THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY FARNESE, WAUGH, FONTANA, BROWNE, ORIE, DINNIMAN, HUGHES AND WASHINGTON, MARCH 23, 2011

REFERRED TO FINANCE, MARCH 23, 2011  

AN ACT

Amending the act of December 18, 1984 (P.L.1005, No.205),

entitled, as amended, "An act mandating actuarial funding

standards for all municipal pension systems; establishing a

recovery program for municipal pension systems determined to

be financially distressed; providing for the distribution of

the tax on the premiums of foreign fire insurance companies;

providing for the establishment and administration of

deferred retirement option plans in local governments and for

local tax; and making repeals," in provisions relating to

cities of the first class, providing for purchase of credit

for previous government service.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of December 18, 1984 (P.L.1005, No.205),

known as the Municipal Pension Plan Funding Standard and

Recovery Act, is amended by adding a section to read:

Section 1004.  Purchase of credit for previous government

service.

(a)  General rule.--A member of a retirement system of a city

of the first class may purchase credited service for previous

government employment, which was full-time or its prorated

equivalent and which occurred prior to the member's current term

of employment with the city of the first class, as follows:

(1)  service with the military, under a branch of the

armed forces of the United States; or

(2)  service as an employee of the Federal Government,

State or political subdivision within the Commonwealth or any

agency or instrumentality thereof or any association of

employees thereof; or of an educational organization which is

a public school within this Commonwealth which provides

elementary or secondary education, as determined by State

law.

(b)  Limitation.--

(1)  Credited service which may be purchased, only if the

member has vested in the current retirement system, for

allowable other government employment is limited to a maximum

of ten years and shall be permitted only with respect to

service for which the member is not or will not be entitled

to a vested pension from another employer.

(2)  Notwithstanding the provisions of paragraph (1), a

member may purchase credit for prior military service for

which the member is or will be entitled to a military

pension, if that member's entitlement to a military pension

is based on whole or in part upon service in the military

reserves.

(c)  Amount payable and payments.--The amount payable shall

be certified in each case by the pension board in accordance

with methods approved by the actuary and shall be paid in a lump

sum within 30 days or amortized with statutory interest through

salary deductions in amounts agreed upon by the member and the

pension board.

(d)  Applications.--Applications for purchase of credited

service under this section shall be made on forms provided by

the pension board and, in the case of an application for

allowable military service, shall be accompanied by a certified

copy of the applicant's military record plus proof of a

discharge from the armed forces of the United States that is

characterized as "honorable" or "under honorable conditions." 

Such discharge shall be a condition precedent to being entitled

to the purchase of credited service with respect to military

service.

(e)  Compliance by city of the first class.--A city of the

first class that has an established procedure for members of its

retirement system to purchase previous government service which

procedure does not conform to the provisions of subsection (b)

shall amend its plan:

(1)  within 180 days of the effective date of this

section; or

(2)  when the current labor-management contract creating

the plan expires, whichever is later, to conform with the

provisions of this section with respect to future retirement

system participants.

(f)  Applicability.--The provisions of subsection (b) shall

not apply to a member of the retirement system who:

(1)  has civil service status;

(2)  is entitled to be represented by a union; and

(3)  has five or more years of credited service with the

retirement system.

(g)  Construction.--A change of position in employment within

an administrative department of a city of the first class or

between administrative departments of a city of the first class

shall not be deemed as establishing a new current term of

employment for purposes of this section.

Section 2.  This act shall take effect in 60 days.