1Amending Titles 24 (Education) and 51 (Military Affairs) of the
2Pennsylvania Consolidated Statutes, further providing for the
3calculation of military members' Public School Employees
4Retirement System benefits.

5The General Assembly of the Commonwealth of Pennsylvania
6hereby enacts as follows:

7Section 1. Section 8102 of Title 24 of the Pennsylvania
8Consolidated Statutes is amended to read:

9§ 8102. Definitions.

10The following words and phrases when used in this part shall
11have, unless the context clearly indicates otherwise, the
12meanings given to them in this section:

13"Accumulated deductions." The total of pickup contributions
14and the contributions paid into the fund by the member on
15account of current school service, previous school service, or
16creditable nonschool service and the statutory interest credited
17on all such contributions.

18"Activated military service." Military service by a member 

1of a reserve component of the armed forces, pursuant to an order 
2on or after July 1, 1990, and prior to July 1, 2013, to enter 
3into active military service, other than an order to enter into 
4active duty to meet periodic training requirements, who was an 
5active member of the system immediately preceding the order into 
6active military service and to whom the military leave 
7provisions of 51 Pa.C.S. Ch. 73 (relating to military leave of 
8absence) do not apply.

9"Active member." A school employee for whom pickup
10contributions are being made to the fund or for whom such
11contributions otherwise required for current school service are
12not being made solely by reason of any provision of this part
13relating to the limitations under section 401(a)(17) or 415(b)
14of the Internal Revenue Code of 1986 (Public Law 99-514, 26
15U.S.C. § 401(a)(17) or 415(b)).

16"Actuarially equivalent." Equal present values, computed on
17the basis of statutory interest and the mortality tables adopted
18by the board.

19"Actuary." The consultant to the board who shall be:

20(1) a member of the American Academy of Actuaries;

21(2) an individual who has demonstrated to the
22satisfaction of the Insurance Commissioner of Pennsylvania
23that he has the educational background necessary for the
24practice of actuarial science and has had at least seven
25years of actuarial experience; or

26(3) a firm, partnership, or corporation of which at
27least one member meets the requirements of paragraph (1) or
28(2).

29"Alternate payee." Any spouse, former spouse, child or 
30dependent of a member who is recognized by a domestic relations 

1order as having a right to receive all or a portion of the 
2moneys payable to that member under this part.

3"Alternative investment." An investment in a private equity
4fund, private debt fund, venture fund, real estate fund, hedge
5fund or absolute return fund.

6"Alternative investment vehicle." A limited partnership,
7limited liability company or any other legal vehicle for
8authorized investments under section 8521(i) (relating to
9management of fund and accounts) through which the system makes
10an alternative investment.

11"Annuitant." Any member on or after the effective date of
12retirement until his annuity is terminated.

13"Approved domestic relations order." Any domestic relations
14order which has been determined to be approved in accordance
15with section 8533.1 (relating to approval of domestic relations
16orders).

17"Approved leave of absence." A leave of absence for
18activated military service or which has been approved by the
19employer for sabbatical leave, service as an exchange teacher,
20service with a collective bargaining organization or
21professional study.

22"Basic contribution rate." For Class T-A, T-B and T-C 
23service, the rate of 6 1/4%. For Class T-D service, the rate of 
247 1/2%. For all active members on the effective date of this 
25provision who are currently paying 5 1/4% and elect Class T-D 
26service, the rate of 6 1/2%. For Class T-E service, the rate of 
277 1/2%. For Class T-F service, the rate of 10.30%.

28"Beneficiary." The person or persons last designated in
29writing to the board by a member to receive his accumulated
30deductions or a lump sum benefit upon the death of such member.

1"Board." The Public School Employees' Retirement Board or
2the Public School Employes' Retirement Board.

3"Class of service multiplier."

4Class of service	Multiplier
5T-A	.714
6T-B	.625
7T-C	1.000
8T-D	1.000
9T-E	1.000
10T-F	1.000

11"Commissioner." The Commissioner of the Internal Revenue
12Service.

13"Compensation." Pickup contributions plus any remuneration 
14received as a school employee excluding reimbursements for 
15expenses incidental to employment and excluding any bonus, 
16severance payments, any other remuneration or other emolument 
17received by a school employee during his school service which is 
18not based on the standard salary schedule under which he is 
19rendering service, payments for unused sick leave or vacation 
20leave, bonuses or other compensation for attending school 
21seminars and conventions, payments under health and welfare 
22plans based on hours of employment or any other payment or 
23emolument which may be provided for in a collective bargaining 
24agreement which may be determined by the Public School 
25Employees' Retirement Board to be for the purpose of enhancing 
26compensation as a factor in the determination of final average 
27salary[, provided]; and excluding payments for military leave 
28and any other payments made by an employer while on USERRA 
29leave, leave of absence granted under 51 Pa.C.S. § 4102 
30(relating to leaves of absence for certain government 

1employees), military leave of absence granted under 51 Pa.C.S. § 
27302 (relating to granting military leaves of absence), leave 
3granted under section 1178 of the act of March 10, 1949 (P.L.30, 
4No.14), known as the Public School Code of 1949, or other types 
5of military leave, including other types of leave payments, 
6stipends, differential wage payments as defined in IRC § 414(u)
7(12) and any other payments: Provided, however, that the 
8limitation under section 401(a)(17) of the Internal Revenue Code 
9of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(17)) taken into 
10account for the purpose of member contributions, including 
11regular or joint coverage member contributions, regardless of 
12class of service, shall apply to each member who first became a 
13member of the Public School Employes' Retirement System on or 
14after July 1, 1996, and who by reason of such fact is a 
15noneligible member subject to the application of the provisions 
16of section 8325.1 (relating to annual compensation limit under 
17IRC § 401(a)(17)).

18"Concurrent service." Simultaneously credited school and
19State service.

20"Creditable nonschool service." Service other than service
21as a school employee for which an active member may obtain
22credit.

23"Credited service." School or creditable nonschool service
24for which the required contributions have been made, or for
25which the contributions otherwise required for such service were
26not made solely by reason of any provision of this part relating
27to the limitations under section 401(a)(17) or 415(b) of the
28Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
29401(a)(17) or 415(b)), or for which salary deductions or lump
30sum payments have been agreed upon in writing.

