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HOUSE AMENDED
PRIOR PRINTER'S NO. 886
PRINTER'S NO. 1132
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
1
Session of
2015
INTRODUCED BY CORMAN, BROWNE, SCARNATI, GORDNER, EICHELBERGER,
SMUCKER, FOLMER, SCAVELLO, AUMENT, McGARRIGLE, VULAKOVICH,
STEFANO, BARTOLOTTA, HUTCHINSON, ALLOWAY, YAW, MENSCH, BAKER,
WHITE, BROOKS, ARGALL, McILHINNEY, VANCE, VOGEL, WAGNER AND
WARD, MAY 8, 2015
AS REPORTED FROM COMMITTEE ON STATE GOVERNMENT, HOUSE OF
REPRESENTATIVES, AS AMENDED, JUNE 27, 2015
AN ACT
Amending Titles 24 (Education), 51 (Military Affairs) and 71
(State Government) of the Pennsylvania Consolidated Statutes,
extensively revising pension provisions: for the Public
School Employees' Retirement System, in the areas of
preliminary provisions, of membership, contributions and
benefits, of School Employee's Defined Contribution Plan and
of administration and miscellaneous provisions; for health
insurance for retired school employees, in the area of
preliminary provisions; for military pensions, in the area of
military leave of absence; for boards and offices, in the
area of Independent Fiscal Office; for the State Employees'
Retirement System, in the areas of preliminary provisions, of
membership, credited service, classes of service and
eligibility for benefits, of State Employees' Defined
Contribution Plan, of contributions, of benefits and of
administration, funds, accounts, general provisions; and
providing, as to the revisions, for construction and
administration, for applicability, for funding, for
liability, for State Employee member statements and for State
Employees Retirement Board obligations.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
ARTICLE I
Section 101. (1) It is the intent of the General Assembly
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to ensure the financial health of the Commonwealth and its
school districts by adopting reforms to provide for the
sustainability of our public retirement system.
(2) Pennsylvania's retirement systems, SERS for State
employees and PSERS for school employees, together have an
unfunded liability of $60,121,184,000. The level of payment
by the Commonwealth and school districts required to annually
address these amounts is staggering, particularly when other
state revenues are reduced due to a struggling economy. The
current condition of Pennsylvania's unfunded system combined
with the State's structural deficit threaten the financial
well-being of current and future public employees.
(3) In order to fully fund State pensions systems,
economists estimate that contributions will continue to
require a significant portion of state revenues. In fiscal
year 2015-2016, pension expenditures are expected to exceed
$4,800,000,000 and $7,300,000,000 by 2025.
(4) The tax increases that would be required to address
increasing pension obligations would place a heavy burden on
the citizens of this Commonwealth and hamper the ability to
provide them with services vital to the public's health,
safety and welfare. Therefore, it is imperative that the
Commonwealth adopt reforms that will maintain the financial
health of the Commonwealth and its school districts.
(5) Therefore, the reforms contained in this legislation
are intended to use resources judiciously and enable the
Commonwealth to provide retirement security for Commonwealth
and school employees while reducing the burden on taxpayers.
(6) The reforms of the retirement benefits of
Commonwealth and school district employees contained in this
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act are prospective and will not impact benefits earned from
services rendered prior to the effective date of this act.
(7) The General Assembly finds that it is necessary to
advance and maintain the long-term stability of public
employee pension systems by adopting reform relating to
current and to future employees in order to:
(i) Ensure that the Commonwealth and its school
districts will have adequate funds to continue to be able
to provide retirement benefits for their employees.
(ii) To ensure that the cost of current and future
benefits does not jeopardize the ability and obligation
to provide for public education, infrastructure, programs
for the elderly and other vulnerable populations and
public safety.
(8) The General Assembly expressly finds and declares
that the situation confronting our pensions systems has
reached a critical state and that enactment of this act is
reasonable and necessary to achieve and protect the public
interests. Further, the General Assembly finds that
protecting benefits for services already rendered meets all
legal standards relating to changes in benefits.
ARTICLE II
Section 201. Section 8102 of Title 24 of the Pennsylvania
Consolidated Statutes is amended to read:
§ 8102. Definitions.
The following words and phrases when used in this part shall
have, unless the context clearly indicates otherwise, the
meanings given to them in this section:
"Accumulated deductions." The total of pickup contributions
[and], eligible roll-ins made under section 8507(l) (relating to
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rights and duties of school employees, members and
participants), the contributions paid into the fund by the
member on account of current school service, previous school
service, or creditable nonschool service, excess interest
awarded under section 8523(d) (relating to members' savings
account and cash balance account) on member contributions, and
the statutory interest credited on all such contributions.
"Accumulated employer defined contributions." The total of
the employer defined contributions paid into the trust on
account of a participant's school service together with any
investment earnings and losses and adjustments 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 school 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 adjustments for fees,
costs and expenses credited or charged thereon.
"Activated military service." Military service by a member
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of a reserve component of the armed forces, pursuant to an order
on or after July 1, 1990, and prior to July 1, 2013, to enter
into active military service, other than an order to enter into
active duty to meet periodic training requirements, who was an
active member of the system immediately preceding the order into
active military service and to whom the military leave
provisions of 51 Pa.C.S. Ch. 73 (relating to military leave of
absence) do not apply.
"Active member." A school employee for whom pickup
contributions are being made to the fund or for whom such
contributions otherwise required for current school service are
not being made solely by reason of any provision of this part
limiting compensation or 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)).
"Active participant." A school employee for whom mandatory
pickup participant contributions are being made to the trust or
for whom such contributions otherwise required for current
school 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) or any provision of
this part limiting compensation.
"Actuarially equivalent." Equal present values, computed on
the basis of statutory interest and the mortality tables adopted
by the board.
"Actuary." The consultant to the board who shall be:
(1) a member of the American Academy of Actuaries;
(2) an individual who has demonstrated to the
satisfaction of the Insurance Commissioner of Pennsylvania
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that he has the educational background necessary for the
practice of actuarial science and has had at least seven
years of actuarial experience; or
(3) a firm, partnership, or corporation of which at
least one member meets the requirements of paragraph (1) or
(2).
"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.
"Alternative investment." An investment in a private equity
fund, private debt fund, venture fund, real estate fund, hedge
fund or absolute return fund.
"Alternative investment vehicle." A limited partnership,
limited liability company or any other legal vehicle for
authorized investments under section 8521(i) (relating to
management of fund and accounts) through which the system makes
an alternative investment.
