PRIOR PRINTER'S NO. 2940 PRINTER'S NO. 3689
No. 2084 Session of 2007
INTRODUCED BY GIBBONS, SAINATO, GRUCELA, BELFANTI, BASTIAN,
BIANCUCCI, BLACKWELL, BRENNAN, BUXTON, CAPPELLI, CARROLL,
CAUSER, CLYMER, CONKLIN, COSTA, CRUZ, DENLINGER, ELLIS,
FABRIZIO, FLECK, GEORGE, GERGELY, GINGRICH, GOODMAN, HALUSKA,
HANNA, HARHAI, HARKINS, HELM, HENNESSEY, HESS, HORNAMAN,
HUTCHINSON, JAMES, KOTIK, KULA, LEACH, LONGIETTI, MAHONEY,
MANDERINO, MARKOSEK, McILHATTAN, MENSCH, MILNE, MOYER, MUNDY,
MURT, MYERS, M. O'BRIEN, O'NEILL, PASHINSKI, PAYNE, PETRARCA,
PETRONE, PICKETT, RAMALEY, READSHAW, REICHLEY, SCAVELLO,
SCHRODER, SEIP, SHIMKUS, SIPTROTH, McILVAINE SMITH, K. SMITH,
SOLOBAY, STERN, SURRA, TANGRETTI, WAGNER, J. WHITE,
WOJNAROSKI, HARRIS, KAUFFMAN, D. EVANS, REED, MARSHALL,
SWANGER, M. KELLER, KORTZ, BENNINGHOFF AND McCALL,
DECEMBER 5, 2007
AS REPORTED FROM COMMITTEE ON STATE GOVERNMENT, HOUSE OF
REPRESENTATIVES, AS AMENDED, MAY 5, 2008
AN ACT
1 Amending Titles 24 (Education) and 71 (State Government) of the <--
2 Pennsylvania Consolidated Statutes, providing for
3 supplemental annuity commencing 2007.
4 AMENDING TITLES 24 (EDUCATION) AND 71 (STATE GOVERNMENT) OF THE <--
5 PENNSYLVANIA CONSOLIDATED STATUTES, FURTHER PROVIDING FOR
6 ACTUARIAL COST METHOD; PROVIDING FOR SUPPLEMENTAL ANNUITIES
7 COMMENCING 2008 AND FOR SUPPLEMENTAL POSTRETIREMENT
8 ADJUSTMENT OF 2008; FURTHER PROVIDING FOR ANNUITY RESERVE
9 ACCOUNT AND FOR SUPPLEMENTAL ANNUITY ACCOUNT; AND PROVIDING
10 FOR WINDOW FOR MULTIPLE SERVICE ELECTION.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Title 24 of the Pennsylvania Consolidated <--
14 Statutes is amended by adding a section to read:
15 § 8348.8. Supplemental annuity commencing 2007.
1 (a) Benefits.--Commencing with the first monthly annuity
2 payment after July 1, 2007, any eligible benefit recipient shall
3 be entitled to receive an additional monthly supplemental
4 annuity from the system that shall be paid over a five-year
5 period in accordance with this section. This shall be in
6 addition to the supplemental annuities provided for in sections
7 8348 (relating to supplemental annuities), 8348.1 (relating to
8 additional supplemental annuities), 8348.2 (relating to further
9 additional supplemental annuities), 8348.3 (relating to
10 supplemental annuities commencing 1994), 8348.4 (relating to
11 special supplemental postretirement adjustment), 8348.5
12 (relating to supplemental annuities commencing 1998), 8348.6
13 (relating to supplemental annuities commencing 2002) and 8348.7
14 (relating to supplemental annuities commencing 2003).
15 (b) Amount of additional supplemental annuity.--The amount
16 of the supplemental annuity payable from July 1, 2007, through
17 June 30, 2008, pursuant to this section shall be a percentage of
18 the amount of the monthly annuity payment on July 1, 2007,
19 determined on the basis of the most recent effective date of
20 retirement as follows:
21 Most recent effective Percentage factor
22 date of retirement
23 July 2, 2000, through July 1, 2001 20.0%
24 July 2, 1999, through July 1, 2000 24.0%
25 July 2, 1998, through July 1, 1999 28.0%
26 July 2, 1997, through July 1, 1998 32.0%
27 July 2, 1996, through July 1, 1997 36.0%
28 July 2, 1995, through July 1, 1996 40.0%
29 July 2, 1994, through July 1, 1995 44.0%
30 July 2, 1993, through July 1, 1994 48.0%
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1 July 2, 1992, through July 1, 1993 52.0%
2 July 2, 1991, through July 1, 1992 56.0%
3 July 2, 1990, through July 1, 1991 60.0%
4 July 2, 1989, through July 1, 1990 64.0%
5 July 2, 1988, through July 1, 1989 68.0%
6 July 2, 1987, through July 1, 1988 72.0%
7 July 2, 1986, through July 1, 1987 76.0%
8 July 2, 1985, through July 1, 1986 80.0%
9 July 2, 1984, through July 1, 1985 84.0%
10 July 2, 1983, through July 1, 1984 88.0%
11 July 2, 1982, through July 1, 1983 92.0%
12 July 2, 1981, through July 1, 1982 96.0%
13 Prior to July 2, 1981 100.0%
14 (c) Payment.--The supplemental annuity provided under this
15 section shall be paid automatically over a five-year period at
16 20% of the supplemental annuity amount each year unless the
17 annuitant files a written notice with the board requesting that
18 the additional monthly supplemental annuity not be paid.
