24 Pa.C.S. Ch. 85

24 Pa.C.S. Ch. 85
in effect

24 Pa.C.S. § 8501 Public School Employees' Retirement Board.

(a) Status and membership.--The board shall be an independent administrative board and shall consist of 15 members: the Secretary of Education, ex officio; the State Treasurer, ex officio; the Secretary of Banking and Securities, ex officio; two Senators; two members of the House of Representatives; the executive secretary of the Pennsylvania School Boards Association, ex officio; one to be appointed by the Governor; three to be elected by the active professional members of the system and active professional participants in the plan from among their number; one to be elected by annuitants and Class DC participants receiving distributions, from among their number; one to be elected by the active nonprofessional members of the system and active nonprofessional participants in the plan from among their number; and one to be elected by members of Pennsylvania public school boards from among their number. The appointments made by the Governor shall be confirmed by the Senate and each election shall be conducted in a manner approved by the board. The terms of the appointed and nonlegislative elected members shall be three years. The members from the Senate shall be appointed by the President pro tempore of the Senate and shall consist of one member from the majority and one member from the minority. The members from the House of Representatives shall be appointed by the Speaker of the House of Representatives and shall consist of one member from the majority and one member from the minority. 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. The chairman of the board shall be elected by the board members. Each ex officio member of the board and each legislative member of the board may appoint a duly authorized designee to act in his stead. In the event that a board member, who is designated as an active participant or as the participant in the plan who is receiving or is eligible to receive distributions, receives a total distribution of the board member's interest in the plan, that board member may continue to serve on the board for the remainder of his term. (b) Vacancies.--A vacancy occurring during the term of any member shall be filled for the unexpired term by a successor appointed or elected as the case may be in the same manner as his predecessor. (c) Oath of office.--Each member of the board shall take an oath of office that he will, so far as it devolves upon him, diligently and honestly administer the affairs of said board, the system and the plan and that he will not knowingly violate or willfully permit to be violated any of the provisions of law applicable to this part. Such oath shall be subscribed by the member making 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. (d) Compensation and expenses.--The members of the board who are members of the system or participants in the plan shall serve without compensation. Members of the board who are members of the system or participants in the plan and who are employed by a governmental entity shall not suffer loss of salary or wages through serving on the board. The board, on request of the employer of any member of the board who is an active professional or nonprofessional member of the system or active professional or nonprofessional participant in the plan, may reimburse such employer for the salary or wages of the member or participant, or for the cost of employing a substitute for such member or participant, while the member or participant is necessarily absent from employment to execute the duties of the board. The employer of any such member shall provide leave to allow such member to execute the duties of the board, including but not limited to, attendance at the location of all regular and special board and committee meetings. The members of the board who are not members of either the school system or the State Employees' Retirement System may be paid $100 per day when attending meetings and all board members shall be reimbursed for any necessary expenses. However, when the duties of the board as mandated are not executed, no compensation or reimbursement for expenses of board members shall be paid or payable during the period in which such duties are not executed. (e) Corporate power and legal advisor.--For the purposes of this part, the board shall possess the power and privileges of a corporation. The board shall be an independent agency under the act of October 15, 1980 (P.L.950, No.164), known as the Commonwealth Attorneys Act. (f) Board training.--Each member of the board will be required to obtain 10 hours of mandatory training in investment strategies, actuarial cost analysis, asset allocation, risk assessment and retirement portfolio management on an annual basis. (g) Committees.-- (1) In order to be appointed to the Audit/Compliance Committee as a voting member, a board member must complete at least 16 hours of training in risk assessments, internal controls and auditing standards within 90 days of appointment to the committee. The 16 hours of training are inclusive of the hours indicated for board training. The Committee on Sponsoring Organizations Enterprise risk management guidelines may be considered as a guide to the training. Individuals who are members of the Audit/Compliance Committee on the effective date of this paragraph shall be exempt from the initial 16-hour requirement. In order to continue serving as a voting member of the Audit/Compliance Committee following initial appointment, a board member must complete at least eight hours of continuing education in risk assessments, internal controls and auditing standards each calendar year thereafter. (2) The board may establish an executive committee, which shall consist of the board chair, the board vice chair, if one has been appointed, the chair of the Audit/Compliance Committee, the chair of the Bylaws/Policy Committee, the chair of the Investment Committee and the chair of the Budget/Finance Committee or other members of the board as determined by the board. (3) The board shall establish a function within the Investment Committee of an Asset Liability Contingency Operating capability, which shall be charged with evaluating the risk associated with the system's assets and liabilities. (June 25, 1982, P.L.647, No.183, eff. 60 days; Oct. 21, 1988, P.L.844, No.112, eff. imd.; Aug. 5, 1991, P.L.183, No.23, eff. imd.; May 17, 2001, P.L.26, No.9, eff. imd.; June 12, 2017, P.L.11, No.5, eff. imd.; July 2, 2019, P.L.434, No.72, eff. 60 days; Nov. 25, 2020, P.L.1237, No.128, eff. 90 days) 2020 Amendment. Act 128 amended subsec. (f) and added subsec. (g). Section 7(3) of Act 128 provided that the amendment of subsec. (f) shall apply after December 31, 2021. 2019 Amendment. Act 72 amended subsec. (a). See section 6.2 of Act 72 in the appendix to this title for special provisions relating to severability. 2017 Amendment. Act 5 amended subsecs. (a), (c), (d) and (e) and added subsec. (f). See sections 409 and 416 of Act 5 in the appendix to this title for special provisions relating to authority of Governor's Office of General Counsel and appointment of Secretary of Banking and Securities. 2001 Amendment. Act 9 amended subsecs. (a) and (b). Transfer of Functions. The powers and duties of the Attorney General and the Department of Justice contained in section 8501(e) were transferred to the Office of General Counsel by section 502 of the act of October 15, 1980 (P.L.950, No.164), known as the Commonwealth Attorneys Act, effective January 20, 1981.

