PRINTER'S NO. 219
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
304
Session of
2015
INTRODUCED BY TEPLITZ, SCHWANK, COSTA, FONTANA AND WILLIAMS,
JANUARY 26, 2015
REFERRED TO FINANCE, JANUARY 26, 2015
AN ACT
Amending the act of February 1, 1974 (P.L.34, No.15), entitled
"An act creating a Pennsylvania Municipal Retirement System
for the payment of retirement allowances to officers,
employes, firemen and police of political subdivisions and
municipal authorities and of institutions supported and
maintained by political subdivisions and municipal government
associations and providing for the administration of the same
by a board composed of the State Treasurer and others
appointed by the Governor; imposing certain duties on the
Pennsylvania Municipal Retirement Board and the actuary
thereof; providing the procedure whereby political
subdivisions and municipal authorities may join such system,
and imposing certain liabilities and obligations on such
political subdivisions and municipal authorities in
connection therewith, and as to certain existing retirement
and pension systems, and upon officers, employes, firemen and
police of such political subdivisions, institutions supported
and maintained by political subdivisions, and upon municipal
authorities; providing for the continuation of certain
municipal retirement systems now administered by the
Commonwealth; providing certain exemptions from taxation,
execution, attachment, levy and sale and providing for the
repeal of certain related acts," in provisions relating to
municipal employees, providing for rights of municipal
employees' spouses and further providing for options on
superannuation or early retirement; in provisions relating to
municipal firemen and municipal police, further providing for
options on superannuation or early retirement; and, in
optional retirement plans, further providing for options on
superannuation or early retirement.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
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Section 1. The act of February 1, 1974 (P.L.34, No.15),
known as the Pennsylvania Municipal Retirement Law, is amended
by adding a section to read:
Section 209.1. Rights of Municipal Employes' Spouses.-- (a)
A retirement system or retirement plan of a municipality shall
provide that a designation by an employe, service provider or
retiree of a beneficiary or survivor annuitant to receive
payments under the retirement plan shall not be valid without
the express written consent of the spouse of the member if:
(1) the member is married at the time of the member's
selection of a beneficiary or survivor annuitant;
(2) the member is married at the time of the member's
selection of a form of benefit payment or distribution unless
the spouse has previously consented to an alternative
designation; or
(3) the member becomes married following a selection of a
beneficiary or survivor annuitant but prior to becoming entitled
to or selecting a form of benefit payment or distribution.
(b) A retirement system or retirement plan of a municipality
shall provide that retirement benefits, other than benefits
payable pursuant to a defined contribution or account balance
plan, shall be payable in the form of a joint and survivor
annuity, with at least a 50% survivor annuity to a member's
surviving spouse, unless:
(1) All of the following are satisfied:
(i) the spouse of the member consents in writing to another
form of benefit;
(ii) the election designates a beneficiary or form of
benefits that may not be changed without spousal consent or the
consent of the spouse expressly permits designations by the
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member without any requirement of further consent by the spouse;
and
(iii) the spouse's consent acknowledges the effect of the
election and is witnessed by a member of the board or a notary
public.
(2) It is established to the satisfaction of the plan
administrator that the consent required under paragraph (1) may
not be obtained because there is no spouse or because the spouse
cannot be located.
(c) Any consent by a spouse or establishment that the
consent of a spouse cannot be obtained shall be effective only
with respect to that spouse.
Section 2. Sections 211, 312 and 409 of the act, amended
July 9, 2010 (P.L.434, No.56), are amended to read:
Section 211. Options on Superannuation or Early
Retirement.--(a) At the time of his superannuation or early
retirement, a contributor may elect to receive his benefits in a
retirement allowance payable throughout his life, which shall be
known as a single life annuity. In the event of the death of an
annuitant who has elected to receive the maximum single life
annuity before he has received in annuity payments the full
amount of the total accumulated deductions standing to his
credit on the effective date of retirement, the balance shall be
paid to his designated beneficiary, or instead, he may elect to
receive the equivalent actuarial value at that time of his
retirement allowance in a lesser allowance, payable throughout
life with provisions that:
(1) Option 1. If he shall die before receiving in payments
the present value of his retirement allowance as it was at the
time of his retirement, the balance, if less than five thousand
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dollars ($5,000), shall be paid in a lump sum to his legal
representative, or to or in trust for his beneficiary. If the
balance is five thousand dollars ($5,000) or more, the
beneficiary may elect by application duly acknowledged and filed
with the board to receive payment of such balance according to
any one of the following provisions: (i) a lump sum payment;
(ii) an annuity having a present value equal to the balance
payable; (iii) a lump sum payment and an annuity. Such annuity
shall be of equivalent actuarial value to the balance payable
less the amount of the lump sum payment specified by the
beneficiary.