1"Date of termination of service." The last date of service
2for which pickup contributions are made for an active member or,
3in the case of an inactive member, the effective date of his
4resignation or the date his employment is formally discontinued
5by his employer or two years following the last day of service
6for which contributions were made, whichever is earliest.

7"Disability annuitant." A member on or after the effective
8date of disability until his disability annuity or the portion
9of his disability annuity payments in excess of any annuity to
10which he may otherwise be entitled is terminated.

11"Distribution." Payment of all or any portion of a person's
12interest in the Public School Employees' Retirement Fund which
13is payable under this part.

14"Domestic relations order." Any judgment, decree or order,
15including approval of a property settlement agreement, entered
16on or after the effective date of this definition by a court of
17competent jurisdiction pursuant to a domestic relations law
18which relates to the marital property rights of the spouse or
19former spouse of a member, including the right to receive all or
20a portion of the moneys payable to that member under this part
21in furtherance of the equitable distribution of marital assets.
22The term includes orders of support as that term is defined by
2323 Pa.C.S. § 4302 (relating to definitions) and orders for the
24enforcement of arrearages as provided in 23 Pa.C.S. § 3703
25(relating to enforcement of arrearages).

26"Effective date of retirement." The first day following the
27date of termination of service of a member if he has properly
28filed an application for an annuity within 90 days of such date
29or:

30(1) In the case of a member who applies for an annuity

1subsequent to 90 days after termination of service, the date
2of filing such application or the date specified on the
3application, whichever is later.

4(2) In the case of a vestee who files an application for
5an annuity within 90 days of his superannuation age, the
6attainment of such age.

7(3) In the case of a vestee who defers the filing of an
8application for an annuity to a date later than 90 days
9following attainment of superannuation age, the date of
10filing or the date specified on the application, whichever is
11later.

12(4) In the case of a finding of disability, the date
13certified by the board as the effective date of disability.

14"Eligible annuitants." All current and prospective
15annuitants with 24 1/2 or more eligibility points and all
16current and prospective disability annuitants. Beginning January
171, 1995, "eligible annuitants" shall include members with 15 or
18more eligibility points who terminated or who terminate school
19service on or after attaining superannuation retirement age and
20who are annuitants with an effective date of retirement after
21superannuation age.

22"Eligibility points." Points which are accrued by an active 
23member [or], a multiple service member who is an active member 
24of the State Employees' Retirement System for credited service 
25or by a member who has been reemployed from USERRA leave or dies 
26while performing USERRA leave and are used in the determination 
27of eligibility for benefits as provided in section 8306 
28(relating to eligibility points).

29"Employer." Any governmental entity directly responsible for 
30the employment and payment of the school employee and charged 

1with the responsibility of providing public education within 
2this Commonwealth, including but not limited to: State-owned 
3colleges and universities, the Pennsylvania State University, 
4community colleges, area vocational-technical schools, 
5intermediate units, the State Board of Education, Scotland 
6School for Veterans' Children, Thaddeus Stevens College of 
7Technology, and the Western Pennsylvania School for the Deaf.

8"Final average salary." The highest average compensation 
9received as an active member during any three nonoverlapping 
10periods of 12 consecutive months with the compensation for part-
11time service being annualized on the basis of the fractional 
12portion of the school year for which credit is received; except, 
13if the employee was not a member for three such periods, the 
14total compensation received as an active member annualized in 
15the case of part-time service divided by the number of such 
16periods of membership; in the case of a member with multiple 
17service credit, the final average salary shall be determined by 
18reference to compensation received by him as a school employee 
19or a State employee or both; and, in the case of a noneligible 
20member, subject to the application of the provisions of section 
218325.1 (relating to annual compensation limit under IRC § 401(a)
22(17)). Final average salary shall be determined by including in 
23compensation, payments deemed to have been made to a member 
24reemployed from USERRA leave to the extent member contributions 
25have been made as provided in section 8302(d)(2) (relating to 
26credited school service) and payments made to a member on leave 
27of absence under 51 Pa.C.S. § 4102 (relating to leaves of 
28absence for certain government employees) as provided in section 
298302(d)(6).

30"Full coverage member." Any member for whom regular member 

1pickup contributions are being picked up or who has paid or has 
2agreed to pay to the fund the actuarial equivalent of regular 
3member contributions due on account of service prior to January 
41, 1983.

5"Fund." The Public School Employees' Retirement Fund.

6"Governmental entity." Board of school directors, board of
7public education, intermediate unit board of directors, area
8vocational-technical board, any governing board of any agency or
9authority created by them, and the Commonwealth.

10"Inactive member." A member for whom no pickup contributions 
11are being made, except in the case of an active member for whom 
12such contributions otherwise required for current school service 
13are not being made solely by reason of any provision of this 
14part relating to the limitations under section 401(a)(17) or 
15415(b) of the Internal Revenue Code of 1986 (Public Law 99-514, 
1626 U.S.C. § 401(a)(17) or 415(b)) or because the member is on 
17USERRA leave, who has accumulated deductions standing to his 
18credit in the fund and for whom contributions have been made 
19within the last two school years or a multiple service member 
20who is active in the State Employees' Retirement System.

21"Intervening military service." Active military service of a
22member who was a school employee immediately preceding his
23induction into the armed services or forces of the United States
24in order to meet a draft obligation excluding any voluntary
25extension of such obligational service and who becomes a school
26employee within 90 days of the expiration of such service.

27"IRC." The Internal Revenue Code of 1986, as designated and 
28referred to in section 2 of the Tax Reform Act of 1986 (Public 
29Law 99-514, 100 Stat. 2085, 2095). A reference in this part to 
30"IRC § " shall be deemed to refer to the identically numbered 

1section and subsection or other subdivision of such section in 
226 United States Code (relating to Internal Revenue Code).

3"Irrevocable beneficiary." The person or persons permanently
4designated by a member in writing to the board pursuant to an
5approved domestic relations order to receive all or a portion of
6the accumulated deductions or lump sum benefit payable upon the
7death of such member.

