THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY KAMPF, SACCONE, STEPHENS, BENNINGHOFF, GABLER, AUMENT, BARRAR, BEAR, BLOOM, CLYMER, CUTLER, DENLINGER, EMRICK, EVANKOVICH, GINGRICH, GROVE, HACKETT, HARPER, HARRIS, HENNESSEY, HUTCHINSON, KAUFFMAN, F. KELLER, KILLION, LAWRENCE, MAHER, MALONEY, MASSER, MILLER, MOUL, MUSTIO, O'NEILL, PERRY, QUIGLEY, ROSS, SCHMOTZER, SWANGER, TALLMAN, TOBASH, TOEPEL, TOOHIL, TRUITT, TURZAI AND WATSON, JUNE 13, 2012

REFERRED TO COMMITTEE ON FINANCE, JUNE 13, 2012  

AN ACT

Amending Titles 51 (Military Affairs) and 71 (State Government)

of the Pennsylvania Consolidated Statutes, in Title 51, in

employment preferences and pensions, further providing for

military leaves of absence; in Title 71, in retirement for

state employees and officers, further providing for

definitions, for preliminary provisions and for membership,

credited service, classes of service, and eligibility

benefits, providing for State Employees' Defined Contribution

Plan, further providing for contributions, for benefits and

for administration, funds and accounts; and making editorial

changes. 

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 7306(a) introductory paragraph of Title 51

of the Pennsylvania Consolidated Statutes is amended and the

section is amended by adding a subsection to read:

§ 7306.  Retirement rights.

(a)  Options available to employees.--Any employee who is a

member of a retirement system, other than an active participant

or inactive participant on leave without pay of the State

Employees' Defined Contribution Plan, at the time he is granted

a military leave of absence shall be entitled to exercise any

one of the following options in regard thereto:

* * *

(d)  Participants of the State Employees' Defined

Contribution Plan.--An employee who is an active participant or

inactive participant on leave without pay of the State

Employees' Defined Contribution Plan at the time he is granted a

military leave of absence shall be entitled to make

contributions to the State Employees' Defined Contribution Trust

for such leave as provided in 71 Pa.C.S. Pt. XXV (relating to

retirement for State employees and officers).

Section 2.  The definitions of "alternate payee," "average

noncovered salary," "beneficiary," "compensation," "creditable

nonstate service," "credited service," "date of termination of

service," "distribution," "domestic relations order," "final

average salary," "inactive member," "intervening military

service," "irrevocable beneficiary," "previous State service,"

"retirement counselor," "salary deductions," "special vestee,"

"State employee," "superannuation age," "survivor annuitant" and

"valuation interest" in section 5102 of Title 71 are amended and

the section is amended by adding definitions to read:

§ 5102.  Definitions.

The following words and phrases as used in this part, unless

a different meaning is plainly required by the context, shall

have the following meanings:

* * *

"Accumulated employer defined contributions."  The total of

the employer defined contributions paid into the trust on

account of a participant's State service together with any

investment earnings and losses and adjustment for fees, costs

and expenses credited or charged thereon.

"Accumulated mandatory participant contributions."  The total

of the mandatory pickup participant contributions paid into the

trust on account of a participant's State service together with

any investment earnings and losses and adjustments for fees,

costs and expenses credited or charged thereon.

"Accumulated total defined contributions."  The total of the

accumulated mandatory participant contributions, accumulated

employer defined contributions and accumulated voluntary

contributions, reduced by any distributions, standing to the

credit of a participant in an individual investment account in

the trust.

"Accumulated voluntary contributions."  The total of

voluntary contributions paid into the trust by a participant and

any amounts rolled over by a participant or transferred by a

direct trustee-to-trustee transfer into the trust together with

any investment earnings and losses and adjustment for fees,

costs and expenses credited or charged thereon.

* * *

"Active participant."  A State employee for whom mandatory

pickup participant contributions are being made to the trust or

for whom such contributions otherwise required for current State

service are not being made solely by reason of any provision of

this part relating to the limitations under section 401(a)(17)

or 415 of the Internal Revenue Code of 1986 (Public Law 99-514,

26 U.S.C. § 401(a)(17) or § 415).

* * *

"Alternate payee."  Any spouse, former spouse, child or

dependent of a member or participant who is recognized by a

domestic relations order as having a right to receive all or a

portion of the moneys payable to that member or participant 

under this part.

* * *

"Average noncovered salary."  The average of the amounts of

compensation received by an active member each calendar year

since January 1, 1956, exclusive of the amount which was or

could have been covered by the Federal Social Security Act[,] 

(42 U.S.C. § 301 et seq.), during that portion of the member's

service since January 1, 1956, for which he has received social

security integration credit.

* * *

"Beneficiary."  The person or persons last designated in

writing to the board by a member to receive his accumulated

deductions or a lump sum benefit upon the death of such member.

A participant's spouse shall be his beneficiary unless a

participant is not married or the spouse consents to the person

or persons last designated in writing to the board by a

participant to receive the participant's accumulated total

defined contributions or a lump sum benefit upon the death of

such participant. A combined service employee may designate

different beneficiaries for his benefits from the system and the

plan.

* * *

"Combined service employee."  A current or former State

employee who is both a member of the system and a participant in

the plan.

