H2497B3853A07493     DMS:JB  06/13/10     #90        A07493

AMENDMENTS TO HOUSE BILL NO. 2497

Sponsor: REPRESENTATIVE D. EVANS

Printer's No. 3853

Amend Bill, page 1, line 10, by striking out "and" and

inserting a comma

Amend Bill, page 1, line 10, by inserting after

"Commonwealth"

, for eligibility points for retention and reinstatement of

service credits and for creditable nonschool service; providing

for election to become a Class T-F member; further providing for

classes of service, for eligibility for annuities, for

eligibility for vesting, for member contributions for creditable

school service, for contributions for purchase of credit for

creditable nonschool service, for maximum single life annuity,

for disability annuities, for member's options, for duties of

board regarding applications and elections of members and for

rights and duties of school employees and members

Amend Bill, page 1, lines 11 and 12, by striking out "rights"

in line 11 and "and duties of State employees and members" in

line 12 and inserting

 credited State service, for retention and reinstatement of

service credits, for creditable non-State service and for

classes of service; providing for election to become a Class A-4

member; further providing for eligibility for annuities, for

eligibility for vesting, for waiver of regular member

contributions and Social Security integration member

contributions, for member contributions for purchase of credit

for previous State service or to become a full coverage member,

for contributions for the purchase of credit for creditable non-

State service

Amend Bill, page 1, line 14, by inserting after "method,"

 for maximum single life annuity, for disability annuities and

for member's options; providing for payment of accumulated

deductions resulting from Class A-3 service; further providing

Amend Bill, page 1, line 20, by inserting after "board,"

for duties of board to advise and report to heads of departments

and members, for duties of board regarding applications and

elections of members, for installment payments of accumulated

deductions, for rights and duties of State employees and

members, 

Amend Bill, page 1, line 20, by striking out "and" and

inserting

, for State Police Benefit Account, for Enforcement

Officers' Benefit Account,

Amend Bill, page 1, line 21, by inserting after "account"

 and for construction of part

Amend Bill, page 1, line 22, by striking out "and" and

inserting a comma

Amend Bill, page 1, line 23, by inserting after "harmless"

, for construction of calculation or actuarial method and

for certain operational provisions

Amend Bill, page 1, lines 26 and 27; page 2, line 1, by

striking out all of said lines on said pages and inserting

Section 1.  The definitions of "basic contribution rate,"

"class of service multiplier," "employer," "standard single life

annuity," "superannuation or normal retirement age" and "vestee"

in section 8102 of Title 24 of the Pennsylvania Consolidated

Statutes are amended to read:

Amend Bill, page 2, by inserting between lines 6 and 7

"Basic contribution rate."  For Class T-A, T-B and T-C

service, the rate of 6 1/4%. For Class T-D service, the rate of

7 1/2%. For all active members on the effective date of this

provision who are currently paying 5 1/4% and elect Class T-D

service, the rate of 6 1/2%. For Class T-E service, the rate of

7 1/2%. For Class T-F service, the rate of 10.30%.

* * *

"Class of service multiplier."

* * *

Amend Bill, page 2, line 14, by inserting a bracket before

"State"

Amend Bill, page 2, line 14, by inserting after "School"

where it occurs the second time

] College

Amend Bill, page 2, by inserting between lines 17 and 18

"Standard single life annuity."  For Class T-A, T-B and T-C

credited service of a member, an annuity equal to 2% of the

final average salary, multiplied by the total number of years

and fractional part of a year of credited service of a member.

For Class T-D credited service of a member, an annuity equal to

2.5% of the final average salary, multiplied by the total number

of years and fractional part of a year of credited service. For

Class T-E credited service of a member, an annuity equal to 2%

of the final average salary, multiplied by the total number of

years and fractional part of a year of credited service of a

member. For Class T-F credited service of a member, an annuity

equal to 2.5% of the final average salary, multiplied by the

total number of years and fractional part of a year of credited

service of a member.

* * *

"Superannuation or normal retirement age."

* * *

"Vestee."  A member with five or more eligibility points who

has terminated school service, has left his accumulated

deductions in the fund and is deferring filing of an application

for receipt of an annuity. For Class T-E and Class T-F members,

a member with ten or more eligibility points who has terminated

school service, has left his accumulated deductions in the fund

and is deferring filing of an application for receipt of an

annuity.

Amend Bill, page 2, lines 18 through 20, by striking out

"8326(a), 8327(a) and (c), 8328, " in line 18, all of line 19

and "8348.7(f), 8502(k) and 8535(3)" in line 20 and inserting

 8303(c) and 8304(a)

Amend Bill, page 2, by inserting between lines 20 and 21

§ 8303.  Eligibility points for retention and reinstatement of

service credits.