8"Irrevocable survivor annuitant." The person permanently
9designated by a member in writing to the board pursuant to an
10approved domestic relations order to receive an annuity upon the
11death of such member.

12"Joint coverage member." Any member who agreed prior to
13January 1, 1966 to make joint coverage member contributions to
14the fund and has not elected to become a full coverage member.

15"Joint coverage member contributions." Regular member
16contributions reduced for a joint coverage member.

17"Leave for service with a collective bargaining 
18organization." Paid leave granted to an active member by an 
19employer for purposes of working full time for or serving full 
20time as an officer of a Statewide employee organization or a 
21local collective bargaining representative under the act of July 
2223, 1970 (P.L.563, No.195), known as the Public Employe 
23Relations Act: Provided, That greater than one-half of the 
24members of the employee organization are active members of the 
25system; that the employer shall fully compensate the member, 
26including, but not limited to, salary, wages, pension and 
27retirement contributions and benefits, other benefits and 
28seniority, as if he were in full-time active service; and that 
29the employee organization shall fully reimburse the employer for 
30such salary, wages, pension and retirement contributions and 

1benefits and other benefits and seniority.

2"Maternity leave of absence." An involuntary leave of
3absence required by the employer because of the pregnancy of the
4member and commencing prior to May 17, 1975.

5"Member." Active member, inactive member, annuitant, or
6vestee.

7"Member's annuity." The single life annuity which is 
8actuarially equivalent on the effective date of retirement to 
9the sum of the accumulated deductions and the shared-risk member 
10contributions and statutory interest credited on the deductions 
11and contributions standing to the member's credit in the 
12members' savings account.

13"Military service." All active military service for which a
14member has received a discharge other than an undesirable, bad
15conduct, or dishonorable discharge.

16"Multiple service." Credited service of a member who has
17elected to combine his credited service in both the Public
18School Employees' Retirement System and the State Employees'
19Retirement System.

20"Noneligible member." For the purposes of section 8325.1
21(relating to annual compensation limit under IRC § 401(a)(17)),
22a member who first became a member on or after July 1, 1996.

23"Participating eligible annuitants." All eligible annuitants
24who are enrolled or elect to enroll in a health insurance
25program approved by the Public School Employees' Retirement
26Board.

27"Pickup contributions." Regular or joint coverage member 
28contributions and shared-risk member contributions which are 
29made by the employer for active members for current service on 
30and after January 1, 1983.

1"Previous school service." Service rendered as a school
2employee including service in any summer school conducted by a
3school district of the Commonwealth prior to the member's most
4recent entrance in the system.

5"Public school." Any or all classes or schools within this
6Commonwealth conducted under the order and superintendence of
7the Department of Education including, but not limited to: all
8educational classes of any employer charged with the
9responsibility of public education within this Commonwealth as
10well as those classes financed wholly or in part by the Federal
11Government, State-owned colleges and universities, the
12Pennsylvania State University, community colleges, area
13vocational-technical schools, intermediate units, the State
14Board of Education, Scotland School for Veterans' Children,
15Thaddeus Stevens State School of Technology, and the
16Pennsylvania State Oral School for the Deaf.

17"Public School Code." The act of March 10, 1949 (P.L.30,
18No.14), known as the Public School Code of 1949.

19"Reemployed from USERRA leave."  Resumption of active 
20membership as a school employee after a period of USERRA leave, 
21if the resumption of active membership was within the time 
22period and under conditions and circumstances such that the 
23school employee was entitled to reemployment rights under 38 
24U.S.C. Ch. 43 (relating to employment and reemployment rights of 
25members of the uniformed services).

26"Regular member contributions." The product of the basic
27contribution rate and the compensation of the member.

28"Reserve component of the armed forces." The United States 
29Army Reserve, United States Navy Reserve, United States Marine 
30Corps Reserve, United States Coast Guard Reserve, United States 

1Air Force Reserve, Pennsylvania Army National Guard and 
2Pennsylvania Air National Guard.

3"Salaried employee." A school employee who is compensated on
4the basis of an annual salary.

5"Salary deductions." The amounts certified by the board,
6deducted from the compensation of an active member or the State
7service compensation of a multiple service member who is an
8active member of the State Employees' Retirement System and paid
9into the fund.

10"School employee." Any person engaged in work relating to a
11public school for any governmental entity and for which work he
12is receiving regular remuneration as an officer, administrator
13or employee excluding, however, any independent contractor or a
14person compensated on a fee basis.

15"School entity." A school district of any class,
16intermediate unit or an area vocational-technical school, as
17provided for under the act of March 10, 1949 (P.L.30, No.14),
18known as the Public School Code of 1949.

19"School service." Service rendered as a school employee.

20"School year." The 12-month period which the governmental
21entity uses for purposes of administration regardless of the
22actual time during which a member renders service.

23"Severance payments." Any payments for unused vacation or
24sick leave and any additional compensation contingent upon
25retirement including payments in excess of the scheduled or
26customary salaries provided for members within the same
27governmental entity with the same educational and experience
28qualifications who are not terminating service.

29"Shared-risk contribution rate." The additional contribution
30rate that is added to the basic contribution rate for Class T-E

1and T-F members, as provided for in section 8321(b) (relating to
2regular member contributions for current service).

3"Standard single life annuity." For Class T-A, T-B and T-C 
4credited service of a member, an annuity equal to 2% of the 
5final average salary, multiplied by the total number of years 
6and fractional part of a year of credited service of a member. 
7For Class T-D credited service of a member, an annuity equal to 
82.5% of the final average salary, multiplied by the total number 
9of years and fractional part of a year of credited service. For 
10Class T-E credited service of a member, an annuity equal to 2% 
11of the final average salary, multiplied by the total number of 
12years and fractional part of a year of credited service of a 
13member. For Class T-F credited service of a member, an annuity 
14equal to 2.5% of the final average salary, multiplied by the 
15total number of years and fractional part of a year of credited 
16service of a member.

17"State Employees' Retirement System." The retirement system
18established by the act of June 27, 1923 (P.L.858, No.331) and
19codified by the act of June 1, 1959 (P.L.392, No.78) and by Part
20XXV of Title 71 (relating to retirement for State employees and
21officers), added March 1, 1974 (P.L.125, No.31).

