SENATE AMENDED
PRIOR PRINTER'S NOS. 312, 616 PRINTER'S NO. 3727
No. 27 Session of 2001
INTRODUCED BY HERMAN, BENNINGHOFF, ARMSTRONG, M. BAKER, BASTIAN,
BELFANTI, CAPPELLI, COY, DeWEESE, FREEMAN, HARHAI, HESS,
LAUGHLIN, McCALL, McILHATTAN, R. MILLER, PETRARCA, PHILLIPS,
READSHAW, ROSS, RUBLEY, SAINATO, SATHER, SCHULER, SEMMEL,
SHANER, B. SMITH, BARD, BELARDI, CALTAGIRONE, CORRIGAN,
CURRY, FAIRCHILD, GEIST, HENNESSEY, SOLOBAY, STABACK,
STEELMAN, STERN, SURRA, E. Z. TAYLOR, TIGUE, TRAVAGLIO,
TULLI, WANSACZ, WOGAN, WOJNAROSKI, YUDICHAK, HORSEY, WATERS,
WASHINGTON AND J. BAKER, JANUARY 31, 2001
SENATOR THOMPSON, APPROPRIATIONS, IN SENATE, RE-REPORTED AS
AMENDED, APRIL 17, 2002
AN ACT
1 Amending Titles 24 (Education) and 71 (State Government) of the
2 Pennsylvania Consolidated Statutes, further defining "salary <--
3 deductions"; and further providing for member contributions
4 for creditable school service, for contributions for purchase
5 of credit for creditable nonschool service, for incomplete
6 payments, for termination of annuities, for administrative
7 duties of board, for reporting requirements of board, for
8 duties of board regarding applications and elections of
9 members, for duties of employers, for creditable nonstate
10 service, for member contributions for purchase of credit for
11 previous State service or to become a full coverage member,
12 for contributions for the purchase of credit for creditable
13 nonstate service and for duties of heads of departments and
14 for rights and duties of State employees and members. FURTHER <--
15 PROVIDING FOR CREDITABLE NONSCHOOL SERVICE, FOR ELECTION TO
16 BECOME A CLASS T-D MEMBER, FOR ACTUARIAL COST METHOD AND FOR
17 TERMINATION OF ANNUITIES; PROVIDING FOR SUPPLEMENTAL
18 ANNUITIES COMMENCING 2002 AND 2003; FURTHER PROVIDING FOR
19 PAYMENT OF BENEFITS, FOR ANNUITY RESERVE ACCOUNT AND FOR THE
20 DEFINITIONS OF "CREDITABLE NONSTATE SERVICE," "STATE
21 EMPLOYEES," "STATE SERVICE" AND "TOTAL ACCUMULATED
22 DEDUCTIONS"; PROVIDING FOR NOTICE TO MEMBERS; FURTHER
23 PROVIDING FOR MANDATORY AND OPTIONAL MEMBERSHIP, FOR CREDITED
24 STATE SERVICE AND FOR RETENTION AND REINSTATEMENT OF SERVICE
25 CREDITS; PROVIDING FOR ELECTION TO CONVERT SCHOOL SERVICE TO
1 STATE SERVICE; FURTHER PROVIDING FOR CREDITABLE NONSTATE
2 SERVICE, FOR CLASSES OF SERVICE, FOR CONTRIBUTIONS BY THE
3 COMMONWEALTH AND OTHER EMPLOYERS AND FOR ACTUARIAL COST
4 METHOD; PROVIDING FOR TRANSFER OF ACCUMULATED DEDUCTIONS;
5 FURTHER PROVIDING FOR DISABILITY ANNUITIES; PROVIDING FOR
6 SUPPLEMENTAL ANNUITIES COMMENCING 2002 AND 2003 AND FOR
7 SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT OF 2002;
8 FURTHER PROVIDING FOR DUTIES OF THE BOARD TO ADVISE AND
9 REPORT TO HEADS OF DEPARTMENTS AND MEMBERS, FOR DUTIES OF THE
10 BOARD TO REPORT TO THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT
11 BOARD, FOR RIGHTS AND DUTIES OF ANNUITANTS, FOR MEMBERS'
12 SAVINGS ACCOUNT, FOR STATE ACCUMULATION ACCOUNT AND FOR
13 SUPPLEMENTAL ANNUITY ACCOUNT; AND MAKING TECHNICAL
14 CORRECTIONS.
15 The General Assembly of the Commonwealth of Pennsylvania
16 hereby enacts as follows:
17 Section 1. The definition of "salary deductions" in section <--
18 8102 of Title 24 of the Pennsylvania Consolidated Statutes is
19 amended to read:
20 § 8102. Definitions.
21 The following words and phrases when used in this part shall
22 have, unless the context clearly indicates otherwise, the
23 meanings given to them in this section:
24 * * *
25 "Salary deductions." The amounts certified by the board,
26 deducted from the compensation of an active member or the State
27 service compensation of a multiple service member who is an
28 active member of the State Employees' Retirement System and paid
29 into the fund.
30 * * *
31 Section 2. Sections 8323(d), 8324(b) and (d) and 8325 of
32 Title 24 are amended to read:
33 § 8323. Member contributions for creditable school service.
34 * * *
35 (d) Certification and payment of contributions.--
36 (1) In all cases other than for the purchase of credit
20010H0027B3727 - 2 -
1 for sabbatical leave and activated military service leave
2 beginning before the effective date of paragraph (2), the
3 amount payable shall be certified by the board in accordance
4 with methods approved by the actuary and may be paid in a
5 lump sum within 90 days or, in the case of an active member
6 or eligible State employee who is an active member of the
7 State Employees' Retirement System, may be amortized with
8 statutory interest through salary deductions [or by personal
9 checks] in amounts agreed upon by the member and the board.
10 The salary deduction amortization plans agreed to by members
11 and the board may include a deferral of payment amounts and
12 statutory interest until the termination of school service or
13 State service, as the board, in its sole discretion, decides
14 to allow. The board may limit salary deduction amortization
15 plans to such terms as the board, in its sole discretion,
16 determines. In the case of an eligible State employee who is
17 an active member of the State Employees' Retirement System,
18 the agreed upon salary deductions shall be remitted to the
19 State Employees' Retirement Board, which shall certify and
20 transfer to the board the amounts paid.
21 (2) In the case of activated military service leave
22 beginning before the effective date of this paragraph, the
23 amount payable may be paid according to this subsection or
24 subsection (c.1), but all lump sum payments must be made and
25 all amortization payments commenced within one year of the
26 termination of activated military service leave.
27 § 8324. Contributions for purchase of credit for creditable
28 nonschool service.
29 * * *
30 (b) Nonintervening military service.--The amount due for the
20010H0027B3727 - 3 -
1 purchase of credit for military service other than intervening
2 military service shall be determined by applying the member's
3 basic contribution rate plus the normal contribution rate as
4 provided in section 8328 (relating to actuarial cost method) at
5 the time of entry of the member into school service subsequent
6 to such military service to one-third of his total compensation
7 received during the first three years of such subsequent
8 credited school service and multiplying the product by the
9 number of years and fractional part of a year of creditable
10 nonintervening military service being purchased together with
11 statutory interest during all periods of subsequent school and
12 State service to date of purchase. Upon certification of the
13 amount due, payment may be made in a lump sum within 90 days or
14 in the case of an active member or eligible State employee who
15 is an active member of the State Employees' Retirement System it
16 may be amortized with statutory interest through salary
17 deductions [or by personal checks] in amounts agreed upon by the
18 member and the board. The salary deduction amortization plans
19 agreed to by members and the board may include a deferral of
20 payment amounts and statutory interest until the termination of
21 school service or State service, as the board, in its sole
22 discretion, decides to allow. The board may limit salary
23 deduction amortization plans to such terms as the board, in its
24 sole discretion, determines. In the case of an eligible State
25 employee who is an active member of the State Employees'
26 Retirement System, the agreed upon salary deductions shall be
27 remitted to the State Employes' Retirement Board, which shall
28 certify and transfer to the board the amounts paid. Application
29 may be filed for all such military service credit upon
30 completion of three years of subsequent credited school service
20010H0027B3727 - 4 -
1 and shall be credited as Class T-C service.
2 * * *
3 (d) Other creditable nonschool service.--Contributions on
4 account of Class T-C credit for creditable nonschool service
5 other than military service shall be determined by applying the
6 member's basic contribution rate plus the normal contribution
7 rate as provided in section 8328 at the time of the member's
8 entry into school service subsequent to such creditable
9 nonschool service to his total compensation received during the
10 first year of subsequent credited school service and multiplying
11 the product by the number of years and fractional part of a year
12 of creditable nonschool service being purchased together with
13 statutory interest during all periods of subsequent school or
14 State service to the date of purchase, except that in the case
15 of purchase of credit for creditable nonschool service as set
16 forth in section 8304(b)(5) (relating to creditable nonschool
17 service) the member shall pay only the employee's share unless
18 otherwise provided by law. Upon certification of the amount due,
19 payment may be made in a lump sum within 90 days or in the case
20 of an active member or eligible State employee who is an active
21 member of the State Employees' Retirement System it may be
22 amortized with statutory interest through salary deductions [or
23 by personal checks] in amounts agreed upon by the member and the
24 board. The salary deduction amortization plans agreed to by the
25 members and the board may include a deferral of payment amounts
26 and statutory interest until the termination of school service
27 or State service, as the board, in its sole discretion, decides
28 to allow. The board may limit salary deduction amortization
29 plans to such terms as the board, in its sole discretion,
30 determines. In the case of an eligible State employee who is an
20010H0027B3727 - 5 -
1 active member of the State Employes' Retirement System, the
2 agreed upon salary deductions shall be remitted to the State
3 Employees' Retirement Board, which shall certify and transfer to
4 the board the amounts paid.
5 * * *
6 § 8325. Incomplete payments.
7 In the event that a member terminates school service or a
8 multiple service member who is an active member of the State
9 Employees' Retirement System terminates State service before any
10 agreed upon payments or return of benefits on account of
11 returning to school service or entering State service and
12 electing multiple service have been completed the member or
13 multiple service member who is an active member of the State
14 Employees' Retirement System shall have the right to pay within
15 30 days of termination of school service or State service the
16 balance due, including interest, in a lump sum and the annuity
17 shall be calculated including full credit for the previous
18 school service, creditable nonschool service, or full-coverage
19 membership. In the event a member does not pay the balance due
20 within 30 days of termination of school service or in the event
21 a member dies in school service or within 30 days of termination
22 of school service or in the case of a multiple service member
23 who is an active member of the State Employees' Retirement
24 System, does not pay the balance due within 30 days of
25 termination of State service or dies in State service or within
26 30 days of termination of State service and before the agreed
27 upon payments have been completed, the present value of the
28 benefit otherwise payable shall be reduced by the balance due,
29 including interest, and the benefit payable shall be calculated
30 as the actuarial equivalent of such reduced present value.
20010H0027B3727 - 6 -
1 Section 3. Section 8346(a) of Title 24 is amended and the
2 section is amended by adding a subsection to read:
3 § 8346. Termination of annuities.
4 (a) General rule.--If an annuitant returns to school service
5 or enters or has entered State service and elects multiple
6 service membership, any annuity payable to him under this part
7 shall cease effective upon the date of his return to school
8 service or entering State service and in the case of an annuity
9 other than a disability annuity the present value of such
10 annuity, adjusted for full coverage in the case of a joint
11 coverage member who makes the appropriate back contributions for
12 full coverage, shall be frozen as of the date such annuity
13 ceases. An annuitant who is credited with an additional 10% of
14 membership service as provided in section 8302(b.2) (relating to
15 credited school service) and who returns to school service,
16 except as provided in subsection (b), shall forfeit such
17 credited service and shall have his frozen present value
18 adjusted as if his 10% retirement incentive had not been applied
19 to his account. In the event that the cost-of-living increase
20 enacted December 18, 1979, occurred during the period of such
21 State or school employment, the frozen present value shall be
22 increased, on or after the member attains superannuation age, by
23 the percent applicable had he not returned to service.
24 (a.1) Return of benefits.--In the event an annuitant whose
25 annuity ceases pursuant to this section receives any annuity
26 payment, including a lump sum payment pursuant to section 8345
27 (relating to member's options) on or after the date of his
28 return to school service or entering State service, he shall
29 return to the board the amount so received plus statutory
30 interest. The amount payable shall be certified in each case by
20010H0027B3727 - 7 -
1 the board in accordance with methods approved by the actuary and
2 shall be paid in a lump sum within 90 days or in the case of an
3 active member or State employee who is an active member of the
4 State Employees' Retirement System may be amortized with
5 statutory interest through salary deductions in amounts agreed
6 upon by the member and the board. In the case of a State
7 employee who is an active member of the State Employees'
8 Retirement System, the agreed upon salary deductions shall be
9 remitted to the State Employees' Retirement Board, which shall
10 certify and transfer to the board the amounts paid.
11 * * *
12 Section 4. Sections 8502(m) and 8504(b) of Title 24 are
13 amended to read:
14 § 8502. Administrative duties of board.
15 * * *
16 (m) Member contributions and interest.--The board shall
17 cause each member's contributions, including payroll deductions,
18 pickup contributions and all other payments, including, but not
19 limited to, amounts collected by the State Employees' Retirement
20 System for the reinstatement of previous school service or
21 creditable nonschool service, and amounts paid to return
22 benefits paid after the date of return to school service or
23 entering State service representing lump sum payments made
24 pursuant to section 8345(a)(4)(iii) (relating to member's
25 options) and member's annuity payments, but not including other
26 benefits returned pursuant to section 8346(a.1) (relating to
27 termination of annuities) to be credited to the account of such
28 member and shall pay all such amounts into the fund. Such
29 contributions shall be credited with statutory interest until
30 date of termination of service, except in the case of a vestee,
20010H0027B3727 - 8 -
1 who shall have such interest credited until the effective date
2 of retirement or until the return of his accumulated deductions,
3 if he so elects; and in the case of a multiple service member
4 who shall have such interest credited until termination of
5 service in both the school and the State systems.
6 * * *
7 § 8504. Duties of board to report to State Employees'
8 Retirement Board.
9 * * *
10 (b) Multiple service membership of State employees.--Upon
11 receipt of notification from the State Employees' Retirement
12 Board that a former school employee has become an active member
13 in the State Employees' Retirement System and has elected to
14 receive credit for multiple service, the board shall certify to
15 the State Employees' Retirement Board and concurrently to the
16 member:
17 (1) The total credited service in the system and the
18 number of years and fractional part of a year of service
19 credited in each class of service.
20 (2) The annual compensation received each school year by
21 the member for credited school service.
22 (3) If the member has elected payroll deductions
23 pursuant to section 8323 (relating to member contributions
24 for creditable school service) or 8324 (relating to
25 contributions for purchase of credit for creditable nonschool
26 service), the amount of the deductions and the period over
27 which they are to be made.
28 * * *
29 Section 5. Section 8505(b) of Title 24 is amended and the
30 section is amended by adding a subsection to read:
20010H0027B3727 - 9 -
1 § 8505. Duties of board regarding applications and elections of
2 members.
3 * * *
4 (b) State employees electing multiple service status.--Upon
5 receipt of notification from the State Employees' Retirement
6 Board that a former school employee has become an active member
7 in the State Employees' Retirement System and has elected to
8 become a member with multiple service status, the board shall:
9 (1) In case of a member who is receiving an annuity from
10 the system[, discontinue]:
11 (i) Discontinue payments, transfer the present
12 value[, at that time,] of the member's annuity at the
13 time of entering State service, plus the amount withdrawn
14 in a lump sum payment, on or after the date of entering
15 State service, pursuant to section 8345 (relating to
16 member's options), with statutory interest to date of
17 transfer, minus the amount to be returned to the board on
18 account of return to service that the board has
19 determined is to be credited in the member's savings
20 account, from the annuity reserve account to the
21 [members'] member's savings account and resume crediting
22 of statutory interest on the amount restored to his
23 credit [and transfer].
24 (ii) Transfer the balance of the present value of
25 the total annuity, minus the amount to be returned to the
26 board on account of return to service that the board has
27 determined is to be credited in the State accumulation
28 account, from the annuity reserve account to the State
29 accumulation account.
30 (iii) Certify to the member the amount of lump sum
20010H0027B3727 - 10 -
1 and annuity payments with statutory interest to be
2 returned to the board by him, and of those amounts, which
3 amount shall be credited to the member's savings account
4 and credited with statutory interest as such payments are
5 returned and which amount shall be credited 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 * * *
21 (k) School employees electing multiple service status.--Upon
22 receipt of notification from the State Employees' Retirement
23 Board that a member who has elected multiple service membership
24 has elected to restore State service or purchase creditable
25 nonstate service in the State Employees' Retirement System or is
26 obligated to return benefits to the State Employees' Retirement
27 Board on account of electing multiple service membership has
28 elected to pay all or part of the amount due to the State
29 Employees' Retirement Board by salary deductions, the board
30 shall collect from the employee the amounts certified by the
20010H0027B3727 - 11 -
1 State Employees' Retirement Board as due and owing by the member
2 and shall certify and transfer to the State Employees'
3 Retirement Board the amounts so collected.
4 Section 6. Sections 8506(c), (g,) and (h) and 8507(c) of
5 Title 24 are amended to read:
6 § 8506. Duties of employers.
7 * * *
8 (c) Member and employer contributions.--The employer shall
9 certify to its treasurer the required member contributions
10 picked up and any other contributions, including, but not
11 limited to, amounts collected for the State Employees'
12 Retirement Board for the reinstatement of previous State service
13 or creditable nonstate service and amounts paid to return
14 benefits paid after the date of return to State service or
15 entering school service, deducted from each payroll. On July 1,
16 1996, and upon any later effective date of employment of any
17 noneligible member to whom limitation under IRC § 401(a)(17)
18 applies or is expected to apply, the employer shall identify to
19 its treasurer or other payroll administrator the member or
20 members to whom such limit applies or may apply and shall cause
21 any such member's contributions deducted from payroll and the
22 employer's contribution on his behalf to cease at the limitation
23 under IRC § 401(a)(17) on the payroll date if and when such
24 limit shall be reached. 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). If, upon crediting the remittance of a noneligible
29 member's contributions to the member's savings account, the
30 board shall determine that such account shall have been credited
20010H0027B3727 - 12 -
1 with pickup contributions attributable to compensation which is
2 in excess of the annual compensation limit under IRC §
3 401(a)(17), or with total member contributions for such member
4 which would cause such member's contributions or benefits to
5 exceed any applicable limitation on contributions or benefits
6 under IRC § 401(a)(17), the board shall as soon as practicable
7 refund to the member from his individual member account such
8 amount, together with the statutory interest thereon, as will
9 cause the member's total member contributions not to exceed the
10 applicable limit. The payment of any such refund to the member
11 shall be charged to the member's savings account.
12 * * *
13 (g) Former State employee contributors.--The employer shall,
14 upon the employment of a former member of the State Employees'
15 Retirement System who is not an annuitant of the State
16 Employees' Retirement System, advise such employee of his right
17 to elect multiple service membership within [30] 365 days of
18 entry into the system and, in the case any such employee who so
19 elects has withdrawn his accumulated deductions, require him to
20 restore his accumulated deductions as they would have been at
21 the time of his separation had he been a full coverage member,
22 together with statutory interest for all periods of subsequent
23 State and school service to date of repayment. The employer
24 shall advise the board of such election.
25 (h) Former State employee annuitants.--The employer shall,
26 upon the employment of an annuitant of the State Employees'
27 Retirement System who applies for membership in the system,
28 advise such employee that he may elect multiple service
29 membership within [30] 365 days of entry into the system and
30 that if he so elects his annuity from the State Employees'
20010H0027B3727 - 13 -
1 Retirement System will be discontinued effective upon the date
2 of his return to school service and, upon termination of school
3 service and application for an annuity, the annuity will be
4 adjusted in accordance with section 8346 (relating to
5 termination of annuities). The employer shall advise the board
6 of such election.
7 * * *
8 § 8507. Rights and duties of school employees and members.
9 * * *
10 (c) Multiple service membership.--Any active member who was
11 formerly an active member in the State Employees' Retirement
12 System may elect to become a multiple service member. Such
13 election shall occur no later than [30] 365 days after becoming
14 an active member in this system.
15 * * *
16 Section 7. The definition of "salary deductions" in section
17 5102 of Title 71 is amended to read:
18 § 5102. Definitions.
