PRIOR PRINTER'S NO. 853
PRINTER'S NO. 902
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
1
Session of
2017
INTRODUCED BY CORMAN, SCARNATI, BROWNE, GORDNER, LANGERHOLC,
McILHINNEY, MENSCH, REGAN, RESCHENTHALER, BARTOLOTTA,
KILLION, VULAKOVICH, ARGALL, WARD, FOLMER, AUMENT, YAW,
STEFANO, VOGEL, WHITE, MARTIN, McGARRIGLE, SCAVELLO, LAUGHLIN
AND BAKER, MAY 18, 2017
SENATOR BROWNE, APPROPRIATIONS, RE-REPORTED AS AMENDED, JUNE 4,
2017
AN ACT
Amending Titles 24 (Education), 51 (Military Affairs) and 71
(State Government) of the Pennsylvania Consolidated Statutes,
extensively revising pension provisions as follows:
In Title 24:
for retirement for school employees, in the areas of
preliminary provisions, of membership, contributions and
benefits, of school employees' defined contribution plan
and of administration and miscellaneous provisions; and
for health insurance for retired school employees, in
the area of preliminary provisions.
In Title 51:
for employment preferences and pensions, in the area
of military leave of absence.
In Title 71:
for boards and offices, in the area of Independent
Fiscal Office; and
for retirement for State employees and officers, in
the areas of preliminary provisions, of membership,
credited service, classes of service and eligibility for
benefits, of contributions, of benefits, of State
employees' defined contribution plan and of
administration, funds, accounts, general provisions.
Providing, as to the revisions:
for construction and administration, for
applicability, for liability, for member statements and
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for suspension of provisions of the Public Employee
Retirement Study Commission Act.
AMENDING TITLES 24 (EDUCATION), 51 (MILITARY AFFAIRS) AND 71
(STATE GOVERNMENT) OF THE PENNSYLVANIA CONSOLIDATED STATUTES,
EXTENSIVELY REVISING PENSION PROVISIONS AS FOLLOWS:
IN TITLE 24:
FOR RETIREMENT FOR SCHOOL EMPLOYEES, IN THE AREAS OF
PRELIMINARY PROVISIONS, OF MEMBERSHIP, CONTRIBUTIONS AND
BENEFITS, OF SCHOOL EMPLOYEES' DEFINED CONTRIBUTION PLAN
AND OF ADMINISTRATION AND MISCELLANEOUS PROVISIONS; AND
FOR HEALTH INSURANCE FOR RETIRED SCHOOL EMPLOYEES, IN
THE AREA OF PRELIMINARY PROVISIONS.
IN TITLE 51:
FOR EMPLOYMENT PREFERENCES AND PENSIONS, IN THE AREA
OF MILITARY LEAVE OF ABSENCE.
IN TITLE 71:
FOR BOARDS AND OFFICES, IN THE AREA OF INDEPENDENT
FISCAL OFFICE; AND
FOR RETIREMENT FOR STATE EMPLOYEES AND OFFICERS, IN
THE AREAS OF PRELIMINARY PROVISIONS, OF MEMBERSHIP,
CREDITED SERVICE, CLASSES OF SERVICE AND ELIGIBILITY FOR
BENEFITS, OF CONTRIBUTIONS, OF BENEFITS, OF STATE
EMPLOYEES' DEFINED CONTRIBUTION PLAN AND OF
ADMINISTRATION, FUNDS, ACCOUNTS, GENERAL PROVISIONS.
