Bill Text: PA HB2200 | 2011-2012 | Regular Session | Introduced

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Bill Title: Further providing for definitions and for classes of service; providing for election to become a Class D-C member; and establishing the Legislative Agency Official and Employee Defined Contribution Benefit Program and the Individual Annuity Savings Account.

Spectrum: Strong Partisan Bill (Republican 69-6)

Status: (Introduced - Dead) 2012-02-29 - Referred to STATE GOVERNMENT [HB2200 Detail]

Download: Pennsylvania-2011-HB2200-Introduced.html

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PRINTER'S NO. 3144
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2200 Session of2012
INTRODUCED BY EVANKOVICH, TRUITT, AUMENT, BARRAR, BEAR, BENNINGHOFF, BLOOM, BOYD, BROOKS, R. BROWN, CAUSER, CHRISTIANA, CLYMER, COX, CREIGHTON, CUTLER, DENLINGER, DePASQUALE, DONATUCCI, EMRICK, EVERETT, FARRY, FLECK, GABLER, GERGELY, GILLEN, GINGRICH, GODSHALL, GROVE, HACKETT, HARHART, HELM, HENNESSEY, HUTCHINSON, KAMPF, KAUFFMAN, F. KELLER, KILLION, KORTZ, LAWRENCE, MAHER, MALONEY, MARSHALL, MASSER, METCALFE, MILNE, MULLERY, MURT, OBERLANDER, PERRY, PETRI, PICKETT, PYLE, RAPP, REED, REESE, ROCK, SACCONE, SANTARSIERO, SAYLOR, CULVER, SCHRODER, SIMMONS, STEPHENS, STEVENSON, TALLMAN, TAYLOR, TOBASH, TOEPEL, TOOHIL, TURZAI, VEREB AND VULAKOVICH, FEBRUARY 29, 2012
REFERRED TO COMMITTEE ON STATE GOVERNMENT, FEBRUARY 29, 2012
AN ACT
Amending Title 71 (State Government) of the Pennsylvania
Consolidated Statutes, further providing for definitions and
for classes of service; providing for election to become a
Class D-C member; and establishing the Legislative Agency
Official and Employee Defined Contribution Benefit Program
and the Individual Annuity Savings Account.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 5102 of Title 71 of the Pennsylvania
Consolidated Statutes is amended by adding definitions to read:
§ 5102. Definitions.
The following words and phrases as used in this part, unless
a different meaning is plainly required by the context, shall
have the following meanings:
* * *
"Individual annuity savings plan." The defined contribution
benefit plan established by the board exclusively for the
benefit of Class D-C members in conformity with section 401(a)
of the Internal Revenue Code of 1986 (Public Law 99-514, 26
U.S.C. § 401(a)).
* * *
"Legislative agency." Any of the following:
(1) The Senate.
(2) The House of Representatives.
(3) The Capitol Preservation Committee.
(4) The Center for Rural Pennsylvania.
(5) The Joint Legislative Air and Water Pollution
Control and Conservation Committee.
(6) The Joint State Government Commission.
(7) The Legislative Budget and Finance Committee.
(8) The Legislative Data Processing Committee.
(9) The Independent Regulatory Review Commission.
(10) The Legislative Reference Bureau.
(11) The Local Government Commission.
(12) The Pennsylvania Commission on Sentencing.
(13) The Legislative Reapportionment Commission.
(14) The Legislative Office for Research Liaison.
(15) The Legislative Audit Advisory Commission.
"Legislative Agency Official and Employee Defined
Contribution Benefit Program." The defined contribution benefit
program established under Chapter 56 (relating to Legislative
Agency Official and Employee Defined Contribution Benefit
Program).
* * *
Section 2. Section 5306(a)(2) of Title 71 is amended and the
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section is amended by adding a subsection to read:
§ 5306. Classes of service.
(a) Class A and Class A-3 membership.--
* * *
(2) [A] Except as provided under subsection (a.4), a
State employee who first becomes a member of the system on or
after January 1, 2011, or on or after December 1, 2010, as a
member of the General Assembly, shall be classified as a
Class A-3 member and receive credit for Class A-3 service
upon payment of regular member contributions and shared-risk
member contributions for Class A-3 service provided that the
State employee does not become a member of Class A-4 pursuant
to subsection (a.3), except that a member of the judiciary
shall be classified as a member of such other class of
service for which the member of the judiciary is eligible,
shall elect and make regular member contributions.
* * *
(a.4) Class D-C membership.--
(1) A person who does any of the following shall be
classified as a Class D-C member upon payment of member
contributions under section 5607 (relating to rights and
duties of Class D-C members):
(i) Becomes a member of the General Assembly and an
active member of the system after November 30, 2012.
(ii) Enters State service as an employee of a
legislative agency and becomes an active member of the
system after November 30, 2012.
(2) If an election to become a Class D-C member is made
under section 5306.4 (relating to election to become a Class
D-C member), a person who, on November 30, 2012, is an
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employee of a legislative agency or a member of the General
Assembly and is not an active member of the system because
membership in the system is optional under section 5301,
shall be classified as a Class D-C member upon payment of
member contributions under section 5607.
* * *
Section 3. Title 71 is amended by adding a section to read:
§ 5306.4. Election to become a Class D-C member.
(a) General rule.--A person eligible for Class D-C
membership under section 5306(a.4) (relating to classes of
service) may elect to become a member of Class D-C.
(b) Time for making election.--The election to become a
Class D-C member under subsection (a) must be made by the member
filing written notice with the board in a form and manner
determined by the board under Chapter 56 (relating to
Legislative Agency Official and Employee Defined Contribution
Benefit Program) no later than 45 days after notice from the
board of the member's eligibility to elect Class D-C membership.
(c) Effect of election.--An election to become a Class D-C
member shall be irrevocable and shall become effective on the
effective date of membership in the system and shall remain in
effect during subsequent periods of State service.
Section 4. Title 71 is amended by adding a chapter to read:
CHAPTER 56
LEGISLATIVE AGENCY OFFICIAL
AND EMPLOYEE DEFINED CONTRIBUTION
BENEFIT PROGRAM
Sec.
5601. Individual annuity savings plan.
5602. Agreements with financial institutions and other
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organizations.
5603. Rules and regulations.
5604. Responsibility for investment loss.
5605. Nonassignment and nontransferability.
5606. Powers and duties of board.