22"State service." Service rendered as a State employee and
23credited as service in the State Employees' Retirement System.

24"Statutory interest." Interest at 4% per annum, compounded
25annually.

26"Superannuation annuitant." An annuitant whose annuity first
27became payable on or after the attainment of superannuation age
28and who is not a disability annuitant.

29"Superannuation or normal retirement age."

30Class of service	Age
20130SB0797PN0817 -14-
1T-A 2	62 or any age upon accrual of 35 eligibility points
3T-B	62
4T-C and T-D 5 6 7 8	62 or age 60 provided the member has at least 30 eligibility points or any age upon accrual of 35 eligibility points
9T-E and T-F 10 11 12 13 14 15 16	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

17"Survivor annuitant." The person or persons last designated
18by a member under a joint and survivor annuity option to receive
19an annuity upon the death of such member.

20"System." The Public School Employes' Retirement System of
21Pennsylvania as established by the act of July 18, 1917
22(P.L.1043, No.343), and codified by the act of June 1, 1959
23(P.L.350, No.77).

24"Total member contribution rate." The sum of the basic
25contribution rate and the shared-risk contribution rate.

26"USERRA."  The Uniformed Services Employment and Reemployment 
27Rights Act, 38 U.S.C. Ch. 43 (relating to employment and 
28reemployment rights of members of the uniformed services).

29"USERRA leave."  Any period of time for service in the 
30uniformed services as defined in 38 U.S.C. Ch. 43 (relating to 

1employment and reemployment rights of members of the uniformed 
2services) by a school employee or former school employee who 
3terminated school service to perform the service in the 
4uniformed services, if the current or former school employee is 
5entitled to reemployment rights under 38 U.S.C. Ch. 43 with 
6respect to the uniformed service.

7"Valuation interest." Interest at 5 1/2% per annum,
8compounded annually and applied to all accounts other than the
9members' savings account.

10"Vestee." A member with five or more eligibility points who
11has terminated school service, has left his accumulated
12deductions in the fund and is deferring filing of an application
13for receipt of an annuity. For Class T-E and Class T-F members,
14a member with ten or more eligibility points who has terminated
15school service, has left his accumulated deductions in the fund
16and is deferring filing of an application for receipt of an
17annuity.

18Section 2. Section 8302(b.1) of Title 24 is amended by
19adding a paragraph and the section is amended by adding a
20subsection to read:

21§ 8302. Credited school service.

22* * *

23(b.1) Optional credit for leave of absence for activated
24military service.--

25* * *

26(4) This subsection shall apply to leaves of absence for
27activated military service that commence on or before June
2830, 2013.

29* * *

30(d) Credit for military service.--

1(1)  For purposes of determining whether a member is
2eligible to receive credited service for a period of active
3military service, other than active duty service to meet
4periodic training requirements, rendered after August 5, 1991
5and that began before the effective date of this paragraph,
6the provisions of 51 Pa.C.S. Ch. 73 (relating to military
7leave of absence) shall apply to all individuals who were
8active members of the system when the period of military
9service began, notwithstanding if the member is not defined
10as an employee under 51 Pa.C.S. § 7301 (relating to
11definitions). School employees may not receive service credit
12or exercise the options under 51 Pa.C.S. § 7306(a), (b) and
13(c) (relating to retirement rights) for military leaves that
14begin on or after the effective date of this subsection,
15except otherwise provided under this subsection.

16(2)  A school employee who has performed USERRA leave may
17receive credit as provided by this paragraph.

18(i)  A school employee who is reemployed from USERRA
19leave shall be treated as not having incurred a break in
20school service by reason of the USERRA leave and shall be
21granted eligibility points as if the school employee had
22not been on the USERRA leave. If a school employee who is
23reemployed from USERRA leave subsequently makes regular
24member contributions, shared risk member contributions
25and any other member contributions in the amounts and in
26the time periods required by 38 U.S.C. Ch. 43 and IRC §
27414(u) as if the school employee had continued in his
28school office or employment and performed school service
29and been compensated during the period of USERRA leave,
30the school employee shall be granted school service

1credit for the period of USERRA leave. The employee shall
2have his benefits, rights and obligations determined
3under this part as if he was an active member who
4performed creditable school service during the USERRA
5leave in the job position that he would have held had he
6not been on USERRA leave and received the compensation on
7which the member contributions to receive school service
8credit for the USERRA leave were determined.

9(ii)  For purposes of determining whether a school
10employee has made the required employee contributions for
11School service credit for USERRA leave, if an employee
12who is reemployed from USERRA leave terminates school
13service or dies in school service before the expiration
14of the allowed payment period, school service credit for
15the USERRA leave shall be granted as if the required
16member contributions were paid the day before termination
17or death. The amount of the required member contributions
18shall be treated as an incomplete payment subject to the
19provisions of section 8325 (relating to incomplete
20payments). Upon a subsequent return to school service or
21to State service as a multiple service member, the
22required member contributions treated as incomplete
23payments shall be treated as member contributions that
24were either withdrawn in a lump sum at termination, or
25paid as a lump sum under section 8345(a)(4) (relating to
26member's options).

27(iii)  A school employee who is reemployed from
28USERRA leave and who does not make the required member
29contributions or makes only part of the required member
30contributions within the allowed payment period shall not

1be:

2(A) Granted credited service for the period of
3USERRA leave for which the required member
4contributions were not timely made

5(B) Eligible to subsequently make contributions.

6(C) Granted either school service credit or
7nonschool service credit for the period of USERRA
8leave for which the required member contributions
9were not timely made.

10(3)  A school employee who performs USERRA leave from
11which the employee could have been reemployed from USERRA
12leave had the School employee returned to school service in
13the time frames required by 38 U.S.C. Ch. 43 for reemployment
14rights, but did not do so, shall be able to receive
15creditable nonschool service as nonintervening military
16service for the period of USERRA leave if the employee later
17returns to school service and is otherwise eligible to
18purchase the service as nonintervening military service.