PROVIDING, AS TO THE REVISIONS:
FOR CONSTRUCTION AND ADMINISTRATION, FOR
APPLICABILITY, FOR LIABILITY, FOR MEMBER STATEMENTS AND
FOR SUSPENSION OF PROVISIONS OF THE PUBLIC EMPLOYEE
RETIREMENT STUDY COMMISSION ACT.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
ARTICLE I
Section 101. The definitions of "alternate payee," "basic
contribution rate," "beneficiary," "class of service
multiplier," "compensation," "creditable nonschool service,"
"credited service," "date of termination of service,"
"distribution," "domestic relations order," "final average
salary," "inactive member," "intervening military service,"
"irrevocable beneficiary," "leave for service with a collective
bargaining organization," "reemployed from USERRA leave,"
"required beginning date," "salary deductions," "shared-risk
contribution rate," "standard single life annuity,"
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"superannuation or normal retirement age," "valuation interest"
and "vestee" in section 8102 of Title 24 of the Pennsylvania
Consolidated Statutes are amended and the section is amended by
adding definitions 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:
* * *
"Accumulated employer defined contributions." The total of
the employer defined contributions paid into the trust on
account of a participant's school service, together with any
investment earnings and losses and adjustments for fees, costs
and expenses credited or charged thereon and reduced by any
distributions.
"Accumulated mandatory participant contributions." The total
of the mandatory pickup participant contributions paid into the
trust on account of a participant's school service, together
with any investment earnings and losses and adjustments for
fees, costs and expenses credited or charged thereon and reduced
by any distributions.
"Accumulated total defined contributions." The total of the
accumulated mandatory participant contributions, accumulated
employer defined contributions and accumulated voluntary
contributions standing to the credit of a participant in an
individual investment account in the trust.
"Accumulated voluntary contributions." The total of
voluntary contributions paid into the trust by a participant and
any amounts rolled over by a participant or transferred by a
direct trustee-to-trustee transfer into the trust, together with
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any investment earnings and losses and adjustments for fees,
costs and expenses credited or charged thereon and reduced by
any distributions.
* * *
"Active participant." A school employee for whom mandatory
pickup participant contributions are being made to the trust or
for whom contributions otherwise required are not being made
solely by reason of any provision of this part relating to the
limitations under section 401(a)(17) or 415 of the Internal
Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(17)
or 415).
* * *
"Alternate payee." Any spouse, former spouse, child or
dependent of a member or participant who is recognized by a
domestic relations order as having a right to receive all or a
portion of the moneys payable to that member or participant
under this part.
* * *
"Basic contribution rate." For Class T-A, T-B and T-C
service, the rate of 6 1/4%. For Class T-D service, the rate of
7 1/2%. For all active members on the effective date of this
provision who are currently paying 5 1/4% and elect Class T-D
service, the rate of 6 1/2%. For Class T-E service, the rate of
7 1/2%. For Class T-F service, the rate of 10.30%. For Class T-G
service, the rate of 5.5%. For Class T-H service, the rate of
4.5%.
"Beneficiary." [The] In the case of the system, the person
or persons last designated in writing to the board by a member
to receive his accumulated deductions or a lump sum benefit upon
the death of such member. In the case of the plan, the person or
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persons last designated in writing to the board by a participant
to receive the participant's vested accumulated total defined
contributions or a lump sum benefit upon the death of the
participant.
* * *
"Class of service multiplier."
Class of service Multiplier
T-A .714
T-B .625
T-C 1.000
T-D 1.000
T-E 1.000
T-F 1.000
T-G 1.000
T-H 1.000
* * *
"Compensation." Pickup contributions and mandatory pickup
participant contributions plus any remuneration received as a
school employee excluding reimbursements for expenses incidental
to employment and excluding any bonus, severance payments, any
other remuneration or other emolument received by a school
employee during his school service which is not based on the
standard salary schedule under which he is rendering service,
payments for unused sick leave or vacation leave, bonuses or
other compensation for attending school seminars and
conventions, payments under health and welfare plans based on
hours of employment or any other payment or emolument which may
be provided for in a collective bargaining agreement which may
be determined by the Public School Employees' Retirement Board
to be for the purpose of enhancing compensation as a factor in
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the determination of final average salary, and excluding
payments for military leave and any other payments made by an
employer while on USERRA leave, leave of absence granted under
51 Pa.C.S. § 4102 (relating to leaves of absence for certain
government employees), military leave of absence granted under
51 Pa.C.S. § 7302 (relating to granting military leaves of
absence), leave granted under section 1178 of the act of March
10, 1949 (P.L.30, No.14), known as the Public School Code of
1949, or other types of military leave, including other types of
leave payments, stipends, differential wage payments as defined
in IRC § 414(u)(12) and any other payments, provided, however,
that the limitation under section 401(a)(17) of the Internal
Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(17))
taken into account for the purpose of member contributions,
including regular or joint coverage member contributions,
regardless of class of service, shall apply to each member who
first became a member of the Public School Employes' Retirement
System on or after July 1, 1996, and who by reason of such fact
is a noneligible member subject to the application of the
provisions of section 8325.1 (relating to annual compensation
limit under IRC § 401(a)(17)), and shall apply to each
participant pertaining to the participant's participation in the
plan.
