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.

1"Activated military service." Military service by a member 
2of a reserve component of the armed forces, pursuant to an order 
3on or after July 1, 1990, and prior to July 1, 2013, to enter 
4into active military service, other than an order to enter into 
5active duty to meet periodic training requirements, who was an 
6active member of the system immediately preceding the order into 
7active military service and to whom the military leave 
8provisions of 51 Pa.C.S. Ch. 73 (relating to military leave of 
9absence) do not apply.

10"Active member." A school employee for whom pickup
11contributions are being made to the fund or for whom such
12contributions otherwise required for current school service are
13not being made solely by reason of any provision of this part
14relating to the limitations under section 401(a)(17) or 415(b)
15of the Internal Revenue Code of 1986 (Public Law 99-514, 26
16U.S.C. § 401(a)(17) or 415(b)).

17"Actuarially equivalent." Equal present values, computed on
18the basis of statutory interest and the mortality tables adopted
19by the board.

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

21(1) a member of the American Academy of Actuaries;

22(2) an individual who has demonstrated to the
23satisfaction of the Insurance Commissioner of Pennsylvania
24that he has the educational background necessary for the
25practice of actuarial science and has had at least seven
26years of actuarial experience; or

27(3) a firm, partnership, or corporation of which at
28least one member meets the requirements of paragraph (1) or
29(2).

30"Alternate payee." Any spouse, former spouse, child or
 

1dependent of a member who is recognized by a domestic relations 
2order as having a right to receive all or a portion of the 
3moneys payable to that member under this part.

4"Alternative investment." An investment in a private equity
5fund, private debt fund, venture fund, real estate fund, hedge
6fund or absolute return fund.

7"Alternative investment vehicle." A limited partnership,
8limited liability company or any other legal vehicle for
9authorized investments under section 8521(i) (relating to
10management of fund and accounts) through which the system makes
11an alternative investment.

12"Annuitant." Any member on or after the effective date of
13retirement until his annuity is terminated.

14"Approved domestic relations order." Any domestic relations
15order which has been determined to be approved in accordance
16with section 8533.1 (relating to approval of domestic relations
17orders).

18"Approved leave of absence." A leave of absence for
19activated military service or which has been approved by the
20employer for sabbatical leave, service as an exchange teacher,
21service with a collective bargaining organization or
22professional study.

23"Basic contribution rate." For Class T-A, T-B and T-C 
24service, the rate of 6 1/4%. For Class T-D service, the rate of 
257 1/2%. For all active members on the effective date of this 
26provision who are currently paying 5 1/4% and elect Class T-D 
27service, the rate of 6 1/2%. For Class T-E service, the rate of 
287 1/2%. For Class T-F service, the rate of 10.30%.

29"Beneficiary." The person or persons last designated in
30writing to the board by a member to receive his accumulated

1deductions or a lump sum benefit upon the death of such member.

2"Board." The Public School Employees' Retirement Board or
3the Public School Employes' Retirement Board.

4"Class of service multiplier."

5Class of service	Multiplier
6T-A	.714
7T-B	.625
8T-C	1.000
9T-D	1.000
10T-E	1.000
11T-F	1.000

12"Commissioner." The Commissioner of the Internal Revenue
13Service.

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

1(relating to leaves of absence for certain government 
2employees), military leave of absence granted under 51 Pa.C.S. § 
37302 (relating to granting military leaves of absence), leave 
4granted under section 1178 of the act of March 10, 1949 (P.L.30, 
5No.14), known as the Public School Code of 1949, or other types 
6of military leave, including other types of leave payments, 
7stipends, differential wage payments as defined in IRC § 414(u)
8(12) and any other payments<-: Provided, provided, however, that 
9the limitation under section 401(a)(17) of the Internal Revenue 
10Code of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(17)) taken 
11into account for the purpose of member contributions, including 
12regular or joint coverage member contributions, regardless of 
13class of service, shall apply to each member who first became a 
14member of the Public School Employes' Retirement System on or 
15after July 1, 1996, and who by reason of such fact is a 
16noneligible member subject to the application of the provisions 
17of section 8325.1 (relating to annual compensation limit under 
18IRC § 401(a)(17)).

19"Concurrent service." Simultaneously credited school and
20State service.

21"Creditable nonschool service." Service other than service
22as a school employee for which an active member may obtain
23credit.

24"Credited service." School or creditable nonschool service
25for which the required contributions have been made, or for
26which the contributions otherwise required for such service were
27not made solely by reason of any provision of this part relating
28to the limitations under section 401(a)(17) or 415(b) of the
29Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
30401(a)(17) or 415(b)), or for which salary deductions or lump

1sum payments have been agreed upon in writing.

2"Date of termination of service." The last date of service
3for which pickup contributions are made for an active member or,
4in the case of an inactive member, the effective date of his
5resignation or the date his employment is formally discontinued
6by his employer or two years following the last day of service
7for which contributions were made, whichever is earliest.

8"Disability annuitant." A member on or after the effective
9date of disability until his disability annuity or the portion
10of his disability annuity payments in excess of any annuity to
11which he may otherwise be entitled is terminated.

12"Distribution." Payment of all or any portion of a person's
13interest in the Public School Employees' Retirement Fund which
14is payable under this part.

15"Domestic relations order." Any judgment, decree or order,
16including approval of a property settlement agreement, entered
17on or after the effective date of this definition by a court of
18competent jurisdiction pursuant to a domestic relations law
19which relates to the marital property rights of the spouse or
20former spouse of a member, including the right to receive all or
21a portion of the moneys payable to that member under this part
22in furtherance of the equitable distribution of marital assets.
23The term includes orders of support as that term is defined by
2423 Pa.C.S. § 4302 (relating to definitions) and orders for the
25enforcement of arrearages as provided in 23 Pa.C.S. § 3703
26(relating to enforcement of arrearages).

