Act 44 Amendments Regarding Municipal Pension Plan Management
December 18, 2014 12:22 PM to All House Members
Circulated By
Representative Tim Briggs
D House District 149
Memo
In the near future, I intend to re-introduce legislation which would amend Act 44, dealing with municipal pension plan management (HB 1323 of last session).
Currently, Act 44 requires a Request for Proposal (RFP) if a municipality intends to change any professional advisors, if those advisors would be paid from plan assets. This measure was put in place to protect plan assets but it has had the unintended effect of locking small municipal pension plans into their existing professional advisors, even if they are unhappy with their advice or service.
In order to assist with compliance to Act 44 municipalities are hiring outside legal services to navigate the RFP process. Since the fees for these services cannot be paid out of plan assets, municipalities are unable to find the money in their general fund budgets complete the RFP process as required by Act 44. The end result is that no small municipalities are able to change advisors.
My legislation would fix this unintended consequence by limiting the professional services contracting requirements of Act 44 to municipal pension systems with 100 or more active members. This would exempt those municipalities that can least afford additional payments outside of plan assets and allow pension plans to find the professional advisor who works best for them.
Previous Co-Sponsors: KORTZ and SWANGER
Currently, Act 44 requires a Request for Proposal (RFP) if a municipality intends to change any professional advisors, if those advisors would be paid from plan assets. This measure was put in place to protect plan assets but it has had the unintended effect of locking small municipal pension plans into their existing professional advisors, even if they are unhappy with their advice or service.
In order to assist with compliance to Act 44 municipalities are hiring outside legal services to navigate the RFP process. Since the fees for these services cannot be paid out of plan assets, municipalities are unable to find the money in their general fund budgets complete the RFP process as required by Act 44. The end result is that no small municipalities are able to change advisors.
My legislation would fix this unintended consequence by limiting the professional services contracting requirements of Act 44 to municipal pension systems with 100 or more active members. This would exempt those municipalities that can least afford additional payments outside of plan assets and allow pension plans to find the professional advisor who works best for them.
Previous Co-Sponsors: KORTZ and SWANGER
Legislation
Document - Introduced as HB 414
Act 44 Amendments Regarding Municipal Pension Plan Management
December 18, 2014 12:22 PM to All House Members
Circulated By
BRIGGS
Memo
In the near future, I intend to re-introduce legislation which would amend Act 44, dealing with municipal pension plan management (HB 1323 of last session).
Currently, Act 44 requires a Request for Proposal (RFP) if a municipality intends to change any professional advisors, if those advisors would be paid from plan assets. This measure was put in place to protect plan assets but it has had the unintended effect of locking small municipal pension plans into their existing professional advisors, even if they are unhappy with their advice or service.
In order to assist with compliance to Act 44 municipalities are hiring outside legal services to navigate the RFP process. Since the fees for these services cannot be paid out of plan assets, municipalities are unable to find the money in their general fund budgets complete the RFP process as required by Act 44. The end result is that no small municipalities are able to change advisors.
My legislation would fix this unintended consequence by limiting the professional services contracting requirements of Act 44 to municipal pension systems with 100 or more active members. This would exempt those municipalities that can least afford additional payments outside of plan assets and allow pension plans to find the professional advisor who works best for them.
Previous Co-Sponsors: KORTZ and SWANGER
Currently, Act 44 requires a Request for Proposal (RFP) if a municipality intends to change any professional advisors, if those advisors would be paid from plan assets. This measure was put in place to protect plan assets but it has had the unintended effect of locking small municipal pension plans into their existing professional advisors, even if they are unhappy with their advice or service.
In order to assist with compliance to Act 44 municipalities are hiring outside legal services to navigate the RFP process. Since the fees for these services cannot be paid out of plan assets, municipalities are unable to find the money in their general fund budgets complete the RFP process as required by Act 44. The end result is that no small municipalities are able to change advisors.
My legislation would fix this unintended consequence by limiting the professional services contracting requirements of Act 44 to municipal pension systems with 100 or more active members. This would exempt those municipalities that can least afford additional payments outside of plan assets and allow pension plans to find the professional advisor who works best for them.
Previous Co-Sponsors: KORTZ and SWANGER
Document
Introduced as HB 414
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