* * *
"Creditable nonschool service." Service other than service
as a school employee for which an active member may obtain
credit in the system.
"Credited service." School or creditable nonschool service
for which the required contributions have been made to the fund,
or for which the contributions otherwise required for such
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service were not made solely by reason of any provision of this
part relating to the limitations under section 401(a)(17) or 415
of the Internal Revenue Code of 1986 (Public Law 99-514, 26
U.S.C. § 401(a)(17) or 415), or for which salary deductions to
the system or lump sum payments have been agreed upon in
writing.
"Date of termination of service." The latest of the
following dates:
(1) The last [date] day of service for which pickup
contributions are made for an active member or[,] for which
the contributions otherwise required for service were not
made solely by reason of any provision of this part relating
to the limitations under section 401(a)(17) or 415 of the
Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
401(a)(17) or 415); or
(2) in the case of an inactive member or an inactive
participant, the effective date of his resignation or the
date his employment is formally discontinued by his employer
or two years following the last day of service for which
contributions were made, whichever is earliest.
(3) Mandatory pickup participant contributions are made
for an active participant.
* * *
"Distribution." Payment of all or any portion of a person's
interest in either the Public School Employees' Retirement Fund
or the School Employees' Defined Contribution Trust, or both,
which is payable under this part.
"Domestic relations order." Any judgment, decree or order,
including approval of a property settlement agreement, entered
on or after the effective date of this definition by a court of
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competent jurisdiction pursuant to a domestic relations law
which relates to the marital property rights of the spouse or
former spouse of a member or participant, including the right to
receive all or a portion of the moneys payable to that member or
participant under this part in furtherance of the equitable
distribution of marital assets. The term includes orders of
support as that term is defined by 23 Pa.C.S. § 4302 (relating
to definitions) and orders for the enforcement of arrearages as
provided in 23 Pa.C.S. § 3703 (relating to enforcement of
arrearages).
* * *
"Employer defined contributions." Contributions equal to
2.0% of an active participant's compensation that are made by an
employer to the trust, to be credited in the active
participant's individual investment account.
"Final average salary." [The] As follows:
(1) For purposes of calculating annuities and benefits
from the system attributable to a class of service other than
Class T-G and Class T-H, the highest average compensation
received as an active member during any three nonoverlapping
periods of 12 consecutive months with the compensation for
part-time service being annualized on the basis of the
fractional portion of the school year for which credit is
received; except, if the employee was not a member for three
such periods, the total compensation received as an active
member annualized in the case of part-time service divided by
the number of such periods of membership; in the case of a
member with multiple service credit, the final average salary
shall be determined by reference to compensation received by
him as a school employee or a State employee or both; and, in
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the case of a noneligible member, subject to the application
of the provisions of section 8325.1 (relating to annual
compensation limit under IRC § 401(a)(17)). Final average
salary shall be determined by including in compensation,
payments deemed to have been made to a member reemployed from
USERRA leave to the extent member contributions have been
made as provided in section 8302(d)(2) (relating to credited
school service) and payments made to a member on leave of
absence under 51 Pa.C.S. § 4102 (relating to leaves of
absence for certain government employees) as provided in
section 8302(d)(6).
(2) For purposes of calculating annuities and benefits
from the system attributable to Class T-G and Class T-H
service, the following shall apply:
(i) The highest average compensation received as an
active member during any five nonoverlapping periods of
12 consecutive months, with the compensation for part-
time service being annualized on the basis of the
fractional portion of the school year for which credit is
received shall be used or the calculation shall be made
in accordance with the following:
(A) If the employee was not a member for five
periods, the total compensation received as an active
member annualized in the case of part-time service
divided by the number of periods of membership.