* * *

(c)  Purchase of previous creditable service.--Every active

member of the system or a multiple service member who is an

active member of the State Employees' Retirement System on or

after the effective date of this part may purchase credit and

receive eligibility points:

(1)  as a member of Class T-C, Class T-E or Class T-F for

previous school service or creditable nonschool service; or

(2)  as a member of Class T-D for previous school

service, provided the member elects to become a Class T-D

member pursuant to section 8305.1 (relating to election to

become a Class T-D member);

upon written agreement by the member and the board as to the

manner of payment of the amount due for credit for such service;

except, that any purchase for reinstatement of service credit

shall be for all service previously credited.

§ 8304.  Creditable nonschool service.

(a)  Eligibility.--An active member or a multiple service

member who is an active member of the State Employees'

Retirement System shall be eligible to receive Class T-C, Class

T-E or Class T-F service credit for creditable nonschool service

and Class T-D, Class T-E or Class T-F service for intervening

military service, provided the member becomes a Class T-D member

pursuant to section 8305.1 (relating to election to become a

Class T-D member) or Class T-F member pursuant to section 8305.2

(relating to election to become a Class T-F member) or 8305

(relating to classes of service), as set forth in subsection (b)

provided that he is not entitled to receive, eligible to receive

now or in the future, or is receiving retirement benefits for

such service under a retirement system administered and wholly

or partially paid for by any other governmental agency or by any

private employer, or a retirement program approved by the

employer in accordance with section 8301(a)(1) (relating to

mandatory and optional membership), and further provided that

such service is certified by the previous employer and the

manner of payment of the amount due is agreed upon by the

member, the employer, and the board.

* * *

Section 3.  Section 8305 of Title 24 is amended by adding

subsections to read:

§ 8305.  Classes of service.

* * *

(d)  Class T-E membership.--Notwithstanding any other

provision, a person who first becomes a school employee and an

active member, or a person who first becomes a multiple service

member who is a State employee and a member of the State

Employees' Retirement System, on or after the effective date of

this subsection shall be classified as a Class T-E member upon

payment of regular member contributions.

(e)  Class T-F membership.--Notwithstanding any other

provision, a person who first becomes a school employee and an

active member, or a person who first becomes a multiple service

member who is a State employee and a member of the State

Employees' Retirement System, on or after the effective date of

this subsection, and who is eligible to become a Class T-E

member, shall have the right to elect into Class T-F membership,

provided the person elects to become a Class T-F member pursuant

to section 8305.2 (relating to election to become a Class T-F

member), upon written election filed with the board and payment

of regular member contributions.

Section 4.  Title 24 is amended by adding a section to read:

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

(a)  General rule.--A person who first becomes a school

employee and an active member, or a person who first becomes a

multiple service member who is a State employee and a member of

the State Employees' Retirement System, on or after the

effective date of this subsection and who is eligible to become

a Class T-E member may elect to become a member of Class T-F.

(b)  Time for making election.--A member must elect to become

a Class T-F member by filing a written election with the board

within 45 days of notification by the board that such member is

eligible for such election.

(c)  Effect of election.--An election to become a Class T-F

member shall be irrevocable. A member who elects Class T-F

membership shall receive Class T-F service credit on any and all

future service, regardless of whether the member terminates

service or has a break in service.

(d)  Effect of failure to make election.--If a member fails

to timely file an election to become a Class T-F member, then

the member shall be enrolled as a member of Class T-E and the

member shall never be able to elect Class T-F service,

regardless of whether the member terminates service or has a

break in service.

Section 5.  Sections 8307(b), 8308, 8323(a), (c) and (c.1),

8324(a), (b), (d), (e) and (f), 8326(a), 8327(a) and (c), 8328,

8342(a), 8344(d), 8345(a), 8348.1(f), 8348.2(f), 8348.3(f),

8348.5(f), 8348.6(f), 8348.7(f) and 8502(k) of Title 24 are

amended to read:

§ 8307.  Eligibility for annuities.

* * *

(b)  Withdrawal annuity.--A vestee in Class T-C or Class T-D 

with five or more eligibility points or an active or inactive

Class T-C or Class T-D member who terminates school service

having five or more eligibility points shall, upon filing a

proper application, be entitled to receive an early annuity. A

vestee in Class T-E or Class T-F with ten or more eligibility

points or an active or inactive Class T-E or Class T-F member

who terminates school service having ten or more eligibility

points shall, upon filing a proper application, be entitled to

receive an early annuity.

* * *

§ 8308.  Eligibility for vesting.

Any Class T-C or Class T-D member who terminates school

service with five or more eligibility points shall be entitled

to vest his retirement benefits until attainment of

superannuation age. Any Class T-E or Class T-F member who

terminates school service with ten or more eligibility points

shall be entitled to vest his retirement benefits until

attainment of superannuation age.

§ 8323.  Member contributions for creditable school service.