19 (d) Conditions.--The supplemental annuity provided under
20 this section shall be payable under the same terms and
21 conditions as provided under the option plan in effect as of
22 July 1, 2007.
23 (e) Benefits to beneficiaries or survivors.--No supplemental
24 annuity provided under this section shall be payable to the
25 beneficiary or survivor annuitant of a member who dies before
26 July 1, 2007.
27 (f) Funding.--The additional liability for the increase in
28 benefits provided in this section shall be funded in equal
29 dollar annual installments over a period of ten years beginning
30 July 1, 2007.
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1 (g) Eligible benefit recipient.--As used in this section,
2 the term "eligible benefit recipient" means a person:
3 (1) who is receiving a superannuation, withdrawal or
4 disability annuity on July 1, 2007;
5 (2) whose most recent effective date of retirement is
6 prior to July 1, 2001; and
7 (3) whose credited service does not include any service
8 credited as either Class T-D, Class D-4 or Class AA service.
9 Notwithstanding the above, the supplemental annuities provided
10 under this section shall not be payable to an annuitant
11 receiving a withdrawal annuity prior to the first day of July
12 coincident with or following the annuitant's attainment of
13 superannuation age.
14 Section 2. Title 71 is amended by adding a section to read:
15 § 5708.9. Supplemental annuity commencing 2007.
16 (a) Benefits.--Commencing with the first monthly annuity
17 payment after July 1, 2007, any eligible benefit recipient shall
18 be entitled to receive an additional monthly supplemental
19 annuity from the system that shall be paid over a five-year
20 period in accordance with this section. This shall be in
21 addition to the supplemental annuities provided for in sections
22 5708 (relating to supplemental annuities), 5708.1 (relating to
23 additional supplemental annuities), 5708.2 (relating to further
24 additional supplemental annuities), 5708.3 (relating to
25 supplemental annuities commencing 1994), 5708.4 (relating to
26 special supplemental postretirement adjustment), 5708.5
27 (relating to supplemental annuities commencing 1998), 5708.6
28 (relating to supplemental annuities commencing 2002) and 5708.7
29 (relating to supplemental annuities commencing 2003).
30 (b) Amount of additional supplemental annuity.--The amount
20070H2084B3689 - 4 -
1 of the supplemental annuity payable from July 1, 2007, through
2 June 30, 2008, pursuant to this section shall be a percentage of
3 the amount of the monthly annuity payment on July 1, 2007,
4 determined on the basis of the most recent effective date of
5 retirement as follows:
6 Most recent effective Percentage factor
7 date of retirement
8 July 2, 2000, through July 1, 2001 20.0%
9 July 2, 1999, through July 1, 2000 24.0%
10 July 2, 1998, through July 1, 1999 28.0%
11 July 2, 1997, through July 1, 1998 32.0%
12 July 2, 1996, through July 1, 1997 36.0%
13 July 2, 1995, through July 1, 1996 40.0%
14 July 2, 1994, through July 1, 1995 44.0%
15 July 2, 1993, through July 1, 1994 48.0%
16 July 2, 1992, through July 1, 1993 52.0%
17 July 2, 1991, through July 1, 1992 56.0%
18 July 2, 1990, through July 1, 1991 60.0%
19 July 2, 1989, through July 1, 1990 64.0%
20 July 2, 1988, through July 1, 1989 68.0%
21 July 2, 1987, through July 1, 1988 72.0%
22 July 2, 1986, through July 1, 1987 76.0%
23 July 2, 1985, through July 1, 1986 80.0%
24 July 2, 1984, through July 1, 1985 84.0%
25 July 2, 1983, through July 1, 1984 88.0%
26 July 2, 1982, through July 1, 1983 92.0%
27 July 2, 1981, through July 1, 1982 96.0%
28 Prior to July 2, 1981 100.0%
29 (c) Payment.--The supplemental annuity provided under this
30 section shall be paid automatically over a five-year period at
20070H2084B3689 - 5 -
1 20% of the supplemental annuity amount each year unless the
2 annuitant files a written notice with the board requesting that
3 the additional monthly supplemental annuity not be paid.
4 (d) Conditions.--The supplemental annuity provided under
5 this section shall be payable under the same terms and
6 conditions as provided under the option plan in effect as of
7 July 1, 2007.
8 (e) Benefits to beneficiaries or survivors.--No supplemental
9 annuity provided under this section shall be payable to the
10 beneficiary or survivor annuitant of a member who dies before
11 July 1, 2007.
12 (f) Funding.--The additional liability for the increase in
13 benefits provided in this section shall be funded in equal
14 dollar annual installments over a period of ten years beginning
15 July 1, 2007.
16 (g) Eligible benefit recipient.--As used in this section,
17 the term "eligible benefit recipient" means a person:
18 (1) who is receiving a superannuation, withdrawal or
19 disability annuity on July 1, 2007;
20 (2) whose most recent effective date of retirement is
21 prior to July 1, 2001; and
22 (3) whose credited service does not include any service
23 credited as either Class T-D, Class D-4 or Class AA service.
