1Amending Title 71 (State Government) of the Pennsylvania
2Consolidated Statutes, further providing for definitions and
3for classes of service; providing for election to become a 
4Class D-C member; and establishing the Legislative Agency
5Official and Employee Defined Contribution Benefit Program
6and the Individual Annuity Savings Account.

7The General Assembly of the Commonwealth of Pennsylvania
8hereby enacts as follows:

9Section 1. Section 5102 of Title 71 of the Pennsylvania
10Consolidated Statutes is amended by adding definitions to read:

11§ 5102. Definitions.

12The following words and phrases as used in this part, unless
13a different meaning is plainly required by the context, shall
14have the following meanings:

15* * *

16"Individual annuity savings plan." The defined contribution
17benefit plan established by the board exclusively for the

1benefit of Class D-C members in conformity with section 401(a)
2of the Internal Revenue Code of 1986 (Public Law 99-514, 26
3U.S.C. § 401(a)).

4* * *

5"Legislative agency." Any of the following:

6(1) The Senate.

7(2) The House of Representatives.

8(3) The Capitol Preservation Committee.

9(4) The Center for Rural Pennsylvania.

10(5) The Joint Legislative Air and Water Pollution
11Control and Conservation Committee.

12(6) The Joint State Government Commission.

13(7) The Legislative Budget and Finance Committee.

14(8) The Legislative Data Processing Committee.

15(9) The Independent Regulatory Review Commission.

16(10) The Legislative Reference Bureau.

17(11) The Local Government Commission.

18(12) The Pennsylvania Commission on Sentencing.

19(13) The Legislative Reapportionment Commission.

20(14) The Legislative Audit Advisory Commission.

21"Legislative Agency Official and Employee Defined
22Contribution Benefit Program." The defined contribution benefit
23program established under Chapter 56 (relating to Legislative
24Agency Official and Employee Defined Contribution Benefit
25Program).

26* * *

27Section 2. Section 5306(a)(2) of Title 71 is amended and the
28section is amended by adding a subsection to read:

29§ 5306. Classes of service.

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

1* * *

2(2) [A] Except as provided under subsection (a.4), a
3State employee who first becomes a member of the system on or
4after January 1, 2011, or on or after December 1, 2010, as a
5member of the General Assembly, shall be classified as a
6Class A-3 member and receive credit for Class A-3 service
7upon payment of regular member contributions and shared-risk
8member contributions for Class A-3 service provided that the
9State employee does not become a member of Class A-4 pursuant
10to subsection (a.3), except that a member of the judiciary
11shall be classified as a member of such other class of
12service for which the member of the judiciary is eligible,
13shall elect and make regular member contributions.

14* * *

15(a.4) Class D-C membership.--

16(1) A person who does any of the following shall be
17classified as a Class D-C member upon payment of member
18contributions under section 5607 (relating to rights and
19duties of Class D-C members):

20(i) Becomes a member of the General Assembly and an
21active member of the system after November 30, 2014.

22(ii) Enters State service as an employee of a
23legislative agency and becomes an active member of the
24system after November 30, 2014.

25(2) If an election to become a Class D-C member is made
26under section 5306.4 (relating to election to become a Class
27D-C member), a person who, on November 30, 2014, is an
28employee of a legislative agency or a member of the General
29Assembly and is not an active member of the system because
30membership in the system is optional under section 5301,

1shall be classified as a Class D-C member upon payment of
2member contributions under section 5607.

3* * *

4Section 3. Title 71 is amended by adding a section to read:

5§ 5306.4. Election to become a Class D-C member.

6(a) General rule.--A person eligible for Class D-C
7membership under section 5306(a.4) (relating to classes of
8service) may elect to become a member of Class D-C.

9(b) Time for making election.--The election to become a
10Class D-C member under subsection (a) must be made by the member
11filing written notice with the board in a form and manner
12determined by the board under Chapter 56 (relating to
13Legislative Agency Official and Employee Defined Contribution
14Benefit Program) no later than 45 days after notice from the
15board of the member's eligibility to elect Class D-C membership.

16(c) Effect of election.--An election to become a Class D-C
17member shall be irrevocable and shall become effective on the
18effective date of membership in the system and shall remain in
19effect during subsequent periods of State service.

20Section 4. Title 71 is amended by adding a chapter to read:

21CHAPTER 56

22LEGISLATIVE AGENCY OFFICIAL

23AND EMPLOYEE DEFINED CONTRIBUTION

24BENEFIT PROGRAM

25Sec.

265601. Individual annuity savings plan.

275602. Agreements with financial institutions and other
28organizations.

295603. Rules and regulations.

305604. Responsibility for investment loss.

15605. Nonassignment and nontransferability.

25606. Powers and duties of board.

35607. Rights and duties of Class D-C members.

45608. Employer contributions.

55609. Investments based on members' investment allocation
6choices.

7§ 5601. Individual annuity savings plan.