"Annuitant." Any member on or after the effective date of
retirement until his annuity is terminated.
"Approved domestic relations order." Any domestic relations
order which has been determined to be approved in accordance
with section 8533.1 (relating to approval of domestic relations
orders).
"Approved leave of absence." [A] As applied to all classes
of membership except Class T-I, a leave of absence for activated
military service or which has been approved by the employer for
sabbatical leave, service as an exchange teacher, service with a
collective bargaining organization or professional study. As
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applied to Class T-I members, a leave of absence that has been
approved as a contributory leave by the employer for sabbatical
leave, service as an exchange teacher, service with a collective
bargaining organization or professional study.
"Basic contribution rate." For Class T-A, T-B and T-C
service, the rate of 6 1/4%. For Class T-D service, the rate of
7 1/2%. For all active members on the effective date of this
provision who are currently paying 5 1/4% and elect Class T-D
service, the rate of 6 1/2%. For Class T-E service, the rate of
7 1/2%. For Class T-F service, the rate of 10.30%. For all
members on the effective date of this provision whose basic
contribution rate is 6.5%, the Class T-G service rate is 9.5%
and the Class T-H service rate is 5.25%. For all members on the
effective date of this provision whose basic contribution rate
is 7.5%, the Class T-G service rate is 10.5% and the Class T-H
service rate is 6.25%. For Class T-I service, the rate of 3%.
"Beneficiary." [The] In the case of the system, 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. In the case of the plan, the person or
persons last designated in writing to the board by a participant
to receive the participant's vested accumulated total defined
contributions upon the death of the participant.
"Board." The Public School Employees' Retirement Board or
the Public School Employes' Retirement Board.
"Cash balance account." The ledger account into which
members contribute cash balance member contributions, together
with employer contributions, interest and excess interest, as
provided in this part.
"Cash balance member contributions." For members in a class
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other than Class T-I, the amount voluntarily contributed by such
member and eligible amounts rolled in to the cash balance
account, as provided in this part.
"Class of service multiplier."
Class of service Multiplier
T-A .714
T-B .625
T-C 1.000
T-D 1.000
T-E 1.000
T-F 1.000
T-G 1.000
T-H 1.000
"Combined service employee." A current or former school
employee who is both a member of the system and a participant in
the plan.
"Commissioner." The Commissioner of the Internal Revenue
Service.
"Compensation." Pickup contributions and mandatory pickup
participant contributions plus any remuneration received as a
school employee excluding reimbursements for expenses incidental
to employment and excluding any bonus, severance payments, any
other remuneration or other emolument received by a school
employee during his school service which is not based on the
standard salary schedule under which he is rendering service,
payments for unused sick leave or vacation leave, bonuses or
other compensation for attending school seminars and
conventions, payments under health and welfare plans based on
hours of employment or any other payment or emolument which may
be provided for in a collective bargaining agreement which may
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be determined by the Public School Employees' Retirement Board
to be for the purpose of enhancing compensation as a factor in
the determination of final average salary, 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), leave granted under section 1178 of
the act of March 10, 1949 (P.L.30, No.14), known as the Public
School Code of 1949, or other types of military leave, including
other types of leave payments, stipends, differential wage
payments as defined in IRC § 414(u)(12) and any other payments,
provided, however, that the limitation under section 401(a)(17)
of the Internal Revenue Code of 1986 (Public Law 99-514, 26
U.S.C. § 401(a)(17)) taken into account for the purpose of
member contributions, including regular or joint coverage member
contributions, regardless of class of service, shall apply to
each member who first became a member of the Public School
Employes' Retirement System on or after July 1, 1996, and who by
reason of such fact is a noneligible member subject to the
application of the provisions of section 8325.1 (relating to
annual compensation limit under IRC § 401(a)(17))[.] and shall
apply to each participant. Notwithstanding the above, for Class
T-E and Class T-F service performed on or after July 1, 2016,
compensation for each fiscal year, for purposes of determining
final average salary and applying the basic contribution rate,
shall not exceed the Social Security taxable wage base in effect
at the beginning of the fiscal year. The limit shall be applied
separately to each employer of a member.
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"Concurrent service." Simultaneously credited school and
State service.
"Creditable nonschool service." Service other than service
as a school employee for which an active member may obtain
credit in the system.
"Credited service." School or creditable nonschool 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 any provision of this
part limiting compensation or 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 latest of the
following dates:
(1) the last [date] day of service for which pickup
contributions are made for an active member or[,] for which
the contributions otherwise required for such service were
not made solely by reason of any provision of this part
limiting compensation or 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;
(2) in the case of an inactive member or an inactive
participant, the effective date of his resignation or the
date his employment is formally discontinued by his employer
or two years following the last day of service for which
contributions were made, whichever is earliest[.]; or
(3) in the case of a combined service employee, the
latest of the dates in paragraph (1) or (2).
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"Disability annuitant." A member on or after the effective
date of disability until his disability annuity or the portion
of his disability annuity payments in excess of any annuity to
which he may otherwise be entitled is terminated.
"Distribution." Payment of all or any portion of a person's
interest in either the Public School Employees' Retirement Fund
or the School Employees' Defined Contribution Trust, or both,
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).
"Effective date of retirement." The first day following the
date of termination of service of a member if he has properly
filed an application for an annuity within 90 days of such date
or:
(1) In the case of a member who applies for an annuity
subsequent to 90 days after termination of service, the date
of filing such application or the date specified on the
application, whichever is later.
(2) In the case of a vestee who files an application for
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an annuity within 90 days of his superannuation age, the
attainment of such age.
(3) In the case of a vestee who defers the filing of an
application for an annuity to a date later than 90 days
following attainment of superannuation age, the date of
filing or the date specified on the application, whichever is
later.
(4) In the case of a finding of disability, the date
certified by the board as the effective date of disability.
"Eligible annuitants." All current and prospective
annuitants with 24 1/2 or more eligibility points and all
current and prospective disability annuitants. Beginning January
1, 1995, "eligible annuitants" shall include members other than
Class T-I members with 15 or more eligibility points who
terminated or who terminate school service on or after attaining
superannuation retirement age and who are annuitants with an
effective date of retirement after superannuation age.