* * *

"Compensation."  Pickup contributions and mandatory pickup

participant contributions plus remuneration actually received as

a State employee excluding refunds for expenses, contingency and

accountable expense allowances, and excluding any severance

payments or payments for unused vacation or sick leave, and for

participants excluding payments for military leave and any other

payments made by an employer while on USERRA leave, leave of

absence granted under 51 Pa.C.S. § 4102 (relating to leaves of

absence for certain government employees), military leave of

absence granted under 51 Pa.C.S. § 7302 (relating to granting

military leaves of absence) or other types of military leave,

including other types of leave payments, stipends, differential

wage payments as defined in section 414(u)(12) of the Internal

Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 414(u)(12)) 

and any other payments: Provided, however, That compensation

received prior to January 1, 1973, shall be subject to the

limitations for retirement purposes in effect December 31, 1972,

if any: Provided further, That the limitation under section

[401(a)(17) of the Internal Revenue Code of 1986 (Public Law

99-514, 26 U.S.C.]IRC § 401(a)(17)) taken into account for the

purpose of member contributions, including any additional member

contributions in addition to regular or joint coverage member

contributions and Social Security integration contributions,

regardless of class of service, shall apply to each member who

first became a member of the State Employees' Retirement System

on or after January 1, 1996, and who by reason of such fact is a

noneligible member subject to the application of the provisions

of section 5506.1(a) (relating to annual compensation limit

under IRC § 401(a)(17)) and shall apply to each participant.

* * *

"Creditable nonstate service."  Service other than:

(1)  service as a State employee;

(2)  service converted to State service pursuant to

section 5303.1 (relating to election to convert county

service to State service); or

(3)  school service converted to State service pursuant

to section 5303.2 (relating to election to convert school

service to State service) for which an active member may

obtain credit in the system.

"Credited service."  State or creditable nonstate service for

which the required contributions have been made to the fund or

for which the contributions otherwise required for such service

were not made solely by reason of section 5502.1 (relating to

waiver of regular member contributions and Social Security

integration member contributions) or any provision of this part

relating to the limitations under section 401(a)(17) or 415(b)

of the Internal Revenue Code of 1986 (Public Law 99-514, 26

U.S.C. § 401(a)(17) or 415(b)), or for which salary deductions

to the system or lump sum payments have been agreed upon in

writing.

"Date of termination of service."  The last day of service

for which:

(1)  pickup contributions are made for an active member

[or] ;

(2)  in the case of an inactive member on leave without

pay, the date of his resignation or the date his employment

is formally discontinued by his employer;

(3)  mandatory pickup participant contributions are made

for an active participant;

(4)  in the case of an inactive participant on leave

without pay, the date of his resignation or the date his

employment is formally discontinued by his employer; or

(5)  in the case of a combined service employee, the

latest of the dates in paragraphs (1), (2), (3) and (4).

* * *

"Distribution."  Payment of all or any portion of a person's

interest in the State Employees' Retirement Fund or the State

Employees' Defined Contribution Trust which is payable under

this part.

"Domestic relations order."  Any judgment, decree or order,

including approval of a property settlement agreement, entered

on or after the effective date of this definition by a court of

competent jurisdiction pursuant to a domestic relations law

which relates to the marital property rights of the spouse or

former spouse of a member or participant, including the right to

receive all or a portion of the moneys payable to that member or

participant under this part in furtherance of the equitable

distribution of marital assets.  The term includes orders of

support as that term is defined by 23 Pa.C.S. § 4302 (relating

to definitions) and orders for the enforcement of arrearages as

provided in 23 Pa.C.S. § 3703 (relating to enforcement of

arrearages).

* * *

"Employer defined contributions."

(1)  Unless paragraph (2) applies, contributions equal to

4% of an active participant's compensation which are made by

the Commonwealth or other employer for current service to the

trust to be credited in the participant's individual

investment account.

(2)  For active participants who elected to be

participants under section 5416 (relating to elections by

members to be participants), contributions equal to 7% of an

active participant's compensation which are made by the

Commonwealth or other employer for current service to the

trust to be credited in the participant's individual

investment account. This paragraph shall apply to a

participant only until termination of service such that the

participant is eligible for benefits under section 5407

(relating to eligibility for benefits) without regard to

whether or not a participant actually receives benefits. For

subsequent State service as an active participant, the

employer defined contributions shall equal 4% of an active

participant's compensation.

* * *

"Final average salary."  The highest average compensation

received as a member during any three nonoverlapping periods of

four consecutive calendar quarters during which the member was a

State employee, with the compensation for part-time service

being annualized on the basis of the fractional portion of the

year for which credit is received; except if the employee was

not a member for three nonoverlapping periods of four

consecutive calendar quarters, the total compensation received

as a member, annualized in the case of part-time service,

divided by the number of nonoverlapping periods of four

consecutive calendar quarters of membership; in the case of a

member with multiple service, the final average salary shall be

determined on the basis of the compensation received by him as a

[State employee] member of the system or as a school employee

other than as a participant in the School Employees' Defined

Contribution Plan, or both; in the case of a member with Class

A-3 or Class A-4 service and service in one or more other

classes of service, the final average salary shall be determined

on the basis of the compensation received by him in all classes

of State service credited in the system; and, in the case of a

member who first became a member on or after January 1, 1996,

the final average salary shall be determined as hereinabove

provided but subject to the application of the provisions of

section 5506.1(a) (relating to annual compensation limit under

IRC § 401(a)(17)).

