PRINTER'S NO. 514
No. 487 Session of 2001
INTRODUCED BY ARMSTRONG, CORMAN, M. WHITE, MADIGAN AND THOMPSON,
FEBRUARY 15, 2001
REFERRED TO FINANCE, FEBRUARY 15, 2001
AN ACT
1 Amending Title 24 (Education) of the Pennsylvania Consolidated
2 Statutes, further providing for mandatory and optional
3 membership in the retirement system.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Section 8301 of Title 24 of the Pennsylvania
7 Consolidated Statutes is amended to read:
8 § 8301. Mandatory and optional membership.
9 (a) Mandatory membership.--Membership in the system shall be
10 mandatory as of the effective date of employment for all school
11 employees except the following:
12 (1) Any officer or employee of the Department of
13 Education, State-owned educational institutions, community
14 colleges, area vocational-technical schools, technical
15 institutes, or the Pennsylvania State University and who is a
16 member of the State Employees' Retirement System or a member
17 of another retirement program approved by the employer.
18 (2) Any school employee who is employed on a per diem or
1 hourly basis for less than 80 full-day sessions or 500 hours
2 in any fiscal year or annuitant who returns to school service
3 under the provisions of section 8346(b) (relating to
4 termination of annuities).
5 (3) Any officer or employee of a governmental entity who
6 subsequent to December 22, 1965 and prior to July 1, 1975
7 administers, supervises, or teaches classes financed wholly
8 or in part by the Federal Government so long as he continues
9 in such service.
10 (4) Any part-time school employee who has an individual
11 retirement account pursuant to the Federal act of September
12 2, 1974 (Public Law 93-406, 88 Stat. 829), known as the
13 Employee Retirement Income Security Act of 1974.
14 (5) Any school employee who has elected participation in
15 an alternate retirement plan established pursuant to
16 subsection (d). Once such election is exercised,
17 participation in the alternate retirement plan shall continue
18 until the termination of school service.
19 (b) Prohibited membership.--The school employees categorized
20 in subsection (a)(1) [and], (2) and (5) shall not have the right
21 to elect membership in the system.
22 (c) Optional membership.--The school employees categorized
23 in subsection (a)(3) and, if otherwise eligible, subsection
24 (a)(4) shall have the right to elect membership in the system.
25 Once such election is exercised, membership shall commence from
26 the original date of eligibility and shall continue until the
27 termination of such service.
28 (d) Alternate retirement plan.--
29 (1) The board shall contract with one or more providers
30 of defined contribution retirement plans to provide one or
20010S0487B0514 - 2 -
1 more defined contribution alternate retirement plans. Such
2 plans shall be offered to school employees employed by the
3 Commonwealth and to other school employees whose employers
4 have elected to offer a defined contribution alternate
5 retirement plan to its employees. An employer who elects to
6 offer such plans to its employees must continue to offer such
7 plans to all future employees.
8 (2) Only individuals who become school employees on or
9 after the date an alternate retirement plan is approved by
10 the board and becomes effective may elect to participate in
11 it.
12 (3) The employer of each participant in another
13 retirement program or in an alternate retirement plan shall
14 make contributions to such program or plan at a rate equal to
15 9.29% of the participant's compensation.
16 (4) The board shall have the authority, in its sole
17 discretion, to establish the procedure by which each provider
18 will be approved, the qualifications of each provider and the
19 terms and conditions of each alternate retirement plan. The
20 board shall not be required to follow the provisions of 62
21 Pa.C.S. Pt. 1 (relating to Commonwealth procurement code)
22 when it contracts with a provider of a defined contribution
23 alternate retirement plan.
24 (5) Neither the Commonwealth nor the board shall be
25 responsible for any investment loss incurred in another
26 retirement program or in an alternate retirement plan
27 permitted hereunder, or for the failure of any investment to
28 earn any specific or expected return or to earn as much as
29 any other investment opportunity.
30 (6) A school employee who has elected participation in
20010S0487B0514 - 3 -
1 another retirement program under subsection (a)(1), an
2 individual retirement account under subsection (a)(4) or an
3 alternate retirement program plan under subsection (a)(5) or
4 a State employee who has elected membership in an independent
5 retirement program or an alternative retirement plan under 71
6 Pa.C.S. § 5301(a) (relating to mandatory and optional
7 membership) shall not be eligible to receive credited service
8 for any school or nonschool service for contributions that
9 were made to that program, account or plan.
10 Section 2. This act shall take effect in 180 days.
B9L24JLW/20010S0487B0514 - 4 -