24 Pa.C.S. § 8502 Administrative duties of board.

(a) Employees.-- (1) Effective 30 days after the effective date of this paragraph, 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, as those positions are vacated. 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 and legal counsel shall be established 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. (3) The board may utilize the staff of employees provided for under this subsection for both the system and the plan, but shall allocate the fees, costs and expenses incurred under this subsection between the system and the plan as appropriate. (b) Professional personnel.-- (1) The board shall contract for the services of a chief medical examiner, an actuary, investment advisors, counselors, an investment coordinator, and such other professional personnel as it deems advisable. (2) The board may utilize the same individuals and firms contracted under this subsection for both the system and the plan but shall allocate the fees, costs and expenses incurred under this subsection between the system and the plan as appropriate. (c) Expenses.-- (1) The board shall, through the Governor, submit to the General Assembly annually a budget covering the administrative expenses of the system and a separate budget covering the administrative expenses of the plan. The separate budgets shall include those expenses necessary to establish the plan and trust. (2) Such expenses of the system as approved by the General Assembly in an appropriation bill shall be paid from investment earnings of the fund. (3) For fiscal years beginning on or after July 1, 2019, the expenses of the plan as approved by the General Assembly shall be paid from interest, under section 8413(b) (relating to investments based on participant's investment allocation choices) or assessments on the balances of the participants' individual investment accounts or as otherwise provided in this part. (4) 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 the actual expenditures from the past year actually paid by the board through the use of directed commissions. All such directed commission expenditures shall be made by the board for the exclusive benefit of the system and its members and for the exclusive benefit of the plan and its participants, respectively. (d) Meetings.--The board shall hold at least six regular meetings annually and such other meetings as it may deem necessary. (e) Records.-- (1) The board shall keep a record of all its proceedings which shall be accessible to the public, except as otherwise provided in this part or by other law. (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 access 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 access would: (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 or trust 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; or (iii) have a substantial detrimental impact on the value of an investment to be acquired, held or disposed of by the fund or trust, or would cause a breach of the standard of care or fiduciary duty set forth in this part. (3) The following apply: (i) The sensitive investment or financial information excluded from access under paragraph (2)(i), to the extent not otherwise excluded from access, shall constitute a public record subject to public access under the Right-to-Know Law once the board is no longer required by its agreement to maintain confidentiality. (ii) The sensitive investment or financial information excluded from access under paragraph (2)(ii), to the extent not otherwise excluded from access, shall constitute a public record subject to public access under the Right-to-Know Law once: (A) the access no longer causes substantial competitive harm to the person from whom the information was received; or (B) the entity in which the investment was made is liquidated; whichever is later. (iii) The sensitive investment or financial information excluded from access under paragraph (2)(iii), to the extent not otherwise excluded from access, shall constitute a public record subject to public access under the Right-to-Know Law once: (A) the access no longer has a substantial detrimental impact on the value of an investment of the fund or trust and would not cause a breach of the standard of care or fiduciary duty set forth in this part; or (B) the entity in which the investment was made is liquidated; whichever is later. (4) Except for the provisions of paragraph (3), nothing in this subsection shall be construed to designate any record, material or data received, prepared, used or retained by the board or its employees, investment professionals or agents relating to an investment as a public record subject to public access under the Right-to-Know Law. (5) Notwithstanding the provisions of this subsection, the following information regarding an alternative investment vehicle shall be subject to public access under the Right-to-Know Law: (i) The name, address and vintage year of the alternative investment vehicle. (ii) The identity of the manager of the alternative investment vehicle. (iii) The dollar amount of the commitment made by the system or plan to the alternative investment vehicle. (iv) The dollar amount of cash contributions made by the system or plan to the alternative investment vehicle since inception. (v) The dollar amount of cash distributions received by the system or plan from the alternative investment vehicle since inception. (vi) The net internal rate of return of the alternative investment vehicle since inception, provided that the system or plan shall not be required to disclose the net internal rate of return under circumstances in which, because of the limited number of portfolio assets remaining in the alternative investment vehicle, the disclosure could reveal the values of specifically identifiable remaining portfolio assets to the detriment of the alternative investment. (vii) The aggregate value of the remaining portfolio assets attributable to the system's or plan's investment in the alternative investment vehicle, provided that the system or plan shall not be required to disclose the value under circumstances in which, because of the limited number of portfolio assets remaining in the alternative investment vehicle, the disclosure could reveal the values of specifically identifiable remaining portfolio assets to the detriment of the alternative investment. (viii) The dollar amount of total management fees and costs paid to the alternative investment vehicle by the system or plan on an annual fiscal year-end basis. (6) Any record, material or data received, prepared, used or retained by the board or its employees or agents relating to the contributions, account value or benefits payable to or on account of a participant shall not constitute a public record subject to public access under the Right-to-Know Law, if, in the reasonable judgment of the board, the access would disclose any of the following: (i) The existence, date, amount and any other information pertaining to the voluntary contributions, including rollover contributions and trustee-to-trustee transfers, of any participant. (ii) The investment option selections of any participant. (iii) The balance of a participant's individual investment account, including the amount distributed to the participant, and any investment gains or losses, or rates of return. (iv) The identity of a participant's designated beneficiary, successor payee or alternate payee. (v) The benefit payment option of a participant. (7) The following shall apply: (i) Nothing in this part shall be construed to mean that the release or publicizing of a record, material or data that would not constitute a public record under this subsection shall be a violation of the board's fiduciary duties. (ii) This subsection shall apply to a record, material or data under this subsection, notwithstanding whether: (A) the record, material or data was created, generated or stored before the effective date of this section; (B) the record, material or data was previously released or made public; or (C) a request for the record, material or data was made or is pending final response under the former act of June 21, 1957 (P.L.390, No.212), referred to as the Right-to-Know Law, or the Right-to-Know Law. (f) Functions.--The board shall perform such other functions as are required for the execution of this part and shall have the right to inspect the employment records of employers. (g) Performance of employer duties.--In the event the employer fails to comply with the procedures as mandated in section 8506 (relating to duties of employers), the board shall perform such duties and bill the employer who shall pay for the cost of same. In the event the employer is delinquent in payment of contributions in accordance with section 8327 (relating to payments by employers), the board shall notify the Secretary of Education and the State Treasurer of such delinquency. (h) Regulations and procedures.--The board shall, with the advice of the Attorney General, legal counsel and the actuary, adopt and promulgate rules and regulations for the uniform administration of the system. The actuary shall approve in writing all computational procedures used in the calculation of contributions and benefits pertaining to the system, and the board shall by resolution adopt such computational procedures, prior to their application by the board. Such rules, regulations and computational procedures as so adopted from time to time and as in force and effect at any time, together with such tables as are adopted and published pursuant to subsection (j) as necessary for the calculation of annuities and other benefits, shall be as effective as if fully set forth in this part. Any actuarial assumption specified in or underlying any such rule, regulation or computational procedure and utilized as a basis for determining any benefit shall be applied in a uniform manner. (i) Data.--The board shall keep in convenient form such data as are stipulated by the actuary in order that an annual actuarial valuation of the various accounts of the fund can be completed within six months of the close of each fiscal year. The board shall have final authority over the means by which data is collected, maintained and stored and in so doing shall protect the rights of its membership as to privacy and confidentiality. (j) Actuarial investigation and valuation.--The board shall have the actuary make an annual valuation of the various accounts of the fund within six months of the close of each fiscal year. In the fiscal year 1975 and in every fifth year thereafter, the board shall have the actuary conduct an actuarial investigation and evaluation of the system based on data including the mortality, service, and compensation experience provided by the board annually during the preceding five years concerning the members and beneficiaries of the system. The board shall by resolution adopt such tables as are necessary for the actuarial valuation of the fund and calculation of contributions, annuities, and other benefits based on the reports and recommendations of the actuary. Within 30 days of their adoption, the secretary of the board shall cause those tables which relate to the calculation of annuities and other benefits to be published in the Pennsylvania Bulletin in accordance with the provisions of 45 Pa.C.S. § 725(a) (relating to additional contents of Pennsylvania Bulletin) and, unless the board specifies therein a later effective date, such tables shall become effective on such publication. The board shall include a report on the significant facts, recommendations and data developed in each five-year actuarial investigation and evaluation of the system in the annual financial statement published pursuant to the requirements of subsection (n) for the fiscal year in which such investigation and evaluation were concluded. (k) Certification of employer contributions to fund.--The board shall, each year in addition to the itemized budget required under section 8330 (relating to appropriations by the Commonwealth), certify to the employers and the Commonwealth the employer contribution rate expressed as a percentage of members' payroll necessary for the funding of prospective annuities for active members and the annuities of annuitants, and certify the rates and amounts of the normal contributions as determined pursuant to section 8328(b) (relating to actuarial cost method), accrued liability contributions as determined pursuant to section 8328(c), supplemental annuities contribution rate as determined pursuant to section 8328(d), the experience adjustment factor as determined pursuant to section 8328(e), premium assistance contributions as determined pursuant to section 8328(f), the costs added by legislation as determined pursuant to section 8328(i), the actuarial required contribution rate as determined pursuant to section 8328(i), the collared contribution rate as determined pursuant to section 8328(g), the final contribution rate as determined pursuant to section 8328(h) and the shared-risk contribution rate as determined under section 8321(b) (relating to regular member contributions for current service), which shall be paid to the fund and credited to the appropriate accounts. These certifications shall be regarded as final and not subject to modification by the Secretary of the Budget. (l) Commonwealth payments.--The board shall within 30 days following the end of each quarter determine the amount due to the fund from the Commonwealth during that quarter and submit at that time a requisition for the amount determined to be due from the Commonwealth to the State Treasurer. (m) Member contributions and interest.--The board shall cause each member's contributions, including payroll deductions, pickup contributions, shared-risk contributions and all other payments, including, but not limited to, amounts collected by the State Employees' Retirement System for the reinstatement of previous school service or creditable nonschool service and amounts paid to return benefits paid after the date of return to school service or entering State service representing lump sum payments made pursuant to section 8345(a)(4)(iii) (relating to member's options) and member's annuity payments, but not including other benefits returned pursuant to section 8346(a.1) and (a.2) (relating to termination of annuities), to be credited to the account of such member and shall pay all such amounts into the fund. Such contributions shall be credited with statutory interest until date of termination of service, except in the case of a vestee, who shall have such interest credited until the effective date of retirement or until the return of his accumulated deductions, if he so elects; and in the case of a multiple service member who shall have such interest credited until termination of service in both the school and the State systems. (n) Annual financial statements.--The board shall prepare and have published, on or before January 1 of each year, financial statements as of the fiscal year ending June 30 of the previous year showing the condition of the fund, the trust and the various accounts, including, but not limited to, the board's accrual and expenditure of directed commissions, and setting forth such other facts, recommendations and data as may be of use in the advancement of knowledge concerning annuities and other benefits provided by this part. The board shall submit said financial statements to the Governor and shall make copies available to the employers for the use of the school employees and the public. (o) Independent audits.-- (1) The board shall provide for annual audits of the system and the plan by an independent certified public accounting firm. The audits shall include the board's accrual and expenditure of directed commissions. The board may use the same independent certified public accounting firm for the audits of both the system and the plan. (2) The following shall apply: (i) Except as provided under subparagraph (ii), the board shall provide for an internal control audit of the system and the plan at least every five years. (ii) If an annual financial report prepared under subsection (n) identifies a material weakness or significant deficiency or an internal control audit identifies a material weakness or significant deficiency, the board shall provide for an additional internal control audit of the system and the plan for the year subsequent to the report or audit in which the weakness or deficiency was identified. (p) Transfer of employer contributions.--The board shall, upon receipt of a written request from a public employee retirement system of a county of the third class and upon receipt of written verification that a member of the fund who withdrew contributions upon termination of employment will deposit the employee's contributions with the retirement system of a county of the third class, transfer, within 30 days, to the retirement system of the county of the third class the full amount of employer contributions and the accumulated interest on such contributions credited to the former member's account. This subsection shall apply only where the transfer of employment from the public school district to the county was not voluntary on the part of the employee. (q) Participant and employer contributions to trust.--The board shall, each year in addition to any fees and itemized budget required under section 8330, certify, as a percentage of each participant's compensation, the employer defined contributions, which shall be paid to the trust and credited to each participant's individual investment account. These certifications shall be regarded as final and not subject to modification by the Secretary of the Budget. The board shall cause all mandatory pickup participant contributions made on behalf of a participant and all voluntary contributions made by a participant to be credited to the participant's individual investment account. (r) Limitation on fees charged to the board.--In striving to achieve actuarial savings of $1,500,000,000 over 30 years from the effective date of this subsection, while achieving the assumed annual rate of return at the least cost and maximum return of the fund, the board shall: (1) Consider the findings and recommendations of the Public Pension Management and Asset Investment Review Commission. The board may, at its sole discretion, adopt guidelines and procedures to implement any recommendations of the Public Pension Management and Asset Investment Review Commission that the board determines appropriate in attaining the highest return on investment at the lowest responsible cost. (2) Review, identify and implement any investment fee reduction and cost avoidance strategies identified to be prudent by the board, to reduce expenditures for investment costs. (June 25, 1982, P.L.647, No.183, eff. 60 days; July 22, 1983, P.L.104, No.31, eff. imd.; Feb. 9, 1984, P.L.25, No.10, eff. imd.; Dec. 19, 1984, P.L.1191, No.226, eff. imd.; Aug. 5, 1991, P.L.183, No.23, eff. imd.; Apr. 29, 1994, P.L.159, No.29, eff. imd.; Dec. 20, 1995, P.L.689, No.77, eff. 60 days; Apr. 2, 1998, P.L.229, No.41, eff. imd.; June 18, 1998, P.L.685, No.88, eff. imd.; May 17, 2001, P.L.26, No.9, eff. July 1, 2001; Nov. 9, 2006, P.L.1371, No.148, eff. imd.; Nov. 23, 2010, P.L.1269, No.120, eff. July 1, 2011; July 1, 2013, P.L.174, No.32, eff. July 1, 2013; June 12, 2017, P.L.11, No.5, eff. imd.; Nov. 25, 2020, P.L.1237, No.128, eff. 90 days) 2020 Amendment. Act 128 amended subsec. (o). 2017 Amendment. Act 5 amended subsecs. (a), (b), (c), (e), (h), (i), (j), (k), (m), (n) and (o) and added subsecs. (q) and (r). 2006 Amendment. See sections 3, 4, 5 and 6 of Act 148 in the appendix to this title for special provisions relating to authority of Auditor General, construction of law, application of law and fees. 2001 Amendment. See section 31 of Act 9 in the appendix to this title for special provisions relating to recertification to Budget Secretary and employers. Transfer of Functions. The powers and duties of the Attorney General and the Department of Justice contained in section 8502(h) were transferred to the Office of General Counsel by section 502 of the act of October 15, 1980 (P.L.950, No.164), known as the Commonwealth Attorneys Act, effective January 20, 1981. Special Provisions in Appendix. See section 18 of Act 38 of 2002 in the appendix to this title for special provisions relating to recertification to Budget Secretary and employers. References in Text. The act of August 5, 1941, P.L.752, No.286, referred to in subsec. (a)(1), was repealed by the act of June 28, 2018, P.L.460, No.71. Cross References. Section 8502 is referred to in sections 8103, 8321 of this title.

24 Pa.C.S. § 8502.1 Health insurance (Deleted by amendment).

2001 Amendment. Section 8502.1 was deleted by amendment May 17, 2001, P.L.26, No.9, effective immediately.

24 Pa.C.S. § 8502.2 Health insurance.

(a) Authority.--The board may sponsor a participant-funded group health insurance program for annuitants, participants receiving distributions, spouses of annuitants and participants receiving distributions, survivor annuitants and their dependents. The board may promulgate regulations regarding the prudent and efficient operation of the program, including, but not limited to: (1) Establishment of an annual budget and disbursements in accordance with the budget. (2) Determination of the benefits structure. (3) Determination of enrollment procedures. (4) Establishment of premium rates sufficient to fully fund the program, including administrative expenses. (5) Contracting for goods, equipment, services, consultants and other professional personnel as needed to operate the program. (b) Separate account.--All funds related to the health insurance program shall be maintained and accounted for separately from the Public School Employees' Retirement Fund. (c) Operation.--The board may establish and operate the program through a lawfully authorized entity. (d) Additional requirements.--The assets of the fund shall not be liable or utilized for payment of any expenses or claims incurred by the health insurance program. The program shall be an approved health insurance program for purposes of section 8505(i) (relating to duties of board regarding applications and elections of members) and an approved insurance carrier for purposes of section 8509 (relating to health insurance premium assistance program). The program shall not be subject to the provisions of section 8531 (relating to State guarantee). (May 17, 2001, P.L.26, No.9; June 12, 2017, P.L.11, No.5, eff. imd.) 2017 Amendment. Act 5 amended subsec. (a). 2001 Amendment. Act 9 added section 8502.2. Section 39(4) of Act 9 provided that section 8502.2 shall take effect upon publication of the notice under section 25 of Act 9. See section 25 of Act 9 in the appendix to this title for special provisions relating to notice of impaired authority over health insurance.

24 Pa.C.S. § 8503 Duties of board to advise and report to employers, members and participants.

(a) Manual of regulations.--The board shall, with the advice of the Attorney General and the actuary, prepare, within 90 days of the effective date of this part, a manual incorporating rules and regulations consistent with the provisions of this part for the employers who shall make information contained therein available to the general membership. The board shall thereafter advise the employers within 90 days of any changes in such rules and regulations due to changes in the law or due to changes in administrative policies. As soon as practicable after the commissioner's publication with respect thereto, the board shall also advise the employers as to any cost-of-living adjustment for the succeeding calendar year in the amount of the limitation under IRC § 401(a)(17) and the dollar amounts of the limitations under IRC § 415. (b) Member status statements.--The board shall furnish annually on or before December 31, a statement to each member showing the accumulated deductions standing to the credit of the member and the number of years and fractional part of a year of service credited in each class of service, as applicable, as of June 30 of that year. Each member's statement shall include a request that the member make any necessary corrections or revisions regarding his designated beneficiary, whose name at the request of the member shall remain confidential and not appear on this statement. (b.1) Participant status statements.--The board shall furnish annually to each participant on or before December 31, and more frequently as the board may agree or as required by law, a statement showing the accumulated total defined contributions credited to the participant's individual investment account, the nature and type of investments and the investment allocation of future contributions as of June 30 of the current year and shall request the participant to make any necessary correction or revision regarding his designated beneficiary. (c) Purchase of credit for previous service.--Upon receipt of an application from an active member or a State employee with multiple service credit to purchase credit for previous school or creditable nonschool service, the board shall determine and certify to the member the amount required to be paid by the member. When necessary, the board shall certify to the proper employer the amount which would have been paid together with statutory interest into the State accumulation account had such employee been an active member in the system during said period. (d) Purchase of Class T-C credit or full coverage.--Upon receipt of an application from a member of Class T-A or Class T-B to become a member of Class T-C or an active joint coverage member who elects to become a full coverage member, the board shall determine and certify to the member the amount required to be paid by the member, the effective date of the transfer, and the prospective rate for regular member contributions. (Dec. 20, 1995, P.L.689, No.77, eff. July 1, 1996; May 17, 2001, P.L.26, No.9, eff. imd.; Dec. 28, 2015, P.L.529, No.93, eff. imd.; June 12, 2017, P.L.11, No.5, eff. imd.) 2017 Amendment. Act 5 amended the section heading and subsec. (b) and added subsec. (b.1). 2015 Amendment. Act 93 amended subsecs. (a) and (b). 2001 Amendment. See section 27(a) of Act 9 in the appendix to this title for special provisions relating to statements or estimates of benefits. Transfer of Functions. The powers and duties of the Attorney General and the Department of Justice contained in section 8503 were transferred to the Office of General Counsel by section 502 of the act of October 15, 1980 (P.L.950, No.164), known as the Commonwealth Attorneys Act, effective January 20, 1981.