(a)  Previous school service, sabbatical leave and full

coverage.--The contributions to be paid by an active member or

an eligible State employee for credit for reinstatement of all

previously credited school service, school service not

previously credited, sabbatical leave as if he had been in full-

time daily attendance, or full-coverage membership shall be

sufficient to provide an amount equal to the accumulated

deductions which would have been standing to the credit of the

member for such service had regular member contributions been

made with full coverage at the rate of contribution necessary to

be credited as Class T-C service [or], Class T-D service if the

member is a Class T-D member, or Class T-E service if the member

is a Class T-E member, or Class T-F service if the member is a

Class T-F member, and had such contributions been credited with

statutory interest during the period the contributions would

have been made and during all periods of subsequent school and

State service up to the date of purchase.

* * *

(c)  Approved leave of absence other than sabbatical leave

and activated military service leave.--The contributions to be

paid by an active member for credit for an approved leave of

absence, other than sabbatical leave and activated military

service leave, shall be sufficient to transfer his membership to

Class T-C or to Class T-D if the member is a Class T-D member or

to Class T-E if the member is a Class T-E member or to Class T-F

if the member is a Class T-F member and further to provide an

annuity as a Class T-C member or Class T-D member if the member

is a Class T-D member or Class T-E if the member is a Class T-E

member or to Class T-F if the member is a Class T-F member for 

such additional credited service. Such amount shall be the sum

of the amount required in accordance with the provisions of

subsection (b) and an amount determined as the sum of the

member's basic contribution rate and the normal contribution

rate as provided in section 8328 (relating to actuarial cost

method) during such period multiplied by the compensation which

was received or which would have been received during such

period and with statutory interest during all periods of

subsequent school and State service up to the date of purchase.

(c.1)  Activated military service leave.--The contributions

to be paid by an active member for credit for all activated

military service leave as if he had been in regular attendance

in the duties for which he is employed shall be sufficient to

provide an amount equal to the accumulated deductions which

would have been standing to the credit of the member for such

service had regular member contributions been made with full

coverage at the rate of contribution necessary to be credited as

Class T-C service or Class T-D service if the member is a Class

T-D member or Class T-E service if the member is a Class T-E

member or Class T-F if the member is a Class T-F member and had

such contributions been credited with statutory interest during

the period the contributions would have been made and during all

periods of subsequent State and school service up to the date of

purchase. In the case of activated military service leave

beginning after the date of enactment of this subsection,

contributions due from the member shall be made as if he is in

regular attendance in the duties for which he is employed.

* * *

§ 8324.  Contributions for purchase of credit for creditable

nonschool service.

(a)  Source of contributions.--The total contributions to

purchase credit as a member of Class T-C, Class T-E or Class T-F 

for creditable nonschool service of an active member or an

eligible State employee shall be paid either by the member, the

member's previous employer, the Commonwealth, or a combination

thereof, as provided by law.

(b)  Nonintervening military service.--The amount due for the

purchase of credit for military service other than intervening

military service shall be determined by applying the member's

basic contribution rate plus the normal contribution rate as

provided in section 8328 (relating to actuarial cost method) at

the time of entry of the member into school service subsequent

to such military service to one-third of his total compensation

received during the first three years of such subsequent

credited school service and multiplying the product by the

number of years and fractional part of a year of creditable

nonintervening military service being purchased together with

statutory interest during all periods of subsequent school and

State service to date of purchase. Upon certification of the

amount due, payment may be made in a lump sum within 90 days or

in the case of an active member or an eligible State employee

who is an active member of the State Employees' Retirement

System it may be amortized with statutory interest through

salary deductions in amounts agreed upon by the member and the

board. The salary deduction amortization plans agreed to by

members and the board may include a deferral of payment amounts

and statutory interest until the termination of school service

or State service as the board in its sole discretion decides to

allow. The board may limit salary deduction amortization plans

to such terms as the board in its sole discretion determines. In

the case of an eligible State employee who is an active member

of the State Employees' Retirement System, the agreed upon

salary deductions shall be remitted to the State Employees'

Retirement Board, which shall certify and transfer to the board

the amounts paid. Application may be filed for all such military

service credit upon completion of three years of subsequent

credited school service and shall be credited as Class T-C

service. In the event that a Class T-E member makes a purchase

of credit for such military service, then such service shall be

credited as Class T-E service. In the event that a Class T-F

member makes a purchase of credit for such military service,

then such service shall be credited as Class T-F service.

* * *

(d)  Other creditable nonschool service.--Contributions on

account of Class T-C, Class T-E or Class T-F credit for

creditable nonschool service other than military service shall

be determined by applying the member's basic contribution rate

plus the normal contribution rate as provided in section 8328 at

the time of the member's entry into school service subsequent to

such creditable nonschool service to his total compensation

received during the first year of subsequent credited school

service and multiplying the product by the number of years and

fractional part of a year of creditable nonschool service being

purchased together with statutory interest during all periods of

subsequent school or State service to the date of purchase,

except that in the case of purchase of credit for creditable

nonschool service as set forth in section 8304(b)(5) (relating

to creditable nonschool service) the member shall pay only the

employee's share unless otherwise provided by law. Upon

certification of the amount due, payment may be made in a lump

sum within 90 days or in the case of an active member or an

eligible State employee who is an active member of the State

Employees' Retirement System it may be amortized with statutory

interest through salary deductions in amounts agreed upon by the

member and the board. The salary deduction amortization plans

agreed to by the members and the board may include a deferral of

payment amounts and statutory interest until the termination of

school service or State service as the board in its sole

discretion decides to allow. The board may limit salary

deduction amortization plans to such terms as the board in its

sole discretion determines. In the case of an eligible State

employee who is an active member of the State Employees'

Retirement System, the agreed upon salary deductions shall be

remitted to the State Employees' Retirement Board, which shall

certify and transfer to the board the amounts paid.