(2) Option 2. Upon his death, his retirement allowance
shall be continued throughout the life of and paid to his
survivor annuitant, if then living.
(3) Option 3. Upon his death, one-half of his retirement
allowance shall be continued throughout the life of and paid to
his survivor annuitant, if then living.
(b) A member or beneficiary shall not be entitled to a form
of benefit which commences or is payable over a period which
fails to satisfy the required distributions of section 401(a)(9)
of the Internal Revenue Code.
(c) (1) Notwithstanding any provision of this act to the
contrary, except as provided in paragraph (2), a member,
including a contributor, may not select a beneficiary or
survivor annuitant other than the member's spouse if the member:
(i) is married at the time of the member's selection of a
beneficiary or survivor annuitant;
(ii) is married at the time of the member's selection of a
form of benefit payment; or
(iii) becomes married prior to becoming entitled to or
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selecting a form of payment or distribution.
(2) A member may select a beneficiary or survivor annuitant
other than the member's spouse if:
(i) all of the following are satisfied:
(A) the spouse of the eligible member consents in writing to
the election;
(B) the election designates a beneficiary, or form of
benefit, that may not be changed without spousal consent or the
consent of the spouse expressly permits designations by the
member without any requirement of further consent by the spouse;
and
(C) the spouse's consent acknowledges the effect of the
election and is witnessed by a member of the board or a notary
public; or
(ii) it is established to the satisfaction of the board that
the consent required under subparagraph (i) cannot be obtained
because there is no spouse or because the spouse cannot be
located.
(3) Any consent by a spouse or establishment that the
consent of a spouse cannot be obtained shall be effective only
with respect to that spouse.
Section 312. Options on Superannuation or Early
Retirement.--(a) At the time of his superannuation or early
retirement, a contributor may elect to receive his benefits in a
retirement allowance payable throughout his life, which shall be
known as a single life annuity. In the event of the death of an
annuitant who has elected to receive the maximum single life
annuity before he has received in annuity payments the full
amount of the total accumulated deductions standing to his
credit on the effective date of retirement, the balance shall be
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paid to his designated beneficiary, or instead, he may elect, to
receive the actuarial equivalent value at that time of his
retirement allowance in a lesser allowance, payable throughout
life with provisions that:
(1) Option 1. If he shall die before receiving in payments
the present value of his retirement allowance as it was at the
time of his retirement, the balance, if less than five thousand
dollars ($5,000) shall be paid in a lump sum to his legal
representative, or to or in trust for his beneficiary. If the
balance is five thousand dollars ($5,000) or more, the
beneficiary may elect by application duly acknowledged and filed
with the board to receive payment of such balance according to
any of the following provisions: (i) a lump sum payment, (ii) an
annuity having a present value equal to the balance payable,
(iii) a lump sum payment and an annuity. Such annuity shall be
of equivalent actuarial value to the balance payable less the
amount of the lump sum payment specified by the beneficiary.
(2) Option 2. Upon his death his retirement allowance shall
be continued throughout the life of and paid to his survivor
annuitant, if then living.
(3) Option 3. Upon his death, one-half of his retirement
allowance shall be continued throughout the life of and paid to
his survivor annuitant, if then living.
(b) A member or beneficiary shall not be entitled to a form
of benefit which commences or is payable over a period which
fails to satisfy the required distributions of section 401(a)(9)
of the Internal Revenue Code.