* * *

"Inactive member."  A member for whom no pickup contributions

are being made to the fund, except in the case of an active

member for whom such contributions otherwise required for

current State service are not being made solely by reason of

section 5502.1 (relating to waiver of regular member

contributions and Social Security integration member

contributions) or any provision of this part relating to the

limitations under section 401(a)(17) or 415(b) of the Internal

Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(17)

or 415(b)), but who has accumulated deductions standing to his

credit in the fund and who is not eligible to become or has not

elected to become a vestee or has not filed an application for

an annuity.

"Inactive participant."  A participant for whom no mandatory

pickup participant contributions are being made to the trust,

except in the case of an active participant for whom such

contributions otherwise required for current State service are

not being made solely by reason of any provision of this part

relating to limitations under section 401(a)(17) or 415 of the

Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §

401(a)(17) or 415), but who has accumulated total defined

contributions standing to his credit in the trust and who has

not filed an application for an annuity.

"Individual investment account."  The account in the trust to

which are credited the amounts of the contributions made by a

participant and the participant's employer in accordance with

the provisions of this part, together with all interest and

investment earnings after deduction for fees, costs, expenses

and investment losses and charges for distributions.

"Intervening military service."  Active military service of a

member who was a State employee and active member of the system

immediately preceding his induction into the armed services or

forces of the United States in order to meet a military

obligation excluding any voluntary extension of such service and

who becomes a State employee within 90 days of the expiration of

such service.

* * *

"Irrevocable beneficiary."  The person or persons permanently

designated by a member or a participant in writing to the State

Employees' Retirement Board pursuant to an approved domestic

relations order to receive all or a portion of the accumulated

deductions, accumulated total defined contributions or lump sum

benefit payable upon the death of such member.

"Irrevocable successor payee."  The person permanently

designated by a participant receiving distributions in writing

to the board pursuant to an approved domestic relations order to

receive one or more distributions from the plan upon the death

of such participant.

* * *

"Mandatory pickup participant contributions."  Contributions

equal to 4% of compensation that are made by the Commonwealth or

other employer for active participants for current service which

are picked up by the employer.

* * *

"Participant."  An active participant, inactive participant

or participant receiving distributions.

"Participant receiving distributions."  A participant in the

plan who has commenced receiving distributions from his

individual investment account but who has not received a total

distribution of his interest in the account.

* * *

"Plan."  The State Employees' Defined Contribution Plan as

established by the provisions of this part and the board.

"Plan document."  The documents created by the board under

section 5402 (relating to plan document) that contain the terms

and provisions of the plan and trust as established by the board

regarding the establishment, administration and investment of

the plan and trust.

"Previous State service."  Service rendered as a State

employee prior to his most recent entrance in the system,

provided that the State employee was not a participant in the

plan, was not eligible to be an optional participant in the plan

under section 5302(b.1) (relating to credited State service) or

was not prohibited from being a participant under section

5302(c.1) during such service.

* * *

"Reemployed from USERRA leave."  Resumption of active

participation as a State employee after a period of USERRA

leave, provided however, that the resumption of active

participation was within the time period and under conditions

and circumstances such that the State employee was entitled to

reemployment rights under 38 U.S.C. Ch. 43 (relating to

employment and reemployment rights of members of the uniformed

services).

* * *

"Required beginning date."  The latest date by which

distributions of a participant's interest in his individual

investment account must commence under section 401(a)(9) of the

Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §

401(a)(9)).

"Retirement counselor."  The State Employees' Retirement

System or State Employees' Defined Contribution Plan employee

whose duty it shall be to advise each employee of his rights and

duties as a member of the system or as a participant of the

plan.

"Salary deductions."  The amounts certified by the board,

deducted from the compensation of an active member or active

participant, or the school service compensation of a multiple

service member who is an active member of the Public School

Employees' Retirement System, and paid into the fund or trust.

"School Employees' Defined Contribution Plan."  The defined

contribution plan for school employees established under 24

Pa.C.S. Pt. IV (relating to retirement for school employees).

* * *

"Special vestee."  An employee of The Pennsylvania State

University who is a member of the State Employees' Retirement

System with five or more but less than ten eligibility points

and who has a date of termination of service from The

Pennsylvania State University of June 30, 1997, because of the

transfer of his job position or duties to a controlled

organization of the Penn State Geisinger Health System or

because of the elimination of his job position or duties due to

the transfer of other job positions or duties to a controlled

organization of the Penn State Geisinger Health System, provided

that:

(1)  subsequent to termination of State service as an

employee of The Pennsylvania State University, the member has

not returned to State service in any other capacity or

position as a State employee;

(2)  The Pennsylvania State University certifies to the

board that the member is eligible to be a special vestee;

(3)  the member files an application to vest the member's

retirement rights pursuant to section 5907(f) (relating to

rights and duties of State employees [and], members and

participants) on or before September 30, 1997; and

(4)  the member elects to leave the member's total

accumulated deductions in the fund and to defer receipt of an

annuity until attainment of superannuation age.

* * *

"State employee."  Any person holding a State office or

position under the Commonwealth, employed by the State

Government of the Commonwealth, in any capacity whatsoever,

except an independent contractor or any person compensated on a

fee basis or any person paid directly by an entity other than a

State Employees' Retirement System employer, and shall include

members of the General Assembly, and any officer or employee of

the following:

(1)  (i)  The Department of Education.