"Eligibility points." Points which are accrued by an active
member, a multiple service member who is an active member of the
State Employees' Retirement System for credited service or by a
member who has been reemployed from USERRA leave or dies while
performing USERRA leave and are used in the determination of
eligibility for benefits as provided in section 8306 (relating
to eligibility points). Class T-I members shall be deemed to
accrue one eligibility point for each fiscal year in which
contributions have been made to the fund.
"Employer." Any governmental entity directly responsible for
the employment and payment of the school employee and charged
with the responsibility of providing public education within
this Commonwealth, including but not limited to: State-owned
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colleges and universities, the Pennsylvania State University,
community colleges, area vocational-technical schools,
intermediate units, the State Board of Education, Scotland
School for Veterans' Children, Thaddeus Stevens College of
Technology, and the Western Pennsylvania School for the Deaf.
"Employer defined contributions." Contributions equal to
2.59% of an active participant's compensation that are made by
an employer for current service to the trust to be credited in
the active participant's individual investment account.
"Excess interest." The investment earnings of the fund
attributable to Class T-I members and members who have elected
to contribute to the cash balance account, calculated in
accordance with section 8523(d) (relating to members' savings
account and cash balance account).
"Final average salary." The highest average compensation
received as an active member during any three nonoverlapping
periods of 12 consecutive months with the compensation for part-
time service being annualized on the basis of the fractional
portion of the school year for which credit is received; except,
if the employee was not a member for three such periods, the
total compensation received as an active member annualized in
the case of part-time service divided by the number of such
periods of membership; in the case of a member with multiple
service credit, the final average salary shall be determined by
reference to compensation received by him as a school employee
or a State employee or both; and, in the case of a noneligible
member, subject to the application of the provisions of section
8325.1 (relating to annual compensation limit under IRC § 401(a)
(17)). Final average salary shall be determined by including in
compensation, payments deemed to have been made to a member
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reemployed from USERRA leave to the extent member contributions
have been made as provided in section 8302(d)(2) (relating to
credited school service) and payments made to a member on leave
of absence under 51 Pa.C.S. § 4102 (relating to leaves of
absence for certain government employees) as provided in section
8302(d)(6). Notwithstanding the above, for Class T-E and Class
T-F service performed on or after July 1, 2016, compensation to
be used for final average salary calculation shall not exceed
the Social Security taxable wage base in effect at the beginning
of the fiscal year.
"Full coverage member." Any member for whom regular member
pickup contributions are being picked up or who has paid or has
agreed to pay to the fund the actuarial equivalent of regular
member contributions due on account of service prior to January
1, 1983.
"Fund." The Public School Employees' Retirement Fund.
"Governmental entity." Board of school directors, board of
public education, intermediate unit board of directors, area
vocational-technical board, any governing board of any agency or
authority created by them, and the Commonwealth.
"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 school 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(b) of the Internal Revenue Code of
1986 (Public Law 99-514, 26 U.S.C. § 401(a)(17) or 415(b)) or
because the member is on USERRA leave, who has accumulated
deductions standing to his credit in the fund and for whom
contributions have been made within the last two school years or
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a multiple service member who is active in the State Employees'
Retirement System.
"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 school 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), who has vested accumulated total defined
contributions standing to his credit in the trust and who has
not filed an application for a distribution.
"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 investment
earnings after deduction for fees, costs and expenses,
investment losses and charges for distributions.
"Intervening military service." Active military service of a
member who was a school employee and an active member of the
system immediately preceding his induction into the armed
services or forces of the United States in order to meet a draft
obligation excluding any voluntary extension of such
obligational service and who becomes a school employee and an
active member of the system within 90 days of the expiration of
such service.
"IRC." The Internal Revenue Code of 1986, as designated and
referred to in section 2 of the Tax Reform Act of 1986 (Public
Law 99-514, 100 Stat. 2085, 2095). A reference in this part to
"IRC § " shall be deemed to refer to the identically numbered
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section and subsection or other subdivision of such section in
26 United States Code (relating to Internal Revenue Code).
"Irrevocable beneficiary." The person or persons permanently
designated by a member or participant in writing to the board
pursuant to an approved domestic relations order to receive all
or a portion of the accumulated deductions, vested accumulated
total defined contributions or lump sum benefit payable upon the
death of such member or participant.
"Irrevocable successor payee." The person permanently
designated in writing by a participant 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.
"Irrevocable survivor annuitant." The person permanently
designated by a member in writing to the board pursuant to an
approved domestic relations order to receive an annuity upon the
death of such member.
"Joint coverage member." Any member who agreed prior to
January 1, 1966 to make joint coverage member contributions to
the fund and has not elected to become a full coverage member.
"Joint coverage member contributions." Regular member
contributions reduced for a joint coverage member.
"Leave for service with a collective bargaining
organization." Paid leave granted to an active member or active
participant by an employer for purposes of working full time for
or serving full time as an officer of a Statewide employee
organization or a local collective bargaining representative
under the act of July 23, 1970 (P.L.563, No.195), known as the
Public Employe Relations Act: Provided, That greater than one-
half of the members of the employee organization are active
members of the system or active participants of the plan; that
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the employer shall fully compensate the member or active
participant, 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 employee organization shall fully
reimburse the employer for such salary, wages, pension and
retirement contributions and benefits and other benefits and
seniority.
"Mandatory pickup participant contributions." Contributions
equal to 3% of compensation that are made by the employer for
active participants for current service that are picked up by
the employer and credited in the trust.
"Maternity leave of absence." An involuntary leave of
absence required by the employer because of the pregnancy of the
member and commencing prior to May 17, 1975.
"Member." Active member, inactive member, annuitant, or
vestee.
"Member's annuity." The single life annuity which is
actuarially equivalent on the effective date of retirement to
the sum of the accumulated deductions and the shared-risk member
contributions and statutory interest credited on the deductions
and contributions standing to the member's credit in the
members' savings account.
"Military service." All active military service for which a
member has received a discharge other than an undesirable, bad
conduct, or dishonorable discharge.
"Multiple service." Credited service of a member other than
a Class T-I member or Class TDB member in the State Employees'
Retirement System who has elected to combine his credited
service in both the Public School Employees' Retirement System
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and the State Employees' Retirement System.
"Noneligible member." For the purposes of section 8325.1
(relating to annual compensation limit under IRC § 401(a)(17)),
a member who first became a member on or after July 1, 1996.
"Participant." An active participant, inactive participant
or participant receiving distributions.
"Participating eligible annuitants." All eligible annuitants
who are enrolled or elect to enroll in a health insurance
program approved by the Public School Employees' Retirement
Board.
