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PRINTER'S NO. 186
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
197
Session of
2017
INTRODUCED BY HUGHES, SCHWANK, BREWSTER, COSTA AND HAYWOOD,
JANUARY 26, 2017
REFERRED TO FINANCE, JANUARY 26, 2017
AN ACT
Amending Titles 24 (Education) and 71 (State Government) of the
Pennsylvania Consolidated Statutes, in membership,
contributions and benefits, further providing for member's
options, for death benefits and for payment of benefits; in
administration and miscellaneous provisions, further
providing for duties of board regarding applications and
elections of members and for rights and duties of school
employees and members; in benefits, further providing for
member's options, for death benefits and for payment of
benefits; and, in administration, funds, accounts, general
provisions, further providing for duties of board regarding
applications and elections of members and for rights and
duties of State employees and members.
The General Assembly finds and declares as follows:
(1) Spouses of State and public school employees in this
Commonwealth should be protected from impoverishment as a
result of the death of their spouses, consistent with the
Commonwealth's treatment of marital property and the
protections afforded spouses of private company employees.
(2) The law in this Commonwealth currently recognizes a
spouse's marital property interest in a State or public
school employee's accrued pension benefits upon divorce, but
does not provide adequate protection to the nonemployee
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spouse in the event of the employee's death.
(3) Research indicates that women are less likely to
have a pension than men. To the extent women have a pension,
they typically receive a lower payout, because women have
historically earned less than men and, as primary caregivers,
have less consistent work records than men.
(4) Older women are more likely than older men to
experience the loss of a spouse and, with such loss, a severe
reduction of income and threat of poverty during widowhood.
(5) To address such disparities, Congress adopted the
Retirement Equity Act of 1984 (Public Law 98-397, 98 Stat.
1426) to require all privately sponsored pension plans to
make benefit payments in the form of a preretirement survivor
annuity in the event of the employee's death during
employment and a joint and survivor annuity upon retirement,
each with a minimum 50% annuity payable to the surviving
spouse upon the death of the employee or pensioner unless the
surviving spouse consents to another form of benefit payment.
(6) While the majority of the states have adopted laws
providing surviving spouses with protections similar to those
imposed by Federal law, the Commonwealth has not provided
such protection.
(7) The purpose of this legislation is to provide
greater economic security to surviving spouses of public
employees in this Commonwealth while being revenue neutral
with regard to the State budget.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 8345 of Title 24 of the Pennsylvania
Consolidated Statutes is amended by adding a subsection to read:
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§ 8345. Member's options.
* * *
(c) Spouse must consent to election.--
(1) Any eligible member's election under this section
that does not provide for at least 50% survivor annuity to
such member's surviving spouse shall not take effect unless:
(i) (A) the spouse of the eligible member consents
in writing to such election;
(B) such election designates a beneficiary or
form of benefits that may not be changed without
spousal consent or the consent of such spouse
expressly permits designations by the member without
any requirement of further consent by the spouse; and
(C) the spouse's consent acknowledges the effect
of such election and is witnessed by a member of the
board or a notary public; or
(ii) it is established to the satisfaction of the
board that the consent required under subparagraph (i)
may not be obtained because there is no spouse or because
the spouse cannot be located.
(2) Any consent by a spouse or establishment that the
consent of a spouse may not be obtained under paragraph (1)
(ii) shall be effective only with respect to such spouse.
Section 2. Sections 8347(a), 8349(c) and 8505(h) of Title 24
are amended to read:
§ 8347. Death benefits.
(a) Members eligible for annuities.--Any member or former
member on USERRA leave, other than an annuitant, who dies and
was eligible for an annuity in accordance with section 8307(a)
or (b) (relating to eligibility for annuities) shall be
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considered as having applied for an annuity to become effective
the day before his death; and, in the event he has not elected
an option, it shall be assumed that he elected Option 1 and
assigned as beneficiary [that person last designated in writing
to the board.] his spouse unless a contrary beneficiary
designation meeting the requirements of this chapter has been
provided in writing to the board. If such member is unmarried
and has not designated a beneficiary under this chapter, it
shall be assumed that he elected Option 1 and assigned his
estate as his beneficiary.
* * *
§ 8349. Payment of benefits.
* * *
(c) Death or absence of beneficiary.--If the beneficiary
designated by a member should predecease him or die within 30
days of his death, or if a valid nomination of a beneficiary is
not in effect at his death, any money payable to a beneficiary
shall be [paid to the estate of the member] payable first to his
surviving spouse and, if there is no spouse, then to his estate.
§ 8505. Duties of board regarding applications and elections of
members.
* * *
(h) Death benefits.--Upon receipt of notification of the
death of a member or former member on USERRA leave, the board
shall notify the designated beneficiary or survivor annuitant of
the benefits to which he is entitled and shall make the first
payment to the beneficiary under the plan elected by the
beneficiary within 60 days of receipt of certification of death
and other necessary data. If no beneficiary designation is in
effect at the date of the member's death [or no notice has been
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filed with the board to pay the amount of such benefits to the
member's estate], the member's designated beneficiary shall be
deemed to be his surviving spouse. If such member did not
designate a beneficiary and was unmarried at the time of his
death, the board is authorized to pay such benefits to the
executor, administrator[, surviving spouse] or next-of-kin of
the deceased member, and payment pursuant hereto shall fully
discharge the fund from any further liability to make payment of
such benefits to any other person.
* * *
Section 3. Section 8507 of Title 24 is amended by adding a
subsection to read:
§ 8507. Rights and duties of school employees and members.