19 The following words and phrases as used in this part, unless
20 a different meaning is plainly required by the context, shall
21 have the following meanings:
22 * * *
23 "Salary deductions." The amounts certified by the board,
24 deducted from the compensation of an active member or the school
25 service compensation of a multiple service member who is an
26 active member of the Public School Employees' Retirement System
27 and paid into the fund.
28 * * *
29 Section 8. Sections 5304(a), 5504((b), 5505(b) and (d) and
30 5506 of Title 71 are amended to read:
20010H0027B3727 - 14 -
1 § 5304. Creditable nonstate service.
2 (a) Eligibility.--An active member or a multiple service
3 member who is a school employee and an active member of the
4 Public School Employees' Retirement System shall be eligible for
5 Class A service credit for creditable nonstate service as set
6 forth in subsections (b) and (c) except that intervening
7 military service shall be credited in the class of service for
8 which the member was eligible at the time of entering into
9 military service and for which he makes the required
10 contributions and except that a multiple service member who is a
11 school employee and an active member of the Public School
12 Employees' Retirement System shall not be eligible to purchase
13 service credit for creditable nonstate service set forth in
14 subsection (c)(5).
15 * * *
16 § 5504. Member contributions for the purchase of credit for
17 previous State service or to become a full coverage
18 member.
19 * * *
20 (b) Certification and method of payment.--The amount payable
21 shall be certified in each case by the board in accordance with
22 methods approved by the actuary and shall be paid in a lump sum
23 within 30 days or in the case of an active member or eligible
24 school employee who is an active member of the Public School
25 Employees' Retirement System may be amortized with statutory
26 interest through salary deductions in amounts agreed upon by the
27 member and the board. The salary deduction amortization plans
28 agreed to by members and the board may include a deferral of
29 payment amounts and statutory interest until the termination of
30 school service or State service, as the board, in its sole
20010H0027B3727 - 15 -
1 discretion, decides to allow. The board may limit salary
2 deduction amortization plans to such terms as the board, in its
3 sole discretion, determines. In the case of an eligible school
4 employee who is an active member of the Public School Employees'
5 Retirement System, the agreed upon salary deductions shall be
6 remitted to the Public School Employees' Retirement Board, which
7 shall certify and transfer to the board the amounts paid.
8 § 5505. Contributions for the purchase of credit for creditable
9 nonstate service.
10 * * *
11 (b) Nonintervening military service.--
12 (1) The amount due for the purchase of credit for
13 military service other than intervening military service
14 shall be determined by applying the member's basic
15 contribution rate, the additional contribution rate plus the
16 Commonwealth normal contribution rate for active members at
17 the time of entry, subsequent to such military service, of
18 the member into State service to his average annual rate of
19 compensation over the first three years of such subsequent
20 State service and multiplying the result by the number of
21 years and fractional part of a year of creditable
22 nonintervening military service being purchased together with
23 statutory interest during all periods of subsequent State and
24 school service to date of purchase. Upon application for
25 credit for such service, payment shall be made in a lump sum
26 within 30 days or in the case of an active member or eligible
27 school employee who is an active member of the Public School
28 Employees' Retirement System it may be amortized with
29 statutory interest through salary deductions in amounts
30 agreed upon by the member and the board. The salary deduction
20010H0027B3727 - 16 -
1 amortization plans agreed to by members and the board may
2 include a deferral of payment amounts and statutory interest
3 until the termination of school service or State service, as
4 the board, in its sole discretion, decides to allow. The
5 board may limit salary deduction amortization plans to such
6 terms as the board, in its sole discretion, determines. In
7 the case of an eligible school employee who is an active
8 member of the Public School Employees' Retirement System, the
9 agreed upon salary deductions shall be remitted to the Public
10 School Employees' Retirement Board, which shall certify and
11 transfer to the board the amounts paid. Application may be
12 filed for all such military service credit upon completion of
13 three years of subsequent State service and shall be credited
14 as Class A service.
15 (2) Applicants may purchase credit as follows:
16 (i) one purchase of the total amount of creditable
17 nonintervening military service; or
18 (ii) one purchase per 12-month period of a portion
19 of creditable nonintervening military service.
20 The amount of each purchase shall be not less than one year
21 of creditable nonintervening military service.
22 * * *
23 (d) Nonmilitary and nonmagisterial service.--Contributions
24 on account of credit for creditable nonstate service other than
25 military and magisterial service shall be determined by applying
26 the member's basic contribution rate, the additional
27 contribution rate plus the Commonwealth normal contribution rate
28 for active members at the time of entry subsequent to such
29 creditable nonstate service of the member into State service to
30 his compensation at the time of entry into State service and
20010H0027B3727 - 17 -
1 multiplying the result by the number of years and fractional
2 part of a year of creditable nonstate service being purchased
3 together with statutory interest during all periods of
4 subsequent State and school service to the date of purchase.
5 Upon application for credit for such service payment shall be
6 made in a lump sum within 30 days or in the case of an active
7 member or eligible school employee who is an active member of
8 the Public School Employees' Retirement System it may be
9 amortized with statutory interest through salary deductions in
10 amounts agreed upon by the member and the board. The salary
11 deduction amortization plans agreed to by members and the board
12 may include a deferral of payment amounts and statutory interest
13 until the termination of school service or State service, as the
14 board, in its sole discretion, decides to allow. The board may
15 limit salary deduction amortization plans to such terms as the
16 board, in its sole discretion, determines. In the case of an
17 eligible school employee who is an active member of the Public
18 School Employees' Retirement System, the agreed upon salary
19 deductions shall be remitted to the Public School Employees'
20 Retirement Board, which shall certify and transfer to the board
21 the amounts paid.
22 * * *
23 § 5506. Incomplete payments.
24 In the event that a member terminates State service or a
25 multiple service member who is an active member of the Public
26 School Employees' Retirement System terminates school service
27 before the agreed upon payments for credit for previous State
28 service, creditable nonstate service, social security
29 integration, [or] full coverage membership or return of benefits
30 on account of returning to State service or entering school
20010H0027B3727 - 18 -
1 service and electing multiple service have been completed, the
2 member or multiple service member who is an active member of the
3 Public School Employees' Retirement System shall have the right
4 to pay within 30 days of termination of State service or school
5 service the balance due, including interest, in a lump sum and
6 the annuity shall be calculated including full credit for the
7 previous State service, creditable nonstate service, social
8 security integration, or full coverage membership. In the event
9 a member does not pay the balance due within 30 days of
10 termination of State service or in the event a member dies in
11 State service or within 30 days of termination of State service
12 or in the case of a multiple service member who is an active
13 member of the Public School Employees' Retirement System, does
14 not pay the balance due within 30 days of termination of school
15 service or dies in school service or within 30 days of
16 termination of school service and before the agreed upon
17 payments have been completed, the present value of the benefit
18 otherwise payable shall be reduced by the balance due, including
19 interest, and the benefit payable shall be calculated as the
20 actuarial equivalent of such reduced present value.
21 Section 9. Section 5706(a) of Title 71 is amended and the
22 section is amended by adding a subsection to read:
23 § 5706. Termination of annuities.
24 (a) General rule.--If the annuitant returns to State service
25 or enters or has entered school service and elects multiple
26 service membership, any annuity payable to him under this part
27 shall cease effective upon the date of his return to State
28 service or entering school service and in the case of an annuity
29 other than a disability annuity the present value of such
30 annuity, adjusted for full coverage in the case of a joint
20010H0027B3727 - 19 -
1 coverage member who makes the appropriate back contributions for
2 full coverage, shall be frozen as of the date such annuity
3 ceases. An annuitant who is credited with an additional 10% of
4 Class A and Class C service as provided in section 5302(c)
5 (relating to credited State service) and who returns to State
6 service shall forfeit such credited service and shall have his
7 frozen present value adjusted as if his 10% retirement incentive
8 had not been applied to his account. In the event that the cost-
9 of-living increase enacted December 18, 1979 occurred during the
10 period of such State or school employment, the frozen present
11 value shall be increased, on or after the member attains
12 superannuation age, by the percent applicable had he not
13 returned to service. This subsection shall not apply in the case
14 of any annuitant who may render services to the Commonwealth in
15 the capacity of an independent contractor or as a member of an
16 independent board or commission or as a member of a departmental
17 administrative or advisory board or commission when such members
18 of independent or departmental boards or commissions are
19 compensated on a per diem basis for not more than 150 days per
20 calendar year.
21 * * *
22 (a.2) Return of benefits.--In the event an annuitant whose
23 annuity ceases pursuant to this section receives any annuity
24 payment, including a lump sum payment pursuant to section 5705
25 (relating to member's options) on or after the date of his
26 return to State service or entering school service, he shall
27 return to the board the amount so received plus statutory
28 interest. The amount payable shall be certified in each case by
29 the board in accordance with methods approved by the actuary and
30 shall be paid in a lump sum within 30 days or in the case of an
20010H0027B3727 - 20 -
1 active member or school employee who is an active member of the
2 Public School Employees' Retirement System may be amortized with
3 statutory interest through salary deductions in amounts agreed
4 upon by the member and the board. In the case of a school
5 employee who is an active member of the Public School Employees'
6 Retirement System, the agreed upon salary deductions shall be
7 remitted to the Public School Employees' Retirement Board, which
8 shall certify and transfer to the board the amounts paid.
9 * * *
10 Section 10. Sections 5902(l) and 5904(b) of Title 71 are
11 amended to read:
12 § 5902. Administrative duties of the board.
13 * * *
14 (l) Member contributions.--The board shall cause all pickup
15 contributions made on behalf of a member to be credited to the
16 account of the member and credit to his account any other
17 payment made by such member, including, but not limited to,
18 amounts collected by the Public School Employees' Retirement
19 System for the reinstatement of previous State service or
20 creditable nonstate service, and amounts paid to return benefits
21 paid after the date of return to State service or entering
22 school service representing lump sum payments made pursuant to
23 section 5705(a)(4)(iii) (relating to member's options) and
24 member's annuity payments, but not including other benefits
25 returned pursuant to section 5706(a.2) (relating to termination
26 of annuities) and shall pay all such amounts into the fund.
27 * * *
28 § 5904. Duties of the board to report to the Public School
29 Employees' Retirement Board.
30 * * *
20010H0027B3727 - 21 -
1 (b) Multiple service membership of school employees.--Upon
2 receipt of notification from the Public School Employees'
3 Retirement Board that a former State employee has become an
4 active member in the Public School Employees' Retirement System
5 and has elected to receive credit for multiple service, the
6 board shall certify to the Public School Employees' Retirement
7 Board and concurrently to the member:
8 (1) the total credited service in the system and the
9 number of years and fractional part of a year of service
10 credited in each class of service;
11 (2) the annual compensation received each calendar year
12 by the member for credited State service; [and]
13 (3) the social security integration credited service to
14 which the member is entitled and the average noncovered
15 salary upon which the single life annuity attributable to
16 such service will be computed[.]; and
17 (4) if the member has elected payroll deductions
18 pursuant to section 5504 (relating to member contributions
19 for the purchase of credit for previous State service or to
20 become a full coverage member) or 5505 (relating to
21 contributions for the purchase of credit for creditable
22 nonstate service), the amount of the deductions and the
23 period over which they are to be made.
24 * * *
25 Section 11. Section 5905(b) of Title 71 is amended and the
26 section is amended by adding a subsection to read:
27 § 5905. Duties of the board regarding applications and
28 elections of members.
29 * * *
30 (b) School employees electing multiple service status.--Upon
20010H0027B3727 - 22 -
1 receipt of notification from the Public School Employees'
2 Retirement Board that a former State employee has become an
3 active member in the Public School Employees' Retirement System
4 and has elected to become a member with multiple service status
5 the board shall:
6 (1) in case of a member receiving an annuity from the
7 system[, discontinue]:
8 (i) discontinue payments, transfer the present
9 value[, at that time,] of the member's annuity at the
10 time of entering school service, plus the amount
11 withdrawn in a lump sum payment, on or after the date of
12 entering school service, pursuant to section 5705
13 (relating to member's options), with statutory interest
14 to date of transfer, minus the amount to be returned to
15 the board on account of return to service, that the board
16 has determined is to be credited in the member's savings
17 account, from the annuity reserve account to the
18 [members'] member's savings account and resume crediting
19 of statutory interest on the amount restored to his
20 credit [and transfer];
21 (ii) transfer the balance of the present value of
22 the total annuity, minus the amount to be returned to the
23 board on account of return to service that the board has
24 determined is to be credited in the State accumulation
25 account, from the annuity reserve account to the State
26 accumulation account; and
27 (iii) certify to the member the amount of lump sum
28 and annuity payments with statutory interest to be
29 returned to the board by him, and of those amounts, which
30 amount shall be credited to the member's savings account
20010H0027B3727 - 23 -
1 and credited with statutory interest as such payments are
2 returned and which amount shall be credited to the State
3 accumulation account; or
4 (2) in case of a member who is not receiving an annuity
5 and has not withdrawn his total accumulated deductions,
6 continue or resume the crediting of statutory interest on his
7 total accumulated deductions during the period his total
8 accumulated deductions remain in the fund; or
9 (3) in case of a former State employee who is not
10 receiving an annuity from the system and his total
11 accumulated deductions were withdrawn, certify to the former
12 State employee the accumulated deductions as they would have
13 been at the time of his separation had he been a full
14 coverage member together with statutory interest for all
15 periods of subsequent State and school service to the date of
16 repayment. Such amount shall be restored by him and shall be
17 credited with statutory interest as such payments are
18 restored.
19 * * *
20 (j) State employees' electing multiple service status.--
21 Upon receipt of notification from the Public School Employees'
22 Retirement Board that a member who has elected multiple service
23 membership has elected to restore school service or purchase
24 creditable nonschool service in the Public School Employees'
25 Retirement System or is obligated to return benefits to the
26 Public School Employees' Retirement Board on account of electing
27 multiple service membership has elected to pay all or part of
28 the amount due to the Public School Employees' Retirement Board
29 by salary deductions, the board shall collect from the employee
30 the amounts certified by the Public School Employees' Retirement
20010H0027B3727 - 24 -
1 Board as due and owing by the member and shall certify and
2 transfer to the Public School Employees' Retirement Board the
3 amounts so collected.
4 Section 12. Sections 5906(c), (g) and (h) and 5907(c) of
5 Title 71 are amended to read:
6 § 5906. Duties of heads of departments.
7 * * *
8 (c) Member contributions.--The head of department shall
9 cause the required pickup contributions for current service to
10 be made and shall cause to be deducted any other required member
11 contributions, including, but not limited to, contributions owed
12 by an active member with multiple service membership for school
13 service and creditable nonschool service in the Public School
14 Employees' Retirement System, and amounts certified by the
15 Public School Employees' Retirement Board as due and owning on
16 account of termination of annuities from each payroll. The head
17 of department shall notify the board at times and in a manner
18 prescribed by the board of the compensation of any noneligible
19 member to whom the limitation under IRC § 401(a)(17) either
20 applies or is expected to apply and shall cause such member's
21 contributions deducted from payroll to cease at the limitation
22 under IRC § 401(a)(17) on the payroll date if and when such
23 limit shall be reached. The head of department shall certify to
24 the State Treasurer the amounts picked up and deducted and shall
25 send the total amount picked up and deducted together with a
26 duplicate of such voucher to the secretary of the board every
27 pay period. The head of department shall pay pickup
28 contributions from the same source of funds which is used to pay
29 other compensation to the employee. On or before January 31,
30 1997, and on or before January 31 of each year thereafter, the
20010H0027B3727 - 25 -
1 head of department shall, at the time when the income and
2 withholding information required by law is furnished to each
3 member, also furnish the amount of pickup contributions made on
4 his behalf and notify the board, if it has not been previously
5 notified, of any noneligible member whose compensation in the
6 preceding year exceeded the annual compensation limit under IRC
7 § 401(a)(17). If the board shall determine that the member's
8 savings account shall have been credited with pickup
9 contributions for a noneligible member in the preceding year
10 which are attributable to compensation in excess of the
11 limitation under IRC § 401(a)(17), or with total member
12 contributions for such member which would cause such member's
13 contributions or benefits to exceed any applicable limitation
14 under IRC § 401(a)(17), the board shall as soon as practicable
15 refund to the member from his individual member account such
16 amount, together with the statutory interest thereon, as will
17 cause the member's total member contributions in the preceding
18 year not to exceed the applicable limit. The payment of any such
19 refund to the member shall be charged to the member's savings
20 account.
21 * * *
22 (g) Former school employee contributors.--The head of
23 department shall, upon the employment of a former contributor to
24 the Public School Employees' Retirement System who is not an
25 annuitant of the Public School Employees' Retirement System,
26 advise such employee of his right to elect within [30] 365 days
27 of entry into the system to become a multiple service member,
28 and in the case of any such employee who so elects and has
29 withdrawn his accumulated deductions, require him to reinstate
30 his credit in the Public School Employees' Retirement System.
20010H0027B3727 - 26 -
1 The head of the department shall advise the board of such
2 election.
3 (h) Former school employee annuitants.--The head of
4 department shall, upon the employment of an annuitant of the
5 Public School Employees' Retirement System who applies for
6 membership in the system, advise such employee that he may elect
7 multiple service membership within [30] 365 days of entry into
8 the system and if he so elects his public school employee's
9 annuity will be discontinued effective upon the date of his
10 return to State service and, upon termination of State service
11 and application for an annuity, the annuity will be adjusted in
12 accordance with section 5706 (relating to termination of
13 annuities). The head of department shall advise the board of
14 such election.
15 * * *
16 § 5907. Rights and duties of State employees and members.
17 * * *
18 (c) Multiple service membership.--Any active member who was
19 formerly an active member in the Public School Employees'
20 Retirement System may elect to become a multiple service member.
21 Such election shall occur no later than [30] 365 days after
22 becoming an active member in this system.
23 * * *
24 Section 13. (a) Notwithstanding the limitation contained in
25 24 Pa.C.S. § 8507(c), any active member of the Public School
26 Employees' Retirement System who was formerly an active member
27 in the State Employees' Retirement System and whose service
28 credit in the State Employees' Retirement System has not been
29 converted to service credited in another public pension plan or
30 retirement system in this Commonwealth may elect to become a
20010H0027B3727 - 27 -
1 multiple service member on or before December 31, 2003.
2 (b) Notwithstanding the limitation contained in 71 Pa.C.S. §
3 5907(c), any active member of the State Employees' Retirement
4 System who was formerly an active member of the Public School
5 Employees' Retirement System and whose service credit in the
6 Public School Employees' Retirement System has not been
7 converted to service credited in another public pension plan or
8 retirement system in this Commonwealth may elect to become a
9 multiple service member on or before December 31, 2003.
10 Section 14. (a) Except as provided in subsection (b), this
11 act shall apply retroactively to the date of enactment.
12 (b) Deceased members of the State Employees' Retirement
13 System or Public School Employees' Retirement System with a date
14 of death on or before 180 days after the enactment of this act,
15 or their personal representatives, may not elect multiple
16 service membership pursuant to this act.
17 Section 15. This act shall take effect on the first day of
18 the month next following 180 days after the date of enactment.
19 SECTION 1. SECTIONS 8304(A), 8305.1(C), 8328 AND 8346(A.1) <--
20 AND (B) OF TITLE 24 OF THE PENNSYLVANIA CONSOLIDATED STATUTES
21 ARE AMENDED TO READ:
22 § 8304. CREDITABLE NONSCHOOL SERVICE.