(B) In the case of a member with multiple
service credit, the final average salary shall be
determined by reference to compensation received by
the member as a school employee or a State employee
or both.
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(C) In the case of a noneligible member, subject
to the application of the provisions of section
8325.1.
(ii) Final average salary shall be determined by
including in compensation, payments deemed to have been
made to a member reemployed from USERRA leave to the
extent member contributions have been made as provided in
section 8302(d)(2) and payments made to a member on leave
of absence under 51 Pa.C.S. § 4102 as provided in section
8302(d)(6).
* * *
"Inactive member." A member for whom no pickup contributions
are being made to the fund, except in the case of an active
member for whom such contributions otherwise required for
current school service are not being made solely by reason of
any provision of this part relating to the limitations under
section 401(a)(17) or 415 of the Internal Revenue Code of 1986
(Public Law 99-514, 26 U.S.C. § 401(a)(17) or 415) or because
the member is on USERRA leave, who has accumulated deductions
standing to his credit in the fund and for whom contributions
have been made within the last two school years or a multiple
service member who is active in the State Employees' Retirement
System.
"Inactive participant." A participant for whom no mandatory
pickup participant contributions are being made to the trust,
except in the case of an active participant for whom the
contributions otherwise required for current school service are
not being made solely by reason of any provision of this part
relating to limitations under section 401(a)(17) or 415 of the
Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
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401(a)(17) or 415), but who has vested accumulated total defined
contributions standing to the participant's credit in the trust
and who has not filed an application for a distribution.
"Individual investment account." The account in the trust to
which are credited the amounts of the contributions made by a
participant and the participant's employer in accordance with
the provisions of this part, together with all investment
earnings after deduction for fees, costs and expenses,
investment losses and charges for distributions.
"Intervening military service." Active military service of a
member who was a school employee and an active member of the
system immediately preceding his induction into the armed
services or forces of the United States in order to meet a draft
obligation excluding any voluntary extension of such
obligational service and who becomes a school employee and an
active member of the system within 90 days of the expiration of
such service.
* * *
"Irrevocable beneficiary." The person or persons permanently
designated by a member or participant in writing to the board
pursuant to an approved domestic relations order to receive all
or a portion of the accumulated deductions, vested accumulated
total defined contributions or lump sum benefit payable upon the
death of such member or participant.
"Irrevocable successor payee." The person permanently
designated in writing by a participant receiving distributions
to the board under an approved domestic relations order to
receive one or more distributions from the plan upon the death
of such participant.
* * *
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"Leave for service with a collective bargaining
organization." Paid leave granted to an active member or active
participant by an employer for purposes of working full time for
or serving full time as an officer of a Statewide employee
organization or a local collective bargaining representative
under the act of July 23, 1970 (P.L.563, No.195), known as the
Public Employe Relations Act: Provided, That greater than one-
half of the members of the employee organization are active
members of the system or active participants of the plan; that
the employer shall fully compensate the member or participant,
including, but not limited to, salary, wages, pension and
retirement contributions and benefits, employer defined
contributions, other benefits and seniority, as if he were in
full-time active service; and that the employee organization
shall fully reimburse the employer for such salary, wages,
pension and retirement contributions and benefits, employer
defined contributions and other benefits and seniority.
"Mandatory pickup participant contributions." Contributions
equal to a percentage of compensation that are made by the
employer for active participants for current school service that
are picked up by the employer and credited in the plan as
follows:
(1) For Class T-G and Class T-H members, 3.0%.
(2) For Class DC participants, 7.5%.
* * *
"Participant." An active participant, inactive participant
or participant receiving distributions.
"Participant receiving distributions." A participant in the
plan who has commenced receiving distributions from the
participant's individual investment account, but who has not
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received a total distribution of the vested interest in the
individual investment account.
* * *
"Plan." The School Employees' Defined Contribution Plan as
established by the provisions of this part and the board.
"Plan document." The documents created by the board under
section 8402 (relating to plan document) that contain the terms
and provisions of the plan and trust as established by the board
regarding the establishment, administration and investment of
the plan and trust.