24 Notwithstanding the above, the supplemental annuities provided
25 under this section shall not be payable to an annuitant
26 receiving a withdrawal annuity prior to the first day of July
27 coincident with or following the annuitant's attainment of
28 superannuation age.
29 Section 3. This act shall take effect immediately.
30 SECTION 1. SECTION 8328(B), (C)(1) AND (D) OF TITLE 24 OF <--
20070H2084B3689 - 6 -
1 THE PENNSYLVANIA CONSOLIDATED STATUTES ARE AMENDED TO READ:
2 § 8328. ACTUARIAL COST METHOD.
3 * * *
4 (B) NORMAL CONTRIBUTION RATE.--THE NORMAL CONTRIBUTION RATE
5 SHALL BE DETERMINED AFTER EACH ACTUARIAL VALUATION. UNTIL ALL
6 ACCRUED LIABILITY CONTRIBUTIONS HAVE BEEN COMPLETED, THE NORMAL
7 CONTRIBUTION RATE SHALL BE DETERMINED, ON THE BASIS OF AN ANNUAL
8 INTEREST RATE AND SUCH MORTALITY AND OTHER TABLES AS SHALL BE
9 ADOPTED BY THE BOARD IN ACCORDANCE WITH GENERALLY ACCEPTED
10 ACTUARIAL PRINCIPLES, AS A LEVEL PERCENTAGE OF THE COMPENSATION
11 OF THE AVERAGE NEW ACTIVE MEMBER, WHICH PERCENTAGE, IF
12 CONTRIBUTED ON THE BASIS OF HIS PROSPECTIVE COMPENSATION THROUGH
13 THE ENTIRE PERIOD OF ACTIVE SCHOOL SERVICE, WOULD BE SUFFICIENT
14 TO FUND THE LIABILITY FOR ANY PROSPECTIVE BENEFIT PAYABLE TO
15 HIM, IN EXCESS OF THAT PORTION FUNDED BY HIS PROSPECTIVE MEMBER
16 CONTRIBUTIONS, EXCEPT FOR THE SUPPLEMENTAL BENEFITS PROVIDED IN
17 SECTIONS 8348 (RELATING TO SUPPLEMENTAL ANNUITIES), 8348.1
18 (RELATING TO ADDITIONAL SUPPLEMENTAL ANNUITIES), 8348.2
19 (RELATING TO FURTHER ADDITIONAL SUPPLEMENTAL ANNUITIES), 8348.3
20 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 1994), 8348.4
21 (RELATING TO SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT),
22 8348.5 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 1998),
23 8348.6 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 2002)
24 [AND], 8348.7 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING
25 2003) AND 8348.8 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING
26 2008).