23 (A) ELIGIBILITY.--AN ACTIVE MEMBER OR A MULTIPLE SERVICE
24 MEMBER WHO IS AN ACTIVE MEMBER OF THE STATE EMPLOYEES'
25 RETIREMENT SYSTEM SHALL BE ELIGIBLE TO RECEIVE CLASS T-C SERVICE
26 CREDIT FOR CREDITABLE NONSCHOOL SERVICE AND CLASS T-D SERVICE
27 FOR INTERVENING MILITARY SERVICE, PROVIDED THE MEMBER [ELECTS
28 TO] BECOME A CLASS T-D MEMBER PURSUANT TO SECTION 8305.1
29 (RELATING TO ELECTION TO BECOME A CLASS T-D MEMBER) OR SECTION
30 8305 (RELATING TO CLASSES OF SERVICE), AS SET FORTH IN
20010H0027B3727 - 28 -
1 SUBSECTION (B) PROVIDED THAT HE IS NOT ENTITLED TO RECEIVE,
2 ELIGIBLE TO RECEIVE NOW OR IN THE FUTURE, OR IS RECEIVING
3 RETIREMENT BENEFITS FOR SUCH SERVICE UNDER A RETIREMENT SYSTEM
4 ADMINISTERED AND WHOLLY OR PARTIALLY PAID FOR BY ANY OTHER
5 GOVERNMENTAL AGENCY OR BY ANY PRIVATE EMPLOYER, OR A RETIREMENT
6 PROGRAM APPROVED BY THE EMPLOYER IN ACCORDANCE WITH SECTION
7 8301(A)(1) (RELATING TO MANDATORY AND OPTIONAL MEMBERSHIP), AND
8 FURTHER PROVIDED THAT SUCH SERVICE IS CERTIFIED BY THE PREVIOUS
9 EMPLOYER AND THE MANNER OF PAYMENT OF THE AMOUNT DUE IS AGREED
10 UPON BY THE MEMBER, THE EMPLOYER, AND THE BOARD.
11 * * *
12 § 8305.1. ELECTION TO BECOME A CLASS T-D MEMBER.
13 * * *
14 (C) EFFECT OF ELECTION.--AN ELECTION TO BECOME A CLASS T-D
15 MEMBER SHALL REMAIN IN EFFECT UNTIL THE TERMINATION OF
16 EMPLOYMENT [AND SHALL RESULT IN ALL SERVICE WHICH COULD HAVE
17 BEEN CREDITED AS CLASS T-C SERVICE BEING CREDITED AS CLASS T-D
18 SERVICE]. THOSE MEMBERS WHO, ON THE EFFECTIVE DATE OF THIS
19 SECTION, CONTRIBUTE AT THE RATE OF 5 1/4% SHALL BE DEEMED TO
20 HAVE ACCEPTED THE BASIC CONTRIBUTION RATE OF 6 1/2% FOR ALL
21 CLASS T-D SERVICE PERFORMED ON OR AFTER JANUARY 1, 2002. THOSE
22 MEMBERS WHO, ON THE EFFECTIVE DATE OF THIS SECTION, CONTRIBUTE
23 AT THE RATE OF 6 1/4% SHALL BE DEEMED TO HAVE ACCEPTED THE BASIC
24 CONTRIBUTION RATE OF 7 1/2% FOR ALL CLASS T-D SERVICE PERFORMED
25 ON OR AFTER JANUARY 1, 2002.
26 * * *
27 § 8328. ACTUARIAL COST METHOD.
28 (A) EMPLOYER CONTRIBUTION RATE ON BEHALF OF ACTIVE
29 MEMBERS.--THE AMOUNT OF THE TOTAL EMPLOYER CONTRIBUTIONS ON
30 BEHALF OF ALL ACTIVE MEMBERS SHALL BE COMPUTED BY THE ACTUARY AS
20010H0027B3727 - 29 -
1 A PERCENTAGE OF THE TOTAL COMPENSATION OF ALL ACTIVE MEMBERS
2 DURING THE PERIOD FOR WHICH THE AMOUNT IS DETERMINED AND SHALL
3 BE SO CERTIFIED BY THE BOARD. THE TOTAL CONTRIBUTION RATE ON
4 BEHALF OF ALL ACTIVE MEMBERS SHALL CONSIST OF THE NORMAL
5 CONTRIBUTION RATE AS DEFINED IN SUBSECTION (B) [AND], THE
6 ACCRUED LIABILITY CONTRIBUTION RATE AS DEFINED IN SUBSECTION (C)
7 AND THE SUPPLEMENTAL ANNUITY CONTRIBUTION RATE AS DEFINED IN
8 SUBSECTION (D). THE TOTAL CONTRIBUTION RATE SHALL BE MODIFIED BY
9 THE EXPERIENCE ADJUSTMENT FACTORS AS CALCULATED IN SUBSECTION
10 (E) BUT IN NO CASE SHALL IT BE LESS THAN [ZERO] 1% PLUS THE
11 PREMIUM ASSISTANCE CONTRIBUTION RATE.
12 (B) NORMAL CONTRIBUTION RATE.--THE NORMAL CONTRIBUTION RATE
13 SHALL BE DETERMINED AFTER EACH ACTUARIAL VALUATION. UNTIL ALL
14 ACCRUED LIABILITY CONTRIBUTIONS HAVE BEEN COMPLETED, THE NORMAL
15 CONTRIBUTION RATE SHALL BE DETERMINED, ON THE BASIS OF AN ANNUAL
16 INTEREST RATE AND SUCH MORTALITY AND OTHER TABLES AS SHALL BE
17 ADOPTED BY THE BOARD IN ACCORDANCE WITH GENERALLY ACCEPTED
18 ACTUARIAL PRINCIPLES, AS A LEVEL PERCENTAGE OF THE COMPENSATION
19 OF THE AVERAGE NEW ACTIVE MEMBER, WHICH PERCENTAGE, IF
20 CONTRIBUTED ON THE BASIS OF HIS PROSPECTIVE COMPENSATION THROUGH
21 THE ENTIRE PERIOD OF ACTIVE SCHOOL SERVICE, WOULD BE SUFFICIENT
22 TO FUND THE LIABILITY FOR ANY PROSPECTIVE BENEFIT PAYABLE TO
23 HIM, IN EXCESS OF THAT PORTION FUNDED BY HIS PROSPECTIVE MEMBER
24 CONTRIBUTIONS, EXCEPT FOR THE SUPPLEMENTAL BENEFITS PROVIDED IN
25 SECTIONS 8348 (RELATING TO SUPPLEMENTAL ANNUITIES), 8348.1
26 (RELATING TO ADDITIONAL SUPPLEMENTAL ANNUITIES), 8348.2
27 (RELATING TO FURTHER ADDITIONAL SUPPLEMENTAL ANNUITIES), 8348.3
28 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 1994), 8348.4
29 (RELATING TO SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT)
30 [AND], 8348.5 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING
20010H0027B3727 - 30 -
1 1998), 8348.6 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING
2 2002) AND 8348.7 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING
3 2003).
4 (C) ACCRUED LIABILITY CONTRIBUTION RATE.--FOR THE FISCAL
5 YEAR BEGINNING JULY 1, 2002, THE ACCRUED LIABILITY CONTRIBUTION
6 RATE SHALL BE COMPUTED AS THE RATE OF TOTAL COMPENSATION OF ALL
7 ACTIVE MEMBERS WHICH SHALL BE CERTIFIED BY THE ACTUARY AS
8 SUFFICIENT TO FUND OVER A PERIOD OF TEN YEARS FROM JULY 1, 2002,
9 THE PRESENT VALUE OF THE LIABILITIES FOR ALL PROSPECTIVE
10 BENEFITS OF ACTIVE MEMBERS, EXCEPT FOR THE SUPPLEMENTAL BENEFITS
11 PROVIDED IN SECTIONS 8348, 8348.1, 8348.2, 8348.3, 8348.4 [AND],
12 8348.5, 8348.6 AND 8348.7, IN EXCESS OF THE TOTAL ASSETS IN THE
13 FUND (CALCULATED BY RECOGNIZING THE ACTUARIALLY EXPECTED
14 INVESTMENT RETURN IMMEDIATELY, AND RECOGNIZING THE DIFFERENCE
15 BETWEEN THE ACTUAL INVESTMENT RETURN AND THE ACTUARIALLY
16 EXPECTED INVESTMENT RETURN OVER A FIVE-YEAR PERIOD), EXCLUDING
17 THE BALANCE IN THE ANNUITY RESERVE ACCOUNT, AND OF THE PRESENT
18 VALUE OF NORMAL CONTRIBUTIONS AND OF MEMBER CONTRIBUTIONS
19 PAYABLE WITH RESPECT TO ALL ACTIVE MEMBERS ON JULY 1, 2002,
20 DURING THE REMAINDER OF THEIR ACTIVE SERVICE. THEREAFTER, THE
21 AMOUNT OF EACH ANNUAL ACCRUED LIABILITY CONTRIBUTION SHALL BE
22 EQUAL TO THE AMOUNT OF SUCH CONTRIBUTION FOR THE FISCAL YEAR,
23 BEGINNING JULY 1, 2002, EXCEPT THAT, IF THE ACCRUED LIABILITY IS
24 INCREASED BY LEGISLATION ENACTED SUBSEQUENT TO JUNE 30, 2002,
25 SUCH ADDITIONAL LIABILITY SHALL BE FUNDED OVER A PERIOD OF TEN
26 YEARS FROM THE FIRST DAY OF JULY, COINCIDENT WITH OR NEXT
27 FOLLOWING THE EFFECTIVE DATE OF THE INCREASE. THE AMOUNT OF EACH
28 ANNUAL ACCRUED LIABILITY CONTRIBUTION FOR SUCH ADDITIONAL
29 LEGISLATIVE LIABILITIES SHALL BE EQUAL TO THE AMOUNT OF SUCH
30 CONTRIBUTION FOR THE FIRST ANNUAL PAYMENT.
20010H0027B3727 - 31 -
1 (D) SUPPLEMENTAL ANNUITY CONTRIBUTION RATE.--CONTRIBUTIONS
2 FROM THE COMMONWEALTH AND OTHER EMPLOYERS REQUIRED TO PROVIDE
3 FOR THE PAYMENT OF THE SUPPLEMENTAL ANNUITIES PROVIDED FOR IN
4 SECTIONS 8348, 8348.1, 8348.2, 8348.4 AND 8348.5 SHALL BE PAID
5 OVER A PERIOD OF TEN YEARS FROM JULY 1, 2002. THE FUNDING FOR
6 THE SUPPLEMENTAL ANNUITIES COMMENCING 2002 PROVIDED FOR IN
7 SECTION 8348.6 SHALL BE AS PROVIDED IN SECTION 8348.6(F). THE
8 FUNDING FOR THE SUPPLEMENTAL ANNUITIES COMMENCING 2003 PROVIDED
9 FOR IN SECTION 8348.7 SHALL BE AS PROVIDED IN SECTION 8348.7(F).
10 THE AMOUNT OF EACH ANNUAL SUPPLEMENTAL ANNUITIES CONTRIBUTION
11 SHALL BE EQUAL TO THE AMOUNT OF SUCH CONTRIBUTION FOR THE FISCAL
12 YEAR BEGINNING JULY 1, 2002. IN THE EVENT THAT SUPPLEMENTAL
13 ANNUITIES ARE INCREASED BY LEGISLATION ENACTED SUBSEQUENT TO
14 JUNE 30, 2002, THE ADDITIONAL LIABILITY FOR THE INCREASED
15 BENEFITS TO BE AMORTIZED SHALL BE FUNDED IN EQUAL DOLLAR ANNUAL
16 INSTALLMENTS OVER A PERIOD OF TEN YEARS [FROM THE JULY 1,
17 COINCIDENT WITH OR NEXT FOLLOWING THE EFFECTIVE DATE OF SUCH
18 LEGISLATION].
19 (E) EXPERIENCE ADJUSTMENT FACTOR.--FOR EACH YEAR AFTER THE
20 ESTABLISHMENT OF THE ACCRUED LIABILITY CONTRIBUTION RATE FOR THE
21 FISCAL YEAR BEGINNING JULY 1, 2002, ANY INCREASE OR DECREASE IN
22 THE UNFUNDED ACCRUED LIABILITY [(INCLUDING LIABILITY FOR
23 SUPPLEMENTAL ANNUITIES)], EXCLUDING THE GAINS OR LOSSES ON THE
24 ASSETS OF THE HEALTH INSURANCE ACCOUNT, DUE TO ACTUAL EXPERIENCE
25 DIFFERING FROM ASSUMED EXPERIENCE, CHANGES IN ACTUARIAL
26 ASSUMPTIONS, CHANGES IN THE TERMS AND CONDITIONS OF THE BENEFITS
27 PROVIDED BY THE SYSTEM BY JUDICIAL, ADMINISTRATIVE OR OTHER
28 PROCESSES OTHER THAN LEGISLATION, INCLUDING, BUT NOT LIMITED TO,
29 REINTERPRETATION OF THE PROVISIONS OF THIS PART, SHALL BE
30 AMORTIZED IN EQUAL DOLLAR ANNUAL INSTALLMENTS OVER A PERIOD OF
20010H0027B3727 - 32 -
1 TEN YEARS BEGINNING WITH THE JULY 1 SECOND SUCCEEDING THE
2 ACTUARIAL VALUATION.
3 (F) PREMIUM ASSISTANCE CONTRIBUTION RATE.--FOR [THE] EACH
4 FISCAL YEAR BEGINNING WITH JULY 1, 1991, THE TOTAL CONTRIBUTION
5 RATE AS CALCULATED ACCORDING TO THIS SECTION SHALL BE INCREASED
6 ANNUALLY IN THE FULL AMOUNT CERTIFIED BY THE BOARD AS NECESSARY
7 TO FUND THE PREMIUM ASSISTANCE PROGRAM IN ACCORDANCE WITH
8 SECTION 8509 (RELATING TO HEALTH INSURANCE PREMIUM ASSISTANCE
9 PROGRAM), NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS SECTION.
10 § 8346. TERMINATION OF ANNUITIES.
11 * * *
12 (A.1) RETURN OF BENEFITS.--IN THE EVENT AN ANNUITANT WHOSE
13 ANNUITY CEASES PURSUANT TO THIS SECTION RECEIVES ANY ANNUITY
14 PAYMENT, INCLUDING A LUMP SUM PAYMENT PURSUANT TO SECTION 8345
15 (RELATING TO MEMBER'S OPTIONS) ON OR AFTER THE DATE OF HIS
16 RETURN TO SCHOOL SERVICE OR ENTERING STATE SERVICE, THE
17 ANNUITANT SHALL RETURN TO THE BOARD THE AMOUNT SO RECEIVED PLUS
18 STATUTORY INTEREST. THE AMOUNT PAYABLE SHALL BE CERTIFIED IN
19 EACH CASE BY THE BOARD IN ACCORDANCE WITH METHODS APPROVED BY
20 THE ACTUARY AND SHALL BE PAID IN A LUMP SUM WITHIN 90 DAYS OR IN
21 THE CASE OF AN ACTIVE MEMBER OR A STATE EMPLOYEE WHO IS AN
22 ACTIVE MEMBER OF THE STATE EMPLOYEES' RETIREMENT SYSTEM MAY BE
23 AMORTIZED WITH STATUTORY INTEREST THROUGH SALARY DEDUCTIONS IN
24 AMOUNTS AGREED UPON BY THE MEMBER AND THE BOARD. THE SALARY
25 DEDUCTION AMORTIZATION PLANS AGREED TO BY THE MEMBER AND THE
26 BOARD MAY INCLUDE A DEFERRAL OF PAYMENT AMOUNTS AND STATUTORY
27 INTEREST UNTIL THE TERMINATION OF SCHOOL SERVICE OR STATE
28 SERVICE, AS THE BOARD, IN ITS SOLE DISCRETION, DECIDES TO ALLOW.
29 THE BOARD MAY LIMIT SALARY DEDUCTION AMORTIZATION PLANS TO SUCH
30 TERMS AS THE BOARD, IN ITS SOLE DISCRETION, DETERMINES. IN THE
20010H0027B3727 - 33 -
1 CASE OF A STATE EMPLOYEE WHO IS AN ACTIVE MEMBER OF THE STATE
2 EMPLOYEES' RETIREMENT SYSTEM, THE AGREED UPON SALARY DEDUCTIONS
3 SHALL BE REMITTED TO THE STATE EMPLOYEES' RETIREMENT BOARD,
4 WHICH SHALL CERTIFY AND TRANSFER TO THE BOARD THE AMOUNTS PAID.
5 (B) RETURN TO SCHOOL SERVICE DURING EMERGENCY.--WHEN, IN THE
6 JUDGMENT OF THE EMPLOYER, AN EMERGENCY CREATES AN INCREASE IN
7 THE WORK LOAD SUCH THAT THERE IS SERIOUS IMPAIRMENT OF SERVICE
8 TO THE PUBLIC OR IN THE EVENT OF A SHORTAGE OF APPROPRIATE
9 SUBJECT CERTIFIED TEACHERS, AN ANNUITANT MAY BE RETURNED TO
10 SCHOOL SERVICE FOR A PERIOD NOT TO EXCEED 95 FULL-DAY SESSIONS
11 IN ANY SCHOOL YEAR WITHOUT LOSS OF HIS ANNUITY. IN COMPUTING THE
12 NUMBER OF DAYS AN ANNUITANT HAS RETURNED TO SCHOOL SERVICE, ANY
13 AMOUNT OF TIME LESS THAN ONE-HALF OF A DAY SHALL BE COUNTED AS
14 ONE-HALF OF A DAY.
15 * * *
16 SECTION 2. TITLE 24 IS AMENDED BY ADDING SECTIONS TO READ:
17 § 8348.6. SUPPLEMENTAL ANNUITIES COMMENCING 2002.
18 (A) BENEFITS.--COMMENCING WITH THE FIRST MONTHLY ANNUITY
19 PAYMENT AFTER JULY 1, 2002, ANY ELIGIBLE BENEFIT RECIPIENT SHALL
20 BE ENTITLED TO RECEIVE AN ADDITIONAL MONTHLY SUPPLEMENTAL
21 ANNUITY FROM THE SYSTEM. THIS SHALL BE IN ADDITION TO THE
22 SUPPLEMENTAL ANNUITIES PROVIDED FOR IN SECTIONS 8348 (RELATING
23 TO SUPPLEMENTAL ANNUITIES), 8348.1 (RELATING TO ADDITIONAL
24 SUPPLEMENTAL ANNUITIES), 8348.2 (RELATING TO FURTHER ADDITIONAL
25 SUPPLEMENTAL ANNUITIES), 8348.3 (RELATING TO SUPPLEMENTAL
26 ANNUITIES COMMENCING 1994), 8348.4 (RELATING TO SPECIAL
27 SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT) AND 8348.5 (RELATING TO
28 SUPPLEMENTAL ANNUITIES COMMENCING 1998).
29 (B) AMOUNT OF SUPPLEMENTAL ANNUITY.--THE AMOUNT OF THE
30 SUPPLEMENTAL ANNUITY PAYABLE PURSUANT TO THIS SECTION SHALL BE A
20010H0027B3727 - 34 -
1 PERCENTAGE OF THE AMOUNT OF THE MONTHLY ANNUITY PAYMENT ON JULY
2 1, 2002, DETERMINED ON THE BASIS OF THE MOST RECENT EFFECTIVE
3 DATE OF RETIREMENT, AS FOLLOWS:
4 MOST RECENT EFFECTIVE DATE PERCENTAGE FACTOR
5 OF RETIREMENT
6 JULY 2, 1988, THROUGH JULY 1, 1990 8.0%
7 JULY 2, 1983, THROUGH JULY 1, 1988 10.0%
8 JULY 2, 1980, THROUGH JULY 1, 1983 15.0%
9 PRIOR TO JULY 2, 1980 25.0%
10 (C) PAYMENT.--THE SUPPLEMENTAL ANNUITY PROVIDED UNDER THIS
11 SECTION SHALL BE PAID AUTOMATICALLY UNLESS THE ANNUITANT FILES A
12 WRITTEN NOTICE WITH THE BOARD REQUESTING THAT THE ADDITIONAL
13 MONTHLY SUPPLEMENTAL ANNUITY NOT BE PAID.
14 (D) CONDITIONS.--THE SUPPLEMENTAL ANNUITY PROVIDED UNDER
15 THIS SECTION SHALL BE PAYABLE UNDER THE SAME TERMS AND
16 CONDITIONS AS PROVIDED UNDER THE OPTION PLAN IN EFFECT AS OF
17 JULY 1, 2002.
18 (E) BENEFITS TO BENEFICIARIES OR SURVIVORS.--NO SUPPLEMENTAL
19 ANNUITY PROVIDED UNDER THIS SECTION SHALL BE PAYABLE TO THE
20 BENEFICIARY OR SURVIVOR ANNUITANT OF A MEMBER WHO DIES BEFORE
21 JULY 1, 2002.
22 (F) FUNDING.--THE ADDITIONAL LIABILITY FOR THE INCREASE IN
23 BENEFITS PROVIDED IN THIS SECTION SHALL BE FUNDED IN EQUAL
24 DOLLAR ANNUAL INSTALLMENTS OVER A PERIOD OF TEN YEARS BEGINNING
25 JULY 1, 2003.
26 (G) ELIGIBLE BENEFIT RECIPIENT.--AS USED IN THIS SECTION,
27 THE TERM "ELIGIBLE BENEFIT RECIPIENT" MEANS A PERSON WHO IS
28 RECEIVING A SUPERANNUATION, WITHDRAWAL OR DISABILITY ANNUITY ON
29 JULY 1, 2002, AND WHOSE MOST RECENT EFFECTIVE DATE OF RETIREMENT
30 IS PRIOR TO JULY 2, 1990, BUT THE SUPPLEMENTAL ANNUITIES
20010H0027B3727 - 35 -
1 PROVIDED UNDER THIS SECTION SHALL NOT BE PAYABLE TO AN ANNUITANT
2 RECEIVING A WITHDRAWAL ANNUITY PRIOR TO THE FIRST DAY OF JULY
3 COINCIDENT WITH OR FOLLOWING THE ANNUITANT'S ATTAINMENT OF
4 SUPERANNUATION AGE.
5 § 8348.7. SUPPLEMENTAL ANNUITIES COMMENCING 2003.