* * *
"Reemployed from USERRA leave." Resumption of active
membership or active participation as a school employee after a
period of USERRA leave, if the resumption of active membership
or active participation was within the time period and under
conditions and circumstances such that the school employee was
entitled to reemployment rights under 38 U.S.C. Ch. 43 (relating
to employment and reemployment rights of members of the
uniformed services).
* * *
"Required beginning date." The [beginning] latest date by
which distributions of a member's interest must commence under
section 401(a)(9) of the Internal Revenue Code of 1986 (Public
Law 99-514, 26 U.S.C. § 401(a)(9)).
* * *
"Salary deductions." The amounts certified by the board,
deducted from the compensation of an active member or active
participant or the State service compensation of a multiple
service member who is an active member of the State Employees'
Retirement System and paid into the fund or trust.
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* * *
"Shared-risk contribution rate." The additional contribution
rate that is added to the basic contribution rate for Class T-E
[and T-F], Class T-F, Class T-G and Class T-H members, as
provided for in section 8321(b) (relating to regular member
contributions for current service).
"Standard single life annuity." For Class T-A, T-B and T-C
credited service of a member, an annuity equal to 2% of the
final average salary, multiplied by the total number of years
and fractional part of a year of credited service of a member.
For Class T-D credited service of a member, an annuity equal to
2.5% of the final average salary, multiplied by the total number
of years and fractional part of a year of credited service. For
Class T-E credited service of a member, an annuity equal to 2%
of the final average salary, multiplied by the total number of
years and fractional part of a year of credited service of a
member. For Class T-F credited service of a member, an annuity
equal to 2.5% of the final average salary, multiplied by the
total number of years and fractional part of a year of credited
service of a member. For Class T-G credited service of a member,
an annuity equal to 1.25% of the final average salary,
multiplied by the total number of years and fractional part of a
year of credited service of a member. For Class T-H credited
service of a member, an annuity equal to 1.0% of the final
average salary, multiplied by the total number of years and
fractional parts of a year of credited service of a member.
"State Employees' Defined Contribution Plan." The defined
contribution plan for State employees established by 71 Pa.C.S.
Pt. XXV (relating to retirement for State employees and
officers).
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* * *
"Successor payee." The person or persons last designated in
writing to the board by a participant receiving distributions to
receive one or more distributions upon the death of the
participant.
* * *
"Superannuation or normal retirement age."
Class of service Age
T-A
62 or any age upon accrual of
35 eligibility points
T-B 62
T-C and T-D
62 or age 60 provided the
member has at least 30
eligibility points or any
age upon accrual of 35
eligibility points
T-E and T-F
65 with accrual of at least
three eligibility points
or a combination of age
and eligibility points
totaling 92, provided the
member has accrued at
least 35 eligibility
points
T-G and T-H 67 with accrual of at least 3
eligibility points
* * *
"Trust." The School Employees' Defined Contribution Trust
established under Chapter 84 (relating to School Employees'
Defined Contribution Plan).
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* * *
"Valuation interest." Interest at 5 1/2% per annum,
compounded annually and applied to all accounts of the fund
other than the members' savings account.
"Vestee." A member with five or more eligibility points in a
class of service other than Class T-E or Class T-F who has
terminated school service, has left his accumulated deductions
in the fund and is deferring filing of an application for
receipt of an annuity. For Class T-E and Class T-F members, a
member with ten or more eligibility points who has terminated
school service, has left his accumulated deductions in the fund
and is deferring filing of an application for receipt of an
annuity.
"Voluntary contributions." Contributions made by a
participant to the trust and credited to the participant's
individual investment account in excess of the mandatory pickup
participant contributions, either by after-tax salary deductions
paid through the employer or by an eligible rollover or direct
trustee-to-trustee transfers.
Section 102. Section 8103 of Title 24 is amended by adding
subsections to read:
§ 8103. Construction of part.