"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 vested interest in the individual investment
account.
"Pickup contributions." Regular or joint coverage member
contributions and shared-risk member contributions and mandatory
cash balance account contributions which are made by the
employer for active members for current service on and after
January 1, 1983.
"Plan." The School 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 8402 (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 school service." Service [rendered] as a school
employee including service in any summer school conducted by a
school district of the Commonwealth, but excluding service
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rendered during which the school employee was or could have been
a participant in the plan, prior to the member's most recent
entrance in the system.
"Public school." Any or all classes or schools within this
Commonwealth conducted under the order and superintendence of
the Department of Education including, but not limited to: all
educational classes of any employer charged with the
responsibility of public education within this Commonwealth as
well as those classes financed wholly or in part by the Federal
Government, State-owned colleges and universities, the
Pennsylvania State University, community colleges, area
vocational-technical schools, intermediate units, the State
Board of Education, Scotland School for Veterans' Children,
Thaddeus Stevens State School of Technology, and the
Pennsylvania State Oral School for the Deaf.
"Public School Code." The act of March 10, 1949 (P.L.30,
No.14), known as the Public School Code of 1949.
"Reemployed from USERRA leave." Resumption of active
membership or active participation as a school employee after a
period of USERRA leave, if the resumption of active membership
or active participation was within the time period and under
conditions and circumstances such that the school 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).
"Regular member contributions." The product of the basic
contribution rate and the compensation of the member.
"Required beginning date." The latest date by which
distributions of a participant's interest in his individual
investment account must commence under the Internal Revenue Code
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of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(9)).
"Reserve component of the armed forces." The United States
Army Reserve, United States Navy Reserve, United States Marine
Corps Reserve, United States Coast Guard Reserve, United States
Air Force Reserve, Pennsylvania Army National Guard and
Pennsylvania Air National Guard.
"Salaried employee." A school employee who is compensated on
the basis of an annual salary.
"Salary deductions." The amounts certified by the board,
deducted from the compensation of an active member or active
participant or the State service compensation of a multiple
service member who is an active member of the State Employees'
Retirement System or active participant of the School Employees'
Defined Contribution Plan and paid into the fund or trust.
"School employee." Any person engaged in work relating to a
public school for any governmental entity and for which work he
is receiving regular remuneration as an officer, administrator
or employee excluding, however, any independent contractor or a
person compensated on a fee basis.
"School entity." A school district of any class,
intermediate unit or an area vocational-technical school, as
provided for under the act of March 10, 1949 (P.L.30, No.14),
known as the Public School Code of 1949.
"School service." Service rendered as a school employee.
"School year." The 12-month period which the governmental
entity uses for purposes of administration regardless of the
actual time during which a member renders service.
"Severance payments." Any payments for unused vacation or
sick leave and any additional compensation contingent upon
retirement including payments in excess of the scheduled or
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customary salaries provided for members within the same
governmental entity with the same educational and experience
qualifications who are not terminating service.
"Shared-risk contribution rate." The [additional]
contribution rate that is [added] applied to the basic
contribution rate for Class T-D, T-E and T-F members, as
provided for in section 8321(b) and (c) (relating to regular
member contributions for current service)[.], and the
contribution rate that is applied to the basic contribution rate
for Class T-G members, as provided for in section 8321(d)
(relating to regular member contributions and cash balance
member contributions for current service).
"Standard single life annuity." For Class T-A, T-B [and], T-
C and T-H credited service of a member, an annuity equal to 2%
of the final average salary, multiplied by the total number of
years and fractional part of a year of credited service of a
member in that class. For Class T-D and Class T-G credited
service of a member, an annuity equal to 2.5% of the final
average salary, multiplied by the total number of years and
fractional part of a year of credited service in that class. For
Class T-E credited service of a member, an annuity equal to 2%
of the final average salary, multiplied by the total number of
years and fractional part of a year of credited service of a
member. For Class T-F credited service of a member, an annuity
equal to 2.5% of the final average salary, multiplied by the
total number of years and fractional part of a year of credited
service of a member. For Class T-I members, and for monies in
the cash balance account of members of other classes, an annuity
that is actuarially equivalent to the balance of the member's
savings account or the cash balance account, as applicable,
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calculated using 120% of the mid-term Treasury note rate in
effect on the effective date of retirement of the member.
"State Employees' Defined Contribution Plan." The defined
contribution plan for State employees established by 71 Pa.C.S.
Pt. XXV (relating to retirement for State employees and
officers).
"State Employees' Retirement System." The retirement system
established by the act of June 27, 1923 (P.L.858, No.331) and
codified by the act of June 1, 1959 (P.L.392, No.78) and by Part
XXV of Title 71 (relating to retirement for State employees and
officers), added March 1, 1974 (P.L.125, No.31).
"State service." Service rendered as a State employee and
credited as service in the State Employees' Retirement System.
"Statutory interest." Interest at 4% per annum, compounded
annually.
"Successor payee." The person or persons last designated in
writing by a participant to the board to receive one or more
distributions upon the death of such participant.
"Superannuation annuitant." An annuitant whose annuity first
became payable on or after the attainment of superannuation age
and who is not a disability annuitant.
"Superannuation or normal retirement age."
Class of service Age
T-A
62 or any age upon accrual of
35 eligibility points
T-B 62
T-C [and], T-D, T-G
and T-H T-D
62 or age 60 provided the
member has at least 30
eligibility points or any
age upon accrual of 35
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eligibility points
T-E and T-F
65 with accrual of at least
three eligibility points
or a combination of age
and eligibility points
totaling 92, provided the
member has accrued at
least 35 eligibility
points
"Survivor annuitant." The person or persons last designated
by a member or participant 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 the benefits from the system and
beneficiaries or successor payees for the benefits from the
plan.
"System." The Public School Employes' Retirement System of
Pennsylvania as established by the act of July 18, 1917
(P.L.1043, No.343), and codified by the act of June 1, 1959
(P.L.350, No.77).
"Total member contribution rate." The sum of the basic
contribution rate and the shared-risk contribution rate.
"Trust." The School Employees' Defined Contribution Trust
established under Chapter 84 (relating to School Employees'
Defined Contribution Plan).
"USERRA." The Uniformed Services Employment and Reemployment
Rights Act, 38 U.S.C. Ch. 43 (relating to employment and
reemployment rights of members of the uniformed services).
