HOUSE AMENDED
PRIOR PRINTER'S NOS. 24, 372, 691, PRINTER'S NO. 1235
1140
No. 24 Session of 1975
INTRODUCED BY COPPERSMITH, MURPHY, DWYER, FLEMING, MESSINGER,
O'PAKE, STAPLETON, REIBMAN, HANKINS, NOLAN AND MELLOW,
JANUARY 21, 1975
AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF
REPRESENTATIVES, AS AMENDED, SEPTEMBER 24, 1975
AN ACT
1 Amending Title 24 (Education) of the Pennsylvania Consolidated
2 Statutes, adding provisions relating to retirement for school
3 employees and making repeals.
4 TABLE OF CONTENTS
5 TITLE 24
6 EDUCATION
7 PART IV. RETIREMENT FOR SCHOOL EMPLOYEES
8 Chapter 81. Preliminary Provisions
9 § 8101. Short title of part.
10 § 8102. Definitions.
11 § 8103. Construction of part.
12 § 8104. Severability of provisions.
13 Chapter 83. Membership, Contributions and Benefits
14 Subchapter A. General Provisions
15 § 8301. Mandatory and optional membership.
16 § 8302. Credited school service.
1 § 8303. Eligibility points for retention and reinstatement of
2 service credits.
3 § 8304. Creditable nonschool service.
4 § 8305. Classes of service.
5 § 8306. Eligibility points.
6 § 8307. Eligibility for annuities.
7 § 8308. Eligibility for vesting.
8 § 8309. Eligibility for death benefits.
9 § 8310. Eligibility for refunds.
10 Subchapter B. Contributions
11 § 8321. Regular member contributions for current service.
12 § 8322. Joint coverage member contributions.
13 § 8323. Member contributions for creditable school service.
14 § 8324. Contributions for the purchase of credit for creditable
15 nonschool service.
16 § 8325. Incomplete payments.
17 § 8326. Contributions by the Commonwealth.
18 § 8327. Payments by employers.
19 § 8328. Actuarial cost method.
20 § 8329. Payments on account of social security deductions from
21 appropriations.
22 § 8330. Appropriations by the Commonwealth.
23 Subchapter C. Benefits
24 § 8341. Return of accumulated deductions.
25 § 8342. Maximum single life annuity.
26 § 8343. Reduction of annuities on account of social security
27 old-age insurance benefits.
28 § 8344. Disability annuities.
29 § 8345. Member's options.
30 § 8346. Termination of annuities.
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1 § 8347. Death benefits.
2 § 8348. Supplemental annuities.
3 § 8349. Payment of benefits.
4 Chapter 85. Administration and Miscellaneous Provisions
5 Subchapter A. Administration
6 § 8501. Public School Employees' Retirement Board.
7 § 8502. Administrative duties of the board.
8 § 8503. Duties of the board to advise and report to the
9 employers and members.
10 § 8504. Duties of the board to report to the State Employees'
11 Retirement Board.
12 § 8505. Duties of the board regarding applications and
13 elections of members.
14 § 8506. Duties of employers.
15 § 8507. Rights and duties of school employees and members.
16 § 8508. Rights and duties of annuitants.
17 Subchapter B. Retirement Fund and Accounts
18 § 8521. Management of fund and accounts.
19 § 8522. Public School Employees' Retirement Fund.
20 § 8523. Members' savings account.
21 § 8524. State accumulation account.
22 § 8525. Annuity reserve account.
23 Subchapter C. Miscellaneous Provisions
24 § 8531. State guarantee.
25 § 8532. State supervision.
26 § 8533. Taxation, attachment and assignment of funds.
27 § 8534. Fraud and adjustment of errors.
28 The General Assembly of the Commonwealth of Pennsylvania
29 hereby enacts as follows:
30 Section 1. Title 24, act of November 25, 1970 (P.L.707,
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1 No.230), known as the Pennsylvania Consolidated Statutes, is
2 amended by adding a title analysis and part to read:
3 TITLE 24
4 EDUCATION
5 Part
6 IV. Retirement for School Employees
7 PART IV
8 RETIREMENT FOR SCHOOL EMPLOYEES
9 Chapter
10 81. Preliminary Provisions
11 83. Membership, Contributions and Benefits
12 85. Administration and Miscellaneous Provisions
13 CHAPTER 81
14 PRELIMINARY PROVISIONS
15 Sec.
16 8101. Short title of part.
17 8102. Definitions.
18 8103. Construction of part.
19 8104. Severability of provisions.
20 § 8101. Short title of part.
21 This part shall be known and may be cited as the "Public
22 School Employees' Retirement Code."
23 § 8102. Definitions.
24 The following words and phrases when used in this part shall
25 have, unless the context clearly indicates otherwise, the
26 meanings given to them in this section:
27 "Accumulated deductions." The total of the contributions
28 paid into the fund by the member on account of current school
29 service, previous school service, or creditable nonschool
30 service and the statutory interest credited on all such
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1 contributions.
2 "Active member." A school employee who is contributing to
3 the fund or for whom authorized contributions are being made to
4 the fund.
5 "Actuarially equivalent." Equal present values, computed on
6 the basis of statutory interest and the mortality tables adopted
7 by the board.
8 "Actuary." The consultant to the board who shall be:
9 (1) a member of the American Academy of Actuaries; or
10 (2) an individual who has demonstrated to the
11 satisfaction of the Insurance Commissioner of Pennsylvania
12 that he has the educational background necessary for the
13 practice of actuarial science and has had at least seven
14 years of actuarial experience; or
15 (3) a firm, partnership, or corporation of which at
16 least one member meets the requirements of (1) or (2).
17 "Annuitant." Any member on or after the effective date of
18 retirement until his annuity is terminated.
19 "Approved leave of absence." A leave of absence which has
20 been approved by the employer for sabbatical leave, service as
21 an exchange teacher, or professional study.
22 "Basic contribution rate." The rate of 5 1/2% 5 1/4% except <--
23 for an active member of Class T-A or T-B, the appropriate rate
24 based on sex and age at entry into the system.
25 "Beneficiary." The person or persons last designated in
26 writing to the board by a member to receive his accumulated
27 deductions or a lump sum benefit upon the death of such member.
28 "Board." The Public School Employees' Retirement Board or
29 the Public School Employes' Retirement Board.
30 "Class of service multiplier."
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1 Class of service Multiplier
2 T-A .714
3 T-B .625
4 T-C 1.000
5 "Compensation." Any remuneration received as a school
6 employee excluding refunds for expenses incidental to employment
7 and excluding any severance payments.
8 "Concurrent service." Simultaneously credited school and
9 State service.
10 "Creditable nonschool service." Service other than service
11 as a school employee for which an active member may obtain
12 credit.
13 "Credited service." School or creditable nonschool service
14 for which the required contributions have been made or for which
15 salary deductions or lump sum payments have been agreed upon in
16 writing.
17 "Date of termination of service." The last date of service
18 for which a member makes contributions or, in the case of an
19 inactive member, the effective date of his resignation or the
20 date his employment is formally discontinued by his employer or
21 two years following the last day of service for which he made
22 contributions, whichever is earliest.
23 "Effective date of retirement." The first day following the
24 date of termination of service of a member if he has properly
25 filed an application for an annuity within 90 days of such date
26 or:
27 (1) In the case of a member who applies for an annuity
28 subsequent to 90 days after termination of service, the date
29 of filing such application or the date specified on the
30 application, whichever is later.
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1 (2) In the case of a vestee who files an application for
2 an annuity within 90 days of his superannuation age, the
3 attainment of such age.
4 (3) In the case of a finding of disability, the date
5 certified by the board as the effective date of disability.
6 "Eligibility points." Points which are accrued by an active
7 member or a multiple service member who is an active member of
8 the State Employees' Retirement System for credited service and
9 are used in the determination of eligibility for benefits as
10 provided in section 8306 (relating to eligibility points).
11 "Employer." Any governmental entity directly responsible for
12 the employment and payment of the school employee and charged
13 with the responsibility of providing public education within
14 this Commonwealth, including but not limited to: State-owned
15 colleges and universities, the Pennsylvania State University,
16 community colleges, area vocational-technical schools,
17 intermediate units, the State Board of Education, Scotland
18 School for Veterans' Children, Thaddeus Stevens Trade School,
19 and the Pennsylvania State Oral School for the Deaf.
20 "Final average salary." The highest average compensation
21 received as an active member during any three nonoverlapping
22 periods of 12 consecutive months with the compensation for part-
23 time service being annualized on the basis of the fractional
24 portion of the school year for which credit is received; except,
25 if the employee was not a member for three such periods, the
26 total compensation received as an active member annualized in
27 the case of part-time service divided by the number of such
28 periods of membership; and, in the case of a member with
29 multiple service credit, the final average salary shall be
30 determined by reference to compensation received by him as a
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1 school employee or a State employee or both.
2 "Full coverage member." Any member who has made or is making
3 regular member contributions, or has paid or has agreed to pay
4 to the fund the actuarial equivalent of regular member
5 contributions over the entire period of his credited service.
6 "Fund." The Public School Employees' Retirement Fund.
7 "Governmental entity." Board of school directors, board of
8 public education, intermediate unit board of directors, area
9 vocational-technical board, any governing board of any agency or
10 authority created by them, and the Commonwealth.
11 "Inactive member." A member who is not making regular member
12 contributions, who has accumulated deductions standing to his
13 credit in the fund and who has contributed to the fund within
14 the last two school years or a multiple service member who is
15 active in the State Employees' Retirement System.
16 "Intervening military service." Active military service of a
17 member who was a school employee immediately preceding his
18 induction into the armed services or forces of the United States
19 in order to meet a draft obligation excluding any voluntary
20 extension of such obligational service and who becomes a school
21 employee within 90 days of the expiration of such service.
22 "Joint coverage member." Any member who agreed prior to
23 January 1, 1966 to make joint coverage member contributions to
24 the fund and has not elected to become a full coverage member.
25 "Joint coverage member contributions." Regular member
26 contributions reduced for a joint coverage member.
27 "Member." Active member, inactive member, annuitant, or
28 vestee.
29 "Member's annuity." The single life annuity which is
30 actuarially equivalent on the effective date of retirement to
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1 the accumulated deductions standing to the member's credit in
2 the members' savings account.
3 "Military service." All active military service for which a
4 member has received a discharge other than an undesirable, bad
5 conduct, or dishonorable discharge.
6 "Multiple service." Credited service of a member who has
7 elected to combine his credited service in both the Public
8 School Employees' Retirement System and the State Employees'
9 Retirement System.
10 "Previous school service." Service rendered as a school
11 employee including service in any summer school conducted by a
12 school district of the Commonwealth prior to the member's most
13 recent entrance in the system.
14 "Public school." Any or all classes or schools within this
15 Commonwealth conducted under the order and superintendence of
16 the Department of Education including, but not limited to: all
17 educational classes of any employer charged with the
18 responsibility of public education within this Commonwealth as
19 well as those classes financed wholly or in part by the Federal
20 Government, State-owned colleges and universities, the
21 Pennsylvania State University, community colleges, area
22 vocational-technical schools, intermediate units, the State
23 Board of Education, Scotland School for Veterans' Children,
24 Thaddeus Stevens Trade School, and the Pennsylvania State Oral
25 School for the Deaf.
26 "Regular member contributions." The product of the basic
27 contribution rate and the compensation of the member.
28 "Salaried employee." A school employee who is compensated on
29 the basis of an annual salary.
30 "Salary deductions." The amounts certified by the board,
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1 deducted from the compensation of an active member and paid into
2 the fund.
3 "School employee." Any person engaged in work relating to a
4 public school for any governmental entity and for which work he
5 is receiving regular remuneration as an officer, administrator
6 or employee excluding, however, any independent contractor or a
7 person compensated on a fee basis.
8 "School service." Service rendered as a school employee.
9 "School year." The 12-month period which the governmental
10 entity uses for purposes of administration regardless of the
11 actual time during which a member renders service.
12 "Severance payments." Any payments for unused vacation or
13 sick leave and any additional compensation contingent upon
14 retirement including payments in excess of the scheduled or
15 customary salaries provided for members within the same
16 governmental entity with the same educational and experience
17 qualifications who are not terminating service.
18 "Standard single life annuity." An annuity equal to 2% of
19 the final average salary, multiplied by the total number of
20 years and fractional part of a year of credited service of a
21 member.
22 "State Employees' Retirement System." The retirement system
23 established by the act of June 27, 1923 (P.L.858, No.331) and
24 codified by the act of June 1, 1959 (P.L.392, No.78) and by Part
25 XXV of Title 71 (relating to retirement for State employees and
26 officers), added March 1, 1974 (No.31).
27 "State service." Service rendered as a State employee and
28 credited as service in the State Employees' Retirement System.
29 "Statutory interest." Interest at 4% per annum, compounded
30 annually.
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1 "Superannuation annuitant." An annuitant whose annuity
2 became payable on or after the attainment of superannuation age.
3 "Superannuation or normal retirement age."
4 Class of service Age
5 T-A 62 or any age upon accrual
6 of 35 eligibility points
7 T-B 62
8 T-C 62 or age 60 provided the
9 member has at least 30
10 eligibility points or
11 any age upon accrual of
12 35 eligibility points
13 "Survivor annuitant." The person or persons last designated
14 by a member under a joint and survivor annuity option to receive
15 an annuity upon the death of such member.