(e)  Creditable work experience.--Contributions on account of

Class T-C, Class T-E or Class T-F credit for creditable work

experience pursuant to section 8304(b)(6) shall be the present

value of the full actuarial cost of the increase in the

projected superannuation annuity caused by the additional

service credited on account of the purchase of creditable work

experience. The amount paid for the purchase of credit for

creditable work experience shall not be payable as a lump sum

under section 8345(a)(4)(iii) (relating to member's options).

Any individual eligible to receive an annuity, excluding an

annuity received under the Federal Social Security Act (42

U.S.C. § 301 et seq.), in another pension system, other than a

military pension system, shall not be eligible to purchase this

service.

(f)  Creditable maternity leave.--Contributions on account of

Class T-C, Class T-E or Class T-F credit for creditable

maternity leave pursuant to section 8304(b)(7) shall be

determined by applying the member's basic contribution rate plus

the normal contribution rate as provided in section 8328 at the

time of the member's return to school service to the total

compensation received during the first year of subsequent school

service and multiplying the product by the number of years and

fractional part of a year of creditable service being purchased,

together with statutory interest during all periods of

subsequent school or State service to the date of purchase. The

amount paid for the purchase of credit for creditable maternity

leave shall not be eligible for withdrawal as a lump sum under

section 8345(a)(4)(iii).

Amend Bill, page 4, line 2, by inserting a bracket before

"State"

Amend Bill, page 4, line 2, by inserting after "School"

] College

Amend Bill, page 5, line 27, by inserting after "of"

the actuarial cost method,

Amend Bill, page 13, by inserting between lines 10 and 11

§ 8342.  Maximum single life annuity.

(a)  General rule.--Upon termination of service, any full

coverage member who is eligible to receive an annuity pursuant

to the provisions of section 8307(a) or (b) (relating to

eligibility for annuities) and has made an application in

accordance with the provisions of section 8507(f) (relating to

rights and duties of school employees and members) shall be

entitled to receive a maximum single life annuity attributable

to his credited service and equal to the sum of the following

single life annuities beginning at the effective date of

retirement and, in case the member on the effective date of

retirement is under superannuation age, multiplied by a

reduction factor calculated to provide benefits actuarially

equivalent to an annuity starting at superannuation age:

Provided however, That on or after July 1, 1976, in the case of

any Class T-C, T-D, T-E or T-F member who has attained age 55

and has 25 or more eligibility points such sum of single life

annuities shall be reduced by a percentage determined by

multiplying the number of months, including a fraction of a

month as a full month, by which the effective date of retirement

precedes superannuation age by 1/4%:

(1)  A standard single life annuity multiplied by the

class of service multiplier and calculated on the basis of

the number of years of credited school service other than

concurrent service.

(2)  A standard single life annuity multiplied by the

class of service multiplier and calculated on the basis of

the number of years of concurrent service and multiplied by

the ratio of total compensation received in the school system

during the period of concurrent service to the total

compensation received during such period.

(3)  A supplemental annuity such that the total annuity

prior to any optional modification or any reduction due to

retirement prior to superannuation age shall be at least $100

for each full year of credited service.

* * *

§ 8344.  Disability annuities.

* * *

(d)  Withdrawal of accumulated deductions.--Upon termination

of disability annuity payments in excess of an annuity

calculated in accordance with section 8342, a disability

annuitant who:

(1)  is a Class T-C or Class T-D member; or

(2)  is a Class T-E or Class T-F member with less than

ten eligibility points

and who does not return to school service may file an

application with the board for an amount equal to the

accumulated deductions standing to his credit at the effective

date of disability less the total payments received on account

of his member's annuity.

* * *

§ 8345.  Member's options.

(a)  General rule.--Any Class T-C or Class T-D member who is

a vestee with five or more eligibility points, any Class T-E or

Class T-F member who is a vestee with ten or more eligibility

points, or any other eligible member upon termination of school

service who has not withdrawn his accumulated deductions as

provided in section 8341 (relating to return of accumulated

deductions) may apply for and elect to receive either a maximum

single life annuity, as calculated in accordance with the

provisions of section 8342 (relating to maximum single life

annuity), or a reduced annuity certified by the actuary to be

actuarially equivalent to the maximum single life annuity and in

accordance with one of the following options, except that no

member shall elect an annuity payable to one or more survivor

annuitants other than his spouse or alternate payee of such a

magnitude that the present value of the annuity payable to him

for life plus any lump sum payment he may have elected to

receive is less than 50% of the present value of his maximum

single life annuity.