6 (A) BENEFITS.--COMMENCING WITH THE FIRST MONTHLY ANNUITY
7 PAYMENT AFTER JULY 1, 2003, ANY ELIGIBLE BENEFIT RECIPIENT SHALL
8 BE ENTITLED TO RECEIVE AN ADDITIONAL MONTHLY SUPPLEMENTAL
9 ANNUITY FROM THE SYSTEM. THIS SHALL BE IN ADDITION TO THE
10 SUPPLEMENTAL ANNUITIES PROVIDED FOR IN SECTIONS 8348 (RELATING
11 TO SUPPLEMENTAL ANNUITIES), 8348.1 (RELATING TO ADDITIONAL
12 SUPPLEMENTAL ANNUITIES), 8348.2 (RELATING TO FURTHER ADDITIONAL
13 SUPPLEMENTAL ANNUITIES), 8348.3 (RELATING TO SUPPLEMENTAL
14 ANNUITIES COMMENCING 1994), 8348.4 (RELATING TO SPECIAL
15 SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT) AND 8348.5 (RELATING TO
16 SUPPLEMENTAL ANNUITIES COMMENCING 1998).
17 (B) AMOUNT OF SUPPLEMENTAL ANNUITY.--THE AMOUNT OF THE
18 SUPPLEMENTAL ANNUITY PAYABLE PURSUANT TO THIS SECTION SHALL BE A
19 PERCENTAGE OF THE AMOUNT OF THE MONTHLY ANNUITY PAYMENT ON JULY
20 1, 2003, DETERMINED ON THE BASIS OF THE MOST RECENT EFFECTIVE
21 DATE OF RETIREMENT, AS FOLLOWS:
22 MOST RECENT EFFECTIVE DATE PERCENTAGE FACTOR
23 OF RETIREMENT
24 JULY 2, 2001, THROUGH JULY 1, 2002 2.27%
25 JULY 2, 2000, THROUGH JULY 1, 2001 3.08%
26 JULY 2, 1999, THROUGH JULY 1, 2000 4.87%
27 JULY 2, 1998, THROUGH JULY 1, 1999 6.35%
28 JULY 2, 1994, THROUGH JULY 1, 1998 7.50%
29 JULY 2, 1990, THROUGH JULY 1, 1994 9.00%
30 PRIOR TO JULY 2, 1990 0.00%
20010H0027B3727 - 36 -
1 (C) PAYMENT.--THE SUPPLEMENTAL ANNUITY PROVIDED UNDER THIS
2 SECTION SHALL BE PAID AUTOMATICALLY UNLESS THE ANNUITANT FILES A
3 WRITTEN NOTICE WITH THE BOARD REQUESTING THAT THE ADDITIONAL
4 MONTHLY SUPPLEMENTAL ANNUITY NOT BE PAID.
5 (D) CONDITIONS.--THE SUPPLEMENTAL ANNUITY PROVIDED UNDER
6 THIS SECTION SHALL BE PAYABLE UNDER THE SAME TERMS AND
7 CONDITIONS AS PROVIDED UNDER THE OPTION PLAN IN EFFECT AS OF
8 JULY 1, 2003.
9 (E) BENEFITS TO BENEFICIARIES OR SURVIVORS.--NO SUPPLEMENTAL
10 ANNUITY PROVIDED UNDER THIS SECTION SHALL BE PAYABLE TO THE
11 BENEFICIARY OR SURVIVOR ANNUITANT OF A MEMBER WHO DIES BEFORE
12 JULY 1, 2003.
13 (F) FUNDING.--THE ADDITIONAL LIABILITY FOR THE INCREASE IN
14 BENEFITS PROVIDED IN THIS SECTION SHALL BE FUNDED IN EQUAL
15 DOLLAR ANNUAL INSTALLMENTS OVER A PERIOD OF TEN YEARS BEGINNING
16 JULY 1, 2004.
17 (G) ELIGIBLE BENEFIT RECIPIENT.--AS USED IN THIS SECTION,
18 THE TERM "ELIGIBLE BENEFIT RECIPIENT" MEANS A PERSON:
19 (1) WHO IS RECEIVING A SUPERANNUATION, WITHDRAWAL OR
20 DISABILITY ANNUITY ON JULY 1, 2003;
21 (2) WHOSE MOST RECENT EFFECTIVE DATE OF RETIREMENT IS
22 PRIOR TO JULY 2, 2002; AND
23 (3) WHOSE CREDITED SERVICE DOES NOT INCLUDE ANY SERVICE
24 CREDITED AS EITHER CLASS T-D, CLASS D-4 OR CLASS AA SERVICE.
25 NOTWITHSTANDING THE ABOVE, THE SUPPLEMENTAL ANNUITIES PROVIDED
26 UNDER THIS SECTION SHALL NOT BE PAYABLE TO AN ANNUITANT
27 RECEIVING A WITHDRAWAL ANNUITY PRIOR TO THE FIRST DAY OF JULY
28 COINCIDENT WITH OR FOLLOWING THE ANNUITANT'S ATTAINMENT OF
29 SUPERANNUATION AGE.
30 SECTION 3. SECTIONS 8349(B) AND 8525(A) OF TITLE 24 ARE
20010H0027B3727 - 37 -
1 AMENDED TO READ:
2 § 8349. PAYMENT OF BENEFITS.
3 * * *
4 (B) DEATH BENEFITS.--IF THE AMOUNT OF A DEATH BENEFIT
5 PAYABLE TO A BENEFICIARY UNDER SECTION 8347 (RELATING TO DEATH
6 BENEFITS) OR UNDER THE PROVISIONS OF OPTION 1 OF SECTION
7 8345(A)(1) (RELATING TO MEMBER'S OPTIONS) IS [$5,000] $10,000 OR
8 MORE, SUCH BENEFICIARY MAY ELECT TO RECEIVE PAYMENT ACCORDING TO
9 ONE OF THE FOLLOWING OPTIONS:
10 (1) A LUMP SUM PAYMENT.
11 (2) AN ANNUITY ACTUARIALLY EQUIVALENT TO THE AMOUNT
12 PAYABLE.
13 (3) A LUMP SUM PAYMENT AND AN ANNUITY SUCH THAT THE
14 ANNUITY IS ACTUARIALLY EQUIVALENT TO THE AMOUNT PAYABLE LESS
15 THE LUMP SUM PAYMENT SPECIFIED BY THE BENEFICIARY.
16 * * *
17 § 8525. ANNUITY RESERVE ACCOUNT.
18 (A) CREDITS AND CHARGES TO ACCOUNT.--THE ANNUITY RESERVE
19 ACCOUNT SHALL BE THE LEDGER ACCOUNT TO WHICH SHALL BE CREDITED
20 THE RESERVES HELD FOR THE PAYMENT OF ANNUITIES AND DEATH
21 BENEFITS ON ACCOUNT OF ALL ANNUITANTS AND THE CONTRIBUTIONS FROM
22 THE COMMONWEALTH AND OTHER EMPLOYERS AS DETERMINED IN ACCORDANCE
23 WITH SECTION 8328 (RELATING TO ACTUARIAL COST METHOD) FOR THE
24 PAYMENT OF THE SUPPLEMENTAL ANNUITIES PROVIDED IN SECTIONS 8348
25 (RELATING TO SUPPLEMENTAL ANNUITIES), 8348.1 (RELATING TO
26 ADDITIONAL SUPPLEMENTAL ANNUITIES), 8348.2 (RELATING TO FURTHER
27 ADDITIONAL SUPPLEMENTAL ANNUITIES), 8348.3 (RELATING TO
28 SUPPLEMENTAL ANNUITIES COMMENCING 1994), 8348.4 (RELATING TO
29 SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT) [AND], 8348.5
30 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 1998), 8348.6
20010H0027B3727 - 38 -
1 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 2002) AND 8348.7
2 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 2003). THE
3 ANNUITY RESERVE ACCOUNT SHALL BE CREDITED WITH VALUATION
4 INTEREST. AFTER THE TRANSFERS PROVIDED IN SECTIONS 8523
5 (RELATING TO MEMBERS' SAVINGS ACCOUNT) AND 8524 (RELATING TO
6 STATE ACCUMULATION ACCOUNT), ALL ANNUITY AND DEATH BENEFIT
7 PAYMENTS SHALL BE CHARGED TO THE ANNUITY RESERVE ACCOUNT AND
8 PAID FROM THE FUND.
9 * * *
10 SECTION 4. THE DEFINITIONS OF "CREDITABLE NONSTATE SERVICE,"
11 "STATE EMPLOYEE," "STATE SERVICE" AND "TOTAL ACCUMULATED
12 DEDUCTIONS" IN SECTION 5102 OF TITLE 71 OF THE PENNSYLVANIA
13 CONSOLIDATED STATUTES ARE AMENDED TO READ:
14 § 5102. DEFINITIONS.
15 THE FOLLOWING WORDS AND PHRASES AS USED IN THIS PART, UNLESS
16 A DIFFERENT MEANING IS PLAINLY REQUIRED BY THE CONTEXT, SHALL
17 HAVE THE FOLLOWING MEANINGS:
18 * * *
19 "CREDITABLE NONSTATE SERVICE." SERVICE OTHER THAN:
20 (1) SERVICE AS A STATE EMPLOYEE [OR];
21 (2) SERVICE CONVERTED TO STATE SERVICE PURSUANT TO
22 SECTION 5303.1 (RELATING TO ELECTION TO CONVERT COUNTY
23 SERVICE TO STATE SERVICE); OR
24 (3) SCHOOL SERVICE CONVERTED TO STATE SERVICE PURSUANT
25 TO SECTION 5303.2 (RELATING TO ELECTION TO CONVERT SCHOOL
26 SERVICE TO STATE SERVICE)
27 FOR WHICH AN ACTIVE MEMBER MAY OBTAIN CREDIT.
28 * * *
29 "STATE EMPLOYEE." ANY PERSON HOLDING A STATE OFFICE OR
30 POSITION UNDER THE COMMONWEALTH, EMPLOYED BY THE STATE
20010H0027B3727 - 39 -
1 GOVERNMENT OF THE COMMONWEALTH, IN ANY CAPACITY WHATSOEVER,
2 EXCEPT AN INDEPENDENT CONTRACTOR OR ANY PERSON COMPENSATED ON A
3 FEE BASIS OR ANY PERSON PAID DIRECTLY BY AN ENTITY OTHER THAN A
4 STATE EMPLOYEES' RETIREMENT SYSTEM EMPLOYER, AND SHALL INCLUDE
5 MEMBERS OF THE GENERAL ASSEMBLY, AND ANY OFFICER OR EMPLOYEE OF
6 THE FOLLOWING:
7 (1) (I) THE DEPARTMENT OF EDUCATION.
8 (II) STATE-OWNED EDUCATIONAL INSTITUTIONS.
9 (III) COMMUNITY COLLEGES.
10 (IV) THE PENNSYLVANIA STATE UNIVERSITY, EXCEPT AN
11 EMPLOYEE IN THE COLLEGE OF AGRICULTURE WHO IS PAID WHOLLY
12 FROM FEDERAL FUNDS OR AN EMPLOYEE WHO IS PARTICIPATING IN
13 THE FEDERAL CIVIL SERVICE RETIREMENT SYSTEM. THE
14 UNIVERSITY SHALL BE TOTALLY RESPONSIBLE FOR ALL EMPLOYER
15 CONTRIBUTIONS UNDER SECTION 5507 (RELATING TO
16 CONTRIBUTIONS BY THE COMMONWEALTH AND OTHER EMPLOYERS).
17 (2) THE PENNSYLVANIA TURNPIKE COMMISSION, THE DELAWARE
18 RIVER PORT AUTHORITY, THE PORT AUTHORITY TRANSIT CORPORATION,
19 THE PHILADELPHIA REGIONAL PORT AUTHORITY, THE DELAWARE RIVER
20 JOINT TOLL BRIDGE COMMISSION, THE STATE PUBLIC SCHOOL
21 BUILDING AUTHORITY, THE GENERAL STATE AUTHORITY, THE STATE
22 HIGHWAY AND BRIDGE AUTHORITY, THE DELAWARE VALLEY REGIONAL
23 PLANNING COMMISSION, THE INTERSTATE COMMISSION OF THE
24 DELAWARE RIVER BASIN, AND THE SUSQUEHANNA RIVER BASIN
25 COMMISSION ANY TIME SUBSEQUENT TO ITS CREATION, PROVIDED THE
26 COMMISSION OR AUTHORITY AGREES TO CONTRIBUTE AND DOES
27 CONTRIBUTE TO THE FUND, FROM TIME TO TIME, THE MONEYS
28 REQUIRED TO BUILD UP THE RESERVES NECESSARY FOR THE PAYMENT
29 OF THE ANNUITIES OF SUCH OFFICERS AND EMPLOYEES WITHOUT ANY
30 LIABILITY ON THE PART OF THE COMMONWEALTH TO MAKE
20010H0027B3727 - 40 -
1 APPROPRIATIONS FOR SUCH PURPOSES, AND PROVIDED IN THE CASE OF
2 EMPLOYEES OF THE INTERSTATE COMMISSION OF THE DELAWARE RIVER
3 BASIN, THAT THE EMPLOYEE SHALL HAVE BEEN A MEMBER OF THE
4 SYSTEM FOR AT LEAST TEN YEARS PRIOR TO JANUARY 1, 1963.
5 (3) ANY SEPARATE INDEPENDENT PUBLIC CORPORATION CREATED
6 BY STATUTE, NOT INCLUDING ANY MUNICIPAL OR QUASI-MUNICIPAL
7 CORPORATION, SO LONG AS HE REMAINS AN OFFICER OR EMPLOYEE OF
8 SUCH PUBLIC CORPORATION, AND PROVIDED THAT SUCH OFFICER OR
9 EMPLOYEE OF SUCH PUBLIC CORPORATION WAS AN EMPLOYEE OF THE
10 COMMONWEALTH IMMEDIATELY PRIOR TO HIS EMPLOYMENT BY SUCH
11 CORPORATION, AND FURTHER PROVIDED SUCH PUBLIC CORPORATION
12 SHALL AGREE TO CONTRIBUTE AND CONTRIBUTES TO THE FUND, FROM
13 TIME TO TIME, THE MONEYS REQUIRED TO BUILD UP THE RESERVES
14 NECESSARY FOR THE PAYMENT OF THE ANNUITIES OF SUCH OFFICERS
15 AND EMPLOYEES WITHOUT ANY LIABILITY ON THE PART OF THE
16 COMMONWEALTH TO MAKE APPROPRIATIONS FOR SUCH PURPOSES.
17 * * *
18 "STATE SERVICE." SERVICE CONVERTED FROM COUNTY SERVICE
19 PURSUANT TO SECTION 5303.1 (RELATING TO ELECTION TO CONVERT
20 COUNTY SERVICE TO STATE SERVICE), CONVERTED FROM SCHOOL SERVICE
21 PURSUANT TO SECTION 5303.2 (RELATING TO ELECTION TO CONVERT
22 SCHOOL SERVICE TO STATE SERVICE) OR RENDERED AS A STATE
23 EMPLOYEE.
24 * * *
25 "TOTAL ACCUMULATED DEDUCTIONS." THE SUM OF THE REGULAR
26 ACCUMULATED DEDUCTIONS, ADDITIONAL ACCUMULATED DEDUCTIONS, THE
27 SOCIAL SECURITY INTEGRATION ACCUMULATED DEDUCTIONS, AND ALL
28 OTHER CONTRIBUTIONS PAID INTO THE FUND FOR THE PURCHASE,
29 TRANSFER OR CONVERSION OF CREDIT FOR SERVICE OR OTHER COVERAGE
30 TOGETHER WITH ALL STATUTORY INTEREST CREDITED THEREON UNTIL THE
20010H0027B3727 - 41 -
1 DATE OF TERMINATION OF SERVICE. IN THE CASE OF A VESTEE OR A
2 SPECIAL VESTEE, STATUTORY INTEREST SHALL BE CREDITED UNTIL THE
3 EFFECTIVE DATE OF RETIREMENT. A MEMBER'S ACCOUNT SHALL NOT BE
4 CREDITED WITH STATUTORY INTEREST FOR MORE THAN TWO YEARS DURING
5 A LEAVE WITHOUT PAY.
6 * * *
7 SECTION 5. TITLE 71 IS AMENDED BY ADDING A SECTION TO READ:
8 § 5103. NOTICE TO MEMBERS.
9 NOTICE BY PUBLICATION, INCLUDING, WITHOUT BEING LIMITED TO,
10 NEWSLETTERS, NEWSPAPERS, FORMS, FIRST CLASS MAIL, LETTERS,
11 MANUALS AND, TO THE EXTENT AUTHORIZED BY A POLICY ADOPTED BY THE
12 BOARD, ELECTRONICALLY, INCLUDING, WITHOUT BEING LIMITED TO, E-
13 MAIL OR WORLD WIDE WEB SITES, DISTRIBUTED OR MADE AVAILABLE TO
14 MEMBERS IN A MANNER REASONABLY CALCULATED TO GIVE ACTUAL NOTICE
15 OF THOSE SECTIONS OF THE STATE EMPLOYEES' RETIREMENT CODE THAT
16 REQUIRE NOTICE TO MEMBERS SHALL BE DEEMED SUFFICIENT NOTICE FOR
17 ALL PURPOSES.
18 SECTION 6. SECTION 5301(A) OF TITLE 71 IS AMENDED BY ADDING
19 A PARAGRAPH AND THE SECTION IS AMENDED BY ADDING A SUBSECTION TO
20 READ:
21 § 5301. MANDATORY AND OPTIONAL MEMBERSHIP.