16 "System." The Public School Employes' Retirement System of
17 Pennsylvania as established by the act of July 18, 1917
18 (P.L.1043, No.343), and codified by the act of June 1, 1959
19 (P.L.350, No.77).
20 "Valuation interest." Interest at 5 1/2% per annum,
21 compounded annually and applied to all accounts other than the
22 members' savings account.
23 "Vestee." A member with ten or more eligibility points who
24 has terminated school service, has left his accumulated
25 deductions in the fund, and is deferring filing of an
26 application for receipt of an annuity.
27 § 8103. Construction of part.
28 The provisions of this part in so far as they are the same as
29 those of existing law are intended as a continuation of such
30 laws and not as new enactments. The provisions of this part
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1 shall not affect any act done, liability incurred, right accrued
2 or vested, or any suit or prosecution pending or to be
3 instituted to enforce any right or penalty or to punish any
4 offense under the authority of any repealed laws.
5 § 8104. Severability of provisions.
6 The provisions of this part are severable and if any of its
7 provisions shall be held to be unconstitutional, the decision of
8 the court shall not affect or impair any of the remaining
9 provisions. It is hereby declared to be the legislative intent
10 that this part would have been adopted had such unconstitutional
11 provisions not been included.
12 CHAPTER 83
13 MEMBERSHIP, CONTRIBUTIONS AND BENEFITS
14 Subchapter
15 A. General Provisions
16 B. Contributions
17 C. Benefits
18 SUBCHAPTER A
19 GENERAL PROVISIONS
20 Sec.
21 8301. Mandatory and optional membership.
22 8302. Credited school service.
23 8303. Eligibility points for retention and reinstatement of
24 service credits.
25 8304. Creditable nonschool service.
26 8305. Classes of service.
27 8306. Eligibility points.
28 8307. Eligibility for annuities.
29 8308. Eligibility for vesting.
30 8309. Eligibility for death benefits.
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1 8310. Eligibility for refunds.
2 § 8301. Mandatory and optional membership.
3 (a) Mandatory membership.--Membership in the system shall be
4 mandatory as of the effective date of employment for all school
5 employees except the following:
6 (1) Any officer or employee of the Department of
7 Education, State-owned educational institutions, community
8 colleges, area vocational-technical schools, technical
9 institutes, or the Pennsylvania State University and who is a
10 member of the State Employees' Retirement System or a member
11 of another retirement program approved by the employer.
12 (2) Any school employee who is employed on a per diem or
13 hourly basis for less than 80 full-day sessions or 500 hours
14 in any fiscal year.
15 (3) Any officer or employee of a governmental entity who
16 subsequent to December 22, 1965 and prior to July 1, 1975
17 administers, supervises, or teaches classes financed wholly
18 or in part by the Federal Government so long as he continues
19 in such service.
20 (b) Prohibited membership.--The school employees categorized
21 in subsection (a)(1) and (2) shall not have the right to elect
22 membership in the system.
23 (c) Optional membership.--The school employees categorized
24 in subsection (a)(3) shall have the right to elect membership in
25 the system. Once such election is exercised, membership shall
26 commence from the original date of eligibility and shall
27 continue until the termination of such service.
28 § 8302. Credited school service.
29 (a) Computation of credited service.--In computing credited
30 school service of a member for the determination of benefits, a
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1 full-time salaried school employee shall receive one year of
2 credit for each school year or the corresponding fraction
3 thereof, in accordance with the proportion of the full school
4 year for which the required regular member contributions have
5 been made. A per diem or hourly school employee shall receive
6 one year of credited service for each nonoverlapping period of
7 12 consecutive months in which he is employed and for which he
8 contributes for at least 180 full-day sessions or 1,100 hours of
9 employment. If such member was employed and contributed for less
10 than 180 full-day sessions or 1,100 hours, he shall be credited
11 with a fractional portion of a year determined by the ratio of
12 the number of full-day sessions or hours of service actually
13 rendered to 180 full-day sessions or 1,100 hours, as the case
14 may be. A part-time salaried employee shall be credited with the
15 fractional portion of the year which corresponds to the service
16 actually rendered in relation to the service required as a
17 comparable full-time salaried employee. In no case shall a
18 member receive more than one year of credited service for any 12
19 consecutive months or a member who has elected multiple service
20 receive an aggregate in the two systems of more than one year of
21 credited service for any 12 consecutive months.
22 (b) Approved leaves of absence.--An active member shall
23 receive credit for an approved leave of absence provided that:
24 (1) the member returns for a period at least equal to the
25 length of the leave or one year, whichever is less, to the
26 school district which granted his leave, unless such
27 condition is waived by the employer; and
28 (2) the proper contributions are made by the member and
29 the employer.
30 (c) Cancellation of credited service.--All credited service
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1 shall be cancelled if a member withdraws his accumulated
2 deductions.
3 § 8303. Eligibility points for retention and reinstatement of
4 service credits.
5 (a) Accrued credited service.--Eligibility points shall be
6 computed in accordance with section 8306 (relating to
7 eligibility points) with respect to all credited service accrued
8 as of the effective date of this part.
9 (b) Future school service.--Every active member of the
10 system shall accrue an eligibility point for each year of school
11 service rendered subsequent to the effective date of this part.
12 (c) Previous service.--Every active member of the system or
13 a multiple service member who is an active member of the State
14 Employees' Retirement System on or after the effective date of
15 this part may purchase credit and receive eligibility points as
16 a member of Class T-C for previous school service or creditable
17 nonschool service upon written agreement by the member and the
18 board as to the manner of payment of the amount due for credit
19 for such service; except, that any purchase for reinstatement of
20 service credit shall be for all service previously credited.
21 § 8304. Creditable nonschool service.
22 (a) Eligibility.--An active member or a multiple service
23 member who is an active member of the State Employees'
24 Retirement System shall be eligible to receive Class T-C service
25 credit for creditable nonschool service as set forth in
26 subsection (b) provided that he is not entitled to receive,
27 eligible to receive now or in the future, or is receiving
28 retirement benefits for such service under a retirement system
29 administered and wholly or partially paid for by any other
30 governmental agency or by any private employer, or a retirement
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1 program approved by the employer in accordance with section
2 8301(a)(1) (relating to mandatory and optional membership), and
3 further provided that such service is certified by the previous
4 employer and the manner of payment of the amount due is agreed
5 upon by the member, the employer, and the board.
6 (b) Limitations on nonschool service.--Creditable nonschool
7 service credit shall be limited to:
8 (1) Intervening military service.
9 (2) Other military service not exceeding five years.
10 (3) Service in any public school or public educational
11 institution in any state other than this Commonwealth or in
12 any territory or area under the jurisdiction of the United
13 States.
14 (4) Service as an administrator, teacher, or instructor
15 in the field of public school education for any agency or
16 department of the government of the United States whether or
17 not such area was under the jurisdiction of the United
18 States.
19 (5) Previous service as an employee of a county board of
20 school directors which employment was terminated because of
21 the transfer of the administration of such service or of the
22 entire agency to a governmental entity.
23 (c) Limitations on years of credit.--Service listed in
24 subsection (b)(3) and (4) must have been for a period of at
25 least one school year and credit for such service shall be
26 limited to the lesser of 12 years or the number of years of
27 school service credited in the system. In no case shall the
28 total credit for nonschool service other than that listed in
29 subsection (b)(5) exceed the number of years of school service
30 credited in the system, plus, in the case of a multiple service
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1 member, any additional years of State service credited in the
2 State Employees' Retirement System.
3 § 8305. Classes of service.
4 (a) Class T-C membership.--A school employee who is a member
5 of Class T-C on the effective date of this part or who becomes a
6 member of the system subsequent to the effective date of this
7 part shall be classified as a Class T-C member.
8 (b) Other class membership.--A school employee who is a
9 member of a class of service other than Class T-C on the
10 effective date of this part may elect to become a member of
11 Class T-C or may retain his membership in such other class until
12 the service is discontinued or he elects to become a full
13 coverage member or elects to purchase credit for previous school
14 or creditable nonschool service.
15 § 8306. Eligibility points.
16 An active member of the system shall accrue one eligibility
17 point for each year of credited service as a member of the
18 school or State retirement system. A member shall accrue an
19 additional two-thirds of an eligibility point for each year of
20 Class D-3 credited service under the State Employees' Retirement
21 System. In the case of a fractional part of a year of credited
22 service, a member shall accrue the corresponding fractional
23 portion of an eligibility point.
24 § 8307. Eligibility for annuities.
25 (a) Superannuation annuity.--An active or an inactive member
26 who attains superannuation age shall be entitled to receive a
27 superannuation annuity upon termination of service and filing of
28 a proper application.
29 (b) Withdrawal annuity.--A vestee with ten or more
30 eligibility points or an active or inactive member who
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1 terminates school service having ten or more eligibility points
2 shall, upon filing a proper application, be entitled to receive
3 an early annuity.
4 (c) Disability annuity.--An active or inactive member who
5 has credit for at least five years of service shall, upon filing
6 of a proper application, be entitled to a disability annuity if,
7 prior to attainment of superannuation age, he becomes mentally
8 or physically incapable of continuing to perform the duties for
9 which he is employed and qualifies for an annuity in accordance
10 with the provisions of section 8505(c)(1) (relating to duties of
11 the board regarding applications and elections of members).
12 § 8308. Eligibility for vesting.
13 Any member who terminates school service with ten or more
14 eligibility points shall be entitled to vest his retirement
15 benefits until attainment of superannuation age.
16 § 8309. Eligibility for death benefits.
17 In the event of the death of a member who is eligible for an
18 annuity in accordance with section 8307(a) or (b) (relating to
19 eligibility for annuities) his beneficiary shall be entitled to
20 a death benefit as provided in section 8347 (relating to death
21 benefits). In the event of the death of a member not eligible
22 for an annuity his beneficiary shall receive the accumulated
23 deductions standing to the member's credit in the fund.
24 § 8310. Eligibility for refunds.
25 Upon termination of service any active member, regardless of
26 eligibility for benefits, may elect to receive his accumulated
27 deductions in lieu of any benefit to which he is entitled.
28 SUBCHAPTER B
29 CONTRIBUTIONS
30 Sec.
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1 8321. Regular member contributions for current service.
2 8322. Joint coverage member contributions.
3 8323. Member contributions for creditable school service.
4 8324. Contributions for the purchase of credit for creditable
5 nonschool service.
6 8325. Incomplete payments.
7 8326. Contributions by the Commonwealth.
8 8327. Payments by employers.
9 8328. Actuarial cost method.
10 8329. Payments on account of social security deductions from
11 appropriations.
12 8330. Appropriations by the Commonwealth.
13 § 8321. Regular member contributions for current service.
14 Every active member shall make regular member contributions
15 to the fund for current service by salary deductions.
16 § 8322. Joint coverage member contributions.
17 The regular member contributions for current service of a
18 joint coverage member shall be reduced by 40% of the tax on
19 taxable wages prescribed by the Federal Insurance Contributions
20 Act, 26 U.S.C. §§ 3101-3125, exclusive of that portion of such
21 tax attributable to coverage for disability and medical
22 benefits.
23 § 8323. Member contributions for creditable school service.
24 (a) Previous school service, sabbatical leave and full
25 coverage.--The contributions to be paid by an active member or
26 an eligible State employee for credit for reinstatement of all
27 previously credited school service, school service not
28 previously credited, sabbatical leave as if he had been in full-
29 time daily attendance, or full-coverage membership shall be
30 sufficient to provide an amount equal to the accumulated
19750S0024B1235 - 19 -
1 deductions which would have been standing to the credit of the
2 member for such service had he made regular member contributions
3 with full coverage at the rate of contribution necessary to be
4 credited as Class T-C service and had such contributions been
5 credited with statutory interest during the period the
6 contributions would have been made and during all periods of
7 subsequent school and State service up to the date of purchase.
8 (b) Class T-C membership.--The contributions to be paid by a
9 member who elects to transfer to Class T-C shall be equal to the
10 amount of additional contributions, if any, which he would have
11 made had he become a member of Class T-C on July 1, 1967 and had
12 such contributions been credited with statutory interest during
13 all periods of subsequent school and State service up to the
14 date of purchase.
15 (c) Approved leave of absence other than sabbatical leave.--
16 The contributions to be paid by an active member for credit for
17 an approved leave of absence other than sabbatical leave, shall
18 be sufficient to transfer his membership to Class T-C and
19 further to provide an annuity as a Class T-C member for such
20 additional credited service. Such amount shall be the sum of the
21 amount required in accordance with the provisions of subsection
22 (b) and an amount determined as the sum of the member's basic
23 contribution rate and the normal contribution rate as provided
24 in section 8328 (relating to actuarial cost method) during such
25 period multiplied by the compensation which was received or
26 which would have been received during such period and with
27 statutory interest during all periods of subsequent school and
28 State service up to the date of purchase.
29 (d) Certification and payment of contributions.--In all
30 cases other than for the purchase of credit for sabbatical
19750S0024B1235 - 20 -
1 leave, the amount payable shall be certified by the board in
2 accordance with methods approved by the actuary and may be paid
3 in a lump sum within 90 days or, in the case of an active
4 member, may be amortized with statutory interest through salary
5 deductions or by personal checks in amounts agreed upon by the
6 member and the board.