(ii)  State-owned educational institutions.

(iii)  Community colleges.

(iv)  The Pennsylvania State University, except an

employee in the College of Agriculture who is paid wholly

from Federal funds or an employee who is participating in

the Federal Civil Service Retirement System. The

university shall be totally responsible for all employer

contributions under [section] sections 5507 (relating to

contributions to the system by the Commonwealth and other

[employers)] employers before July 1, 2015) and 5507.1

(relating to contributions to the system by the

Commonwealth and other employers starting July 1, 2015).

(2)  The Pennsylvania Turnpike Commission, the Delaware

River Port Authority, the Port Authority Transit Corporation,

the Philadelphia Regional Port Authority, the Delaware River

Joint Toll Bridge Commission, the State Public School

Building Authority, The General State Authority, the State

Highway and Bridge Authority, the Delaware Valley Regional

Planning Commission, the Interstate Commission of the

Delaware River Basin, and the Susquehanna River Basin

Commission any time subsequent to its creation, provided the

commission or authority agrees to contribute and does

contribute to the fund or to the trust, from time to time,

the moneys required to build up the reserves necessary for

the payment of the annuities or other benefits  of such

officers and employees without any liability on the part of

the Commonwealth to make appropriations for such purposes,

and provided in the case of employees of the Interstate

Commission of the Delaware River Basin, that the employee

shall have been a member of the system for at least ten years

prior to January 1, 1963.

(3)  Any separate independent public corporation created

by statute, not including any municipal or quasi-municipal

corporation, so long as he remains an officer or employee of

such public corporation, and provided that such officer or

employee of such public corporation was an employee of the

Commonwealth immediately prior to his employment by such

corporation, and further provided such public corporation

shall agree to contribute and contributes to the fund or to

the trust, from time to time, the moneys required to build up

the reserves necessary for the payment of the annuities or

other benefits of such officers and employees without any

liability on the part of the Commonwealth to make

appropriations for such purposes.

* * *

"Successor payee."  The person or persons last designated by

a participant receiving distributions in writing to the board to

receive one or more distributions upon the death of such

participant. A combined service employee may designate different

persons to be successor payees for his benefits in the plan and

beneficiaries or survivor annuitants for his benefits from the

system.

"Superannuation age."  For classes of service in the system

other than Class A-3 and Class A-4, any age upon accrual of 35

eligibility points or age 60, except for a member of the General

Assembly, an enforcement officer, a correction officer, a

psychiatric security aide, a Delaware River Port Authority

policeman or an officer of the Pennsylvania State Police, age

50, and, except for a member with Class G, Class H, Class I,

Class J, Class K, Class L, Class M or Class N service, age 55

upon accrual of 20 eligibility points. For Class A-3 and Class

A-4 service, any age upon attainment of a superannuation score

of 92, provided the member has accrued 35 eligibility points, or

age 65, or for park rangers or capitol police officers, age 55

with 20 years of service as a park ranger or capitol police

officer, except for a member of the General Assembly, an

enforcement officer, a correction officer, a psychiatric

security aide, a Delaware River Port Authority policeman or an

officer of the Pennsylvania State Police, age 55. A vestee with

Class A-3 or Class A-4 service credit attains superannuation age

on the birthday the vestee attains the age resulting in a

superannuation score of 92, provided that the vestee has at

least 35 eligibility points, or attains another applicable

superannuation age, whichever occurs first.

* * *

"Survivor annuitant."  The person or persons last designated

by a member under a joint and survivor annuity option to receive

an annuity upon the death of such member. A combined service

employee may designate different persons to be survivor

annuitants for his benefits from the system and beneficiaries or

successor payees for his benefits in the plan.

* * *

"Trust."  The State Employees' Defined Contribution Trust

established under Chapter 54 (relating to State Employees'

Defined Contribution Plan).

"USERRA leave."  Any period of time for service in the

uniformed services, as defined in 38 U.S.C. Ch. 43 (relating to

employment and reemployment rights of members of the uniformed

services), by a participant or former participant who terminated

State service to perform such service in the uniformed services,

if such current or former participant is entitled to

reemployment rights under 38 U.S.C. Ch. 43 with respect to such

uniformed service.

"Valuation interest."  Interest at 5 1/2% per annum

compounded annually and applied to all accounts of the fund

other than the members' savings account.

* * *

"Voluntary contributions."  Contributions made by a

participant to the trust and credited to his individual

investment account in excess of his mandatory pickup participant

contributions, by salary deductions paid through the

Commonwealth or other employer, or by an eligible rollover or

direct trustee-to-trustee transfer.

Section 3.  Section 5103 of Title 71 is amended to read:

§ 5103.  Notice to members and participants.

Notice by publication, including, without being limited to,

newsletters, newspapers, forms, first class mail, letters,

manuals and, to the extent authorized by a policy adopted by the

board, electronically, including, without being limited to, e-

mail or [World Wide Web] Internet sites, distributed or made

available to members and participants in a manner reasonably

calculated to give actual notice of those sections of the State

Employees' Retirement Code that require notice to members or

participants shall be deemed sufficient notice for all purposes.

Section 4.  Title 71 is amended by adding a section to read:

§ 5104.  Reference to State Employees' Retirement System.