22 (A) MANDATORY MEMBERSHIP.--MEMBERSHIP IN THE SYSTEM SHALL BE
23 MANDATORY AS OF THE EFFECTIVE DATE OF EMPLOYMENT FOR ALL STATE
24 EMPLOYEES EXCEPT THE FOLLOWING:
25 * * *
26 (16) EMPLOYEES OF JUVENILE COURT JUDGES' COMMISSION WHO,
27 BEFORE THE EFFECTIVE DATE OF THIS PARAGRAPH, WERE TRANSFERRED
28 FROM THE STATE SYSTEM OF HIGHER EDUCATION TO THE JUVENILE
29 COURT JUDGES' COMMISSION AS A RESULT OF AN INTERAGENCY
30 TRANSFER OF STAFF APPROVED BY THE OFFICE OF ADMINISTRATION
20010H0027B3727 - 42 -
1 AND WHO, WHILE EMPLOYEES OF THE STATE SYSTEM OF HIGHER
2 EDUCATION, HAD ELECTED MEMBERSHIP IN AN INDEPENDENT
3 RETIREMENT PROGRAM APPROVED BY THE EMPLOYER.
4 * * *
5 (F) ADDITIONAL OPTIONAL MEMBERSHIP.--THE STATE EMPLOYEES
6 LISTED IN SUBSECTION (A)(16) SHALL BE MANDATORY MEMBERS OF THE
7 SYSTEM AS OF THE EFFECTIVE DATE OF EMPLOYMENT WITH THE JUVENILE
8 COURT JUDGES' COMMISSION UNLESS THEY ELECT MEMBERSHIP IN AN
9 INDEPENDENT RETIREMENT PROGRAM APPROVED BY THE JUVENILE COURT
10 JUDGES' COMMISSION. EMPLOYEES WHO ELECT MEMBERSHIP IN AN
11 INDEPENDENT RETIREMENT PROGRAM APPROVED BY THE JUVENILE COURT
12 JUDGES' COMMISSION SHALL BE PROHIBITED FROM BEING ACTIVE MEMBERS
13 IN THE SYSTEM WHILE EMPLOYED BY THE JUVENILE COURT JUDGES'
14 COMMISSION. IF AN EMPLOYEE DESCRIBED IN THIS SUBSECTION BECOMES
15 A STATE EMPLOYEE WITH AN EMPLOYER OTHER THAN THE JUVENILE COURT
16 JUDGES' COMMISSION, THEN MEMBERSHIP FOR THAT EMPLOYEE SHALL BE
17 DETERMINED AS OTHERWISE PROVIDED FOR IN THIS PART. THE ELECTION
18 OF MEMBERSHIP IN THE INDEPENDENT RETIREMENT PROGRAM APPROVED BY
19 THE JUVENILE COURT JUDGES' COMMISSION MUST BE MADE BY THE
20 TRANSFERRED EMPLOYEE FILING WRITTEN NOTICE WITH THE EMPLOYER
21 WHILE A STATE EMPLOYEE NO LATER THAN 90 DAYS AFTER THE EFFECTIVE
22 DATE OF THIS SUBSECTION. UPON RECEIPT OF SUCH AN ELECTION, THE
23 JUVENILE COURT JUDGES' COMMISSION SHALL CERTIFY THE ELECTION TO
24 THE BOARD AND THE INDEPENDENT RETIREMENT PROGRAM.
25 SECTION 7. SECTION 5302 OF TITLE 71 IS AMENDED BY ADDING A
26 SUBSECTION TO READ:
27 § 5302. CREDITED STATE SERVICE.
28 * * *
29 (D.2) EFFECT OF CONVERTING SCHOOL SERVICE.--A STATE EMPLOYEE
30 WHO CONVERTS SCHOOL SERVICE FROM THE PUBLIC SCHOOL EMPLOYEES'
20010H0027B3727 - 43 -
1 RETIREMENT SYSTEM PURSUANT TO SECTION 5303.2 (RELATING TO
2 ELECTION TO CONVERT SCHOOL SERVICE TO STATE SERVICE) SHALL
3 RECEIVE ONE YEAR OR FRACTIONAL PART OF A YEAR OF STATE SERVICE
4 CREDIT FOR EACH YEAR OR FRACTIONAL PART OF A YEAR, AS THE CASE
5 MAY BE, OF SCHOOL SERVICE CREDITED IN THE PUBLIC SCHOOL
6 EMPLOYEES' RETIREMENT SYSTEM, PROVIDED HOWEVER, THAT NO MORE
7 THAN ONE YEAR OF STATE SERVICE OF ALL CLASSES WILL BE CREDITED
8 FOR ANY ONE CALENDAR YEAR.
9 * * *
10 SECTION 8. SECTION 5303(B) OF TITLE 71 IS AMENDED BY ADDING
11 A PARAGRAPH AND THE SECTION IS AMENDED BY ADDING A SUBSECTION TO
12 READ:
13 § 5303. RETENTION AND REINSTATEMENT OF SERVICE CREDITS.
14 * * *
15 (B) ELIGIBILITY POINTS FOR PROSPECTIVE CREDITED SERVICE.--
16 * * *
17 (1.2) EVERY MEMBER OF THE SYSTEM WHO ELECTS TO CONVERT
18 SCHOOL SERVICE TO STATE SERVICE PURSUANT TO SECTION 5303.2
19 (RELATING TO ELECTION TO CONVERT SCHOOL SERVICE TO STATE
20 SERVICE) SHALL RECEIVE ELIGIBILITY POINTS IN ACCORDANCE WITH
21 SECTION 5307 FOR CONVERTED SCHOOL SERVICE. THE CLASS OR
22 CLASSES OF SERVICE IN WHICH THE MEMBER MAY BE CREDITED FOR
23 CONVERTED SCHOOL SERVICE SHALL BE DETERMINED IN ACCORDANCE
24 WITH SECTION 5306(D).
25 * * *
26 (G) CREDIT FOR EMPLOYEES OF JUVENILE COURT JUDGES'
27 COMMISSION.--AN EMPLOYEE OF THE JUVENILE COURT JUDGES'
28 COMMISSION WHO ELECTS MEMBERSHIP IN AN INDEPENDENT RETIREMENT
29 PROGRAM APPROVED BY THE EMPLOYER UNDER SECTION 5301(F) SHALL
30 HAVE ALL SERVICE CREDITED PURSUANT TO SECTION 5302(A) (RELATING
20010H0027B3727 - 44 -
1 TO CREDITED STATE SERVICE) FOR STATE SERVICE WITH THE JUVENILE
2 COURT JUDGES' COMMISSION ON OR AFTER THE EFFECTIVE DATE OF THE
3 INTERAGENCY TRANSFER CANCELED AND THEREAFTER INELIGIBLE TO BE
4 CREDITED AS STATE SERVICE. ADDITIONALLY ALL CREDITABLE STATE
5 SERVICE AND NONSTATE SERVICE REINSTATED OR PURCHASED WHILE AN
6 EMPLOYEE OF THE JUVENILE COURT JUDGES' COMMISSION SHALL BE
7 CANCELED. SUCH EMPLOYEES SHALL BE PROHIBITED FROM RECEIVING
8 CREDITED SERVICE FOR STATE SERVICE PERFORMED WHILE A MEMBER OF
9 AN ALTERNATE RETIREMENT SYSTEM APPROVED BY AN EMPLOYER.
10 SECTION 9. TITLE 71 IS AMENDED BY ADDING A SECTION TO READ:
11 § 5303.2. ELECTION TO CONVERT SCHOOL SERVICE TO STATE SERVICE.
12 (A) ELIGIBILITY.--AN ACTIVE MEMBER OR INACTIVE MEMBER ON
13 LEAVE WITHOUT PAY WHO WAS AN EMPLOYEE TRANSFERRED FROM THE
14 DEPARTMENT OF EDUCATION TO THE DEPARTMENT OF CORRECTIONS
15 PURSUANT TO SECTION 908-B OF THE ACT OF APRIL 9, 1929 (P.L.177,
16 NO.175), KNOWN AS THE ADMINISTRATIVE CODE OF 1929, AND WHO ON
17 THE EFFECTIVE DATE OF THAT TRANSFER DID NOT PARTICIPATE IN AN
18 INDEPENDENT RETIREMENT PROGRAM APPROVED BY THE DEPARTMENT OF
19 EDUCATION UNDER 24 PA.C.S. § 8301(A)(1) (RELATING TO MANDATORY
20 AND OPTIONAL MEMBERSHIP) OR SECTION 5301(A)(12) (RELATING TO
21 MANDATORY AND OPTIONAL MEMBERSHIP), NOTWITHSTANDING ANY OTHER
22 PROVISION OF LAW OR ANY COLLECTIVE BARGAINING AGREEMENT,
23 ARBITRATION AWARD, CONTRACT OR TERM OR CONDITIONS OF ANY
24 RETIREMENT SYSTEM OR PENSION PLAN, MAY MAKE A ONE-TIME ELECTION
25 TO CONVERT ALL SERVICE CREDITED IN THE PUBLIC SCHOOL EMPLOYEES'
26 RETIREMENT SYSTEM AS OF JUNE 30, 1999, AND TRANSFER TO THE
27 SYSTEM ALL ACCUMULATED MEMBER CONTRIBUTIONS AND STATUTORY
28 INTEREST CREDITED IN THE MEMBERS' SAVINGS ACCOUNT IN THE PUBLIC
29 SCHOOL EMPLOYEES' RETIREMENT SYSTEM AS OF JUNE 30, 1999, PLUS
30 STATUTORY INTEREST ON THAT AMOUNT CREDITED BY THE PUBLIC SCHOOL
20010H0027B3727 - 45 -
1 EMPLOYEES' RETIREMENT SYSTEM FROM JULY 1, 1999, TO THE DATE OF
2 TRANSFER TO THE SYSTEM.
3 (B) TIME FOR MAKING ELECTION.--AN ELECTION PURSUANT TO
4 SUBSECTION (A) MUST BE MADE BY THE MEMBER FILING WRITTEN NOTICE
5 WITH THE BOARD ON OR BEFORE 90 DAYS AFTER THE EFFECTIVE DATE OF
6 THIS SECTION OR BEFORE THE MEMBER TERMINATES STATE SERVICE,
7 WHICHEVER OCCURS FIRST.
8 (C) EFFECT OF ELECTION.--AN ELECTION TO HAVE CREDITED
9 SERVICE AND ACCUMULATED DEDUCTIONS IN THE PUBLIC SCHOOL
10 EMPLOYEES' RETIREMENT SYSTEM TRANSFERRED TO THE SYSTEM SHALL
11 BECOME EFFECTIVE WHEN THE ELECTION IS FILED WITH THE BOARD. IF A
12 MEMBER ELECTS TO TRANSFER CREDITED SERVICE FROM THE PUBLIC
13 SCHOOL EMPLOYEES' RETIREMENT SYSTEM TO THE SYSTEM, THEN ALL
14 SCHOOL SERVICE AND NONSCHOOL SERVICE CREDITED IN THE PUBLIC
15 SCHOOL EMPLOYEES' RETIREMENT SYSTEM ON JUNE 30, 1999, SHALL BE
16 CONVERTED TO STATE SERVICE AND NONSTATE SERVICE RESPECTIVELY AND
17 CREDITED IN THE SYSTEM IN ACCORDANCE WITH SECTION 5306(D)
18 (RELATING TO CLASSES OF SERVICE). ALL ACCUMULATED MEMBER
19 CONTRIBUTIONS AND STATUTORY INTEREST CREDITED IN THE MEMBERS'
20 SAVINGS ACCOUNT IN THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT
21 SYSTEM ON JUNE 30, 1999, PLUS STATUTORY INTEREST ON THAT AMOUNT
22 CREDITED BY THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM FROM
23 JULY 1, 1999, TO THE DATE OF TRANSFER TO THE SYSTEM SHALL BE
24 TRANSFERRED TO THE SYSTEM AND CREDITED IN THE MEMBERS' SAVINGS
25 ACCOUNT IN THE SYSTEM. SCHOOL SERVICE WHICH WOULD HAVE BEEN
26 SERVICE AS A CORRECTIONS OFFICER AS DEFINED IN SECTION 5102
27 (RELATING TO DEFINITIONS) HAD THE EMPLOYEE BEEN A MEMBER OF THE
28 SYSTEM AT THE TIME IT WAS PERFORMED SHALL BE CREDITED AS
29 CORRECTIONS OFFICER SERVICE. AFTER THE EFFECTIVE DATE OF THE
30 CONVERSION, THE CONVERTED SERVICE SHALL NOT BE CONSIDERED SCHOOL
20010H0027B3727 - 46 -
1 OR NONSCHOOL SERVICE FOR ANY PURPOSE, BUT SHALL BE CONSIDERED
2 STATE AND NONSTATE SERVICE FOR ALL PURPOSES.
3 (D) EFFECT OF FAILURE TO MAKE ELECTION.--FAILURE TO ELECT TO
4 CONVERT SCHOOL SERVICE AND NONSCHOOL SERVICE TO STATE SERVICE
5 AND NONSTATE SERVICE WITHIN THE ELECTION PERIOD SET FORTH IN
6 SUBSECTION (B) SHALL RESULT IN THE CREDITED SERVICE IN THE
7 PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM NOT BEING CONVERTED.
8 TRANSFERRED EMPLOYEES WHO DO NOT ELECT TO CONVERT SCHOOL SERVICE
9 AND NONSCHOOL SERVICE SHALL NOT HAVE THE OPPORTUNITY TO MAKE A
10 SUBSEQUENT CONVERSION ELECTION SHOULD THEY LATER OBTAIN
11 DIFFERENT EMPLOYMENT IN THE DEPARTMENT OF CORRECTIONS OR OTHER
12 STATE EMPLOYMENT ELIGIBLE FOR MEMBERSHIP IN THE SYSTEM.
13 (E) TRANSFER.--WITHIN 180 DAYS AFTER THE EFFECTIVE DATE OF
14 THIS SUBSECTION, THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM
15 SHALL TRANSFER TO THE BOARD FOR EACH MEMBER ELECTING TO CONVERT
16 UNDER THIS SECTION THE ACCUMULATED MEMBER CONTRIBUTIONS AND
17 STATUTORY INTEREST CREDITED IN THE PUBLIC SCHOOL EMPLOYEES'
18 RETIREMENT SYSTEM, PLUS AN AMOUNT EQUAL TO THE VALUE OF ALL
19 ANNUAL EMPLOYER CONTRIBUTIONS MADE TO THE PUBLIC SCHOOL
20 EMPLOYEES' RETIREMENT SYSTEM WITH INTEREST AT THE ANNUAL RATE
21 ADOPTED BY THE BOARD FOR THE CALCULATION OF THE NORMAL
22 CONTRIBUTION RATE UNDER SECTION 5508(B) (RELATING TO ACTUARIAL
23 COST METHOD), FROM THE DATE OF EACH CONTRIBUTION TO THE DATE OF
24 THE TRANSFER OF THE FUNDS TO THE BOARD. ANY DEBT OWED BY A
25 MEMBER TO THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM FOR
26 WHATEVER REASON SHALL BE TRANSFERRED TO THE SYSTEM AND SHALL BE
27 PAID IN A MANNER AND IN ACCORDANCE WITH CONDITIONS PRESCRIBED BY
28 THE BOARD.
29 (F) DETERMINATION OF ADDITIONAL ACTUARIAL LIABILITY FOR
30 CONVERTED SCHOOL SERVICE.--NOTWITHSTANDING ANY OTHER PROVISION
20010H0027B3727 - 47 -
1 OF THIS PART OR OTHER LAW, AS PART OF THE FIRST ANNUAL VALUATION
2 MADE AFTER THE EFFECTIVE DATE OF THIS SECTION, THE BOARD SHALL
3 DETERMINE THE TOTAL ADDITIONAL ACTUARIAL ACCRUED LIABILITY
4 RESULTING FROM THE CONVERSION OF SERVICE UNDER THIS SECTION. THE
5 DEPARTMENT OF CORRECTIONS SHALL PAY THE AMOUNT OF THE ADDITIONAL
6 ACTUARIAL ACCRUED LIABILITY TO THE BOARD IN ONE LUMP SUM WITHIN
7 180 DAYS OF THE BOARD'S CERTIFICATION OF THE AMOUNT TO THE
8 DEPARTMENT OF CORRECTIONS.
9 SECTION 10. SECTIONS 5304 AND 5306 OF TITLE 71 ARE AMENDED
10 BY ADDING SUBSECTIONS TO READ:
11 § 5304. CREDITABLE NONSTATE SERVICE.
12 * * *
13 (A.1) ADDITIONAL ELIGIBILITY UPON TRANSFERRING NONSCHOOL
14 SERVICE.--A STATE EMPLOYEE WHO CONVERTS NONSCHOOL SERVICE FROM
15 THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM TO THE SYSTEM
16 PURSUANT TO SECTION 5303.2 (RELATING TO ELECTION TO CONVERT
17 SCHOOL SERVICE TO STATE SERVICE) SHALL RECEIVE ONE YEAR OR
18 FRACTIONAL PART OF A YEAR OF NONSTATE SERVICE CREDIT FOR EACH
19 YEAR OR FRACTIONAL PART OF A YEAR, AS THE CASE MAY BE, OF
20 NONSCHOOL SERVICE CREDITED IN THE PUBLIC SCHOOL EMPLOYEES'
21 RETIREMENT SYSTEM, PROVIDED, HOWEVER, THAT NO MORE THAN ONE YEAR
22 OF STATE AND NONSTATE SERVICE OF ALL CLASSES WILL BE CREDITED
23 FOR ANY ONE CALENDAR YEAR. CONVERTED NONSCHOOL SERVICE SHALL BE
24 CREDITED AS CLASS A AS SET FORTH IN SECTION 5306(D) (RELATING TO
25 CLASSES OF SERVICE).
26 * * *
27 § 5306. CLASSES OF SERVICE.
28 * * *
29 (D) CLASS OF SERVICE FOR CONVERTED SCHOOL SERVICE AND
30 NONSCHOOL SERVICE.--IF A MEMBER ELECTS TO CONVERT CREDITED
20010H0027B3727 - 48 -
1 SERVICE FROM THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM TO
2 THE SYSTEM PURSUANT TO SECTION 5303.2 (RELATING TO ELECTION TO
3 CONVERT SCHOOL SERVICE TO STATE SERVICE), THEN CLASS T-C SCHOOL
4 SERVICE AND ALL NONSCHOOL SERVICE CREDITED IN THE PUBLIC SCHOOL
5 EMPLOYEES' RETIREMENT SYSTEM SHALL BE CONVERTED TO CREDITED
6 SERVICE IN THE SYSTEM AND CREDITED AS CLASS A STATE SERVICE OR
7 NONSTATE SERVICE, RESPECTIVELY AND CLASS T-D SCHOOL SERVICE
8 CREDITED IN THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM SHALL
9 BE CONVERTED TO CREDITED SERVICE IN THE SYSTEM AND CREDITED AS
10 CLASS AA STATE SERVICE.
11 SECTION 11. SECTION 5508 OF TITLE 71 IS AMENDED TO READ:
12 § 5508. ACTUARIAL COST METHOD.
