1Amending Title 71 (State Government) of the Pennsylvania
2Consolidated Statutes, in preliminary provisions relating to 
3retirement for State employees and officers, further 
4providing for definitions; in membership, credited service, 
5classes of service and eligibility for benefits, further 
6providing for mandatory and optional membership and for 
7eligibility for vesting; and providing for election to 
8discontinue active membership by optional members.

9The General Assembly of the Commonwealth of Pennsylvania
10hereby enacts as follows:

11Section 1. The definitions of "additional accumulated
12deductions," "regular accumulated deductions," "shared-risk
13accumulated deductions," "total accumulated deductions" and
14"vestee" in section 5102 of Title 71 of the Pennsylvania
15Consolidated Statutes are amended to read:

16§ 5102. Definitions.

17The following words and phrases as used in this part, unless
18a different meaning is plainly required by the context, shall
19have the following meanings:

20* * *

21"Additional accumulated deductions." The total of the
 

1additional member contributions paid into the fund on account of 
2current service or previous State or creditable nonstate 
3service, together with the statutory interest credited thereon 
4until the date of termination of service. In the case of a 
5vestee, statutory interest shall be credited until the effective 
6date of retirement[.] or the date on which active membership is 
7discontinued under section 5312 (relating to election to 
8discontinue active membership by optional members), whichever is 
9earlier. A member's account shall not be credited with statutory 
10interest for more than two years during a leave without pay.

11* * *

12"Regular accumulated deductions." The total of the regular 
13or joint coverage member contributions paid into the fund on 
14account of current service or previous State or creditable 
15nonstate service, together with the statutory interest credited 
16thereon until the date of termination of service[.] or the date 
17on which active membership is discontinued under section 5312 
18(relating to election to discontinue active membership by 
19optional members), whichever is earlier. In the case of a vestee 
20or a special vestee, statutory interest shall be credited until 
21the effective date of retirement. A member's account shall not 
22be credited with statutory interest for more than two years 
23during a leave without pay.

24* * *

25"Shared-risk accumulated deductions." The total of the
26shared-risk member contributions paid into the fund on account
27of current service or previous State service or creditable
28nonstate service, together with the statutory interest credited
29on the contributions until the date of termination of service[.]
30or the date on which active membership is discontinued under
 

1section 5312 (relating to election to discontinue active 
2membership by optional members), whichever is earlier. In the
3case of a vestee, statutory interest shall be credited until the
4effective date of retirement. A member's account shall not be
5credited with statutory interest for more than two years during
6a leave without pay.

7* * *

8"Total accumulated deductions." The sum of the regular 
9accumulated deductions, additional accumulated deductions, the 
10social security integration accumulated deductions, shared-risk 
11member contributions and all other contributions paid into the 
12fund for the purchase, transfer or conversion of credit for 
13service or other coverage together with all statutory interest 
14credited thereon until the date of termination of service[.] or 
15the date on which active membership is discontinued under 
16section 5312 (relating to election to discontinue active 
17membership by optional members), whichever is earlier. In the 
18case of a vestee or a special vestee, statutory interest shall 
19be credited until the effective date of retirement. A member's 
20account shall not be credited with statutory interest for more 
21than two years during a leave without pay.

22* * *

23"Vestee." A member with five or more eligibility points in a 
24class of service other than Class A-3 or Class A-4 or Class T-E 
25or Class T-F in the Public School Employees' Retirement System,
26a member with Class G, Class H, Class I, Class J, Class K, Class 
27L, Class M or Class N service with five or more eligibility 
28points, or a member with Class A-3 or Class A-4 service with ten 
29or more eligibility points who has terminated State service and 
30has elected to leave his total accumulated deductions in the

1fund and to defer receipt of an annuity[.] or who continues 
2State service, discontinues active membership in the system 
3under section 5312 (relating to election to discontinue active 
4membership by optional members), and leaves his total 
5accumulated deductions in the fund.

6Section 2. Section 5301(a), (b) and (c) of Title 71 are
7amended to read:

8§ 5301. Mandatory and optional membership.

9(a) Mandatory membership.--Membership in the system shall be
10mandatory as of the effective date of employment for all State
11employees except the following:

12(1) Governor.

13(2) Lieutenant Governor.

14(3) Members of the General Assembly.

15(4) Heads or deputy heads of administrative departments.

16(5) Members of any independent administrative board or
17commission.

18(6) Members of any departmental board or commission.

19(7) Members of any advisory board or commission.

20(8) Secretary to the Governor.

21(9) Budget Secretary.

22(10) Legislative employees.

23(11) School employees who have elected membership in the
24Public School Employees' Retirement System.

