PRINTER'S NO. 430
No. 405 Session of 1991
INTRODUCED BY MELLOW, O'PAKE, REIBMAN, STAPLETON, LINCOLN, HART,
MUSTO, STOUT, DAWIDA, LYNCH, FUMO, BODACK, PECORA, BELAN,
SCHWARTZ, ANDREZESKI, BORTNER, JONES, AFFLERBACH, SCANLON,
LAVALLE, LEWIS, WILLIAMS, PORTERFIELD, RHOADES, SHUMAKER,
HELFRICK, LEMMOND, BELL AND STEWART, FEBRUARY 11, 1991
REFERRED TO FINANCE, FEBRUARY 11, 1991
AN ACT
1 Amending Title 71 (State Government) of the Pennsylvania
2 Consolidated Statutes, adding provisions relating to credited
3 service as a retirement incentive; and further providing for
4 accrued liability.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Section 5302(c) of Title 71 of the Pennsylvania
8 Consolidated Statutes is amended and the section is amended by
9 adding a subsection to read:
10 § 5302. Credited State service.
11 * * *
12 (c) Credited service as retirement incentive.--
13 Notwithstanding any provisions of this title to the contrary,
14 for the period only of April 1, 1991, through September 30,
15 1991, any active member having at least ten eligibility points,
16 who has attained age 55 and upon termination of service has
17 filed with the board an application for retirement shall be
1 credited with an additional 10% of their Class A service. This
2 provision shall not apply in the case of judges or justices,
3 legislators, other elected officials or an officer of the
4 Pennsylvania State Police.
5 [(c)] (d) Cancellation of credited service.--All credited
6 service shall be cancelled if a member withdraws his total
7 accumulated deductions.
8 Section 2. Sections 5508(c) and 5706(a) of Title 71 are
9 amended to read:
10 § 5508. Actuarial cost method.
11 * * *
12 (c) Accrued liability contribution rate.--For the fiscal
13 year beginning July 1, 1969, the accrued liability contribution
14 rate shall be computed as the rate of total compensation of all
15 active members which shall be certified by the actuary as
16 sufficient to fund over a period of 30 years from such date the
17 present value of the liabilities for all prospective benefits,
18 except supplemental benefits as provided in section 5708, in
19 excess of the total assets in the fund, excluding the balance in
20 the supplemental annuity account, and the present value of
21 employer normal contributions and of member contributions
22 payable with respect to all active members on such date during
23 the remainder of their active service, assuming that the total
24 compensation of all active members will increase at the annual
25 rate of 4% compounded annually. Thereafter, the amount of each
26 annual accrued liability contribution shall be at least 4%
27 greater than the amount of such contribution for the previous
28 fiscal year, except that, if the accrued liability is increased
29 by legislation enacted subsequent to July 1, 1969, such
30 additional liability, except as provided for by section 5302(c)
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1 (relating to credited State service), shall be funded over a
2 period of 30 years from the first day of July, coincident with
3 or next following the effective date of the increase assuming
4 that the total compensation of all active members will increase
5 at the annual rate of 4% compounded annually. The added
6 liability created by the enactment of section 5302(c) shall be
7 funded over a period of ten years from July 1, 1992, on a
8 uniform annual dollar amount over that period. The accrued
9 liability contributions under this section shall be discontinued
10 as soon as the total assets in the fund, excluding the balance
11 in the supplemental annuity account, equals the present value of
12 the liability for all prospective benefits, except the
13 supplemental benefits as provided in section 5708, less the
14 present value of the prospective employer normal contributions
15 and of member contributions payable with respect to all active
16 members on such date during the remainder of their active
17 service.
18 * * *
19 § 5706. Termination of annuities.
20 (a) General rule.--If the annuitant returns to State service
21 or enters school service and elects multiple service membership,
22 any annuity payable to him under this part shall cease and in
23 the case of an annuity other than a disability annuity the
24 present value of such annuity, adjusted for full coverage in the
25 case of a joint coverage member who makes the appropriate back
26 contributions for full coverage, shall be frozen as of the date
27 such annuity ceases. An annuitant who is credited with an
28 additional 10% of Class A service as provided in section 5302(c)
29 (relating to credited State service) and who returns to State
30 service shall forfeit such credited service and shall have his
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1 frozen present value adjusted accordingly. In the event that the
2 cost-of-living increase enacted December 18, 1979, occurred
3 during the period of such State or school employment, the frozen
4 present value shall be increased, on or after the member attains
5 superannuation age, by the percent applicable had he not
6 returned to service. This subsection shall not apply in the case
7 of any annuitant who may render services to the Commonwealth in
8 the capacity of an independent contractor or as a member of an
9 independent board or commission or as a member of a departmental
10 administrative or advisory board or commission when such members
11 of independent or departmental boards or commissions are
12 compensated on a per diem basis for not more than 100 days per
13 calendar year.
14 * * *
15 Section 3. This act shall take effect immediately.
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