* * *
(f) Exclusive source of rights and benefits.--Regardless of
any other provision of law, pension and benefit rights of school
employees shall be determined solely by this part or any
amendment thereto, or the plan document established by the
board, and no collective bargaining agreement nor any
arbitration award between the employer and the employer's
employees or the employee's collective bargaining
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representatives shall be construed to do any of the following:
(1) Change any of the provisions of this part.
(2) Require the board to administer pension or
retirement benefits not set forth in this part or not
established by the board in the plan document.
(3) Require the board to modify, amend or change any of
the terms and provisions of the plan document.
(4) Otherwise require action by any other government
body pertaining to pension or retirement benefits or rights
of school employees.
(g) References to certain Federal statutes.--References in
this part to the IRC or the Uniformed Services Employment and
Reemployment Rights Act of 1994 (Public Law 103-353, 108 Stat.
3149), including administrative regulations promulgated under
the IRC or the Uniformed Services Employment and Reemployment
Rights Act of 1994, are intended to include laws and regulations
in effect on the effective date of this section and amended,
supplemented or supplanted on and after the effective date of
this section.
(h) Construction.--This part may not be construed to mean
any of the following:
(1) That the limitations on benefits or other
requirements under IRC § 401(a) or other applicable
provisions of the IRC that are applicable to participants in
the plan do not apply to the participants or to the members
of the system and the benefits payable under this part.
(2) That an interpretation or application of a provision
of this part or benefits available to members of the Public
School Employees' Retirement System was not in accordance
with the provisions of this part or other applicable law,
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including the IRC and the Uniformed Services Employment and
Reemployment Rights Act of 1994 before the effective date of
this section.
(3) That the release or publicizing of a record,
material or data that would not constitute a public record
under section 8502(e)(2) (relating to administrative duties
of board) is a violation of the fiduciary duties of the
board.
Section 103. Title 24 is amended by adding a section to
read:
§ 8103.2. Reference to Public School Employees' Retirement
System.
(a) General rule.--As of the effective date of this section,
unless the context clearly indicates otherwise, a reference to
the Public School Employees' Retirement System in a statutory
provision, other than this part and 71 Pa.C.S. Pt. XXV (relating
to retirement for State employees and officers), shall include a
reference to the plan, and a reference to the Public School
Employees' Retirement Fund shall include a reference to the
trust.
(b) Certain agreements.--The agreement of an employer to
make contributions to the fund or to enroll employees as members
in the system shall be deemed to be an agreement to make
contributions to the trust or to enroll employees in the plan.
Section 104. Section 8301 of Title 24 is amended to read:
§ 8301. Mandatory and optional membership in the system and
participation in the plan.
(a) Mandatory membership.--Membership in the system shall be
mandatory as of the effective date of employment for all school
employees except the following:
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(1) Any officer or employee of the Department of
Education, State-owned educational institutions, community
colleges, area vocational-technical schools, technical
institutes, or [the] The Pennsylvania State University and
who is a member of the State Employees' Retirement System or
a member of another retirement program approved by the
employer.
(2) Any school employee who is not a member of the
system and who is employed on a per diem or hourly basis for
less than 80 full-day sessions or 500 hours in any fiscal
year or annuitant who returns to school service under the
provisions of section 8346(b) (relating to termination of
annuities).
(3) Any officer or employee of a governmental entity who
subsequent to December 22, 1965 and prior to July 1, 1975
administers, supervises, or teaches classes financed wholly
or in part by the Federal Government so long as he continues
in such service.
(4) Any part-time school employee who has an individual
retirement account pursuant to the Federal act of September
2, 1974 (Public Law 93-406, 88 Stat. 829), known as the
Employee Retirement Income Security Act of 1974.
(b) Prohibited membership.--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.
(c) Optional membership.--The school employees categorized
in subsection (a)(3) and, if otherwise eligible, subsection (a)
(4) shall have the right to elect membership in the system. Once
such election is exercised, membership shall commence from the
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original date of eligibility and shall continue until the
termination of such service.
(d) Mandatory participation in the plan.--A school employee
who is a mandatory member of either Class T-G or Class T-H shall
also be a mandatory participant in the plan as of the effective
date of membership in the system.