13 (A) EMPLOYER CONTRIBUTION RATE ON BEHALF OF ACTIVE
14 MEMBERS.--THE AMOUNT OF THE COMMONWEALTH AND OTHER EMPLOYER
15 CONTRIBUTIONS ON BEHALF OF ALL ACTIVE MEMBERS SHALL BE COMPUTED
16 BY THE ACTUARY AS A PERCENTAGE OF THE TOTAL COMPENSATION OF ALL
17 ACTIVE MEMBERS DURING THE PERIOD FOR WHICH THE AMOUNT IS
18 DETERMINED AND SHALL BE SO CERTIFIED BY THE BOARD. THE TOTAL
19 EMPLOYER CONTRIBUTION RATE ON BEHALF OF ALL ACTIVE MEMBERS SHALL
20 CONSIST OF THE EMPLOYER NORMAL CONTRIBUTION RATE, AS DEFINED IN
21 SUBSECTION (B), AND THE ACCRUED LIABILITY CONTRIBUTION RATE AS
22 DEFINED IN SUBSECTION (C). THE TOTAL EMPLOYER CONTRIBUTION RATE
23 SHALL BE MODIFIED BY THE EXPERIENCE ADJUSTMENT FACTOR AS
24 CALCULATED IN SUBSECTION (F) BUT IN NO CASE SHALL IT BE LESS
25 THAN ZERO. BEGINNING JULY 1, 2004, THE TOTAL EMPLOYER
26 CONTRIBUTION RATE SHALL BE MODIFIED BY THE EXPERIENCE ADJUSTMENT
27 FACTOR AS CALCULATED IN SUBSECTION (F), BUT IN NO CASE SHALL IT
28 BE LESS THAN 1%.
29 (B) EMPLOYER NORMAL CONTRIBUTION RATE.--THE EMPLOYER NORMAL
30 CONTRIBUTION RATE SHALL BE DETERMINED AFTER EACH ACTUARIAL
20010H0027B3727 - 49 -
1 VALUATION ON THE BASIS OF AN ANNUAL INTEREST RATE AND SUCH
2 MORTALITY AND OTHER TABLES AS SHALL BE ADOPTED BY THE BOARD IN
3 ACCORDANCE WITH GENERALLY ACCEPTED ACTUARIAL PRINCIPLES. THE
4 EMPLOYER NORMAL CONTRIBUTION RATE SHALL BE DETERMINED AS A LEVEL
5 PERCENTAGE OF THE COMPENSATION OF THE AVERAGE NEW ACTIVE MEMBER,
6 WHICH PERCENTAGE, IF CONTRIBUTED ON THE BASIS OF HIS PROSPECTIVE
7 COMPENSATION THROUGH HIS ENTIRE PERIOD OF ACTIVE STATE SERVICE,
8 WOULD BE SUFFICIENT TO FUND THE LIABILITY FOR ANY PROSPECTIVE
9 BENEFIT PAYABLE TO HIM, EXCEPT FOR THE SUPPLEMENTAL BENEFITS
10 PROVIDED FOR IN SECTIONS 5708 (RELATING TO SUPPLEMENTAL
11 ANNUITIES), 5708.1 (RELATING TO ADDITIONAL SUPPLEMENTAL
12 ANNUITIES), 5708.2 (RELATING TO FURTHER ADDITIONAL SUPPLEMENTAL
13 ANNUITIES), 5708.3 (RELATING TO SUPPLEMENTAL ANNUITIES
14 COMMENCING 1994), 5708.4 (RELATING TO SPECIAL SUPPLEMENTAL
15 POSTRETIREMENT ADJUSTMENT) [AND], 5708.5 (RELATING TO
16 SUPPLEMENTAL ANNUITIES COMMENCING 1998), 5708.6 (RELATING TO
17 SUPPLEMENTAL ANNUITIES COMMENCING 2002), 5708.7 (RELATING TO
18 SUPPLEMENTAL ANNUITIES COMMENCING 2003) AND 5708.8 (RELATING TO
19 SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT OF 2002), IN
20 EXCESS OF THAT PORTION FUNDED BY HIS PROSPECTIVE MEMBER
21 CONTRIBUTIONS.
22 (C) ACCRUED LIABILITY CONTRIBUTION RATE.--FOR THE FISCAL
23 YEAR BEGINNING JULY 1, 2002, THE ACCRUED LIABILITY CONTRIBUTION
24 RATE SHALL BE COMPUTED AS THE RATE OF TOTAL COMPENSATION OF ALL
25 ACTIVE MEMBERS WHICH SHALL BE CERTIFIED BY THE ACTUARY AS
26 SUFFICIENT TO FUND OVER A PERIOD OF TEN YEARS FROM JULY 1, 2002,
27 THE PRESENT VALUE OF THE LIABILITIES FOR ALL PROSPECTIVE
28 BENEFITS, EXCEPT FOR THE SUPPLEMENTAL BENEFITS AS PROVIDED IN
29 SECTIONS 5708, 5708.1, 5708.2, 5708.3, 5708.4 [AND], 5708.5,
30 5708.6, 5708.7 AND 5708.8, IN EXCESS OF THE TOTAL ASSETS IN THE
20010H0027B3727 - 50 -
1 FUND (CALCULATED RECOGNIZING ALL INVESTMENT GAINS AND LOSSES
2 OVER A FIVE-YEAR PERIOD), EXCLUDING THE BALANCE IN THE
3 SUPPLEMENTAL ANNUITY ACCOUNT, AND THE PRESENT VALUE OF EMPLOYER
4 NORMAL CONTRIBUTIONS AND OF MEMBER CONTRIBUTIONS PAYABLE WITH
5 RESPECT TO ALL ACTIVE MEMBERS ON [JULY 1, 2002] DECEMBER 31,
6 2001, AND EXCLUDING CONTRIBUTIONS TO BE TRANSFERRED BY COUNTY
7 RETIREMENT SYSTEMS OR PENSION PLANS PURSUANT TO SECTION 5507(C)
8 (RELATING TO CONTRIBUTIONS BY THE COMMONWEALTH AND OTHER
9 EMPLOYERS). THE AMOUNT OF EACH ANNUAL ACCRUED LIABILITY
10 CONTRIBUTION SHALL BE EQUAL TO THE AMOUNT OF SUCH CONTRIBUTION
11 FOR THE FISCAL YEAR BEGINNING JULY 1, 2002, EXCEPT THAT, IF THE
12 ACCRUED LIABILITY IS INCREASED BY LEGISLATION ENACTED SUBSEQUENT
13 TO JUNE 30, 2002, SUCH ADDITIONAL LIABILITY SHALL BE FUNDED OVER
14 A PERIOD OF TEN YEARS FROM THE FIRST DAY OF JULY, COINCIDENT
15 WITH OR NEXT FOLLOWING THE EFFECTIVE DATE OF THE INCREASE. THE
16 AMOUNT OF EACH ANNUAL ACCRUED LIABILITY CONTRIBUTION FOR SUCH
17 ADDITIONAL LEGISLATIVE LIABILITIES SHALL BE EQUAL TO THE AMOUNT
18 OF SUCH CONTRIBUTION FOR THE FIRST ANNUAL PAYMENT.
19 (D) SPECIAL PROVISIONS ON CALCULATING CONTRIBUTIONS.--IN
20 CALCULATING THE CONTRIBUTIONS REQUIRED BY SUBSECTIONS (A), (B)
21 AND (C), THE ACTIVE MEMBERS OF CLASS C SHALL BE CONSIDERED TO BE
22 MEMBERS OF CLASS A. IN ADDITION, THE ACTUARY SHALL DETERMINE THE
23 COMMONWEALTH OR OTHER EMPLOYER CONTRIBUTIONS REQUIRED FOR ACTIVE
24 MEMBERS OF CLASS C AND OFFICERS OF THE PENNSYLVANIA STATE POLICE
25 AND ENFORCEMENT OFFICERS AND INVESTIGATORS OF THE PENNSYLVANIA
26 LIQUOR CONTROL BOARD WHO ARE MEMBERS OF CLASS A TO FINANCE THEIR
27 BENEFITS IN EXCESS OF THOSE TO WHICH OTHER MEMBERS OF CLASS A
28 ARE ENTITLED. SUCH ADDITIONAL CONTRIBUTIONS SHALL BE DETERMINED
29 SEPARATELY FOR OFFICERS AND EMPLOYEES OF THE PENNSYLVANIA STATE
30 POLICE AND FOR ENFORCEMENT OFFICERS AND INVESTIGATORS OF THE
20010H0027B3727 - 51 -
1 PENNSYLVANIA LIQUOR CONTROL BOARD. SUCH CONTRIBUTIONS PAYABLE ON
2 BEHALF OF OFFICERS AND EMPLOYEES OF THE PENNSYLVANIA STATE
3 POLICE SHALL INCLUDE THE AMOUNTS RECEIVED BY THE SYSTEM UNDER
4 THE PROVISIONS OF THE ACT OF MAY 12, 1943 (P.L.259, NO.120),
5 REFERRED TO AS THE FOREIGN CASUALTY INSURANCE PREMIUM TAX
6 ALLOCATION LAW, AND ON BEHALF OF ENFORCEMENT OFFICERS OR
7 INVESTIGATORS OF THE PENNSYLVANIA LIQUOR CONTROL BOARD, THE
8 AMOUNTS RECEIVED BY THE SYSTEM UNDER THE PROVISIONS OF THE ACT
9 OF APRIL 12, 1951 (P.L.90, NO.21), KNOWN AS THE LIQUOR CODE.
10 (E) SUPPLEMENTAL ANNUITY CONTRIBUTION RATE.--CONTRIBUTIONS
11 FROM THE COMMONWEALTH REQUIRED TO PROVIDE FOR THE PAYMENT OF
12 SUPPLEMENTAL ANNUITIES AS PROVIDED IN SECTIONS 5708, 5708.1,
13 5708.2, 5708.3, 5708.4 AND 5708.5 SHALL BE PAID OVER A PERIOD OF
14 TEN YEARS FROM JULY 1, 2002. THE FUNDING FOR THE SUPPLEMENTAL
15 ANNUITIES COMMENCING 2002 PROVIDED FOR IN SECTION 5708.6 SHALL
16 BE AS PROVIDED IN SECTION 5708.6(F). THE FUNDING FOR THE
17 SUPPLEMENTAL ANNUITIES COMMENCING 2003 PROVIDED FOR IN SECTION
18 5708.7 SHALL BE AS PROVIDED IN SECTION 5708.7(F). THE FUNDING
19 FOR THE SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT OF 2002
20 UNDER SECTION 5708.8 SHALL BE AS PROVIDED IN SECTION 5708.8(G).
21 THE AMOUNT OF EACH ANNUAL SUPPLEMENTAL ANNUITIES CONTRIBUTION
22 SHALL BE EQUAL TO THE AMOUNT OF SUCH CONTRIBUTION FOR THE FISCAL
23 YEAR BEGINNING JULY 1, 2002. IN THE EVENT THAT SUPPLEMENTAL
24 ANNUITIES ARE INCREASED BY LEGISLATION ENACTED SUBSEQUENT TO
25 JUNE 30, 2002, THE ADDITIONAL LIABILITY FOR THE INCREASE IN
26 BENEFITS SHALL BE FUNDED IN EQUAL DOLLAR ANNUAL INSTALLMENTS
27 OVER A PERIOD OF TEN YEARS FROM THE JULY FIRST, COINCIDENT WITH
28 OR NEXT FOLLOWING THE EFFECTIVE DATE OF SUCH LEGISLATION.
29 (F) EXPERIENCE ADJUSTMENT FACTOR.--FOR EACH YEAR AFTER THE
30 ESTABLISHMENT OF THE ACCRUED LIABILITY CONTRIBUTION RATE FOR THE
20010H0027B3727 - 52 -
1 FISCAL YEAR BEGINNING JULY 1, 2002, ANY INCREASE OR DECREASE IN
2 THE [ACCRUED] UNFUNDED LIABILITY, INCLUDING LIABILITY FOR
3 SUPPLEMENTAL ANNUITIES, DUE TO ACTUAL EXPERIENCE DIFFERING FROM
4 ASSUMED EXPERIENCE, CHANGES IN ACTUARIAL ASSUMPTIONS, CHANGES IN
5 THE TERMS AND CONDITIONS OF THE BENEFITS PROVIDED BY THE SYSTEM
6 BY JUDICIAL, ADMINISTRATIVE OR OTHER PROCESSES OTHER THAN
7 LEGISLATION, INCLUDING, BUT NOT LIMITED TO, REINTERPRETATION OF
8 THE PROVISIONS OF THIS PART, SHALL BE AMORTIZED IN EQUAL DOLLAR
9 ANNUAL INSTALLMENTS OVER A PERIOD OF TEN YEARS BEGINNING WITH
10 THE JULY 1 SUCCEEDING THE ACTUARIAL VALUATION.
11 (G) DETERMINATION OF LIABILITY FOR SPECIAL VESTEE.--
12 NOTWITHSTANDING ANY OTHER PROVISION OF THIS PART OR OTHER LAW,
13 THE TOTAL ADDITIONAL ACCRUED ACTUARIAL LIABILITY RESULTING FROM
14 ELIGIBILITY OF SPECIAL VESTEES FOR BENEFITS UPON THE ATTAINMENT
15 OF SUPERANNUATION AGE SHALL BE DETERMINED BY THE ACTUARY AS PART
16 OF THE FIRST ANNUAL VALUATION MADE AFTER JUNE 30, 1997. THE
17 RESULTING ADDITIONAL ACCRUED ACTUARIAL LIABILITY SHALL BE PAID
18 BY THE PENNSYLVANIA STATE UNIVERSITY TO THE BOARD IN ONE LUMP
19 SUM PAYMENT WITHIN 90 DAYS OF THE BOARD'S CERTIFICATION OF THE
20 AMOUNT TO THE PENNSYLVANIA STATE UNIVERSITY.
21 SECTION 12. TITLE 71 IS AMENDED BY ADDING A SECTION TO READ:
22 § 5701.1. TRANSFER OF ACCUMULATED DEDUCTIONS.
23 WHEN AN EMPLOYEE OF THE JUVENILE COURT JUDGES' COMMISSION
24 ELECTS MEMBERSHIP IN AN INDEPENDENT RETIREMENT PROGRAM PURSUANT
25 TO SECTION 5301(F) (RELATING TO MANDATORY AND OPTIONAL
26 MEMBERSHIP), THE BOARD SHALL TRANSFER DIRECTLY TO THE TRUSTEE OR
27 ADMINISTRATOR OF THE INDEPENDENT RETIREMENT PROGRAM ALL
28 ACCUMULATED DEDUCTIONS RESULTING FROM SERVICE CREDITED WHILE AN
29 EMPLOYEE OF THE JUVENILE COURT JUDGES' COMMISSION.
30 SECTION 13. SECTIONS 5704(C) AND (F) AND 5706(A.2) OF TITLE
20010H0027B3727 - 53 -
1 71 ARE AMENDED TO READ:
2 § 5704. DISABILITY ANNUITIES.
3 * * *
4 (C) REDUCTION ON ACCOUNT OF EARNED INCOME.--SUBSEQUENT TO
5 JANUARY 1, 1972, PAYMENTS ON ACCOUNT OF DISABILITY SHALL BE
6 REDUCED BY THAT AMOUNT BY WHICH THE EARNED INCOME OF THE
7 ANNUITANT, AS REPORTED IN ACCORDANCE WITH SECTION 5908(B)
8 (RELATING TO RIGHTS AND DUTIES OF ANNUITANTS), FOR THE PRECEDING
9 CALENDAR [QUARTER] YEAR TOGETHER WITH THE DISABILITY ANNUITY
10 PAYMENTS PROVIDED IN THIS SECTION OTHER THAN SUBSECTION (B), FOR
11 THE [QUARTER] YEAR, EXCEEDS THE PRODUCT OF:
12 (I) [THE GREATER OF $1,250 OR ONE-QUARTER OF] THE
13 LAST YEAR'S SALARY OF THE ANNUITANT AS A STATE EMPLOYEE;
14 AND
15 (II) THE RATIO OF THE CURRENT MONTHLY PAYMENT TO THE
16 MONTHLY PAYMENT AT THE EFFECTIVE DATE OF DISABILITY.[;
17 AND
18 (III) THE PERCENTAGE FACTOR DETERMINED BY THE
19 FOLLOWING TABLE FOR THE CALENDAR YEAR OF THE MEMBER'S
20 EFFECTIVE DATE OF DISABILITY:
21 CALENDAR YEAR OF
22 EFFECTIVE DATE OF PERCENTAGE
23 DISABILITY FACTOR
24 1966 OR EARLIER 135%
25 1967 130%
26 1968 125%
27 1969 120%
28 1970 115%
29 1971 110%
20010H0027B3727 - 54 -
1 1972 105%]
2 PROVIDED, THAT THE ANNUITANT SHALL NOT RECEIVE LESS THAN HIS
3 MEMBER'S ANNUITY OR THE AMOUNT TO WHICH HE MAY BE ENTITLED UNDER
4 SECTION 5702 WHICHEVER IS GREATER.
5 * * *
6 (F) SUPPLEMENT FOR SERVICE CONNECTED DISABILITY.--IF A
7 MEMBER HAS BEEN FOUND TO BE ELIGIBLE FOR A DISABILITY ANNUITY
8 AND IF THE DISABILITY HAS BEEN FOUND TO BE A SERVICE CONNECTED
9 DISABILITY AND IF THE MEMBER IS RECEIVING WORKERS' COMPENSATION
10 PAYMENTS FOR OTHER THAN MEDICAL BENEFITS, SUCH MEMBER SHALL
11 RECEIVE A SUPPLEMENT EQUAL TO 70% OF HIS FINAL AVERAGE SALARY
12 LESS THE SUM OF THE ANNUITY AS DETERMINED UNDER SUBSECTION (A)
13 AND ANY PAYMENTS PAID OR PAYABLE ON ACCOUNT OF SUCH DISABILITY
14 UNDER THE ACT OF JUNE 2, 1915 (P.L.736, NO.338), KNOWN AS THE
15 WORKERS' COMPENSATION ACT, THE ACT OF JUNE 21, 1939 (P.L.566,
16 NO.284), KNOWN AS THE PENNSYLVANIA OCCUPATIONAL DISEASE ACT, AND
17 THE SOCIAL SECURITY ACT (49 STAT. 620, 42 U.S.C. § 301 ET SEQ.).
18 SUCH SUPPLEMENT SHALL CONTINUE AS LONG AS HE IS DETERMINED TO BE
19 DISABLED AND IS RECEIVING WORKERS' COMPENSATION PAYMENTS FOR
20 OTHER THAN MEDICAL BENEFITS ON ACCOUNT OF HIS SERVICE CONNECTED
21 DISABILITY IN ACCORDANCE WITH THE WORKERS' COMPENSATION ACT OR
22 THE PENNSYLVANIA OCCUPATIONAL DISEASE ACT. IF THE MEMBER HAS
23 RECEIVED A LUMP SUM WORKERS' COMPENSATION PAYMENT IN LIEU OF
24 FUTURE WEEKLY COMPENSATION PAYMENTS, THE LENGTH IN WEEKS AND
25 CALCULATION OF THE SERVICE CONNECTED DISABILITY SUPPLEMENT SHALL
26 BE DETERMINED BY DIVIDING THE LUMP SUM PAYMENT BY THE AVERAGE
27 WEEKLY WAGE AS DETERMINED BY THE WORKERS' COMPENSATION BOARD.
28 * * *
29 § 5706. TERMINATION OF ANNUITIES.
20010H0027B3727 - 55 -
1 * * *
2 (A.2) RETURN OF BENEFITS.--IN THE EVENT AN ANNUITANT WHOSE
3 ANNUITY CEASES PURSUANT TO THIS SECTION RECEIVES ANY ANNUITY
4 PAYMENT, INCLUDING A LUMP SUM PAYMENT PURSUANT TO SECTION 5705
5 (RELATING TO MEMBER'S OPTIONS) ON OR AFTER THE DATE OF HIS
6 RETURN TO STATE SERVICE OR ENTERING SCHOOL SERVICE, THE
7 ANNUITANT SHALL RETURN TO THE BOARD THE AMOUNT SO RECEIVED PLUS
8 STATUTORY INTEREST. THE AMOUNT PAYABLE SHALL BE CERTIFIED IN
9 EACH CASE BY THE BOARD IN ACCORDANCE WITH METHODS APPROVED BY
10 THE ACTUARY AND SHALL BE PAID IN A LUMP SUM WITHIN 30 DAYS OR IN
11 THE CASE OF AN ACTIVE MEMBER OR SCHOOL EMPLOYEE WHO IS AN ACTIVE
12 MEMBER OF THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM MAY BE
13 AMORTIZED WITH STATUTORY INTEREST THROUGH SALARY DEDUCTIONS IN
14 AMOUNTS AGREED UPON BY THE MEMBER AND THE BOARD. THE SALARY
15 DEDUCTION AMORTIZATION PLANS AGREED TO BY THE MEMBER AND THE
16 BOARD MAY INCLUDE A DEFERRAL OF PAYMENT AMOUNTS AND STATUTORY
17 INTEREST UNTIL THE TERMINATION OF SCHOOL SERVICE OR STATE
18 SERVICE, AS THE BOARD, IN ITS SOLE DISCRETION, DECIDES TO ALLOW.
19 THE BOARD MAY LIMIT SALARY DEDUCTION AMORTIZATION PLANS TO SUCH
20 TERMS AS THE BOARD, IN ITS SOLE DISCRETION, DETERMINES. IN THE
21 CASE OF A SCHOOL EMPLOYEE WHO IS AN ACTIVE MEMBER OF THE PUBLIC
22 SCHOOL EMPLOYEES' RETIREMENT SYSTEM, THE AGREED UPON SALARY
23 DEDUCTIONS SHALL BE REMITTED TO THE PUBLIC SCHOOL EMPLOYEES'
24 RETIREMENT BOARD, WHICH SHALL CERTIFY AND TRANSFER TO THE BOARD
25 THE AMOUNTS PAID.
26 * * *
27 SECTION 14. TITLE 71 IS AMENDED BY ADDING SECTIONS TO READ:
28 § 5708.6. SUPPLEMENTAL ANNUITIES COMMENCING 2002.
29 (A) BENEFITS.--COMMENCING WITH THE FIRST MONTHLY ANNUITY
30 PAYMENT AFTER JULY 1, 2002, ANY ELIGIBLE BENEFIT RECIPIENT SHALL
20010H0027B3727 - 56 -
1 BE ENTITLED TO RECEIVE AN ADDITIONAL MONTHLY SUPPLEMENTAL
2 ANNUITY FROM THE SYSTEM. THIS SHALL BE IN ADDITION TO THE
3 SUPPLEMENTAL ANNUITIES PROVIDED FOR IN SECTIONS 5708 (RELATING
4 TO SUPPLEMENTAL ANNUITIES), 5708.1 (RELATING TO ADDITIONAL
5 SUPPLEMENTAL ANNUITIES), 5708.2 (RELATING TO FURTHER ADDITIONAL
6 SUPPLEMENTAL ANNUITIES), 5708.3 (RELATING TO SUPPLEMENTAL
7 ANNUITIES COMMENCING 1994), 5708.5 (RELATING TO SUPPLEMENTAL
8 ANNUITIES COMMENCING 1998) AND THE SPECIAL SUPPLEMENTAL
9 POSTRETIREMENT ADJUSTMENT PROVIDED FOR IN SECTION 5708.4
10 (RELATING TO SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT).