* * *
(l) Restriction.--
(1) Notwithstanding anything to the contrary in this
chapter, a member who is married at the time of his selection
of a beneficiary or survivor annuitant, who is married at the
time of his selection of a form of benefit payment or who
becomes married following such selection of a beneficiary or
survivor annuitant but prior to becoming entitled to or
selecting a form of payment or distribution shall not be
permitted to select a beneficiary or survivor annuitant other
than his spouse, if married at the time, unless:
(i) (A) the spouse of the eligible member consents
in writing to the election;
(B) the election designates a beneficiary that
may not be changed without spousal consent or the
consent of the spouse expressly permits designations
by the member without any requirement of further
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consent by the spouse; and
(C) the spouse's consent acknowledges the effect
of the election and is witnessed by a member of the
board or a notary public; or
(ii) it is established to the satisfaction of the
board that the consent required under subparagraph (i)
may not be obtained because there is no spouse or because
the spouse cannot be located.
(2) Any consent by a spouse or establishment that the
consent of a spouse may not be obtained under paragraph (1)
(ii) shall be effective only with respect to the spouse.
Section 4. Section 5705 of Title 71 is amended by adding a
subsection to read:
§ 5705. Member's options.
* * *
(c) Spouse must consent to election.--
(1) Any eligible member's election under this section
that does not provide for at least 50% survivor annuity to
such member's surviving spouse shall not take effect unless:
(i) (A) the spouse of the eligible member consents
in writing to such election;
(B) such election designates a beneficiary or
form of benefits that may not be changed without
spousal consent or the consent of the spouse
expressly permits designations by the member without
any requirement of further consent by the spouse; and
(C) the spouse's consent acknowledges the effect
of such election and is witnessed by a member of the
board or a notary public; or
(ii) it is established to the satisfaction of the
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board that the consent required under subparagraph (i)
may not be obtained because there is no spouse or because
the spouse cannot be located.
(2) Any consent by a spouse or establishment that the
consent of a spouse may not be obtained under paragraph (1)
(ii) shall be effective only with respect to such spouse.
Section 5. Sections 5707(a), 5709(c) and 5905(g) of Title 71
are amended to read:
§ 5707. Death benefits.
(a) Members eligible for annuities.--Any active member,
inactive member on leave without pay, vestee or current or
former State employee performing USERRA leave who dies and was
eligible for an annuity in accordance with section 5308(a) or
(b) (relating to eligibility for annuities) or special vestee
who has attained superannuation age and dies before applying for
a superannuation annuity shall be considered as having applied
for an annuity to become effective the day before his death and
in the event he has not elected an option or such election has
not been approved prior to his death, it shall be assumed that
he elected Option 1[.] and assigned as beneficiary his spouse,
unless a contrary beneficiary designation meeting the
requirements of this chapter has been provided in writing to the
board. If such member is unmarried and has not designated a
beneficiary under this chapter, it shall be assumed that he
elected Option 1 and assigned his estate as his beneficiary.
* * *
§ 5709. Payment of benefits.
* * *
(c) Death or absence of beneficiary.--If the beneficiary
designated by a member should predecease him or die within 30
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days of his death, or if a valid nomination of a beneficiary is
not in effect at his death, any money payable to a beneficiary
shall be payable to the estate of the member first to his
surviving spouse and, if there is no spouse, then to his estate.
* * *
§ 5905. Duties of the board regarding applications and
elections of members.
* * *
(g) Death benefits.--Upon receipt of notification from the
head of a department of the death of an active member, a member
performing USERRA leave or a member on leave without pay, the
board shall [advise] notify the designated beneficiary or
survivor annuitant of the benefits to which he is entitled, and
shall make the first payment to the beneficiary, under the plan
elected by the beneficiary, within 60 days of receipt of
certification of death and other necessary data. If no
beneficiary designation is in effect at the date of the member's
death [or no notice has been filed with the board to pay the
amount of the benefits to the member's estate], the member's
designated beneficiary shall be deemed to be his surviving
spouse. If such member did not designate a beneficiary and was
unmarried at the time of his death, the board is authorized to
pay the benefits to the executor, administrator[, surviving
spouse] or next of kin of the deceased member, and payment
pursuant hereto shall fully discharge the fund from any further
liability to make payment of such benefits to any other person.
* * *
Section 6. Section 5907 of Title 71 is amended by adding a
subsection to read:
§ 5907. Rights and duties of State employees and members.
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* * *
(l) Restriction.--
(1) Notwithstanding anything to the contrary in this
chapter, a member who is married at the time of his selection
of a beneficiary or survivor annuitant, who is married at the
time of his selection of a form of benefit payment or who
becomes married following such selection of a beneficiary or
survivor annuitant but prior to becoming entitled to or
selecting a form of payment or distribution shall not be
permitted to select a beneficiary or survivor annuitant other
than his spouse, if married at the time, unless:
(i) (A) the spouse of the eligible member consents
in writing to such election;
(B) such election designates a beneficiary that
may not be changed without spousal consent or the
consent of such spouse expressly permits designations
by the member without any requirement of further
consent by the spouse; and
(C) the spouse's consent acknowledges the effect
of such election and is witnessed by a member of the
board or a notary public; or
(ii) it is established to the satisfaction of the
board that the consent required under subparagraph (i)
may not be obtained because there is no spouse or because
the spouse cannot be located.
(2) Any consent by a spouse or establishment that the
consent of a spouse may not be obtained under paragraph (1)
(ii) shall be effective only with respect to such spouse.
Section 7. This act shall take effect in 60 days.
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