24 Pa.C.S. § 8504 Duties of board to report to State Employees' Retirement Board.

(a) Multiple service membership of school employees.--Upon receipt of an application for membership in the system of a school employee who is a former State employee and who has elected multiple service membership, the board shall advise the State Employees' Retirement Board accordingly. (b) Multiple service membership of State employees.--Upon receipt of notification from the State Employees' Retirement Board that a former school employee has become an active member in the State Employees' Retirement System and has elected to receive credit for multiple service, the board shall certify to the State Employees' Retirement Board and concurrently to the member: (1) The total credited service in the system and the number of years and fractional part of a year of service credited in each class of service. (2) The annual compensation received each school year by the member for credited school service. (3) The amount of the deductions and the period over which they are to be made if the member has elected payroll deductions pursuant to section 8323 (relating to member contributions for creditable school service) or 8324 (relating to contributions for purchase of credit for creditable nonschool service). (c) Applications for benefits for State employees.--Upon receipt of notification and the required data from the State Employees' Retirement Board that a former school employee who elected multiple service has applied for a State employee's retirement benefit or, in the event of his death, his legally constituted representative has applied for such benefit, the board shall: (1) Certify to the State Employees' Retirement Board: (i) The salary history as a member of the Public School Employees' Retirement System and the final average salary as calculated on the basis of the compensation received as a State and school employee. (ii) The annuity or benefit which the member or his beneficiary is entitled to receive under this part and modified according to the option selected. (2) Transfer to the State Employees' Retirement Fund the accumulated deductions standing to such member's credit and the actuarial reserve required on account of the member's years of credited service in the school system and his final average salary determined on the basis of his compensation in both systems. (May 17, 2001, P.L.26, No.9, eff. July 1, 2001) 2001 Amendment. Act 9 amended subsec. (b).

24 Pa.C.S. § 8505 Duties of board regarding applications and elections of members and participants.

(a) Statement to new members.--As soon as practicable after each member shall have joined the system, the board shall issue to him a statement as to the aggregate length of total previous school service and creditable nonschool service for which he may receive credit. (b) State employees electing multiple service status.--Upon receipt of notification from the State Employees' Retirement Board that a former school employee has become an active member in the State Employees' Retirement System and has elected to become a member with multiple service status, the board shall: (1) In case of a member who is receiving an annuity from the system: (i) Discontinue payments, transfer the present value of the member's annuity at the time of entering State service, plus the amount withdrawn in a lump sum payment, on or after the date of entering State service, pursuant to section 8345 (relating to member's options), with statutory interest to date of transfer, minus the amount to be returned to the board on account of return to service that the board has determined is to be credited in the members' savings account, from the annuity reserve account to the members' savings account and resume crediting of statutory interest on the amount restored to his credit. (ii) Transfer the balance of the present value of the total annuity, minus the amount to be returned to the board on account of return to service that the board has determined is to be credited in the State accumulation account, from the annuity reserve account to the State accumulation account. (iii) Certify to the member the amount of lump sum and annuity payments with statutory interest the member is to return to the board and, of those amounts, which amount shall be credited to the members' savings account and credited with statutory interest as such payments are returned and which amount shall be credited to the State accumulation account. (2) In case of a member who is not receiving an annuity from the system and who has not withdrawn his accumulated deductions, continue or resume the crediting of statutory interest on his accumulated deductions. (3) In case of a member who is not receiving an annuity from the system and his accumulated deductions were withdrawn, certify to the member the accumulated deductions as they would have been at the time of his separation had he been a full coverage member together with statutory interest for all periods of subsequent State and school service to the date of repayment. Such amount shall be restored by him and shall be credited with statutory interest as such payments are restored. (c) Disability annuities.--In every case where the board has received an application duly executed by the member or by a person legally authorized to act in his behalf for a disability annuity based upon the member's physical or mental incapacity for the performance of the job for which he is employed, the board shall: (1) Through the medical examiner, have the application and any supporting medical records and other documentation submitted with the application reviewed and, on the basis of said review and the subsequent recommendation by the medical examiner regarding the applicant's medical qualification for a disability annuity along with such other recommendations which he may make with respect to the permanency of disability or the need for subsequent reviews, make a finding of disability or nondisability and, in the case of disability, establish an effective date of disability and the terms and conditions regarding subsequent reviews. (2) Upon the recommendation of the medical examiner on the basis of a review of subsequent medical reports submitted with an application for continuance of disability, make a finding of disability or nondisability and, in the case of a finding of nondisability, establish the date of termination of disability and at that time discontinue any annuity payments in excess of any annuity to which he may be otherwise entitled under section 8342 (relating to maximum single life annuity). (3) Upon receipt of a written statement from a disability annuitant of his earned income of the previous year, adjust the payments of the disability annuity for the following year in accordance with the provisions for a reduction of disability payments of section 8344 (relating to disability annuities). (d) Withdrawal of accumulated deductions.--(Deleted by amendment). (e) Certification to vestees terminating service.--The board shall certify to a vestee within one year of termination of service of such member: (1) The accumulated deductions standing to his credit at the date of termination of service. (2) The number of years and fractional part of a year of credit in each class of service. (3) The maximum single life annuity to which the vestee shall become entitled upon the attainment of superannuation age and the filing of an application for such annuity. (4) The obligation of the member to commence distributions by the member's required beginning date. (e.1) Certification to participants terminating service.--The board shall certify to the participant in writing within one year of termination of service of the participants of the vested accumulated total defined contributions credited to the participant's individual investment account as of the date stated in the writing, any notices regarding rollover or other matters required by the IRC or other law, the obligation of the participant to commence distributions from the plan by the participant's required beginning date and the ability to receive all or part of the vested balance in the participant's individual investment account in a lump sum or in such other form as the board may authorize or as required by law. (f) Notification to vestees approaching superannuation age.--The board shall notify each vestee in writing 90 days prior to his attainment of superannuation age that he shall apply for his annuity within 90 days of attainment of superannuation age; that, if he does so apply, his effective date of retirement will be the date of attainment of superannuation age; that, if he does not so apply but defers his application to a later date, his effective date of retirement will be the date of filing the application or the date specified on the application, whichever is later; provided that in no event shall a member begin receiving benefits on a date later than the required beginning date. (f.1) Notification to inactive participants approaching required beginning date.--The board shall notify in writing each inactive participant who has terminated school service and who has not commenced distribution by 90 days before the participant's required beginning date that the inactive participant has an obligation to commence distributions by the required beginning date in a form and manner required by IRC § 401(a)(9) and other applicable provisions of the IRC. (g) Initial annuity payment and certification.--The board shall make the first monthly payment to a member who is eligible for an annuity within 60 days of the filing of his application for an annuity or, in the case of a vestee who has deferred the filing of his application to a date later than 90 days following attainment of superannuation age, within 60 days of his effective date of retirement, and receipt of the required data from the employer of the member, provided that in no event shall a member begin receiving benefits on a date later than the required beginning date. Concurrently the board shall certify to such member: (1) The accumulated deductions standing to his credit showing separately the amount contributed by the member, the pickup contribution and the interest credited to the date of termination of service. (2) The number of years and fractional part of a year credited in each class of service. (3) The final average salary on which his annuity is based as well as any applicable reduction factors due to age or election of an option or both. (4) The total annuity payable under the option elected and the amount and effective date of any future reduction on account of social security old-age insurance benefits. (g.1) Initial payment to a participant.--The board shall make the initial payment to a participant who has applied for a distribution within 60 days of the filing of the application and receipt of the required data from the employer of the participant and other necessary data. (h) Death benefits.--Upon receipt of notification of the death of a member or former member on USERRA leave or an active participant, an inactive participant or a former participant performing USERRA leave, the board shall notify the designated beneficiary or survivor annuitant of the benefits to which he is entitled and shall make the first payment to the beneficiary under the benefits elected by the beneficiary within 60 days of receipt of certification of death and other necessary data. If no beneficiary designation is in effect at the date of the member's or participant's death or no notice has been filed with the board to pay the amount of such benefits to the member's or participant's estate, the board is authorized to pay such benefits to the executor, administrator, surviving spouse or next-of-kin of the deceased member or participant, and payment pursuant hereto shall fully discharge the fund or plan from any further liability to make payment of such benefits to any other person. (i) Medical insurance coverage.--Upon receipt of notification from an insurance carrier offering a health insurance program approved by the board that an annuitant or participant who has attained age 65 has elected medical, major medical, and hospitalization insurance coverage or notification that annuitants with less than 24 1/2 eligibility points (other than disability annuitants), spouses of annuitants and survivor annuitants eligible to elect to enroll in the approved health insurance program have elected participation in such health insurance program, the board may deduct from the annuity payments, from payments to a participant receiving distributions or from a successor payee, the appropriate annual charges in equal monthly installments. Such deductions shall be transmitted to the insurance carrier. (j) Joint coverage annuitants.--The board shall notify in writing each joint coverage annuitant who retired prior to July 1, 1962 that he may elect any time prior to, but not later than, one year following the effective date of this part, to receive his annuity without reduction attributable to social security coverage. The board shall within 60 days of such election certify in writing to each annuitant who so elects the amount required to be paid. Upon receipt of a lump sum payment within 60 days in the amount certified to such annuitant, the board shall recompute the annuity payable to such annuitant and the annuity and/or lump sum, if any, payable upon his death to his beneficiary or survivor annuitant as though he had been a full coverage member on the effective date of retirement. Such recomputed annuity shall be paid beginning with the second monthly payment next following the month in which the lump sum payment is received. (k) School employees electing multiple service status.--Upon receipt of notification from the State Employees' Retirement Board that a member who has elected multiple service membership has elected to restore State service or purchase creditable nonstate service in the State Employees' Retirement System or is obligated to return benefits to the State Employees' Retirement Board on account of electing multiple service membership has elected to pay all or part of the amount due to the State Employees' Retirement Board by salary deductions, the board shall collect from the employee the amounts certified by the State Employees' Retirement Board as due and owing by the member and shall certify and transfer to the State Employees' Retirement Board the amounts so collected. (l) Notification of Class T-F membership.--The board shall inform any eligible school employee of the right to elect Class T-F membership. (July 22, 1983, P.L.104, No.31, eff. imd.; Dec. 19, 1984, P.L.1191, No.226, eff. imd.; June 13, 1985, P.L.40, No.19, eff. imd.; Aug. 5, 1991, P.L.183, No.23, eff. imd.; Apr. 29, 1994, P.L.159, No.29, eff. 60 days; May 17, 2001, P.L.26, No.9, eff. July 1, 2001; Nov. 23, 2010, P.L.1269, No.120, eff. July 1, 2011; July 1, 2013, P.L.174, No.32, eff. July 1, 2013; Dec. 28, 2015, P.L.529, No.93, eff. imd.; June 12, 2017, P.L.11, No.5, eff. imd.) 2017 Amendment. Act 5 amended the section heading and subsecs. (h) and (i) and added subsecs. (e.1), (f.1) and (g.1). 2015 Amendment. Act 93 amended subsecs. (e), (f), (g) and (h). 2010 Amendment. Act 120 added subsec. (l). 2001 Amendment. Act 9 amended subsec. (b) and added subsec. (k). 1994 Amendment. Act 29 amended subsecs. (c), (f), (g) and (h). 1985 Amendment. Act 19 amended subsec. (c) and deleted subsec. (d). Cross References. Section 8505 is referred to in sections 8307, 8344, 8502.2, 8507, 9101 of this title.

24 Pa.C.S. § 8505.1 Installment payments of accumulated deductions.

(a) General rule.--Notwithstanding any other provision of this part, whenever a member elects to withdraw his accumulated deductions pursuant to section 8310 (relating to eligibility for refunds) or 8341 (relating to return of accumulated deductions) or elects to receive a portion of his benefit payable as a lump sum pursuant to section 8345(a)(4)(iii) (relating to member's options), the member may elect to receive the amount in not more than four installments. (b) Payment of first installment.--The payment of the first installment shall be made in the amount and within seven days of the date specified by the member, except as follows: (1) Upon receipt of a member's application to withdraw his accumulated deductions as provided in section 8310 or 8341 and upon receipt of all required data from the employer, the board shall not be required to pay the first installment prior to 45 days after the filing of the application and the receipt of the data or the date of termination of service, whichever is later. (2) In the case of an election as provided in section 8345(a)(4)(iii) by a member terminating service within 60 days prior to the end of a calendar year and upon receipt of all required data from the employer, the board shall not be required to pay the first installment prior to 21 days after the later of the filing of the application and the receipt of the data or date of termination of service, but, unless otherwise directed by the member, the payment shall be made no later than 45 days after the filing of the application and the receipt of the data or the date of termination of service, whichever is later. (3) In the case of an election as provided in section 8345(a)(4)(iii) by a member who is not terminating service within 60 days prior to the end of a calendar year and upon receipt of all required data from the employer, the board shall not be required to pay the first installment prior to 45 days after the filing of the application and the receipt of the data or the date of termination of service, whichever is later. (c) Payment of subsequent installments.--The payment of subsequent installments shall be made at the time annuity checks are payable for the month and year specified by the member. (d) Statutory interest.--Any lump sum or installment payable shall include statutory interest credited to the date of payment, except in the case of a member, other than a vestee, who has not filed his application prior to 90 days following his date of termination of service. (June 13, 1985, P.L.40, No.19, eff. 180 days) 1985 Amendment. Act 19 added section 8505.1.