27"Effective date of retirement." The first day following the
28date of termination of service of a member if he has properly
29filed an application for an annuity within 90 days of such date
30or:

1(1) In the case of a member who applies for an annuity
2subsequent to 90 days after termination of service, the date
3of filing such application or the date specified on the
4application, whichever is later.

5(2) In the case of a vestee who files an application for
6an annuity within 90 days of his superannuation age, the
7attainment of such age.

8(3) In the case of a vestee who defers the filing of an
9application for an annuity to a date later than 90 days
10following attainment of superannuation age, the date of
11filing or the date specified on the application, whichever is
12later.

13(4) In the case of a finding of disability, the date
14certified by the board as the effective date of disability.

15"Eligible annuitants." All current and prospective
16annuitants with 24 1/2 or more eligibility points and all
17current and prospective disability annuitants. Beginning January
181, 1995, "eligible annuitants" shall include members with 15 or
19more eligibility points who terminated or who terminate school
20service on or after attaining superannuation retirement age and
21who are annuitants with an effective date of retirement after
22superannuation age.

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

30"Employer." Any governmental entity directly responsible for
 

1the employment and payment of the school employee and charged 
2with the responsibility of providing public education within 
3this Commonwealth, including but not limited to: State-owned 
4colleges and universities, the Pennsylvania State University, 
5community colleges, area vocational-technical schools, 
6intermediate units, the State Board of Education, Scotland 
7School for Veterans' Children, Thaddeus Stevens College of 
8Technology, and the Western Pennsylvania School for the Deaf.

9"Final average salary." The highest average compensation 
10received as an active member during any three nonoverlapping 
11periods of 12 consecutive months with the compensation for part-
12time service being annualized on the basis of the fractional 
13portion of the school year for which credit is received; except, 
14if the employee was not a member for three such periods, the 
15total compensation received as an active member annualized in 
16the case of part-time service divided by the number of such 
17periods of membership; in the case of a member with multiple 
18service credit, the final average salary shall be determined by 
19reference to compensation received by him as a school employee 
20or a State employee or both; and, in the case of a noneligible 
21member, subject to the application of the provisions of section 
228325.1 (relating to annual compensation limit under IRC § 401(a)
23(17)). Final average salary shall be determined by including in 
24compensation, payments deemed to have been made to a member 
25reemployed from USERRA leave to the extent member contributions 
26have been made as provided in section 8302(d)(2) (relating to 
27credited school service) and payments made to a member on leave 
28of absence under 51 Pa.C.S. § 4102 (relating to leaves of 
29absence for certain government employees) as provided in section 
308302(d)(6).

1"Full coverage member." Any member for whom regular member 
2pickup contributions are being picked up or who has paid or has 
3agreed to pay to the fund the actuarial equivalent of regular 
4member contributions due on account of service prior to January 
51, 1983.

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

7"Governmental entity." Board of school directors, board of
8public education, intermediate unit board of directors, area
9vocational-technical board, any governing board of any agency or
10authority created by them, and the Commonwealth.

11"Inactive member." A member for whom no pickup contributions 
12are being made, except in the case of an active member for whom 
13such contributions otherwise required for current school service 
14are not being made solely by reason of any provision of this 
15part relating to the limitations under section 401(a)(17) or 
16415(b) of the Internal Revenue Code of 1986 (Public Law 99-514, 
1726 U.S.C. § 401(a)(17) or 415(b)) or because the member is on 
18USERRA leave, who has accumulated deductions standing to his 
19credit in the fund and for whom contributions have been made 
20within the last two school years or a multiple service member 
21who is active in the State Employees' Retirement System.

22"Intervening military service." Active military service of a
23member who was a school employee immediately preceding his
24induction into the armed services or forces of the United States
25in order to meet a draft obligation excluding any voluntary
26extension of such obligational service and who becomes a school
27employee within 90 days of the expiration of such service.

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

1"IRC § " shall be deemed to refer to the identically numbered 
2section and subsection or other subdivision of such section in 
326 United States Code (relating to Internal Revenue Code).

4"Irrevocable beneficiary." The person or persons permanently
5designated by a member in writing to the board pursuant to an
6approved domestic relations order to receive all or a portion of
7the accumulated deductions or lump sum benefit payable upon the
8death of such member.

9"Irrevocable survivor annuitant." The person permanently
10designated by a member in writing to the board pursuant to an
11approved domestic relations order to receive an annuity upon the
12death of such member.

13"Joint coverage member." Any member who agreed prior to
14January 1, 1966 to make joint coverage member contributions to
15the fund and has not elected to become a full coverage member.

16"Joint coverage member contributions." Regular member
17contributions reduced for a joint coverage member.

18"Leave for service with a collective bargaining 
19organization." Paid leave granted to an active member by an 
20employer for purposes of working full time for or serving full 
21time as an officer of a Statewide employee organization or a 
22local collective bargaining representative under the act of July 
2323, 1970 (P.L.563, No.195), known as the Public Employe 
24Relations Act: Provided, That greater than one-half of the 
25members of the employee organization are active members of the 
26system; that the employer shall fully compensate the member, 
27including, but not limited to, salary, wages, pension and 
28retirement contributions and benefits, other benefits and 
29seniority, as if he were in full-time active service; and that 
30the employee organization shall fully reimburse the employer for
 

1such salary, wages, pension and retirement contributions and 
2benefits and other benefits and seniority.

3"Maternity leave of absence." An involuntary leave of
4absence required by the employer because of the pregnancy of the
5member and commencing prior to May 17, 1975.