27 (C) ACCRUED LIABILITY CONTRIBUTION RATE.--
28 (1) FOR THE FISCAL YEAR BEGINNING JULY 1, 2002, THE
29 ACCRUED LIABILITY CONTRIBUTION RATE SHALL BE COMPUTED AS THE
30 RATE OF TOTAL COMPENSATION OF ALL ACTIVE MEMBERS WHICH SHALL
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1 BE CERTIFIED BY THE ACTUARY AS SUFFICIENT TO FUND OVER A
2 PERIOD OF TEN YEARS FROM JULY 1, 2002, THE PRESENT VALUE OF
3 THE LIABILITIES FOR ALL PROSPECTIVE BENEFITS OF ACTIVE
4 MEMBERS, EXCEPT FOR THE SUPPLEMENTAL BENEFITS PROVIDED IN
5 SECTIONS 8348, 8348.1, 8348.2, 8348.3, 8348.4, 8348.5, 8348.6
6 [AND], 8348.7 AND 8348.8, IN EXCESS OF THE TOTAL ASSETS IN
7 THE FUND (CALCULATED BY RECOGNIZING THE ACTUARIALLY EXPECTED
8 INVESTMENT RETURN IMMEDIATELY AND RECOGNIZING THE DIFFERENCE
9 BETWEEN THE ACTUAL INVESTMENT RETURN AND THE ACTUARIALLY
10 EXPECTED INVESTMENT RETURN OVER A FIVE-YEAR PERIOD),
11 EXCLUDING THE BALANCE IN THE ANNUITY RESERVE ACCOUNT, AND OF
12 THE PRESENT VALUE OF NORMAL CONTRIBUTIONS AND OF MEMBER
13 CONTRIBUTIONS PAYABLE WITH RESPECT TO ALL ACTIVE MEMBERS ON
14 JULY 1, 2002, DURING THE REMAINDER OF THEIR ACTIVE SERVICE.
15 * * *
16 (D) SUPPLEMENTAL ANNUITY CONTRIBUTION RATE.--CONTRIBUTIONS
17 FROM THE COMMONWEALTH AND OTHER EMPLOYERS REQUIRED TO PROVIDE
18 FOR THE PAYMENT OF THE SUPPLEMENTAL ANNUITIES PROVIDED FOR IN
19 SECTIONS 8348, 8348.1, 8348.2, 8348.4 AND 8348.5 SHALL BE PAID
20 OVER A PERIOD OF TEN YEARS FROM JULY 1, 2002. THE FUNDING FOR
21 THE SUPPLEMENTAL ANNUITIES COMMENCING 2002 PROVIDED FOR IN
22 SECTION 8348.6 SHALL BE AS PROVIDED IN SECTION 8348.6(F). THE
23 FUNDING FOR THE SUPPLEMENTAL ANNUITIES COMMENCING 2003 PROVIDED
24 FOR IN SECTION 8348.7 SHALL BE AS PROVIDED IN SECTION 8348.7(F).
25 THE FUNDING FOR THE SUPPLEMENTAL ANNUITIES COMMENCING 2008
26 PROVIDED FOR IN SECTION 8348.8 SHALL BE AS PROVIDED IN SECTION
27 8348.8(F). THE AMOUNT OF EACH ANNUAL SUPPLEMENTAL ANNUITIES
28 CONTRIBUTION SHALL BE EQUAL TO THE AMOUNT OF SUCH CONTRIBUTION
29 FOR THE FISCAL YEAR BEGINNING JULY 1, 2002. IN THE EVENT THAT
30 SUPPLEMENTAL ANNUITIES ARE INCREASED BY LEGISLATION ENACTED
20070H2084B3689 - 8 -
1 SUBSEQUENT TO JUNE 30, 2002, THE ADDITIONAL LIABILITY FOR THE
2 INCREASED BENEFITS TO BE AMORTIZED SHALL BE FUNDED IN EQUAL
3 DOLLAR ANNUAL INSTALLMENTS OVER A PERIOD OF [TEN] TWENTY YEARS.
4 * * *
5 SECTION 2. TITLE 24 IS AMENDED BY ADDING A SECTION TO READ:
6 § 8348.8. SUPPLEMENTAL ANNUITIES COMMENCING 2008.
7 (A) BENEFITS.--COMMENCING WITH THE FIRST MONTHLY ANNUITY
8 PAYMENT AFTER JULY 1, 2008, ANY ELIGIBLE BENEFIT RECIPIENT SHALL
9 BE ENTITLED TO RECEIVE AN ADDITIONAL MONTHLY SUPPLEMENTAL
10 ANNUITY FROM THE SYSTEM. THIS SHALL BE IN ADDITION TO THE
11 SUPPLEMENTAL ANNUITIES PROVIDED FOR IN SECTIONS 8348 (RELATING
12 TO SUPPLEMENTAL ANNUITIES), 8348.1 (RELATING TO ADDITIONAL
13 SUPPLEMENTAL ANNUITIES), 8348.2 (RELATING TO FURTHER ADDITIONAL
14 SUPPLEMENTAL ANNUITIES), 8348.3 (RELATING TO SUPPLEMENTAL
15 ANNUITIES COMMENCING 1994), 8348.4 (RELATING TO SPECIAL
16 SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT), 8348.5 (RELATING TO
17 SUPPLEMENTAL ANNUITIES COMMENCING 1998), 8348.6 (RELATING TO
18 SUPPLEMENTAL ANNUITIES COMMENCING 2002) AND 8348.7 (RELATING TO
19 SUPPLEMENTAL ANNUITIES COMMENCING 2003).
20 (B) AMOUNT OF SUPPLEMENTAL ANNUITY.--THE AMOUNT OF THE
21 SUPPLEMENTAL ANNUITY PAYABLE PURSUANT TO THIS SECTION SHALL BE A
22 PERCENTAGE OF THE AMOUNT OF THE MONTHLY ANNUITY PAYMENT ON JULY
23 1, 2008, DETERMINED ON THE BASIS OF THE MOST RECENT EFFECTIVE
24 DATE OF RETIREMENT, AS FOLLOWS:
25 MOST RECENT EFFECTIVE DATE PERCENTAGE FACTOR
26 OF RETIREMENT
27 JULY 2, 2006, THROUGH JULY 1, 2007 2.67%
28 JULY 2, 2005, THROUGH JULY 1, 2006 4.01%
29 JULY 2, 2004, THROUGH JULY 1, 2005 5.85%
30 JULY 2, 2003, THROUGH JULY 1, 2004 7.67%
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1 JULY 2, 2002, THROUGH JULY 1, 2003 8.75%