As of the effective date of this section, unless the context

clearly indicates otherwise, any reference to the State

Employees' Retirement System in a statutory provision other than

this part and 24 Pa.C.S. Pt. IV (relating to retirement for

school employees) shall include a reference to the State

Employees' Defined Contribution Plan and any reference to the

State Employees' Retirement Fund shall include a reference to

the State Employees' Defined Contribution Trust.

Section 5.  Sections 5301 heading, (a), (b), (c) and (d) and

5302(a), (b), (d) and (e) of Title 71 are amended and the

sections are amended by adding subsections to read:

§ 5301.  Mandatory and optional membership in the system and

participation in the plan.

(a)  Mandatory membership.--[Membership] Unless an election

to be a participant in the plan is made, membership in the

system shall be mandatory as of the effective date of employment

for all State employees except the following:

(1)  Governor.

(2)  Lieutenant Governor.

(3)  Members of the General Assembly.

(4)  Heads or deputy heads of administrative departments.

(5)  Members of any independent administrative board or

commission.

(6)  Members of any departmental board or commission.

(7)  Members of any advisory board or commission.

(8)  Secretary to the Governor.

(9)  Budget Secretary.

(10)  Legislative employees.

(11)  School employees who have elected membership in the

Public School Employees' Retirement System.

(12)  School employees who have elected membership in an

independent retirement program approved by the employer,

provided that in no case, except as hereinafter provided,

shall the employer contribute on account of such elected

membership at a rate greater than the employer normal

contribution rate as determined in section 5508(b) (relating

to actuarial cost method for fiscal years ending before July

1, 2015). For the fiscal year 1986-1987 an employer may

contribute on account of such elected membership at a rate

which is the greater of 7% or the employer normal

contribution rate as determined in section 5508(b) and for

the fiscal year 1992-1993 and all years after that at a rate

of 9.29%.

(13)  Persons who have elected to retain membership in

the retirement system of the political subdivision by which

they were employed prior to becoming eligible for membership

in the State Employees' Retirement System.

(14)  Persons who are not members of the system and are

employed on a per diem or hourly basis for less than 100 days

or 750 hours in a 12-month period.

(15)  Employees of the Philadelphia Regional Port

Authority who have elected to retain membership in the

pension plan or retirement system in which they were enrolled

as employees of the predecessor Philadelphia Port Corporation

prior to the creation of the Philadelphia Regional Port

Authority.

(16)  Employees of the Juvenile Court Judges' Commission

who, before the effective date of this paragraph, were

transferred from the State System of Higher Education to the

Juvenile Court Judges' Commission as a result of an

interagency transfer of staff approved by the Office of

Administration and who, while employees of the State System

of Higher Education, had elected membership in an independent

retirement program approved by the employer.

(17)  State employees who are in a position covered by

Social Security and whose most recent period of State service

starts on or after January 1, 2015. For purposes of this

paragraph, a State employee who is furloughed under section

802 of the act of August 5, 1941 (P.L.752, No.286), known as

the Civil Service Act, and reemployed in any class or civil

service status which was previously held shall not be treated

as having a break in State service.

(a.1)  Mandatory participation in the plan.--State employees

listed in subsection (a)(17) who are not listed in subsection

(a)(1) through (13) shall be mandatory participants as of the

most recent effective date of State service.

(b)  Optional membership in the system.--The State employees

listed in subsection (a)(1) through (11) shall have the right to

elect membership in the system on or before December 31, 2014;

once such election is exercised, membership shall continue until

the termination of State service or until the State employee

elects to be a participant of the plan.

(b.1)  Optional participation in the plan.--The State

employees listed in subsection (a)(17) who also are listed in

subsection (a)(1) through (10) shall have the right to elect

participation in the plan; once such election is exercised,

participation will be effective as of the date of election and

shall continue until the termination of State service.

(c)  Prohibited membership in the system.--The State

employees listed in subsection (a)(12), (13), (14) [and], (15) 

and (17) shall not have the right to elect membership in the

system.

(c.1)  Prohibited participation in the plan.--The State

employees listed in subsection (a)(17) who also are listed in

subsection (a)(13) and (15) or who are employees of The

Pennsylvania State University, the State System of Higher

Education, State-owned educational institutions or community

colleges shall not be eligible to participate in the plan.

(d)  Return to service.--An annuitant who returns to service

as a State employee before January 1, 2015, or if on or after

January 1, 2015, to a position not covered by Social Security 

shall resume active membership in the system as of the effective

date of employment, except as otherwise provided in section

5706(a) (relating to termination of annuities), regardless of

the optional membership category of the position. An annuitant,

inactive participant or a participant receiving distributions

who returns to service as a State employee on or after January

1, 2015, shall be an active participant of the plan as of the

effective date of employment unless the position is not covered

by Social Security, is eligible for optional participation or is

not eligible for participation in the plan, or except as

otherwise provided in section 5706(a).

* * *

§ 5302.  Credited State service.