19(4) A school employee who, on or after the effect date
20of this subsection, is granted a leave of absence under
21section 1178 of the act of March 10, 1949 (P.L.30, No.14),
22known as the Public School Code of 1949, a leave of absence
23under 51 Pa.C.S. § 4102 (relating to leaves of absence for
24certain government employees) or a military leave under the
2551 Pa.C.S. Ch. 73, that is not USERRA leave shall be able to
26receive creditable nonschool service as nonintervening
27military service should the employee return to school service
28and is otherwise eligible to purchase the service as
29nonintervening military service.

30(5) If a member dies while performing USERRA leave, the

1beneficiaries or survivor annuitants of the deceased member
2shall be entitled to any additional benefits, including
3eligibility points, other than benefit accruals relating to
4the period of qualified military service, provided under this
5part as if the member resumed and then terminated employment
6on account of death.

7(6)  A school employee who is on a leave of absence from
8his duties as a school employee and for which 51 Pa.C.S. §
94102 provides that he is not to suffer a loss of pay, time or
10efficiency shall not be an active member, receive service
11credit or make member contributions for the leave of absence
12except as provided for in this part. Notwithstanding this
13paragraph, any pay the member receives under section 1178 of
14the Public School Code of 1949 or 51 Pa.C.S. § 4102 shall be
15included in the determination of final average salary and
16other calculations utilizing compensation as if the payments
17were compensation under this part.

18Section 3. Section 8303 of Title 24 is amended by adding a
19subsection to read:

20§ 8303. Eligibility points for retention and reinstatement of
21service credits.

22* * *

23(b.1) USERRA leave.--A member who is reemployed from USERRA 
24leave or who dies while performing USERRA leave shall receive 
25eligibility points in accordance with section 8306 for the 
26school service that would have been performed had the member not 
27performed USERRA leave.

28* * *

29Section 4. Sections 8304(b) and 8305.2(b) of Title 24 are
30amended to read:

1§ 8304. Creditable nonschool service.

2* * *

3(b) Limitations on nonschool service.--Creditable nonschool
4service credit shall be limited to:

5(1) Intervening military service, if the member returned 
6to school service before July 1, 2013.

7(2) Military service other than intervening military
8service [and], activated military service or service 
9performed during USERRA leave not exceeding five years
10provided that a member with multiple service may not purchase
11more than a total of five years of military service in both
12the system and the State Employees' Retirement System.

13(3) Service in any public school or public educational
14institution in any state other than this Commonwealth or in
15any territory or area under the jurisdiction of the United
16States. This paragraph includes service, prior to July 1,
171965, at a community college established under the act of 
18August 24, 1963 (P.L.1132, No.484), known as the Community
19College Act of 1963.

20(4) Service as an administrator, teacher, or instructor
21in the field of public school education for any agency or
22department of the government of the United States whether or
23not such area was under the jurisdiction of the United
24States.

25(5) Previous service as an employee of a county board of
26school directors which employment was terminated because of
27the transfer of the administration of such service or of the
28entire agency to a governmental entity.

29(6) Previous service as a county employee as a nurse.
30For every three years or major fraction thereof in previous

1work experience, an individual may buy one year of creditable
2service, not to exceed a total of five years. The purchase of
3this service shall begin within three years of the employee's
4eligibility to purchase this creditable service.

5(7) (i) Service for the period of time spent on a
6maternity leave of absence required by the employer,
7which creditable service shall not exceed two years per
8leave and shall be applicable only to a maternity leave
9which was mandatory prior to May 17, 1975. The purchase
10of this service shall begin within one year of the
11employee's eligibility to purchase the creditable service
12under this subparagraph as originally enacted by the act
13of August 5, 1991 (P.L.183, No.23), entitled "An act
14amending Titles 24 (Education) and 71 (State Government)
15of the Pennsylvania Consolidated Statutes, further
16providing for the Public School Employees' Retirement
17System and the State Employees' Retirement System; adding
18and amending certain definitions; further providing for
19membership in the systems, for creditable nonschool and
20nonstate service and the purchase of credit, for
21incentives for special early retirement, for
22contributions to the retirement funds, for annuities and
23the rights and duties of annuitants, for health insurance
24premium assistance, for board membership and for the re-
25amortization and management of the retirement funds."

26(ii) Service for the period of time spent on a
27maternity leave of absence required by the employer,
28which creditable service shall not exceed two years per
29leave and shall be applicable only to a maternity leave
30that was mandatory and began after May 16, 1975, and

1prior to November 1, 1978. The purchase of this service
2shall begin within one year of the employee's eligibility
3to purchase the creditable service under this
4subparagraph.

5(8) Service in the Cadet Nurse Corps with respect to any
6period of training as a student or graduate nurse under a
7plan approved under section 2 of the act of June 15, 1943
8(Public Law 78-73, 57 Stat. 153), if the total period of
9training under the plan was at least two years, the credit
10for such service not to exceed three years.

11* * *

12§ 8305.2. Election to become a Class T-F member.

13* * *

14(b) Time for making election.--A member must elect to become 
15a Class T-F member by filing a written election with the board 
16within 45 days of notification by the board that such member is 
17eligible for such election. A school employee who is eligible to 
18elect to become a Class T-F member who begins USERRA leave 
19during the election period without having elected Class T-F 
20membership may make the election within 45 days after being 
21reemployed from USERRA leave.

22* * *

23Section 5. Section 8306(b) of Title 24 is amended and the
24section is amended by adding a subsection to read:

25§ 8306. Eligibility points.

26* * *

27(a.1) USERRA leave.--A member who is reemployed from USERRA 
28leave or who dies while performing USERRA leave shall be granted 
29the eligibility points that he would have accrued had he 
30continued in his school office or employment instead of 

1performing USERRA leave. If a school employee who is reemployed 
2from USERRA leave makes the member contributions to be granted 
3school service credit for the USERRA leave, no additional 
4eligibility points may be granted.

