PRINTER'S NO. 936
No. 842 Session of 2001
INTRODUCED BY STETLER, NICKOL, B. SMITH, R. MILLER, BEBKO-JONES,
BELARDI, BISHOP, CAPPELLI, COSTA, CRUZ, CURRY, FREEMAN,
GEIST, GEORGE, GRUCELA, HARHAI, HERMAN, HERSHEY, HORSEY,
JOSEPHS, LAUGHLIN, LEDERER, MANDERINO, McCALL, McILHATTAN,
NAILOR, PRESTON, READSHAW, SAINATO, SATHER, SAYLOR, STABACK,
STEELMAN, SURRA, TANGRETTI, E. Z. TAYLOR, THOMAS, TRELLO,
VANCE, WANSACZ, C. WILLIAMS, YOUNGBLOOD AND YUDICHAK,
MARCH 6, 2001
REFERRED TO COMMITTEE ON EDUCATION, MARCH 6, 2001
AN ACT
1 Amending Title 24 (Education) of the Pennsylvania Consolidated
2 Statutes, further providing for termination of annuities.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Section 8346 of Title 24 of the Pennsylvania
6 Consolidated Statutes is amended to read:
7 § 8346. Termination of annuities.
8 (a) General rule.--If an annuitant returns to school service
9 or enters State service and elects multiple service membership,
10 any annuity payable to him under this part shall cease and in
11 the case of an annuity other than a disability annuity the
12 present value of such annuity, adjusted for full coverage in the
13 case of a joint coverage member who makes the appropriate back
14 contributions for full coverage, shall be frozen as of the date
15 such annuity ceases. An annuitant who is credited with an
1 additional 10% of membership service as provided in section
2 8302(b.2) (relating to credited school service) and who returns
3 to school service, except as provided in subsection (b), shall
4 forfeit such credited service and shall have his frozen present
5 value adjusted as if his 10% retirement incentive had not been
6 applied to his account. In the event that the cost-of-living
7 increase enacted December 18, 1979, occurred during the period
8 of such State or school employment, the frozen present value
9 shall be increased, on or after the member attains
10 superannuation age, by the percent applicable had he not
11 returned to service.
12 (b) Return to school service during emergency.--When, in the
13 judgment of the employer, an emergency creates an increase in
14 the work load such that there is serious impairment of service
15 to the public or in the event of a shortage of appropriate
16 subject certified teachers, an annuitant may be returned to
17 school service for a period not to exceed [95] 120 full-day
18 sessions in any school year without loss of his annuity. In
19 computing the number of days an annuitant has returned to school
20 service, any amount of time less than one-half of a day shall be
21 counted as one-half of a day.
22 (c) Subsequent discontinuance of service.--Upon subsequent
23 discontinuance of service, such member other than a former
24 annuitant who had the effect of his frozen present value
25 eliminated in accordance with subsection (d) or a former
26 disability annuitant shall be entitled to an annuity which is
27 actuarially equivalent to the sum of the present value as
28 determined under subsection (a) and the present value of a
29 maximum single life annuity based on years of service credited
30 subsequent to reentry in the system and his final average salary
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1 computed by reference to his compensation during his entire
2 period of school and State service.
3 (d) Elimination of the effect of frozen present value.--
4 (1) An annuitant who returns to school service and earns
5 three eligibility points by performing credited school
6 service following the most recent period of receipt of an
7 annuity under this part, or an annuitant who enters State
8 service and:
9 (i) is a multiple service member; or
10 (ii) who elects multiple service membership, and
11 earns three eligibility points by performing credited State
12 service or credited school service following the most recent
13 period of receipt of an annuity under this part, and who had
14 the present value of his annuity frozen in accordance with
15 subsection (a), shall qualify to have the effect of the
16 frozen present value resulting from all previous periods of
17 retirement eliminated, provided that all payments under
18 Option 4 and annuity payments payable during previous periods
19 of retirement plus interest as set forth in paragraph (3)
20 shall be returned to the fund in the form of an actuarial
21 adjustment to his subsequent benefits or in such form as the
22 board may otherwise direct.
23 (2) Upon subsequent discontinuance of service and the
24 filing of an application for an annuity, a former annuitant
25 who qualifies to have the effect of a frozen present value
26 eliminated under this subsection shall be entitled to receive
27 the higher of either:
28 (i) an annuity (prior to optional modification)
29 calculated as if the freezing of the former annuitant's
30 account pursuant to subsection (a) had not occurred,
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1 adjusted according to paragraph (3), provided that a
2 former annuitant of the system or a former annuitant of
3 the State Employees' Retirement System who retired under
4 a provision of law granting additional service credit if
5 termination of school or State service or retirement
6 occurred during a specific period of time shall not be
7 permitted to retain the additional service credit under
8 the prior law when the annuity is computed for his most
9 recent retirement; or
10 (ii) an annuity (prior to optional modification)
11 calculated as if the former annuitant did not qualify to
12 have the effect on the frozen present value eliminated,
13 unless the former annuitant notifies the board in writing by
14 the later of the date the application for annuity is filed or
15 the effective date of retirement that the former annuitant
16 wishes to receive the lower annuity.
17 (3) In addition to any other adjustment to the present
18 value of the maximum single life annuity that a member may be
19 entitled to receive that occurs as a result of any other
20 provision of law, the present value of the maximum single
21 life annuity shall be reduced by all amounts paid or payable
22 to him during all previous periods of retirement plus
23 interest on these amounts until the date of subsequent
24 retirement. The interest for each year shall be calculated
25 based upon the annual interest rate adopted for that school
26 year by the board for the calculation of the normal
27 contribution rate pursuant to section 8328(b) (relating to
28 actuarial cost method).
29 Section 2. This act shall take effect immediately.
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