24 Pa.C.S. § 8506 Duties of employers.

(a) Status of members and participants.--The employer shall, each month, notify the board in a manner prescribed by the board of the salary changes effective during the past month, the date of all removals from the payroll, and the type of leave of any member or participant who has been removed from the payroll for any time during that month, and: (1) if the removal is due to leave without pay, the employer shall furnish the board with the date of beginning leave, the date of return to service, and the reason for leave; (2) if the removal is due to a transfer to another employer, the former employer shall furnish such employer and the board with a complete school service record, including credited or creditable nonschool service; or (3) if the removal is due to termination of school service, the employer shall furnish the board with a complete school service record including credited or creditable nonschool service and in the case of death of the member or participant the employer shall so notify the board. (b) Records and information.--At the direction of the board, the employer shall furnish service and compensation records as well as other information requested by the board and shall maintain and preserve such records as the board may require for the expeditious discharge of its duties. (c) Member and employer contributions.--The employer shall certify to its treasurer the required member contributions picked up and any other contributions, including, but not limited to, amounts collected for the State Employees' Retirement Board for the reinstatement of previous State service or creditable nonstate service and amounts paid to return benefits paid after the date of return to State service or entering school service, deducted from each payroll. On July 1, 1996, and upon any later effective date of employment of any noneligible member to whom limitations under IRC § 401(a)(17) or 415 applies or is expected to apply, the employer shall identify to its treasurer or other payroll administrator the member or members to whom such limit applies or may apply and shall cause any such member's contributions deducted from payroll and the employer's contribution on his behalf to cease at the limitations under IRC § 401(a)(17) or 415 on the payroll date if and when such limit shall be reached. The treasurer shall remit to the secretary of the board each month the total of the member contributions and the amount due from the employer determined in accordance with section 8327 (relating to payments by employers). If, upon crediting the remittance of a noneligible member's contributions to the member's savings account, the board shall determine that such account shall have been credited with pickup contributions attributable to compensation which is in excess of the annual compensation limit under IRC § 401(a)(17) or 415, or with total member contributions for such member which would cause such member's contributions or benefits to exceed any applicable limitation on contributions or benefits under IRC § 401(a)(17) or 415, the board shall as soon as practicable refund to the member from his individual member account such amount, together with the statutory interest thereon, as will cause the member's total member contributions not to exceed the applicable limit. The payment of any such refund to the member shall be charged to the member's savings account. (c.1) Participant and employer defined contributions.--The employer shall cause the mandatory pickup participant contributions on behalf of a participant to be made and shall cause to be deducted any voluntary contributions authorized by a participant. The employer shall also cause the employer defined contributions on behalf of a participant to be made. The employer shall notify the board at times and in a manner prescribed by the board of the compensation of any participant to whom the limitation under IRC § 401(a)(17) either applies or is expected to apply and shall cause the participant's contributions to be deducted from payroll to cease at the limitation under IRC § 401(a)(17) on the payroll date if and when such limit shall be reached. The employer shall certify to the board the amounts picked up and deducted and the employer defined contributions being made and shall send the total amount picked up, deducted and contributed together with a duplicate of such voucher to the secretary of the board every pay period or on such schedule as established by the board. (d) New employees subject to mandatory membership or participation.--Upon the assumption of duties of each new school employee whose membership in the system or plan is mandatory, the employer shall no later than 30 days thereafter cause an application for membership or participation, which application shall include the employee's home address, birthdate certified by the employer, previous school or State service and any other information requested by the board, and a nomination of beneficiary to be made by such employee and filed with the board and shall make pickup contributions or mandatory pickup participant contributions from the effective date of school employment. (e) New employees subject to optional membership or participation.--The employer shall inform any eligible school employee whose membership in the system or participation in the plan is not mandatory of his opportunity to become a member of the system or participant in the plan provided that he elects to purchase credit for all such continuous creditable service. If such employee so elects, the employer shall no later than 30 days thereafter cause an application for membership or participation which application shall include the employee's home address, birthdate certified by the employer, previous school or State service and any other information requested by the board, and a nomination of beneficiary to be made by him and filed with the board and shall cause proper contributions to be made from the date of election of membership or participation. (f) Advising members of duties.--The employer shall advise his employees of their duties as members of the system and participants of the plan. Local school districts shall be held harmless from decisions made by the employee in this regard. (g) Former State employee contributors.--The employer shall, upon the employment of a former member of the State Employees' Retirement System who is not an annuitant of the State Employees' Retirement System, advise such employee of his right to elect multiple service membership within 365 days of entry into the system and, in the case any such employee who so elects has withdrawn his accumulated deductions, require him to restore his accumulated deductions as they would have been at the time of his separation had he been a full coverage member, together with statutory interest for all periods of subsequent State and school service to date of repayment. The employer shall advise the board of such election. (h) Former State employee annuitants.--The employer shall, upon the employment of an annuitant of the State Employees' Retirement System who applies for membership in the system, advise such employee that he may elect multiple service membership within 365 days of entry into the system and that if he so elects his annuity from the State Employees' Retirement System will be discontinued effective upon the date of his return to school service and, upon termination of school service and application for an annuity, the annuity will be adjusted in accordance with section 8346 (relating to termination of annuities). The employer shall advise the board of such election. (i) Termination of service by members.--The employer shall, in the case of any member terminating school service, advise such member in writing of any benefits from the system to which he may be entitled under the provisions of this part and shall have the member prepare, on or before the date of termination of school service, one of the following three forms, a copy of which shall be given to the member and the original of which shall be filed with the board: (1) An application for the return of accumulated deductions. (2) An election to vest his retirement rights, if eligible, and, if he is a joint coverage member and so desires, an election to become a full coverage member and an agreement to pay within 30 days of the date of termination of service the lump sum required. (3) An application for an immediate annuity, if eligible, and, if he is a joint coverage member and so desires, an election to become a full coverage member and an agreement to pay within 30 days of date of termination of service the lump sum required. (j) Date of application for benefits.--Any application properly executed and filed with the employer under subsection (i) or properly executed and filed with the employer after termination of service shall be deemed to have been filed with the board on the date filed with the employer. (k) School employees performing USERRA or military-related leave of absence.--The employer shall report to the board all of the following: (1) Any school employee who: (i) ceases to be an active member or active participant to perform USERRA service; or (ii) is granted a leave of absence under 51 Pa.C.S. § 4102 (relating to leaves of absence for certain government employees) or a military leave of absence under 51 Pa.C.S. § 7302 (relating to granting military leaves of absence). (2) The date on which the USERRA service, leave of absence or military leave of absence began. (3) The date on which the school employee is reemployed from USERRA leave or returns after the leave of absence or military leave of absence, if applicable. (4) Any other information the board may require. (l) Differential wage payments and military leave of absence payments.--Notwithstanding the exclusion of differential wage payments as defined in IRC § 414(u)(12) from compensation under this part, the employer of any school employee on USERRA leave shall report differential wage payments made to the employee to the board, and the employer of any school employee on leave of absence under 51 Pa.C.S. § 4102 shall report any payment made to the employee in the form and manner established by the board. (July 22, 1983, P.L.104, No.31, eff. imd.; Dec. 19, 1984, P.L.1191, No.226, eff. imd.; Dec. 20, 1995, P.L.689, No.77, eff. July 1, 1996; May 17, 2001, P.L.26, No.9; July 1, 2013, P.L.174, No.32, eff. July 1, 2013; Dec. 28, 2015, P.L.529, No.93, eff. imd.; June 12, 2017, P.L.11, No.5, eff. imd.) 2017 Amendment. Act 5 amended subsecs. (a), (d), (e), (f), (i) and (k) and added subsecs. (c.1) and (l). 2015 Amendment. Act 93 amended subsec. (c). 2001 Amendment. Act 9 amended subsecs. (c), (g) and (h), effective immediately as to subsec. (c) and July 1, 2001, as to the remainder of the section. Cross References. Section 8506 is referred to in sections 8502, 8507 of this title.

24 Pa.C.S. § 8507 Rights and duties of school employees, members and participants.

(a) Information on new employees.--Upon his assumption of duties, each new school employee shall furnish his employer with a complete record of his previous school or State service, or creditable nonschool service, proof of his date of birth, his home address, his current status in the system and the plan and in the State Employees' Retirement System and the State Employees' Defined Contribution Plan and such other information as the board may require. Willful failure to provide the information required by this subsection to the extent available or the provision of erroneous information upon entrance into the system or plan shall result in the forfeiture of the right of the member or participant to subsequently assert any right to benefits based on erroneous information or on any of the required information which he failed to provide. In any case in which the board finds that a member or participant is receiving an annuity based on false information, the additional amounts received predicated on such false information together with statutory interest doubled and compounded shall be deducted from the present value of any remaining benefits to which the member or participant is legally entitled and such remaining benefits shall be correspondingly decreased. (b) Application for membership.--A new employee who is not currently a member of the system and whose membership is mandatory or a new employee whose membership in the system is not mandatory but who desires to become a member of the system shall execute an application for membership and a nomination of beneficiary. (c) Multiple service membership.--Any active member who was formerly an active member in the State Employees' Retirement System may elect to become a multiple service member. Such election shall occur no later than 365 days after becoming an active member in this system. A school employee who is eligible to elect to become a multiple service member and who begins USERRA leave during the election period without having elected multiple service membership shall have the election period extended by the number of days on USERRA leave. (d) Credit for previous service or change in membership status.--Any active member or multiple service member who is a State employee who desires to receive credit for his previous school service or creditable nonschool service to which he is entitled, or a member of Class T-A or Class T-B who desires to become a member of Class T-C, or a joint coverage member who desires to become a full coverage member shall so notify the board. Upon written agreement by the member and the board as to the manner of payment of the amount due, the member shall receive credit for such service as of the date of such agreement subject to the provisions of section 8325 (relating to incomplete payments) and subject to the provisions in this part relating to limitations under IRC § 415. (d.1) School service for USERRA leave.--Any active member or inactive member who was reemployed from USERRA leave and who desires to receive school service credit for his USERRA leave shall notify the board within the time period required under 38 U.S.C. Ch. 43 (relating to employment and reemployment rights of members of the uniformed services) and IRC § 414(u) of his desire to make the required member contributions. Upon making the required member contributions within the allowed time period, the member shall receive credit for the service as of the date the contributions are made. (d.2) Contributions for USERRA leave.--Any active participant or inactive participant or former participant who was reemployed from USERRA leave and who desires to make mandatory pickup participant contributions and voluntary contributions for his USERRA leave shall so notify the board within the time period required under 38 U.S.C. Ch. 43 (relating to employment and reemployment rights of members of the uniformed services) and IRC § 414(u) of his desire to make such contributions. Upon the participant making the permitted mandatory pickup participant contributions within the allowed time period, the employer shall make the corresponding employer defined contributions at the same time. (d.3) Voluntary contributions by a participant.--Any participant who desires to make voluntary contributions to be credited to his individual investment account shall notify the board and, upon compliance with the requirements, procedures and limitations established by the board in the plan document, may do so subject to the limitations under IRC §§ 401(a) and 415 and other applicable law. (e) Beneficiary for death benefits from system.--Every member shall nominate a beneficiary by written designation filed with the board to receive the death benefit or the benefit payable from the system under the provisions of Option 1. Such nomination may be changed at any time by the member by written designation filed with the board. A member may also nominate a contingent beneficiary or beneficiaries to receive the death benefit or the benefit payable under the provisions of Option 1. (e.1) Beneficiary for death benefits from plan.--Every participant shall nominate a beneficiary by written designation filed with the board as provided in section 8506 (relating to duties of employers) to receive the death benefit payable under section 8408 (relating to death benefits). A participant may also nominate a contingent beneficiary or beneficiaries to receive the death benefit provided under section 8408. Such nominations may be changed at any time by the participant by written designation filed with the board. (e.2) Beneficiary designation.--A school employee may designate or nominate different persons to be beneficiaries, survivor annuitants and successor payees for his benefits from the system and the plan. (f) Termination of service by members.--Each member who terminates school service and who is not then a disability annuitant shall execute on or before the date of termination of service a written application, duly attested by the member or his legally constituted representative, electing to do one or more of the following: (1) Withdraw his accumulated deductions. (2) Vest his retirement rights, if eligible, and if he is a joint coverage member, and so desires, elect to become a full coverage member and agree to pay within 30 days of the date of termination of service the lump sum required. (3) Receive an immediate annuity, if eligible, and may, if he is a joint coverage member, elect to become a full coverage member and agree to pay within 30 days of date of termination of service the lump sum required. (g) Vesting of retirement rights.--If a member elects to vest his retirement rights, he shall nominate a beneficiary by written designation filed with the board and he may anytime thereafter withdraw the accumulated deductions standing to his credit or apply for an annuity if eligible as provided in section 8307(a) or (b) (relating to eligibility for annuities), provided that in no event shall a member begin receiving benefits on a date later than the required beginning date. (g.1) Deferral of retirement rights.--If a participant terminates school service and does not commence receiving a distribution, he shall nominate a beneficiary by written designation filed with the board, and he may anytime thereafter, but no later than his required beginning date, withdraw the vested accumulated total defined contributions standing to his credit or apply for another form of distribution required by law or authorized by the board. (h) Vestees attaining superannuation age.--Upon attainment of superannuation age a vestee shall execute and file within 90 days an application for an annuity. Any application filed after such 90 day period shall be effective as of the date it is filed with the board, subject to the provisions of section 8505(g) (relating to duties of board regarding applications and elections of members), provided that in no event shall a member begin receiving benefits on a date later than the required beginning date. If a vestee does not file an application within seven years after attaining superannuation age, he shall be deemed to have elected to receive his accumulated deductions upon attainment of superannuation age. (i) Failure to apply for annuity.--If a member is eligible to receive an annuity from the system and does not file a proper application within 90 days of termination of service, he shall be deemed to have elected to vest, and his annuity will become effective as of the date an application is filed with the board or the date designated on the application whichever is later, provided that in no event shall a member begin receiving benefits on a date later than the required beginning date. (j) Nomination of beneficiary or survivor annuitant.--A member who is eligible and elects to receive a reduced annuity under Option 1, 2, 3, or 4, shall nominate a beneficiary or a survivor annuitant, as the case may be, by written designation filed with the board at the time of his retirement. A member who has elected Option 1, may change his designated beneficiary at any time. A member having designated a survivor annuitant at time of retirement shall not be permitted to nominate a new survivor annuitant unless such survivor annuitant predeceases him or unless the member is awarded a divorce or becomes married subsequent to the election of the option. In such cases, the annuitant shall have the right to reelect an option and to nominate a beneficiary or a new survivor annuitant and to have his annuity recomputed to be actuarially equivalent as of the date of recomputation to the annuity in effect immediately prior to the recomputation. In no other case shall a benefit plan be changed by an annuitant. (k) Disability annuities.--If service of a member is terminated due to his physical or mental incapacity for the performance of duty, in lieu of an application and election under subsection (f), an application for a disability annuity may be executed by him or by a person legally authorized to act on his behalf. (July 22, 1983, P.L.104, No.31, eff. imd.; Dec. 19, 1984, P.L.1191, No.226, eff. imd.; Apr. 29, 1994, P.L.159, No.29, eff. 60 days; May 17, 2001, P.L.26, No.9, eff. July 1, 2001; Nov. 23, 2010, P.L.1269, No.120, eff. imd.; July 1, 2013, P.L.174, No.32, eff. July 1, 2013; Dec. 28, 2015, P.L.529, No.93, eff. imd.; June 12, 2017, P.L.11, No.5, eff. imd.) 2017 Amendment. Act 5 amended the section heading and subsecs. (a), (c), (e), (f) and (i) and added subsecs. (d.2), (d.3), (e.1), (e.2) and (g.1). 2015 Amendment. Act 93 amended subsecs. (d), (g), (h) and (i). Amendment. Act 32 amended subsec. (c) and added subsec. (d.1). 2001 Amendment. See sections 29 and 36.1 of Act 9 in the appendix to this title for special provisions relating to election of multiple service membership in Public School Employees' Retirement System and applicability of amendment to Public School Employees' Retirement System members. 1994 Amendment. Act 29 amended subsecs. (f), (h) and (k). 1984 Amendment. Act 226 reenacted subsec. (b), retroactive to January 1, 1983. Cross References. Section 8507 is referred to in sections 8342, 8344 of this title.