6"Member." Active member, inactive member, annuitant, or
7vestee.

8"Member's annuity." The single life annuity which is 
9actuarially equivalent on the effective date of retirement to 
10the sum of the accumulated deductions and the shared-risk member 
11contributions and statutory interest credited on the deductions 
12and contributions standing to the member's credit in the 
13members' savings account.

14"Military service." All active military service for which a
15member has received a discharge other than an undesirable, bad
16conduct, or dishonorable discharge.

17"Multiple service." Credited service of a member who has
18elected to combine his credited service in both the Public
19School Employees' Retirement System and the State Employees'
20Retirement System.

21"Noneligible member." For the purposes of section 8325.1
22(relating to annual compensation limit under IRC § 401(a)(17)),
23a member who first became a member on or after July 1, 1996.

24"Participating eligible annuitants." All eligible annuitants
25who are enrolled or elect to enroll in a health insurance
26program approved by the Public School Employees' Retirement
27Board.

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

1and after January 1, 1983.

2"Previous school service." Service rendered as a school
3employee including service in any summer school conducted by a
4school district of the Commonwealth prior to the member's most
5recent entrance in the system.

6"Public school." Any or all classes or schools within this
7Commonwealth conducted under the order and superintendence of
8the Department of Education including, but not limited to: all
9educational classes of any employer charged with the
10responsibility of public education within this Commonwealth as
11well as those classes financed wholly or in part by the Federal
12Government, State-owned colleges and universities, the
13Pennsylvania State University, community colleges, area
14vocational-technical schools, intermediate units, the State
15Board of Education, Scotland School for Veterans' Children,
16Thaddeus Stevens State School of Technology, and the
17Pennsylvania State Oral School for the Deaf.

18"Public School Code." The act of March 10, 1949 (P.L.30,
19No.14), known as the Public School Code of 1949.

20"Reemployed from USERRA leave."  Resumption of active 
21membership as a school employee after a period of USERRA leave, 
22if the resumption of active membership was within the time 
23period and under conditions and circumstances such that the 
24school employee was entitled to reemployment rights under 38 
25U.S.C. Ch. 43 (relating to employment and reemployment rights of 
26members of the uniformed services).

27"Regular member contributions." The product of the basic
28contribution rate and the compensation of the member.

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

1Corps Reserve, United States Coast Guard Reserve, United States 
2Air Force Reserve, Pennsylvania Army National Guard and 
3Pennsylvania Air National Guard.

4"Salaried employee." A school employee who is compensated on
5the basis of an annual salary.

6"Salary deductions." The amounts certified by the board,
7deducted from the compensation of an active member or the State
8service compensation of a multiple service member who is an
9active member of the State Employees' Retirement System and paid
10into the fund.

11"School employee." Any person engaged in work relating to a
12public school for any governmental entity and for which work he
13is receiving regular remuneration as an officer, administrator
14or employee excluding, however, any independent contractor or a
15person compensated on a fee basis.

16"School entity." A school district of any class,
17intermediate unit or an area vocational-technical school, as
18provided for under the act of March 10, 1949 (P.L.30, No.14),
19known as the Public School Code of 1949.

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

21"School year." The 12-month period which the governmental
22entity uses for purposes of administration regardless of the
23actual time during which a member renders service.

24"Severance payments." Any payments for unused vacation or
25sick leave and any additional compensation contingent upon
26retirement including payments in excess of the scheduled or
27customary salaries provided for members within the same
28governmental entity with the same educational and experience
29qualifications who are not terminating service.

30"Shared-risk contribution rate." The additional contribution

1rate that is added to the basic contribution rate for Class T-E
2and T-F members, as provided for in section 8321(b) (relating to
3regular member contributions for current service).

4"Standard single life annuity." For Class T-A, T-B and T-C 
5credited service of a member, an annuity equal to 2% of the 
6final average salary, multiplied by the total number of years 
7and fractional part of a year of credited service of a member. 
8For Class T-D credited service of a member, an annuity equal to 
92.5% of the final average salary, multiplied by the total number 
10of years and fractional part of a year of credited service. For 
11Class T-E credited service of a member, an annuity equal to 2% 
12of the final average salary, multiplied by the total number of 
13years and fractional part of a year of credited service of a 
14member. For Class T-F credited service of a member, an annuity 
15equal to 2.5% of the final average salary, multiplied by the 
16total number of years and fractional part of a year of credited 
17service of a member.

18"State Employees' Retirement System." The retirement system
19established by the act of June 27, 1923 (P.L.858, No.331) and
20codified by the act of June 1, 1959 (P.L.392, No.78) and by Part
21XXV of Title 71 (relating to retirement for State employees and
22officers), added March 1, 1974 (P.L.125, No.31).

23"State service." Service rendered as a State employee and
24credited as service in the State Employees' Retirement System.

25"Statutory interest." Interest at 4% per annum, compounded
26annually.

27"Superannuation annuitant." An annuitant whose annuity first
28became payable on or after the attainment of superannuation age
29and who is not a disability annuitant.

30"Superannuation or normal retirement age."

20130SB0797PN1148 -14-
1Class of service	Age
2T-A 3	62 or any age upon accrual of 35 eligibility points
4T-B	62
5T-C and T-D 6 7 8 9	62 or age 60 provided the member has at least 30 eligibility points or any age upon accrual of 35 eligibility points
10T-E and T-F 11 12 13 14 15 16 17	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

18"Survivor annuitant." The person or persons last designated
19by a member under a joint and survivor annuity option to receive
20an annuity upon the death of such member.

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

25"Total member contribution rate." The sum of the basic
26contribution rate and the shared-risk contribution rate.