2 JULY 1, 2001, THROUGH JULY 1, 2002 9.15%
3 JULY 2, 1997, THROUGH JUNE 30, 2001 10.00%
4 JULY 2, 1990, THROUGH JULY 1, 1997 15.00%
5 PRIOR TO JULY 2, 1990 25.00%
6 (C) PAYMENT.--THE SUPPLEMENTAL ANNUITY PROVIDED UNDER THIS
7 SECTION SHALL BE PAID AUTOMATICALLY UNLESS THE ANNUITANT FILES A
8 WRITTEN NOTICE WITH THE BOARD REQUESTING THAT THE ADDITIONAL
9 MONTHLY SUPPLEMENTAL ANNUITY NOT BE PAID.
10 (D) CONDITIONS.--THE SUPPLEMENTAL ANNUITY PROVIDED UNDER
11 THIS SECTION SHALL BE PAYABLE UNDER THE SAME TERMS AND
12 CONDITIONS AS PROVIDED UNDER THE OPTION PLAN IN EFFECT AS OF
13 JULY 1, 2008.
14 (E) BENEFITS TO BENEFICIARIES OR SURVIVORS.--NO SUPPLEMENTAL
15 ANNUITY PROVIDED UNDER THIS SECTION SHALL BE PAYABLE TO THE
16 BENEFICIARY OR SURVIVOR ANNUITANT OF A MEMBER WHO DIES BEFORE
17 JULY 1, 2008.
18 (F) FUNDING.--THE ADDITIONAL LIABILITY FOR THE INCREASE
19 UNDER BENEFITS PROVIDED IN THIS SECTION SHALL BE FUNDED IN EQUAL
20 DOLLAR ANNUAL INSTALLMENTS OVER A PERIOD OF 20 YEARS BEGINNING
21 JULY 1, 2009.
22 (G) ELIGIBLE BENEFIT RECIPIENT.--AS USED IN THIS SECTION,
23 THE TERM "ELIGIBLE BENEFIT RECIPIENT" MEANS A PERSON WHO IS
24 RECEIVING A SUPERANNUATION, WITHDRAWAL OR DISABILITY ANNUITY ON
25 JULY 1, 2008; WHOSE MOST RECENT EFFECTIVE DATE OF RETIREMENT IS
26 PRIOR TO JULY 2, 2007, BUT THE SUPPLEMENTAL ANNUITIES PROVIDED
27 UNDER THIS SECTION SHALL NOT BE PAYABLE TO AN ANNUITANT
28 RECEIVING A WITHDRAWAL ANNUITY PRIOR TO THE FIRST DAY OF JULY
29 COINCIDENT WITH OR FOLLOWING THE ANNUITANT'S ATTAINMENT OF
30 SUPERANNUATION AGE.
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1 SECTION 3. SECTION 8525(A) OF TITLE 24 IS AMENDED TO READ:
2 § 8525. ANNUITY RESERVE ACCOUNT.
3 (A) CREDITS AND CHARGES TO ACCOUNT.--THE ANNUITY RESERVE
4 ACCOUNT SHALL BE THE LEDGER ACCOUNT TO WHICH SHALL BE CREDITED
5 THE RESERVES HELD FOR THE PAYMENT OF ANNUITIES AND DEATH
6 BENEFITS ON ACCOUNT OF ALL ANNUITANTS AND THE CONTRIBUTIONS FROM
7 THE COMMONWEALTH AND OTHER EMPLOYERS AS DETERMINED IN ACCORDANCE
8 WITH SECTION 8328 (RELATING TO ACTUARIAL COST METHOD) FOR THE
9 PAYMENT OF THE SUPPLEMENTAL ANNUITIES PROVIDED IN SECTIONS 8348
10 (RELATING TO SUPPLEMENTAL ANNUITIES), 8348.1 (RELATING TO
11 ADDITIONAL SUPPLEMENTAL ANNUITIES), 8348.2 (RELATING TO FURTHER
12 ADDITIONAL SUPPLEMENTAL ANNUITIES), 8348.3 (RELATING TO
13 SUPPLEMENTAL ANNUITIES COMMENCING 1994), 8348.4 (RELATING TO
14 SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT), 8348.5
15 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 1998), 8348.6
16 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 2002) [AND],
17 8348.7 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 2003) AND
18 8348.8 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 2008). THE
19 ANNUITY RESERVE ACCOUNT SHALL BE CREDITED WITH VALUATION
20 INTEREST. AFTER THE TRANSFERS PROVIDED IN SECTIONS 8523
21 (RELATING TO MEMBERS' SAVINGS ACCOUNT) AND 8524 (RELATING TO
22 STATE ACCUMULATION ACCOUNT), ALL ANNUITY AND DEATH BENEFIT
23 PAYMENTS SHALL BE CHARGED TO THE ANNUITY RESERVE ACCOUNT AND
24 PAID FROM THE FUND.
25 * * *
26 SECTION 4. SECTION 5508(B), (C)(1) AND (E) OF TITLE 71 ARE
27 AMENDED TO READ:
28 § 5508. ACTUARIAL COST METHOD.
