PRINTER'S NO. 430
No. 422 Session of 2001
INTRODUCED BY ARMSTRONG, COSTA, M. WHITE, THOMPSON, BELL, CORMAN, SCHWARTZ, LOGAN AND KASUNIC, FEBRUARY 12, 2001
REFERRED TO FINANCE, FEBRUARY 12, 2001
AN ACT
1 Amending Titles 24 (Education) and 71 (State Government) of the
2 Pennsylvania Consolidated Statutes, reducing the vesting
3 period for pension benefits.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. The definition of "vestee" in section 8102 of
7 Title 24 of the Pennsylvania Consolidated Statutes is amended to
8 read:
9 § 8102. Definitions.
10 The following words and phrases when used in this part shall
11 have, unless the context clearly indicates otherwise, the
12 meanings given to them in this section:
13 * * *
14 "Vestee." A member with [ten] five or more eligibility
15 points who has terminated school service, has left his
16 accumulated deductions in the fund, and is deferring filing of
17 an application for receipt of an annuity.
18 Section 2. Sections 8307(b), 8308 and 8345(a) of Title 24
1 are amended to read: 2 § 8307. Eligibility for annuities. 3 * * * 4 (b) Withdrawal annuity.--A vestee with [ten] five or more 5 eligibility points or an active or inactive member who 6 terminates school service having [ten] five or more eligibility 7 points shall, upon filing a proper application, be entitled to 8 receive an early annuity. 9 * * * 10 § 8308. Eligibility for vesting. 11 Any member who terminates school service with [ten] five or 12 more eligibility points shall be entitled to vest his retirement 13 benefits until attainment of superannuation age. 14 § 8345. Member's options. 15 (a) General rule.--Any vestee with [ten] five or more 16 eligibility points or any other eligible member upon termination 17 of school service who has not withdrawn his accumulated 18 deductions as provided in section 8341 (relating to return of 19 accumulated deductions) may apply for and elect to receive 20 either a maximum single life annuity, as calculated in 21 accordance with the provisions of section 8342 (relating to 22 maximum single life annuity), or a reduced annuity certified by 23 the actuary to be actuarially equivalent to the maximum single 24 life annuity and in accordance with one of the following 25 options, except that no member shall elect an annuity payable to 26 one or more survivor annuitants other than his spouse or 27 alternate payee of such a magnitude that the present value of 28 the annuity payable to him for life plus any lump sum payment he 29 may have elected to receive is less than 50% of the present 30 value of his maximum single life annuity. 20010S0422B0430 - 2 -
1 (1) Option 1.--A life annuity to the member with a 2 guaranteed total payment equal to the present value of the 3 maximum single life annuity on the effective date of 4 retirement with the provision that, if, at his death, he has 5 received less than such present value, the unpaid balance 6 shall be payable to his beneficiary. 7 (2) Option 2.--A joint and survivor annuity payable 8 during the lifetime of the member with the full amount of 9 such annuity payable thereafter to his survivor annuitant, if 10 living at his death. 11 (3) Option 3.--A joint and fifty percent (50%) survivor 12 annuity payable during the lifetime of the member with one- 13 half of such annuity payable thereafter to his survivor 14 annuitant, if living at his death. 15 (4) Option 4.--Some other benefit which shall be 16 certified by the actuary to be actuarially equivalent to the 17 maximum single life annuity, subject to the following 18 restrictions: 19 (i) Any annuity shall be payable without reduction 20 during the lifetime of the member. 21 (ii) The sum of all annuities payable to the 22 designated survivor annuitants shall not be greater than 23 one and one-half times the annuity payable to the member. 24 (iii) A portion of the benefit may be payable as a 25 lump sum, except that such lump sum payment shall not 26 exceed an amount equal to the accumulated deductions 27 standing to the credit of the member. The balance of the 28 present value of the maximum single life annuity adjusted 29 in accordance with section 8342(b) shall be paid in the 30 form of an annuity with a guaranteed total payment, a 20010S0422B0430 - 3 -
1 single life annuity, or a joint and survivor annuity or 2 any combination thereof but subject to the restrictions 3 of subparagraphs (i) and (ii) of this paragraph. 4 * * * 5 Section 3. The definition of "vestee" in section 5102 of 6 Title 71 is amended to read: 7 § 5102. Definitions. 8 The following words and phrases as used in this part, unless 9 a different meaning is plainly required by the context, shall 10 have the following meanings: 11 * * * 12 "Vestee." A member with [ten] five or more eligibility 13 points, or a member with Class G, Class H, Class I, Class J, 14 Class K, Class L, Class M or Class N service with [eight] five 15 or more eligibility points, who has terminated State service and 16 has elected to leave his total accumulated deductions in the 17 fund and to defer receipt of an annuity. 18 Section 4. Sections 5308(b), 5309, 5704(b) and 5705(a) of 19 Title 71 are amended to read: 20 § 5308. Eligibility for annuities. 21 * * * 22 (b) Withdrawal annuity.--Any vestee or any active member or 23 inactive member on leave without pay who terminates State 24 service having [ten] five or more eligibility points, or who has 25 Class G, Class H, Class I, Class J, Class K, Class L, Class M or 26 Class N service and terminates State service having [eight] five 27 or more eligibility points, upon compliance with section 28 5907(f), (g) or (h) shall be entitled to receive an annuity. 29 * * * 30 § 5309. Eligibility for vesting. 20010S0422B0430 - 4 -
