SENATE AMENDED
PRIOR PRINTER'S NOS. 651, 2274, 2346 PRINTER'S NO. 2521
No. 601 Session of 1979
INTRODUCED BY MESSRS. DAVIES, BURNS, GALLAGHER, MILLER, NOYE,
SALVATORE, MILANOVICH, CIMINI, GRIECO, MRS. ARTY, MESSRS.
CALTAGIRONE, KNEPPER, SIEMINSKI, MANMILLER, GOEBEL, J. L.
WRIGHT, SCIRICA, COHEN, A. K. HUTCHINSON, W. D. HUTCHINSON
AND GRABOWSKI, MARCH 7, 1979
SENATOR SMITH, APPROPRIATIONS, RE-REPORTED AS AMENDED,
IN SENATE, NOVEMBER 27, 1979
AN ACT
1 Amending Title TITLES 24 (Education) AND 71 (STATE GOVERNMENT) <--
2 of the Pennsylvania Consolidated Statutes, further providing
3 for CERTAIN CONTRIBUTIONS BY THE COMMONWEALTH; AND FOR a <--
4 cost-of-living increase TO ANNUITANTS. <--
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Sections 8326, 8327, 8328(d), 8342(A) and 8348(a) <--
8 and (b), (B) AND (D) of Title 24, act of November 25, 1970 <--
9 (P.L.707, No.230), known as the Pennsylvania Consolidated
10 Statutes, are amended to read:
11 § 8326. CONTRIBUTIONS BY THE COMMONWEALTH. <--
12 (A) CONTRIBUTIONS ON BEHALF OF ACTIVE MEMBERS.--THE
13 COMMONWEALTH SHALL MAKE CONTRIBUTIONS INTO THE FUND ON BEHALF OF
14 ALL ACTIVE MEMBERS, EXCEPT THAT IT SHALL NOT BE LIABLE FOR ANY
15 CONTRIBUTIONS WHATSOEVER ATTRIBUTABLE TO SALARIES PAID THROUGH
16 FEDERAL FUNDS, UNLESS IT IS AN EMPLOYER, AS DEFINED IN SECTION
1 8327(A) (RELATING TO PAYMENTS BY EMPLOYERS), IN AN AMOUNT EQUAL
2 TO ONE-HALF THE AMOUNT CERTIFIED BY THE BOARD AS NECESSARY TO
3 PROVIDE, TOGETHER WITH THE MEMBERS' CONTRIBUTIONS, ANNUITY
4 RESERVES ON ACCOUNT OF PROSPECTIVE ANNUITIES AS PROVIDED IN THIS
5 PART IN ACCORDANCE WITH SECTION 8328(A), (B) AND (C) (RELATING
6 TO ACTUARIAL COST METHOD). IN CASE A SCHOOL EMPLOYEE HAS ELECTED
7 MEMBERSHIP IN A RETIREMENT PROGRAM APPROVED BY THE EMPLOYER, THE
8 COMMONWEALTH SHALL CONTRIBUTE TO SUCH PROGRAM ON ACCOUNT OF HIS
9 MEMBERSHIP AN AMOUNT NO GREATER THAN THE AMOUNT IT WOULD HAVE
10 CONTRIBUTED HAD THE EMPLOYEE BEEN A MEMBER OF THE PUBLIC SCHOOL
11 EMPLOYEES' RETIREMENT SYSTEM.
12 (B) CONTRIBUTIONS ON BEHALF OF ANNUITANTS.--THE COMMONWEALTH
13 SHALL MAKE CONTRIBUTIONS ON BEHALF OF ALL ANNUITANTS IN AN
14 AMOUNT EQUAL TO ONE-HALF OF THE AMOUNT CERTIFIED BY THE BOARD AS
15 NECESSARY TO FUND THE ADDITIONAL LIABILITIES FOR MINIMUM AND
16 SUPPLEMENTAL ANNUITIES IN ACCORDANCE WITH SECTION 8328(D).
17 (C) CONTRIBUTIONS FROM FEDERAL FUNDS.--COMMONWEALTH
18 CONTRIBUTIONS AS REQUIRED BY THIS SECTION, WHEN PAID FOR
19 EMPLOYEES WHOSE SALARIES ARE WHOLLY OR PARTIALLY FEDERALLY
20 FUNDED, SHALL BE PAID FROM FEDERAL FUNDS IN THAT SAME RATIO IN
21 WHICH SUCH EMPLOYEE SALARIES ARE PAID.
22 § 8327. PAYMENTS BY EMPLOYERS.
