SB 1327 — An Act amending Title 24 (Education) of the Pennsylvania Consolidated Statutes, in preliminary provisions relating to retirement for school employees, further providing for definitions; and, in membership, contributions and benefits, further providing for mandatory and optional membership in the system and participation in the plan.

Summary

Clarifying PSERS Eligibility and Removing Ineligible Entities

Bill Text

• Printer's No. 1715 View text Current

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This bill amends the definitions related to governmental entities and modifies membership participation rules for school employees in Pennsylvania's retirement system.

• 24 Pa.C.S. § 8102

  The term does not include an association, nonprofit corporation or other entity that does not perform a governmental function, including an association specified under section 516 of the Public School Code.

  The definition of 'governmental entity' is clarified by explicitly excluding certain associations and nonprofit corporations.

• 24 Pa.C.S. § 8301(b)

  (2) An entity other than a governmental entity shall be ineligible for membership in the system and an employee of the entity shall be ineligible to participate in the system, except that an active participant employed by the entity on the effective date of this paragraph shall remain an active participant until the active participant's employment with the entity ends. An employee hired by the entity after the effective date of this paragraph shall be ineligible to participate in the system. No later than 30 days after the effective date of this paragraph, the board shall identify and remove an ineligible entity and associated employees from the system.

  A new provision states that non-governmental entities and their employees are ineligible for retirement system membership.

• 24 Pa.C.S. § 8301(e)

  (1) An entity determined to be ineligible for membership under subsection (b)(2) and removed from the system shall not be considered a nonparticipating employer under section 8327.1 (relating to nonparticipating employer withdrawal liability). In lieu of withdrawal liability under section 8327.1, the board shall impose a one-time administrative removal fee on an entity determined to be ineligible for membership under subsection (b)(2) and removed from the system. The administrative removal fee shall not exceed 5% of the amount that would have been the entity's withdrawal liability under section 8327.1(c), determined as of the date of the last actuarial valuation adopted by the board.

  An administrative removal fee is established for entities ineligible for membership instead of applying withdrawal liability.

• 24 Pa.C.S. § 8301(e)

  (2) Within 45 days after the board determines that an entity is ineligible under subsection (b)(2), the board shall provide the entity with written notice of the administrative removal fee, including the basis of calculation and payment terms. The administrative removal fee shall be due within 90 days after the date of the notice and shall be deposited into the State accumulation account to defray costs related to identifying and removing ineligible entities under subsection (b)(2) and associated administrative functions.

  The process for notifying ineligible entities of the removal fee and collecting it is formalized.

Action History

1. May 07, 2026

   Referred to EDUCATION, May 7, 2026

Sponsors

• Dawn W. Keefer · Cosponsor
• Greg Rothman · Cosponsor
• Nick Miller · Cosponsor
• Doug Mastriano · Cosponsor
• Camera Bartolotta · Primary
• Elder A. Vogel · Cosponsor
• Judy Ward · Cosponsor

Subjects