor and evaluate from time to time all the

laws and systems thereunder which relate to public employee

pension and retirement policy in this Commonwealth.

(15) Study the relationship of retirement and pension

policy to other aspects of public personnel policy and to

the effective operation of government generally.

(16) Examine the interrelationships among public

employee retirement plans throughout this Commonwealth.

(17) Recommend to the General Assembly a change in

the process by which public employee pension and retirement

legislation is analyzed and acted upon by the General

Assembly.

(18) Issue actuarial notes pursuant to section 4105.1

(relating to actuarial notes).

(19) Issue an annual public report to the Governor and

General Assembly, including, but not limited to, its

findings, recommendations and a summary of its activities.

* * *

Section 4. Title 71 is amended by adding a section to read:

§ 4105.1. Actuarial notes.

(a) Note required for bills.--Except as otherwise provided

in subsection (f)(1), no bill proposing any change relative to a

public employee retirement plan shall be given second

consideration in either house of the General Assembly until the

office has attached an actuarial note prepared by an enrolled

pension actuary, which shall include a reliable estimate of the

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cost and actuarial effect of the proposed change in the public

employee retirement plan.

(b) Note required for amendments.--Except as otherwise

provided in subsection (f)(2), no amendment to any bill

concerning any public employee retirement plan shall be

considered by either house of the General Assembly until an

actuarial note prepared by an enrolled pension actuary has been

attached.

enrolled pension actuary to prepare an actuarial note which

shall include a reliable estimate of the financial and

actuarial effect of the proposed change in any public employee

retirement plan.

(d) Contents of note.--The actuarial note shall be factual,

and shall, if possible, provide a reliable estimate of both the

immediate cost and effect of the bill and, if determinable or

reasonably foreseeable, the long-range actuarial cost and effect

of the measure.

(e) Notes for proposed constitutional amendments.--The

office shall issue an actuarial note, prepared by an

enrolled pension actuary, for any joint resolution proposing an

amendment to the Constitution of Pennsylvania which initially

passes either house of the General Assembly. If the joint

resolution is subsequently amended and passes either house of

the General Assembly, a new actuarial note shall be prepared.

(f) Effect of failure of office to attach note.--

(1) If the office fails to attach an actuarial note

within 20 legislative days after a bill proposing a change

relative to a public employee retirement plan has received

first consideration in either house of the General Assembly,

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the bill may be further considered in the same manner as if

the actuarial note had been attached to the bill.

(2) If the office fails to attach an actuarial note

within 20 legislative days after an amendment to a bill

proposing a change relative to a public employee pension or

retirement plan has been submitted to the office, the

amendment may be considered in the same manner as if the

actuarial note had been attached to the amendment.

Section 5. Sections 4110 and 4111 of Title 71 are amended to

read:

§ 4110. Selection and organization committee.

[(a) Selection and organization committee.--] The

Independent Fiscal Office Selection and Organization Committee

is established to [organize the office and] select the director

of the office, based on qualifications established by the

committee. The committee shall consist of the following:

(1) The chairman and minority chairman of the

Appropriations Committee of the Senate and the chairman and

minority chairman of the Appropriations Committee of the

House of Representatives.

(2) The Majority Leader and the Minority Leader of the

Senate and the Majority Leader and the Minority Leader of the

House of Representatives.

(3) The President pro tempore of the Senate and the

Speaker of the House of Representatives.

[(b) Duties of committee.--By January 15, 2011, the

selection and organization committee shall deliberate the

following:

(1) The procedures to be adopted to select the director

of the office.

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(2) The operational budget for the office.]

§ 4111. Appointment.

(a) Director.--The office shall be headed by a director

appointed by the [selection and organization] committee [by May

30, 2011]. The appointment shall be made without regard to

political affiliation and solely on the basis of fitness to

perform the duties of the office based on qualifications

[published] established by the [selection and organization]

committee.

(b) Deputy director.--The director shall appoint a deputy

director who shall perform such duties as assigned by the

director and who shall, during the absence or incapacity of the

director or a vacancy, act as the director.

years. An individual appointed as director by the committee to

fill a vacancy prior to the expiration of a term shall serve

only for the unexpired portion of that term. An individual

serving as director at the expiration of a term may continue to

serve until a successor is appointed by the committee.

(d) Removal.--The director may be removed by a concurrent

resolution passed by the Senate and the House of

Representatives.

Section 6. The Public Employee Retirement Commission is

abolished.

Section 7. Repeals are as follows:

(1) The General Assembly declares that the repeal under

paragraph (2) is necessary to effectuate the amendment or

addition of 71 Pa.C.S. §§ 4101, 4102, 4104(a) and 4105.1.

(2) The act of July 9, 1981 (P.L.208, No.66), known as

the Public Employee Retirement Commission Act, is repealed.

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Section 8. The following apply:

(1) Except as otherwise provided in 71 Pa.C.S. Ch. 41,

all activities initiated under the act of July 9, 1981

(P.L.208, No.66), known as the Public Employee Retirement

Commission Act, shall continue and remain in full force and

effect and may be completed under 71 Pa.C.S. Ch. 41. Orders,

regulations, rules and decisions which were made under the

Public Employee Retirement Commission Act, and which are in

effect on the effective date of this section, shall remain in

full force and effect until revoked, vacated or modified

under 71 Pa.C.S. Ch. 41.

(2) All allocations, appropriations, equipment, files,

records, contracts, agreements, obligations and other

materials which are used, employed or expended by the Public

Employee Retirement Commission are transferred to the

Independent Fiscal Office with the same force and effect as

if the appropriations had been made to and the items had been

the property of the Independent Fiscal Office in the first

instance and as if the contracts, agreements and obligations

had been incurred or entered into by the Independent Fiscal

Office. Contracts and obligations entered into under the

Public Employee Retirement Commission Act are not affected

nor impaired by the repeal of the Public Employee Retirement

Commission Act.

Section 9. A reference to the Public Employee Retirement

Commission in a statute or a regulation shall be deemed a

reference to the Independent Fiscal Office.

Section 10. This act shall take effect July 1, 2016, or

immediately, whichever is later.

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