27"USERRA."  The Uniformed Services Employment and Reemployment 
28Rights Act, 38 U.S.C. Ch. 43 (relating to employment and 
29reemployment rights of members of the uniformed services).

30"USERRA leave."  Any period of time for service in the
 

1uniformed services as defined in 38 U.S.C. Ch. 43 (relating to 
2employment and reemployment rights of members of the uniformed 
3services) by a school employee or former school employee who 
4terminated school service to perform the service in the 
5uniformed services, if the current or former school employee is 
6entitled to reemployment rights under 38 U.S.C. Ch. 43 with 
7respect to the uniformed service.

8"Valuation interest." Interest at 5 1/2% per annum,
9compounded annually and applied to all accounts other than the
10members' savings account.

11"Vestee." A member with five or more eligibility points who
12has terminated school service, has left his accumulated
13deductions in the fund and is deferring filing of an application
14for receipt of an annuity. For Class T-E and Class T-F members,
15a member with ten or more eligibility points who has terminated
16school service, has left his accumulated deductions in the fund
17and is deferring filing of an application for receipt of an
18annuity.

19Section 2. Section 8302(b.1) of Title 24 is amended by
20adding a paragraph and the section is amended by adding a
21subsection to read:

22§ 8302. Credited school service.

23* * *

24(b.1) Optional credit for leave of absence for activated
25military service.--

26* * *

27(4) This subsection shall apply to leaves of absence for
28activated military service that commence on or before June
2930, 2013.

30* * *

1(d) Credit for military service.--

2(1)  For purposes of determining whether a member is
3eligible to receive credited service for a period of active
4military service, other than active duty service to meet
5periodic training requirements, rendered after August 5, 1991
6and that began before the effective date of this paragraph,
7the provisions of 51 Pa.C.S. Ch. 73 (relating to military
8leave of absence) shall apply to all individuals who were
9active members of the system when the period of military
10service began, notwithstanding if the member is not defined
11as an employee under 51 Pa.C.S. § 7301 (relating to
12definitions). School employees may not receive service credit
13or exercise the options under 51 Pa.C.S. § 7306(a), (b) and
14(c) (relating to retirement rights) for military leaves that
15begin on or after the effective date of this subsection,
16except otherwise provided under this subsection.

17(2)  A school employee who has performed USERRA leave may
18receive credit as provided by this paragraph.

19(i)  A school employee who is reemployed from USERRA
20leave shall be treated as not having incurred a break in
21school service by reason of the USERRA leave and shall be
22granted eligibility points as if the school employee had
23not been on the USERRA leave. If a school employee who is
24reemployed from USERRA leave subsequently makes regular
25member contributions, shared risk member contributions
26and any other member contributions in the amounts and in
27the time periods required by 38 U.S.C. Ch. 43 and IRC §
28414(u) as if the school employee had continued in his
29school office or employment and performed school service
30and been compensated during the period of USERRA leave,

1the school employee shall be granted school service
2credit for the period of USERRA leave. The employee shall
3have his benefits, rights and obligations determined
4under this part as if he was an active member who
5performed creditable school service during the USERRA
6leave in the job position that he would have held had he
7not been on USERRA leave and received the compensation on
8which the member contributions to receive school service
9credit for the USERRA leave were determined.

10(ii)  For purposes of determining whether a school
11employee has made the required employee contributions for
12School service credit for USERRA leave, if an employee
13who is reemployed from USERRA leave terminates school
14service or dies in school service before the expiration
15of the allowed payment period, school service credit for
16the USERRA leave shall be granted as if the required
17member contributions were paid the day before termination
18or death. The amount of the required member contributions
19shall be treated as an incomplete payment subject to the
20provisions of section 8325 (relating to incomplete
21payments). Upon a subsequent return to school service or
22to State service as a multiple service member, the
23required member contributions treated as incomplete
24payments shall be treated as member contributions that
25were either withdrawn in a lump sum at termination, or
26paid as a lump sum under section 8345(a)(4) (relating to
27member's options). <-For this purpose, the exclusion of 
28Class T-E and Class T-F members from electing a form of 
29payment under section 8345(a)(4)(iii) shall be ignored.

30(iii)  A school employee who is reemployed from

1USERRA leave and who does not make the required member
2contributions or makes only part of the required member
3contributions within the allowed payment period shall not
4be:

5(A) Granted credited service for the period of
6USERRA leave for which the required member
7contributions were not timely made

8(B) Eligible to subsequently make contributions.

9(C) Granted either school service credit or
10nonschool service credit for the period of USERRA
11leave for which the required member contributions
12were not timely made.

13(3)  A school employee who performs USERRA leave from
14which the employee could have been reemployed from USERRA
15leave had the School employee returned to school service in
16the time frames required by 38 U.S.C. Ch. 43 for reemployment
17rights, but did not do so, shall be able to receive
18creditable nonschool service as nonintervening military
19service for the period of USERRA leave if the employee later
20returns to school service and is otherwise eligible to
21purchase the service as nonintervening military service.

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

1school service and is otherwise eligible to purchase the
2service as nonintervening military service.

3(5) If a member dies while performing USERRA leave, the
4beneficiaries or survivor annuitants of the deceased member
5shall be entitled to any additional benefits, including
6eligibility points, other than benefit accruals relating to
7the period of qualified military service, provided under this
8part as if the member resumed and then terminated employment
9on account of death.

10(6)  A school employee who is on a leave of absence from
11his duties as a school employee and for which 51 Pa.C.S. §
124102 provides that he is not to suffer a loss of pay, time or
13efficiency shall not be an active member, receive service
14credit or make member contributions for the leave of absence
15except as provided for in this part. Notwithstanding this
16paragraph, any pay the member receives under section 1178 of
17the Public School Code of 1949 or 51 Pa.C.S. § 4102 shall be
18included in the determination of final average salary and
19other calculations utilizing compensation as if the payments
20were compensation under this part.

