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


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

  

 

    

PRINTER'S NO.  3144

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

2200

Session of

2012

  

  

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

  

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Amending Title 71 (State Government) of the Pennsylvania

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Consolidated Statutes, further providing for definitions and

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for classes of service; providing for election to become a

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Class D-C member; and establishing the Legislative Agency

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Official and Employee Defined Contribution Benefit Program

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and the Individual Annuity Savings Account.

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The General Assembly of the Commonwealth of Pennsylvania

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hereby enacts as follows:

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Section 1.  Section 5102 of Title 71 of the Pennsylvania

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Consolidated Statutes is amended by adding definitions to read:

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§ 5102.  Definitions.

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The following words and phrases as used in this part, unless

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a different meaning is plainly required by the context, shall

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have the following meanings:

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* * *

 


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"Individual annuity savings plan."  The defined contribution

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benefit plan established by the board exclusively for the

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benefit of Class D-C members in conformity with section 401(a)

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of the Internal Revenue Code of 1986 (Public Law 99-514, 26

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U.S.C. § 401(a)).

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* * *

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"Legislative agency."  Any of the following:

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(1)  The Senate.

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(2)  The House of Representatives.

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(3)  The Capitol Preservation Committee.

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(4)  The Center for Rural Pennsylvania.

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(5)  The Joint Legislative Air and Water Pollution

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Control and Conservation Committee.

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(6)  The Joint State Government Commission.

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(7)  The Legislative Budget and Finance Committee.

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(8)  The Legislative Data Processing Committee.

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(9)  The Independent Regulatory Review Commission.

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(10)  The Legislative Reference Bureau.

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(11)  The Local Government Commission.

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(12)  The Pennsylvania Commission on Sentencing.

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(13)  The Legislative Reapportionment Commission.

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(14)  The Legislative Office for Research Liaison.

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(15)  The Legislative Audit Advisory Commission.

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"Legislative Agency Official and Employee Defined

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Contribution Benefit Program."  The defined contribution benefit

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program established under Chapter 56 (relating to Legislative

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Agency Official and Employee Defined Contribution Benefit

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Program).

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* * *

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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:

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§ 5306.  Classes of service.

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(a)  Class A and Class A-3 membership.--

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* * *

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(2)  [A] Except as provided under subsection (a.4), a 

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State employee who first becomes a member of the system on or

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after January 1, 2011, or on or after December 1, 2010, as a

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member of the General Assembly, shall be classified as a

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Class A-3 member and receive credit for Class A-3 service

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upon payment of regular member contributions and shared-risk

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member contributions for Class A-3 service provided that the

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State employee does not become a member of Class A-4 pursuant

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to subsection (a.3), except that a member of the judiciary

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shall be classified as a member of such other class of

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service for which the member of the judiciary is eligible,

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shall elect and make regular member contributions.

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* * *

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(a.4)  Class D-C membership.--

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(1)  A person who does any of the following shall be

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classified as a Class D-C member upon payment of member

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contributions under section 5607 (relating to rights and

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duties of Class D-C members):

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(i)  Becomes a member of the General Assembly and an

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active member of the system after November 30, 2012.

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(ii)  Enters State service as an employee of a

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legislative agency and becomes an active member of the

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system after November 30, 2012.

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(2)  If an election to become a Class D-C member is made

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under section 5306.4 (relating to election to become a Class

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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

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Assembly and is not an active member of the system because

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membership in the system is optional under section 5301,

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shall be classified as a Class D-C member upon payment of

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member contributions under section 5607.

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* * *

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Section 3.  Title 71 is amended by adding a section to read:

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§ 5306.4.  Election to become a Class D-C member.

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(a)  General rule.--A person eligible for Class D-C

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membership under section 5306(a.4) (relating to classes of

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service) may elect to become a member of Class D-C.

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(b)  Time for making election.--The election to become a

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Class D-C member under subsection (a) must be made by the member

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filing written notice with the board in a form and manner

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determined by the board under Chapter 56 (relating to

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Legislative Agency Official and Employee Defined Contribution

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Benefit Program) no later than 45 days after notice from the

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board of the member's eligibility to elect Class D-C membership.

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(c)  Effect of election.--An election to become a Class D-C

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member shall be irrevocable and shall become effective on the

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effective date of membership in the system and shall remain in

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effect during subsequent periods of State service.

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

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CHAPTER 56

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LEGISLATIVE AGENCY OFFICIAL

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AND EMPLOYEE DEFINED CONTRIBUTION

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BENEFIT PROGRAM

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Sec.

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5601.  Individual annuity savings plan.

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5602.  Agreements with financial institutions and other

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organizations.

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5603.  Rules and regulations.

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5604.  Responsibility for investment loss.

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5605.  Nonassignment and nontransferability.

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5606.  Powers and duties of board.

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5607.  Rights and duties of Class D-C members.

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5608.  Employer contributions.

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5609.  Investments based on members' investment allocation

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choices.

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§ 5601.  Individual annuity savings plan.

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The board shall establish and serve as trustee of a defined

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contribution benefit plan exclusively for Class D-C members

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within the meaning of and in conformity with section 401(a) of

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the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C.

