2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 71 - STATE GOVERNMENT › Chapter 59 - Administration, Funds, Accounts, General Provisions › Section 5953 - Taxation, attachment and assignment of funds

§ 5953. Taxation, attachment and assignment of funds.
(a) General rule.--
(1) Except as provided in paragraphs (2), (3) and (4), the right of a person to any benefit or right accrued or accruing under the provisions of this part and the moneys in the fund and the trust are hereby exempt from any State or municipal tax, levy and sale, garnishment, attachment, spouse's election, the provisions of Article XIII.1 of the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal Code, or any other process whatsoever, and no participant or beneficiary, successor payee or alternate payee of a participant shall have the ability to commute, sell, assign, alienate, anticipate, mortgage, pledge, hypothecate, commutate or otherwise transfer or convey any benefit or interest in an individual investment account or rights to receive or direct distributions under this part or under agreements entered into under this part except as provided in this part, and in the case of either a member or a participant except for a set-off by the Commonwealth in the case provided in this paragraph, and shall be unassignable except to the Commonwealth in the case of a member or participant who is terminating State service and has been determined to be obligated to the Commonwealth for the repayment of money owed on account of his employment.
(2) (i) Rights under this part shall be subject to forfeiture as provided by the act of July 8, 1978 (P.L.752, No.140), known as the Public Employee Pension Forfeiture Act, and by or pursuant to section 16(b) of Article V of the Constitution of Pennsylvania. Forfeitures under this subsection or under any other provision of law may not be applied to increase the benefits that any member would otherwise receive under this part.
(ii) In accordance with section 16(b) of Article V of the Constitution of Pennsylvania and notwithstanding this paragraph, the Public Employee Pension Forfeiture Act, or 42 Pa.C.S. § 3352 (relating to pension rights), the accumulated mandatory participant contributions and accumulated voluntary contributions standing to the credit of a participant shall not be forfeited but shall be available for payment of fines and restitution as provided by law. In accordance with section 16(b) of Article V of the Constitution of Pennsylvania, amounts in the trust that have been ordered to be distributed to an alternate payee as the result of an equitable distribution of marital property as part of an approved domestic relations order entered before the date of the order or action in a court or other tribunal resulting in a forfeiture of a participant's interest in the trust shall not be subject to the provisions of the Public Employee Pension Forfeiture Act or 42 Pa.C.S. § 3352. Any accumulated employer defined contributions forfeited as a result of this paragraph or other law shall be retained by the board and notwithstanding sections 5812(2) (relating to powers and duties of board), 5815 (relating to expenses) and 5902(c) (relating to administrative duties of the board) used for the payment of administrative fees, costs and expenses of the plan.
(3) Rights under this part shall be subject to attachment in favor of an alternate payee as set forth in an approved domestic relations order.
(4) Effective with distributions made on or after January 1, 1993, and notwithstanding any other provision of this part to the contrary, a distributee may elect, at the time and in the manner prescribed by the board, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan by way of a direct rollover. For purposes of this paragraph, a "distributee" includes a member, a participant, a member's surviving spouse, a participant's surviving spouse, a member's former spouse who is an alternate payee under an approved domestic relations order, a participant's former spouse who is an alternate payee under an approved domestic relations order and anyone else authorized under the IRC and the plan terms approved by the board to have an eligible rollover distribution paid directly to an eligible retirement plan by way of a direct rollover. For purposes of this paragraph, the term "eligible rollover distribution" has the meaning given such term by IRC § 402(f)(2)(A), and "eligible retirement plan" has the meaning given such term by IRC § 402(c)(8)(B), except that a qualified trust shall be considered an eligible retirement plan only if it accepts the distributee's eligible rollover distribution; however, in the case of an eligible rollover distribution to a surviving spouse, an eligible retirement plan is an "individual retirement account" or an "individual retirement annuity" as those terms are defined in IRC § 408(a) and (b).
(b) Authorized payments from fund and trust.--
(1) The board shall be authorized to pay from the fund and the trust in the case of a member or participant who is terminating service, the amount determined after certification by the head of the department that the member or participant is so obligated, and after review and approval by the department or agency's legal representative or upon receipt of an assignment from the member or participant in the amount so certified, except that no payment shall be made from the individual investment account of a participant until the participant otherwise applies for and receives a distribution and shall not exceed the amount of the distribution.
(2) In the case of a participant whose former spouse is an alternate payee of an equitable distribution of marital assets under an approved domestic relations order, a lump sum of the alternate payee's interest in the participant's vested accumulated total defined contributions. This paragraph shall apply without regard to whether the participant has not terminated, is terminating or has terminated State service.
(Oct. 7, 1975, P.L.348, No.101, eff. imd.; Oct. 5, 1980, P.L.693, No.142, eff. 60 days; Apr. 29, 1994, P.L.159, No.29; Dec. 20, 1995, P.L.689, No.77, eff. imd.; Dec. 28, 2015, P.L.529, No.93, eff. imd.; June 12, 2017, P.L.11, No.5, eff. imd.; Oct. 29, 2020, P.L.775, No.94, eff. imd.)
2020 Amendment.
Act 94 amended subsec. (a)(2)(ii). See section 4 of Act 94 in the appendix to this title for special provisions relating to applicability.
2017 Amendment.
See section 408 of Act 5 in the appendix to this title for special provisions relating to restoration of service credit or retirement benefits.
1995 Amendment.
Act 77 amended subsec. (a), retroactive as to subsec. (a)(2) to the effective date of the act of July 8, 1978 (P.L.752, No.140), known as the Public Employee Pension Forfeiture Act.
1994 Amendment.
Act 29 amended the entire section, effective immediately and retroactive to July 1, 1993, as to subsec. (a)(4) and 60 days as to the remainder of the section. See section 15 of Act 29 in the appendix to this title for special provisions relating to Public Employee Forfeiture Act unaffected.
Cross References.
Section 5953 is referred to in sections 5809, 5812, 5815, 5902 of this title; section 8124 of Title 42 (Judiciary and Judicial Procedure).