(a)  Computation of credited service.--In computing credited

State service of a member for the determination of benefits, a

full-time salaried State employee, including any member of the

General Assembly, shall receive credit for service in each

period for which contributions as required are made to the fund,

or for which contributions otherwise required for such service

were not made solely by reason of section 5502.1 (relating to

waiver of regular member contributions and Social Security

integration member contributions) or any provision of this part

relating to the limitations under IRC § 401(a)(17) or 415(b),

but in no case shall he receive more than one year's credit for

any 12 consecutive months or 26 consecutive biweekly pay

periods. A per diem or hourly State employee shall receive one

year of credited service for each nonoverlapping period of 12

consecutive months or 26 consecutive biweekly pay periods in

which he is employed and for which contributions are made to the

fund or would have been made to the fund but for such waiver

under section 5502.1 or limitations under the IRC for at least

220 days or 1,650 hours of employment. If the member was

employed and contributions were made to the fund for less than

220 days or 1,650 hours, he shall be credited with a fractional

portion of a year determined by the ratio of the number of days

or hours of service actually rendered to 220 days or 1,650

hours, as the case may be. A part-time salaried employee shall

be credited with the fractional portion of the year which

corresponds to the number of hours or days of service actually

rendered and for which contributions are made to the fund in

relation to 1,650 hours or 220 days, as the case may be. In no

case shall a member who has elected multiple service receive an

aggregate in the two systems of more than one year of credited

service for any 12 consecutive months.

(b)  Creditable leaves of absence.--

(1)  A member on leave without pay who is studying under

a Federal grant approved by the head of his department or who

is engaged up to a maximum of two years of temporary service

with the United States Government, another state or a local

government under the Intergovernmental Personnel Act of 1970

(5 U.S.C. §§ 1304, 3371-3376; 42 U.S.C. §§ 4701-4772) shall

be eligible for credit for such service: Provided, That

contributions are made in accordance with sections 5501

(relating to regular member contributions for current

service), 5501.1 (relating to shared-risk member

contributions for Class A-3 and Class A-4 service), 5505.1

(relating to additional member contributions) [and], 5507

(relating to contributions to the system by the Commonwealth

and other employers before July 1, 2015) and 5507.1 (relating

to contributions to the system by the Commonwealth and other

employers starting July 1, 2015), the member returns from

leave without pay to active State service as a member of the

system for a period of at least one year, and he is not

entitled to retirement benefits for such service under a

retirement system administered by any other governmental

agency.

(2)  An active member or active participant on paid leave

granted by an employer for purposes of serving as an elected

full-time officer for a Statewide employee organization which

is a collective bargaining representative under the act of 

June 24, 1968 (P.L.237, No.111), referred to as the Policemen

and Firemen Collective Bargaining Act, or the act of July 23,

1970 (P.L.563, No.195), known as the Public Employe Relations

Act, and up to 14 full-time business agents appointed by an

employee organization that represents correction officers

employed at State correctional institutions: Provided, That

for elected full-time officers such leave shall not be for

more than three consecutive terms of the same office and for

up to 14 full-time business agents appointed by an employee

organization that represents correction officers employed at

State correctional institutions no more than three

consecutive terms of the same office; that the employer shall

fully compensate the member, including, but not limited to,

salary, wages, pension and retirement contributions and

benefits, other benefits and seniority, as if he were in

full-time active service; and that the Statewide employee

organization shall fully reimburse the employer for all

expenses and costs of such paid leave, including, but not

limited to, contributions and payment in accordance with

[sections] section 5404 (relating to participant

contributions), 5405 (relating to mandatory pickup

participant contributions), 5501, 5501.1, 5505.1 [and], 5507

or 5507.1, if the employee organization either directly pays,

or reimburses the Commonwealth or other employer for,

contributions made in accordance with [section] sections

5405, 5507 and 5507.1.

* * *

(d)  Enlargement of coverage of Military Code.--For purposes

of determining whether a member is eligible to receive credited

service for active military service rendered after the date of

this act, other than active duty service to meet periodic

training requirements, the provisions of 51 Pa.C.S. Ch. 73 

(relating to military leave of absence) shall apply to all

individuals who were active members of the system when they

entered active military service, even if not defined as an

employee pursuant to 51 Pa.C.S. § 7301 (relating to

definitions).

* * *

(e)  Cancellation of credited service.--All credited service 

in the system shall be cancelled if a member withdraws his total

accumulated deductions, except that a member with Class A-3 or

Class A-4 service credit and one or more other classes of

service credit shall not have his service credit as a member of

any classes of service other than as a member of Class A-3 or

Class A-4 cancelled when the member receives a lump sum payment

of accumulated deductions resulting from Class A-3 or Class A-4

service pursuant to section 5705.1 (relating to payment of

accumulated deductions resulting from Class A-3 and Class A-4

service). A partial or total distribution of accumulated total

defined contributions to a combined service employee shall not

cancel service credited in the system.

(f)  Military service by a participant.--A participant who

has performed USERRA leave shall be treated and may make

contributions as follows:

(1)  A participant who is reemployed from USERRA leave

shall be treated as not having incurred a break in State

service by reason of the USERRA leave. If a participant who

is reemployed from USERRA leave subsequently makes mandatory

pickup participant contributions in the amounts and in the

time periods required by 38 U.S.C. Ch. 43 (relating to

employment and reemployment rights of members of the

uniformed services) and IRC § 414(u) as if the participant

had continued in his State office or employment and performed

State service and been compensated during the period of

USERRA leave, the participant's employer shall make the

corresponding employer defined contributions. Such an

employee shall have his contributions, benefits, rights and

obligations determined under this part as if he were an

active participant who performed State service during the

USERRA leave in the job position that he would have held had

he not been on USERRA leave and received the compensation on

which the mandatory pickup participant contributions to

receive State service credit for the USERRA leave were

determined, including the right to make voluntary

contributions on such compensation as permitted by law.