7 § 8324. Contributions for the purchase of credit for creditable
8 nonschool service.
9 (a) Source of contributions.--The total contributions to
10 purchase credit as a member of Class T-C for creditable
11 nonschool service of an active member or an eligible State
12 employee shall be paid either by the member, the member's
13 previous employer, the Commonwealth, or a combination thereof,
14 as provided by law.
15 (b) Military service.--The amount due for the purchase of
16 credit for military service other than intervening military
17 service shall be determined by applying the member's basic
18 contribution rate plus the normal contribution rate as provided
19 in section 8328 (relating to actuarial cost method) at the time
20 of entry of the member into school service subsequent to such
21 military service to one-third of his total compensation received
22 during the first three years of such subsequent credited school
23 service and multiplying the product by the number of years and
24 fractional part of a year of creditable nonintervening military
25 service being purchased together with statutory interest during
26 all periods of subsequent school and State service to date of
27 purchase. Upon certification of the amount due, payment may be
28 made in a lump sum within 90 days or in the case of an active
29 member it may be amortized with statutory interest through
30 salary deductions or by personal checks in amounts agreed upon
19750S0024B1235 - 21 -
1 by the member and the board. Application may be filed for all
2 such military service credit upon completion of three years of
3 subsequent credited school service and shall be credited as
4 Class T-C service.
5 (c) Intervening military service.--Contributions on account
6 of credit for intervening military service shall be determined
7 by the member's basic contribution rate and compensation at the
8 time of entry of the member into active military service,
9 together with statutory interest during all periods of
10 subsequent school and State service to date of purchase. Upon
11 application for such credit the amount due shall be certified in
12 the case of each member by the board, in accordance with methods
13 approved by the actuary, and contributions may be made by one of
14 the following methods:
15 (1) Regular monthly payments during active military
16 service.
17 (2) A lump sum payment within 90 days of certification
18 of the amount due.
19 (3) Salary deductions or personal checks in amounts
20 agreed upon by the member and the board.
21 (d) Other creditable nonschool service.--Contributions on
22 account of Class T-C credit for creditable nonschool service
23 other than military service shall be determined by applying the
24 member's basic contribution rate plus the normal contribution
25 rate as provided in section 8328 at the time of the member's
26 entry into school service subsequent to such creditable
27 nonschool service to his total compensation received during the
28 first year of subsequent credited school service and multiplying
29 the product by the number of years and fractional part of a year
30 of creditable nonschool service being purchased together with
19750S0024B1235 - 22 -
1 statutory interest during all periods of subsequent school or
2 State service to the date of purchase, except that in the case
3 of purchase of credit for creditable nonschool service as set
4 forth in section 8304(b)(5) (relating to creditable nonschool
5 service) the member shall pay only the employee's share unless
6 otherwise provided by law. Upon certification of the amount due,
7 payment may be made in a lump sum within 90 days or in the case
8 of an active member it may be amortized with statutory interest
9 through salary deductions or by personal checks in amounts
10 agreed upon by the member and the board.
11 § 8325. Incomplete payments.
12 In the event that a member terminates school service before
13 any agreed upon payments have been completed the member shall
14 have the right to pay within 30 days of termination of school
15 service the balance due, including interest, in a lump sum and
16 the annuity shall be calculated including full credit for the
17 previous school service, creditable nonschool service, or full-
18 coverage membership. In the event a member does not pay the
19 balance due within 30 days of termination of school service or
20 in the event a member dies in school service or within 30 days
21 of termination of school service and before the agreed upon
22 payments have been completed, the present value of the benefit
23 otherwise payable shall be reduced by the balance due, including
24 interest, and the benefit payable shall be calculated as the
25 actuarial equivalent of such reduced present value.
26 § 8326. Contributions by the Commonwealth.
27 (a) Contributions on behalf of active members.--The
28 Commonwealth shall make contributions into the fund on behalf of
29 all active members in an amount equal to one-half the amount
30 certified by the board as necessary to provide, together with
19750S0024B1235 - 23 -
1 the members' contributions, annuity reserves on account of
2 prospective annuities as provided in this part in accordance
3 with section 8328(a), (b) and (c) (relating to actuarial cost
4 method). In case a school employee has elected membership in a
5 retirement program approved by the employer, the Commonwealth
6 shall contribute to such program on account of his membership an
7 amount no greater than the amount it would have contributed had
8 the employee been a member of the Public School Employees'
9 Retirement System.
10 (b) Contributions on behalf of annuitants.--The Commonwealth
11 shall make contributions on behalf of all annuitants in an
12 amount equal to one-half of the amount certified by the board as
13 necessary to fund the additional liabilities for minimum and
14 supplemental annuities in accordance with section 8328(d).
15 § 8327. Payments by employers.
16 (a) General rule.--Each employer, including the Commonwealth
17 as employer of employees of the Department of Education, State-
18 owned colleges and universities, Thaddeus Stevens Trade School,
19 Pennsylvania State Oral School for the Deaf, Scotland School for
20 Veterans' Children, and the Pennsylvania State University, shall
21 make payments to the fund each quarter in an amount equal to
22 one-half the sum of the percentages, as determined under section
23 8328 (relating to actuarial cost method), applied to the total
24 compensation during the pay periods in the preceding quarter of
25 all its employees who were members of the system during such
26 period.
27 (b) Deduction from appropriations.--To facilitate the
28 payment of amounts due from any employer to the fund through the
29 State Treasurer and to permit the exchange of credits between
30 the State Treasurer and any employer, the Secretary of Education
19750S0024B1235 - 24 -
1 and the State Treasurer shall cause to be deducted and paid into
2 the fund from the amount of any moneys due to any employer on
3 account of any appropriation for schools or other purposes such
4 amount due to the fund as certified by the board and as remains
5 unpaid on the date such appropriations would otherwise be paid
6 to the employer, and such amount shall be credited to the
7 employer's account in the fund.
8 § 8328. Actuarial cost method.
9 (a) Employer contribution rate on behalf of active
10 members.--The amount of the total employer contributions on
11 behalf of all active members shall be computed by the actuary as
12 a percentage of the total compensation of all active members
13 during the period for which the amount is determined and shall
14 be so certified by the board. The total contribution rate on
15 behalf of all active members shall consist of the normal
16 contribution rate and the accrued liability contribution rate.
17 (b) Normal contribution rate.--The normal contribution rate
18 shall be determined after each actuarial valuation. Until all
19 accrued liability contributions have been completed, the normal
20 contribution rate shall be determined, on the basis of an annual
21 5 1/2% interest rate and such mortality and other tables as
22 shall be adopted by the board, as a level percentage of the
23 compensation of the average new active member, which percentage,
24 if contributed on the basis of his prospective compensation
25 through the entire period of active school service, would be
26 sufficient to fund the liability for any prospective benefit
27 payable to him, in excess of that portion funded by his
28 prospective member contributions. After all accrued liability
29 contributions have been completed, the normal contribution rate
30 shall be determined by deducting from the present value of the
19750S0024B1235 - 25 -
1 liabilities for all prospective benefits of active members, the
2 sum of the total assets in the fund on the valuation date,
3 excluding the balance in the annuity reserve account, and the
4 present value of prospective member contributions, and dividing
5 the remainder by the present value of the future compensation of
6 all active members.
7 (c) Accrued liability contribution rate.--For the fiscal
8 year beginning July 1, 1967, the accrued liability contribution
9 rate shall be computed as the rate of total compensation of all
10 active members which shall be certified by the actuary as
11 sufficient to fund over a period of 30 years from such date the
12 present value of the liabilities for all prospective benefits of
13 active members in excess of the total assets in the fund,
14 excluding the balance in the annuity reserve account, and of the
15 present value of normal contributions and of member
16 contributions payable with respect to all active members on such
17 date during the remainder of their active service. Thereafter,
18 the amount of each annual accrued liability contribution shall
19 be at least 4% greater than the amount of such contribution for
20 the previous fiscal year, except that, if the accrued liability
21 is increased by legislation enacted subsequent to July 1, 1967,
22 such additional liability shall be funded over a period of 30
23 years from the first day of July, coincident with or next
24 following the effective date of the increase on the basis that
25 each succeeding annual additional accrued liability contribution
26 shall be at least 4% greater than the amount of such additional
27 contribution for the previous fiscal year. The accrued liability
28 contributions under this section shall be discontinued as soon
29 as the total assets in the fund, excluding the balance in the
30 annuity reserve account, equals the present value of the
19750S0024B1235 - 26 -
1 liability for all prospective benefits of active members, less
2 the present value of the prospective normal contributions and of
3 member contributions payable with respect to all active members
4 on such date during the remainder of their active service.
5 (d) Supplemental annuity contribution rate.--Contributions
6 from the Commonwealth and other employers required to provide
7 for the payment of supplemental annuities to annuitants as
8 provided in section 8348 (relating to supplemental annuities)
9 shall be determined as a percentage of the total compensation of
10 all active members during the period for which the amount is
11 certified as sufficient to fund the liabilities of the
12 supplemental retirement allowance account as a level percentage
13 over a period of 30 years from July 1, 1967. In the event that
14 annuities are increased by legislation enacted subsequent to
15 July 1, 1974, the additional liability for the increase in
16 benefits to annuitants shall be funded similarly as a level
17 percentage over a period of 20 years from the first day of July
18 coincident with or next following the effective date of such
19 legislation.
20 § 8329. Payments on account of social security deductions from
21 appropriations.
22 (a) Payments by Commonwealth.--Where the Secretary of
23 Education enters into an agreement with the Commonwealth to
24 place under the Federal Social Security Act members who have
25 elected coverage, the Commonwealth shall pay into the
26 contribution fund created under the provisions of the act of
27 January 5, 1952 (P.L.1833, No.491), such amounts and at such
28 times as are required to be paid by the employers and the
29 covered employees on account of such coverage.
30 (b) Reimbursement by employers.--The Commonwealth shall be
19750S0024B1235 - 27 -
1 reimbursed by the employers to the extent of the total amounts
2 contributable by covered employees and by one-half of the
3 contributions payable under the employer's tax established by
4 the Federal Social Security Act on all covered wages which are
5 not Federally funded. For the purpose of this part, the tax
6 contributions payable shall be the first obligation against any
7 State funds received by the employer for their use or authorized
8 under the act of March 10, 1949 (P.L.30, No.14), known as the
9 "Public School Code of 1949," and shall first be paid therefrom.
10 (c) Deduction from appropriations.--The Secretary of
11 Education and the State Treasurer are hereby authorized to cause
12 to be deducted and paid into or retained in the State Treasury
13 from any moneys due to any employer on account of appropriations
14 for schools or other purposes the amounts payable under the
15 provisions of this section.
16 § 8330. Appropriations by the Commonwealth.
17 (a) Annual submission of budget.--The board shall prepare
18 and through the Governor submit annually to the General Assembly
19 an itemized budget consisting of the amounts necessary to be
20 appropriated by the Commonwealth out of the General Fund
21 required to meet the obligations accruing during the fiscal
22 period beginning July 1 of the following year.
23 (b) Appropriation and payment.--The General Assembly shall
24 make an appropriation sufficient to provide for the obligations
25 of the Commonwealth. Such amount shall be paid by the State
26 Treasurer through the Department of Revenue into the fund within
27 30 days of receipt of the requisition presented each quarter by
28 the board.
29 SUBCHAPTER C
30 BENEFITS
19750S0024B1235 - 28 -
1 Sec.
2 8341. Return of accumulated deductions.
3 8342. Maximum single life annuity.
4 8343. Reduction of annuities on account of social security
5 old-age insurance benefits.
6 8344. Disability annuities.
7 8345. Member's options.
8 8346. Termination of annuities.
9 8347. Death benefits.
10 8348. Supplemental annuities.
11 8349. Payment of benefits.
12 § 8341. Return of accumulated deductions.
13 Any member upon termination of service may, in lieu of all
14 benefits payable under this chapter to which he may be entitled,
15 elect to receive his accumulated deductions.
16 § 8342. Maximum single life annuity.
17 (a) General rule.--Upon termination of service, any full
18 coverage member who is eligible to receive an annuity pursuant
19 to the provisions of section 8307(a) or (b) (relating to
20 eligibility for annuities) and has made an application in
21 accordance with the provisions of section 8507(f) (relating to
22 rights and duties of school employees and members) shall be
23 entitled to receive a maximum single life annuity attributable
24 to his credited service and equal to the sum of the following
25 single life annuities beginning at the effective date of
26 retirement and, in case the member on the effective date of
27 retirement is under superannuation age, multiplied by a
28 reduction factor calculated to provide benefits actuarially
29 equivalent to an annuity starting at superannuation age:
30 provided however, that on or after July 1, 1976, in the case of <--
19750S0024B1235 - 29 -
1 any member with 25 or more eligibility points such sum of single
2 life annuities shall be reduced by a percentage determined by
3 multiplying the number of months, including a fraction of a
4 month as a full month, by which the effective date of retirement
5 precedes superannuation age by 1/4%: PROVIDED HOWEVER, THAT ON <--
6 OR AFTER JULY 1, 1976, IN THE CASE OF ANY MEMBER WHO HAS
7 ATTAINED AGE 55 AND HAS 25 OR MORE ELIGIBILITY POINTS SUCH SUM
8 OF SINGLE LIFE ANNUITIES SHALL BE REDUCED BY A PERCENTAGE
9 DETERMINED BY MULTIPLYING THE NUMBER OF MONTHS, INCLUDING A
10 FRACTION OF A MONTH AS A FULL MONTH, BY WHICH THE EFFECTIVE DATE
11 OF RETIREMENT PRECEDES SUPERANNUATION AGE BY 1/4%:
12 (1) A standard single life annuity multiplied by the
13 class of service multiplier and calculated on the basis of
14 the number of years of credited school service other than
15 concurrent service.