5(b) Transitional rule.--For the purposes of the transition:

6(1) In determining whether a member, other than a
7disability annuitant who returns to school service after June
830, 2001, upon termination of the disability annuity, who is
9not a school employee or a State employee on June 30, 2001,
10and July 1, 2001, and who has previous school service, has
11the five eligibility points required by the definition of
12"vestee" in sections 8102 (relating to definitions), 8307
13(relating to eligibility for annuities), 8308 (relating to
14eligibility for vesting) and 8345 (relating to member's
15options), only eligibility points earned by performing
16credited school service, USERRA leave or credited State
17service after June 30, 2001, shall be counted until such
18member earns one eligibility point by performing credited
19school service or credited State service after June 30, 2001,
20at which time all eligibility points as determined under
21subsection (a) shall be counted.

22(2) A member subject to paragraph (1) shall be
23considered to have satisfied any requirement for five
24eligibility points contained in this part if the member has
25at least ten eligibility points determined under subsection
26(a).

27Section 6. Section 8325 of Title 24 is amended to read:

28§ 8325. Incomplete payments.

29In the event that a member terminates school service or a 
30multiple service member who is an active member of the State 

1Employees' Retirement System terminates State service before any 
2agreed upon payments for USERRA leave or return of benefits on 
3account of returning to school service or entering State service 
4and electing multiple service have been completed, the member or 
5multiple service member who is an active member of the State 
6Employees' Retirement System shall have the right to pay within 
730 days of termination of school service or State service the 
8balance due, including interest, in a lump sum, and the annuity 
9shall be calculated including full credit for the previous 
10school service, creditable nonschool service, or full-coverage 
11membership. In the event a member does not pay the balance due 
12within 30 days of termination of school service or in the event 
13a member dies in school service or within 30 days of termination 
14of school service or in the case of a multiple service member 
15who is an active member of the State Employees' Retirement 
16System does not pay the balance due within 30 days of 
17termination of State service or dies in State service or within 
1830 days of termination of State service and before the agreed 
19upon payments have been completed, the present value of the 
20benefit otherwise payable shall be reduced by the balance due, 
21including interest, and the benefit payable shall be calculated 
22as the actuarial equivalent of such reduced present value.

23Section 7. Section 8326 of Title 24 is amended by adding a
24section to read:

25§ 8326. Contributions by the Commonwealth.

26* * *

27(d)  Contributions resulting from members reemployed from 
28USERRA leave.--When a school employee reemployed from USERRA 
29leave makes the member contributions required to be granted 
30School service credit for the USERRA leave, either by actual 

1payment or by actuarial debt under section 8325 (relating to 
2incomplete payments), the Commonwealth employer or other 
3employer by whom the School employee is employed at the time the 
4member contributions are made, or the last employer before 
5termination in the case of payment under sections 8327 (relating 
6to payments by employers) and 8535 (relating to payments to 
7school entities by Commonwealth), shall make any employer 
8contributions that would have been made under this section as if 
9the employee making the member contributions after being 
10reemployed from USERRA leave continued to be employed in his 
11school office or position instead of performing USERRA leave.

12Section 8. Section 8346(d) of Title 24 is amended and the
13section is amended by adding a subsection to read:

14§ 8346. Termination of annuities.

15* * *

16(a.2)  Return of benefits paid during USERRA leave.--If a 
17former school employee is reemployed from USERRA leave who had 
18received any payments or annuity from the system during the 
19USERRA leave, the employee shall return to the board the amount 
20received plus statutory interest. The amount payable shall be 
21certified by the board in accordance with methods approved by 
22the actuary and:

23(1) shall be paid in a lump sum within 30 days; or

24(2) in the case of an active member, may be amortized 
25with statutory interest through salary deductions in amounts 
26agreed upon by the member and the board for not longer than a 
27period that starts with the date of reemployment and 
28continuing for up to three times the length of the member's 
29immediate past period of USERRA leave. A repayment period 
30under this paragraph may not exceed five years or a longer 

1time as agreed to between the board and the member.

2* * *

3(d) Elimination of the effect of frozen present value.--

4(1) An annuitant who returns to school service and earns
5three eligibility points by performing credited school
6service or reemployment from USERRA leave following the most
7recent period of receipt of an annuity under this part, or an
8annuitant who enters State service and:

9(i) is a multiple service member; or

10(ii) who elects multiple service membership, and

11earns three eligibility points by performing credited State
12service, reemployment from USERRA leave or credited school
13service following the most recent period of receipt of an
14annuity under this part, and who had the present value of his
15annuity frozen in accordance with subsection (a), shall
16qualify to have the effect of the frozen present value
17resulting from all previous periods of retirement eliminated,
18provided that all payments under Option 4 and annuity
19payments payable during previous periods of retirement plus
20interest as set forth in paragraph (3) shall be returned to
21the fund in the form of an actuarial adjustment to his
22subsequent benefits or in such form as the board may
23otherwise direct.

24(2) Upon subsequent discontinuance of service and the
25filing of an application for an annuity, a former annuitant
26who qualifies to have the effect of a frozen present value
27eliminated under this subsection shall be entitled to receive
28the higher of either:

29(i) an annuity (prior to optional modification)
30calculated as if the freezing of the former annuitant's

1account pursuant to subsection (a) had not occurred,
2adjusted by crediting Class T-C school service as Class
3T-D service as provided for in section 8305(c) (relating
4to classes of service) and further adjusted according to
5paragraph (3), provided that a former annuitant of the
6system or a former annuitant of the State Employees'
7Retirement System who retired under a provision of law
8granting additional service credit if termination of
9school or State service or retirement occurred during a
10specific period of time shall not be permitted to retain
11the additional service credit under the prior law when
12the annuity is computed for his most recent retirement;
13or

14(ii) an annuity (prior to optional modification)
15calculated as if the former annuitant did not qualify to
16have the effect on the frozen present value eliminated,

17unless the former annuitant notifies the board in writing by
18the later of the date the application for annuity is filed or
19the effective date of retirement that the former annuitant
20wishes to receive the lower annuity.

21(3) In addition to any other adjustment to the present
22value of the maximum single life annuity that a member may be
23entitled to receive that occurs as a result of any other
24provision of law, the present value of the maximum single
25life annuity shall be reduced by all amounts paid or payable
26to him during all previous periods of retirement plus
27interest on these amounts until the date of subsequent
28retirement. The interest for each year shall be calculated
29based upon the annual interest rate adopted for that school
30year by the board for the calculation of the normal

1contribution rate pursuant to section 8328(b) (relating to
2actuarial cost method).