24 Pa.C.S. § 8508 Rights and duties of annuitants.

(a) Election by joint coverage annuitants.--Any annuitant who is a joint coverage member who was receiving an annuity prior to July 1, 1962 may elect to receive his annuity without reduction on account of social security old-age insurance benefits provided that he shall file such election with the board prior to one year following the effective date of this part and shall make a lump sum payment within 60 days of receipt of the certification of the amount due. (b) Periodic earnings statements by disability annuitants.--It shall be the duty of an annuitant receiving a disability annuity while still under superannuation age to furnish a written statement within 30 days of the close of each year of all earned income during that year and information showing whether or not he is able to engage in a gainful occupation and such other information as may be required by the board. On failure, neglect, or refusal to furnish such information for the period of the preceding year, the board may refuse to make further payments due to disability to such annuitant until he has furnished such information to the satisfaction of the board. Should such refusal continue for six months, all of his rights to the disability annuity payments in excess of any annuity to which he is otherwise entitled shall be forfeited from the date of his last statement to the board. Any moneys received in excess of those to which he was entitled shall be deducted from the present value of the annuity to which he is otherwise entitled. (c) Medical examinations of disability annuitants.--Should any disability annuitant refuse to submit to a medical examination by a physician or physicians at the request of the board, his payments due to disability shall be discontinued until the withdrawal of such refusal. Should such refusal continue for a period of six months, all of his rights to the disability annuity payments in excess of any annuity to which he is otherwise entitled shall be forfeited. (d) Continuances of disability annuities.--In all instances, the member shall have the burden of establishing continued disability. (Aug. 5, 1991, P.L.183, No.23, eff. imd.; Apr. 29, 1994, P.L.159, No.29, eff. 60 days) 1994 Amendment. Act 29 amended subsec. (c). 1991 Amendment. Act 23 added subsec. (d). Cross References. Section 8508 is referred to in section 8344 of this title.

24 Pa.C.S. § 8509 Health insurance premium assistance program.

(a) Contribution rate.--Effective July 1, 1991, the premium assistance contribution rate established in section 8328(f) (relating to actuarial cost method) shall be sufficient to provide reserves in the health insurance account as of June 30, 1992, for the payment of premium assistance set forth in subsection (b) during the fiscal year beginning July 1, 1992, for all eligible annuitants who by that date elect to be participating eligible annuitants and all additional eligible annuitants who elect to be participating eligible annuitants in the health insurance premium assistance program during the fiscal year beginning July 1, 1992. For each fiscal year beginning after July 1, 1991, the premium assistance contribution rate shall be established to provide reserves sufficient, when combined with unexpended amounts from the reserves set aside the previous fiscal year for health insurance assistance payments, to provide premium assistance payments in the subsequent fiscal year for all participating eligible annuitants. The board is authorized to expend an amount not to exceed 2% of the health insurance account each year to pay for the direct expense of administering the health insurance premium assistance program, which expenditure may be included in the board's consideration when it establishes the premium assistance contribution rate each year. (b) Amount of premium assistance.--Participating eligible annuitants shall receive premium assistance payments as provided in paragraphs (1) and (2). Such payments shall be made by the board to the participating eligible annuitants for their payment directly to their approved insurance carriers. Such payments may also be paid by the board, at the board's discretion, directly to the participating eligible annuitants' approved insurance carriers. The board shall have the right to verify the application and receipt of the payments by the participating eligible annuitants and their approved insurance carriers. The premium assistance payments are as follows: (1) Effective July 1, 1992, $55 per month or the actual monthly premium, whichever is less. (2) Effective January 1, 2002, $100 per month or the actual monthly premium, whichever is less. (c) Participating eligible annuitants.--An eligible annuitant may elect to participate in the health insurance premium assistance program by filing an election to be covered by a health insurance carrier approved by the board and to participate in the health insurance premium assistance program. Participation in the health insurance premium assistance program shall begin upon the effective date of the health insurance coverage provided by a health insurance carrier approved by the board, but in no event before the effective date of retirement. (Aug. 5, 1991, P.L.183, No.23, eff. imd.; Apr. 29, 1994, P.L.159, No.29, eff. imd.; May 17, 2001, P.L.26, No.9, eff. imd.) 2001 Amendment. Act 9 amended subsec. (b). 1991 Amendment. Act 23 added section 8509. Section 32 of Act 23 provided that if the health insurance program established under Act 23 is canceled by statute, any remaining funds shall revert to the Public School Employees' Retirement Fund. Cross References. Section 8509 is referred to in sections 8326, 8328, 8502.2, 8526, 9101 of this title.

24 Pa.C.S. § 8510 Stress test of system.

(a) General rule.--The board shall conduct an annual stress test of the system and submit the results of the stress test to the Governor, the General Assembly and the Independent Fiscal Office no later than January 1 of each year. The stress test shall include a scenario analysis, simulation analysis and sensitivity analysis. The board shall disclose in the report of the stress test results which industry standards were used and whether any changes to industry standards have been made. (b) Report by Independent Fiscal Office.--No later than March 1 of each year, the Independent Fiscal Office shall produce a report summarizing the results of the stress test, including a calculation of the ratio of projected employer pension contributions to projected State revenues under a scenario analysis. (c) Definitions.--As used in this section, the following words and phrases shall have the meanings given to them in this subsection unless the context clearly indicates otherwise: "Scenario analysis." Projections of assets, liabilities, unfunded actuarial accrued liabilities, the change in unfunded actuarial accrued liabilities, employer contributions, benefit payments, service costs, payroll and calculations of the ratios of assets to liabilities, employer contributions to payroll and operating cash flow to assets in sufficient number as determined prudent by the board as informed by recognized industry standards. "Sensitivity analysis." The following: (1) Estimates of the total normal cost and employer normal cost for new employees, calculated using various investment return assumptions in sufficient number as determined prudent by the board as informed by recognized industry standards. (2) Estimates of the unfunded actuarial accrued liability and unfunded liability, calculated using various annual assumed rates of return in sufficient number as determined prudent by the board as informed by recognized industry standards. "Simulation analysis." Projections of the range of required employer contributions for each of the next 20 years, based on analysis that simulates the volatility of annual investment returns above and below the assumed rate of return, applying methodology determined prudent by the board as informed by recognized industry standards. (Nov. 25, 2020, P.L.1237, No.128, eff. 60 days) 2020 Amendment. Act 128 added section 8510. Section 7(1) of Act 128 provided that the addition of section 8510 shall apply to fiscal years beginning after June 30, 2022.

24 Pa.C.S. § 8521 Management of fund and accounts.

(a) Control and management of fund.--The members of the board shall be the trustees of the fund. Regardless of any other provision of law governing the investments of funds under the control of an administrative board of the State government, the trustees shall have exclusive control and management of the said fund and full power to invest the same, in accordance with the provisions of this section, subject, however, to the exercise of that degree of judgment, skill and care under the circumstances then prevailing which persons of prudence, discretion and intelligence who are familiar with such matters exercise in the management of their own affairs not in regard to speculation, but in regard to the permanent disposition of the fund, considering the probable income to be derived therefrom as well as the probable safety of their capital. The trustees shall have the power to hold, purchase, sell, lend, assign, transfer, or dispose of any of the securities and investments in which any of the moneys in the fund shall have been invested as well as of the proceeds of said investments, including any directed commissions which have accrued to the benefit of the fund as a consequence of the investments, and of any moneys belonging to said fund, subject in every case to meeting the standard of prudence set forth in this subsection. (b) Crediting of interest.--The board annually shall allow statutory interest, excluding the individual investment accounts, to the credit of the members' savings account on the mean amount of the accumulated deductions of all members for whom interest is payable for the preceding year and valuation interest on the mean amount of the annuity reserve account for the preceding year to the credit of that account. The board annually shall allow valuation interest calculated on the mean amount for the preceding year of the balance in the State accumulation account excluding any earnings of the fund credited to the account during that year. In the event the total earnings for the year do not exceed 5 1/2% of the mean amount for the preceding year of the total assets of the fund less earnings credited to the fund during that year plus the administrative expenses of the board, the difference required to be appropriated from the General Fund shall be credited to the State accumulation account. (c) Custodian of fund.--The State Treasurer shall be the custodian of the fund. (d) Payments from fund.--All payments from the fund shall be made by the State Treasurer in accordance with requisitions signed by the secretary of the board, or his designee, and ratified by resolution of the board. (e) Fiduciary status of board.--The members of the board, employees of the board, and agents thereof shall stand in a fiduciary relationship to the members of the system regarding the investments and disbursements of any of the moneys of the fund and shall not profit either directly or indirectly with respect thereto. The board may, when possible and consistent with its fiduciary duties imposed by this subsection or other law, including its obligation to invest and manage the fund for the exclusive benefit of the members of the system, consider whether an investment in any project or business enhances and promotes the general welfare of this Commonwealth and its citizens, including, but not limited to, investments that increase and enhance the employment of Commonwealth residents, encourage the construction and retention of adequate housing and stimulate further investment and economic activity in this Commonwealth. The board shall, through the Governor, submit to the General Assembly annually, at the same time the board submits its budget covering administrative expenses, a report identifying the nature and amount of all existing investments made pursuant to this subsection. (f) Name for transacting business.--By the name of "The Public School Employees' Retirement System" or "The Public School Employes' Retirement System" all of the business of the system shall be transacted, its fund invested, all requisitions for money drawn and payments made, and all of its cash and securities and other property shall be held, except that, any other law to the contrary notwithstanding, the board may establish a nominee registration procedure for the purpose of registering securities in order to facilitate the purchase, sale, or other disposition of securities pursuant to the provisions of this part. (g) Deposits in banks and trust companies.--For the purpose of meeting disbursements for annuities and other payments in excess of the receipts, there shall be kept available by the State Treasurer an amount, not exceeding 10% of the total amount in the fund, on deposit in any bank, savings bank or savings and loan association in this Commonwealth organized under the laws thereof or under the laws of the United States or with any trust company or companies incorporated by any law of this Commonwealth, provided any of such banks, trust companies, savings banks or savings and loan associations shall furnish adequate security for said deposit. The sum deposited in any one bank or trust company shall not exceed 25% of the paid-up capital and surplus of said bank or trust company or, in the case of savings banks or savings and loan associations, shall not exceed 25% of the unappropriated surplus. (h) Venture capital, private placement and alternative investments.--The board in its prudent discretion may make any venture capital investment, private placement investment or other alternative investment of any kind, structure or manner which meets the standard of prudence set forth in subsection (a). (i) Vehicles for authorized investments.--The board in its prudent discretion may make any investments which meet the standard of prudence set forth in subsection (a) by acquiring any type of interest in a business organization existing under the laws of any jurisdiction, provided that, in any such case, the liability of the Public School Employees' Retirement Fund shall be limited to the amount of its investment. (j) Legislative declaration concerning certain authorized investments.--The General Assembly finds and declares that authorized investments of the fund made by or on behalf of the board under this section whereby the board becomes a joint owner or stockholder in any company, corporation, association or other lawful business organization are outside the scope of the original intent of and therefore do not violate the prohibition set forth in section 8 of Article VIII of the Constitution of Pennsylvania. (June 25, 1982, P.L.647, No.183, eff. 60 days; June 29, 1984, P.L.450, No.95, eff. imd.; Aug. 5, 1991, P.L.183, No.23, eff. imd.; Apr. 29, 1994, P.L.159, No.29, eff. imd.; Dec. 20, 1995, P.L.689, No.77, eff. imd.; May 17, 2001, P.L.26, No.9, eff. imd.; June 12, 2017, P.L.11, No.5, eff. imd.) 2017 Amendment. Act 5 amended subsec. (b). 2001 Amendment. Act 9 amended subsecs. (h), (i) and (j). See section 24 of Act 9 in the appendix to this title for special provisions relating to authorized investments. 1994 Amendment. See section 14 of Act 29 in the appendix to this title for special provisions relating to authorized investments of the Public School Employees' Retirement Board as described in subsec. (i). Cross References. Section 8521 is referred to in section 8102 of this title.