16 (2) A standard single life annuity multiplied by the
17 class of service multiplier and calculated on the basis of
18 the number of years of concurrent service and multiplied by
19 the ratio of total compensation received in the school system
20 during the period of concurrent service to the total
21 compensation received during such period.
22 (3) A supplemental annuity such that the total annuity
23 including any cost-of-living increases and prior to any
24 optional modification or any reduction due to retirement
25 prior to superannuation age shall be at least $100 for each
26 full year of credited service.
27 (b) Present value of annuity.--The present value of the
28 maximum single life annuity as calculated in accordance with
29 subsection (a) shall be determined by multiplying the maximum
30 single life annuity by the cost of a dollar annuity on the
19750S0024B1235 - 30 -
1 effective date of retirement. Such present value shall be
2 decreased only as specifically provided in this part.
3 § 8343. Reduction of annuities on account of social security
4 old-age insurance benefits.
5 (a) General rule.--A joint coverage member who is eligible
6 to receive an annuity under section 8307(a) or (b) (relating to
7 eligibility for annuities) shall be entitled to receive the
8 annuity provided for in section 8342 (relating to maximum single
9 life annuity) and section 8348 (relating to supplemental
10 annuities) which shall be reduced at the time at which the
11 member would be entitled to receive full social security old-age
12 insurance benefits whether or not he has applied for such
13 benefits. The reduction shall be an amount equal to 40% of the
14 primary insurance amount paid or payable to him and subject to
15 the following provisions:
16 (1) The eligibility of such member for the old-age
17 insurance benefit and the amount of such benefit upon which
18 the reduction in his annuity shall be based shall be
19 determined by the board in accordance with the provisions of
20 the Federal Social Security Act, 42 U.S.C. § 301 et seq., in
21 effect on the effective date of retirement, except that in
22 determining such eligibility and such amount only wages or
23 compensation for services covered by the system shall be
24 included.
25 (2) The reduction shall not be more than one-half of the
26 standard single life annuity multiplied by the ratio of the
27 sum of the three years of highest taxable wages to an amount
28 equal to three times the final average salary and by the
29 ratio of the years of credited service after December 31,
30 1955 to total years of credited service.
19750S0024B1235 - 31 -
1 (3) Whenever the amount of the reduction from the
2 annuity shall have been once determined, it shall remain
3 fixed for the duration of the annuity except that any
4 decrease in the old-age insurance benefit under the Federal
5 Social Security Act, 42 U.S.C. § 301 et seq., shall result in
6 a corresponding decrease in the amount of the reduction from
7 the annuity.
8 (b) Exception.--The reduction provided for in subsection (a)
9 shall not apply to disability annuities.
10 § 8344. Disability annuities.
11 (a) Amount of annuity.--A member who has made application
12 for a disability annuity as provided in section 8507(k)
13 (relating to rights and duties of school employees and members)
14 and has been found to be eligible in accordance with the
15 provisions of sections 8307(c) (relating to eligibility for
16 annuities) and 8505(c)(1) (relating to duties of the board
17 regarding applications and elections of members) shall receive a
18 disability annuity payable from the effective date of disability
19 and continued until a subsequent determination by the board that
20 the annuitant is no longer entitled to a disability annuity. The
21 disability annuity shall be equal to a standard single life
22 annuity if the total number of years of credited service is
23 greater than 16.667, otherwise the standard single life annuity
24 shall be multiplied by the lesser of the following ratios:
25 Y*/Y or 16.667/Y
26 where Y = number of years of credited service and Y* = total
27 years of credited service if the member were to continue as a
28 school employee until attaining superannuation age. In no event
29 shall the disability annuity plus any cost-of-living increases
30 be less than $100 for each full year of credited service. The
19750S0024B1235 - 32 -
1 member shall be entitled to the election of a joint and survivor
2 annuity on that portion of the disability annuity to which he is
3 entitled under section 8342 (relating to maximum single life
4 annuity).
5 (b) Reduction on account of earned income.--Payments on
6 account of disability shall be reduced by that amount by which
7 the earned income of the annuitant, as reported in accordance
8 with section 8508(b) (relating to rights and duties of
9 annuitants) for the preceding year together with the disability
10 annuity payments for the year, exceeds the greater of $5,000 or
11 the last year's salary of the annuitant as a school employee,
12 provided that the annuitant shall not receive less than his
13 member's annuity or the amount to which he may be entitled under
14 section 8342 (relating to maximum single life annuity),
15 whichever is greater.
16 (c) Termination and modification of payments.--Payment of
17 that portion of the disability annuity in excess of the annuity
18 to which the annuitant was entitled on the effective date of
19 disability calculated in accordance with section 8342 shall
20 cease if the annuitant is no longer eligible under the
21 provisions of section 8505(c)(2) or section 8508(b) or (c) and
22 if such annuitant on the date of termination of service was
23 eligible for an annuity, he may file an application with the
24 board for an election of an optional modification of the annuity
25 to which he was entitled in accordance with section 8342.
26 (d) Withdrawal of accumulated deductions.--Upon termination
27 of disability annuity payments in excess of an annuity
28 calculated in accordance with section 8342, a disability
29 annuitant who does not return to school service may file an
30 application with the board for an amount equal to the
19750S0024B1235 - 33 -
1 accumulated deductions standing to his credit at the effective
2 date of disability less the total payments received on account
3 of his member's annuity.
4 § 8345. Member's options.
5 (a) General rule.--Any vestee with ten or more eligibility
6 points or any other eligible member upon termination of school
7 service who has not withdrawn his accumulated deductions as
8 provided in section 8341 (relating to return of accumulated
9 deductions) may apply for and elect to receive either a maximum
10 single life annuity, as calculated in accordance with the
11 provisions of section 8342 (relating to maximum single life
12 annuity), or a reduced annuity certified by the actuary to be
13 actuarially equivalent to the maximum single life annuity and in
14 accordance with one of the following options, except that no
15 member shall elect an annuity payable to one or more survivor
16 annuitants other than his spouse of such a magnitude that the
17 present value of the annuity payable to him for life plus any
18 lump sum payment he may have elected to receive is less than 50%
19 of the present value of his maximum single life annuity.
20 (1) Option 1. A life annuity to the member with a
21 guaranteed total payment equal to the present value of the
22 maximum single life annuity on the effective date of
23 retirement with the provision that, if, at his death, he has
24 received less than such present value, the unpaid balance
25 shall be payable to his beneficiary.
26 (2) Option 2. A joint and survivor annuity payable
27 during the lifetime of the member with the full amount of
28 such annuity payable thereafter to his survivor annuitant, if
29 living at his death.
30 (3) Option 3. A joint and fifty percent (50%) survivor
19750S0024B1235 - 34 -
1 annuity payable during the lifetime of the member with one-
2 half of such annuity payable thereafter to his survivor
3 annuitant, if living at his death.
4 (4) Option 4. Some other benefit which shall be
5 certified by the actuary to be actuarially equivalent to the
6 maximum single life annuity, subject to the following
7 restrictions:
8 (i) Any annuity shall be payable without reduction
9 during the lifetime of the member except as the result of
10 the member's election to receive an annuity reduced upon
11 attainment of age 65, in anticipation of the receipt of a
12 social security benefit.
13 (ii) The sum of all annuities payable to the
14 designated survivor annuitants shall not be greater than
15 one and one-half times the annuity payable to the member.
16 (iii) A portion of the benefit may be payable as a
17 lump sum, except that such lump sum payment shall be
18 limited to one such payment and it shall not exceed an
19 amount equal to the accumulated deductions standing to
20 the credit of the member. The balance of the present
21 value of the maximum single life annuity adjusted in
22 accordance with section 8342(b) shall be paid in the form
23 of an annuity with a guaranteed total payment, a single
24 life annuity, or a joint and survivor annuity or any
25 combination thereof but subject to the restrictions of
26 subparagraphs (i) and (ii) of this paragraph.
27 (b) Present value of joint coverage annuity.--The present
28 value of an annuity payable to a member of the joint coverage
29 group shall be determined by taking into account prospectively
30 the reduction applicable upon the attainment of the age at which
19750S0024B1235 - 35 -
1 full social security benefits are payable.
2 § 8346. Termination of annuities.
3 (a) General rule.--If an annuitant returns to school service
4 or enters State service and elects multiple service membership,
5 any annuity payable to him under this part shall cease and in
6 the case of an annuity other than a disability annuity the
7 present value of such annuity, adjusted for full coverage in the
8 case of a joint coverage member who makes the appropriate back
9 contributions for full coverage, shall be frozen as of the date
10 such annuity ceases.
11 (b) Exception.--When, in the judgment of the employer, an
12 emergency creates an increase in the work load such that there
13 is serious impairment of service to the public, an annuitant may
14 be returned to school service for a period not to exceed 60 days
15 in any school year without loss of his annuity.
16 (c) Subsequent discontinuance of service.--Upon subsequent
17 discontinuance of service, such member other than a former
18 disability annuitant shall be entitled to an annuity which is
19 actuarially equivalent to the sum of the present value as
20 determined under subsection (a) and the present value of a
21 maximum single life annuity based on years of service credited
22 subsequent to reentry in the system and his final average salary
23 computed by reference to his compensation during his entire
24 period of school and State service.
25 § 8347. Death benefits.
26 (a) Members eligible for annuities.--Any member, other than
27 an annuitant, who dies and was eligible for an annuity in
28 accordance with section 8307(a) or (b) (relating to eligibility
29 for annuities) shall be considered as having applied for an
30 annuity to become effective the day before his death; and, in
19750S0024B1235 - 36 -
1 the event he has not elected an option, it shall be assumed that
2 he elected Option 1 and assigned as beneficiary that person last
3 designated in writing to the board.
4 (b) Members ineligible for annuities.--In the event of the
5 death of any member, other than an annuitant, who is not
6 entitled to a death benefit as provided in subsection (a), his
7 designated beneficiary shall be paid the full amount of his
8 accumulated deductions.
9 (c) Disability annuitants.--In the event of the death of a
10 disability annuitant who has elected to receive a maximum
11 disability annuity before he has received in annuity payments an
12 amount equal to the present value, on the effective date of
13 disability, of the benefits to which he would have been entitled
14 under subsection (a) had he died while in school service, the
15 balance of such amount shall be paid to his designated
16 beneficiary, except that in the event of the death of a
17 disability annuitant who was not entitled to receive benefits
18 under subsection (a), his beneficiary shall be paid the
19 accumulated deductions standing to his credit on the effective
20 date of disability less the total payments received on account
21 of his member's annuity.
22 (d) Other annuitants.--In the event of the death of an
23 annuitant who has elected to receive the maximum single life
24 annuity before he has received in total annuity payments an
25 amount equal to the full amount of the accumulated deductions
26 standing to his credit on the effective date of retirement, the
27 difference between the total payments made to the date of death
28 and the accumulated deductions shall be paid to his designated
29 beneficiary.
30 § 8348. Supplemental annuities.
19750S0024B1235 - 37 -
1 (a) General rule.--Every annuitant who is in receipt of a
2 superannuation, withdrawal or disability annuity, shall continue
3 to receive such annuity and beginning July 1, 1974, any
4 annuitant who retired on or prior to July 1, 1973, shall receive
5 a cost-of-living supplement determined as a percentage applied
6 to the entire retirement annuity as of June 30, 1974. Beginning
7 July 1, 1974, any annuitant whose effective date of retirement
8 is after July 1, 1973 and prior to March 1, 1974 shall receive a
9 supplement determined as an adjustment of 5% applied to the
10 entire retirement annuity on the effective date of retirement.
11 All supplements provided in this subsection shall be payable
12 under the same terms and conditions as provided under the option
13 plan in effect as of June 30, 1974.
14 (b) Cost-of-living adjustment factors.--The percentage which
15 is to be applied in the determination of the cost-of-living
16 supplements shall be determined on the basis of the effective
17 date of retirement as follows:
18 Effective date of retirement Percentage factor
19 After July 1, 1971 through July 1, 1973 5%
20 After July 1, 1970 through July 1, 1971 10%
21 After July 1, 1969 through July 1, 1970 15%
22 After July 1, 1968 through July 1, 1969 20%
23 After July 1, 1967 through July 1, 1968 25%
24 On or prior to July 1, 1967 30%
25 (c) Withdrawal annuitants.--The cost-of-living supplement as
26 determined in subsection (b) shall not be payable to an
27 annuitant receiving a withdrawal annuity prior to the first day
28 of July coincident with or following his attainment of
29 superannuation age.
30 (d) Disability annuitants.--Any disability annuitant whose
19750S0024B1235 - 38 -
1 effective date of retirement is prior to July 1, 1971 and whose
2 annuity was increased by less than 20% of the annuity at the
3 time of retirement under the amendatory act of November 27, 1970
4 (P.L.798, No.261) or September 9, 1971 (P.L.456, No.106), shall
5 receive beginning July 1, 1974 an additional increase in his
6 annuity equal to 20% of the annuity at the time of retirement
7 less the increase he received under either amendatory act.