3Section 9. Sections 8347(a) and (b), 8502(m) and 8505(h) of
4Title 24 are amended to read:

5§ 8347. Death benefits.

6(a) Members eligible for annuities.--Any member or former 
7member on USERRA leave, other than an annuitant, who dies and
8was eligible for an annuity in accordance with section 8307(a)
9or (b) (relating to eligibility for annuities) shall be
10considered as having applied for an annuity to become effective
11the day before his death; and, in the event he has not elected
12an option, it shall be assumed that he elected Option 1 and
13assigned as beneficiary that person last designated in writing
14to the board.

15(b) Members ineligible for annuities.--In the event of the
16death of any member or former member on USERRA leave, other than
17an annuitant, who is not entitled to a death benefit as provided
18in subsection (a), his designated beneficiary shall be paid the
19full amount of his accumulated deductions.

20* * *

21§ 8502. Administrative duties of board.

22* * *

23(m) Member contributions and interest.--The board shall
24cause each member's contributions, including payroll deductions,
25pickup contributions and all other payments, including, but not
26limited to, amounts collected by the State Employees' Retirement
27System for the reinstatement of previous school service or
28creditable nonschool service and amounts paid to return benefits
29paid after the date of return to school service or entering
30State service representing lump sum payments made pursuant to

1section 8345(a)(4)(iii) (relating to member's options) and
2member's annuity payments, but not including other benefits
3returned pursuant to section 8346(a.1) (relating to termination
4of annuities) and section 8346(a.2), to be credited to the
5account of such member and shall pay all such amounts into the
6fund. Such contributions shall be credited with statutory
7interest until date of termination of service, except in the
8case of a vestee, who shall have such interest credited until
9the effective date of retirement or until the return of his
10accumulated deductions, if he so elects; and in the case of a
11multiple service member who shall have such interest credited
12until termination of service in both the school and the State
13systems.

14* * *

15§ 8505. Duties of board regarding applications and elections of
16members.

17* * *

18(h) Death benefits.--Upon receipt of notification of the
19death of a member or former member on USERRA leave, the board
20shall notify the designated beneficiary or survivor annuitant of
21the benefits to which he is entitled and shall make the first
22payment to the beneficiary under the plan elected by the
23beneficiary within 60 days of receipt of certification of death
24and other necessary data. If no beneficiary designation is in
25effect at the date of the member's death or no notice has been
26filed with the board to pay the amount of such benefits to the
27member's estate, the board is authorized to pay such benefits to
28the executor, administrator, surviving spouse or next-of-kin of
29the deceased member, and payment pursuant hereto shall fully
30discharge the fund from any further liability to make payment of

1such benefits to any other person. If the surviving spouse or
2next-of-kin of the deceased member cannot be found for the
3purpose of paying such benefits for a period of seven years from
4the date of death of the member, then such benefits shall be
5escheated to the Commonwealth for the benefit of the fund.

6* * *

7Section 10. Section 8506 of Title 24 is amended by adding a
8subsection to read:

9§ 8506. Duties of employers.

10* * *

11(k)  School employees performing USERRA or military-related 
12leave of absence.--The employer shall report to the board all of 
13the following:

14(1) Any school employee who:

15(i) ceases to be an active member to perform USERRA
16service; or

17(ii) is granted a leave of absence under 51 Pa.C.S.
18§ 4102 (relating to leaves of absence for certain
19government employees) or a military leave of absence
20under 51 Pa.C.S. § 7302 (relating to granting military
21leaves of absence).

22(2) The date on which the USERRA service, leave of
23absence or military leave of absence under began.

24(3) The date on which the school employee is reemployed
25from USERRA leave or returns after the leave of absence or
26military leave of absence, if applicable.

27(4) Any other information the board may require.

28Section 11. Section 8507(c) of Title 24 is amended and the
29section is amended by adding a subsection to read:

30§ 8507. Rights and duties of school employees and members.

1* * *

2(c) Multiple service membership.--Any active member who was
3formerly an active member in the State Employees' Retirement
4System may elect to become a multiple service member. Such
5election shall occur no later than 365 days after becoming an
6active member in this system. A school employee who is eligible 
7to elect to become a multiple service member and who begins 
8USERRA leave during the election period without having elected 
9multiple service membership may make the election within 365 
10days after being reemployed from USERRA leave.

11* * *

12(d.1)  School service for USERRA leave.--Any active member or
13inactive member on leave without pay who was reemployed from
14USERRA leave and who desires to receive school service credit
15for his USERRA leave shall notify the board within the time
16period required under 38 U.S.C. Chapter 43 (relating to
17employment and reemployment rights of members of the uniformed
18services) and IRC §414(u) of his desire to make the required
19member contributions. Upon making the required member
20contributions within the allowed time period, the member shall
21receive credit for the service as of the date the contributions
22are made.

23* * *

24Section 12. Section 7306(a) of Title 51, amended October 24,
252012 (P.L.1436, No.181), is amended and the section is amended
26by adding a subsection to read:

27§ 7306. Retirement rights.

28(a) Options available to employees.--Any employee who is a
29member of a retirement system other than an active member or 
30inactive member on leave without pay of the State Employees' 

1Retirement System or an active or inactive member of the Public 
2School Employees' Retirement System at the time he is granted a
3military leave of absence shall be entitled to exercise any one
4of the following options in regard thereto:

5(1) He may continue to make regular payments into the
6fund during the period of his military leave of absence. The
7amount of such payments shall be the same as they would have
8been, had he not been granted a military leave of absence,
9but had instead remained actively in his employment. The time
10of making such payments shall be mutually agreed upon by the
11employee and the retirement association of which he is a
12member, but in no event shall be less frequent than
13semiannually. The employer shall make its contributions on
14the same basis as is used to compute the employee's
15contributions. In this case, his retirement rights shall be
16determined on the basis that he was in the active, continuous
17and uninterrupted employ of his employer for the period
18during which he was on military leave of absence.