(2)  A participant who is reemployed from USERRA leave

who does not make the mandatory pickup participant

contributions or makes only part of the mandatory pickup

participant contributions within the allowed payment period

shall not be eligible to make mandatory pickup participant

contributions or voluntary contributions at a later date for

the period of USERRA leave for which the mandatory pickup

participant contributions were not timely made.

(3)  A participant employee who performs USERRA leave

from which the employee could have been reemployed from

USERRA leave had the State employee returned to State service

in the time frames required by 38 U.S.C. Ch. 43 for

reemployment rights, but was not reemployed, shall not be

eligible to make mandatory pickup participant contributions

or voluntary contributions for the period of USERRA leave

should the employee later return to State service and be a

participant in the plan.

(4)  An active participant or inactive participant on

leave without pay who, on or after the effective date of this

subsection, is granted a leave of absence under 51 Pa.C.S. §

4102 (relating to leaves of absence for certain government

employees) or a military leave under the 51 Pa.C.S. Ch.73

(relating to military leave of absence) that is not USERRA

leave shall not be able to make mandatory pickup participant

contributions or voluntary contributions during or for the

leave of absence or military leave and shall not have

employer defined contributions made during such leave,

without regard to whether or not the State employee received

salary, wages, stipends, differential wage payments or other

payments from his employer during the leave, notwithstanding

any provision to the contrary in 51 Pa.C.S. § 4102 or 51

Pa.C.S. Ch. 73.

(5)  If a participant dies while performing USERRA leave,

the beneficiaries or successor payees of the deceased

participant are entitled to any additional benefits, other

than benefit accruals relating to the period of qualified

military service, provided under this part had the

participant resumed and terminated employment on account of

death.

Section 6.  Sections 5303(b)(2), (d)(1), (e)(1) and (4),

5303.2(a) and (e), 5304(a) and (b), 5305(b) introductory

paragraph and (3) and 5305.1 of Title 71 are amended to read:

§ 5303.  Retention and reinstatement of service credits.

* * *

(b)  Eligibility points for prospective credited service.--

* * *

(2)  A special vestee or person otherwise eligible to be

a special vestee who returns to State service, other than as

a participant in the plan, or withdraws his accumulated

deductions pursuant to section 5311 (relating to eligibility

for refunds) or 5701 (relating to return of total accumulated

deductions) shall receive or retain eligibility points in

accordance with paragraph (1) but upon subsequent termination

of State service shall only be eligible to be an annuitant,

vestee or inactive member without regard to previous status

as a special vestee and without regard to the provisions of

this part providing for special vestees.

* * *

(d)  Transfer of certain pension service credit.--

(1)  Any person who was an employee of any county in this

Commonwealth on the personal staff of an appellate court

judge prior to September 9, 1985, and who had that employment

transferred to the Commonwealth pursuant to 42 Pa.C.S. § 3703

(relating to local chamber facilities) shall be a member of

the system for all service rendered as an employee of the

Commonwealth on the personal staff of an appellate court

judge subsequent to the date of the transfer unless

specifically prohibited pursuant to section 5301(c) (relating

to mandatory and optional membership in the system and

participation in the plan). The employee shall be entitled to

have any prior service credit in that county or other

municipal pension plan or retirement system transferred to

the system and deemed to be State service for all purposes

under this part. However, for those employees who were in

continuous county employment which commenced prior to July

22, 1983, section 5505.1 shall not apply. The transfer of

prior service credit to the system shall occur upon the

transfer, by the member, county or other municipal pension

plan or retirement system, to the system of the amount of

accumulated member contributions, pick-up contributions and

credited interest standing in the employee's county or

municipal pension plan or retirement system account as of the

date that these funds are transferred to the system. In the

event that these funds have been refunded to the member, the

transfer of service credit shall occur when the member

transfers an amount equal to either the refund which the

member received from the county or municipal pension plan or

retirement system or the amount due under section 5504, if

less. In the case of a transfer by the member, the transfer

shall occur by December 31, 1987, in order for the member to

receive credit for the prior service. In the case of a

transfer by the county or other municipal pension plan or

retirement system, the transfer shall also occur by December

31, 1987. If the amount transferred to the system by the

member of a county or municipal pension plan or retirement

system is greater than the amount that would have accumulated

in the member's account if the employee had been a member of

the system, all excess funds shall be returned to the

employee within 90 days of the date on which such funds are

credited to the member's account in the system. Within 60

days of receipt of written notice that an employee has

elected to transfer credits under the provisions of this

subsection, the county or other municipal pension plans or

retirement systems shall be required to transfer to the

system an amount, excluding contributions due under section

5504(a), equal to the liability of the prior service in

accordance with county or other municipal pension plan or

retirement system benefit provisions, multiplied by the ratio

of system actuarial value of assets for active members to the

system actuarial accrued liability for active members. The

Public Employee Retirement Study Commission shall determine

the appropriate amount of employer contributions to be

transferred to the system by the county or other municipal

pension plans or retirement systems.

* * *

(e)  Transfer and purchase of certain pension service credit;

Philadelphia Regional Port Authority.--

(1)  Any employee of the Philadelphia Regional Port

Authority who becomes a State employee, as defined in section

5102 (relating to definitions), and an active member of the

system shall be eligible to obtain retirement credit for

prior uncredited service with the Philadelphia Port

Corporation, a Pennsylvania not-for-profit corporation

("predecessor corporation"), provided that the Commonwealth

does not incur any liability for the funding of the annuities

attributable to the prior, uncredited "predecessor

corporation" service, the cost of which shall be determined

according to paragraph (2).

