act-1951-0-491•Pennsylvania Act 1951-491 — PROVIDE FEDERAL OLD-AGE AND SURVIVOR INSURANCE FOR STATE EMPLOYEES
Pennsylvania Act 1951-491 — PROVIDE FEDERAL OLD-AGE AND SURVIVOR INSURANCE FOR STATE EMPLOYEES
act-1951-0-4911951 Pa. Act 491Law
Act text
PROVIDE FEDERAL OLD-AGE AND SURVIVOR INSURANCE FOR STATE EMPLOYEES
Act of Jan. 5, (1952) 1951, P.L. 1833, No. 491 Cl. 65
(Reenacted and amended June 1, 1956, 1955 P.L.1973, No.662)
AN ACT
To provide for the coverage of certain officers and employes of
the Commonwealth and its political subdivisions under the
old-age and survivor insurance provisions of Title II of the
Federal Social Security Act, as amended; creating the State
Agency and conferring powers and imposing duties upon the
State Agency; authorizing the State Agency to enter into
agreements with the Federal Secretary of Health, Education
and Welfare and with political subdivisions or
instrumentalities thereof under certain terms and conditions;
providing for the Commonwealth's contribution under
agreements with the Federal Secretary of Health, Education
and Welfare and for the collection and payment of employer
and employe contributions; authorizing interstate cooperation
in certain cases, creating a Contribution Fund; and making
appropriations.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Declaration of Policy.--In order to extend to
employes, except those hereinafter excluded from the provisions
of the act, of the Commonwealth and its political subdivisions
and of the instrumentalities of either and to the dependents and
survivors of such employes, the basic protection accorded to
others by the old-age and survivors insurance system embodied in
the Social Security Act, it is hereby declared to be the policy
of the General Assembly, subject to the limitations of this act,
that such steps be taken as to provide such protection to
employes of the Commonwealth and its political subdivisions and
to the instrumentalities of either on as broad a basis as is
permitted under the Federal Social Security Act. It is also the
policy of the General Assembly that the protection afforded
employes, in positions covered by a retirement system
established by the Commonwealth or a political subdivision on
the date an agreement under this act is made applicable to
service performed in such positions or receiving periodic
benefits under such retirement system at such time, will not be
impaired as a result of making the agreement so applicable or as
a result of legislative enactment in anticipation thereof.
Section 2. Definitions.--The following words and phrases
shall have the meaning ascribed to them in this section unless
the context clearly indicates otherwise:
(a) "Social Security Act" means the Act of the Congress,
approved the fourteenth day of August, one thousand nine hundred
thirty-five, Chapter 531, 49 Statutes 620, officially cited as
the "Social Security Act" (including regulations and
requirements issued pursuant thereto), as such act has been and
may from time to time be amended,
(b) "Federal Insurance Contributions Act" means subchapter A
of Chapter 9 of the Federal Internal Revenue Code of 1939, and
subchapters A and B of Chapter 21 of the Federal Internal
Revenue Code of 1954; and "employe tax" means the tax imposed by
section 1400 of the Code of 1939 and section 3101 of the Code of
1954, as such codes have been and may, from time to time, be
amended.
(c) "Political subdivision" includes a city, borough,
incorporated town, township, county, county institution
district, school district, vocational school district, municipal
authority, and any instrumentality or agency of the
Commonwealth, or one or more of its political subdivisions or of
the Commonwealth and one or more of its political subdivisions,
but only if such instrumentality or agency is an entity which is
legally separate and distinct from the Commonwealth or political
subdivision, and only if its employes are not by virtue of their
relation to such legal entity employes of the Commonwealth or
political subdivision; except that the limitations upon
instrumentalities or agencies of political subdivisions shall
not apply in the case of joint-county departments of health.
There shall be included in a political subdivision, as defined
herein, any department, agency, board or other means heretofore
or hereafter created for the charge or the administration by the
political subdivision, of property and estates dedicated to
charitable uses or trusts, now or which shall hereafter become
vested in or confided to the political subdivision.
(d) "State Agency" means the agency created under section
three hereof.
(e) "Federal Agency" includes any individual, department or
agency as is charged, on behalf of the Federal Government, by or
is under the applicable Federal law, with the particular Federal
function referred to in this act in connection with such term.