8The board shall establish and serve as trustee of a defined
9contribution benefit plan exclusively for Class D-C members
10within the meaning of and in conformity with section 401(a) of
11the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C.
12§ 401(a) et seq.), which shall be known as the Individual
13Annuity Savings Plan. The board shall determine all of the terms
14and provisions of the plan not inconsistent with this part or
15the Internal Revenue Code of 1986, including, but not limited
16to, standards and procedures for its funding, and shall provide
17for the plan's administration.

18§ 5602. Agreements with financial institutions and other
19organizations.

20The board shall, to establish and administer the individual
21annuity savings plan, have the power to enter into written
22agreements with one or more financial institutions or other
23organizations relating to the plan's administration and
24investment of funds held pursuant to the plan.

25§ 5603. Rules and regulations.

26The board shall have the power to promulgate rules and
27regulations necessary for the administration and management of
28the individual annuity savings plan, including, but not limited
29to, establishing:

30(1) Procedures whereby eligible Class D-C members may

1change optional election amounts or their investment choices
2on a periodic basis or make other elections regarding their
3participation in the plan.

4(2) Procedures for deducting amounts to be deferred from
5members' compensation.

6(3) Standards or criteria for the selection of financial
7institutions or other organizations that may be qualified as
8managers of funds deferred under the plan or to provide other
9services relating to the administration and management of the
10plan.

11(4) Standards and criteria for disclosing and providing
12options to eligible individuals regarding investments of
13amounts deferred under the plan. One of the available options
14must serve as the default option for members who do not make
15a timely election. The investment options shall represent a
16broad cross section of asset classes and risk profiles.

17(5) Standards and criteria for disclosing the
18anticipated and actual income attributable to amounts
19invested, property rights and all fees, costs and charges to
20be made against amounts deferred to cover the costs and
21expenses of administering and managing the plan or funds.

22(6) Procedures, standards and criteria for the making of
23withdrawals from the plan upon separation from employment or
24death or in other circumstances consistent with the purpose
25of the plan.

26§ 5604. Responsibility for investment loss.

27Neither the board nor the Commonwealth shall be responsible
28for:

29(1) Any investment loss incurred under the plan.

30(2) The failure of any investment to earn any specific

1or expected return or to earn as much as any other investment
2opportunity, whether or not the other opportunity was offered
3to participants in the plan.

4§ 5605. Nonassignment and nontransferability.

5Except as provided under section 5953 (relating to taxation,
6attachment and assignment of funds), no participant or
7beneficiary shall have the right to commute, sell, assign or
8otherwise transfer or convey the rights to receive payments
9under agreements entered into under this chapter. Payments and
10rights shall be exempt from any State or municipal tax and
11exempt from levy and sale, garnishment, attachment or any other
12process and shall be nonassignable and nontransferable.

13§ 5606. Powers and duties of board.

14The board shall have the following powers and duties to
15administer this chapter:

16(1) The board may commingle or pool assets with the
17assets of other persons or entities.

18(2) The board shall pay all administrative costs of
19managing and administering the individual savings account
20plans from the contributions and earnings of the individual
21accounts.

22(3) The board may establish investment guidelines and
23limits on the types of investments that Class D-C members can
24make, consistent with the board's fiduciary obligations.

25(4) The board shall at all times have the power to
26change the terms of the plan as may be necessary to maintain
27the tax-qualified status of the plan.

28§ 5607. Rights and duties of Class D-C members.

29Class D-C members shall have the following rights and duties
30under this chapter:

1(1) Each Class D-C member may make contributions to the
2member's individual annuity savings account.

3(2) Each Class D-C member may make contributions to the
4extent permitted by Federal law and subject to rules and
5requirements for the making of elections as may be imposed by
6Federal law and rules and regulations of the board.

7(3) Upon termination of service, a Class D-C member
8shall withdraw the money in the account if and to the extent
9required or permitted by regulations established by the
10board.

11§ 5608. Employer contributions.

12The employer of each Class D-C member shall make
13contributions to the member's individual annuity savings account
14which shall match the contribution made by the Class D-C member
15under section 5607 (relating to rights and duties of Class D-C
16members), but may not exceed 6% of the member's compensation. No
17further contributions by employers shall be permitted.

18§ 5609. Investments based on members' investment allocation
19choices.

20All contributions, interest and investment earnings shall be
21entirely vested based on the Class D-C member's investment
22allocation choices. Each Class D-C member shall be credited
23individually with the amount of contributions, interest and
24investment earnings.

25Section 5. Title 71 is amended by adding a section to read:

26§ 5942. Individual Annuity Savings Account.

27The Individual Annuity Savings Account is established as the
28ledger account to which shall be credited the amounts of
29contributions made by the employer and contributions or lump sum
30payments made by Class D-C members in accordance with Chapter 56

1(relating to Legislative Agency Official and Employee Defined
2Contribution Benefit Program), together with all interest and
3investment earnings.

4Section 6. This act shall take effect as follows:

5(1) The addition of 71 Pa.C.S. § 5306(a.4)(2) shall take
6effect December 1, 2014, or immediately, whichever is later.

7(2) The remainder of this act shall take effect
8immediately.