24 Pa.C.S. § 8522 Public School Employees' Retirement Fund.

(a) General rule.--The fund shall consist of all moneys in the several separate funds in the State Treasury set apart to be used under the direction of the board for the benefit of members of the system; and the Treasury Department shall credit to the fund all moneys received from the Department of Revenue arising from the contributions relating to or on behalf of the members of the system required under the provisions of Chapter 83 (relating to membership, contributions and benefits) and all earnings from investments or moneys of said fund. There shall be established and maintained by the board the several ledger accounts specified in sections 8523 (relating to members' savings account), 8524 (relating to State accumulation account), 8525 (relating to annuity reserve account) and 8526 (relating to health insurance account). (b) Individual investment accounts and trust.--The individual investment accounts that are part of the trust are not part of the fund. Mandatory pickup participant contributions, voluntary contributions and employer defined contributions made under this part and any income earned by the investment of such contributions shall not be paid or credited to the fund but instead shall be paid to the trust and credited to the individual investment accounts. (Aug. 5, 1991, P.L.183, No.23, eff. imd.; June 12, 2017, P.L.11, No.5, eff. imd.) Cross References. Section 8522 is referred to in sections 8902, 9101 of this title.

24 Pa.C.S. § 8523 Members' savings account.

(a) Credits to account.--The members' savings account shall be the ledger account to which shall be credited the amounts of the pickup contributions made by the employer and contributions or lump sum payments made by active members in accordance with the provisions of Chapter 83 (relating to membership, contributions and benefits). (b) Interest and transfers from account.--The individual member accounts to which interest is payable shall be credited with statutory interest. The accumulated deductions credited to the account of a member who dies in service or whose application for an annuity has been approved shall be transferred from the members' savings account to the annuity reserve account provided for in section 8525 (relating to annuity reserve account). (c) Charges to account.--Upon the election of a member to withdraw his accumulated deductions, the payment of such amount shall be charged to the members' savings account. (July 22, 1983, P.L.104, No.31, eff. imd.; Dec. 19, 1984, P.L.1191, No.226, eff. imd.) 1984 Amendment. Act 226 reenacted subsec. (a), retroactive to January 1, 1983. Cross References. Section 8523 is referred to in sections 8522, 8525 of this title.

24 Pa.C.S. § 8524 State accumulation account.

The State accumulation account shall be the ledger account to which shall be credited all contributions of the Commonwealth and other employers as well as the earnings of the fund, except the premium assistance contributions and earnings thereon in the health insurance account. Valuation interest shall be allowed on the total amount of such account less any earnings of the fund credited during the year. The reserves necessary for the payment of annuities and death benefits resulting from membership in the system as approved by the board and as provided in Chapter 83 (relating to membership, contributions and benefits) shall be transferred from the State accumulation account to the annuity reserve account. At the end of each year the required interest shall be transferred from the State accumulation account to the credit of the members' savings account and the annuity reserve account. The administrative expenses of the board shall be charged to the State accumulation account. Employer defined contributions, mandatory pickup contributions and a participant's voluntary contributions, together with any income or interest earned thereon, may be temporarily placed into the State accumulation account pending allocation or distribution to the participant's individual investment account. (Aug. 5, 1991, P.L.183, No.23, eff. imd.; June 12, 2017, P.L.11, No.5, eff. imd.) Cross References. Section 8524 is referred to in sections 8522, 8525 of this title.

24 Pa.C.S. § 8525 Annuity reserve account.

(a) Credits and charges to account.--The annuity reserve account shall be the ledger account to which shall be credited the reserves held for the payment of annuities and death benefits resulting from membership in the system on account of all annuitants and the contributions from the Commonwealth and other employers as determined in accordance with section 8328 (relating to actuarial cost method) for the payment of the supplemental annuities provided in sections 8348 (relating to supplemental annuities), 8348.1 (relating to additional supplemental annuities), 8348.2 (relating to further additional supplemental annuities), 8348.3 (relating to supplemental annuities commencing 1994), 8348.4 (relating to special supplemental postretirement adjustment), 8348.5 (relating to supplemental annuities commencing 1998), 8348.6 (relating to supplemental annuities commencing 2002) and 8348.7 (relating to supplemental annuities commencing 2003). The annuity reserve account shall be credited with valuation interest. After the transfers provided in sections 8523 (relating to members' savings account) and 8524 (relating to State accumulation account), all annuity and death benefit payments shall be charged to the annuity reserve account and paid from the fund. (b) Transfers from account.--Should an annuitant be subsequently restored to active service either as a member of the system or participant in the plan, the present value of his member's annuity at the time of reentry into school service shall be transferred from the annuity reserve account and placed to his individual credit in the members' savings account. In addition, the actuarial reserve for his annuity less the amount transferred to the members' savings account shall be transferred from the annuity reserve account to the State accumulation account. (Aug. 5, 1991, P.L.183, No.23, eff. imd.; June 18, 1998, P.L.685, No.88, eff. imd.; May 17, 2001, P.L.26, No.9, eff. July 1, 2001; Apr. 23, 2002, P.L.272, No.38, eff. imd.; June 12, 2017, P.L.11, No.5, eff. imd.) Cross References. Section 8525 is referred to in sections 8522, 8523 of this title.

24 Pa.C.S. § 8526 Health insurance account.

The health insurance account shall be the ledger account to which shall be credited the contributions from the Commonwealth and other employers as determined in accordance with section 8328(f) (relating to actuarial cost method) for the payment of health insurance premium assistance for participating eligible annuitants as provided in section 8509 (relating to health insurance premium assistance program). All earnings derived from investment of the assets of the health insurance account shall be credited to this account. The board is authorized to separately invest the amounts in the health insurance account in a prudent manner intended to maximize the safety of the capital contained in the health insurance account. The direct administrative expenses of the board related to the administration of the health insurance program, as provided in section 8509, shall be charged to this account. (Aug. 5, 1991, P.L.183, No.23, eff. imd.) 1991 Amendment. Act 23 added section 8526. Section 32 of Act 23 provided that if the health insurance program established under Act 23 is canceled by statute, any remaining funds shall revert to the Public School Employees' Retirement Fund. Cross References. Section 8526 is referred to in sections 8522, 8902 of this title.

24 Pa.C.S. § 8527 Northern Ireland-related investments.

(a) General rule.--Notwithstanding any other provision of law, on and after the effective date of this section, any moneys or assets of the fund which shall remain or be invested in the stocks, securities or other obligations of any institution or company doing business in or with Northern Ireland or with agencies or instrumentalities thereof shall be invested subject to the provisions of subsection (c). (b) Annual review.--On or before January 1 of each year, the board shall determine the existence of affirmative action taken by institutions or companies doing business in Northern Ireland to eliminate ethnic or religious discrimination based on actions taken for: (1) Increasing the representation of individuals from underrepresented religious groups in the work force, including managerial, supervisory, administrative, clerical and technical jobs. (2) Providing adequate security for the protection of minority employees, both at the workplace and while traveling to and from work. (3) The banning of provocative religious or political emblems from the workplace. (4) Publicly advertising all job openings and making special recruitment efforts to attract applicants from underrepresented religious groups. (5) Providing that layoff, recall and termination procedures should not in practice favor particular religious groupings. (6) The abolition of job reservations, apprenticeship restrictions and differential employment criteria which discriminate on the basis of religion or ethnic origin. (7) The development of training programs that will prepare substantial numbers of current minority employees for skilled jobs, including the expansion of existing programs and the creation of new programs to train, upgrade and improve the skills of minority employees. (8) The establishment of procedures to assess, identify and actively recruit minority employees with potential for further advancement. (9) The appointment of senior management staff members to oversee affirmative action efforts and the setting up of timetables to carry out affirmative action principles. (c) Investments.--Consistent with sound investment policy, the board shall invest the assets of the fund in such a manner that the investments in institutions doing business in or with Northern Ireland shall reflect the advances made by the institutions in eliminating discrimination as established pursuant to subsection (b). (May 28, 1992, P.L.258, No.43, eff. imd.) 1992 Amendment. Act 43 added section 8527.

24 Pa.C.S. § 8531 State guarantee regarding the system.

Statutory interest charges payable, the maintenance of reserves in the fund, and the payment of all annuities and other benefits granted by the board from the system under the provisions of this part relating to the establishment and administration of the system are hereby made obligations of the Commonwealth. All income, interest, and dividends derived from deposits and investments of the system authorized by this part shall be used for the payment of the said obligations of the Commonwealth and shall not be used for any obligations of the plan or trust. (June 12, 2017, P.L.11, No.5, eff. imd.) Cross References. Section 8531 is referred to in sections 8502.2, 9101 of this title.

24 Pa.C.S. § 8532 State supervision.

The fund and ledger accounts provided for by this part shall be subject to the supervision of the State Insurance Department.

24 Pa.C.S. § 8533 Taxation, attachment and assignment of funds.

(a) General rule.--Except as provided in subsections (b), (c) and (d), the right of a person to a member's annuity, a State annuity, or retirement allowance, to the return of contributions, any benefit or right accrued or accruing to any person under the provisions of this part, and the moneys in the fund and the trust are hereby exempt from any State or municipal tax, levy and sale, garnishment, attachment, the provisions of Article XIII.1 of the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal Code, or any other process whatsoever, and shall be unassignable. (a.1) Individual investment accounts and distributions.--No participant or beneficiary, successor payee or alternate payee of a participant shall have the ability to commute, sell, assign, alienate, anticipate, mortgage, pledge, hypothecate, commutate or otherwise transfer or convey any benefit or interest in an individual investment account or rights to receive or direct distributions under this part or under agreements entered into under this part except as otherwise provided in this part and in the case of either a member or a participant. (b) Forfeiture.-- (1) Rights under this part shall be subject to forfeiture as provided by the act of July 8, 1978 (P.L.752, No.140), known as the Public Employee Pension Forfeiture Act. Forfeitures under this subsection or under any other provision of law may not be applied to increase the benefits that any member would otherwise receive under this part. (2) In accordance with section 16(b) of Article V of the Constitution of Pennsylvania and notwithstanding paragraph (1), the Public Employee Pension Forfeiture Act or 42 Pa.C.S. § 3352 (relating to pension rights), the accumulated mandatory participant contributions and accumulated voluntary contributions standing to the credit of a participant shall not be forfeited but shall be available for payment of fines and restitution as provided by law. Amounts in the trust that have been ordered to be distributed to an alternate payee as the result of an equitable distribution of marital property as part of an approved domestic relations order entered before the date of the order or action in a court or other tribunal resulting in a forfeiture of a participant's interest in the trust shall not be subject to the Public Employee Pension Forfeiture Act or 42 Pa.C.S. § 3352. Any accumulated employer defined contributions forfeited as a result of this subsection or other law shall be retained by the board and used for the payment of expenses of the plan. (c) Domestic relations order.--Rights under this part shall be subject to attachment in favor of an alternate payee as set forth in an approved domestic relations order. (d) Direct rollover.--Effective with distributions made on or after January 1, 1993, and notwithstanding any other provision of this part to the contrary, a distributee may elect, at the time and in the manner prescribed by the board, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan by way of a direct rollover. For purposes of this subsection, a "distributee" includes a member, a participant, a member's surviving spouse, a participant's surviving spouse, a member's former spouse who is an alternate payee under an approved domestic relations order, a participant's former spouse who is an alternate payee under an approved domestic relations order and anyone else authorized under the IRC and the plan terms approved by the board to have an eligible rollover distribution paid directly to an eligible retirement plan by way of a direct rollover. For purposes of this subsection, the term "eligible rollover distribution" has the meaning given such term by IRC § 402(f)(2)(A) and "eligible retirement plan" has the meaning given such term by IRC § 402(c)(8)(B), except that a qualified trust shall be considered an eligible retirement plan only if it accepts the distributee's eligible rollover distribution; however, in the case of an eligible rollover distribution to a surviving spouse, an eligible retirement plan is an "individual retirement account" or an "individual retirement annuity" as those terms are defined in IRC § 408(a) and (b). (Oct. 5, 1980, P.L.693, No.142, eff. 60 days; Apr. 29, 1994, P.L.159, No.29; Dec. 20, 1995, P.L.689, No.77, eff. imd.; June 12, 2017, P.L.11, No.5, eff. imd.) 2017 Amendment. Act 5 amended subsecs. (a), (b) and (d) and added subsec. (a.1). Cross References. Section 8533 is referred to in section 8409 of this title; section 8124 of Title 42 (Judiciary and Judicial Procedure).