"USERRA leave." Any period of time for service in the
uniformed services as defined in 38 U.S.C. Ch. 43 (relating to
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employment and reemployment rights of members of the uniformed
services) by a school employee or former school employee or
participant who terminated school service to perform the service
in the uniformed services, if the current or former school
employee or participant is entitled to reemployment rights under
38 U.S.C. Ch. 43 with respect to the 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.
"Vestee." A member with five or more eligibility points in a
class of service other than Class T-E, Class T-F or Class T-I
who has terminated school service, has left his accumulated
deductions in the fund and is deferring filing of an application
for receipt of an annuity. For Class T-E and Class T-F members,
a member with ten or more eligibility points who has terminated
school service, has left his accumulated deductions in the fund
and is deferring filing of an application for receipt of an
annuity. For Class T-I members, a member who has terminated
school service, has left his accumulated deductions in the fund
and is deferring filing of an application for receipt of
annuity.
"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, and contributions made by a member to the system
and credited to his cash balance account in excess of his
mandatory pickup contributions, either by salary deductions paid
through the employer or by an eligible rollover or direct
trustee-to-trustee transfers.
Section 202. Section 8103 of Title 24 is amended by adding
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subsections to read:
§ 8103. Construction of part.
* * *
(c) Construction regarding inactive member and inactive
participant.--As used in this part:
(1) The term "inactive member" does not include a
combined service employee who is an "inactive participant,"
unless the combined service employee is concurrently employed
in a position in which such employee is a member of the
system.
(2) The term "inactive participant" does not include a
combined service employee who is an "inactive member," unless
the combined service employee is concurrently employed in a
position in which such employee is a participant in the plan.
(d) Provisions severable.--The provisions of this part are
severable and if any of its provisions shall be held to be
unconstitutional, the decision of the court shall not affect or
impair any of the remaining provisions. It is hereby declared to
be the legislative intent that this part would have been adopted
had such unconstitutional provisions not been included.
(e) References to certain Federal statutes.--References in
this part to the IRC or the Uniformed Services Employment and
Reemployment Rights Act of 1994 (Public Law 103-353, 108 Stat.
3149), including administrative regulations promulgated under
the IRC or the Uniformed Services Employment and Reemployment
Rights Act of 1994, are intended to include laws and regulations
in effect on the effective date of this section and amended,
supplemented or supplanted on and after the effective date of
this section.
(f) Construction.--
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(1) This part may not be construed to mean that the
limitations on benefits or other requirements under IRC §
401(a) or other applicable provisions of the IRC that are
applicable to participants in the plan do not apply to the
participants or to the members of the system and the benefits
payable under Part IV.
(2) This part may not be construed to mean that an
interpretation or application of the provisions of Part IV or
benefits available to members of the Public School Employees'
Retirement System was not in accordance with the provisions
of Part IV or other applicable law, including the IRC and the
Uniformed Services Employment and Reemployment Rights Act of
1994 before the effective date of this section.
(3) This part may not be construed to mean that the
release or publicizing of a record, material or data that
would not constitute a public record under section 8502(e)(2)
(relating to administrative duties of board) is a violation
of the fiduciary duties of the board.
(g) Applicability.--The following shall apply:
(1) The amendment of Part IV regarding the establishment
of Class T-G shall apply to current and former members of the
system who have returned to school service on or after July
1, 2016, after a termination of school service,
notwithstanding the following:
(i) Whether the termination occurred before or after
July 1, 2016.
(ii) Whether the school employee was an annuitant,
inactive member, vestee or withdrew accumulated
deductions during the period of termination.
(2) A terminated school employee who returns to school
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service on or after July 1, 2016, is subject to the
provisions of Part IV regarding Class T-G membership in the
system that are in effect on the effective date of
reemployment, including, but not limited to, benefit formulas
and accrual rates, eligibility for annuities and
distributions, contribution rates, definitions, purchase of
creditable school and nonschool service provisions and
actuarial and funding assumptions.
(3) This part shall apply to a record, material or data
under 8502(e)(2) notwithstanding whether:
(i) the record, material or data was created,
generated or stored before the effective date of this
section;
(ii) the record, material or data was previously
released or made public; or
(iii) a request for the record, material or data was
made or is pending final response under the former act of
June 21, 1957 (P.L.390, No. 212), referred to as the
(G) APPLICABILITY.--THIS PART SHALL APPLY TO A RECORD,
MATERIAL OR DATA UNDER SECTION 8502(E)(2) NOTWITHSTANDING
WHETHER:
(1) THE RECORD, MATERIAL OR DATA WAS CREATED, GENERATED
OR STORED BEFORE THE EFFECTIVE DATE OF THIS SECTION;
(2) THE RECORD, MATERIAL OR DATA WAS PREVIOUSLY RELEASED
OR MADE PUBLIC; OR
(3) A REQUEST FOR THE RECORD, MATERIAL OR DATA WAS MADE
OR IS PENDING FINAL RESPONSE UNDER THE FORMER ACT OF JUNE 21,
1957 (P.L.390, NO.212), REFERRED TO AS THE Right-to-Know Law,
or the act of February 14, 2008 (P.L.6, No. 3), known as the
Right-to-Know Law.
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(h) Pension rights.--Notwithstanding any other provision of
law, no collective bargaining agreement nor any arbitration
award between the school employer and its employees or their
collective bargaining representatives shall be construed to
change any of the provisions in this part, to require the board
to administer pension or retirement benefits not set forth under
this part or to require action by any other government body
pertaining to pension or retirement benefits or rights of school
employees.
Section 203. Title 24 is amended by adding sections to read:
§ 8103.1. Reference to Public School Employees' Retirement
System.
As of the effective date of this section, unless the context
clearly indicates otherwise, a reference to the Public School
Employees' Retirement System in a statutory provision, other
than this part and 71 Pa.C.S. Pt. XXV (relating to retirement
for State employees and officers), shall include a reference to
the plan, and a reference to the Public School Employees'
Retirement Fund shall include a reference to the trust.
§ 8103.2. Notice to members and participants.
Notice by publication, including, without being limited to,
newsletters, newspapers, forms, first class mail, letters,
manuals, and electronic notice, including, but not limited to,
e-mail or internet websites distributed or made available to
members and participants in a manner reasonably calculated to
give actual notice of the provisions of this part that require
notice to members and participants shall be deemed sufficient
notice for all purposes.
Section 204. Sections 8301, 8302, 8303, 8303.1 and 8304(a)
of Title 24 are amended to read:
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§ 8301. Mandatory and optional membership.