19(2) He may discontinue making payments into the fund
20during the period of his military leave of absence. In such
21event, the employer shall also discontinue making its
22contributions during this period. In this case, his
23retirement rights shall be determined by completely
24disregarding the period of his military leave of absence for
25all purposes.

26* * *

27(e)  Members of Public School Employees' Retirement System.--
28An employee who is an active member or inactive member of the
29Public School Employees' Retirement System at the time he is
30granted a military leave of absence shall be entitled to receive

1credit in the Public School Employees' Retirement System for the
2leave as provided under 24 Pa.C.S. Pt. IV (relating to
3retirement for school employees).

4Section 13. This act shall apply as follows:

5(1)(i) Except as provided under subparagraph (ii), the
6amendment of 24 Pa.C.S. Pt. IV shall apply to leaves of
7absence, military leaves of absence and leaves pursuant to 38
8U.S.C. Ch. 43 that are granted on or after the effective date
9of this section.

10(ii) If a member died performing uniformed service
11under 38 U.S.C. Ch. 43, the amendment of 24 Pa.C.S. Pt.
12IV shall apply to leaves of absence, military leaves of
13absence and leaves pursuant to 38 U.S.C. Ch. 43 that were
14granted on or after December 31, 2006.

15(2) The amendment or addition of 51 Pa.C.S. § 7306(a)
16and (e) shall apply to leaves of absence or military leaves
17of absence that are granted on or after the effective date of
18this section.

19Section 14.  Notwithstanding the provisions of 24 Pa.C.S. §
208503(b), the statement for each member prepared by the Public
21School Employees' Retirement Board for the period ending June
2230, 2013, and any other statements or estimates of benefits
23prepared by the board under 24 Pa.C.S. Pt. IV from the effective
24date of this section to June 30, 2014, shall not be required to
25reflect the provisions of this act.

26Section 15.  Notwithstanding the provisions of 24 Pa.C.S. Pt.
27IV, the obligation of the Public School Employees' Retirement
28Board to make payments to any individual whose rights, benefits
29and obligations are affected by this act within specified time
30periods of the receipt of applications for benefits or other

1information shall not apply from the effective date of this
2section to June 30, 2014.

3Section 16.  The board shall have the authority to:

4(1) Implement the requirements of 24 Pa.C.S. Pt IV.
5pertaining to school employees on USERRA leave or who have
6been granted a leave of absence under 51 Pa.C.S. § 4102, a
7leave of absence under 24 Pa.C.S. Pt IV or a military leave
8of absence under 51 Pa.C.S. § 7302.

9(2) Establish administrative, reporting and payment
10requirements and processes pertaining to the leaves
11applicable to employers and members.

12Section 17.  Nothing under this act shall be deemed to permit
13the restoration of service credit or retirement benefits which
14were or are subject to 42 Pa.C.S. § 3352 or the subject of an
15order of forfeiture pursuant to the act of July 8, 1978
16(P.L.752, No.140), known as the Public Employee Pension
17Forfeiture Act.

18Section 18.  Nothing under this act shall be construed or
19deemed to imply that any interpretation or application of the
20provisions of 24 Pa.C.S. Pt. IV or benefits available to members
21of the Public School Employees' Retirement System was not in
22accordance with the provisions of 24 Pa.C.S. Pt. IV or other
23applicable law, including the Internal Revenue Code of 1986
24(Public Law 99-514, 26 U.S.C. § 1 et seq.) prior to the
25effective date of this section. It is the express intent of the
26General Assembly that nothing under this act shall be construed
27to grant to or be deemed to imply that this act expands,
28contracts or otherwise affects any contractual rights, either
29expressed or implied, or any other constitutionally protected
30rights, in the terms and conditions of the Public School

1Employees' Retirement System or other pension or retirement
2benefits as a State employee, including, but not limited to,
3benefits, options, rights or privileges established by 24
4Pa.C.S. Pt. IV for any current or former public school
5employees.

6Section 19.  This act shall be construed and administered in
7such a manner that the Public School Employees' Retirement
8System will satisfy the requirements necessary to qualify as a
9qualified pension plan under section 401(a) and other applicable
10provisions of the Internal Revenue Code of 1986 (Public Law 99-
11514, 26 U.S.C. § 1 et seq.) and 38 U.S.C. Ch. 43. The rules,
12regulations and procedures adopted and promulgated by the State
13Employees' Retirement Board under 24 Pa.C.S. § 8502(h) may
14include those necessary to accomplish the purpose of this
15section.

16Section 20. The following shall apply:

17(1) The amendment of 51 Pa.C.S. § 7306 or 24 Pa.C.S. Pt.
18IV shall not:

19(i) Create in any member of the Public School
20Employees' Retirement System or in any other person
21claiming an interest in the account of any member a
22contractual right, either expressed or implied, in
23relation to requirements for qualification of the Public
24School Employees' Retirement System as a qualified
25pension plan under the Internal Revenue Code of 1986
26(Public Law 99-514, 26 U.S.C. § 1 et seq.).

27(ii) Establish compliance with or affect any
28construction of:

29(A) 38 U.S.C. Ch. 43.

30(B) 24 Pa.C.S. Pt. IV or any rules or

1regulations adopted under 24 Pa.C.S. Pt. IV.

2(2) The provisions of 24 Pa.C.S. Pt. IV shall remain
3subject to the Internal Revenue Code of 1986, and the General
4Assembly reserves to itself the further exercise of its
5legislative power to amend or supplement the provisions as
6may be required in order to maintain the qualification of the
7system as a qualified pension plan under section 401(a) and
8other applicable provisions of the Internal Revenue Code of
91986 and 38 U.S.C. Ch. 43.

10Section 21.  References in this act to the Internal Revenue
11Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et. Seq.) or 38
12U.S.C. Ch. 43, including for this purpose administrative
13regulations promulgated under those acts, are intended to
14include laws and regulations in effect on the effective date of
15this section and as they may be amended or supplemented or
16supplanted by successor provisions after the effective date of
17this section.

18Section 22.  This act shall take effect July 1, 2013, or
19immediately, whichever is later.