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§ 401(a) et seq.), which shall be known as the Individual

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Annuity Savings Plan. The board shall determine all of the terms

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and provisions of the plan not inconsistent with this part or

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the Internal Revenue Code of 1986, including, but not limited

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to, standards and procedures for its funding, and shall provide

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for the plan's administration.

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§ 5602.  Agreements with financial institutions and other

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organizations.

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The board shall, to establish and administer the individual

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annuity savings plan, have the power to enter into written

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agreements with one or more financial institutions or other

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organizations relating to the plan's administration and

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investment of funds held pursuant to the plan.

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§ 5603.  Rules and regulations.

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The board shall have the power to promulgate rules and

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regulations necessary for the administration and management of

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the individual annuity savings plan, including, but not limited

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to, establishing:

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(1)  Procedures whereby eligible Class D-C members may

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change optional election amounts or their investment choices

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on a periodic basis or make other elections regarding their

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participation in the plan.

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(2)  Procedures for deducting amounts to be deferred from

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members' compensation.

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(3)  Standards or criteria for the selection of financial

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institutions or other organizations that may be qualified as

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managers of funds deferred under the plan or to provide other

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services relating to the administration and management of the

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plan.

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(4)  Standards and criteria for disclosing and providing

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options to eligible individuals regarding investments of

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amounts deferred under the plan. One of the available options

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must serve as the default option for members who do not make

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a timely election. The investment options shall represent a

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broad cross section of asset classes and risk profiles.

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(5)  Standards and criteria for disclosing the

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anticipated and actual income attributable to amounts

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invested, property rights and all fees, costs and charges to

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be made against amounts deferred to cover the costs and

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expenses of administering and managing the plan or funds.

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(6)  Procedures, standards and criteria for the making of

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withdrawals from the plan upon separation from employment or

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death or in other circumstances consistent with the purpose

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of the plan.

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§ 5604.  Responsibility for investment loss.

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Neither the board nor the Commonwealth shall be responsible

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for:

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(1)  Any investment loss incurred under the plan.

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(2)  The failure of any investment to earn any specific

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or expected return or to earn as much as any other investment

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opportunity, whether or not the other opportunity was offered

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to participants in the plan.

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§ 5605.  Nonassignment and nontransferability.

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Except as provided under section 5953 (relating to taxation,

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attachment and assignment of funds), no participant or

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beneficiary shall have the right to commute, sell, assign or

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otherwise transfer or convey the rights to receive payments

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under agreements entered into under this chapter. Payments and

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rights shall be exempt from any State or municipal tax and

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exempt from levy and sale, garnishment, attachment or any other

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process and shall be nonassignable and nontransferable.

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§ 5606.  Powers and duties of board.

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The board shall have the following powers and duties to

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administer this chapter:

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(1)  The board may commingle or pool assets with the

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assets of other persons or entities.

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(2)  The board shall pay all administrative costs of

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managing and administering the individual savings account

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plans from the contributions and earnings of the individual

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accounts.

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(3)  The board may establish investment guidelines and

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limits on the types of investments that Class D-C members can

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make, consistent with the board's fiduciary obligations.

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(4)  The board shall at all times have the power to

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change the terms of the plan as may be necessary to maintain

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the tax-qualified status of the plan.

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§ 5607.  Rights and duties of Class D-C members.

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Class D-C members shall have the following rights and duties

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under this chapter:

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(1)  Each Class D-C member may make contributions to the

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member's individual annuity savings account.

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(2)  Each Class D-C member may make contributions to the

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extent permitted by Federal law and subject to rules and

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requirements for the making of elections as may be imposed by

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Federal law and rules and regulations of the board.

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(3)  Upon termination of service, a Class D-C member

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shall withdraw the money in the account if and to the extent

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required or permitted by regulations established by the

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board.

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§ 5608.  Employer contributions.

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The employer of each Class D-C member shall make

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contributions to the member's individual annuity savings account

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which shall match the contribution made by the Class D-C member

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under section 5607 (relating to rights and duties of Class D-C

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members), but may not exceed 6% of the member's compensation. No

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further contributions by employers shall be permitted.

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§ 5609.  Investments based on members' investment allocation

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choices.

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All contributions, interest and investment earnings shall be

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entirely vested based on the Class D-C member's investment

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allocation choices. Each Class D-C member shall be credited

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individually with the amount of contributions, interest and

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investment earnings.

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Section 5.  Title 71 is amended by adding a section to read:

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§ 5942.  Individual Annuity Savings Account.

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The Individual Annuity Savings Account is established as the

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ledger account to which shall be credited the amounts of

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contributions made by the employer and contributions or lump sum

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payments made by Class D-C members in accordance with Chapter 56

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(relating to Legislative Agency Official and Employee Defined

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Contribution Benefit Program), together with all interest and

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investment earnings.

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Section 6.  This act shall take effect as follows:

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(1)  The addition of 71 Pa.C.S. § 5306(a.4)(2) shall take

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effect December 1, 2012, or immediately, whichever is later.

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(2)  The remainder of this act shall take effect

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immediately.

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