(c) (1) Notwithstanding any provision of this act to the
contrary, except as provided in paragraph (2), a member,
including a contributor, may not select a beneficiary or
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survivor annuitant other than the member's spouse if the member:
(i) is married at the time of the member's selection of a
beneficiary or survivor annuitant;
(ii) is married at the time of the member's selection of a
form of benefit payment; or
(iii) becomes married prior to becoming entitled to or
selecting a form of payment or distribution.
(2) A member may select a beneficiary or survivor annuitant
other than the member's spouse if:
(i) All of the following are satisfied:
(A) the spouse of the eligible member consents in writing to
the election;
(B) the election designates a beneficiary, or form of
benefit, that may not be changed without spousal consent or the
consent of the spouse expressly permits designations by the
member without any requirement of further consent by the spouse;
and
(C) the spouse's consent acknowledges the effect of the
election and is witnessed by a member of the board or a notary
public.
(ii) It is established to the satisfaction of the board that
the consent required under subparagraph (i) cannot be obtained
because there is no spouse or because the spouse cannot be
located.
(3) Any consent by a spouse or establishment that the
consent of a spouse cannot be obtained shall be effective only
with respect to that spouse.
Section 409. Options on Superannuation or Early
Retirement.--(a) At the time of his superannuation or early
retirement, a contributor may elect to receive his benefits in a
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retirement allowance payable throughout his life, which shall be
known as a single life annuity. In the event of the death of an
annuitant who has elected to receive the maximum single life
annuity before he has received in annuity payments the full
amount of the total accumulated deductions standing to his
credit on the effective date of retirement, the balance shall be
paid to his designated beneficiary, or instead, he may elect to
receive the actuarial equivalent at that time of his retirement
allowance in a lesser allowance, payable throughout life with
provisions that:
(1) Option 1. If he shall die before receiving in payments
the present value of his retirement allowance as it was at the
time of his retirement, the balance, if less than five thousand
dollars ($5,000), shall be paid in a lump sum to his legal
representative, or to or in trust for his beneficiary. If the
balance is five thousand dollars ($5,000) or more, the
beneficiary may elect by application duly acknowledged and filed
with the board to receive payment of such balance according to
any one of the following provisions: (i) a lump sum payment,
(ii) an annuity having a present value equal to the balance
payable, (iii) a lump sum payment and an annuity. Such annuity
shall be of equivalent actuarial value to the balance payable
less the amount of the lump sum payment specified by the
beneficiary.
(2) Option 2. Upon his death, his retirement allowance
shall be continued throughout the life of and paid to his
survivor annuitant, if then living.
(3) Option 3. Upon his death, one-half of his retirement
allowance shall be continued throughout the life of and paid to
his survivor annuitant, if then living.
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(4) Option 4. Any other optional form of payment contained
in the contract.
(b) A member or beneficiary shall not be entitled to a form
of benefit which commences or is payable over a period which
fails to satisfy the required distribution provisions of section
401(a)(9) of the Internal Revenue Code, including the incidental
benefit distribution requirements.
(c) (1) Notwithstanding any provision of this act to the
contrary, except as provided in paragraph (2), a member,
including a contributor, may not select a beneficiary or
survivor annuitant other than the member's spouse if the member:
(i) is married at the time of the member's selection of a
beneficiary or survivor annuitant;
(ii) is married at the time of the member's selection of a
form of benefit payment; or
(iii) becomes married prior to becoming entitled to or
selecting a form of payment or distribution.
(2) A member may select a beneficiary or survivor annuitant
other than the member's spouse if:
(i) All of the following are satisfied:
(A) the spouse of the eligible member consents in writing to
the election;
(B) the election designates a beneficiary, or form of
benefit, that may not be changed without spousal consent or the
consent of the spouse expressly permits designations by the
member without any requirement of further consent by the spouse;
and
(C) the spouse's consent acknowledges the effect of the
election and is witnessed by a member of the board or a notary
public.
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(ii) It is established to the satisfaction of the board that
the consent required under subparagraph (i) cannot be obtained
because there is no spouse or because the spouse cannot be
located.
(3) Any consent by a spouse or establishment that the
consent of a spouse cannot be obtained shall be effective only
with respect to that spouse.
Section 3. This act shall take effect in 60 days.
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