(1)  Option 1.--A life annuity to the member with a

guaranteed total payment equal to the present value of the

maximum single life annuity on the effective date of

retirement with the provision that, if, at his death, he has

received less than such present value, the unpaid balance

shall be payable to his beneficiary.

(2)  Option 2.--A joint and survivor annuity payable

during the lifetime of the member with the full amount of

such annuity payable thereafter to his survivor annuitant, if

living at his death.

(3)  Option 3.--A joint and fifty percent (50%) survivor

annuity payable during the lifetime of the member with one-

half of such annuity payable thereafter to his survivor

annuitant, if living at his death.

(4)  Option 4.--Some other benefit which shall be

certified by the actuary to be actuarially equivalent to the

maximum single life annuity, subject to the following

restrictions:

(i)  Any annuity shall be payable without reduction

during the lifetime of the member.

(ii)  The sum of all annuities payable to the

designated survivor annuitants shall not be greater than

one and one-half times the annuity payable to the member.

(iii)  A portion of the benefit may be payable as a

lump sum, except that such lump sum payment shall not

exceed an amount equal to the accumulated deductions

standing to the credit of the member. The balance of the

present value of the maximum single life annuity adjusted

in accordance with section 8342(b) shall be paid in the

form of an annuity with a guaranteed total payment, a

single life annuity, or a joint and survivor annuity or

any combination thereof but subject to the restrictions

of subparagraphs (i) and (ii) of this paragraph. This

subparagraph shall not apply to a Class T-E or Class T-F

member.

* * *

Amend Bill, page 17, by inserting between lines 18 and 19

Section 6.  Section 8505 of Title 24 is amended by adding a

subsection to read:

§ 8505.  Duties of board regarding applications and elections of

members.

* * *

(l)  Notification of Class T-F membership.--The board shall

inform any eligible school employee of the right to elect Class

T-F membership.

Section 7.  Sections 8507(f) and (g) and 8535(3) of Title 24

are amended to read:

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

* * *

(f)  Termination of service.--Each member who terminates

school service and who is not then a disability annuitant shall

execute on or before the date of termination of service a

written application, duly attested by the member or his legally

constituted representative, electing to do one of the following:

(1)  Withdraw his accumulated deductions.

(2)  Vest his retirement rights and if he is a joint

coverage member, and so desires, elect to become a full

coverage member and agree to pay within 30 days of the date

of termination of service the lump sum required.

(3)  Receive an immediate annuity, if eligible, and may,

if he is a joint coverage member, elect to become a full

coverage member and agree to pay within 30 days of date of

termination of service the lump sum required.

(g)  Vesting of retirement rights.--If a member elects to

vest his retirement rights, he shall nominate a beneficiary by

written designation filed with the board and he may anytime

thereafter withdraw the accumulated deductions standing to his

credit or[, if he has five or more eligibility points,] apply

for an annuity if eligible as provided in section 8307(a) or (b)  

(relating to eligibility for annuitants).

* * *

Amend Bill, page 18, by inserting between lines 4 and 5

Section 7.1.  The definitions of "class of service

multiplier," "final average salary," "superannuation age" and

"vestee" in section 5102 of Title 71 are amended to read:

§ 5102.  Definitions.

The following words and phrases as used in this part, unless

a different meaning is plainly required by the context, shall

have the following meanings:

* * *

"Class of service multiplier."

* * * 

"Final average salary."  The highest average compensation

received as a member during any three nonoverlapping periods of

four consecutive calendar quarters during which the member was a

State employee, with the compensation for part-time service

being annualized on the basis of the fractional portion of the

year for which credit is received; except if the employee was

not a member for three nonoverlapping periods of four

consecutive calendar quarters, the total compensation received

as a member, annualized in the case of part-time service,

divided by the number of nonoverlapping periods of four

consecutive calendar quarters of membership; in the case of a

member with multiple service, the final average salary shall be

determined on the basis of the compensation received by him as a

State employee or as a school employee, or both; in the case of

a member with Class A-3 or Class A-4 service and service in one

or more other classes of service, the final average salary shall

be determined on the basis of the compensation received by him

in all classes of State service; and, in the case of a member

who first became a member on or after January 1, 1996, the final

average salary shall be determined as hereinabove provided but

subject to the application of the provisions of section

5506.1(a) (relating to annual compensation limit under IRC §

401(a)(17)).