With respect to action taken prior to the eleventh day of April
1953; "Federal Agency" refers to the Federal Security
Administrator.
(f) "Employe" includes an officer or employe of the
Commonwealth and each political subdivision or instrumentality
thereof.
(g) "Employment" means service which, under the Social
Security Act, may be included in an agreement only upon
certification by the Governor, when the Governor in accordance
with section 218 (d) (3) of the Social Security Act issues with
respect thereto a certificate to the Federal Secretary of
Health, Education and Welfare, and any service performed by an
employe of the Commonwealth or any political subdivision or
instrumentality thereof, except (1) service which in the absence
of an agreement entered into under this act would constitute
"employment" as defined in the Social Security Act, or (2)
service which under the applicable Federal Law may not be
included in an agreement between the Commonwealth and the
Federal Agency entered into under this act.
Civilian employes of National Guard Units of the
Commonwealth, who are employed pursuant to section 90 of the
National Defense Act of June 3, 1916, (32 USC, section 42), and
paid from funds allotted to such units by the Department of
Defense, and individuals employed pursuant to an agreement
entered into pursuant to section 205 of the Agricultural
Marketing Act of 1946 (7 USC 1624), or section 14 of the
Perishable Agricultural Commodities Act of 1930 (7 USC 499n),
between the Commonwealth and the United States Department of
Agriculture, to perform services as inspectors of agricultural
products shall be deemed to be employes of the Commonwealth.
(h) "Wages" means all remuneration for employment as defined
herein, including the cash value of all remuneration paid in any
medium other than cash, except that such term shall not include
that part of such remuneration which, even if it were for
"employment" within the meaning of the Federal Insurance
Contributions Act, would not constitute "wages" within the
meaning of that act.
(i) "Applicable Federal Law" refers to the provisions of the
Federal Social Security Act (including Federal regulations and
requirements issued pursuant thereto), as such provisions have
been and may from time to time be amended, which provide for
extending the benefits of Title II of the Social Security Act to
employes of states, political subdivisions and their
instrumentalities.
(j) "State Treasurer" means the treasurer of the
Commonwealth of Pennsylvania.
(k) "Head of the Department," as applied to State employes,
means the head of the department or branch of service not a
department of the Commonwealth of Pennsylvania, of which the
State employe is a member.
(l) "Treasurer or Paying Officer" means the treasurer or
paying officer of the department or branch of service not a
department of the Commonwealth of Pennsylvania, of which the
State employe is a member.
Section 3. State Agency.--A State Agency is hereby created
to carry out the provisions of this act, which shall consist of
the Secretary of Labor and Industry. He shall, with the approval
of the Governor, appoint such additional employes as may be
deemed necessary to carry on the work required by this act, and
fix the salary or compensation of such additional employes.
Section 4. (a) Federal-State Agreement.--The State Agency,
with the approval of the Governor, is hereby authorized to enter
on behalf of the Commonwealth into an agreement with the Federal
Secretary of Health, Education and Welfare, consistent with the
terms and provisions of this act, for the purpose of extending
the benefits of the Federal old-age and survivors insurance
system to employes of the Commonwealth or any political
subdivision or instrumentality thereof, with respect to services
specified in such agreement which constitute "employment" as
defined in section two of this act. Such agreement may contain
such provisions relating to coverage, benefits, contributions,
effective date, modification and termination of the agreement,
administration, and other appropriate provisions, as the State
Agency and Federal Secretary of Health, Education and Welfare
shall agree upon, but, except as may be otherwise required by or
under the Social Security Act as to the service to be covered,
such agreement shall provide in effect that--
(1) Benefits will be provided for employes whose services
are covered by the agreement and their dependents and survivors
on the same basis as though such services constituted employment
within the meaning of Title II of the Social Security Act;
(2) The Commonwealth will pay to the Federal Agency, at such
time or times as prescribed by the applicable Federal law and by
regulations promulgated thereunder, contributions with respect
to wages (as defined in section two of this act), not in excess
of the sum of taxes on employes and taxes on employers
prescribed under the provisions of the Federal Insurance
Contributions Act. The actual amount of the contributions to be
made under the provisions of this clause shall be the amount
necessary to carry out the provisions of this act and the
agreement entered into in accordance therewith, which amounts