(a) Mandatory membership.--Membership in the system shall be
mandatory as of the effective date of employment for all school
employees except the following:
(1) Any officer or employee of the [Department of
Education] department, State-owned educational institutions,
community colleges, area vocational-technical schools,
technical institutes, or [the] The Pennsylvania State
University and who is a member of the State Employees'
Retirement System or a member of another retirement program
approved by the employer.
(2) Any school employee, other than a school employee
eligible for Class T-I membership, who is not a member of the
system and who is employed on a per diem or hourly basis for
less than 80 full-day sessions or 500 hours in any fiscal
year or annuitant who returns to school service under the
provisions of section 8346(b) (relating to termination of
annuities).
(3) Any officer or employee of a governmental entity who
subsequent to December 22, 1965 and prior to July 1, 1975
administers, supervises, or teaches classes financed wholly
or in part by the Federal Government so long as he continues
in such service.
(4) Any part-time school employee, other than a school
employee eligible for Class T-I membership, who has an
individual retirement account pursuant to the Federal act of
September 2, 1974 (Public Law 93-406, 88 Stat. 829), known as
the Employee Retirement Income Security Act of 1974.
(b) Prohibited membership.--The school employees categorized
in subsection (a)(1) and (2) shall not have the right to elect
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membership in the system.
(c) Optional membership.--The school employees categorized
in subsection (a)(3) and, if otherwise eligible, subsection
(a)(4) shall have the right to elect membership in the system.
Once such election is exercised, membership shall commence from
the original date of eligibility and shall continue until the
termination of such service.
(d) Mandatory participation in the plan.--A school employee
who is a mandatory member of Class T-I shall also be a mandatory
participant in the plan as of the effective date of membership
in the system.
(e) Optional participation in the plan.--Class T-E and Class
T-F members may participate in the plan on or after July 1,
2016, to the extent that the compensation of the participant
exceeds the Social Security taxable wage base in effect at the
beginning of the fiscal year, as provided in section 8404(b)
(relating to participant contributions).
(f) Optional contributions to the cash balance account.--
Class T-C , Class T-G and Class T-H members may contribute to the
cash balance account up to 3% of compensation, as provided in
this part. CLASS T-D, Class T-E and Class T-F members may
contribute to the cash balance account up to 3% of compensation,
but limited to the Social Security taxable wage base in effect
at the beginning of the fiscal year, as provided in this part.
Contributions may be changed as provided in this part or as set
forth in board policy.
(g) Certain agreements.--The agreement of an employer to
make contributions to the fund or to enroll its employees as
members in the system shall be deemed to be an agreement to make
contributions to the trust or to enroll its employees in the
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plan.
§ 8302. Credited school service.
(a) Computation of credited service.--In computing credited
school service of a member for the determination of benefits, a
full-time salaried school employee shall receive one year of
credit for each school year or the corresponding fraction
thereof, in accordance with the proportion of the full school
year for which the required regular member contributions have
been made to the fund, or for which such contributions otherwise
required for such service were not made to the fund solely by
reason of any provision of this part relating to the limitations
under IRC § 401(a)(17) or 415(b) or another provision of this
part limiting compensation. A per diem or hourly school employee
shall receive one year of credited service for each
nonoverlapping period of 12 consecutive months 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 limitations under
the IRC, or another provision of this part limiting compensation
for at least 180 full-day sessions or 1,100 hours of employment.
If such member was employed and contributions were made to the
fund for less than 180 full-day sessions or 1,100 hours, he
shall be credited with a fractional portion of a year determined
by the ratio of the number of full-day sessions or hours of
service actually rendered and for which contributions are made
to the fund to 180 full-day sessions or 1,100 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 service
actually rendered and for which contributions are or would have
been made to the fund in relation to the service required as a
comparable full-time salaried employee. In no case shall a
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member receive more than one year of credited service for any 12
consecutive months or 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) Approved leaves of absence.--An active member shall
receive credit or vesting credit, as applicable, and an active
participant shall receive vesting credit, for an approved leave
of absence provided that:
(1) the member returns for a period at least equal to
the length of the leave or one year as a member of the system
or the participant returns to school service as an active
participant in the plan, whichever is less, to the school
district which granted his leave, unless such condition is
waived by the employer; and
(2) the proper contributions are made by the member and
the employer[.] or by the active participant and the
employer. In the case of a Class T-I member, the proper
contributions must be made during the leave except for USERRA
leave.
* * *
(c) Cancellation of credited service.--All credited service
in the system shall be cancelled if a member withdraws his
accumulated deductions.
(d) Credit for military service.--A school employee who has
performed USERRA leave may receive credit in the system as
follows:
(1) For purposes of determining whether a member is
eligible to receive credited service in the system for a
period of active military service, other than active duty
service to meet periodic training requirements, rendered
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after August 5, 1991, and that began before the effective
date of this paragraph, 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 the
period of military service began, notwithstanding if the
member is not defined as an employee under 51 Pa.C.S. § 7301
(relating to definitions). School employees may not receive
service credit or exercise the options under 51 Pa.C.S. §
7306(a), (b) and (c) (relating to retirement rights) for
military leaves that begin on or after the effective date of
this subsection, except otherwise provided under this
subsection.
(2) A school employee who has performed USERRA leave may
receive credit as provided by this paragraph.
(i) A school employee who is reemployed from USERRA
leave as an active member of the system shall be treated
as not having incurred a break in school service by
reason of the USERRA leave and shall be granted
eligibility points as if the school employee had not been
on the USERRA leave. If a school employee who is
reemployed from USERRA leave as an active member of the
system subsequently makes regular member contributions,
shared-risk member contributions and any other member
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 school employee had continued
in his school office or employment and performed school
service and been compensated during the period of USERRA
leave, then the school employee shall be granted school
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service credit for the period of USERRA leave. The
employee shall have his benefits, rights and obligations
determined under this part as if he was an active member
who performed creditable school 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 member contributions to receive school service
credit for the USERRA leave were determined.
(ii) For purposes of determining whether a school
employee has made the required employee contributions for
school service credit for USERRA leave, if an employee
who is reemployed from USERRA leave as an active member
terminates school service or dies in school service
before the expiration of the allowed payment period,
school service credit for the USERRA leave shall be
granted as if the required member contributions were paid
the day before termination or death. The amount of the
required member contributions shall be treated as an
incomplete payment subject to the provisions of section
8325 (relating to incomplete payments). Upon a subsequent
return to school service or to State service as a
multiple service member, the required member
contributions treated as incomplete payments shall be
treated as member contributions that were either
withdrawn in a lump sum at termination or paid as a lump
sum under section 8345(a)(4) (relating to member's
options). For this purpose, the exclusion of Class T-E
and Class T-F members from electing a form of payment
under section 8345(a)(4)(iii) shall be ignored.