* * *

"Superannuation age."  [Any] For classes of service other

than Class A-3 and Class A-4, any age upon accrual of 35

eligibility points or age 60, except for a member of the General

Assembly, an enforcement officer, a correction officer, a

psychiatric security aide, a Delaware River Port Authority

policeman or an officer of the Pennsylvania State Police, age

50, and, except for a member with Class G, Class H, Class I,

Class J, Class K, Class L, Class M or Class N service, age 55

upon accrual of 20 eligibility points. For Class A-3 and Class

A-4 service, any age upon accrual of 35 eligibility points or

age 65, or for park rangers or capitol police officers, age 55

with 20 years of service as a park ranger or capitol police

officer, except for a member of the General Assembly, an

enforcement officer, a correction officer, a psychiatric

security aide, a Delaware River Port Authority policeman or an

officer of the Pennsylvania State Police, age 55.

* * *

"Vestee."  A member with five or more eligibility points[,

or] in a class of service other than Class A-3 or Class A-4 or

Class T-E or Class T-F in the Public School Employees'

Retirement System, a member with Class G, Class H, Class I,

Class J, Class K, Class L, Class M or Class N service with five

or more eligibility points, or a member with Class A-3 or Class

A-4 service with ten or more eligibility points who has

terminated State service and has elected to leave his total

accumulated deductions in the fund and to defer receipt of an

annuity.

Section 7.2.  Sections 5302(e), 5303(b)(1) and 5304(a) of

Title 71 are amended to read:

§ 5302.  Credited State service.

* * *

(e)  Cancellation of credited service.--All credited service

shall be cancelled if a member withdraws his total accumulated

deductions except that a member with Class A-3 or Class A-4

service credit and one or more other classes of service credit

shall not have his service as a member of any classes of service

other than as a member of Class A-3 or Class A-4 cancelled when

the member receives a lump sum payment of accumulated deductions

resulting from Class A-3 or Class A-4 service pursuant to

section 5705.1 (relating to payment of accumulated deductions

resulting from Class A-3 and Class A-4 service).

§ 5303.  Retention and reinstatement of service credits.

* * *

(b)  Eligibility points for prospective credited service.--

(1)  Every active member of the system or a multiple

service member who is a school employee and a member of the

Public School Employees' Retirement System on or after the

effective date of this part shall receive eligibility points

in accordance with section 5307 for current State service,

previous State service, or creditable nonstate service upon

compliance with sections 5501 (relating to regular member

contributions for current service), 5504 (relating to member

contributions for the purchase of credit for previous State

service or to become a full coverage member), 5505 (relating

to contributions for the purchase of credit for creditable

nonstate service), 5505.1 (relating to additional member

contributions) or 5506 (relating to incomplete payments).

Subject to the limitations in sections 5306.1 (relating to

election to become a Class AA member) and 5306.2 (relating to

elections by members of the General Assembly), the class or

classes of service in which the member may be credited for

previous State service prior to the effective date of this

part shall be the class or classes in which he was or could

have at any time elected to be credited for such service,

except that a State employee who first becomes a member of

the system on or after January 1, 2011, or on or after

December 1, 2010, as a member of the General Assembly and:

(i)  is credited with Class A-3 service for such

membership, shall be credited only with Class A-3 service

for previous State service performed before January 1,

2011, that was not previously credited in the system; or

(ii)  is credited with Class A-4 service for such

membership, shall be credited only with Class A-3 service

for previous State service performed before January 1,

2011, that was not previously credited in the system. The

class of service in which a member shall be credited for

service subsequent to the effective date of this part

shall be determined in accordance with section 5306

(relating to classes of service).

* * *

§ 5304.  Creditable nonstate service.

(a)  Eligibility.--

(1)  An active member who first becomes an active member

before January 1, 2011, or before December 1, 2010, as a

member of the General Assembly, or a multiple service member

who first becomes an active member before January 1, 2011, or

before December 1, 2010, as a member of the General Assembly,

and who is a school employee and an active member of the

Public School Employees' Retirement System shall be eligible

for Class A service credit for creditable nonstate service as

set forth in subsections (b) and (c) except that intervening

military service shall be credited in the class of service

for which the member was eligible at the time of entering

into military service and for which he makes the required

contributions and except that a multiple service member who

is a school employee and an active member of the Public

School Employees' Retirement System shall not be eligible to

purchase service credit for creditable nonstate service set

forth in subsection (c)(5).

(2)  An active member who first becomes an active member

on or after January 1, 2011, or on or after December 1, 2010,

as a member of the General Assembly, or a multiple service

member who first becomes an active member on or after January

1, 2011, or on or after December 1, 2010, as a member of the

General Assembly, and who is a school employee and an active

member of the Public School Employees' Retirement System

shall be eligible for Class A-3 service credit for creditable

nonstate service as set forth in subsections (b) and (c)

except that intervening military service shall be credited in

the class of service for which the member was eligible at the

time of entering into military service and for which he makes

the required contributions and except that a multiple service

member who is a school employee and an active member of the

Public School Employees' Retirement System shall not be

eligible to purchase service credit for creditable nonstate

service set forth in subsection (c)(5).