24 Pa.C.S. § 8533.1 Approval of domestic relations orders.

(a) Certification regarding members.--A domestic relations order pertaining to a member of the system shall be certified as an approved domestic relations order by the secretary of the board, or his designated representative, only if such order meets all of the following: (1) Requires the system to provide any type or form of benefit or any option applicable to members already provided under this part. (2) Requires the system to provide no more than the total amount of benefits than the member would otherwise receive (determined on the basis of actuarial value) unless increased benefits are paid to the member or alternate payee based upon cost-of-living increases or increases based on other than actuarial value. (3) Specifies the amount or percentage of the member's benefits to be paid by the system to each such alternate payee or the manner in which the amount or percentage is to be determined. (4) Specifies the retirement option to be selected by the member upon retirement or states that the member may select any retirement option offered by this part upon retirement. (5) Specifies the name and last known mailing address, if any, of the member and the name and last known mailing address of each alternate payee covered by the order and states that it is the responsibility of each alternate payee to keep a current mailing address on file with the system. (6) Does not grant an alternate payee any of the rights, options or privileges of a member under this part. (7) Requires the member to execute an authorization allowing each alternate payee to monitor the member's compliance with the terms of the domestic relations order through access to information concerning the member maintained by the system. An authorization granted under this section shall be construed as an authorization for the alternate payee to receive information concerning the administration, calculation and payment of the alternate payee's share of the benefits payable under this part and not as an authorization to exercise the rights afforded to members or obtain information that is not related to the administration, calculation and payment of alternate payee's share of the benefits payable under this part. (a.1) Certification regarding participants.--A domestic relations order pertaining to a participant shall be certified as an approved domestic relations order by the secretary of the board, or his designated representative, only if that order meets all of the following: (1) Does not require the plan to provide any type or form of benefit or any option applicable to members of the system or participants in the plan. (2) Does not require the segregation of the alternate payee's share of the participant's individual investment account into a subaccount or newly established individual account titled in the name of the alternate payee. (3) Does not require the plan to recover or distribute any funds that were distributed to the participant or at the participant's direction prior to the approval of the domestic relations order by the secretary of the board or his designated representative. (4) Requires the plan to pay to the alternate payee no more than the lesser of the vested amount of the participant's individual investment account specified by the domestic relations order or the vested amount of the participant's individual investment account as of the date of the transfer of the alternate payee's share to the alternate payee. (5) States that the plan shall not be required to recoup or make good for losses in value to the participant's individual investment account incurred between the date of the valuation of the account used for equitable distribution purposes and the date of distribution to the alternate payee. (6) Specifies the amount or percentage of the participant's individual investment account to be paid to the alternate payee and the date upon which such valuation is based. (7) Specifies the name and last known mailing address, if any, of the participant and the name and last known mailing address of each alternate payee covered by the order and states that it is the responsibility of each alternate payee to keep a current mailing address on file with the plan. (8) Does not grant an alternate payee the rights, privileges or options available to a participant. (9) Requires the participant to execute an authorization allowing each alternate payee to monitor the participant's compliance with the terms of the domestic relations order through access to information concerning the participant maintained by the plan. Any authorization granted under this section shall be construed as an authorization for the alternate payee to receive information concerning the participant that relates to the administration, calculation and payment of the alternate payee's share of the participant's account and not as an authorization to exercise the rights afforded to participants or obtain information that is not related to the administration, calculation and payment of the alternate payee's share of the participant's individual investment account. (10) Requires the immediate distribution of the alternate payee's share of the participant's individual investment account, which may be made by direct payment, eligible rollover or trustee-to-trustee transfer to another eligible plan or qualified account owned by the alternate payee. (11) In the case of a participant who is currently receiving distributions from the plan as of the date the domestic relations order is approved by the secretary of the board or his designated representative, may not order the board to pay the alternate payee more than the vested balance available in the participant's individual investment account as of the date the order is approved or require that distributions continue to the alternate payee after the death of the participant and final settlement of the participant's individual investment account. (b) Determination by secretary.--Within a reasonable period of time after receipt of a domestic relations order, the secretary of the board, or his designated representative, shall determine whether the order is an approved domestic relations order and notify the member or participant and each alternate payee of this determination. Notwithstanding any other provision of law, the exclusive remedy of any member, participant or alternate payee aggrieved by a decision of the secretary of the board, or his designated representative, shall be the right to an adjudication by the board under 2 Pa.C.S. Ch. 5 (relating to practice and procedure) with appeal therefrom to the Commonwealth Court under 2 Pa.C.S. Ch. 7 (relating to judicial review) and 42 Pa.C.S. § 763(a)(1) (relating to direct appeals from government agencies). (c) Other orders.--The requirements for approval identified in subsections (a) and (a.1) shall not apply to any domestic relations order which is an order for support as that term is defined in 23 Pa.C.S. § 4302 (relating to definitions) or an order for the enforcement of arrearages as provided in 23 Pa.C.S. § 3703 (relating to enforcement of arrearages). These orders shall be approved to the extent that they do not attach moneys in excess of the limits on attachments as established by the laws of this Commonwealth and the United States, require distributions of benefits in a manner that would violate the laws of the United States, any other state or this Commonwealth or require the distribution of funds for support or enforcement of arrearages against any participant who is not receiving distributions from the plan at the time the order is entered. These orders may be approved notwithstanding any other provision of this part or the plan that would otherwise require a distribution of accumulated employer defined contributions in the form of an annuity or to require the purchase of an annuity. (d) Obligation discharged.--Only the requirements of this part and any regulations promulgated hereunder shall be used to govern the approval or disapproval of a domestic relations order. Therefore, if the secretary of the board, or his designated representative, acts in accordance with the provisions of this part and any promulgated regulations in approving or disapproving a domestic relations order, then the obligations of the system or plan with respect to such approval or disapproval shall be discharged. (Apr. 29, 1994, P.L.159, No.29, eff. 60 days; June 12, 2017, P.L.11, No.5, eff. imd.) Cross References. Section 8533.1 is referred to in section 8102 of this title.

24 Pa.C.S. § 8533.2 Irrevocable beneficiary.

Notwithstanding any other provision of this part, a domestic relations order may provide for an irrevocable beneficiary. A domestic relations order requiring the nomination of an irrevocable beneficiary shall be deemed to be one that requires a member or participant to nominate an alternate payee as a beneficiary and that prohibits the removal or change of that beneficiary without approval of a court of competent jurisdiction, except by operation of law. Such a domestic relations order may be certified as an approved domestic relations order by the secretary of the board, or his designated representative, after the member or participant makes such nomination, in which case the irrevocable beneficiary so ordered by the court cannot be changed by the member or participant without approval by the court. (Apr. 29, 1994, P.L.159, No.29, eff. 60 days; June 12, 2017, P.L.11, No.5, eff. imd.)

24 Pa.C.S. § 8533.3 Irrevocable survivor annuitant.

Notwithstanding any other provisions of this part, a domestic relations order may provide for an irrevocable survivor annuitant pertaining to a member. A domestic relations order requiring the designation of an irrevocable survivor annuitant of a member of the fund shall be deemed to be one that requires a member to designate an alternate payee as a survivor annuitant and that prohibits the removal or change of that survivor annuitant for benefits payable from the fund without approval of a court of competent jurisdiction, except by operation of law. Such a domestic relations order may be certified as an approved domestic relations order by the secretary of the board, or his designated representative, in which case the irrevocable survivor annuitant so ordered by the court cannot be changed by the member without approval by the court. A person ineligible to be designated as a survivor annuitant may not be designated an irrevocable survivor annuitant. (Apr. 29, 1994, P.L.159, No.29, eff. 60 days; June 12, 2017, P.L.11, No.5, eff. imd.)

24 Pa.C.S. § 8533.4 Amendment of approved domestic relations orders.

(a) Deceased alternate payee.--In the event that the alternate payee predeceases the member or participant and there are benefits payable to the alternate payee, the divorce court may amend the approved domestic relations order to substitute a person for the deceased alternate payee to receive any benefits payable to the deceased alternate payee. (b) Recertification of amended order.--If a divorce court amends the approved domestic relations order for any reason, then the amended order must be submitted for recertification as an approved domestic relations order as set forth in this part. (Apr. 29, 1994, P.L.159, No.29, eff. 60 days; June 12, 2017, P.L.11, No.5, eff. imd.) 2017 Amendment. Act 5 amended subsec. (a). 1994 Amendment. Act 29 added section 8533.4.

24 Pa.C.S. § 8533.5 Irrevocable successor payee.

(a) Condition.--Notwithstanding any other provisions of this part, a domestic relations order pertaining to a participant may provide for an irrevocable successor payee only if the participant is receiving a payment under a payment option provided by the board that allows for a successor payee. (b) Determination.--A domestic relations order requiring the designation of an irrevocable successor payee shall be deemed to be one that requires a participant who is receiving payments from an annuity or other distribution option to designate an alternate payee as a successor payee and that prohibits the removal or change of that successor payee without approval of a court of competent jurisdiction, except by operation of law. (c) Certification.--A domestic relations order under subsection (b) may be certified as an approved domestic relations order by the secretary of the board, or his designated representative, in which case the irrevocable successor payee so ordered by the court cannot be changed by the participant without approval by the court. (d) Ineligibility.--A person ineligible to be designated as a successor payee may not be designated as an irrevocable successor payee. A court may not name an irrevocable successor payee if the alternate payee is eligible to receive a lump sum distribution of the alternate payee's portion of the marital portion of the pension benefit. (June 12, 2017, P.L.11, No.5, eff. imd.) 2017 Amendment. Act 5 added section 8533.5.

24 Pa.C.S. § 8534 Fraud and adjustment of errors.

(a) Penalty for fraud.--Any person who shall knowingly make any false statement or shall falsify or permit to be falsified any record or records of this system or plan in any attempt to defraud the system or plan as a result of such act shall be guilty of a misdemeanor of the second degree. (b) Adjustment of errors.--Should any change or mistake in records result in any member, participant, beneficiary, survivor annuitant or successor payee receiving from the system or plan more or less than he would have been entitled to receive had the records been correct, then regardless of the intentional or unintentional nature of the error and upon the discovery of such error, the board shall correct the error and if the error affects contributions to or payments from the system, then so far as practicable shall adjust the payments which may be made for and to such person in such a manner that the actuarial equivalent of the benefit to which he was correctly entitled shall be paid. If the error affects contributions to or payments from the plan, the board shall take such action as shall be provided for in the plan document. (June 12, 2017, P.L.11, No.5, eff. imd.) Cross References. Section 8534 is referred to in section 8303.1 of this title.

24 Pa.C.S. § 8535 Payments to school entities by Commonwealth.

For each school year beginning with the 1995-1996 school year and ending with the 2018-2019 school year, each school entity shall be paid by the Commonwealth for contributions based upon school service of active members of the system after June 30, 1995, as follows: (1) The Commonwealth shall pay each school entity for contributions made to the Public School Employees' Retirement Fund based upon school service of all active members, including members on activated military service leave, whose effective dates of employment with their school entities are after June 30, 1994, and who also had not previously been employed by any school entity within this Commonwealth an amount equal to the amount certified by the Public School Employees' Retirement Board as necessary to provide, together with the members' contributions, reserves on account of prospective annuities, supplemental annuities and the premium assistance program as provided in this part in accordance with section 8328 (relating to actuarial cost method), multiplied by the market value/income aid ratio of the school entity. For no school year shall any school entity receive less than the amount that would result if the market value/income aid ratio as defined in section 2501(14.1) of the Public School Code was 0.50. (2) The Commonwealth shall pay each school entity for contributions made to the Public School Employees' Retirement Fund based upon school service of all active members, including members on activated military service leave, who are not described in paragraph (1), one-half of the amount certified by the Public School Employees' Retirement Board as necessary to provide, together with the members' contributions, reserves on account of prospective annuities, supplemental annuities and the premium assistance program as provided in this part in accordance with section 8328. (3) School entities shall have up to five days after receipt of the Commonwealth's portion of the employer's liability to forward the payment to the Public School Employees' Retirement Fund. School entities are expected to make the full payment to the Public School Employees' Retirement Fund in accordance with section 8327 (relating to payments by employers) in the event the receipt of the Commonwealth's portion of the employer's liability is delayed because of delinquent salary reporting or other conduct by the school entities. (Apr. 29, 1994, P.L.159, No.29, eff. July 1, 1995; Nov. 23, 2010, P.L.1269, No.120, eff. July 1, 2011; June 12, 2017, P.L.11, No.5, eff. imd.) 1994 Amendment. See section 18 of Act 29 in the appendix to this title for special provisions relating to applicability to 1995-1996 and succeeding school years. Cross References. Section 8535 is referred to in sections 8326, 8348.5 of this title.