(iii) A school employee who is reemployed from
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USERRA leave as an active member of the system and who
does not make the required member contributions or makes
only part of the required member contributions within the
allowed payment period shall not be:
(A) Granted credited service for the period of
USERRA leave for which the required member
contributions were not timely made.
(B) Eligible to subsequently make contributions.
(C) Granted either school service credit or
nonschool service credit for the period of USERRA
leave for which the required member contributions
were not timely made.
(3) A school employee who is a member of the system and
performs USERRA leave from which the employee could have been
reemployed from USERRA leave had the school employee returned
to school service in the time frames required by 38 U.S.C.
Ch. 43 for reemployment rights, but did not do so, shall be
able to receive creditable nonschool service as
nonintervening military service for the period of USERRA
leave if the employee later returns to school service and is
otherwise eligible to purchase the service as nonintervening
military service.
(4) [A school employee] An active or inactive member
who, on or after the effective date of this subsection, is
granted a leave of absence under section 1178 of the Public
School Code, a leave of absence under 51 Pa.C.S. § 4102
(relating to leaves of absence for certain government
employees) or a military leave under 51 Pa.C.S. Ch. 73, that
is not USERRA leave shall be able to receive creditable
nonschool service as nonintervening military service should
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the employee return to school service as an active member of
the system and is otherwise eligible to purchase the service
as nonintervening military service.
(5) If a member dies while performing USERRA leave, the
beneficiaries or survivor annuitants of the deceased member
shall be entitled to any additional benefits, including
eligibility points, other than benefit accruals relating to
the period of qualified military service, provided under this
part as if the member resumed and then terminated employment
on account of death.
(6) A school employee who is on a leave of absence from
his duties as a school employee and for which 51 Pa.C.S. §
4102 provides that he is not to suffer a loss of pay, time or
efficiency shall not be an active member, receive service
credit or make member contributions for the leave of absence
except as provided for in this part. Notwithstanding this
paragraph, any pay the member receives under section 1178 of
the Public School Code or 51 Pa.C.S. § 4102 shall be included
in the determination of final average salary and other
calculations in the system utilizing compensation as if the
payments were compensation under this part.
(e) 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 school
service by reason of the USERRA leave and shall be granted
vesting credit as if the participant had not been on USERRA
leave. If a participant who is reemployed from USERRA leave
subsequently makes mandatory pickup participant contributions
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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 school employment and
performed school service and been compensated during the
period of USERRA leave, then 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 was an
active participant who performed school 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 school 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
and 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 and 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 who performs USERRA leave from which
the employee could have been reemployed from USERRA leave had
the school employee returned to school service in the time
frames required by 38 U.S.C. Ch. 43 for reemployment rights,
but did not do so, shall not be eligible to make mandatory
pickup participant contributions or voluntary contributions
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for the period of USERRA leave should the employee later
return to school service and be a participant in the plan.
(4) An active participant or inactive participant 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 51 Pa.C.S. Ch. 73 (relating to military
leave of absence) that is not USERRA leave shall not be
eligible 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 participant 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 Ch. 73.
(5) If a participant dies while performing USERRA leave,
then the beneficiaries or successor payees, as the case may
be, 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 then terminated
employment on account of death.
§ 8303. Eligibility points for retention and reinstatement of
service credits.
(a) Accrued credited service.--Eligibility points shall be
computed in accordance with section 8306 (relating to
eligibility points) with respect to all credited service accrued
as of the effective date of this part.
(b) Future school service.--Every active member of the
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system other than a Class T-I member shall accrue an eligibility
point for each year of school service rendered subsequent to the
effective date of this part. Class T-I members shall be deemed
to accrue one eligibility point for each fiscal year in which
contributions have been made to the fund.
(b.1) USERRA leave.--A member who is reemployed from USERRA
leave or who dies while performing USERRA leave shall receive
eligibility points in accordance with section 8306 for the
school service that would have been performed had the member not
performed USERRA leave.
(c) Purchase of previous creditable service.--Every active
member of the system other than a Class T-I member or a multiple
service member who is an active member of the State Employees'
Retirement System on or after the effective date of this part
may purchase credit and receive eligibility points:
(1) as a member of Class T-C, Class T-E [or], Class T-F,
Class T-G or Class T-H for previous creditable school service
or creditable nonschool service; or
(2) as a member of Class T-D for previous creditable
school service, provided the member elects to become a Class
T-D member pursuant to section 8305.1 (relating to election
to become a Class T-D member);
upon written agreement by the member and the board as to the
manner of payment of the amount due for credit for such service;
except, that any purchase for reinstatement of service credit
shall be for all service previously credited.
(d) Purchase of previous noncreditable service.--Class T-C
and Class T-D members who are active members on the effective
date of this subsection shall have three years from the
effective date of this subsection to file a written application
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with the board to purchase any previous noncreditable school
service. Class T-C and Class T-D members who are not active
members on the effective date of this subsection but who become
active members after the effective date of this subsection and
Class T-E and class T-F members shall have 365 days from entry
into the system to file a written application with the board to
purchase any previous noncreditable school service. Class T-I
members shall not be eligible to purchase previous noncreditable
school service.
(e) Limitations.--Notwithstanding any other provision of
this part, a Class T-I member shall be permitted to receive
vesting credit or eligibility points, as applicable, for:
(1) USERRA leave; and
(2) an approved leave of absence, provided such approved
leaves of absence leaves are contributory leaves.
§ 8303.1. Waiver of adjustments.
(a) Allowance.--Upon appeal by an affected member,
participant, beneficiary or survivor annuitant, the board may
waive an adjustment or any portion of an adjustment made under
section 8534(b) (relating to fraud and adjustment of errors) if
in the opinion of the board or the board's designated
representative:
(1) the adjustment or portion of the adjustment will
cause undue hardship to the member, participant, beneficiary
or survivor annuitant;
(2) the adjustment was not the result of erroneous
information supplied by the member, participant, beneficiary
or survivor annuitant;
(3) the member or participant had no knowledge or notice
of the error before adjustment was made, and the member,
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participant, beneficiary or survivor annuitant took action
with respect to their benefits based on erroneous information
provided by the system or plan; and
(4) the member, participant, beneficiary or survivor
annuitant had no reasonable grounds to believe the erroneous
information was incorrect before the adjustment was made.