* * *

Section 7.3.  Section 5306(a), (a.1)(1), (2), (5) and (6) and

(a.2) of Title 71 are amended and the section is amended by

adding a subsection to read:

§ 5306.  Classes of service.

(a)  Class A and Class A-3 membership.--

(1)  A State employee who is a member of Class A on the

effective date of this part or who first becomes a member of

the system subsequent to the effective date of this part and

before January 1, 2011, or before December 1, 2010, as a

member of the General Assembly, shall be classified as a

Class A member and receive credit for Class A service upon

payment of regular and additional member contributions for

Class A service, provided that the State employee does not

become a member of Class AA pursuant to subsection (a.1) or a

member of Class D-4 pursuant to subsection (a.2).

(2)  A State employee who first becomes a member of the

system on or after January 1, 2011, or on or after December

1, 2010, as a member of the General Assembly, shall be

classified as a Class A-3 member and receive credit for Class

A-3 service upon payment of regular member contributions for

Class A-3 service provided that the State employee does not

become a member of Class A-4 pursuant to subsection (a.3),

except that a member of the judiciary shall be classified as

a member of such other class of service for which the member

of the judiciary is eligible, shall elect, and make regular

member contributions.

(a.1)  Class AA membership.--

(1)  A person who becomes a State employee and an active

member of the system after June 30, 2001, and who first

became an active member before January 1, 2011, or before

December 1, 2010, as a member of the General Assembly, and

who is not a State police officer and not employed in a

position for which a class of service other than Class A is

credited or could be elected shall be classified as a Class

AA member and receive credit for Class AA State service upon

payment of regular member contributions for Class AA service

and, subject to the limitations contained in paragraph (7),

if previously a member of Class A or previously employed in a

position for which Class A service could have been earned,

shall have all Class A State service (other than State

service performed as a State police officer or for which a

class of service other than Class A was earned or could have

been elected) classified as Class AA service.

(2)  A person who is a State employee on June 30, 2001,

and July 1, 2001, but is not an active member of the system

because membership in the system is optional or prohibited

pursuant to section 5301 (relating to mandatory and optional

membership) and who first becomes an active member after June

30, 2001, and before January 1, 2011, or before December 1,

2010, as a member of the General Assembly, and who is not a

State police officer and not employed in a position for which

a class of service other than Class A is credited or could be

elected shall be classified as a Class AA member and receive

credit for Class AA State service upon payment of regular

member contributions for Class AA service and, subject to the

limitations contained in paragraph (7), if previously a

member of Class A or previously employed in a position for

which Class A service could have been earned, shall have all

Class A State service (other than State service performed as

a State Police officer or for which a class of service other

than Class A was earned or could have been elected)

classified as Class AA service.

* * *

(5)  A former State employee who first becomes a member

before January 1, 2011, or before December 1, 2010, as a

member of the General Assembly, other than a former State

employee who was a State police officer on or after July 1,

1989, who is a school employee and who on or after July 1,

2001, becomes a multiple service member, subject to the

limitations contained in paragraph (7), shall receive Class

AA service credit for all Class A State service other than

State service performed as a State employee in a position in

which the former State employee could have elected a class of

service other than Class A.

(6)  A State employee who after June 30, 2001, becomes a

State police officer or who is employed in a position in

which the member could elect membership in a class of service

other than Class AA or Class D-4 shall retain any Class AA

service credited prior to becoming a State police officer or

being so employed but shall be ineligible to receive Class AA

credit thereafter and instead shall receive Class A credit

for service as a member of the judiciary or if he first

became a member before January 1, 2011, or December 1, 2010,

as a member of the General Assembly, or Class A-3 credit for

service other than as a member of the judiciary and he first

became a member on or after January 1, 2011, or December 1,

2010, as a member of the General Assembly, unless a class of

membership other than Class A is elected.

* * *

(a.2)  Class of membership for members of the General

Assembly.--

(1)  A person who:

(i)  becomes a member of the General Assembly and an

active member of the system after June 30, 2001, and

before December 1, 2010; or

(ii)  is a member of the General Assembly on July 1,

2001, but is not an active member of the system because

membership in the system is optional pursuant to section

5301 and who becomes an active member after June 30,

2001, and before December 1, 2010;

and who was not a State police officer on or after July 1,

1989, shall be classified as a Class D-4 member and receive

credit as a Class D-4 member for all State service as a

member of the General Assembly upon payment of regular member

contributions for Class D-4 service and, subject to the

limitations contained in subsection (a.1)(7), if previously a

member of Class A or employed in a position for which Class A

service could have been earned, shall receive Class AA

service credit for all Class A State service, other than

State service performed as a State police officer or for

which a class of service other than Class A or Class D-4 was

or could have been elected or credited.