21Section 3. Section 8303 of Title 24 is amended by adding a
22subsection to read:

23§ 8303. Eligibility points for retention and reinstatement of
24service credits.

25* * *

26(b.1) USERRA leave.--A member who is reemployed from USERRA 
27leave or who dies while performing USERRA leave shall receive 
28eligibility points in accordance with section 8306 for the 
29school service that would have been performed had the member not 
30performed USERRA leave.

1* * *

2Section 4. Sections 8304(b) and 8305.2(b) of Title 24 are
3amended to read:

4§ 8304. Creditable nonschool service.

5* * *

6(b) Limitations on nonschool service.--Creditable nonschool
7service credit shall be limited to:

8(1) Intervening military service, if the member returned 
9to school service before July 1, 2013.

10(2) Military service other than intervening military
11service [and], activated military service or service 
12performed during USERRA leave not exceeding five years
13provided that a member with multiple service may not purchase
14more than a total of five years of military service in both
15the system and the State Employees' Retirement System.

16(3) Service in any public school or public educational
17institution in any state other than this Commonwealth or in
18any territory or area under the jurisdiction of the United
19States. This paragraph includes service, prior to July 1,
201965, at a community college established under the act of 
21August 24, 1963 (P.L.1132, No.484), known as the Community
22College Act of 1963.

23(4) Service as an administrator, teacher, or instructor
24in the field of public school education for any agency or
25department of the government of the United States whether or
26not such area was under the jurisdiction of the United
27States.

28(5) Previous service as an employee of a county board of
29school directors which employment was terminated because of
30the transfer of the administration of such service or of the

1entire agency to a governmental entity.

2(6) Previous service as a county employee as a nurse.
3For every three years or major fraction thereof in previous
4work experience, an individual may buy one year of creditable
5service, not to exceed a total of five years. The purchase of
6this service shall begin within three years of the employee's
7eligibility to purchase this creditable service.

8(7) (i) Service for the period of time spent on a
9maternity leave of absence required by the employer,
10which creditable service shall not exceed two years per
11leave and shall be applicable only to a maternity leave
12which was mandatory prior to May 17, 1975. The purchase
13of this service shall begin within one year of the
14employee's eligibility to purchase the creditable service
15under this subparagraph as originally enacted by the act
16of August 5, 1991 (P.L.183, No.23), entitled "An act
17amending Titles 24 (Education) and 71 (State Government)
18of the Pennsylvania Consolidated Statutes, further
19providing for the Public School Employees' Retirement
20System and the State Employees' Retirement System; adding
21and amending certain definitions; further providing for
22membership in the systems, for creditable nonschool and
23nonstate service and the purchase of credit, for
24incentives for special early retirement, for
25contributions to the retirement funds, for annuities and
26the rights and duties of annuitants, for health insurance
27premium assistance, for board membership and for the re-
28amortization and management of the retirement funds."

29(ii) Service for the period of time spent on a
30maternity leave of absence required by the employer,

1which creditable service shall not exceed two years per
2leave and shall be applicable only to a maternity leave
3that was mandatory and began after May 16, 1975, and
4prior to November 1, 1978. The purchase of this service
5shall begin within one year of the employee's eligibility
6to purchase the creditable service under this
7subparagraph.

8(8) Service in the Cadet Nurse Corps with respect to any
9period of training as a student or graduate nurse under a
10plan approved under section 2 of the act of June 15, 1943
11(Public Law 78-73, 57 Stat. 153), if the total period of
12training under the plan was at least two years, the credit
13for such service not to exceed three years.

14* * *

15§ 8305.2. Election to become a Class T-F member.

16* * *

17(b) Time for making election.--A member must elect to become 
18a Class T-F member by filing a written election with the board 
19within 45 days of notification by the board that such member is 
20eligible for such election. A school employee who is eligible to 
21elect to become a Class T-F member who begins USERRA leave 
22during the election period without having elected Class T-F 
23membership may make the election within 45 days after being 
24reemployed from USERRA leave.

25* * *

26Section 5. Section 8306(b) of Title 24 is amended and the
27section is amended by adding a subsection to read:

28§ 8306. Eligibility points.

29* * *

30(a.1) USERRA leave.--A member who is reemployed from USERRA
 

1leave or who dies while performing USERRA leave shall be granted 
2the eligibility points that he would have accrued had he 
3continued in his school office or employment instead of 
4performing USERRA leave. If a school employee who is reemployed 
5from USERRA leave makes the member contributions to be granted 
6school service credit for the USERRA leave, no additional 
7eligibility points may be granted.

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

9(1) In determining whether a member, other than a
10disability annuitant who returns to school service after June
1130, 2001, upon termination of the disability annuity, who is
12not a school employee or a State employee on June 30, 2001,
13and July 1, 2001, and who has previous school service, has
14the five eligibility points required by the definition of
15"vestee" in sections 8102 (relating to definitions), 8307
16(relating to eligibility for annuities), 8308 (relating to
17eligibility for vesting) and 8345 (relating to member's
18options), only eligibility points earned by performing
19credited school service, USERRA leave or credited State
20service after June 30, 2001, shall be counted until such
21member earns one eligibility point by performing credited
22school service or credited State service after June 30, 2001,
23at which time all eligibility points as determined under
24subsection (a) shall be counted.

25(2) A member subject to paragraph (1) shall be
26considered to have satisfied any requirement for five
27eligibility points contained in this part if the member has
28at least ten eligibility points determined under subsection
29(a).