* * *

(4)  Any person who became employed by the Philadelphia

Regional Port Authority between July 10, 1989, and passage of

this act and who becomes a State employee, as defined in

section 5102, and an active member of the system shall be

eligible to obtain retirement credit for service from the

date of employment with the Philadelphia Regional Port

Authority, provided that the contributions are made in

accordance with sections 5501, 5504, 5505.1 and 5506.

* * *

§ 5303.2. Election to convert school service to State service.

(a) Eligibility.--An active member or inactive member on

leave without pay who was an employee transferred from the

Department of Education to the Department of Corrections

pursuant to section 908-B of the act of April 9, 1929 (P.L.177,

No.175), known as The Administrative Code of 1929, and who on

the effective date of that transfer did not participate in an

independent retirement program approved by the Department of

Education under 24 Pa.C.S. § 8301(a)(1) (relating to mandatory

and optional membership) or section 5301(a)(12) (relating to

mandatory and optional membership in the system and

participation in the plan), notwithstanding any other provision

of law or any collective bargaining agreement, arbitration

award, contract or term or conditions of any retirement system

or pension plan, may make a one-time election to convert all

service credited in the Public School Employees' Retirement

System as of June 30, 1999, and transfer to the system all

accumulated member contributions and statutory interest credited

in the members' savings account in the Public School Employees'

Retirement System as of June 30, 1999, plus statutory interest

on that amount credited by the Public School Employees'

Retirement System from July 1, 1999, to the date of transfer to

the system.

* * *

(e)  Transfer.--Within 180 days after the effective date of

this subsection, the Public School Employees' Retirement System

shall transfer to the board for each member electing to convert

under this section the accumulated member contributions and

statutory interest credited in the Public School Employees'

Retirement System, plus an amount equal to the value of all

annual employer contributions made to the Public School

Employees' Retirement System with interest at the annual rate

adopted by the board for the calculation of the normal

contribution rate under section 5508(b) (relating to actuarial

cost method for fiscal year ending before July 1, 2015), from

the date of each contribution to the date of the transfer of the

funds to the board. Any debt owed by a member to the Public

School Employees' Retirement System for whatever reason shall be

transferred to the system and shall be paid in a manner and in

accordance with conditions prescribed by the board.

* * *

§ 5304.  Creditable nonstate service.

(a)  Eligibility.--

(1)  An active member who first becomes an active member

before January 1, 2011, or before December 1, 2010, as a

member of the General Assembly, or a multiple service member

who first becomes an active member before January 1, 2011, or

before December 1, 2010, as a member of the General Assembly,

and who is a school employee and an active member of the

Public School Employees' Retirement System shall be eligible

for Class A service credit for creditable nonstate service as

set forth in subsections (b) and (c) except that intervening

military service shall be credited in the class of service

for which the member was eligible at the time of entering

into military service and for which he makes the required

contributions to the fund and except that a multiple service

member who is a school employee and an active member of the

Public School Employees' Retirement System shall not be

eligible to purchase service credit for creditable nonstate

service set forth in subsection (c)(5).

(2)  An active member who first becomes an active member

on or after January 1, 2011, or on or after December 1, 2010,

as a member of the General Assembly, or a multiple service

member who first becomes an active member on or after January

1, 2011, or on or after December 1, 2010, as a member of the

General Assembly, and who is a school employee and an active

member of the Public School Employees' Retirement System

shall be eligible for Class A-3 service credit for creditable

nonstate service as set forth in subsections (b) and (c)

except that intervening military service shall be credited in

the class of service for which the member was eligible at the

time of entering into military service and for which he makes

the required contributions to the fund and except that a

multiple service member who is a school employee and an

active member of the Public School Employees' Retirement

System shall not be eligible to purchase service credit for

creditable nonstate service set forth in subsection (c)(5).

* * *

(b)  Limitations on eligibility.--An active member or a

multiple service member who is a school employee and an active

member of the Public School Employees' Retirement System shall

be eligible to receive credit for nonstate service provided that

he does not have credit for such service in the system or in the

school system and is not entitled to receive, eligible to

receive now or in the future, or is receiving retirement

benefits for such service in the system or under a retirement

system administered and wholly or partially paid for by any

other governmental agency or by any private employer, or a

retirement program approved by the employer in accordance with

section 5301(a)(12) (relating to mandatory and optional

membership in the system and participation in the plan), and

further provided, that such service is certified by the previous

employer and contributions are agreed upon and made in

accordance with section 5505 (relating to contributions for the

purchase of credit for creditable nonstate service).

* * *

§ 5305.  Social security integration credits.

* * *

(b)  Accrual of subsequent credits.--Any active member who

has social security integration accumulated deductions to his

credit or is receiving a benefit on account of social security

integration credits may accrue one social security integration

credit for each year of service as a State employee on or

subsequent to March 1, 1974 and a fractional credit for a

corresponding fractional year of service provided that

contributions are made to the fund, or would have been made to

the fund but for section 5502.1 (relating to waiver of regular

member contributions and Social Security integration member

contributions) or the limitations under IRC § 401(a)(17) or

415(b), in accordance with section 5502 (relating to Social

Security integration member contributions), and he:

* * *