(2)  Provided an election to become a Class D-4 member is

made pursuant to section 5306.2 (relating to elections by

members of the General Assembly), a State employee who was

not a State police officer on or after July 1, 1989, who on

July 1, 2001, is a member of the General Assembly and an

active member of the system and not a member of Class D-3

shall be classified as a Class D-4 member and receive credit

as a Class D-4 member for all State service performed as a

member of the General Assembly not credited as another class

other than Class A upon payment of regular member

contributions for Class D-4 service and, subject to the

limitations contained in paragraph (a.1)(7), shall receive

Class AA service credit for all Class A State service, other

than State service performed as a State police officer or as

a State employee in a position in which the member could have

elected a class of service other than Class A, performed

before July 1, 2001.

(3)  A member of the General Assembly who after June 30,

2001, becomes a State police officer shall retain any Class

AA service or Class D-4 service credited prior to becoming a

State police officer or being so employed but shall be

ineligible to receive Class AA or Class D-4 credit thereafter

and instead shall receive Class A credit or Class A-3 credit

if he first becomes a member of the system on or after

January 1, 2011.

(4)  Notwithstanding the provisions of this subsection,

no service as a member of the General Assembly performed

before December 1, 2010, that is not credited as Class D-4

service on November 30, 2010, shall be credited as Class D-4

service, unless such service was previously credited in the

system as Class D-4 service and the member withdrew his total

accumulated deductions as provided in section 5311 (relating

to eligibility for refunds) or 5701 (relating to return of

total accumulated deductions). No service as a member of the

General Assembly performed on or after December 1, 2010,

shall be credited as Class D-4 service unless the member

previously was credited with Class D-4 service credits.

(a.3)  Class A-3 membership.--Provided that an election to

become a Class A-4 member is made pursuant to section 5306.3

(relating to election to become a Class A-4 member), a State

employee who otherwise would be a member of Class A-3 shall be

classified as a Class A-4 member and receive credit for all

creditable State service performed after the effective date of

membership in the system, except as a member of the judiciary,

upon payment of regular member contributions for Class A-4

service.

* * *

Section 7.4.  Title 71 is amended by adding a section to

read:

§ 5306.3.  Election to become a class A-4 member.

(a)  General rule.--A person who otherwise is eligible for

Class A-3 membership who has not previously elected or declined

to elect Class A-4 membership may elect to become a member of

Class A-4.

(b)  Time for making election.--The election to become a

Class A-4 member must be made by the member filing written

notice with the board in a form and manner determined by the

board no later than 45 days after notice from the board of the

member's eligibility to elect Class A-4 membership.

(c)  Effect of election.--An election to become a Class A-4

member shall be irrevocable and shall become effective on the

effective date of membership in the system and shall remain in

effect for all future creditable State service, other than

service performed as a member of the judiciary. Payment of

regular member contributions for Class A-4 State service

performed prior to the election of Class A-4 service shall be

made in a form, manner and time determined by the board. Upon

termination and subsequent reemployment, a member who elected

Class A-4 membership shall be credited as a Class A-4 member for

creditable State service performed after reemployment, except as

a member of the judiciary, regardless of termination of

employment, termination of membership by withdrawal of

accumulated deductions or status as an annuitant, vestee or

inactive member after the termination of service.

(d)  Effect of failure to make election.--Failure to elect to

become a Class A-4 member within the election period set forth

in subsection (b) shall result in all of the member's State

service, other than service performed as a member of the

judiciary, being credited as Class A-3 service and not subject

to further election or crediting as Class A-4 service. Upon

termination and subsequent employment, a member who failed to

elect to become a Class A-4 member shall not be eligible to make

another election to become a Class A-4 member for either past or

future State service.

Section 7.5.  Sections 5308(b) and 5309 of Title 71 are

amended to read:

§ 5308.  Eligibility for annuities.

* * *

(b)  Withdrawal annuity.--

(1)  Any vestee or any active member or inactive member

on leave without pay who terminates State service having five

or more eligibility points and who does not have Class A-3 or

Class A-4 service credit or Class T-E or Class T-F service

credit in the Public School Employees' Retirement System, or

who has Class G, Class H, Class I, Class J, Class K, Class L,

Class M or Class N service and terminates State service

having five or more eligibility points, upon compliance with

section 5907(f), (g) or (h) shall be entitled to receive an

annuity.

(2)  Any vestee, active member or inactive member on

leave without pay who has Class A-3 or Class A-4 service

credit or Class T-E or Class T-F service credit in the Public

School Employees' Retirement System who terminates State

service having ten or more eligibility points, upon

compliance with section 5907(f), (g) or (h), shall be

entitled to receive an annuity.

(3)  Any vestee, active member or inactive member on

leave without pay who has either Class A-3 or Class A-4

service credit or Class T-E or Class T-F service credit in

the Public School Employees' Retirement System and also has

service credited in the system in one or more other classes

of service who has five or more, but fewer than ten,

eligibility points, upon compliance with section 5907(f), (g)

or (h) shall be eligible to receive an annuity calculated on

his service credited in classes of service other than Class

A-3 or Class A-4, provided that the member has five or more

eligibility points resulting from service in classes other