30Section 6. Section 8325 of Title 24 is amended to read:

1§ 8325. Incomplete payments.

2In the event that a member terminates school service or a 
3multiple service member who is an active member of the State 
4Employees' Retirement System terminates State service before any 
5agreed upon payments <-for USERRA leave, including USERRA leave, 
6or return of benefits on account of returning to school service 
7or entering State service and electing multiple service have 
8been completed, the member or multiple service member who is an 
9active member of the State Employees' Retirement System shall 
10have the right to pay within 30 days of termination of school 
11service or State service the balance due, including interest, in 
12a lump sum, and the annuity shall be calculated including full 
13credit for the previous school service, creditable nonschool 
14service, or full-coverage membership. In the event a member does 
15not pay the balance due within 30 days of termination of school 
16service or in the event a member dies in school service or 
17within 30 days of termination of school service or in the case 
18of a multiple service member who is an active member of the 
19State Employees' Retirement System does not pay the balance due 
20within 30 days of termination of State service or dies in State 
21service or within 30 days of termination of State service and 
22before the agreed upon payments have been completed, the present 
23value of the benefit otherwise payable shall be reduced by the 
24balance due, including interest, and the benefit payable shall 
25be calculated as the actuarial equivalent of such reduced 
26present value.

27Section 7. Section 8326 of Title 24 is amended by adding a
28section to read:

29§ 8326. Contributions by the Commonwealth.

30* * *

1(d)  Contributions resulting from members reemployed from 
2USERRA leave.--When a school employee reemployed from USERRA 
3leave makes the member contributions required to be granted 
4School service credit for the USERRA leave, either by actual 
5payment or by actuarial debt under section 8325 (relating to 
6incomplete payments), the Commonwealth employer or other 
7employer by whom the School employee is employed at the time the 
8member contributions are made, or the last employer before 
9termination in the case of payment under sections 8327 (relating 
10to payments by employers) and 8535 (relating to payments to 
11school entities by Commonwealth), shall make any employer 
12contributions that would have been made under this section as if 
13the employee making the member contributions after being 
14reemployed from USERRA leave continued to be employed in his 
15school office or position instead of performing USERRA leave.

16Section 8. Section 8346(d) of Title 24 is amended and the
17section is amended by adding a subsection to read:

18§ 8346. Termination of annuities.

19* * *

20(a.2)  Return of benefits paid during USERRA leave.--If a 
21former school employee is reemployed from USERRA leave who had 
22received any payments or annuity from the system during the 
23USERRA leave, the employee shall return to the board the amount 
24received plus statutory interest. The amount payable shall be 
25certified by the board in accordance with methods approved by 
26the actuary and:

27(1) shall be paid in a lump sum within 30 days; or

28(2) in the case of an active member, may be amortized 
29with statutory interest through salary deductions in amounts 
30agreed upon by the member and the board for not longer than a
 

1period that starts with the date of reemployment and 
2continuing for up to three times the length of the member's 
3immediate past period of USERRA leave. A repayment period 
4under this paragraph may not exceed five years or a longer 
5time as agreed to between the board and the member.

6* * *

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

8(1) An annuitant who returns to school service and earns
9three eligibility points by performing credited school
10service or reemployment from USERRA leave following the most
11recent period of receipt of an annuity under this part, or an
12annuitant who enters State service and:

13(i) is a multiple service member; or

14(ii) who elects multiple service membership, and

15earns three eligibility points by performing credited State
16service, reemployment from USERRA leave or credited school
17service following the most recent period of receipt of an
18annuity under this part, and who had the present value of his
19annuity frozen in accordance with subsection (a), shall
20qualify to have the effect of the frozen present value
21resulting from all previous periods of retirement eliminated,
22provided that all payments under Option 4 and annuity
23payments payable during previous periods of retirement plus
24interest as set forth in paragraph (3) shall be returned to
25the fund in the form of an actuarial adjustment to his
26subsequent benefits or in such form as the board may
27otherwise direct.

28(2) Upon subsequent discontinuance of service and the
29filing of an application for an annuity, a former annuitant
30who qualifies to have the effect of a frozen present value

1eliminated under this subsection shall be entitled to receive
2the higher of either:

3(i) an annuity (prior to optional modification)
4calculated as if the freezing of the former annuitant's
5account pursuant to subsection (a) had not occurred,
6adjusted by crediting Class T-C school service as Class
7T-D service as provided for in section 8305(c) (relating
8to classes of service) and further adjusted according to
9paragraph (3), provided that a former annuitant of the
10system or a former annuitant of the State Employees'
11Retirement System who retired under a provision of law
12granting additional service credit if termination of
13school or State service or retirement occurred during a
14specific period of time shall not be permitted to retain
15the additional service credit under the prior law when
16the annuity is computed for his most recent retirement;
17or

18(ii) an annuity (prior to optional modification)
19calculated as if the former annuitant did not qualify to
20have the effect on the frozen present value eliminated,

21unless the former annuitant notifies the board in writing by
22the later of the date the application for annuity is filed or
23the effective date of retirement that the former annuitant
24wishes to receive the lower annuity.

25(3) In addition to any other adjustment to the present
26value of the maximum single life annuity that a member may be
27entitled to receive that occurs as a result of any other
28provision of law, the present value of the maximum single
29life annuity shall be reduced by all amounts paid or payable
30to him during all previous periods of retirement plus

1interest on these amounts until the date of subsequent
2retirement. The interest for each year shall be calculated
3based upon the annual interest rate adopted for that school
4year by the board for the calculation of the normal
5contribution rate pursuant to section 8328(b) (relating to
6actuarial cost method).

7Section 9. Sections 8347(a) and (b), 8502(m) and 8505(h) of
8Title 24 are amended to read:

9§ 8347. Death benefits.