8 (e) Death of annuitants.--No supplement enacted after the
9 death of the member shall be payable to the beneficiary or
10 survivor annuitant of such deceased former school employee.
11 § 8349. Payment of benefits.
12 (a) Annuities.--Any annuity granted under the provisions of
13 this part shall be paid in equal monthly installments.
14 (b) Death benefits.--If the amount of a death benefit
15 payable to a beneficiary under section 8347 (relating to death
16 benefits) or under the provisions of Option 1 of section
17 8345(a)(1) (relating to member's options) is $5,000 or more,
18 such beneficiary may elect to receive payment according to one
19 of the following options:
20 (1) A lump sum payment.
21 (2) An annuity actuarially equivalent to the amount
22 payable.
23 (3) A lump sum payment and an annuity such that the
24 annuity is actuarially equivalent to the amount payable less
25 the lump sum payment specified by the beneficiary.
26 (c) Death or absence of beneficiary.--If the beneficiary
27 designated by a member should predecease him or die within 30
28 days of his death, or if a valid nomination of a beneficiary is
29 not in effect at his death, any money payable to a beneficiary
30 shall be paid to the estate of the member.
19750S0024B1235 - 39 -
1 CHAPTER 85
2 ADMINISTRATION AND MISCELLANEOUS PROVISIONS
3 Subchapter
4 A. Administration
5 B. Retirement Fund and Accounts
6 C. Miscellaneous Provisions
7 SUBCHAPTER A
8 ADMINISTRATION
9 Sec.
10 8501. Public School Employees' Retirement Board.
11 8502. Administrative duties of the board.
12 8503. Duties of the board to advise and report to the employers
13 and members.
14 8504. Duties of the board to report to the State Employees'
15 Retirement Board.
16 8505. Duties of the board regarding applications and elections
17 of members.
18 8506. Duties of employers.
19 8507. Rights and duties of school employees and members.
20 8508. Rights and duties of annuitants.
21 § 8501. Public School Employees' Retirement Board.
22 (a) Status and membership.--The board shall be an
23 independent administrative board and shall consist of 11
24 members: the Secretary of Education, ex officio; the State
25 Treasurer, ex officio; the executive secretary of the
26 Pennsylvania School Boards Association, ex officio; two to be
27 appointed by the Governor, at least one of whom shall not be a
28 school employee or an officer or employee of the State; three to
29 be elected by the active professional members of the system from
30 among their number; one to be elected by annuitants from among
19750S0024B1235 - 40 -
1 their number; one to be elected by the active nonprofessional
2 members of the system from among their number; and one to be
3 elected by members of Pennsylvania public school boards from
4 among their number. The appointments made by the Governor shall
5 be confirmed by the Senate and each election shall be conducted
6 in a manner approved by the board. The terms of the appointed
7 and elected members shall be three years. The chairman of the
8 board shall be elected by the board members. Each ex officio
9 member of the board may appoint a duly authorized designee to
10 act in his stead.
11 (b) Appointment and terms of initial members.--For the
12 purposes of securing an orderly transition and staggered terms,
13 the elected members of the board serving on the effective date
14 of this part shall serve until the expiration of their
15 respective terms. The board member initially elected by members
16 of Pennsylvania public school boards shall serve until January
17 1, 1976. The board member initially elected by the active
18 nonprofessional members of the system shall serve until January
19 1, 1977. One of the initial board members appointed by the
20 Governor after the effective date of this part shall serve until
21 January 1, 1976 and the second appointed board member shall
22 serve until January 1, 1977. A vacancy occurring during the term
23 of any member shall be filled for the unexpired term by a
24 successor appointed or elected as the case may be in the same
25 manner as his predecessor.
26 (c) Oath of office.--Each member of the board shall take an
27 oath of office that he will, so far as it devolves upon him,
28 diligently and honestly administer the affairs of said board and
29 that he will not knowingly violate or wilfully permit to be
30 violated any of the provisions of law applicable to this part.
19750S0024B1235 - 41 -
1 Such oath shall be subscribed by the member making it and
2 certified by the officer before whom it is taken and shall be
3 immediately filed in the office of the Secretary of the
4 Commonwealth.
5 (d) Compensation and expenses.--The members of the board who
6 are members of the system shall serve without compensation but
7 shall not suffer loss of salary or wages through serving on the
8 board. The members of the board who are not members of either
9 the school system or the State Employees' Retirement System may
10 be paid $100 per day when attending meetings and all board
11 members shall be reimbursed for any necessary expenses. However,
12 when the duties of the board as mandated are not executed, no
13 compensation or reimbursement for expenses of board members
14 shall be paid or payable during the period in which such duties
15 are not executed.
16 (e) Corporate power and legal advisor.--For the purposes of
17 this part, the board shall possess the power and privileges of a
18 corporation. The Attorney General of the Commonwealth shall be
19 the legal advisor of the board.
20 § 8502. Administrative duties of the board.
21 (a) Employees.--The secretary, clerical and other employees
22 of the board and their successors whose positions on the
23 effective date of this part are under the classified service
24 provisions of the act of August 5, 1941 (P.L.752, No.286), known
25 as the "Civil Service Act," shall continue under such
26 provisions. The compensation and classification of all other
27 persons appointed shall be determined by the board and shall be
28 consistent with the standards established by the Executive Board
29 of the Commonwealth.
30 (b) Professional personnel.--The board shall contract for
19750S0024B1235 - 42 -
1 the services of a chief medical examiner, an actuary, an
2 investment counselor, and such other professional personnel as
3 it deems advisable.
4 (c) Expenses.--The board shall, through the Governor, submit
5 to the General Assembly annually a budget covering the
6 administrative expenses of this part. Such expenses as approved
7 by the General Assembly in an appropriation bill shall be paid
8 from investment earnings of the fund in excess of valuation
9 interest, except that if in any year such earnings are not
10 sufficient the balance required shall be appropriated from the
11 General Fund.
12 (d) Meetings.--The board shall hold at least six regular
13 meetings annually and such other meetings as it may deem
14 necessary.
15 (e) Records.--The board shall keep a record of all its
16 proceedings which shall be open to inspection by the public.
17 (f) Functions.--The board shall perform such other functions
18 as are required for the execution of this part and shall have
19 the right to inspect the employment records of employers.
20 (g) Performance of employer duties.--In the event the
21 employer fails to comply with the procedures as mandated in
22 section 8506 (relating to duties of employers), the board shall
23 perform such duties and bill the employer who shall pay for the
24 cost of same. In the event the employer is delinquent in payment
25 of contributions in accordance with section 8327 (relating to
26 payments by employers), the board shall notify the Secretary of
27 Education and the State Treasurer of such delinquency.
28 (h) Regulations and procedures.--The board shall, with the
29 advice of the Attorney General and the actuary, adopt and
30 promulgate rules and regulations for the uniform administration
19750S0024B1235 - 43 -
1 of the system. The actuary shall approve in writing all
2 computational procedures used in the calculation of
3 contributions and benefits prior to their application by the
4 board.
5 (i) Data.--The board shall keep in convenient form such data
6 as are stipulated by the actuary in order that an annual
7 actuarial valuation of the various accounts can be completed
8 within six months of the close of each fiscal year. The board
9 shall have final authority over the means by which data is
10 collected, maintained and stored and in so doing shall protect
11 the rights of its membership as to privacy and confidentiality.
12 (j) Actuarial investigation and valuation.--The board shall
13 have the actuary make an annual valuation of the various
14 accounts within six months of the close of each fiscal year. In
15 the fiscal year ending 1975 and in every fifth year thereafter,
16 the board shall have the actuary conduct an actuarial
17 investigation and valuation of the system based on data
18 including the mortality, service, and compensation experience
19 provided by the board annually during the preceding five years
20 concerning the members and beneficiaries. The board shall adopt
21 such tables as are necessary for the actuarial valuation of the
22 fund and calculation of contributions, annuities, and benefits
23 based on the reports and recommendations of the actuary.
24 (k) Certification of employer contributions.--The board
25 shall, each year in addition to the itemized budget, certify to
26 the employers and the Commonwealth the percentage of members'
27 payroll necessary for the funding of prospective annuities for
28 active members and certify to them the rates and amounts of the
29 normal contributions, accrued liability contributions and
30 supplemental contributions which shall be paid to the fund and
19750S0024B1235 - 44 -
1 credited to the appropriate accounts. These certifications shall
2 be regarded as final and not subject to modification by the
3 Budget Secretary.
4 (l) Commonwealth payments.--The board shall within 30 days
5 following the end of each quarter determine the amount due to
6 the fund from the Commonwealth during that quarter and submit at
7 that time a requisition for the amount determined to be due from
8 the Commonwealth to the State Treasurer.
9 (m) Member contributions and interest.--The board shall
10 cause each member's contributions, including payroll deductions
11 and all other payments, to be credited to the account of such
12 member and shall pay all such amounts into the fund. Such
13 contributions shall be credited with statutory interest until
14 date of termination of service, except in the case of a vestee,
15 who shall have such interest credited until the effective date
16 of retirement or until the return of his accumulated deductions,
17 if he so elects; and in the case of a multiple service member
18 who shall have such interest credited until termination of
19 service in both the school and the State systems.
20 (n) Annual financial statement.--The board shall prepare and
21 have published, on or before January 1 of each year, a financial
22 statement as of the fiscal year ending June 30 of the previous
23 year showing the condition of the fund and the various accounts
24 and setting forth such other facts, recommendations and data as
25 may be of use in the advancement of knowledge concerning
26 annuities and other benefits provided by this part. The board
27 shall submit said financial statement to the Governor and shall
28 make copies available to the employers for the use of the school
29 employees and the public.
30 § 8503. Duties of the board to advise and report to the
19750S0024B1235 - 45 -
1 employers and members.
2 (a) Manual of regulations.--The board shall, with the advice
3 of the Attorney General and the actuary, prepare within 90 days
4 of the effective date of this part, a manual incorporating rules
5 and regulations consistent with the provisions of this part for
6 the employers who shall make information contained therein
7 available to the general membership. The board shall thereafter
8 advise the employers within 90 days of any changes in such rules
9 and regulations due to changes in the law or due to changes in
10 administrative policies.
11 (b) Member status statements.--The board shall furnish
12 annually on or before December 31, a statement to each member
13 showing the accumulated deductions standing to the credit of the
14 member and the number of years and fractional part of a year of
15 service credited in each class of service as of June 30 of that
16 year. Each member's statement shall be mailed to his home
17 address and shall include a request that the member make any
18 necessary corrections or revisions regarding his designated
19 beneficiary, whose name at the request of the member shall
20 remain confidential and not appear on this statement.
21 (c) Purchase of credit for previous service.--Upon receipt
22 of an application from an active member or a State employee with
23 multiple service credit to purchase credit for previous school
24 or creditable nonschool service, the board shall determine and
25 certify to the member the amount required to be paid by the
26 member. When necessary, the board shall certify to the proper
27 employer the amount which would have been paid together with
28 statutory interest into the State accumulation account had such
29 employee been an active member in the system during said period.
30 (d) Purchase of Class T-C credit or full coverage.--Upon
19750S0024B1235 - 46 -
1 receipt of an application from a member of Class T-A or Class T-
2 B to become a member of Class T-C or an active joint coverage
3 member who elects to become a full coverage member, the board
4 shall determine and certify to the member the amount required to
5 be paid by the member, the effective date of the transfer, and
6 the prospective rate for regular member contributions.
7 § 8504. Duties of the board to report to the State Employees'
8 Retirement Board.
9 (a) Multiple service membership of school employees.--Upon
10 receipt of an application for membership in the system of a
11 school employee who is a former State employee and who has
12 elected multiple service membership, the board shall advise the
13 State Employees' Retirement Board accordingly.
14 (b) Multiple service membership of State employees.--Upon
15 receipt of notification from the State Employees' Retirement
16 Board that a former school employee has become an active member
17 in the State Employees' Retirement System and has elected to
18 receive credit for multiple service, the board shall certify to
19 the State Employees' Retirement Board and concurrently to the
20 member:
21 (1) The total credited service in the system and the
22 number of years and fractional part of a year of service
23 credited in each class of service.
24 (2) The annual compensation received each school year by
25 the member for credited school service.
26 (c) Applications for benefits for State employees.--Upon
27 receipt of notification and the required data from the State
28 Employees' Retirement Board that a former school employee who
29 elected multiple service has applied for a State employee's
30 retirement benefit or, in the event of his death, his legally
19750S0024B1235 - 47 -
1 constituted representative has applied for such benefit, the
2 board shall:
3 (1) Certify to the State Employees' Retirement Board:
4 (i) The salary history as a member of the Public
5 School Employees' Retirement System and the final average
6 salary as calculated on the basis of the compensation
7 received as a State and school employee.
8 (ii) The annuity or benefit which the member or his
9 beneficiary is entitled to receive under this part and
10 modified according to the option selected.
11 (2) Transfer to the State Employees' Retirement Fund the
12 accumulated deductions standing to such member's credit and
13 the actuarial reserve required on account of the member's
14 years of credited service in the school system and his final
15 average salary determined on the basis of his compensation in
16 both systems.
