Regular Session 2017-2018 House Bill 0779 P.N. 0855

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.

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.

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.

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.

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.

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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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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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