10(a) Members eligible for annuities.--Any member or former 
11member on USERRA leave, other than an annuitant, who dies and
12was eligible for an annuity in accordance with section 8307(a)
13or (b) (relating to eligibility for annuities) shall be
14considered as having applied for an annuity to become effective
15the day before his death; and, in the event he has not elected
16an option, it shall be assumed that he elected Option 1 and
17assigned as beneficiary that person last designated in writing
18to the board.

19(b) Members ineligible for annuities.--In the event of the
20death of any member or former member on USERRA leave, other than
21an annuitant, who is not entitled to a death benefit as provided
22in subsection (a), his designated beneficiary shall be paid the
23full amount of his accumulated deductions.

24* * *

25§ 8502. Administrative duties of board.

26* * *

27(m) Member contributions and interest.--The board shall
28cause each member's contributions, including payroll deductions,
29pickup contributions and all other payments, including, but not
30limited to, amounts collected by the State Employees' Retirement

1System for the reinstatement of previous school service or
2creditable nonschool service and amounts paid to return benefits
3paid after the date of return to school service or entering
4State service representing lump sum payments made pursuant to
5section 8345(a)(4)(iii) (relating to member's options) and
6member's annuity payments, but not including other benefits
7returned pursuant to section 8346(a.1) (relating to termination
8of annuities) and section 8346(a.2), to be credited to the
9account of such member and shall pay all such amounts into the
10fund. Such contributions shall be credited with statutory
11interest until date of termination of service, except in the
12case of a vestee, who shall have such interest credited until
13the effective date of retirement or until the return of his
14accumulated deductions, if he so elects; and in the case of a
15multiple service member who shall have such interest credited
16until termination of service in both the school and the State
17systems.

18* * *

19§ 8505. Duties of board regarding applications and elections of
20members.

21* * *

22(h) Death benefits.--Upon receipt of notification of the
23death of a member or former member on USERRA leave, the board
24shall notify the designated beneficiary or survivor annuitant of
25the benefits to which he is entitled and shall make the first
26payment to the beneficiary under the plan elected by the
27beneficiary within 60 days of receipt of certification of death
28and other necessary data. If no beneficiary designation is in
29effect at the date of the member's death or no notice has been
30filed with the board to pay the amount of such benefits to the

1member's estate, the board is authorized to pay such benefits to
2the executor, administrator, surviving spouse or next-of-kin of
3the deceased member, and payment pursuant hereto shall fully
4discharge the fund from any further liability to make payment of
5such benefits to any other person. If the surviving spouse or
6next-of-kin of the deceased member cannot be found for the
7purpose of paying such benefits for a period of seven years from
8the date of death of the member, then such benefits shall be
9escheated to the Commonwealth for the benefit of the fund.

10* * *

11Section 10. Section 8506 of Title 24 is amended by adding a
12subsection to read:

13§ 8506. Duties of employers.

14* * *

15(k)  School employees performing USERRA or military-related 
16leave of absence.--The employer shall report to the board all of 
17the following:

18(1) Any school employee who:

19(i) ceases to be an active member to perform USERRA
20service; or

21(ii) is granted a leave of absence under 51 Pa.C.S.
22§ 4102 (relating to leaves of absence for certain
23government employees) or a military leave of absence
24under 51 Pa.C.S. § 7302 (relating to granting military
25leaves of absence).

26(2) The date on which the USERRA service, leave of
27absence or military leave of absence <-under began.

28(3) The date on which the school employee is reemployed
29from USERRA leave or returns after the leave of absence or
30military leave of absence, if applicable.

1(4) Any other information the board may require.

2Section 11. Section 8507(c) of Title 24 is amended and the
3section is amended by adding a subsection to read:

4§ 8507. Rights and duties of school employees and members.

5* * *

6(c) Multiple service membership.--Any active member who was
7formerly an active member in the State Employees' Retirement
8System may elect to become a multiple service member. Such
9election shall occur no later than 365 days after becoming an
10active member in this system. A school employee who is eligible 
11to elect to become a multiple service member and who begins 
12USERRA leave during the election period without having elected 
13multiple service membership may make the election within 365 
14days after being reemployed from USERRA leave.

15* * *

16(d.1)  School service for USERRA leave.--Any active member or
17inactive member <-on leave without pay who was reemployed from
18USERRA leave and who desires to receive school service credit
19for his USERRA leave shall notify the board within the time
20period required under 38 U.S.C. Chapter 43 (relating to
21employment and reemployment rights of members of the uniformed
22services) and IRC §414(u) of his desire to make the required
23member contributions. Upon making the required member
24contributions within the allowed time period, the member shall
25receive credit for the service as of the date the contributions
26are made.

27* * *

28Section 12. Section 7306(a) of Title 51, amended October 24,
292012 (P.L.1436, No.181), is amended and the section is amended
30by adding a subsection to read:

1§ 7306. Retirement rights.

2(a) Options available to employees.--Any employee who is a
3member of a retirement system other than an active member or 
4inactive member on leave without pay of the State Employees' 
5Retirement System or an active or inactive member of the Public 
6School Employees' Retirement System at the time he is granted a
7military leave of absence shall be entitled to exercise any one
8of the following options in regard thereto:

9(1) He may continue to make regular payments into the
10fund during the period of his military leave of absence. The
11amount of such payments shall be the same as they would have
12been, had he not been granted a military leave of absence,
13but had instead remained actively in his employment. The time
14of making such payments shall be mutually agreed upon by the
15employee and the retirement association of which he is a
16member, but in no event shall be less frequent than
17semiannually. The employer shall make its contributions on
18the same basis as is used to compute the employee's
19contributions. In this case, his retirement rights shall be
20determined on the basis that he was in the active, continuous
21and uninterrupted employ of his employer for the period
22during which he was on military leave of absence.