Section 105. Section 8302(a), (c) and (d) of Title 24 are
amended and the section is amended by adding a subsection to
read:
§ 8302. Credited school service.
(a) Computation of credited service.--In computing credited
school service of a member for the determination of benefits, a
full-time salaried school employee shall receive one year of
credit for each school year or the corresponding fraction
thereof, in accordance with the proportion of the full school
year for which the required regular member contributions have
been made to the fund, or for which such contributions otherwise
required for such service were not made to the fund solely by
reason of any provision of this part relating to the limitations
under IRC § 401(a)(17) or 415. A per diem or hourly school
employee shall receive one year of credited service for each
nonoverlapping period of 12 consecutive months in which he is
employed and for which contributions are made to the fund, or
would have been made to the fund but for such limitations under
the IRC, for at least 180 full-day sessions or 1,100 hours of
employment. If such member was employed and contributions were
made to the fund for less than 180 full-day sessions or 1,100
hours, he shall be credited with a fractional portion of a year
determined by the ratio of the number of full-day sessions or
hours of service actually rendered to 180 full-day sessions or
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1,100 hours, as the case may be. A part-time salaried employee
shall be credited with the fractional portion of the year which
corresponds to the service actually rendered and for which
contributions are or would have been made to the fund except for
the limitations under the IRC in relation to the service
required as a comparable full-time salaried employee. In no case
shall a member receive more than one year of credited service
for any 12 consecutive months or a member who has elected
multiple service receive an aggregate in the two systems of more
than one year of credited service for any 12 consecutive months.
* * *
(c) Cancellation of credited service.--All credited service
in the system shall be cancelled if a member withdraws his
accumulated deductions[.], except that a partial or total
distribution of accumulated total defined contributions to a
participant who is also a member may not cancel service credited
in the system.
(d) Credit for military service.--A school employee who has
performed USERRA leave may receive credit in the system as
follows:
(1) For purposes of determining whether a member is
eligible to receive credited service in the system for a
period of active military service, other than active duty
service to meet periodic training requirements, rendered
after August 5, 1991, and that began before the effective
date of this paragraph, the provisions of 51 Pa.C.S. Ch. 73
(relating to military leave of absence) shall apply to all
individuals who were active members of the system when the
period of military service began, notwithstanding if the
member is not defined as an employee under 51 Pa.C.S. § 7301
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(relating to definitions). School employees may not receive
service credit or exercise the options under 51 Pa.C.S. §
7306(a), (b) and (c) (relating to retirement rights) for
military leaves that begin on or after the effective date of
this subsection, except otherwise provided under this
subsection.
(2) A school employee who has performed USERRA leave may
receive credit as provided by this paragraph.
(i) A school employee who is reemployed from USERRA
leave as an active member of the system shall be treated
as not having incurred a break in school service by
reason of the USERRA leave and shall be granted
eligibility points as if the school employee had not been
on the USERRA leave. If a school employee who is
reemployed from USERRA leave as an active member of the
system subsequently makes regular member contributions,
shared-risk member contributions and any other member
contributions in the amounts and in the time periods
required by 38 U.S.C. Ch. 43 (relating to employment and
reemployment rights of members of the uniformed services)
and IRC § 414(u) as if the school employee had continued
in his school office or employment and performed school
service and been compensated during the period of USERRA
leave, then the school employee shall be granted school
service credit for the period of USERRA leave. The
employee shall have his benefits, rights and obligations
determined under this part as if he was an active member
who performed creditable school service during the USERRA
leave in the job position that he would have held had he
not been on USERRA leave and received the compensation on
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which the member contributions to receive school service
credit for the USERRA leave were determined.
(ii) For purposes of determining whether a school
employee has made the required employee contributions for
school service credit for USERRA leave, if an employee
who is reemployed from USERRA leave as an active member
of the system terminates school service or dies in school
service before the expiration of the allowed payment
period, school service credit for the USERRA leave shall
be granted as if the required member contributions were
paid the day before termination or death. The amount of
the required member contributions shall be treated as an
incomplete payment subject to the provisions of section
8325 (relating to incomplete payments). Upon a subsequent
return to school service or to State service as a
multiple service member, the required member
contributions treated as incomplete payments shall be
treated as member contributions that were either
withdrawn in a lump sum at termination or paid as a lump
sum under section 8345(a)(4) (relating to member's
options). For this purpose, the exclusion of Class T-E
and Class T-F members from electing a form of payment
under section 8345(a)(4)(iii) shall be ignored.