11 (B) AMOUNT OF SUPPLEMENTAL ANNUITY.--THE AMOUNT OF THE
12 SUPPLEMENTAL ANNUITY PAYABLE PURSUANT TO THIS SECTION SHALL BE A
13 PERCENTAGE OF THE AMOUNT OF THE MONTHLY ANNUITY PAYMENT ON JULY
14 1, 2002, DETERMINED ON THE BASIS OF THE MOST RECENT EFFECTIVE
15 DATE OF RETIREMENT, AS FOLLOWS:
16 MOST RECENT EFFECTIVE DATE PERCENTAGE FACTOR
17 OF RETIREMENT
18 JULY 2, 1988, THROUGH JULY 1, 1990 8.0%
19 JULY 2, 1983, THROUGH JULY 1, 1988 10.0%
20 JULY 2, 1980, THROUGH JULY 1, 1983 15.0%
21 PRIOR TO JULY 2, 1980 25.0%
22 (C) PAYMENT.--THE SUPPLEMENTAL ANNUITY PROVIDED UNDER THIS
23 SECTION SHALL BE PAID AUTOMATICALLY UNLESS THE ANNUITANT FILES A
24 WRITTEN NOTICE WITH THE BOARD REQUESTING THAT THE ADDITIONAL
25 MONTHLY SUPPLEMENTAL ANNUITY NOT BE PAID.
26 (D) CONDITIONS.--THE SUPPLEMENTAL ANNUITY PROVIDED UNDER
27 THIS SECTION SHALL BE PAYABLE UNDER THE SAME TERMS AND
28 CONDITIONS AS PROVIDED UNDER THE OPTION PLAN IN EFFECT AS OF
29 JULY 1, 2002.
30 (E) BENEFITS TO BENEFICIARIES OR SURVIVORS.--NO SUPPLEMENTAL
20010H0027B3727 - 57 -
1 ANNUITY PROVIDED UNDER THIS SECTION SHALL BE PAYABLE TO THE
2 BENEFICIARY OR SURVIVOR ANNUITANT OF A MEMBER WHO DIES BEFORE
3 JULY 1, 2002.
4 (F) FUNDING.--THE ADDITIONAL LIABILITY FOR THE INCREASE IN
5 BENEFITS PROVIDED IN THIS SECTION SHALL BE FUNDED IN EQUAL
6 DOLLAR ANNUAL INSTALLMENTS OVER A PERIOD OF TEN YEARS BEGINNING
7 JULY 1, 2003.
8 (G) ELIGIBLE BENEFIT RECIPIENT.--AS USED IN THIS SECTION,
9 THE TERM "ELIGIBLE BENEFIT RECIPIENT" MEANS A PERSON WHO IS
10 RECEIVING A SUPERANNUATION, WITHDRAWAL OR DISABILITY ANNUITY ON
11 JULY 1, 2002, AND WHOSE MOST RECENT EFFECTIVE DATE OF RETIREMENT
12 IS PRIOR TO JULY 2, 1990, BUT THE SUPPLEMENTAL ANNUITIES
13 PROVIDED UNDER THIS SECTION SHALL NOT BE PAYABLE TO AN ANNUITANT
14 RECEIVING A SUPERANNUATION OR WITHDRAWAL ANNUITY PRIOR TO THE
15 FIRST DAY OF JULY COINCIDENT WITH OR FOLLOWING THE ANNUITANT'S
16 ATTAINMENT OF SUPERANNUATION AGE.
17 § 5708.7. SUPPLEMENTAL ANNUITIES COMMENCING 2003.
18 (A) BENEFITS.--COMMENCING WITH THE FIRST MONTHLY ANNUITY
19 PAYMENT AFTER JULY 1, 2003, ANY ELIGIBLE BENEFIT RECIPIENT SHALL
20 BE ENTITLED TO RECEIVE AN ADDITIONAL MONTHLY SUPPLEMENTAL
21 ANNUITY FROM THE SYSTEM. THIS SHALL BE IN ADDITION TO THE
22 SUPPLEMENTAL ANNUITIES PROVIDED FOR IN SECTIONS 5708 (RELATING
23 TO SUPPLEMENTAL ANNUITIES), 5708.1 (RELATING TO ADDITIONAL
24 SUPPLEMENTAL ANNUITIES), 5708.2 (RELATING TO FURTHER ADDITIONAL
25 SUPPLEMENTAL ANNUITIES), 5708.3 (RELATING TO SUPPLEMENTAL
26 ANNUITIES COMMENCING 1994) AND SECTION 5708.5 (RELATING TO
27 SUPPLEMENTAL ANNUITIES COMMENCING 1998) AND THE SPECIAL
28 SUPPLEMENTAL POSTRETIREMENT ADJUSTMENTS PROVIDED FOR IN SECTIONS
29 5708.4 (RELATING TO SPECIAL SUPPLEMENTAL POSTRETIREMENT
30 ADJUSTMENT) AND 5708.8 (RELATING TO SPECIAL SUPPLEMENTAL
20010H0027B3727 - 58 -
1 POSTRETIREMENT ADJUSTMENT OF 2002).
2 (B) AMOUNT OF SUPPLEMENTAL ANNUITY.--THE AMOUNT OF THE
3 SUPPLEMENTAL ANNUITY PAYABLE PURSUANT TO THIS SECTION SHALL BE A
4 PERCENTAGE OF THE AMOUNT OF THE MONTHLY ANNUITY PAYMENT ON JULY
5 1, 2003, DETERMINED ON THE BASIS OF THE MOST RECENT EFFECTIVE
6 DATE OF RETIREMENT, AS FOLLOWS:
7 MOST RECENT EFFECTIVE DATE PERCENTAGE FACTOR
8 OF RETIREMENT
9 JULY 2, 2001, THROUGH JULY 1, 2002 2.27%
10 JULY 2, 2000, THROUGH JULY 1, 2001 3.08%
11 JULY 2, 1999, THROUGH JULY 1, 2000 4.87%
12 JULY 2, 1998, THROUGH JULY 1, 1999 6.35%
13 JULY 2, 1994, THROUGH JULY 1, 1998 7.50%
14 JULY 2, 1990, THROUGH JULY 1, 1994 9.00%
15 PRIOR TO JULY 2, 1990 0.00%
16 (C) PAYMENT.--THE SUPPLEMENTAL ANNUITY PROVIDED UNDER THIS
17 SECTION SHALL BE PAID AUTOMATICALLY UNLESS THE ANNUITANT FILES A
18 WRITTEN NOTICE WITH THE BOARD REQUESTING THAT THE ADDITIONAL
19 MONTHLY SUPPLEMENTAL ANNUITY NOT BE PAID.
20 (D) CONDITIONS.--THE SUPPLEMENTAL ANNUITY PROVIDED UNDER
21 THIS SECTION SHALL BE PAYABLE UNDER THE SAME TERMS AND
22 CONDITIONS AS PROVIDED UNDER THE OPTION PLAN IN EFFECT AS OF
23 JULY 1, 2003.
24 (E) BENEFITS TO BENEFICIARIES OR SURVIVORS.--NO SUPPLEMENTAL
25 ANNUITY PROVIDED UNDER THIS SECTION SHALL BE PAYABLE TO THE
26 BENEFICIARY OR SURVIVOR ANNUITANT OF A MEMBER WHO DIES BEFORE
27 JULY 1, 2003.
28 (F) FUNDING.--THE ADDITIONAL LIABILITY FOR THE INCREASE IN
29 BENEFITS PROVIDED IN THIS SECTION SHALL BE FUNDED IN EQUAL
30 DOLLAR ANNUAL INSTALLMENTS OVER A PERIOD OF TEN YEARS BEGINNING
20010H0027B3727 - 59 -
1 JULY 1, 2004.
2 (G) ELIGIBLE BENEFIT RECIPIENT.--AS USED IN THIS SECTION,
3 THE TERM "ELIGIBLE BENEFIT RECIPIENT" MEANS A PERSON:
4 (1) WHO IS RECEIVING A SUPERANNUATION, WITHDRAWAL OR
5 DISABILITY ANNUITY ON JULY 1, 2003;
6 (2) WHOSE MOST RECENT EFFECTIVE DATE OF RETIREMENT IS
7 PRIOR TO JANUARY 1, 2002; AND
8 (3) WHOSE CREDITED SERVICE DOES NOT INCLUDE ANY SERVICE
9 CREDITED AS EITHER CLASS AA, CLASS D-4 OR CLASS T-D SERVICE.
10 NOTWITHSTANDING THE ABOVE, THE SUPPLEMENTAL ANNUITIES PROVIDED
11 UNDER THIS SECTION SHALL NOT BE PAYABLE TO AN ANNUITANT
12 RECEIVING A SUPERANNUATION OR WITHDRAWAL ANNUITY PRIOR TO THE
13 FIRST DAY OF JULY COINCIDENT WITH OR FOLLOWING THE ANNUITANT'S
14 ATTAINMENT OF SUPERANNUATION AGE.
15 § 5708.8. SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT OF
16 2002.
17 (A) BENEFITS.--COMMENCING WITH THE FIRST MONTHLY ANNUITY
18 PAYMENT AFTER JUNE 30, 2002, ANY ELIGIBLE BENEFIT RECIPIENT
19 SHALL BE ENTITLED TO RECEIVE A SPECIAL SUPPLEMENTAL
20 POSTRETIREMENT ADJUSTMENT IN THE FORM OF AN ADJUSTMENT TO THE
21 MONTHLY ANNUITY PAYABLE FROM THE SYSTEM. THIS SHALL BE IN
22 ADDITION TO THE SUPPLEMENTAL ANNUITIES PROVIDED FOR IN SECTIONS
23 5708 (RELATING TO SUPPLEMENTAL ANNUITIES), 5708.1 (RELATING TO
24 ADDITIONAL SUPPLEMENTAL ANNUITIES), 5708.2 (RELATING TO FURTHER
25 ADDITIONAL SUPPLEMENTAL ANNUITIES), 5708.3 (RELATING TO
26 SUPPLEMENTAL ANNUITIES COMMENCING 1994), 5708.5 (RELATING TO
27 SUPPLEMENTAL ANNUITIES COMMENCING 1998), 5708.7 (RELATING TO
28 SUPPLEMENTAL ANNUITIES COMMENCING 2003) AND THE SPECIAL
29 SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT PROVIDED FOR IN SECTION
30 5708.4 (RELATING TO SPECIAL SUPPLEMENTAL POSTRETIREMENT
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1 ADJUSTMENT).
2 (B) CALCULATION OF ADJUSTMENT.--THE MONTHLY AMOUNT OF THE
3 SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT UNDER THIS
4 SECTION SHALL BE EQUAL TO ONE-TWELFTH OF THE DIFFERENCE BETWEEN
5 THE SUM OF THE MAXIMUM SINGLE LIFE ANNUITY, OR IF A DISABILITY
6 ANNUITANT, THE DISABILITY ANNUITY, THE MEMBER WAS ELIGIBLE TO
7 RECEIVE ON THE EFFECTIVE DATE OF RETIREMENT PLUS ANY ANNUITY THE
8 MEMBER WAS ELIGIBLE TO RECEIVE PURSUANT TO TITLE 24, PT. IV
9 (RELATING TO RETIREMENT FOR SCHOOL EMPLOYEES) ON THE EFFECTIVE
10 DATE OF RETIREMENT, COMPARED TO THE MAXIMUM SINGLE LIFE ANNUITY,
11 OR DISABILITY ANNUITY IF APPLICABLE, THAT THE MEMBER WOULD HAVE
12 BEEN ELIGIBLE TO RECEIVE HAD SECTION 5303.2 (RELATING TO
13 ELECTION TO CONVERT SCHOOL SERVICE TO STATE SERVICE) BEEN IN
14 EFFECT ON THE ANNUITANT'S EFFECTIVE DATE OF RETIREMENT. THIS
15 DIFFERENCE IS TO BE ADJUSTED BY AND PAID ACCORDING TO ANY
16 APPLICABLE OPTION FACTORS FOR PAYMENT UNDER AN OPTIONAL PAYMENT
17 PLAN.
18 (C) PAYMENT.--THE SPECIAL SUPPLEMENTAL POSTRETIREMENT
19 ADJUSTMENT PROVIDED UNDER THIS SECTION SHALL BE PAID
20 AUTOMATICALLY UNLESS THE ANNUITANT FILES A WRITTEN NOTICE WITH
21 THE BOARD REQUESTING THAT THE ADDITIONAL MONTHLY SUPPLEMENTAL
22 POSTRETIREMENT ADJUSTMENT NOT BE PAID.
23 (D) CONDITIONS.--THE SPECIAL SUPPLEMENTAL POSTRETIREMENT
24 ADJUSTMENT PROVIDED UNDER THIS SECTION SHALL BE PAYABLE UNDER
25 THE SAME TERMS AND CONDITIONS AS PROVIDED UNDER THE OPTION PLAN
26 IN EFFECT AS OF JULY 1, 2002.
27 (E) BENEFITS PAID TO BENEFICIARIES OR SURVIVORS.--NO SPECIAL
28 SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT PROVIDED UNDER THIS
29 SECTION SHALL BE PAYABLE TO THE BENEFICIARY OR SURVIVOR
30 ANNUITANT OF A MEMBER WHO DIES BEFORE THE EFFECTIVE DATE OF THIS
20010H0027B3727 - 61 -
1 SECTION.
2 (F) FUTURE SUPPLEMENTAL ANNUITIES.--THE SPECIAL SUPPLEMENTAL
3 POSTRETIREMENT ADJUSTMENT UNDER THIS SECTION SHALL BE INCLUDED
4 IN THE TOTAL ANNUITY IN DETERMINING ALL SUPPLEMENTAL ANNUITIES
5 ENACTED AFTER THE EFFECTIVE DATE OF THIS SECTION.
6 (G) FUNDING.--THE ADDITIONAL LIABILITY FOR THE INCREASE IN
7 BENEFITS PROVIDED IN THIS SECTION SHALL BE FUNDED IN EQUAL
8 DOLLAR ANNUAL INSTALLMENTS OVER A PERIOD OF TEN YEARS BEGINNING
9 JULY 1, 2003.
10 (H) ELIGIBLE BENEFIT RECIPIENT.--AS USED IN THIS SECTION,
11 THE TERM "ELIGIBLE BENEFIT RECIPIENT" MEANS A PERSON WHO IS
12 RECEIVING A SUPERANNUATION, WITHDRAWAL OR DISABILITY ANNUITY ON
13 THE EFFECTIVE DATE OF THIS SECTION AND WHO:
14 (1) TERMINATED STATE SERVICE ON OR AFTER JULY 1, 1999;
15 AND
16 (2) IF IMMEDIATELY PRIOR TO TERMINATION WAS A STATE
17 EMPLOYEE WHO WOULD HAVE QUALIFIED TO CONVERT CREDITED SERVICE
18 AND TRANSFER ACCUMULATED DEDUCTIONS FROM THE PUBLIC SCHOOL
19 EMPLOYEES' RETIREMENT SYSTEM TO THE SYSTEM PURSUANT TO
20 SECTION 5303.2.
21 THE TERM ALSO INCLUDES A MEMBER WHO IS A VESTEE ON THE EFFECTIVE
22 DATE OF THIS SECTION, BUT WHO IF AN ANNUITANT WOULD QUALIFY FOR
23 THE SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT UNDER THIS
24 SECTION. IN THE CASE OF A VESTEE, THE SPECIAL SUPPLEMENTAL
25 POSTRETIREMENT ADJUSTMENT UNDER THIS SECTION SHALL BE EFFECTIVE
26 UPON, AND CALCULATED AS OF, THE EFFECTIVE DATE OF RETIREMENT.
27 SECTION 15. SECTION 5709(B) OF TITLE 71 IS AMENDED TO READ:
28 § 5709. PAYMENT OF BENEFITS.
29 * * *
30 (B) DEATH BENEFITS.--IF THE AMOUNT OF A DEATH BENEFIT
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1 PAYABLE TO A BENEFICIARY UNDER SECTION 5707 (RELATING TO DEATH
2 BENEFITS) OR UNDER THE PROVISIONS OF OPTION 1 OF SECTION
3 5705(A)(1) (RELATING TO MEMBER'S OPTIONS) IS [$5,000] $10,000 OR
4 MORE, SUCH BENEFICIARY MAY ELECT TO RECEIVE PAYMENT ACCORDING TO
5 ONE OF THE FOLLOWING OPTIONS:
6 (1) A LUMP SUM PAYMENT;
7 (2) AN ANNUITY ACTUARIALLY EQUIVALENT TO THE AMOUNT
8 PAYABLE; OR
9 (3) A LUMP SUM PAYMENT AND AN ANNUITY SUCH THAT THE
10 ANNUITY IS ACTUARIALLY EQUIVALENT TO THE AMOUNT PAYABLE LESS
11 THE LUMP SUM PAYMENT SPECIFIED BY THE BENEFICIARY.
12 * * *
13 SECTION 16. SECTIONS 5903 AND 5904 OF TITLE 71 ARE AMENDED
14 BY ADDING SUBSECTIONS TO READ:
15 § 5903. DUTIES OF THE BOARD TO ADVISE AND REPORT TO HEADS OF
16 DEPARTMENTS AND MEMBERS.
17 * * *
18 (F) FORMER SCHOOL EMPLOYEES.--UPON RECEIPT OF AN ELECTION BY
19 A FORMER EMPLOYEE OF THE DEPARTMENT OF EDUCATION TRANSFERRED TO
20 THE DEPARTMENT OF CORRECTIONS PURSUANT TO SECTION 908-B OF THE
21 ACT OF APRIL 9, 1929 (P.L.177, NO.175), KNOWN AS THE
22 ADMINISTRATIVE CODE OF 1929, TO CONVERT SCHOOL SERVICE TO STATE
23 SERVICE, THE BOARD SHALL CERTIFY TO THE MEMBER THE AMOUNT OF
24 SERVICE SO CONVERTED AND THE CLASS AT WHICH SUCH SERVICE IS
25 CREDITED.
26 § 5904. DUTIES OF THE BOARD TO REPORT TO THE PUBLIC SCHOOL
27 EMPLOYEES' RETIREMENT BOARD.
28 * * *
29 (D) ELECTION TO CONVERT SCHOOL SERVICE TO STATE SERVICE.--
30 UPON RECEIPT OF AN ELECTION BY A FORMER EMPLOYEE OF THE
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1 DEPARTMENT OF EDUCATION TO CONVERT SCHOOL SERVICE TO STATE
2 SERVICE PURSUANT TO SECTION 5303.2 (RELATING TO ELECTION TO
3 CONVERT SCHOOL SERVICE TO STATE SERVICE), THE BOARD SHALL
4 CERTIFY THE INFORMATION NECESSARY FOR THE PUBLIC SCHOOL
5 EMPLOYEES' RETIREMENT SYSTEM TO TRANSFER THE FUNDS AND CREDIT
6 REQUIRED TO THE BOARD.
7 SECTION 17. SECTIONS 5908(B), 5933(A) AND (C), 5934 AND 5938
8 OF TITLE 71 ARE AMENDED TO READ:
9 § 5908. RIGHTS AND DUTIES OF ANNUITANTS.