23(2) He may discontinue making payments into the fund
24during the period of his military leave of absence. In such
25event, the employer shall also discontinue making its
26contributions during this period. In this case, his
27retirement rights shall be determined by completely
28disregarding the period of his military leave of absence for
29all purposes.

30* * *

1(e)  Members of Public School Employees' Retirement System.--
2An employee who is an active member or inactive member of the
3Public School Employees' Retirement System at the time he is
4granted a military leave of absence shall be entitled to receive
5credit in the Public School Employees' Retirement System for the
6leave as provided under 24 Pa.C.S. Pt. IV (relating to
7retirement for school employees).

8Section 13. This act shall apply as follows:

9(1)(i) Except as provided under subparagraph (ii), the
10amendment of 24 Pa.C.S. Pt. IV shall apply to leaves of
11absence, military leaves of absence and leaves pursuant to 38
12U.S.C. Ch. 43 that are granted on or after the effective date
13of this section.

14(ii) If a member died performing uniformed service
15under 38 U.S.C. Ch. 43, the amendment of 24 Pa.C.S. Pt.
16IV shall apply to leaves of absence, military leaves of
17absence and leaves pursuant to 38 U.S.C. Ch. 43 that were
18granted on or after December 31, 2006.

19(2) The amendment or addition of 51 Pa.C.S. § 7306(a)
20and (e) shall apply to leaves of absence or military leaves
21of absence that are granted on or after the effective date of
22this section.

23Section 14.  Notwithstanding the provisions of 24 Pa.C.S. §
248503(b), the statement for each member prepared by the Public
25School Employees' Retirement Board for the period ending June
2630, 2013, and any other statements or estimates of benefits
27prepared by the board under 24 Pa.C.S. Pt. IV from the effective
28date of this section to June 30, 2014, shall not be required to
29reflect the provisions of this act.

30Section 15.  Notwithstanding the provisions of 24 Pa.C.S. Pt.

1IV, the obligation of the Public School Employees' Retirement
2Board to make payments to any individual whose rights, benefits
3and obligations are affected by this act within specified time
4periods of the receipt of applications for benefits or other
5information shall not apply from the effective date of this
6section to June 30, 2014.

7Section 16.  The board shall have the authority to:

8(1) Implement the requirements of 24 Pa.C.S. Pt IV.
9pertaining to school employees on USERRA leave or who have
10been granted a leave of absence under 51 Pa.C.S. § 4102, a
11leave of absence under 24 Pa.C.S. Pt IV or a military leave
12of absence under 51 Pa.C.S. § 7302.

13(2) Establish administrative, reporting and payment
14requirements and processes pertaining to the leaves
15applicable to employers and members.

16Section 17.  Nothing under this act shall be deemed to permit
17the restoration of service credit or retirement benefits which
18were or are subject to 42 Pa.C.S. § 3352 or the subject of an
19order of forfeiture pursuant to the act of July 8, 1978
20(P.L.752, No.140), known as the Public Employee Pension
21Forfeiture Act.

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

1to grant to or be deemed to imply that this act expands,
2contracts or otherwise affects any contractual rights, either
3expressed or implied, or any other constitutionally protected
4rights, in the terms and conditions of the Public School
5Employees' Retirement System or other pension or retirement
6benefits as a State employee, including, but not limited to,
7benefits, options, rights or privileges established by 24
8Pa.C.S. Pt. IV for any current or former public school
9employees.

10Section 19.  This act shall be construed and administered in
11such a manner that the Public School Employees' Retirement
12System will satisfy the requirements necessary to qualify as a
13qualified pension plan under section 401(a) and other applicable
14provisions of the Internal Revenue Code of 1986 (Public Law 99-
15514, 26 U.S.C. § 1 et seq.) and 38 U.S.C. Ch. 43. The rules,
16regulations and procedures adopted and promulgated by the <-State 
<-17Public School Employees' Retirement Board under 24 Pa.C.S. §
188502(h) may include those necessary to accomplish the purpose of
19this section.

20Section 20. The following shall apply:

21(1) The amendment of 51 Pa.C.S. § 7306 or 24 Pa.C.S. Pt.
22IV shall not:

23(i) Create in any member of the Public School
24Employees' Retirement System or in any other person
25claiming an interest in the account of any member a
26contractual right, either expressed or implied, in
27relation to requirements for qualification of the Public
28School Employees' Retirement System as a qualified
29pension plan under the Internal Revenue Code of 1986
30(Public Law 99-514, 26 U.S.C. § 1 et seq.).

1(ii) Establish compliance with or affect any
2construction of:

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

4(B) 24 Pa.C.S. Pt. IV or any rules or
5regulations adopted under 24 Pa.C.S. Pt. IV.

6(2) The provisions of 24 Pa.C.S. Pt. IV shall remain
7subject to the Internal Revenue Code of 1986, and the General
8Assembly reserves to itself the further exercise of its
9legislative power to amend or supplement the provisions as
10may be required in order to maintain the qualification of the
11system as a qualified pension plan under section 401(a) and
12other applicable provisions of the Internal Revenue Code of
131986 and 38 U.S.C. Ch. 43.

14Section 21.  References in this act to the Internal Revenue
15Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et. Seq.) or 38
16U.S.C. Ch. 43, including for this purpose administrative
17regulations promulgated under those acts, are intended to
18include laws and regulations in effect on the effective date of
19this section and as they may be amended or supplemented or
20supplanted by successor provisions after the effective date of
21this section.

22Section 22.  This act shall take effect July 1, 2013, or
23immediately, whichever is later.