29 * * *
30 (B) EMPLOYER NORMAL CONTRIBUTION RATE.--THE EMPLOYER NORMAL
20070H2084B3689 - 11 -
1 CONTRIBUTION RATE SHALL BE DETERMINED AFTER EACH ACTUARIAL
2 VALUATION ON THE BASIS OF AN ANNUAL INTEREST RATE AND SUCH
3 MORTALITY AND OTHER TABLES AS SHALL BE ADOPTED BY THE BOARD IN
4 ACCORDANCE WITH GENERALLY ACCEPTED ACTUARIAL PRINCIPLES. THE
5 EMPLOYER NORMAL CONTRIBUTION RATE SHALL BE DETERMINED AS A LEVEL
6 PERCENTAGE OF THE COMPENSATION OF THE AVERAGE NEW ACTIVE MEMBER,
7 WHICH PERCENTAGE, IF CONTRIBUTED ON THE BASIS OF HIS PROSPECTIVE
8 COMPENSATION THROUGH HIS ENTIRE PERIOD OF ACTIVE STATE SERVICE,
9 WOULD BE SUFFICIENT TO FUND THE LIABILITY FOR ANY PROSPECTIVE
10 BENEFIT PAYABLE TO HIM, EXCEPT FOR THE SUPPLEMENTAL BENEFITS
11 PROVIDED FOR IN SECTIONS 5708 (RELATING TO SUPPLEMENTAL
12 ANNUITIES), 5708.1 (RELATING TO ADDITIONAL SUPPLEMENTAL
13 ANNUITIES), 5708.2 (RELATING TO FURTHER ADDITIONAL SUPPLEMENTAL
14 ANNUITIES), 5708.3 (RELATING TO SUPPLEMENTAL ANNUITIES
15 COMMENCING 1994), 5708.4 (RELATING TO SPECIAL SUPPLEMENTAL
16 POSTRETIREMENT ADJUSTMENT), 5708.5 (RELATING TO SUPPLEMENTAL
17 ANNUITIES COMMENCING 1998), 5708.6 (RELATING TO SUPPLEMENTAL
18 ANNUITIES COMMENCING 2002), 5708.7 (RELATING TO SUPPLEMENTAL
19 ANNUITIES COMMENCING 2003) [AND], 5708.8 (RELATING TO SPECIAL
20 SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT OF 2002) AND 5708.9
21 (RELATING TO SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT OF 2008), IN