(iii) A school employee who is reemployed from
USERRA leave as an active member of the system and who
does not make the required member contributions or makes
only part of the required member contributions within the
allowed payment period shall not be:
(A) Granted credited service for the period of
USERRA leave for which the required member
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contributions were not timely made.
(B) Eligible to subsequently make contributions.
(C) Granted either school service credit or
nonschool service credit for the period of USERRA
leave for which the required member contributions
were not timely made.
(3) A school employee who is a member of the system and
performs USERRA leave from which the employee could have been
reemployed from USERRA leave had the school employee returned
to school service in the time frames required by 38 U.S.C.
Ch. 43 for reemployment rights, but did not do so, shall be
able to receive creditable nonschool service as
nonintervening military service for the period of USERRA
leave if the employee later returns to school service and is
otherwise eligible to purchase the service as nonintervening
military service.
(4) [A school employee] An active or inactive member
who, on or after the effective date of this subsection, is
granted a leave of absence under section 1178 of the Public
School Code, a leave of absence under 51 Pa.C.S. § 4102
(relating to leaves of absence for certain government
employees) or a military leave under 51 Pa.C.S. Ch. 73, that
is not USERRA leave shall be able to receive creditable
nonschool service as nonintervening military service should
the employee return to school service as an active member of
the system and is otherwise eligible to purchase the service
as nonintervening military service.
(5) If a member dies while performing USERRA leave, the
beneficiaries or survivor annuitants of the deceased member
shall be entitled to any additional benefits, including
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eligibility points, other than benefit accruals relating to
the period of qualified military service, provided under this
part as if the member resumed and then terminated employment
on account of death.
(6) A school employee who is on a leave of absence from
his duties as a school employee and for which 51 Pa.C.S. §
4102 provides that he is not to suffer a loss of pay, time or
efficiency shall not be an active member, receive service
credit or make member contributions for the leave of absence
except as provided for in this part. Notwithstanding this
paragraph, any pay the member receives under section 1178 of
the Public School Code or 51 Pa.C.S. § 4102 shall be included
in the determination of final average salary and other
calculations in the system utilizing compensation as if the
payments were compensation under this part.
(e) Military service by a participant.--A participant who
has performed USERRA leave shall be treated and may make
contributions as follows:
(1) A participant who is reemployed from USERRA leave
may not be treated as having incurred a break in school
service by reason of the USERRA leave and shall be granted
eligibility points as if the participant had not been on
USERRA leave. If a participant who is reemployed from USERRA
leave subsequently makes mandatory pickup participant
contributions in the amounts and in the time periods required
by 38 U.S.C. Ch. 43 (relating to employment and reemployment
rights of members of the uniformed services) and IRC § 414(u)
as if the participant had continued in the participant's
school employment and performed school service and been
compensated during the period of USERRA leave, then the
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participant's employer shall make the corresponding employer
defined contributions. The employee shall have contributions,
benefits, rights and obligations determined under this part
as if the employee was an active participant who performed
school service during the USERRA leave in the job position
that the employee would have held had the employee not been
on USERRA leave and received the compensation on which the
mandatory pickup participant contributions to receive school
service credit for the USERRA leave were determined,
including the right to make voluntary contributions on such
compensation as permitted by law.
(2) A participant who is reemployed from USERRA leave
and does not make the mandatory pickup participant
contributions or makes only part of the mandatory pickup
participant contributions within the allowed payment period
may not be eligible to make mandatory pickup participant
contributions and voluntary contributions at a later date for
the period of USERRA leave for which the mandatory pickup
participant contributions were not timely made.
(3) A participant who performs USERRA leave from which
the employee could have been reemployed from USERRA leave had
the school employee returned to school service in the time
frames required by 38 U.S.C. Ch. 43 for reemployment rights,