shall, from time to time, be determined by the State Agency,
subject to the limitations herein prescribed. ((2) amended July
8, 1957, P.L.550, No.305)
(3) Such agreement shall be effective with respect to
services, in employment covered by the agreement, performed on
and after the first day of January, one thousand nine hundred
fifty-one, or such later date as may be specified in the
agreement, and modifications may be made effective subject to
the limitations imposed by Federal law;
(4) All services which constitute employment, as defined in
section two, and are performed in the employ of the Commonwealth
by employes of the Commonwealth, shall be covered by the
agreement, except that it may exclude services which are
optionally excludable under the Federal Social Security Act;
(5) All services which constitute employment, as defined in
section two, and are performed in the employ of a political
subdivision or instrumentality thereof, and are covered by a
plan which is in conformity with the terms of the agreement and
has been approved by the State Agency under section six, shall
be covered by the agreement;
(6) As modified, the agreement may include all services
described in clause (4) or clause (5) of this subsection and
performed by individuals to whom section 218 (c) (3) (C) of the
Social Security Act is applicable, and shall provide that the
service of the individual shall continue to be covered by the
agreement in case he thereafter becomes eligible to be a member
of a retirement system; and
(7) As modified, the agreement shall include all services
described in clause (4) or clause (5) of this subsection and
performed by individuals in positions covered by a retirement
system with respect to which the Governor has issued a
certificate to the Federal Secretary of Health, Education and
Welfare, pursuant to section 6.1 of this act.
(b) Interstate Instrumentalities.--Any instrumentality
jointly created by this Commonwealth and any other state or
states is hereby authorized, upon the granting or existence of
like authority by such other state or states, (1) to enter into
an agreement with the Federal Secretary of Health, Education and
Welfare whereby the benefits of the Federal old-age and
survivors insurance system shall be extended to employes of such
instrumentality, (2) to require its employes to pay, and for
that purpose to deduct from their wages, contributions equal to
the amounts which they would be required to pay under section
five (a) if they were covered by an agreement made pursuant to
subsection (a) of this section, and (3) to make payments to the
Federal agency in accordance with such agreement, including
payments from its own funds and otherwise, to comply with such
agreements.
Section 5. Contributions by State Employes.--(a) Every
employe of the Commonwealth, whose services are covered by an
agreement entered into under section four, shall be required to
pay for the period of such coverage, into the Contribution Fund
established by section seven, or other restricted receipt
account established for such purpose, contributions, with
respect to wages (as defined in section two of this act), not in
excess of the amounts prescribed under the provisions of the
Federal Insurance Contribution Act. The actual amount of the
contributions to be made under the provisions of this paragraph
shall be the amount necessary to carry out the provisions of
this act and the agreement entered into in accordance therewith,
which amounts shall, from time to time, be determined by the
State Agency, subject to the limitations herein prescribed; each
liability shall arise in consideration of the employes retention
in the service of the Commonwealth, or his entry upon such
service after the enactment of this act.
(b) The head of each department shall cause to be deducted
on each and every pay-roll of an employe, for each and every
pay-roll period subsequent to the effective date of an agreement
entered into under this act, such percentum of the total amount
of wages earnable by the employe in such pay-roll period
required to satisfy the contribution imposed by clause (a) of
this section, and shall certify to the Treasurer of the
Commonwealth on account of each and every pay-roll of an employe
a statement as voucher for the amounts to be deducted, but
failure to make such deductions shall not relieve the employe
from the liability for such contribution.
(b.1) The State Treasurer, on receipt from the heads of the
departments of the vouchers for deductions from the wages of
employes provided for in clause (b) of this section, shall make
such deductions and shall pay each of the amounts so deducted
into the contribution fund established by section 7 of this act
or such restricted receipt account as may be established for
this purpose.
(b.2) The Treasurer or paying officer, on receipt from the
heads of the departments of the vouchers for deductions from the
wages of employes provided for in clause (b) of this section,
shall make such deductions and shall pay each of the amounts so
deducted into the contribution fund established by section 7 of
this act or such restricted receipt account as may be
established for this purpose.