23 (A) GENERAL RULE.--EACH EMPLOYER, INCLUDING THE COMMONWEALTH
24 AS EMPLOYER OF EMPLOYEES OF THE DEPARTMENT OF EDUCATION, STATE-
25 OWNED COLLEGES AND UNIVERSITIES, THADDEUS STEVENS TRADE SCHOOL,
26 PENNSYLVANIA STATE ORAL SCHOOL FOR THE DEAF, SCOTLAND SCHOOL FOR
27 VETERANS' CHILDREN, AND THE PENNSYLVANIA STATE UNIVERSITY, SHALL
28 MAKE PAYMENTS TO THE FUND EACH QUARTER IN AN AMOUNT EQUAL TO
29 ONE-HALF THE SUM OF THE PERCENTAGES, AS DETERMINED UNDER SECTION
30 8328 (RELATING TO ACTUARIAL COST METHOD), APPLIED TO THE TOTAL
19790H0601B2521 - 2 -
1 COMPENSATION DURING THE PAY PERIODS IN THE PRECEDING QUARTER OF
2 ALL ITS EMPLOYEES WHO WERE MEMBERS OF THE SYSTEM DURING SUCH
3 PERIOD.
4 (B) RULE FOR EMPLOYEES RECEIVING FEDERAL FUNDS.--IN THE CASE
5 OF EMPLOYEES PAID WHOLLY OR PARTIALLY FROM FEDERAL FUNDS, THE
6 EMPLOYER, INCLUDING THE COMMONWEALTH, SHALL MAKE PAYMENTS TO THE
7 FUND EACH QUARTER IN AN AMOUNT EQUAL TO THE FULL PERCENTAGE, AS
8 DETERMINED UNDER SECTION 8328 APPLIED TO THE TOTAL COMPENSATION
9 PAID FROM FEDERAL FUNDS DURING THE PAY PERIOD IN THE PRECEDING
10 QUARTER OF ALL EMPLOYEES WHO WERE MEMBERS OF THE PUBLIC SCHOOL
11 EMPLOYEES' RETIREMENT SYSTEM DURING SUCH PERIOD.
12 [(B)] (C) DEDUCTION FROM APPROPRIATIONS.--TO FACILITATE THE
13 PAYMENT OF AMOUNTS DUE FROM ANY EMPLOYER TO THE FUND THROUGH THE
14 STATE TREASURER AND TO PERMIT THE EXCHANGE OF CREDITS BETWEEN
15 THE STATE TREASURER AND ANY EMPLOYER, THE SECRETARY OF EDUCATION
16 AND THE STATE TREASURER SHALL CAUSE TO BE DEDUCTED AND PAID INTO
17 THE FUND FROM THE AMOUNT OF ANY MONEYS DUE TO ANY EMPLOYER ON
18 ACCOUNT OF ANY APPROPRIATION FOR SCHOOLS OR OTHER PURPOSES SUCH
19 AMOUNT DUE TO THE FUND AS CERTIFIED BY THE BOARD AND AS REMAINS
20 UNPAID ON THE DATE SUCH APPROPRIATIONS WOULD OTHERWISE BE PAID
21 TO THE EMPLOYER, AND SUCH AMOUNT SHALL BE CREDITED TO THE
22 EMPLOYER'S ACCOUNT IN THE FUND.
23 § 8328. Actuarial cost method.
24 * * *
25 (d) Supplemental annuity contribution rate.--Contributions
26 from the Commonwealth and other employers required to provide
27 for the payment of supplemental annuities to annuitants as
28 provided in section 8348 (relating to supplemental annuities)
29 shall be determined as a percentage of the total compensation of
30 all active members during the period for which the amount is
19790H0601B2521 - 3 -
1 certified as sufficient to fund the liabilities of the
2 supplemental retirement allowance account as a level percentage
3 over a period of 30 years from July 1, 1967. In the event that
4 annuities are increased by legislation enacted subsequent to
5 July 1, 1974, the additional liability for the increase in
6 benefits to annuitants shall be funded similarly as a level
7 percentage over a period of 20 years from the first day of July
8 coincident with or next following the effective date of such
9 legislation. Notwithstanding the foregoing, the additional
10 liability on account of any increase in annuities which is
11 effective July 1, 1979 shall be funded by level annual payments
12 over a period of 20 years beginning July 1, 1980.