25(12) School employees who have elected membership in an
26independent retirement program approved by the employer,
27provided that in no case, except as hereinafter provided,
28shall the employer contribute on account of such elected
29membership at a rate greater than the employer normal
30contribution rate as determined in section 5508(b) (relating

1to actuarial cost method). For the fiscal year 1986-1987 an
2employer may contribute on account of such elected membership
3at a rate which is the greater of 7% or the employer normal
4contribution rate as determined in section 5508(b) and for
5the fiscal year 1992-1993 and all years after that at a rate
6of 9.29%.

7(13) Persons who have elected to retain membership in
8the retirement system of the political subdivision by which
9they were employed prior to becoming eligible for membership
10in the State Employees' Retirement System.

11(14) Persons who are not members of the system and are
12employed on a per diem or hourly basis for less than 100 days
13or 750 hours in a 12-month period.

14(15) Employees of the Philadelphia Regional Port
15Authority who have elected to retain membership in the
16pension plan or retirement system in which they were enrolled
17as employees of the predecessor Philadelphia Port Corporation
18prior to the creation of the Philadelphia Regional Port
19Authority.

20(16) Employees of the Juvenile Court Judges' Commission
21who, before the effective date of this paragraph, were
22transferred from the State System of Higher Education to the
23Juvenile Court Judges' Commission as a result of an
24interagency transfer of staff approved by the Office of
25Administration and who, while employees of the State System
26of Higher Education, had elected membership in an independent
27retirement program approved by the employer.

28(17) State employees who have exercised the option to
29discontinue active membership in the system under section
305312 (relating to election to discontinue active membership

1by optional members).

2(b) Optional membership.--The State employees listed in
3subsection (a)(1) through (11) shall have the right to elect
4membership in the system; once such election is exercised,
5membership shall continue until the termination of State
6service, unless the employee exercises the option to discontinue 
7active membership in the system under section 5312.

8(c) Prohibited membership.--The State employees listed in
9subsection (a)(12), (13), (14) [and], (15) and 17 shall not have
10the right to elect membership in the system.

11* * *

12Section 3. Section 5309 of Title 71 is amended by adding
13paragraphs to read:

14§ 5309. Eligibility for vesting.

15Any member who:

16* * *

17(4) Does not have Class A-3 or Class A-4 service credit
18or Class T-E or Class T-F service credit in the Public School
19Employees' Retirement System and continues State service and
20discontinues active membership in the system under section
215312 (relating to election to discontinue active membership
22by optional members) with five or more eligibility points,
23shall be eligible to vest his retirement benefits until
24attainment of superannuation age and termination of State
25service.

26(5) Has Class A-3 or Class A-4 service credit or Class
27T-E or Class T-F service credit in the Public School
28Employees' Retirement System and ten or more eligibility
29points, continues State service and discontinues active
30membership in the system under section 5312 shall be eligible

1to vest his retirement benefits until attainment of
2superannuation age and termination of State service.

3(6) Has either Class A-3 or Class A-4 service credit or
4Class T-E or Class T-F service credit in the Public School
5Employees' Retirement System, also has service credited in
6the system in one or more other classes of service and has
7five or more, but fewer than ten, eligibility points,
8continues State service and discontinues active membership in
9the system under section 5312 shall be eligible, until
10attainment of superannuation age and termination of State
11service, to vest his retirement benefits calculated on his
12service credited in classes of service other than Class A-3
13or Class A-4 and to be credited with statutory interest on
14total accumulated deductions, regardless of whether or not
15any part of his accumulated deductions are a result of Class
16A-3 or Class A-4 service credit.

17Section 4. Title 71 is amended by adding a section to read:

18§ 5312. Election to discontinue active membership by optional
19members.

20(a) General rule.--Notwithstanding any other provision of
21this title to the contrary, a State employee for whom membership
22is optional under section 5301 (relating to mandatory and
23optional membership), who is an active member of the system on
24the effective date of this section, may elect to discontinue
25active membership.

26(b) Time for making election.--An election pursuant to
27subsection (a) must be made by the active member filing written
28notice with the board on or before 90 days after the effective
29date of this section or before the member terminates State
30service, whichever occurs first.

1(c) Effect of election.--Notwithstanding any other provision
2of this title to the contrary, an election to discontinue active
3membership shall be irrevocable and shall become effective when
4the election is filed with the board.

5(d) Effect of failure to make election.--In the case of a
6State employee who is eligible to make an election under
7subsection (a), failure to elect to discontinue active
8membership within the election period specified in subsection
9(b) shall result in the continuation of the employee's active
10membership until the termination of State service.

11Section 5. This act shall take effect in 90 days.