Labor & Employment (Retirement Benefits)

This bill updates Pennsylvania's school employee retirement system by clarifying which organizations are eligible to participate. It specifically prohibits certain school employees and any new hires at non-governmental entities from joining the retirement plan, while allowing current participants at those entities to remain enrolled until they leave their jobs. To manage the exit of ineligible organizations, the bill replaces standard withdrawal liability with a one-time administrative fee capped at 5% of the potential liability, which funds the administrative costs of removing these entities from the system.

SB 166 is an appropriations bill that allocates funds for the operational expenses of the State Employees' Retirement Board. It appropriates $39,795,000 from the State Employees' Retirement Fund and $5,979,000 from the SERS Defined Contribution Fund. These funds are designated to cover salaries, travel, contractual services, and other costs necessary for the board to manage state employee retirement plans. The appropriations apply to the fiscal year from July 1, 2025, to June 30, 2026, and also cover any unpaid bills from the prior fiscal year.

HB 418 amends Pennsylvania's County Pension Law to replace the traditional pension system with a "County Employees' Defined Contribution Plan" for county workers. It requires county employees to make mandatory payroll deductions into individual retirement accounts, with counties "picking up" these contributions by reducing employee pay (instead of the county paying them directly). The bill establishes separate tracking for employee and employer contributions, mandates employer-defined contributions to employee accounts, and requires all funds to be held in trust for employees' retirement, subject to IRS limits. This change directly affects all county employees participating in the new plan and shifts retirement funding responsibility to individual accounts rather than guaranteed pension benefits.