13 § 8342. MAXIMUM SINGLE LIFE ANNUITY. <--
14 (A) GENERAL RULE.--UPON TERMINATION OF SERVICE, ANY FULL
15 COVERAGE MEMBER WHO IS ELIGIBLE TO RECEIVE AN ANNUITY PURSUANT
16 TO THE PROVISIONS OF SECTION 8307(A) OR (B) (RELATING TO
17 ELIGIBILITY FOR ANNUITIES) AND HAS MADE AN APPLICATION IN
18 ACCORDANCE WITH THE PROVISIONS OF SECTION 8507(F) (RELATING TO
19 RIGHTS AND DUTIES OF SCHOOL EMPLOYEES AND MEMBERS) SHALL BE
20 ENTITLED TO RECEIVE A MAXIMUM SINGLE LIFE ANNUITY ATTRIBUTABLE
21 TO HIS CREDITED SERVICE AND EQUAL TO THE SUM OF THE FOLLOWING
22 SINGLE LIFE ANNUITIES BEGINNING AT THE EFFECTIVE DATE OF
23 RETIREMENT AND, IN CASE THE MEMBER ON THE EFFECTIVE DATE OF
24 RETIREMENT IS UNDER SUPERANNUATION AGE, MULTIPLIED BY A
25 REDUCTION FACTOR CALCULATED TO PROVIDE BENEFITS ACTUARIALLY
26 EQUIVALENT TO AN ANNUITY STARTING AT SUPERANNUATION AGE:
27 PROVIDED HOWEVER, THAT ON OR AFTER JULY 1, 1976, IN THE CASE OF
28 ANY MEMBER WHO HAS ATTAINED AGE 55 AND HAS 25 OR MORE
29 ELIGIBILITY POINTS SUCH SUM OF SINGLE LIFE ANNUITIES SHALL BE
30 REDUCED BY A PERCENTAGE DETERMINED BY MULTIPLYING THE NUMBER OF
19790H0601B2521 - 4 -
1 MONTHS, INCLUDING A FRACTION OF A MONTH AS A FULL MONTH, BY
2 WHICH THE EFFECTIVE DATE OF RETIREMENT PRECEDES SUPERANNUATION
3 AGE BY 1/4%:
4 (1) A STANDARD SINGLE LIFE ANNUITY MULTIPLIED BY THE
5 CLASS OF SERVICE MULTIPLIER AND CALCULATED ON THE BASIS OF
6 THE NUMBER OF YEARS OF CREDITED SCHOOL SERVICE OTHER THAN
7 CONCURRENT SERVICE.
8 (2) A STANDARD SINGLE LIFE ANNUITY MULTIPLIED BY THE
9 CLASS OF SERVICE MULTIPLIER AND CALCULATED ON THE BASIS OF
10 THE NUMBER OF YEARS OF CONCURRENT SERVICE AND MULTIPLIED BY
11 THE RATIO OF TOTAL COMPENSATION RECEIVED IN THE SCHOOL SYSTEM
12 DURING THE PERIOD OF CONCURRENT SERVICE TO THE TOTAL
13 COMPENSATION RECEIVED DURING SUCH PERIOD.
14 (3) A SUPPLEMENTAL ANNUITY SUCH THAT THE TOTAL ANNUITY
15 [INCLUDING ANY COST-OF-LIVING INCREASES AND] PRIOR TO ANY
16 OPTIONAL MODIFICATION OR ANY REDUCTION DUE TO RETIREMENT
17 PRIOR TO SUPERANNUATION AGE SHALL BE AT LEAST $100 FOR EACH
18 FULL YEAR OF CREDITED SERVICE.
19 * * *
20 § 8348. Supplemental annuities.
21 (a) General rule.--Every annuitant who is in receipt of a
22 superannuation, withdrawal or disability annuity, shall continue
23 to receive such annuity and beginning July 1, [1974] 1979, any
24 annuitant who retired on or prior to July 1, [1973] 1978, shall
25 receive a cost-of-living supplement determined as a percentage
26 applied to the [entire] retirement annuity as of June 30, [1974.
27 Beginning July 1, 1974, any annuitant whose effective date of
28 retirement is after July 1, 1973 and prior to March 1, 1974
29 shall receive a supplement determined as an adjustment of 5%
30 applied to the entire retirement annuity on the effective date
19790H0601B2521 - 5 -
1 of retirement. All supplements provided in this subsection]
2 1978. Such cost-of-living supplement shall be payable under the
3 same terms and conditions as provided under the option plan in
4 effect as of June 30, [1974] 1978.
