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.

PRINTER'S NO. 1715
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1327
Session of
2026
INTRODUCED BY BARTOLOTTA, KEEFER, J. WARD, ROTHMAN, MILLER AND
VOGEL, MAY 7, 2026
REFERRED TO EDUCATION, MAY 7, 2026
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.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definition of "governmental entity" in
section 8102 of Title 24 of the Pennsylvania Consolidated
Statutes is amended to read:
§ 8102. Definitions.
The following words and phrases when used in this part shall
have, unless the context clearly indicates otherwise, the
meanings given to them in this section:
* * *
"Governmental entity." Board of school directors, board of
public education, intermediate unit board of directors, area
vocational-technical board, any governing board of any agency or
authority created by them, and the Commonwealth. The term does
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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.
* * *
Section 2. Section 8301(b) of Title 24 is amended and the
section is amended by adding a subsection to read:
§ 8301. Mandatory and optional membership in the system and
participation in the plan.
* * *
(b) Prohibited membership.--
(1) The school employees categorized in subsection (a)
(1) and (2) shall not have the right to elect membership in
the system and shall not be eligible to participate in the
plan.
(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.
* * *
(e) Administrative removal fee.--
(1) An entity determined to be ineligible for membership
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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.
(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.
(3) The board may promulgate regulations necessary to
implement this subsection, including procedures for notice,
collection, interest on late payment and appeals.
Section 3. This act shall take effect in 60 days.
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