House Bill 414: At A Glance

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All classes of municipal employers with a uniformed union (UU) pension plan (including Philadelphia) shall implement the below Task Force recommendations. For current and future UU pension plans, all municipal employers:

Shall use an assumed actuarial rate of return not to exceed PMRS rate + 1 within 10 years (except current and future PMRS member plans which shall maintain exact PMRS rate).

Shall pay full annual MMO or lose Act 205 funding.

Shall limit total compensation so as not to exceed 110% of base salary annually (ie; 10% cap on overtime).

Shall calculate final average salary on the average monthly compensation for the 60 months preceding retirement.

Shall not use state aid for administrative fees.

Shall not authorize DROPs.

Shall adopt GASB No. 68.

Shall publicly disclose pension data bi-annually.

Shall not be permitted to enhance or diminish pension plans including through collective bargaining or arbitration.

TIER 1:
Municipal employers with a UU pension plan funded at 90% and higher:
  • Shall implement above noted Task Force recommendations;
  • May maintain current pension plan structure for all employees; current and future;
  • May, for future employees, choose either:
    1. Cash Balance Defined Benefit (using HB 316 language), or
    2. Defined Contribution Benefit (using SB 755 language).

TIER 2:
Municipal employers with a UU pension plan funded between 50.1% to 89.9%:
  • Shall implement above noted Task Force recommendations;
  • Shall choose one of two pension plan structures for future employees, either:
    1. Cash Balance Defined Benefit (using HB 316 language), or
    2. Defined Contribution Benefit (using SB 755 language).

TIER 3:
Municipal employers with a UU pension funded at 50% and below:
  • Shall implement above noted Task Force recommendations;
  • Shall shift current and future plans under PMRS. Current employees maintain existing plans, under PMRS management, while future hires receive PMRS-designed and managed Cash Balance Defined Benefit plan.