5 (b) Cost-of-living adjustment factors.--The percentage which
6 is to be applied in the determination of the cost-of-living
7 supplements shall be determined on the basis of the effective
8 date of retirement [as follows:
9 Effective date of retirement Percentage factor
10 After July 1, 1971 through July 1, 1973 5%
11 After July 1, 1970 through July 1, 1971 10%
12 After July 1, 1969 through July 1, 1970 15%
13 After July 1, 1968 through July 1, 1969 20%
14 After July 1, 1967 through July 1, 1968 25%
15 On or prior to July 1, 1967 30%]
16 payable on the first $10,000 $12,000 of annuity received per <--
17 year. and a constant proportion of percentage increases in the <--
18 Consumer Price Index for all urban consumers (CPI-U) prepared
19 and published by the United States Department of Labor
20 Statistics. Each percentage factor is equal to two-thirds of the
21 percentage change in said index from June 1973 to June of the
22 fiscal year of retirement, whichever is later, to June 1978. The
23 applicable percentage factors are:
24 Effective date of retirement Percentage factor
25 After July 1, 1977 through July 1, 1978 5%
26 After July 1, 1976 through July 1, 1977 10%
27 After July 1, 1975 through July 1, 1976 13%
28 After July 1, 1974 through July 1, 1975 20%
29 After July 1, 1973 through July 1, 1974 27%
30 On or prior to July 1, 1973 31%
19790H0601B2521 - 6 -
1 * * *
2 [(D) DISABILITY ANNUITANTS.--ANY DISABILITY ANNUITANT WHOSE <--
3 EFFECTIVE DATE OF RETIREMENT IS PRIOR TO JULY 1, 1971 AND WHOSE
4 ANNUITY WAS INCREASED BY LESS THAN 20% OF THE ANNUITY AT THE
5 TIME OF RETIREMENT UNDER THE AMENDATORY ACT OF NOVEMBER 27, 1970
6 (P.L.798, NO.261) OR SEPTEMBER 9, 1971 (P.L.456, NO.106), SHALL
7 RECEIVE BEGINNING JULY 1, 1974 AN ADDITIONAL INCREASE IN HIS
8 ANNUITY EQUAL TO 20% OF THE ANNUITY AT THE TIME OF RETIREMENT
9 LESS THE INCREASE HE RECEIVED UNDER EITHER AMENDATORY ACT.]
10 * * *
11 SECTION 2. SECTION 5708(A) AND (B) OF TITLE 71 IS AMENDED TO
12 READ:
13 § 5708. SUPPLEMENTAL ANNUITIES.
14 (A) GENERAL RULE.--EVERY ANNUITANT WHO RETIRED PRIOR TO
15 [MARCH 1, 1974] JULY 1, 1978 AND WHO IS IN RECEIPT OF A
16 SUPERANNUATION, WITHDRAWAL OR DISABILITY ANNUITY, SHALL CONTINUE
17 TO RECEIVE THE ANNUITY TO WHICH HE WAS ENTITLED PRIOR TO [MARCH
18 1, 1974] JULY 1, 1978 AND BEGINNING [JANUARY 1, 1975] JULY 1,
19 1979, ANY ANNUITANT RETIRING ON OR PRIOR TO [FEBRUARY 28, 1974]