24 Pa.C.S. § 8535.1 Payments to school entities by Commonwealth commencing with the 2019-2020 school year.

For each school year, beginning with the 2019-2020 school year, each school entity shall be paid by the Commonwealth for contributions based upon school service of active members of the system and active participants of the plan after June 30, 2018, as follows: (1) The Commonwealth shall pay each school entity for contributions made to the fund or the trust based upon school service of all active members or active participants, including members or participants on activated or USERRA military service leave, whose effective dates of employment with their school entities are after June 30, 1994, and who also had not previously been employed by any school entity within this Commonwealth, an amount equal to the amount certified by the board as necessary to provide, together with the members' and participants' contributions, reserves on account of prospective annuities, supplemental annuities and the premium assistance program as provided in this part in accordance with section 8328 (relating to actuarial cost method), multiplied by the market value/income aid ratio of the school entity. For no school year shall any school entity receive less than the amount that would result if the market value/income aid ratio as defined in section 2501(14.1) of the Public School Code was 0.50. (2) The Commonwealth shall pay each school entity for contributions made to the fund or the trust based upon school service of all active members or active participants, including members or participants on activated military service leave, and active participants of the plan who are not described in paragraph (1) one-half of the amount certified by the board as necessary to provide, together with the members' and participants' contributions, reserves on account of prospective annuities, supplemental annuities and the premium assistance program as provided in this part in accordance with section 8328. (3) School entities shall have up to five days after receipt of the Commonwealth's portion of the employer's liability to forward the payment to the fund or the trust. School entities are expected to make the full payment to the fund or the trust in accordance with section 8327 (relating to payments by employers) in the event the receipt of the Commonwealth's portion of the employer's liability is delayed because of delinquent salary reporting or other conduct by the school entities. (4) Employers whose payments to the Public School Employees' Retirement Fund are delinquent shall be charged interest by the Public School Employees' Retirement Fund at the annual interest rate adopted by the board under section 8328 in effect in the fiscal year in which the payments are required to be paid. (June 12, 2017, P.L.11, No.5, eff. imd.) 2017 Amendment. Act 5 added section 8535.1.

24 Pa.C.S. § 8536 Independent Fiscal Office study.

The Independent Fiscal Office shall study and analyze the implementation of shared-risk contributions under section 8321(b) (relating to regular member contributions for current service) and its impact on the system. The study shall be completed by December 31, 2015, and shall be transmitted to the Appropriations Committee and the Finance Committee of the Senate and the Appropriations Committee and the Finance Committee of the House of Representatives and to the Governor. (Nov. 23, 2010, P.L.1269, No.120, eff. imd.) 2010 Amendment. Act 120 added section 8536.

24 Pa.C.S. § 8537 Internal Revenue Code limitations.

Notwithstanding any provisions of this part to the contrary, no contribution or benefit related to the School Employees' Defined Contribution Plan may be made or payable to the extent that the contribution or benefit exceeds a limitation under IRC § 415 in effect with respect to a "governmental plan" as defined in IRC § 414(d) on the date the contribution or benefit payment becomes effective. An increase in a limitation under IRC § 415 shall be applicable to all current and future participants. (June 12, 2017, P.L.11, No.5, eff. imd.) 2017 Amendment. Act 5 added section 8537.

24 Pa.C.S. § 8538 Public Pension Management and Asset Investment Review Commission.

(a) Establishment.--A Public Pension Management and Asset Investment Review Commission shall be established, which shall be composed of five appointees, one appointed by each of the following: (1) The Governor. (2) The President pro tempore of the Senate. (3) The Minority Leader of the Senate. (4) The Speaker of the House of Representatives. (5) The Minority Leader of the House of Representatives. The appointees shall be investment professionals and retirement advisors and shall be appointed within 90 days of the effective date of this section. (b) Duties.--The duties of the Public Pension Management and Asset Investment Review Commission are as follows: (1) Study the performance of current investment strategies and procedures of the Public School Employees' Retirement System, comparing realized rates of return to established benchmarks and considering associated fees paid for active and passive management. (2) Study the costs and benefits of both active and passive investment strategies in relation to future investment activities of the Public School Employees' Retirement System. (3) Study alternative future investment strategies with available assets of the Public School Employees' Retirement System that will maximize future rates of return net of fees. (3.1) The commission shall evaluate and make recommendations on: (i) Improving investment fee transparency on alternative investments as specified in the Standardized Reporting Guidelines of the Institutional Limited Partners Association. (ii) Implementing the recommendations of the Society of Actuaries Blue Ribbon Panel on stress testing, to test the ability of the plan to withstand a period of investment returns above or below the level of assumed return. (4) Publish extensive and detailed findings online, including findings about: (i) Assets. (ii) Returns. (iii) Financial managers. (iv) Consultants. (v) Requests for proposals. (vi) Investment performance measured against benchmarks. (5) Recommend the lowest amount of investment fees to be paid by the board for the board to achieve the board's anticipated annual rate of return and to develop recommendations to reduce expenditures to generate actuarial savings of $1,500,000,000 over 30 years from the effective date of this section. (6) Report its findings and recommendations to the Governor and the General Assembly within six months of its first organizational meeting. (c) Quorum.--A majority of appointed members shall constitute a quorum for the purpose of conducting business. The members shall select one of their number to be chairperson and another to be vice chairperson. (d) Transparency and ethics.--The Public Pension Management and Asset Investment Review Commission shall be subject to the following laws: (1) The act of February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law. (2) The former act of July 3, 1986 (P.L.388, No.84), known as the Sunshine Act. (3) The act of October 4, 1978 (P.L.883, No.170), known as the Public Official and Employee Ethics Law. (4) The act of July 19, 1957 (P.L.1017, No.451), known as the State Adverse Interest Act. (e) Information gathering.--The Public Pension Management and Asset Investment Review Commission may conduct hearings and otherwise gather pertinent information and analysis that it considers appropriate and necessary to fulfill its duties. (f) Logistical and other support.--The Public Pension Management and Asset Investment Review Commission shall receive logistical and other support from the Joint State Government Commission and may employ additional temporary staff as needed. (g) Reimbursement.--The members of the Public Pension Management and Asset Investment Review Commission shall be reimbursed for reasonable expenses. (h) Expiration.--The Public Pension Management and Asset Investment Review Commission shall expire 60 days after delivery of its report in accordance with subsection (b)(5). Any unspent appropriation shall lapse back to the General Fund. (June 12, 2017, P.L.11, No.5, eff. imd.) 2017 Amendment. Act 5 added section 8538.

24 Pa.C.S. § 8541 Definitions.

The following words and phrases when used in this subchapter shall have the meanings given to them in this section unless the context clearly indicates otherwise: "Program." The Public Markets Emerging Investment Manager Program established under section 8542 (relating to establishment).

24 Pa.C.S. § 8542 Establishment.

(a) Fiduciary duty of board.--Consistent with the board's fiduciary responsibilities, the board shall establish a Public Markets Emerging Investment Manager Program. (b) Location of managers.--The board shall locate fund managers with a history of generating positive risk adjusted returns. (c) Source list.--After location of fund managers, the board shall provide a source of potential managers for the main fund. (d) Assistance with marketing.--In order to grow public market emerging investments firms, the board shall assist in using the system's name in the manager's marketing efforts. Cross References. Section 8542 is referred to in section 8541 of this title.

24 Pa.C.S. § 8543 Funding.

The board shall allocate an amount of at least $250,000,000 and not more than $1,000,000,000 to the program. Funding for each investment manager shall come from assets allocated within the main fund, similar to or most closely related to the investment manager's mandate. The maximum number of investment managers in the program at any one time may not exceed 10, except that the program may be implemented and run with less than 10 investment managers.

24 Pa.C.S. § 8544 Participation criteria.

In order to be considered to participate in the program, an investment manager must meet the following criteria: (1) Be registered under the Investment Advisers Act of 1940 (54 Stat. 847, 15 U.S.C. § 80b-1 et seq.) or be exempt from the Investment Advisers Act of 1940. (2) Have the ability to demonstrate real and contented transparency of positions and transactions. (3) Have the ability to provide and show quarterly liquidity. (4) A firm, portfolio manager or any combination of firm and portfolio manager must have a five-year historical performance record verified by at least one consultant or accounting firm in accordance with the Global Investment Performance Standard in effect on the effective date of this section.

24 Pa.C.S. § 8545 Preference.

Preference shall be given to investment managers deemed to meet the objectives, goals and required criteria contained under this subchapter, plus demonstration of at least one of the following characteristics: (1) Be an investment management firm headquartered or incorporated within this Commonwealth. (2) Be a: (i) veteran-owned investment management firm, with proper DD-214 verification and honorable discharge; or (ii) service-disabled-veteran-owned investment management firm with a letter from the United States Department of Veteran Affairs. (3) Be a minority-owned or women-owned investment management firm approved by the Office of Minority and Women Business Enterprise in accordance with the criteria established by Executive Order No. 1987-18 and 4 Pa. Code § 68.204 (relating to eligibility standards). References in Text. 4 Pa.Code § 68.204, referred to in par. (3), does not exist.

24 Pa.C.S. § 8546 Requirements and limitations of firms.

(a) Equity, commodity or absolute return exposure firms.--Firms considered to provide equity, commodity or absolute return exposure may not have more than $1,500,000,000 of total assets under management when hired. If the total assets under management exceed $3,000,000,000, the investment managers shall be terminated in a reasonable period of time. (b) Fixed-income exposure firms.--Firms considered to provide fixed-income exposure shall have no more than $3,000,000,000 of total assets under management when hired. If the total assets under management exceeds $6,000,000,000, existing investment managers shall be terminated within a reasonable period of time. (c) Performance-based fee accounts.--For performance-based fee accounts, a manager must exceed both a hurdle rate and a high water mark before the manager can earn the performance-based fee. (d) Transition to main fund.--Investment managers hired into the program may continue in the program for a period of at least three years, but not more than five years. If the investment manager generates strong risk adjusted returns, the Investment Office shall use best efforts to make a place in the main fund for the investment manager. The Investment Office shall consider things such as the investment manager's assets under management and projected ability to continue generating strong risk adjusted returns in the future.

24 Pa.C.S. § 8547 Administration.

(a) Authority to hire.--The board and the Investment Office may hire and fund any investment manager meeting the objectives, goals and criteria under this section. (b) Prohibition of investment.--An investment may not be made into an investment vehicle that primarily includes private equity, private debt, venture capital or private real estate instruments. An investment in an absolute return strategy shall be subject to manager selection requirements within the absolute return policy. (c) Emerging manager portfolio manager.--The Investment Office shall appoint an Emerging Manager Portfolio Manager who shall be responsible for administering the program. The Emerging Manager Portfolio Manager shall meet with managers that appear to meet the objectives, goals and criteria of this section. The Emerging Manager Portfolio Manager shall recommend qualified investment managers for inclusion into the main fund and shall further advise the Investment Office if termination of an investment manager is recommended. An investment manager may be terminated by the Emerging Manager Portfolio Manager, with approval from the Investment Office, if the investment manager is underperforming, not generating strong risk adjusted returns, not meeting the criteria to move into the main fund, changes investment processes, has personnel turnover or any other reason which is deemed by the Investment Office to be in the best interests of the system. (d) Internal Review Committee.--An investment manager considered for hiring into the program shall meet with the Internal Review Committee. The Internal Review Committee shall review each manager considered for inclusion in the program and provide feedback to the Emerging Manager Portfolio Manager. Investment Office approval shall be required to hire a manager into the program, including the Emerging Manager Portfolio Manager, the Emerging Manager Portfolio Manager's supervisor and the Chief Investment Officer. (e) Approval for exceptional investment manager.--If the Emerging Manager Portfolio Manager, the Chief Investment Officer or other qualified staff have located an exceptional investment manager that does not meet the required criteria established under this section, the Investment Office shall obtain board approval for hiring. The Investment Office shall present to the board the specific reasons for hiring the investment manager. (f) Contract requirements.--Each investment manager shall manage its portfolio within the constraints of the contract entered into between the investment manager and the board, the Investment Policy Statement, Objectives and Guidelines, any applicable addendum and any applicable amendments to the contract and Investment Policy Statement, Objectives and Guidelines. The Investment Office and board shall have authority to negotiate the investment contract with the investment manager, including the investment guidelines. (g) Insurance.--Each of the standard insurance provisions in the Investment Policy Statement, Objectives and Guidelines, except for the maximum deductibles, shall apply to the investment manager until the investment manager is either managing over $100,000,000 for the program or is moved out of the program into the main fund. The maximum deductible for both the error and omissions insurance and the fidelity bond shall be the greater of 10% of audited retained earnings or the following: Maximum Deductible Asset Size $50,000 $0 - $50,000,000 $100,000 $50,000,000 - $75,000,000 $200,000 $75,000,000 - $100,000,000 (h) Funding.--Board approval shall be required for total capital allocations exceeding $100,000,000. Investment strategy limitations shall be consistent with Investment Policy Statement constraints. The Emerging Manager Portfolio Manager, the Emerging Manager Portfolio Manager's supervisor and the Chief Investment Officer shall determine the amount of the initial allocation and each subsequent allocation to each investment manager.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=24Fetched: 10/16/2026

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