10 * * *
11 (B) PERIODIC EARNINGS STATEMENTS BY DISABILITY ANNUITANTS.--
12 IT SHALL BE THE DUTY OF AN ANNUITANT RECEIVING A DISABILITY
13 ANNUITY PRIOR TO THE ATTAINMENT OF SUPERANNUATION AGE TO FURNISH
14 A WRITTEN STATEMENT WITHIN 30 DAYS OF THE CLOSE OF EACH CALENDAR
15 [QUARTER] YEAR OF ALL EARNED INCOME DURING THAT [QUARTER] YEAR
16 AND INFORMATION SHOWING WHETHER OR NOT HE IS ABLE TO ENGAGE IN A
17 GAINFUL OCCUPATION AND SUCH OTHER INFORMATION AS MAY BE REQUIRED
18 BY THE BOARD. ON FAILURE, NEGLECT, OR REFUSAL TO FURNISH SUCH
19 INFORMATION FOR THE PERIOD OF THE PRECEDING [QUARTER] YEAR, THE
20 BOARD MAY REFUSE TO MAKE FURTHER PAYMENTS DUE TO DISABILITY TO
21 SUCH ANNUITANT UNTIL HE HAS FURNISHED SUCH INFORMATION TO THE
22 SATISFACTION OF THE BOARD. SHOULD SUCH REFUSAL CONTINUE FOR SIX
23 MONTHS, ALL OF HIS RIGHTS TO THE DISABILITY ANNUITY PAYMENTS IN
24 EXCESS OF ANY ANNUITY TO WHICH HE IS OTHERWISE ENTITLED SHALL BE
25 FORFEITED FROM THE DATE OF HIS LAST WRITTEN STATEMENT TO THE
26 BOARD. ANY MONEYS RECEIVED IN EXCESS OF THOSE TO WHICH HE WAS
27 ENTITLED SHALL BE DEDUCTED FROM THE PRESENT VALUE OF THE ANNUITY
28 TO WHICH HE IS OTHERWISE ENTITLED.
29 * * *
30 § 5933. MEMBERS' SAVINGS ACCOUNT.
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1 (A) CREDITS TO ACCOUNT.--THE MEMBERS' SAVINGS ACCOUNT SHALL
2 BE THE LEDGER ACCOUNT TO WHICH SHALL BE CREDITED THE AMOUNTS OF
3 THE PICKUP CONTRIBUTIONS MADE BY THE COMMONWEALTH OR OTHER
4 EMPLOYER AND CONTRIBUTIONS OR LUMP SUM PAYMENTS MADE BY ACTIVE
5 MEMBERS IN ACCORDANCE WITH THE PROVISIONS OF SECTIONS 5501
6 (RELATING TO REGULAR MEMBER CONTRIBUTIONS FOR CURRENT SERVICE),
7 5502 (RELATING TO SOCIAL SECURITY INTEGRATION MEMBER
8 CONTRIBUTIONS), 5503 (RELATING TO JOINT COVERAGE MEMBER
9 CONTRIBUTIONS), 5504 (RELATING TO MEMBER CONTRIBUTIONS FOR THE
10 PURCHASE OF CREDIT FOR PREVIOUS STATE SERVICE OR TO BECOME A
11 FULL COVERAGE MEMBER), 5505.1 (RELATING TO ADDITIONAL MEMBER
12 CONTRIBUTIONS) AND 5505 (RELATING TO CONTRIBUTIONS FOR THE
13 PURCHASE OF CREDIT FOR CREDITABLE NONSTATE SERVICE) AND
14 TRANSFERRED FROM THE MEMBERS' SAVINGS ACCOUNT OF THE PUBLIC
15 SCHOOL EMPLOYEES' RETIREMENT SYSTEM IN ACCORDANCE WITH THE
16 PROVISIONS OF SECTION 5303.2 (RELATING TO ELECTION TO CONVERT
17 SCHOOL SERVICE TO STATE SERVICE).
18 * * *
19 (C) CHARGES TO ACCOUNT.--UPON THE ELECTION OF A MEMBER TO
20 WITHDRAW HIS TOTAL ACCUMULATED DEDUCTIONS OR UPON THE TRANSFER
21 OF ACCUMULATED DEDUCTIONS PURSUANT TO SECTION 5701.1 (RELATING
22 TO TRANSFER OF ACCUMULATED DEDUCTIONS), THE PAYMENT OF SUCH
23 AMOUNT SHALL BE CHARGED TO THE MEMBERS' SAVINGS ACCOUNT.
24 § 5934. STATE ACCUMULATION ACCOUNT.
25 THE STATE ACCUMULATION ACCOUNT SHALL BE THE LEDGER ACCOUNT TO
26 WHICH SHALL BE CREDITED ALL CONTRIBUTIONS OF THE COMMONWEALTH OR
27 OTHER EMPLOYERS WHOSE EMPLOYEES ARE MEMBERS OF THE SYSTEM AND
28 MADE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5507(A)
29 (RELATING TO CONTRIBUTIONS BY THE COMMONWEALTH AND OTHER
30 EMPLOYERS) EXCEPT THAT THE AMOUNTS RECEIVED UNDER THE PROVISIONS
20010H0027B3727 - 65 -
1 OF THE ACT OF MAY 12, 1943 (P.L.259, NO.120), AND THE AMOUNTS
2 RECEIVED UNDER THE PROVISIONS OF THE LIQUOR CODE, ACT OF APRIL
3 12, 1951 (P.L.90, NO.21), SHALL BE CREDITED TO THE STATE POLICE
4 BENEFIT ACCOUNT OR THE ENFORCEMENT OFFICERS' BENEFIT ACCOUNT AS
5 THE CASE MAY BE. ALL AMOUNTS TRANSFERRED TO THE FUND BY COUNTY
6 RETIREMENT SYSTEMS OR PENSION PLANS IN ACCORDANCE WITH THE
7 PROVISIONS OF SECTION 5507(C) ALSO SHALL BE CREDITED TO THE
8 STATE ACCUMULATION ACCOUNT. ALL AMOUNTS TRANSFERRED TO THE FUND
9 BY THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM IN ACCORDANCE
10 WITH SECTION 5303.2(E) (RELATING TO ELECTION TO CONVERT SCHOOL
11 SERVICE TO STATE SERVICE), EXCEPT AMOUNTS CREDITED TO THE
12 MEMBERS' SAVINGS ACCOUNT, AND ALL AMOUNTS PAID BY THE DEPARTMENT
13 OF CORRECTIONS IN ACCORDANCE WITH SECTION 5303.2(F) ALSO SHALL
14 BE CREDITED TO THE STATE ACCUMULATION ACCOUNT. THE STATE
15 ACCUMULATION ACCOUNT SHALL BE CREDITED WITH VALUATION INTEREST.
16 THE RESERVES NECESSARY FOR THE PAYMENT OF ANNUITIES AND DEATH
17 BENEFITS AS APPROVED BY THE BOARD AND AS PROVIDED IN CHAPTER 57
18 (RELATING TO BENEFITS) SHALL BE TRANSFERRED FROM THE STATE
19 ACCUMULATION ACCOUNT TO THE ANNUITY RESERVE ACCOUNT PROVIDED FOR
20 IN SECTION 5935 (RELATING TO ANNUITY RESERVE ACCOUNT), EXCEPT
21 THAT THE RESERVES NECESSARY ON ACCOUNT OF A MEMBER WHO IS AN
22 OFFICER OF THE PENNSYLVANIA STATE POLICE OR AN ENFORCEMENT
23 OFFICER SHALL BE TRANSFERRED FROM THE STATE ACCUMULATION ACCOUNT
24 TO THE STATE POLICE BENEFIT ACCOUNT PROVIDED FOR IN SECTION 5936
25 (RELATING TO STATE POLICE BENEFIT ACCOUNT) OR TO THE ENFORCEMENT
26 OFFICERS' BENEFIT ACCOUNT AS PROVIDED FOR IN SECTION 5937
27 (RELATING TO ENFORCEMENT OFFICERS' BENEFIT ACCOUNT) AS THE CASE
28 MAY BE.
29 § 5938. SUPPLEMENTAL ANNUITY ACCOUNT.
30 THE SUPPLEMENTAL ANNUITY ACCOUNT SHALL BE THE LEDGER ACCOUNT
20010H0027B3727 - 66 -
1 TO WHICH SHALL BE CREDITED ALL CONTRIBUTIONS FROM THE
2 COMMONWEALTH IN ACCORDANCE WITH SECTION 5507(B) (RELATING TO
3 CONTRIBUTIONS BY THE COMMONWEALTH AND OTHER EMPLOYERS) FOR THE
4 PAYMENT OF THE SUPPLEMENTAL ANNUITIES PROVIDED IN SECTIONS 5708
5 (RELATING TO SUPPLEMENTAL ANNUITIES), 5708.1 (RELATING TO
6 ADDITIONAL SUPPLEMENTAL ANNUITIES), 5708.2 (RELATING TO FURTHER
7 ADDITIONAL SUPPLEMENTAL ANNUITIES), 5708.3 (RELATING TO
8 SUPPLEMENTAL ANNUITIES COMMENCING 1994), 5708.4 (RELATING TO
9 SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT) [AND], 5708.5
10 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 1998), 5708.6
11 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 2002), 5708.7
12 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 2003) AND 5708.8
13 (RELATING TO SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT OF
14 2002). THE SUPPLEMENTAL ANNUITY ACCOUNT SHALL BE CREDITED WITH
15 VALUATION INTEREST. THE RESERVES NECESSARY FOR THE PAYMENT OF
16 SUCH SUPPLEMENTAL ANNUITIES SHALL BE TRANSFERRED FROM THE
17 SUPPLEMENTAL ANNUITY ACCOUNT TO THE ANNUITY RESERVE ACCOUNT AS
18 PROVIDED IN SECTION 5935 (RELATING TO ANNUITY RESERVE ACCOUNT).
19 SECTION 18. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE
20 PUBLIC SCHOOL EMPLOYEES' RETIREMENT BOARD SHALL, EFFECTIVE FOR
21 FISCAL YEAR JULY 1, 2002, RECERTIFY TO THE SECRETARY OF THE
22 BUDGET AND THE EMPLOYERS, WITHIN TEN DAYS OF THE EFFECTIVE DATE
23 OF THIS SECTION, THE CONTRIBUTIONS, RATES, FACTORS AND AMOUNTS
24 SET FORTH IN 24 PA.C.S. § 8502(K) TO REFLECT THE IMPACT OF THE
25 AMENDMENTS CONTAINED IN THIS ACT. THE BOARD'S RECERTIFICATION
26 SHALL REFLECT ALL CHANGES IN THE CONTRIBUTIONS, RATES AND
27 AMOUNTS PREVIOUSLY CERTIFIED BY THE BOARD PRIOR TO THE EFFECTIVE
28 DATE OF THIS SECTION FOR THE FISCAL YEAR BEGINNING JULY 1, 2002,
29 REQUIRED TO COMPLY WITH 24 PA.C.S. § 8328 CAUSED BY THE
30 AMENDMENTS CONTAINED IN THIS ACT PROVIDED THAT THE TOTAL
20010H0027B3727 - 67 -
1 CONTRIBUTION RATE FOR THE FISCAL YEAR BEGINNING JULY 1, 2002,
2 SHALL NOT EXCEED 1.15%. THIS RECERTIFICATION SHALL SUPERSEDE THE
3 PRIOR CERTIFICATION FOR ALL PURPOSES.
4 SECTION 19. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, FOR
5 THE TAX YEAR BEGINNING JULY 1, 2002, ALL SCHOOL ENTITIES SHALL
6 BASE THAT PORTION OF THEIR SCHOOL REAL ESTATE TAX MILLAGE RATE
7 ATTRIBUTABLE TO FUNDING THE EMPLOYER CONTRIBUTION RATE REQUIRED
8 UNDER 24 PA.C.S. PT. IV, ON THE EMPLOYER CONTRIBUTION RATE
9 RECERTIFIED PURSUANT TO THIS ACT. TO THE EXTENT THAT A SCHOOL
10 ENTITY'S SCHOOL REAL ESTATE TAX MILLAGE FOR THE TAX YEAR
11 BEGINNING JULY 1, 2002, ALREADY INCLUDES AN INCREASE TO FUND THE
12 PREVIOUSLY CERTIFIED EMPLOYER CONTRIBUTION RATE OF 5.64% FOR THE
13 FISCAL YEAR BEGINNING JULY 1, 2002, THEN THE SCHOOL ENTITY SHALL
14 REDUCE ITS SCHOOL REAL ESTATE TAX MILLAGE TO REFLECT, DOLLAR FOR
15 DOLLAR, THE SAVINGS GENERATED BY THE RECERTIFICATION OF THE
16 EMPLOYER CONTRIBUTION RATE REQUIRED BY THIS ACT, BUT NOT MORE
17 THAN THE ACTUAL INCREASE TO FUND THE PREVIOUSLY CERTIFIED
18 EMPLOYER CONTRIBUTION RATE OF 5.64% FOR THE FISCAL YEAR
19 BEGINNING JULY 1, 2002.
20 SECTION 20. THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM
21 SHALL RECOGNIZE FOR PURPOSES OF CALCULATING THE ACTUARIAL VALUE
22 OF THE SYSTEM'S ASSETS AND TO THE EXTENT NOT PREVIOUSLY
23 RECOGNIZED, ANY REALIZED AND UNREALIZED GAINS AND LOSSES FOR
24 FISCAL YEARS 1998-1999 AND 1999-2000 IN CALCULATING THE RATES
25 FOR FISCAL YEAR 2002-2003 PURSUANT TO 24 PA.C.S. § 8328. THE
26 FIVE-YEAR SMOOTHING METHOD REFERENCED IN 24 PA.C.S. § 8328(C),
27 RELATING TO RECOGNIZING THE DIFFERENCE BETWEEN THE ACTUAL
28 INVESTMENT RETURN AND THE ACTUARIALLY EXPECTED INVESTMENT
29 RETURN, SHALL COMMENCE WITH FISCAL YEAR 2000-2001 AND SHALL BE
30 REFLECTED IN CALCULATING THE RATES FOR FISCAL YEAR 2002-2003.
20010H0027B3727 - 68 -
1 SECTION 21. NOTWITHSTANDING THE DEFINITION OF "FINAL AVERAGE
2 SALARY" CONTAINED IN 71 PA.C.S. § 5102, IF A MEMBER WHO ELECTS
3 TO CONVERT SCHOOL SERVICE TO STATE SERVICE PURSUANT TO 71
4 PA.C.S. § 5303.2 TERMINATES STATE SERVICE BEFORE HAVING BEEN A
5 MEMBER OF THE STATE EMPLOYEES' RETIREMENT SYSTEM FOR THREE
6 NONOVERLAPPING PERIODS OF FOUR CONSECUTIVE CALENDAR QUARTERS,
7 THE FINAL AVERAGE SALARY SHALL BE DETERMINED ON THE BASIS OF THE
8 COMPENSATION RECEIVED AS A STATE EMPLOYEE AND AS A SCHOOL
9 EMPLOYEE BEFORE THE TRANSFER TO STATE EMPLOYMENT AND SHALL BE
10 CALCULATED OVER ANY THREE NONOVERLAPPING PERIODS OF FOUR
11 CONSECUTIVE CALENDAR QUARTERS DURING WHICH THE MEMBER WAS A
12 STATE EMPLOYEE OR A SCHOOL EMPLOYEE, WITH THE COMPENSATION FOR
13 PART-TIME SERVICE BEING ANNUALIZED ON THE BASIS OF THE
14 FRACTIONAL PORTION OF THE YEAR FOR WHICH CREDIT IS RECEIVED.
15 SECTION 22. SCHOOL SERVICE AND NONSCHOOL SERVICE THAT IS
16 CONVERTED TO STATE SERVICE AND NONSTATE SERVICE PURSUANT TO 71
17 PA.C.S. § 5303.2 SHALL BE CANCELED IN ALL OTHER RETIREMENT
18 SYSTEMS IN WHICH IT WAS PREVIOUSLY CREDITED AND SHALL LOSE ALL
19 CHARACTERISTICS OF SCHOOL OR NONSCHOOL SERVICE. BENEFITS AND
20 ELIGIBILITY FOR BENEFITS IN THE PUBLIC SCHOOL EMPLOYEES'
21 RETIREMENT SYSTEM SHALL BE MODIFIED AS SET FORTH IN THIS ACT.
22 THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT BOARD SHALL NOT BE
23 OBLIGATED TO PAY BENEFITS PURSUANT TO THE PUBLIC SCHOOL
24 EMPLOYEES' RETIREMENT CODE OR ANY OTHER LAW BASED UPON SERVICE
25 CONVERTED TO STATE SERVICE OR NONSTATE SERVICE, EXCEPT TO THE
26 EXTENT NECESSARY TO FUND THE BENEFITS PROVIDED FOR UNDER THIS
27 ACT. THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT BOARD SHALL PROVIDE
28 SUCH INFORMATION REGARDING ITS MEMBERS AND FORMER MEMBERS AS
29 REQUESTED BY THE STATE EMPLOYEES' RETIREMENT BOARD FOR THE
30 ADMINISTRATION AND IMPLEMENTATION OF THIS ACT.
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1 SECTION 23. NOTWITHSTANDING THE PROVISIONS OF 71 PA.C.S. §
2 5903(B), THE STATEMENT FOR EACH MEMBER PREPARED BY THE STATE
3 EMPLOYEES' RETIREMENT BOARD FOR THE PERIOD ENDING DECEMBER 31,
4 2002, AND ANY OTHER STATEMENTS OR ESTIMATES OF BENEFITS PREPARED
5 BY THE BOARD PURSUANT TO THE STATE EMPLOYEES' RETIREMENT CODE
6 FROM THE EFFECTIVE DATE OF THIS SECTION TO JUNE 30, 2003, NEED
7 NOT REFLECT THE PROVISIONS OF THIS ACT.
8 SECTION 24. NOTWITHSTANDING THE PROVISIONS OF 71 PA.C.S. PT.
9 XXV, THE OBLIGATION OF THE STATE EMPLOYEES' RETIREMENT BOARD TO
10 MAKE PAYMENTS WITHIN SPECIFIED TIME PERIODS OF THE RECEIPT OF
11 APPLICATIONS FOR BENEFITS OR OTHER INFORMATION SHALL NOT APPLY
12 FROM THE EFFECTIVE DATE OF THIS SECTION TO JUNE 30, 2003.
13 SECTION 25. CONTRIBUTIONS AND OTHER MONEY TRANSFERRED FROM
14 THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM TO THE STATE
15 EMPLOYEES' RETIREMENT SYSTEM SHALL RETAIN THE SAME ATTRIBUTES
16 FOR FEDERAL, STATE AND LOCAL TAX LAWS TO THE EXTENT ALLOWED BY
17 LAW.
18 SECTION 26. IT IS THE EXPRESSED INTENTION OF THE GENERAL
19 ASSEMBLY THAT THIS ACT IS TO PROVIDE CREDIT IN THE STATE
20 EMPLOYEES' RETIREMENT SYSTEM FOR SERVICE CREDITED IN THE PUBLIC
21 SCHOOL EMPLOYEES' RETIREMENT SYSTEM THAT WAS NOT TRANSFERRED TO
22 THE STATE EMPLOYEES' RETIREMENT SYSTEM OR CONVERTED TO STATE
23 SERVICE OR NONSTATE SERVICE BY SECTION 913-B OF THE ACT OF APRIL
24 9, 1929 (P.L.177, NO.175), KNOWN AS THE ADMINISTRATIVE CODE OF
25 1929. SERVICE CONVERTED OR TRANSFERRED PURSUANT TO SECTION 913-B
26 OF THAT ACT SHALL NOT BE CREDITABLE IN THE STATE EMPLOYEES'
27 RETIREMENT SYSTEM MORE THAN ONCE AND SHALL NOT BE CREDITABLE AS
28 STATE SERVICE OR NONSTATE SERVICE UNDER THIS ACT. SERVICE
29 CLAIMED TO BE CREDITABLE IN THE STATE EMPLOYEES' RETIREMENT
30 SYSTEM BY FORMER EMPLOYEES OF THE DEPARTMENT OF EDUCATION THAT
20010H0027B3727 - 70 -
1 WERE TRANSFERRED TO THE DEPARTMENT OF CORRECTIONS BY SECTION
2 913-B OF THAT ACT AND THAT HAS BEEN DENIED BY THE STATE
3 EMPLOYEES' RETIREMENT SYSTEM SHALL BE CREDITABLE TO THE EXTENT
4 ALLOWED BY THIS ACT, AS INTERPRETED BY THE STATE EMPLOYEES'
5 RETIREMENT BOARD, BUT TO THE EXTENT CLAIMED AND CREDITABLE UNDER
6 THIS ACT SHALL RESULT IN A WAIVER OF CLAIMS FOR CREDIT UNDER
7 SECTION 913-B OF THAT ACT.
8 SECTION 27. THIS ACT SHALL TAKE EFFECT AS FOLLOWS:
9 (1) THE AMENDMENT OF 71 PA.C.S. §§ 5704(C) AND 5908(B)
10 SHALL TAKE EFFECT JANUARY 1, 2003.
11 (2) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT
12 IMMEDIATELY.
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