17 § 8505. Duties of the board regarding applications and
18 elections of members.
19 (a) Statement to new members.--As soon as practicable after
20 each member shall have joined the system, the board shall issue
21 to him a statement as to the aggregate length of total previous
22 school service and creditable nonschool service for which he may
23 receive credit.
24 (b) State employees electing multiple service status.--Upon
25 receipt of notification from the State Employees' Retirement
26 Board that a former school employee has become an active member
27 in the State Employees' Retirement System and has elected to
28 become a member with multiple service status, the board shall:
29 (1) In case of a member who is receiving an annuity from
30 the system, discontinue payments, transfer the present value,
19750S0024B1235 - 48 -
1 at that time, of the member's annuity from the annuity
2 reserve account to the members' savings account and resume
3 crediting of statutory interest on the amount restored to his
4 credit and transfer the balance of the present value of the
5 total annuity from the annuity reserve account to the State
6 accumulation account.
7 (2) In case of a member who is not receiving an annuity
8 from the system and who has not withdrawn his accumulated
9 deductions, continue or resume the crediting of statutory
10 interest on his accumulated deductions.
11 (3) In case of a member who is not receiving an annuity
12 from the system and his accumulated deductions were
13 withdrawn, certify to the member the accumulated deductions
14 as they would have been at the time of his separation had he
15 been a full coverage member together with statutory interest
16 for all periods of subsequent State and school service to the
17 date of repayment. Such amount shall be restored by him and
18 shall be credited with statutory interest as such payments
19 are restored.
20 (c) Disability annuities.--In every case where the board has
21 received an application for a disability annuity based upon
22 physical or mental incapacity for the performance of the job for
23 which the member is employed, the board shall:
24 (1) Through the chief medical examiner, have the
25 applicant examined and, on the basis of said examination and
26 the subsequent recommendation by the chief medical examiner
27 regarding the applicant's medical qualification for a
28 disability annuity along with such other recommendations
29 which he may make with respect to the permanency of
30 disability or the need for subsequent reexaminations, make a
19750S0024B1235 - 49 -
1 finding of disability or nondisability and, in the case of
2 disability, establish an effective date of disability and the
3 terms and conditions regarding subsequent reexaminations.
4 (2) Upon the recommendation of the chief medical
5 examiner on the basis of subsequent medical examinations,
6 make a finding of disability or nondisability and, in the
7 case of a finding of nondisability, establish the date of
8 termination of disability and at that time discontinue any
9 annuity payments in excess of any annuity to which he may be
10 otherwise entitled under section 8342 (relating to maximum
11 single life annuity).
12 (3) Upon receipt of a written statement from a
13 disability annuitant of his earned income of the previous
14 year, adjust the payments of the disability annuity for the
15 following year in accordance with the provisions for a
16 reduction of disability payments of section 8344 (relating to
17 disability annuities).
18 (d) Withdrawal of accumulated deductions.--Upon receipt of
19 an application to withdraw his accumulated deductions executed
20 by a member who is terminating school service and the required
21 data from the employer, the board shall pay to such member
22 within 60 days after filing the application or termination of
23 school service, whichever is later, the accumulated deductions
24 standing to his credit.
25 (e) Certification to vestees.--The board shall certify to a
26 vestee within one year of termination of service of such member:
27 (1) The accumulated deductions standing to his credit at
28 the date of termination of service.
29 (2) The number of years and fractional part of a year of
30 credit in each class of service.
19750S0024B1235 - 50 -
1 (3) The maximum single life annuity to which the vestee
2 shall become entitled upon the attainment of superannuation
3 age and the filing of an application for such annuity.
4 (f) Notification to vestees.--The board shall notify each
5 vestee in writing 90 days prior to his attainment of
6 superannuation age that he shall apply for his annuity within 90
7 days of attainment of superannuation age and that failure to
8 apply within that time shall result in the cancellation of the
9 right of the vestee to any death benefit in excess of his
10 accumulated deductions.
11 (g) Initial annuity payment and certification.--The board
12 shall make the first monthly payment to a member who is eligible
13 for an annuity within 60 days of the filing of his application
14 for an annuity and receipt of the required data from the
15 employer of the member. Concurrently the board shall certify to
16 such member:
17 (1) The accumulated deductions standing to his credit
18 showing separately the amount contributed and the interest
19 credited to the date of termination of service.
20 (2) The number of years and fractional part of a year
21 credited in each class of service.
22 (3) The final average salary on which his annuity is
23 based as well as any applicable reduction factors due to age
24 or election of an option or both.
25 (4) The total annuity payable under the option elected
26 and the amount and effective date of any future reduction on
27 account of social security old-age insurance benefits.
28 (h) Death benefits.--Upon receipt of notification of the
29 death of a member, the board shall notify the designated
30 beneficiary or survivor annuitant of the benefits to which he is
19750S0024B1235 - 51 -
1 entitled and shall make the first payment to the beneficiary
2 under the plan elected by the beneficiary within 60 days of
3 receipt of certification of death and other necessary data.
4 (i) Medical insurance coverage.--Upon receipt of
5 notification from an insurance carrier approved by the board
6 that an annuitant who has attained age 65 has elected medical,
7 major medical, and hospitalization insurance coverage, the board
8 shall deduct from the annuity payments the appropriate annual
9 charges in equal monthly installments. Such deductions shall be
10 transmitted to the insurance carrier.
11 (j) Joint coverage annuitants.--The board shall notify in
12 writing each joint coverage annuitant who retired prior to July
13 1, 1962 that he may elect any time prior to, but not later than,
14 one year following the effective date of this part, to receive
15 his annuity without reduction attributable to social security
16 coverage. The board shall within 60 days of such election
17 certify in writing to each annuitant who so elects the amount
18 required to be paid. Upon receipt of a lump-sum payment within
19 60 days in the amount certified to such annuitant, the board
20 shall recompute the annuity payable to such annuitant and the
21 annuity and/or lump sum, if any, payable upon his death to his
22 beneficiary or survivor annuitant as though he had been a full
23 coverage member on the effective date of retirement. Such
24 recomputed annuity shall be paid beginning with the second
25 monthly payment next following the month in which the lump sum
26 payment is received.
27 § 8506. Duties of employers.
28 (a) Status of members.--The employer shall, each month,
29 notify the board in a manner prescribed by the board of the
30 salary changes effective during the past month, the date of all
19750S0024B1235 - 52 -
1 removals from the payroll, and the type of leave of any member
2 who has been removed from the payroll for any time during that
3 month, and:
4 (1) if the removal is due to leave without pay, the
5 employer shall furnish the board with the date of beginning
6 leave, the date of return to service, and the reason for
7 leave; or
8 (2) if the removal is due to a transfer to another
9 employer, the former employer shall furnish such employer and
10 the board with a complete school service record, including
11 credited or creditable nonschool service; or
12 (3) if the removal is due to termination of school
13 service, the employer shall furnish the board with a complete
14 school service record including credited or creditable
15 nonschool service and in the case of death of the member the
16 employer shall so notify the board.
17 (b) Records and information.--At the direction of the board,
18 the employer shall furnish service and compensation records as
19 well as other information requested by the board and shall
20 maintain and preserve such records as the board may require for
21 the expeditious discharge of its duties.
22 (c) Member and employer contributions.--The employer shall
23 certify to his treasurer the required member contributions
24 deducted from each payroll. The treasurer shall remit to the
25 secretary of the board each month the total of the member
26 contributions and the amount due from the employer determined in
27 accordance with section 8327 (relating to payments by
28 employers).
29 (d) New employees subject to mandatory membership.--Upon the
30 assumption of duties of each new school employee whose
19750S0024B1235 - 53 -
1 membership in the system is mandatory, the employer shall no
2 later than 30 days thereafter cause an application for
3 membership, which application shall include the employee's home
4 address, birthdate certified by the employer, previous school or
5 State service and any other information requested by the board,
6 and a nomination of beneficiary to be made by such employee and
7 filed with the board and shall make payroll deductions from the
8 effective date of school employment.
9 (e) New employees subject to optional membership.--The
10 employer shall inform any eligible school employee whose
11 membership in the system is not mandatory of his opportunity to
12 become a member of the system provided that he elects to
13 purchase credit for all such continuous creditable service. If
14 such employee so elects, the employer shall no later than 30
15 days thereafter cause an application for membership which
16 application shall include the employee's home address, birthdate
17 certified by the employer, previous school or State service and
18 any other information requested by the board, and a nomination
19 of beneficiary to be made by him and filed with the board and
20 shall make payroll deductions from the date of election of
21 membership.
22 (f) Advising members of duties.--The employer shall advise
23 his employees of their duties as members of the system. Local
24 school districts shall be held harmless from decisions made by
25 the employee in this regard.
26 (g) Former State employee contributors.--The employer shall,
27 upon the employment of a former member of the State Employees'
28 Retirement System who is not an annuitant of the State
29 Employees' Retirement System, advise such employee of his right
30 to elect multiple service membership within 30 days of entry
19750S0024B1235 - 54 -
1 into the system and, in the case any such employee who so elects
2 has withdrawn his accumulated deductions, require him to restore
3 his accumulated deductions as they would have been at the time
4 of his separation had he been a full coverage member, together
5 with statutory interest for all periods of subsequent State and
6 school service to date of repayment. The employer shall advise
7 the board of such election.
8 (h) Former State employee annuitants.--The employer shall,
9 upon the employment of an annuitant of the State Employees'
10 Retirement System who applies for membership in the system,
11 advise such employee that he may elect multiple service
12 membership within 30 days of entry into the system and that if
13 he so elects his annuity from the State Employees' Retirement
14 System will be discontinued and, upon termination of school
15 service and application for an annuity, the annuity will be
16 adjusted in accordance with section 8346 (relating to
17 termination of annuities). The employer shall advise the board
18 of such election.
19 (i) Termination of service.--The employer shall, in the case
20 of any member terminating school service, advise such member in
21 writing of any benefits to which he may be entitled under the
22 provisions of this part and shall have the member prepare, on or
23 before the date of termination of school service, one of the
24 following three forms, a copy of which shall be given to the
25 member and the original of which shall be filed with the board:
26 (1) An application for the return of accumulated
27 deductions.
28 (2) An election to vest his retirement rights and, if he
29 is a joint coverage member and so desires, an election to
30 become a full coverage member and an agreement to pay within
19750S0024B1235 - 55 -
1 30 days of the date of termination of service the lump sum
2 required.
3 (3) An application for an immediate annuity and, if he
4 is a joint coverage member and so desires, an election to
5 become a full coverage member and an agreement to pay within
6 30 days of date of termination of service the lump sum
7 required.
8 (j) Date of application for benefits.--Any application
9 properly executed and filed with the employer under subsection
10 (i) or properly executed and filed with the employer after
11 termination of service shall be deemed to have been filed with
12 the board on the date filed with the employer.
13 § 8507. Rights and duties of school employees and members.
14 (a) Information on new employees.--Upon his assumption of
15 duties, each new school employee shall furnish his employer with
16 a complete record of his previous school or State service, or
17 creditable nonschool service, proof of his date of birth, his
18 home address, his current status in the system and in the State
19 Employees' Retirement System and such other information as the
20 board may require. Wilful failure to provide the information
21 required by this subsection to the extent available or the
22 provision of erroneous information upon entrance into the system
23 shall result in the forfeiture of the right of the member to
24 subsequently assert any right to benefits based on erroneous
25 information or on any of the required information which he
26 failed to provide. In any case in which the board finds that a
27 member is receiving an annuity based on false information, the
28 additional amounts received predicated on such false information
29 together with statutory interest doubled and compounded shall be
30 deducted from the present value of any remaining benefits to
19750S0024B1235 - 56 -
1 which the member is legally entitled and such remaining benefits
2 shall be correspondingly decreased.
3 (b) Application for membership.--A new employee who is not
4 currently a member of the system and whose membership is
5 mandatory or a new employee whose membership in the system is
6 not mandatory but who desires to become a member of the system
7 shall execute an application for membership and a nomination of
8 beneficiary and shall make the proper contributions.
9 (c) Multiple service membership.--Any active member who was
10 formerly an active member in the State Employees' Retirement
11 System may elect to become a multiple service member. Such
12 election shall occur no later than 30 days after becoming an
13 active member in this system.
14 (d) Credit for previous service or change in membership
15 status.--Any active member or multiple service member who is a
16 State employee who desires to receive credit for his previous
17 school service or creditable nonschool service to which he is
18 entitled, or a member of Class T-A or Class T-B who desires to
19 become a member of Class T-C, or a joint coverage member who
20 desires to become a full coverage member shall so notify the
21 board. Upon written agreement by the member and the board as to
22 the manner of payment of the amount due, the member shall
23 receive credit for such service as of the date of such agreement
24 subject to the provisions of section 8325 (relating to
25 incomplete payments).
26 (e) Beneficiary for death benefits.--Every member shall
27 nominate a beneficiary by written designation filed with the
28 board to receive the death benefit or the benefit payable under
29 the provisions of Option 1. Such nomination may be changed at
30 any time by the member by written designation filed with the
19750S0024B1235 - 57 -
1 board. A member may also nominate a contingent beneficiary or
2 beneficiaries to receive the death benefit or the benefit
3 payable under the provisions of Option 1.