(c) If more or less than the correct amount of the
contribution imposed by this section is paid or deducted with
respect to any remuneration, proper adjustments or refund, if
adjustment is impracticable, shall be made without interest in
such manner and at such times as the State Agency shall
prescribe.
(5 amended Dec. 15, 1986, P.L.1615, No.182)
Section 6. Plans for Coverage of Employes of Political
Subdivisions.--(a) Each political subdivision or
instrumentality thereof of the Commonwealth is hereby authorized
to submit for approval by the State Agency a plan for extending
the benefits of Title II of the Social Security Act, in
conformity with applicable provisions of such act, to employes
of such political subdivision. Each such plan and any amendment
thereof shall be approved by the State Agency if it finds that
such plan, or such plan as amended, is in conformity with such
requirements as are provided in regulations of the State Agency,
except that no such plan shall be approved unless--
(1) it is in conformity with the requirements of the Social
Security Act and with the agreement entered into under section
four;
(2) it provides that all services which constitute
employment, as defined in section two, and are performed in the
employ of the political subdivision or instrumentality thereof
by employes thereof, shall be covered by the plan, except that
it may exclude services rendered by individuals to whom section
218(c)(3) and (5) of the Social Security Act is applicable;
(3) it specifies the source or sources from which the funds
necessary to make the payments required by clause (1) of
subsection (c) and by subsection (d) of this section are
expected to be derived, and contains reasonable assurance that
such sources will be adequate for such purpose;
(4) it provides for such methods of administration of the
plan by the political subdivision or instrumentality thereof as
are found by the State Agency to be necessary for the proper and
efficient administration of the plan;
(5) it provides that the political subdivision or
instrumentality thereof will make such reports, in such form and
containing such information as the State Agency may from time to
time require, and comply with such provisions as the State
Agency or the Federal Agency may from time to time find
necessary to assure the correctness and verification of such
reports; and,
(6) it authorizes the State Agency to terminate the plan in
its entirety, in the discretion of the State Agency, if it finds
that there has been a failure to comply substantially with any
provision contained in such plan, such termination to take
effect at the expiration of such notice and on such conditions
as may be provided by regulations of the State Agency and may be
consistent with the provisions of the Social Security Act.
(b) The State Agency shall not finally refuse to approve a
plan submitted by a political subdivision or instrumentality
thereof under subsection (a), and shall not terminate an
approved plan, without reasonable notice and opportunity for
hearing to the political subdivision or instrumentality thereof
affected thereby.
(c) (1) Each political subdivision or instrumentality
thereof as to which a plan has been approved under this section
shall pay the established social security percentage at the
prescribed time or times to the designated agent as required by
the Federal Government.
(2) Each political subdivision or instrumentality thereof
required to make payments under clause (1) of this subsection is
authorized, in consideration of the employe's retention in or
entry upon employment after enactment of this act, to impose
upon each of its employes, as to services which are covered by
an approved plan, a contribution with respect to his wages (as
defined in section two of this act), not exceeding the amount of
contributions by Commonwealth employes, as provided in
subsection (a) of section five of this act, and to deduct the
amount of such contribution from his wages as and when paid.
Contributions so collected shall be paid as designated by the
Federal Government.
((c) amended Dec. 15, 1986, P.L.1615, No.182)
(d) Delinquent payments due under clause (1) of subsection
(c) may, with interest at the rate of six (6) per centum per
annum, be recovered, by action in a court of competent
jurisdiction, against the political subdivision or
instrumentality thereof liable therefor, or may, at the request
of the State Agency, be deducted from any other moneys payable
to such political subdivision or instrumentality thereof by any
department or agency of the Commonwealth.