(b) Time period.--
(1) In order to obtain consideration of a waiver under
this section, the affected member, participant, beneficiary
or survivor annuitant must appeal to the board in writing
within 30 days after receipt of notice that benefits have
been adjusted or, if no notice was given, within 30 days
after the adjustment was known or should have been known to
the affected member, participant, beneficiary or survivor
annuitant.
(2) For any adjustments made prior to the effective date
of this subsection for which the member, participant,
beneficiary or survivor annuitant appealed to the board and
was denied, an appeal under this section must be filed within
90 days of the effective date of this subsection.
Section 2. Section 8304(a) of Title 24 is amended to read:
§ 8304. Creditable nonschool service.
(a) Eligibility.--An active member, other than a Class T-I
member, or a multiple service member who is an active member of
the State Employees' Retirement System shall be eligible to
receive Class T-C, Class T-E [or], Class T-F, Class T-G or Class
T-H service credit for creditable nonschool service and Class T-
D, Class T-E [or], Class T-F, Class T-G or Class T-H service for
intervening military service, provided the member becomes a
Class T-D member pursuant to section 8305.1 (relating to
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election to become a Class T-D member) or Class T-F member
pursuant to section 8305.2 (relating to election to become a
Class T-F member) or Class T-H member pursuant to section 8305.3
(relating to election to become a Class T-H member) or 8305
(relating to classes of service), as set forth in subsection (b)
provided that he is not entitled to receive, eligible to receive
now or in the future, or is receiving retirement benefits for
such service 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 8301(a)(1) (relating to
mandatory and optional membership), and further provided that
such service is certified by the previous employer and the
manner of payment of the amount due is agreed upon by the
member, the employer, and the board.
* * *
Section 205. Section 8305(b) of Title 24 is amended and the
section is amended by adding subsections A SUBSECTION to read:
§ 8305. Classes of service.
* * *
(b) Other class membership.--A school employee who is a
member of a class of service other than Class T-C on the
effective date of this part may elect to become a member of
Class T-C or Class T-D or may retain his membership in such
other class until the service is discontinued or he elects to
become a full coverage member or elects to purchase credit for
previous school or creditable nonschool service. Any service
[thereafter] as a member of the system shall be credited as
Class T-C [or T-D], Class T-D , Class T-G, or Class T-H or Class
T-I service as applicable.
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* * *
(f) Class T-G membership.--Notwithstanding any other
provision of law, a member who is, becomes, or is eligible to
become, a Class T-D member and who performs school service on or
after July 1, 2016, shall perform the service as a Class T-G
member and shall be classified as a Class T-G member for all
school service performed on or after July 1, 2016, upon payment
of regular member contributions and the shared risk
contributions.
(g) Class T-H membership.--A Class T-D member who is
eligible to become a Class T-G member shall have the right to
elect into Class T-H membership, provided the person elects to
become a Class T-H member pursuant to section 8305.3 (relating
to election to become a Class T-H member), upon written election
filed with the board and payment of regular member
contributions.
(h) (F) Class T-I membership.--Notwithstanding any other
provision, a person who first becomes a school employee and an
active member and active participant, or a person who first
becomes a multiple service member or participant who is a State
employee and a member of the State Employees' Retirement System,
on or after July 1, 2016, shall be classified as a Class T-I
member upon payment of regular member contributions and
participant contributions, as applicable.
Section 206. Section 8305.1(c) of Title 24 is amended to
read:
§ 8305.1. Election to become a Class T-D member.
* * *
(c) Effect of election.--An election to become a Class T-D
member shall remain in effect until the termination of
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employment except as otherwise provided in this part. Those
members who, on the effective date of this section, contribute
at the rate of 5 1/4% shall be deemed to have accepted the basic
contribution rate of 6 1/2% for all Class T-D service performed
on or after January 1, 2002. Those members who, on the effective
date of this section, contribute at the rate of 6 1/4% shall be
deemed to have accepted the basic contribution rate of 7 1/2%
for all Class T-D service performed on or after January 1, 2002.
Upon termination and a subsequent reemployment that occurs
before July 1, 2016, the class of service of the school employee
shall be credited in the class of service otherwise provided for
in this part. If the reemployment occurs on or after July 1,
2016, the school employee's eligibility for membership in the
system or participation in the plan shall be as provided in this
part.
* * *
Section 207. Title 24 is amended by adding a section to
read:
§ 8305.3. Election to become a Class T-H member.
(a) General rule.--A person who is:
(1) a Class T-D member of the system or a Class T-D
multiple service member who is a State employee and a member
of the State Employees' Retirement System; and
(2) who, on the effective date of this subsection, is
eligible for Class T-G membership, may elect to become a
member of Class T-H.
(b) Time for making election.--The member must elect to
become a Class T-H member by filing a written notice with the
board before the termination of school service or State service
as applicable and:
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(1) within 180 days after the effective date of this
subsection; or
(2) June 30, 2016, whichever first occurs. A school
employee who is eligible to elect to become a Class T-H
member who begins USERRA leave during the election period
without having elected Class T-H membership may make the
election within 45 days after being reemployed from USERRA
leave. A school employee who first becomes eligible to elect
to become a Class T-H within 45 days before June 30, 2016
shall have 45 days to make the election.
(c) Effect of election.--An election to become a Class T-H
member shall remain in effect until the termination of service.
Those members who, on the effective date of this section, had a
basic contribution rate of 6.5% shall be deemed to have accepted
the basic contribution rate of 5.25% for all Class T-H service
performed on or after July 1, 2016. Those members who, on the
effective date of this section, had a basic contribution rate of
7.5% shall be deemed to have accepted the basic contribution
rate of 6.25% for all Class T-H service performed on or after
July 1, 2016.
(d) Effect of failure to make election.--If the member fails
to timely file an election to become a Class T-H member, then
the member shall be enrolled as a member of Class T-G and the
member shall never be able to elect Class T-H membership,
regardless of whether the member terminates service or has a
break in service.
(e) Former members.--Class T-D members, or former Class T-D
members who, on the effective date of this section, are not
eligible for Class T-H membership, or who return to service on
or after July 1, 2016 without having made a timely election to
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