1 Any member who terminates State service with [ten] five or 2 more eligibility points, or any member with Class G, Class H, 3 Class I, Class J, Class K, Class L, Class M or Class N service 4 with [eight] five or more eligibility points, shall be eligible 5 until attainment of superannuation age to vest his retirement 6 benefits. 7 § 5704. Disability annuities. 8 * * * 9 (b) Benefit attributable to social security integration 10 credit.--If the member has been found to be eligible for a 11 disability annuity and has social security integration credits 12 as provided in section 5305 (relating to social security 13 integration credits), he may elect to withdraw his social 14 security integration accumulated deductions or if he has [ten] 15 five or more eligibility points to his credit and does not 16 withdraw his social security integration accumulated deductions 17 he may execute an application to be filed with the board to 18 receive, in addition to his disability annuity, an annuity 19 calculated in accordance with section 5702(a)(2). 20 * * * 21 § 5705. Member's options. 22 (a) General rule.--Any special vestee who has attained 23 superannuation age, any vestee having [ten] five or more 24 eligibility points, any member with Class G, Class H, Class I, 25 Class J, Class K, Class L, Class M or Class N service having 26 [eight] five or more eligibility points or any other eligible 27 member upon termination of State service who has not withdrawn 28 his total accumulated deductions as provided in section 5701 29 (relating to return of total accumulated deductions) may apply 30 for and elect to receive either a maximum single life annuity, 20010S0422B0430 - 5 -
1 as calculated in accordance with the provisions of section 5702 2 (relating to maximum single life annuity), or a reduced annuity 3 certified by the actuary to be actuarially equivalent to the 4 maximum single life annuity and in accordance with one of the 5 following options; except that no member shall elect an annuity 6 payable to one or more survivor annuitants other than his spouse 7 or alternate payee of such a magnitude that the present value of 8 the annuity payable to him for life plus any lump sum payment he 9 may have elected to receive is less than 50% of the present 10 value of his maximum single life annuity: 11 (1) Option 1.--A life annuity to the member with a 12 guaranteed total payment equal to the present value of the 13 maximum single life annuity on the effective date of 14 retirement with the provision that, if, at his death, he has 15 received less than such present value, the unpaid balance 16 shall be payable to his beneficiary. 17 (2) Option 2.--A joint and survivor annuity payable 18 during the lifetime of the member with the full amount of 19 such annuity payable thereafter to his survivor annuitant, if 20 living at his death. 21 (3) Option 3.--A joint and fifty percent (50%) survivor 22 annuity payable during the lifetime of the member with one- 23 half of such annuity payable thereafter to his survivor 24 annuitant, if living at his death. 25 (4) Option 4.--Some other benefit which shall be 26 certified by the actuary to be actuarially equivalent to the 27 maximum single life annuity, subject to the following 28 restrictions: 29 (i) any annuity shall be payable without reduction 30 during the lifetime of the member; 20010S0422B0430 - 6 -
1 (ii) the sum of all annuities payable to the 2 designated survivor annuitants shall not be greater than 3 one and one-half times the annuity payable to the member; 4 and 5 (iii) a portion of the benefit may be payable as a 6 lump sum, except that such lump sum payment shall not 7 exceed an amount equal to the total accumulated 8 deductions standing to the credit of the member. The 9 balance of the present value of the maximum single life 10 annuity adjusted in accordance with section 5702(b) shall 11 be paid in the form of an annuity with a guaranteed total 12 payment, a single life annuity, or a joint and survivor 13 annuity or any combination thereof but subject to the 14 restrictions of subparagraphs (i) and (ii) under this 15 option. 16 * * * 17 Section 5. This act shall apply to all members of the Public 18 School Employees' Retirement System who are active or who are 19 inactive but who have not terminated service, on or after the 20 effective date of this act. This act shall apply to all members 21 of the State Employees' Retirement System who are active or 22 inactive on leave without pay, on or after the effective date of 23 this act. 24 Section 6. This act shall take effect July 1, 2001. L7L24JLW/20010S0422B0430 - 7 -