Section 6.1. Referenda and Certification.--(a) With respect
to employes of the Commonwealth and employes of
instrumentalities thereof who are members of the State employes
retirement system, other than those who have elected membership
in the division of the retirement system established for those
members, who have filed with the retirement board a written
statement that they do not elect Social Security coverage under
any agreement with the Federal Secretary of Health, Education
and Welfare entered into by the Commonwealth, or who have not
filed any statement with the retirement board, the Governor is
empowered to authorize a referendum. With respect to employes of
any political subdivision other than an instrumentality of the
Commonwealth whose employes are members of the State employes
retirement system or a school district or vocational school
district or joint school system, he shall authorize a referendum
upon request of the governing body of the subdivision. With
respect to the employes of school district or vocational school
districts or joint school systems of the Commonwealth, the
Governor shall authorize a referendum for the eligible
membership of the public school employes retirement system,
other than those who have elected membership in the division of
the retirement system established for those members, who have
filed with the retirement board a written statement that they do
not elect Social Security coverage under any agreement with the
Federal Secretary of Health, Education and Welfare entered into
by the Commonwealth or who have not filed any statement with the
retirement board, unless within sixty days of the issuance of
official information concerning this act, including the
liabilities to which any will be subject by the State agency,
the governing bodies of at least forty per centum (40%) of the
total number of school districts and vocational school districts
shall notify the State agency, on a form to be supplied by it,
that they do not desire a referendum to be held. Any referendum
shall be conducted and the Governor shall designate an agency or
individual to supervise its conduct in accordance with the
requirements of section 218 (d) (3) of the Social Security Act,
on the question of whether service in positions covered by a
retirement system established by the Commonwealth or by a
political subdivision or instrumentality thereof should be
excluded from, or included under, an agreement under this act.
Information shall be given to all the members of the retirement
system and shall contain a statement in form and detail as the
agency or individual designated to supervise the referendum
shall deem necessary to inform the members of the retirement
system of the rights which will accrue to them and their
dependents and survivors, and the liabilities to which they will
be subject if their services are included under an agreement
under this act and of the changes, if any, proposed to be made
in the provisions of their pension or retirement system at the
time the agreement is entered into. The information shall be
sufficient to illustrate to the member of the retirement system
the total combined costs and benefits which will accrue from
social security and the pension or retirement system or the
proposed modifications thereof.
(b) Upon receiving evidence satisfactory to him that with
respect to any referendum the conditions set forth in section
218 (d) (3) of the Social Security Act have been met, the
Governor shall so certify to the Federal Secretary of Health,
Education and Welfare.
(c) Immediately after a favorable referendum of the eligible
members of the public school employes retirement association,
the services of all such employes of all school districts,
vocational school districts and joint schools shall be included
under the agreement with the Secretary of Health, Education and
Welfare for the extension of old age and survivor's insurance
protection as provided in the Federal Social Security Act. There
shall likewise be included under such agreement the services of
all other such employes in departments of the Commonwealth, who
perform services in positions which are eligible for coverage
under the public school employes retirement laws as well as any
such eligible members of the public school retirement
association not otherwise included by this subsection.
(6.1 amended July 8, 1957, P.L.550, No.305)
Section 6.2. Modification of Retirement Systems in Political
Subdivisions.--Where services covered by a retirement system
established by a political subdivision are included under an
agreement under this act and where any laws providing for
administration of retirement systems in that class of
subdivision do not specifically provide for such cases, the
governing body of such subdivision may reduce the basis upon
which retirement allowances paid by such retirement system are
computed to a proportionate basis which is adjusted for social
security benefits. Any such reduction shall apply only to
benefits payable after the age at which Federal Social Security
benefits are payable and to that portion of such benefits based
on wages (as defined in section 2 of this act): Provided, That
the total sum to be received monthly from social security and
the retirement system following retirement by an employe who is
a member of the system at the time of such change shall not be
less than the allowance that would be paid by the retirement
system in the absence of such agreement. Where the employe
contributions are actuarially determined as amounts sufficient
to provide a specified portion of the benefits such employe
contributions may be correspondingly reduced. The provisions of
this section shall not be deemed to restrict any city of the
first class in modifying any pension and retirement system
covering any officers or employes of such city.
(6.2 amended Sept. 16, 1961, P.L.1364, No.607)
Section 6.3. Limitation on Retirement Benefits; Political
Subdivisions.--(6.3 deleted Sept. 16, 1961, P.L.1364, No.607)
Section 7. Contribution Fund.--(a) There is hereby created
as a special fund in the State Treasury, the Contribution Fund.