22 EXCESS OF THAT PORTION FUNDED BY HIS PROSPECTIVE MEMBER
23 CONTRIBUTIONS.
24 (C) ACCRUED LIABILITY CONTRIBUTION RATE.--
25 (1) FOR THE FISCAL YEAR BEGINNING JULY 1, 2002, THE
26 ACCRUED LIABILITY CONTRIBUTION RATE SHALL BE COMPUTED AS THE
27 RATE OF TOTAL COMPENSATION OF ALL ACTIVE MEMBERS WHICH SHALL
28 BE CERTIFIED BY THE ACTUARY AS SUFFICIENT TO FUND OVER A
29 PERIOD OF TEN YEARS FROM JULY 1, 2002, THE PRESENT VALUE OF
30 THE LIABILITIES FOR ALL PROSPECTIVE BENEFITS, EXCEPT FOR THE
20070H2084B3689 - 12 -
1 SUPPLEMENTAL BENEFITS AS PROVIDED IN SECTIONS 5708, 5708.1,
2 5708.2, 5708.3, 5708.4, 5708.5, 5708.6, 5708.7 [AND], 5708.8
3 AND 5708.9, IN EXCESS OF THE TOTAL ASSETS IN THE FUND
4 (CALCULATED RECOGNIZING ALL INVESTMENT GAINS AND LOSSES OVER
5 A FIVE-YEAR PERIOD), EXCLUDING THE BALANCE IN THE
6 SUPPLEMENTAL ANNUITY ACCOUNT, AND THE PRESENT VALUE OF
7 EMPLOYER NORMAL CONTRIBUTIONS AND OF MEMBER CONTRIBUTIONS
8 PAYABLE WITH RESPECT TO ALL ACTIVE MEMBERS ON DECEMBER 31,
9 2001, AND EXCLUDING CONTRIBUTIONS TO BE TRANSFERRED BY COUNTY
10 RETIREMENT SYSTEMS OR PENSION PLANS PURSUANT TO SECTION
11 5507(C) (RELATING TO CONTRIBUTIONS BY THE COMMONWEALTH AND
12 OTHER EMPLOYERS). THE AMOUNT OF EACH ANNUAL ACCRUED LIABILITY
13 CONTRIBUTION SHALL BE EQUAL TO THE AMOUNT OF SUCH
14 CONTRIBUTION FOR THE FISCAL YEAR BEGINNING JULY 1, 2002,
15 EXCEPT THAT, IF THE ACCRUED LIABILITY IS INCREASED BY
16 LEGISLATION ENACTED SUBSEQUENT TO JUNE 30, 2002, BUT BEFORE
17 JULY 1, 2003, SUCH ADDITIONAL LIABILITY SHALL BE FUNDED OVER
18 A PERIOD OF TEN YEARS FROM THE FIRST DAY OF JULY, COINCIDENT
19 WITH OR NEXT FOLLOWING THE EFFECTIVE DATE OF THE INCREASE.
20 THE AMOUNT OF EACH ANNUAL ACCRUED LIABILITY CONTRIBUTION FOR
21 SUCH ADDITIONAL LEGISLATIVE LIABILITIES SHALL BE EQUAL TO THE
22 AMOUNT OF SUCH CONTRIBUTION FOR THE FIRST ANNUAL PAYMENT.
23 * * *
24 (E) SUPPLEMENTAL ANNUITY CONTRIBUTION RATE.--CONTRIBUTIONS
25 FROM THE COMMONWEALTH REQUIRED TO PROVIDE FOR THE PAYMENT OF
26 SUPPLEMENTAL ANNUITIES AS PROVIDED IN SECTIONS 5708, 5708.1,
27 5708.2, 5708.3, 5708.4 AND 5708.5 SHALL BE PAID OVER A PERIOD OF
28 TEN YEARS FROM JULY 1, 2002. THE FUNDING FOR THE SUPPLEMENTAL
29 ANNUITIES COMMENCING 2002 PROVIDED FOR IN SECTION 5708.6 SHALL
30 BE AS PROVIDED IN SECTION 5708.6(F). THE FUNDING FOR THE
20070H2084B3689 - 13 -
1 SUPPLEMENTAL ANNUITIES COMMENCING 2003 PROVIDED FOR IN SECTION
2 5708.7 SHALL BE AS PROVIDED IN SECTION 5708.7(F). THE FUNDING
3 FOR THE SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT OF 2002
4 UNDER SECTION 5708.8 SHALL BE AS PROVIDED IN SECTION 5708.8(G).
5 THE FUNDING FOR THE SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT OF
6 2008 UNDER SECTION 5708.9 SHALL BE AS PROVIDED IN SECTION
7 5708.9(F). THE AMOUNT OF EACH ANNUAL SUPPLEMENTAL ANNUITIES
8 CONTRIBUTION SHALL BE EQUAL TO THE AMOUNT OF SUCH CONTRIBUTION
9 FOR THE FISCAL YEAR BEGINNING JULY 1, 2002. IN THE EVENT THAT
10 SUPPLEMENTAL ANNUITIES ARE INCREASED BY LEGISLATION ENACTED
11 SUBSEQUENT TO JUNE 30, 2002, THE ADDITIONAL LIABILITY FOR THE
12 INCREASE IN BENEFITS SHALL BE FUNDED IN EQUAL DOLLAR ANNUAL
13 INSTALLMENTS OVER A PERIOD OF [TEN] TWENTY YEARS FROM THE JULY
14 FIRST, COINCIDENT WITH OR NEXT FOLLOWING THE EFFECTIVE DATE OF
15 SUCH LEGISLATION.
16 * * *
17 SECTION 5. TITLE 71 IS AMENDED BY ADDING A SECTION TO READ:
18 § 5708.9 SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT OF 2008.