5607. Rights and duties of Class D-C members.
5608. Employer contributions.
5609. Investments based on members' investment allocation
choices.
§ 5601. Individual annuity savings plan.
The board shall establish and serve as trustee of a defined
contribution benefit plan exclusively for Class D-C members
within the meaning of and in conformity with section 401(a) of
the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C.
§ 401(a) et seq.), which shall be known as the Individual
Annuity Savings Plan. The board shall determine all of the terms
and provisions of the plan not inconsistent with this part or
the Internal Revenue Code of 1986, including, but not limited
to, standards and procedures for its funding, and shall provide
for the plan's administration.
§ 5602. Agreements with financial institutions and other
organizations.
The board shall, to establish and administer the individual
annuity savings plan, have the power to enter into written
agreements with one or more financial institutions or other
organizations relating to the plan's administration and
investment of funds held pursuant to the plan.
§ 5603. Rules and regulations.
The board shall have the power to promulgate rules and
regulations necessary for the administration and management of
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the individual annuity savings plan, including, but not limited
to, establishing:
(1) Procedures whereby eligible Class D-C members may
change optional election amounts or their investment choices
on a periodic basis or make other elections regarding their
participation in the plan.
(2) Procedures for deducting amounts to be deferred from
members' compensation.
(3) Standards or criteria for the selection of financial
institutions or other organizations that may be qualified as
managers of funds deferred under the plan or to provide other
services relating to the administration and management of the
plan.
(4) Standards and criteria for disclosing and providing
options to eligible individuals regarding investments of
amounts deferred under the plan. One of the available options
must serve as the default option for members who do not make
a timely election. The investment options shall represent a
broad cross section of asset classes and risk profiles.
(5) Standards and criteria for disclosing the
anticipated and actual income attributable to amounts
invested, property rights and all fees, costs and charges to
be made against amounts deferred to cover the costs and
expenses of administering and managing the plan or funds.
(6) Procedures, standards and criteria for the making of
withdrawals from the plan upon separation from employment or
death or in other circumstances consistent with the purpose
of the plan.
§ 5604. Responsibility for investment loss.
Neither the board nor the Commonwealth shall be responsible
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for:
(1) Any investment loss incurred under the plan.
(2) The failure of any investment to earn any specific
or expected return or to earn as much as any other investment
opportunity, whether or not the other opportunity was offered
to participants in the plan.
§ 5605. Nonassignment and nontransferability.
Except as provided under section 5953 (relating to taxation,
attachment and assignment of funds), no participant or
beneficiary shall have the right to commute, sell, assign or
otherwise transfer or convey the rights to receive payments
under agreements entered into under this chapter. Payments and
rights shall be exempt from any State or municipal tax and
exempt from levy and sale, garnishment, attachment or any other
process and shall be nonassignable and nontransferable.
§ 5606. Powers and duties of board.
The board shall have the following powers and duties to
administer this chapter:
(1) The board may commingle or pool assets with the
assets of other persons or entities.
(2) The board shall pay all administrative costs of
managing and administering the individual savings account
plans from the contributions and earnings of the individual
accounts.
(3) The board may establish investment guidelines and
limits on the types of investments that Class D-C members can
make, consistent with the board's fiduciary obligations.
(4) The board shall at all times have the power to
change the terms of the plan as may be necessary to maintain
the tax-qualified status of the plan.
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§ 5607. Rights and duties of Class D-C members.
Class D-C members shall have the following rights and duties
under this chapter:
(1) Each Class D-C member may make contributions to the
member's individual annuity savings account.
(2) Each Class D-C member may make contributions to the
extent permitted by Federal law and subject to rules and
requirements for the making of elections as may be imposed by
Federal law and rules and regulations of the board.
(3) Upon termination of service, a Class D-C member
shall withdraw the money in the account if and to the extent
required or permitted by regulations established by the
board.
§ 5608. Employer contributions.
The employer of each Class D-C member shall make
contributions to the member's individual annuity savings account
which shall match the contribution made by the Class D-C member
under section 5607 (relating to rights and duties of Class D-C
members), but may not exceed 6% of the member's compensation. No
further contributions by employers shall be permitted.
§ 5609. Investments based on members' investment allocation
choices.
All contributions, interest and investment earnings shall be
entirely vested based on the Class D-C member's investment
allocation choices. Each Class D-C member shall be credited
individually with the amount of contributions, interest and
investment earnings.
Section 5. Title 71 is amended by adding a section to read:
§ 5942. Individual Annuity Savings Account.
The Individual Annuity Savings Account is established as the
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ledger account to which shall be credited the amounts of
contributions made by the employer and contributions or lump sum
payments made by Class D-C members in accordance with Chapter 56
(relating to Legislative Agency Official and Employee Defined
Contribution Benefit Program), together with all interest and
investment earnings.
Section 6. This act shall take effect as follows:
(1) The addition of 71 Pa.C.S. § 5306(a.4)(2) shall take
effect December 1, 2012, or immediately, whichever is later.
(2) The remainder of this act shall take effect
immediately.
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