Such fund shall consist of and there shall be deposited in such
fund: (1) all contributions, interest and penalties collected
under sections five and six; (2) all moneys appropriated thereto
under this act; (3) any property or securities and earnings
thereof acquired through the use of moneys belonging to the
fund; (4) interest earned upon any moneys in the fund; and (5)
all sums recovered upon the bond of the custodian or otherwise
for losses sustained by the fund and all other moneys received
for the fund from any other source. All moneys in the fund shall
be mingled and undivided. Subject to the provisions of this act,
the State Agency is vested with full power, authority and
jurisdiction over the fund, including all moneys and property or
securities belonging thereto, and may perform any and all acts,
whether or not specifically designated, which are necessary to
the administration thereof and are consistent with the
provisions of this act.
(b) The Contribution Fund shall be established and held
separate and apart from any other funds or moneys of the
Commonwealth, and shall be used and administered exclusively for
the purpose of this act. Withdrawals from such fund shall be
made for and solely for payment of amounts required to be paid
to the Federal Agency pursuant to an agreement entered into
under section four, payment of refunds provided for in section
five (c) of this act, and refunds of overpayments, not otherwise
adjustable, made by a political subdivision. Withdrawals may
also be made for the payment to school entities of the
Commonwealth's portion of the employer's liability for covered
employes. ((b) amended Dec. 15, 1986, P.L.1615, No.182)
(c) From the Contribution Fund the State Treasurer, upon
warrant of the State Agency, shall pay to the Federal Agency
such amounts and at such time or times as may be directed by the
State Agency, in accordance with any agreement entered into
under section four and the Social Security Act. The State
Treasurer is also authorized to make payments to school entities
from the Contribution Fund on warrant of the Department of
Education for the Commonwealth's portion of the employer's
liability for covered employes. The State Treasurer shall make
prompt payment to school entities of the Commonwealth's portion
of the employer's liability for covered employes to insure that
school entities are not required to advance their own funds to
cover the Commonwealth's portion of the employer's liability
when the school entities make their payments to the Federal
Government. ((c) amended Dec. 15, 1986, P.L.1615, No.182)
(d) (1) There are hereby authorized to be appropriated
biennially to the Contribution Fund, in addition to the
contributions collected and paid into the Contribution Fund
under sections five and six, to be available for the purposes of
section seven (b) and (c) until expended, such additional sums
as are found to be necessary in order to make the payments to
the Federal Agency which the Commonwealth is obligated to make
pursuant to an agreement entered into under section four.
(2) The State Agency shall submit to each regular session of
the General Assembly, at least ninety (90) days in advance of
the beginning of such session, an estimate of the amounts
authorized to be appropriated to the Contribution Fund by clause
(1) of this subsection for the next fiscal biennium.
Section 8. Rules and Regulations.--The State Agency is
hereby authorized and empowered to make such rules and
regulations, not inconsistent with the provisions of this act,
as it finds necessary or appropriate to the efficient
administration of the functions with which it is charged under
this act.
Section 9. Studies and Reports.--The State Agency shall make
studies concerning the problem of old-age and survivors
insurance protection for employes of the Commonwealth and local
governments and their instrumentalities, and concerning the
operation of agreements made and plans approved under this act,
and shall submit a report to the General Assembly, at the
beginning of each regular session, covering the administration
and operation of this act during the preceding biennium,
including such recommendations for amendments to this act as the
State Agency considers proper.
Section 10. Administrative Appropriation.--(10 deleted June
1, 1956, 1955 P.L.1973, No.662)
Section 11. The sum of one hundred thousand dollars
($100,000) is hereby appropriated to the State Agency to be paid
into the Contribution Fund.
Section 11.1. The sum of one hundred twenty-five thousand
dollars ($125,000), or as much thereof as may be necessary, is
hereby appropriated to the State Agency to be used for the
payment of all costs and expenses incurred in conducting the
referenda authorized by this act.
Section 12. Repeal.--All acts and parts of acts are hereby
repealed insofar as they are inconsistent with the provisions of
this act.
Section 13. Effective Date.--The provisions of this act
shall become effective immediately upon final enactment.
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