19 (A) BENEFITS.--COMMENCING WITH THE FIRST MONTHLY ANNUITY
20 PAYMENT AFTER JULY 1, 2008, ANY ELIGIBLE BENEFIT RECIPIENT SHALL
21 BE ENTITLED TO RECEIVE AN ADDITIONAL MONTHLY SUPPLEMENTAL
22 ANNUITY FROM THE SYSTEM. THIS SHALL BE IN ADDITION TO THE
23 SUPPLEMENTAL ANNUITIES PROVIDED FOR IN SECTIONS 5708 (RELATING
24 TO SUPPLEMENTAL ANNUITIES), 5708.1 (RELATING TO ADDITIONAL
25 SUPPLEMENTAL ANNUITIES), 5708.2 (RELATING TO FURTHER ADDITIONAL
26 SUPPLEMENTAL ANNUITIES), 5708.3 (RELATING TO SUPPLEMENTAL
27 ANNUITIES COMMENCING 1994), 5708.5 (RELATING TO SUPPLEMENTAL
28 ANNUITIES COMMENCING 1998), 5708.6 (RELATING TO SUPPLEMENTAL
29 ANNUITIES COMMENCING 2002), 5708.7 (RELATING TO SUPPLEMENTAL
30 ANNUITIES COMMENCING 2003) AND THE SPECIAL SUPPLEMENTAL
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1 POSTRETIREMENT ADJUSTMENT PROVIDED FOR IN SECTIONS 5708.4
2 (RELATING TO SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT) AND
3 5708.8 (RELATING TO ADDITIONAL SPECIAL SUPPLEMENTAL
4 POSTRETIREMENT ADJUSTMENT OF 2002).
5 (B) AMOUNT OF SUPPLEMENTAL ANNUITY.--THE AMOUNT OF THE
6 SUPPLEMENTAL ANNUITY PAYABLE PURSUANT TO THIS SECTION SHALL BE A
7 PERCENTAGE OF THE AMOUNT OF THE MONTHLY ANNUITY PAYMENT ON JULY
8 1, 2008, DETERMINED ON THE BASIS OF THE MOST RECENT EFFECTIVE
9 DATE OF RETIREMENT, AS FOLLOWS:
10 MOST RECENT EFFECTIVE DATE PERCENTAGE FACTOR
11 OF RETIREMENT
12 JULY 2, 2006, THROUGH JULY 1, 2007 2.67%
13 JULY 2, 2005, THROUGH JULY 1, 2006 4.01%
14 JULY 2, 2004, THROUGH JULY 1, 2005 5.85%
15 JULY 2, 2003, THROUGH JULY 1, 2004 7.67%
16 JULY 2, 2002, THROUGH JULY 1, 2003 8.75%
17 JULY 1, 2001, THROUGH JULY 1, 2002 9.15%
18 JULY 2, 1997, THROUGH JUNE 30, 2001 10.00%
19 JULY 2, 1990, THROUGH JULY 1, 1997 15.00%
20 PRIOR TO JULY 2, 1990 25.00%
21 (C) PAYMENT.--THE SUPPLEMENTAL ANNUITY PROVIDED UNDER THIS
22 SECTION SHALL BE PAID AUTOMATICALLY UNLESS THE ANNUITANT FILES A
23 WRITTEN NOTICE WITH THE BOARD REQUESTING THAT THE ADDITIONAL
24 MONTHLY SUPPLEMENTAL ANNUITY NOT BE PAID.
25 (D) CONDITIONS.--THE SUPPLEMENTAL ANNUITY PROVIDED UNDER
26 THIS SECTION SHALL BE PAYABLE UNDER THE SAME TERMS AND
27 CONDITIONS AS PROVIDED UNDER THE OPTION PLAN IN EFFECT AS OF
28 JULY 1, 2008.
29 (E) BENEFITS TO BENEFICIARIES OR SURVIVORS.--NO SUPPLEMENTAL
30 ANNUITY PROVIDED UNDER THIS SECTION SHALL BE PAYABLE TO THE
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1 BENEFICIARY OR SURVIVOR ANNUITANT OF A MEMBER WHO DIES BEFORE
2 JULY 1, 2008.
3 (F) FUNDING.--THE ADDITIONAL LIABILITY FOR THE INCREASE IN
4 BENEFITS PROVIDED UNDER THIS SECTION SHALL BE FUNDED IN EQUAL
5 DOLLAR ANNUAL INSTALLMENTS OVER A PERIOD OF 20 YEARS BEGINNING
6 JULY 1, 2009.
7 (G) ELIGIBLE BENEFIT RECIPIENT.--AS USED IN THIS SECTION,
8 THE TERM "ELIGIBLE BENEFIT RECIPIENT" MEANS A PERSON WHO IS
9 RECEIVING A SUPERANNUATION, WITHDRAWAL OR DISABILITY ANNUITY ON
10 JULY 1, 2008, AND WHOSE MOST RECENT EFFECTIVE DATE OF RETIREMENT
11 IS PRIOR TO JULY 2, 2007. NOTWITHSTANDING THE ABOVE, THE
12 SUPPLEMENTAL ANNUITIES PROVIDED UNDER THIS SECTION SHALL NOT BE
13 PAYABLE TO AN ANNUITANT RECEIVING A SUPERANNUATION OR WITHDRAWAL
14 ANNUITY PRIOR TO THE FIRST DAY OF JULY COINCIDENT WITH OR
15 FOLLOWING THE ANNUITANT'S ATTAINMENT OF SUPERANNUATION AGE.
16 SECTION 6. SECTION 5938 OF TITLE 71 IS AMENDED TO READ:
17 § 5938. SUPPLEMENTAL ANNUITY ACCOUNT.
18 THE SUPPLEMENTAL ANNUITY ACCOUNT SHALL BE THE LEDGER ACCOUNT
19 TO WHICH SHALL BE CREDITED ALL CONTRIBUTIONS FROM THE
20 COMMONWEALTH IN ACCORDANCE WITH SECTION 5507(B) (RELATING TO
21 CONTRIBUTIONS BY THE COMMONWEALTH AND OTHER EMPLOYERS) FOR THE
22 PAYMENT OF THE SUPPLEMENTAL ANNUITIES PROVIDED IN SECTIONS 5708
23 (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), 5708.4 (RELATING TO
27 SPECIAL SUPPLEMENTAL POSTRETIREMENT ADJUSTMENT), 5708.5
28 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 1998), 5708.6
29 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 2002), 5708.7
30 (RELATING TO SUPPLEMENTAL ANNUITIES COMMENCING 2003) [AND],
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1 5708.8 (RELATING TO SPECIAL SUPPLEMENTAL POSTRETIREMENT
2 ADJUSTMENT OF 2002) AND 5708.9 (RELATING TO SUPPLEMENTAL
3 POSTRETIREMENT ADJUSTMENT OF 2008). THE SUPPLEMENTAL ANNUITY
4 ACCOUNT SHALL BE CREDITED WITH VALUATION INTEREST. THE RESERVES
5 NECESSARY FOR THE PAYMENT OF SUCH SUPPLEMENTAL ANNUITIES SHALL
6 BE TRANSFERRED FROM THE SUPPLEMENTAL ANNUITY ACCOUNT TO THE
7 ANNUITY RESERVE ACCOUNT AS PROVIDED IN SECTION 5935 (RELATING TO
8 ANNUITY RESERVE ACCOUNT).
9 SECTION 7. NOTWITHSTANDING THE LIMITATION CONTAINED IN 71
10 PA.C.S. § 5907(C), ANY ACTIVE MEMBER OF THE STATE EMPLOYEES'
11 RETIREMENT SYSTEM WHO WAS FORMERLY ELIGIBLE TO BE AN ACTIVE
12 MEMBER OF THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM AND
13 WHOSE SERVICE CREDIT IN THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT
14 SYSTEM HAS NOT BEEN CONVERTED TO SERVICE CREDITED IN ANOTHER
15 PUBLIC PENSION PLAN OR RETIREMENT SYSTEM IN THIS COMMONWEALTH
16 MAY ELECT TO BECOME A MULTIPLE SERVICE MEMBER ON OR BEFORE
17 DECEMBER 31, 2008.
18 SECTION 8. THIS ACT SHALL TAKE EFFECT IMMEDIATELY.
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