20 JUNE 30, L978 SHALL RECEIVE A COST-OF-LIVING SUPPLEMENT
21 DETERMINED AS A PERCENTAGE APPLIED TO THE [ENTIRE] RETIREMENT
22 ANNUITY TO WHICH HE WAS ENTITLED PRIOR TO [MARCH 1, 1974] JULY
23 1, 1978. SUCH COST-OF-LIVING SUPPLEMENT SHALL BE PAYABLE UNDER
24 THE SAME TERMS AND CONDITIONS AS PROVIDED UNDER THE OPTION PLAN
25 IN EFFECT AS OF THE EFFECTIVE DATE OF THIS AMENDATORY ACT.
26 (B) COST-OF-LIVING ADJUSTMENT FACTORS.--THE PERCENTAGE WHICH
27 IS TO BE APPLIED IN THE DETERMINATION OF THE COST-OF-LIVING
28 SUPPLEMENTS, SHALL BE DETERMINED ON THE BASIS OF THE EFFECTIVE
29 DATE OF RETIREMENT PAYABLE ON THE FIRST $12,000 OF ANNUITY
30 RECEIVED PER YEAR, AS FOLLOWS:
19790H0601B2521 - 7 -
1 [EFFECTIVE DATE OF RETIREMENT PERCENTAGE FACTOR
2 JULY 1, 1971 TO FEBRUARY 28, 1974 5%
3 JULY 1, 1970 TO JUNE 30, 1971 10%
4 JULY 1, 1969 TO JUNE 30, 1970 15%
5 JULY 1, 1968 TO JUNE 30, 1969 20%
6 JULY 1, 1967 TO JUNE 30, 1968 25%
7 PRIOR TO JULY 1, 1967 30%]
8 EFFECTIVE DATE OF RETIREMENT PERCENTAGE FACTOR
9 JULY 1, 1977 THROUGH JUNE 30, 1978 5%
10 JULY 1, 1976 THROUGH JUNE 30, 1977 10%
11 JULY 1, 1975 THROUGH JUNE 30, 1976 13%
12 JULY 1, 1974 THROUGH JUNE 30, 1975 20%
13 MARCH 1, 1974 THROUGH JUNE 30, 1974 27%
14 PRIOR TO MARCH 1, 1974 31%
15 PROVIDED, HOWEVER, THAT SUCH COST-OF-LIVING SUPPLEMENT AS
16 DETERMINED ABOVE SHALL NOT BE PAYABLE TO AN ANNUITANT RECEIVING
17 A WITHDRAWAL ANNUITY PRIOR TO THE FIRST DAY OF JULY COINCIDENT
18 WITH OR FOLLOWING HIS ATTAINMENT OF SUPERANNUATION AGE: AND
19 FURTHER PROVIDED, THAT ANY MEMBER TERMINATING LEGISLATIVE
20 SERVICE SUBSEQUENT TO NOVEMBER 30, 1970, SHALL BE ENTITLED TO
21 RECEIVE ON ACCOUNT OF CLASS D-3 SERVICE A MAXIMUM SINGLE LIFE
22 ANNUITY PER YEAR OF SERVICE AS A REGULAR MEMBER OF THE GENERAL
23 ASSEMBLY WHICH SHALL NOT BE LESS THAN THE CORRESPONDING MAXIMUM
24 SINGLE LIFE ANNUITY, INCLUDING ANY COST-OF-LIVING SUPPLEMENTS
25 ENACTED PRIOR TO OCTOBER 1, 1979, OF A MEMBER RETIRING FROM
26 LEGISLATIVE SERVICE NOVEMBER 30, 1970.
27 * * *
28 SECTION 3. WITHIN 30 DAYS AFTER THE CONVENING OF THE GENERAL
29 ASSEMBLY IN AN ODD-NUMBERED YEAR, THE GENERAL ASSEMBLY SHALL
30 ORGANIZE A JOINT COMMITTEE, COMPOSED OF MEMBERS OF THE GENERAL
19790H0601B2521 - 8 -
1 ASSEMBLY TO BE SELECTED AS FOLLOWS: THE PRESIDENT PRO TEMPORE
2 SHALL SELECT THREE SENATORS, TWO FROM THE MAJORITY PARTY AND ONE
3 FROM THE MINORITY PARTY AND THE SPEAKER OF THE HOUSE OF
4 REPRESENTATIVES SHALL SELECT THREE MEMBERS OF THE HOUSE OF
5 REPRESENTATIVES, TWO FROM THE MAJORITY PARTY AND ONE FROM THE
6 MINORITY PARTY. THE JOINT COMMITTEE SHALL SELECT A CHAIRMAN AND
7 SHALL CONDUCT A REVIEW OF THE COST-OF-LIVING SUPPLEMENTS
8 ACCRUING PURSUANT TO SECTION 8348 OF TITLE 24 AND SECTION 5708
9 OF TITLE 71 DURING THE PREVIOUS TWO YEARS, THE CHANGES IN THE
10 CONSUMER PRICE INDEX AND THE EARNINGS OF THE FUNDS, FOR THE
11 PURPOSE OF DETERMINING THE EQUITABILITY OF THE INCREASES IN
12 LIGHT OF THE THEN PREVAILING ECONOMIC CONDITIONS. THE JOINT
13 COMMITTEE SHALL HAVE THE POWER TO CALL ON ANY STATE DEPARTMENT
14 OR AGENCY FOR ASSISTANCE AND SHALL REPORT ITS RECOMMENDATIONS TO
15 THE GENERAL ASSEMBLY PRIOR TO THE END OF THE SESSION.
16 Section 2. 4. This act shall take effect in 60 days <--
17 IMMEDITATELY. <--
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