4 (f) Termination of service.--Each member who terminates
5 school service shall execute on or before the date of
6 termination of service a written application, duly attested by
7 the member or his legally constituted representative, electing
8 to do one of the following:
9 (1) Withdraw his accumulated deductions.
10 (2) Vest his retirement rights and if he is a joint
11 coverage member, and so desires, elect to become a full
12 coverage member and agree to pay within 30 days of the date
13 of termination of service the lump sum required.
14 (3) Receive an immediate annuity, and may, if he is a
15 joint coverage member, elect to become a full coverage member
16 and agree to pay within 30 days of date of termination of
17 service the lump sum required.
18 (g) Vesting of retirement rights.--If a member elects to
19 vest his retirement rights, he shall nominate a beneficiary by
20 written designation filed with the board and he may anytime
21 thereafter withdraw the accumulated deductions standing to his
22 credit or, if he has ten or more eligibility points, apply for
23 an annuity.
24 (h) Vestees attaining superannuation age.--Upon attainment
25 of superannuation age a vestee shall execute and file within 90
26 days an application for an annuity. Any application filed after
27 such 90 day period shall be effective as of the date it is filed
28 with the board. If a vestee does not file an application within
29 seven years after attaining superannuation age, he shall be
30 deemed to have elected to receive his accumulated deductions
19750S0024B1235 - 58 -
1 upon attainment of superannuation age.
2 (i) Failure to apply for annuity.--If a member is eligible
3 to receive an annuity and does not file a proper application
4 within 90 days of termination of service, he shall be deemed to
5 have elected to vest, and his annuity will become effective as
6 of the date an application is filed with the board or the date
7 designated on the application whichever is later.
8 (j) Nomination of beneficiary or survivor annuitant.--A
9 member who is eligible and elects to receive a reduced annuity
10 under Option 1, 2, 3, or 4, shall nominate a beneficiary or a
11 survivor annuitant, as the case may be, by written designation
12 filed with the board at the time of his retirement. A member who
13 has elected Option 1, may change his designated beneficiary at
14 any time. A member having designated a survivor annuitant at
15 time of retirement shall not be permitted to nominate a new
16 survivor annuitant unless such survivor annuitant predeceases
17 him or unless the member is awarded a divorce or becomes married
18 subsequent to the election of the option. In such cases, the
19 annuitant shall have the right to reelect an option and to
20 nominate a beneficiary or a new survivor annuitant and to have
21 his annuity recomputed to be actuarially equivalent as of the
22 date of recomputation to the annuity in effect immediately prior
23 to the recomputation. In no other case shall a benefit plan be
24 changed by an annuitant.
25 (k) Disability annuities.--If service of a member who is
26 under superannuation age is terminated due to his physical or
27 mental incapacity for the performance of duty, an application
28 for a disability annuity may be executed by him or by a person
29 legally authorized to act on his behalf.
30 § 8508. Rights and duties of annuitants.
19750S0024B1235 - 59 -
1 (a) Election by joint coverage annuitants.--Any annuitant
2 who is a joint coverage member who was receiving an annuity
3 prior to July 1, 1962 may elect to receive his annuity without
4 reduction on account of social security old-age insurance
5 benefits provided that he shall file such election with the
6 board prior to one year following the effective date of this
7 part and shall make a lump sum payment within 60 days of receipt
8 of the certification of the amount due.
9 (b) Periodic earnings statements by disability annuitants.--
10 It shall be the duty of an annuitant receiving a disability
11 annuity while still under superannuation age to furnish a
12 written statement within 30 days of the close of each year of
13 all earned income during that year and information showing
14 whether or not he is able to engage in a gainful occupation and
15 such other information as may be required by the board. On
16 failure, neglect, or refusal to furnish such information for the
17 period of the preceding year, the board may refuse to make
18 further payments due to disability to such annuitant until he
19 has furnished such information to the satisfaction of the board.
20 Should such refusal continue for six months, all of his rights
21 to the disability annuity payments in excess of any annuity to
22 which he is otherwise entitled shall be forfeited from the date
23 of his last statement to the board. Any moneys received in
24 excess of those to which he was entitled shall be deducted from
25 the present value of the annuity to which he is otherwise
26 entitled.
27 (c) Medical examinations of disability annuitants.--Should
28 any annuitant receiving a disability annuity while still under
29 superannuation age refuse to submit to a medical examination by
30 a physician or physicians at the request of the board, his
19750S0024B1235 - 60 -
1 payments due to disability shall be discontinued until the
2 withdrawal of such refusal. Should such refusal continue for a
3 period of six months, all of his rights to the disability
4 annuity payments in excess of any annuity to which he is
5 otherwise entitled shall be forfeited.
6 SUBCHAPTER B
7 RETIREMENT FUND AND ACCOUNTS
8 Sec.
9 8521. Management of fund and accounts.
10 8522. Public School Employees' Retirement Fund.
11 8523. Members' savings account.
12 8524. State accumulation account.
13 8525. Annuity reserve account.
14 § 8521. Management of fund and accounts.
15 (a) Control and management of fund.--The members of the
16 board shall be the trustees of the fund and shall have exclusive
17 control and management of the said fund and full power to invest
18 the same, subject, however, to all the terms, conditions,
19 limitations, and restrictions imposed by this part or other law
20 upon the making of investments. Subject to like terms,
21 conditions, limitations, and restrictions, said trustees shall
22 have the power to hold, purchase, sell, assign, transfer, or
23 dispose of any of the securities and investments in which any of
24 the moneys in the fund shall have been invested as well as of
25 the proceeds of said investments and of any moneys belonging to
26 said fund.
27 (b) Crediting of interest.--The board annually shall allow
28 statutory interest to the credit of the members' savings account
29 on the mean amount of the accumulated deductions of all members
30 for whom interest is payable for the preceding year and
19750S0024B1235 - 61 -
1 valuation interest on the mean amount of the annuity reserve
2 account for the preceding year to the credit of that account.
3 The board annually shall allow valuation interest calculated on
4 the mean amount for the preceding year of the balance in the
5 State accumulation account excluding any earnings of the fund
6 credited to the account during that year. In the event the total
7 earnings for the year do not exceed 5 1/2% of the mean amount
8 for the preceding year of the total assets of the fund less
9 earnings credited to the fund during that year plus the
10 administrative expenses of the board, the difference required to
11 be appropriated from the General Fund shall be credited to the
12 State accumulation account.
13 (c) Custodian of fund.--The State Treasurer shall be the
14 custodian of the fund.
15 (d) Payments from fund.--All payments from the fund shall be
16 made by the State Treasurer in accordance with requisitions
17 signed by the secretary of the board and ratified by resolution
18 of the board.
19 (e) Fiduciary status of board.--The members of the board,
20 employees of the board, and agents thereof shall stand in a
21 fiduciary relationship to the members of the system regarding
22 the investments and disbursements of any of the moneys of the
23 fund and shall not profit either directly or indirectly with
24 respect thereto.
25 (f) Name for transacting business.--By the name of "The
26 Public School Employees' Retirement System" or "The Public
27 School Employes' Retirement System" all of the business of the
28 system shall be transacted, its fund invested, all requisitions
29 for money drawn and payments made, and all of its cash and
30 securities and other property shall be held, except that, any
19750S0024B1235 - 62 -
1 other law to the contrary notwithstanding, the board may
2 establish a nominee registration procedure for the purpose of
3 registering securities in order to facilitate the purchase,
4 sale, or other disposition of securities pursuant to the
5 provisions of this part.
6 (g) Deposits in banks and trust companies.--For the purpose
7 of meeting disbursements for annuities and other payments in
8 excess of the receipts, there shall be kept available by the
9 State Treasurer an amount, not exceeding 10% of the total amount
10 in the fund, on deposit in any bank or banks in this
11 Commonwealth organized under the laws thereof or under the laws
12 of the United States or with any trust company or companies
13 incorporated by any law of this Commonwealth, provided any of
14 such banks or trust companies shall furnish adequate security
15 for said deposit. The sum deposited in any one bank or trust
16 company shall not exceed 25% of the paid-up capital and surplus
17 of said bank or trust company.
18 (h) Investment in corporate stocks.--Preferred and common
19 stock of any corporation organized under the laws of the United
20 States or of any commonwealth or state thereof or of the
21 District of Columbia shall be an authorized investment of the
22 fund, regardless of any other provision of law provided that:
23 (1) such stock be purchased with the exercise of that
24 degree of judgment and care under the circumstances then
25 prevailing which men of prudence, discretion and intelligence
26 exercise in the management of their own affairs not in regard
27 to speculation, but in regard to the permanent disposition of
28 the funds, considering the probable income to be derived
29 therefrom as well as the probable safety of their capital;
30 (2) in the case of any stock other than stock of a bank
19750S0024B1235 - 63 -
1 or insurance company, the stock is listed or traded (or if
2 unlisted or not entitled to trading privileges shall be
3 eligible for listing and application for such listing shall
4 have been made) on the New York Stock Exchange or any other
5 exchange approved by the Secretary of Banking;
6 (3) no investment in common stock be made which at that
7 time would cause the book value of the investments in common
8 stock to exceed 25% of the total assets of the fund;
9 (4) no more than 5% of the total assets of the fund be
10 invested in common stocks in any one year, provided that any
11 unused portion may be used in subsequent years, but in no
12 event shall more than 8% of such assets be invested in common
13 stocks in any one year;
14 (5) the amount invested in the common stock of any one
15 company shall not exceed at cost 2% of the book value of the
16 assets of the fund at the time of purchase and shall not
17 exceed 5% of the issued and outstanding common stock of that
18 company; and
19 (6) the percentage limitations of paragraphs (3) and (4)
20 shall not apply to the reinvestment of funds realized from
21 the sale or transfer of common stocks and no sale or other
22 liquidation of any investment shall be required solely
23 because of any change in market values whereby the
24 percentages of stocks set forth in this subsection are
25 exceeded.
26 (i) Common stock defined.--"Common stock" as used in
27 subsection (h) shall include the stock certificates,
28 certificates of beneficial interests, or trust participation
29 certificates issued by any corporation or unincorporated
30 association included under the definition of "corporation" in
19750S0024B1235 - 64 -
1 subsection (j).
2 (j) Corporation defined.--"Corporation" as used in
3 subsection (h) shall include a voluntary association, a joint-
4 stock association or company, a business trust, a Massachusetts
5 trust, a common-law trust, and any other organization organized
6 and existing for any lawful purpose and which like a
7 corporation, continues to exist, notwithstanding changes in the
8 personnel of its members or participants and conducts it affairs
9 through a committee, a board, or some other group acting in a
10 representative capacity.
11 (k) Investment in real estate and mortgages.--Real estate
12 subject to a lease to one or more financially responsible
13 tenants which lease shall not require managerial responsibility
14 by the board; and bonds, notes and deeds of trust, of
15 individuals or corporations secured by mortgages on real estate
16 located in any state, district or territory of the United
17 States, shall be an authorized investment of the board
18 regardless of any other provision of law. The board shall
19 promulgate regulations to implement the foregoing to insure the
20 safety of investments made pursuant to this subsection which
21 regulations shall be in accordance with generally accepted
22 standards and investment principles for pension funds of
23 comparable size. All instruments, transfers of interest, and all
24 records pertaining to real estate, mortgages or bonds invested
25 in by the board, shall be open to public inspection. Reports as
26 requested by the board, shall be submitted on all real estate
27 and mortgage investments by mortgage advisors and
28 correspondents.
29 § 8522. Public School Employees' Retirement Fund.
30 The fund shall consist of all moneys in the several separate
19750S0024B1235 - 65 -
1 funds in the State Treasury set apart to be used under the
2 direction of the board for the benefit of members of the system;
3 and the Treasury Department shall credit to the fund all moneys
4 received from the Department of Revenue arising from the
5 contributions required under the provisions of Chapter 83
6 (relating to membership, contributions and benefits) and all
7 earnings from investments or moneys of said fund. There shall be
8 established and maintained by the board the several ledger
9 accounts specified in sections 8523 (relating to members'
10 savings account), 8524 (relating to State accumulation account)
11 and 8525 (relating to annuity reserve account).
12 § 8523. Members' savings account.
13 (a) Credits to account.--The members' savings account shall
14 be the ledger account to which shall be credited the amounts of
15 the contributions or lump sum payments made by active members in
16 accordance with the provisions of Chapter 83 (relating to
17 membership, contributions and benefits).
18 (b) Interest and transfers from account.--The individual
19 member accounts to which interest is payable shall be credited
20 with statutory interest. The accumulated deductions credited to
21 the account of a member who dies in service or whose application
22 for an annuity has been approved shall be transferred from the
23 members' savings account to the annuity reserve account provided
24 for in section 8525 (relating to annuity reserve account).
25 (c) Charges to account.--Upon the election of a member to
26 withdraw his accumulated deductions, the payment of such amount
27 shall be charged to the members' savings account.
28 § 8524. State accumulation account.
29 The State accumulation account shall be the ledger account to
30 which shall be credited all contributions of the Commonwealth
19750S0024B1235 - 66 -
1 and other employers as well as the earnings of the fund.
2 Valuation interest shall be allowed on the total amount of such
3 account less any earnings of the fund credited during the year.
4 The reserves necessary for the payment of annuities and death
5 benefits as approved by the board and as provided in Chapter 83
6 (relating to membership, contributions and benefits) shall be
7 transferred from the State accumulation account to the annuity
8 reserve account. At the end of each year the required interest
9 shall be transferred from the State accumulation account to the
10 credit of the members' savings account and the annuity reserve
11 account. The administrative expenses of the board shall be
12 charged to the State accumulation account.
13 § 8525. Annuity reserve account.
14 (a) Credits and charges to account.--The annuity reserve
15 account shall be the ledger account to which shall be credited
16 the reserves held for the payment of annuities and death
17 benefits on account of all annuitants and the contributions from
18 the Commonwealth and other employers as determined in accordance
19 with section 8328 (relating to actuarial cost method) for the
20 payment of the supplemental annuities provided in section 8348
21 (relating to supplemental annuities). The annuity reserve
22 account shall be credited with valuation interest. After the
23 transfers provided in sections 8523 (relating to members'
24 savings account) and 8524 (relating to State accumulation
25 account), all annuity and death benefit payments shall be
26 charged to the annuity reserve account and paid from the fund.
27 (b) Transfers from account.--Should an annuitant be
28 subsequently restored to active service, the present value of
29 his member's annuity at the time of reentry into school service
30 shall be transferred from the annuity reserve account and placed
19750S0024B1235 - 67 -
1 to his individual credit in the members' savings account. In
2 addition, the actuarial reserve for his annuity less the amount
3 transferred to the members' savings account shall be transferred
4 from the annuity reserve account to the State accumulation
5 account.
6 SUBCHAPTER C
7 MISCELLANEOUS PROVISIONS
8 Sec.
9 8531. State guarantee.
10 8532. State supervision.
11 8533. Taxation, attachment and assignment of funds.
12 8534. Fraud and adjustment of errors.
13 § 8531. State guarantee.
14 Statutory interest charges payable, the maintenance of
15 reserves in the fund, and the payment of all annuities and other
16 benefits granted by the board under the provisions of this part
17 are hereby made obligations of the Commonwealth. All income,
18 interest, and dividends derived from deposits and investments
19 authorized by this part shall be used for the payment of the
20 said obligations of the Commonwealth.
21 § 8532. State supervision.
22 The fund and ledger accounts provided for by this part shall
23 be subject to the supervision of the State Insurance Department.
24 § 8533. Taxation, attachment and assignment of funds.
25 The right of a person to a member's annuity, a State annuity,
26 or retirement allowance, to the return of contributions, any
27 benefit or right accrued or accruing to any person under the
28 provisions of this part, and the moneys in the fund are hereby
29 exempt from any State or municipal tax, and exempt from levy and
30 sale, garnishment, attachment, or any other process whatsoever,
19750S0024B1235 - 68 -
1 and shall be unassignable.
2 § 8534. Fraud and adjustment of errors.
3 (a) Offense defined.--Any person who shall knowingly make
4 any false statement or shall falsify or permit to be falsified
5 any record or records of this system in any attempt to defraud
6 the system as a result of such act shall be guilty of a
7 misdemeanor of the second degree.
8 (b) Adjustment of errors.--Should any change or mistake in
9 records result in any member, beneficiary, or survivor annuitant
10 receiving from the system more or less than he would have been
11 entitled to receive had the records been correct, then
12 regardless of the intentional or unintentional nature of the
13 error and upon the discovery of such error, the board shall
14 correct the error and so far as practicable shall adjust the
15 payments which may be made for and to such person in such a
16 manner that the actuarial equivalent of the benefit to which he
17 was correctly entitled shall be paid.
18 Section 2. Repeals.--(a) The following acts and parts of
19 acts are repealed absolutely:
20 Act of July 18, 1917 (P.L.1043, No.343), entitled "An act
21 establishing a public school employes' retirement system, and
22 creating a retirement board for the administration thereof;
23 establishing certain funds from contributions by the
24 Commonwealth and contributing employes, defining the uses and
25 purposes thereof and the manner of payments therefrom, and
26 providing for the guaranty by the Commonwealth of certain of
27 said funds; imposing powers and duties upon boards having the
28 employment of public school employes; exempting annuities,
29 allowances, returns, benefits, and rights from taxation and
30 judicial process; and providing penalties."
19750S0024B1235 - 69 -
1 As much of section 202, act of April 9, 1929 (P.L.177,
2 No.175), known as "The Administrative Code of 1929," as relates
3 to the Public School Employes' Retirement Board in the
4 Department of Education.
5 Sections 410 and 1308, act of April 9, 1929 (P.L.177,
6 No.175), known as "The Administrative Code of 1929."
7 Act of May 6, 1942 (Sp. Sess., P.L.101, No.27), entitled "A
8 supplement to the act, approved the eighteenth day of July, one
9 thousand nine hundred seventeen (Pamphlet Laws, one thousand
10 forty-three), entitled 'An act establishing a public school
11 employes' retirement system, and creating a retirement board for
12 the administration thereof; establishing certain funds from
13 contributions by the Commonwealth and contributing employes,
14 defining the uses and purposes thereof and the manner of
15 payments therefrom, and providing for the guaranty by the
16 Commonwealth of certain of said funds; imposing powers and
17 duties upon boards having the employment of public school
18 employes; exempting annuities, allowances, returns, benefits,
19 and rights from taxation and judicial process; and providing
20 penalties,' defining the rights and obligations of certain
21 members of the School Employes' Retirement Association engaged
22 in active military service."
23 Act of January 14, 1952 (P.L.2015, No.560), entitled "A
24 supplement to the act, approved the eighteenth day of July, one
25 thousand nine hundred seventeen (Pamphlet Laws 1043), entitled
26 'An act establishing a public school employes' retirement
27 system, and creating a retirement board for the administration
28 thereof; establishing certain funds from contributions by the
29 Commonwealth and contributing employes, defining the uses and
30 purposes thereof and the manner of payments therefrom, and
19750S0024B1235 - 70 -
1 providing for the guaranty by the Commonwealth of certain of
2 said funds; imposing powers and duties upon boards having the
3 employment of public school employes; exempting annuities,
4 allowances, returns, benefits, and rights from taxation and
5 judicial process; and providing penalties,' by extending certain
6 benefits heretofore granted to school employes entering the
7 armed forces of the United States to certain other similarly
8 qualified school employes."
9 Act of August 19, 1953 (P.L.1097, No.294), entitled "A
10 supplement to the act, approved the eighteenth day of July, one
11 thousand nine hundred seventeen (Pamphlet Laws 1043), entitled
12 'An act establishing a public school employes' retirement
13 system, and creating a retirement board for the administration
14 thereof; establishing certain funds from contributions by the
15 Commonwealth and contributing employes, defining the uses and
16 purposes thereof and the manner of payments therefrom, and
17 providing for the guaranty by the Commonwealth of certain of
18 said funds; imposing powers and duties upon boards having the
19 employment of public school employes; exempting annuities,
20 allowances, returns, benefits, and rights from taxation and
21 judicial process; and providing penalties,' by permitting former
22 contributors who have become State employes and members of the
23 State Employes' Retirement Association to restore membership in
24 the Public School Employes' Retirement Association, and
25 authorizing the transfer of monetary credits in the Public
26 School Employes' Retirement Association to the State Employes'
27 Retirement Association under certain conditions."
28 Act of May 17, 1956 (P.L.1622, No.538), entitled "A
29 supplement to the act, approved the eighteenth day of July, one
30 thousand nine hundred seventeen (Pamphlet Laws 1043), entitled
19750S0024B1235 - 71 -
1 'An act establishing a public school employes' retirement
2 system, and creating a retirement board for the administration
3 thereof; establishing certain funds from contributions by the
4 Commonwealth and contributing employes, defining the uses and
5 purposes thereof and the manner of payments therefrom, and
6 providing for the guaranty by the Commonwealth of certain of
7 said funds; imposing powers and duties upon boards having the
8 employment of public school employes; exempting annuities,
9 allowances, returns, benefits, and rights from taxation and
10 judicial process; and providing penalties,' by permitting former
11 contributors who have become State employes and members of the
12 State Employes' Retirement Association to restore membership in
13 the Public School Employes' Retirement Association and
14 authorizing the transfer of monetary credits in the Public
15 School Employes' Retirement Association to the State Employes'
16 Retirement Association under certain conditions."
17 Act of May 17, 1956 (P.L.1623, No.539), entitled "A
18 supplement to the act, approved the eighteenth day of July, one
19 thousand nine hundred seventeen (Pamphlet Laws 1043), entitled
20 'An act establishing a public school employes' retirement
21 system, and creating a retirement board for the administration
22 thereof; establishing certain funds from contributions by the
23 Commonwealth and contributing employes, defining the uses and
24 purposes thereof and the manner of payments therefrom, and
25 providing for the guaranty by the Commonwealth of certain of
26 said funds; imposing powers and duties upon boards having the
27 employment of public school employes; exempting annuities,
28 allowances, returns, benefits and rights from taxation and
29 judicial process; and providing penalties,' by permitting any
30 school employe as a contributor under the provisions of the
19750S0024B1235 - 72 -
1 School Employes' Retirement System and who was an employe under
2 the State Employes' Retirement System of the Commonwealth and
3 made contributions to the State Employes' Retirement Fund on
4 account of such State service to obtain credit for such service
5 in the School Employes' Retirement System under certain
6 conditions."
7 Act of June 20, 1957 (P.L.337, No.182), entitled "A
8 supplement to the act of July 18, 1917 (P.L.1043), entitled 'An
9 act establishing a public school employes' retirement system,
10 and creating a retirement board for the administration thereof;
11 establishing certain funds from contributions by the
12 Commonwealth and contributing employes, defining the uses and
13 purposes thereof and the manner of payments therefrom, and
14 providing for the guaranty by the Commonwealth of certain of
15 said funds; imposing powers and duties upon boards having the
16 employment of public school employes; exempting annuities,
17 allowances, returns, benefits, and rights from taxation and
18 judicial process; and providing penalties,' authorizing the
19 retransfer of credits of certain State employes to the Public
20 School Employes' Retirement System."
21 Act of June 1, 1959 (P.L.350, No.77), known as the "Public
22 School Employes' Retirement Code of 1959."
23 Act of November 19, 1959 (P.L.1548, No.554), entitled "An act
24 to provide temporary supplemental retirement benefits for
25 certain annuitants of the Public School Employes' Retirement
26 System, creating a special fund in the custody of the State
27 Treasurer, imposing duties on the Public School Employes'
28 Retirement Board, and making an appropriation."
29 (b) All other acts or parts of acts inconsistent with this
30 act are hereby repealed to the extent of such inconsistency.
19750S0024B1235 - 73 -
1 Section 3. Saving Clause.--In order to assure an orderly
2 transition, the following provisions of repealed law shall be
3 saved and applicable as specified:
4 (1) The provisions relating to the calculation of annuities
5 of annuitants who return to school service and subsequently
6 retire shall not apply to former annuitants who are active
7 members of the system on the effective date of this act.
8 (2) The amount due for the purchase of any credit for
9 service creditable to an active member under the provisions of
10 the act of June 1, 1959 (P.L.350, No.77), known as the "Public
11 School Employes' Retirement Code of 1959," shall not include
12 interest if the member makes a lump sum payment of the full
13 amount due prior to July NOVEMBER 1, 1975 JANUARY 1, 1976 or <--
14 commences regular payments through salary deductions for such
15 service prior to July NOVEMBER 1, 1975 JANUARY 1, 1976 and <--
16 completes such payments prior to July NOVEMBER 1, 1977 JANUARY <--
17 1, 1978. Any member who elects to purchase such credit and does
18 not make a lump sum payment of the full amount due prior to July <--
19 NOVEMBER 1, 1975 JANUARY 1, 1976 or commences regular payments <--
20 through salary deductions prior to July NOVEMBER 1, 1975 JANUARY <--
21 1, 1976 and does not complete such payments prior to July <--
22 NOVEMBER 1, 1977 JANUARY 1, 1978 shall be required to purchase <--
23 such credit in accordance with the provisions of this act.
24 (3) The rights of members of Class T-B as provided in
25 section 301(2)(c) and (d) of the act of June 1, 1959 (P.L.350,
26 No.77), known as the "Public School Employes' Retirement Code of
27 1959," shall continue.
28 (4) The provisions relating to former teachers as provided
29 in sections 303(3) and 407(1) of the act of June 1, 1959
30 (P.L.350, No.77), known as the "Public School Employes'
19750S0024B1235 - 74 -
1 Retirement Code of 1959," shall continue.
2 Section 4. Effective Date.--This act shall take effect
3 immediately except that:
4 (1) As applicable to members terminating school service on
5 or after March 1, 1974, the provisions relating to the purchase
6 of credit for previous school or creditable nonschool service
7 and the calculation of benefits shall be effective March 1,
8 1974.
9 (2) The provisions relating to the crediting of statutory
10 interest to the accounts of members on leave without pay shall
11 become effective on July 1, 1975.
12 (3) The PROVISIONS RELATING TO THE BASIC CONTRIBUTION RATE <--
13 OF MEMBERS SHALL BECOME EFFECTIVE ON JULY 1, 1976 AND THE
14 provisions relating to the payment of the employer contributions
15 shall become effective on July 1, 1975.
16 (4) The provisions relating to membership of part-time
17 employees shall become effective with the beginning of the
18 school year 1974-1975 1975-1976. <--
19 (5) The provisions relating to eligibility for disability
20 annuities shall be effective December 1, 1974.
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