SENATE AMENDED

 

PRIOR PRINTER'S NOS. 3730, 3853, 3916, 3928

PRINTER'S NO.  4470

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

2497

Session of

2010

  

  

INTRODUCED BY D. EVANS, BRIGGS, PARKER, WILLIAMS, GALLOWAY, DePASQUALE, KORTZ, W. KELLER, MYERS, SHAPIRO AND SIPTROTH, MAY 11, 2010

  

  

SENATOR BROWNE, FINANCE, IN SENATE, RE-REPORTED AS AMENDED, OCTOBER 12, 2010  

  

  

  

AN ACT

  

1

Amending Titles 24 (Education) and 71 (State Government) of the

2

Pennsylvania Consolidated Statutes, in Title 24, further

3

providing for definitions, for mandatory and optional

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4

membership, for contributions by the Commonwealth, for

5

payments by employers, for actuarial cost method, for

6

additional supplemental annuities, for further additional

7

supplemental annuities, for supplemental annuities commencing

8

1994, for supplemental annuities commencing 1998, for

9

supplemental annuities commencing 2002, for supplemental

10

annuities commencing 2003, for administrative duties of

11

board, for payments to school entities by Commonwealth, for

12

eligibility points for retention and reinstatement of service

13

credits and for creditable nonschool service; providing for

14

election to become a Class T-F member; further providing for

15

classes of service, for eligibility for annuities, for

16

eligibility for vesting, for regular member contributions,

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17

for member contributions for creditable school service, for

18

contributions for purchase of credit for creditable nonschool

19

service, for maximum single life annuity, for disability

20

annuities, for member's options, for duties of board

21

regarding applications and elections of members and for

22

rights and duties of school employees and members; providing

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23

for Independent Fiscal Office study; in Title 71, further

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24

providing for definitions; further providing, for credited

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25

State service, for retention and reinstatement of service

26

credits, for creditable NONSTATE nonstate service and for

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27

classes of service; providing for election to become a Class

28

A-4 member; further providing for eligibility for annuities, 

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29

and for eligibility for vesting,; providing for shared risk

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30

member contributions for Class A-3 and Class A-4 service;

31

further providing for waiver of regular member contributions

 


1

and Social Security integration member contributions, for

2

member contributions for purchase of credit for previous

3

State service or to become a full coverage member, for

4

contributions for the purchase of credit for creditable

5

nonstate service, for contributions by the Commonwealth and

6

other employers, for actuarial cost method, for maximum

7

single life annuity, for disability annuities and for

8

member's options; providing for payment of accumulated

9

deductions resulting from Class A-3 service; further

10

providing for additional supplemental annuities, for further

11

additional supplemental annuities, for supplemental annuities

12

commencing 1994, for supplemental annuities commencing 1998,

13

for supplemental annuities commencing 2002, for supplemental

14

annuities commencing 2003, for special supplemental

15

postretirement adjustment of 2002, for administrative duties

16

of the board, for duties of board to advise and report to

17

heads of departments and members, for duties of board

18

regarding applications and elections of members, for

19

installment payments of accumulated deductions, for rights

20

and duties of State employees and members, for members'

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21

savings account, for State accumulation account, for State

22

Police Benefit Account, for Enforcement Officers' Benefit

23

Account, for supplemental annuity account and for

24

construction of part; and providing for recertification to

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25

the Secretary of the Budget, Independent Fiscal Office study,

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26

for a prohibition on the issuance of pension obligation

27

bonds, for holding certain public officials harmless, for

28

construction of calculation or actuarial method, for

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29

applicability and for certain operational provisions.

30

The General Assembly of the Commonwealth of Pennsylvania

31

hereby enacts as follows:

32

Section 1.  The definitions of "basic contribution rate,"

33

"class of service multiplier," "employer," "member's annuity,"

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34

"pickup contributions," "standard single life annuity,"

35

"superannuation or normal retirement age" and "vestee" in

36

section 8102 of Title 24 of the Pennsylvania Consolidated

37

Statutes are amended and the section is amended by adding

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38

definitions to read:

39

§ 8102.  Definitions.

40

The following words and phrases when used in this part shall

41

have, unless the context clearly indicates otherwise, the

42

meanings given to them in this section:

43

* * *

44

"Basic contribution rate."  For Class T-A, T-B and T-C

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1

service, the rate of 6 1/4%. For Class T-D service, the rate of

2

7 1/2%. For all active members on the effective date of this

3

provision who are currently paying 5 1/4% and elect Class T-D

4

service, the rate of 6 1/2%. For Class T-E service, the rate of

5

7 1/2%. For Class T-F service, the rate of 10.30%.

6

* * *

7

"Class of service multiplier."

8

Class of service

   Multiplier

9

T-A

     .714

10

T-B

     .625

11

T-C

    1.000

12

T-D

    1.000

13

T-E

    1.000

14

T-F

    1.000

15

* * *

16

"Employer."  Any governmental entity directly responsible for

17

the employment and payment of the school employee and charged

18

with the responsibility of providing public education within

19

this Commonwealth, including but not limited to: State-owned

20

colleges and universities, the Pennsylvania State University,

21

community colleges, area vocational-technical schools,

22

intermediate units, the State Board of Education, Scotland

23

School for Veterans' Children, Thaddeus Stevens [State School]

24

College of Technology, and the [Pennsylvania State Oral] Western

25

Pennsylvania School for the Deaf.

26

* * *

27

"Member's annuity."  The single life annuity which is

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28

actuarially equivalent on the effective date of retirement to

29

the sum of the accumulated deductions and the shared risk member

30

contributions and statutory interest credited on the deductions

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1

and contributions standing to the member's credit in the

2

members' savings account.

3

* * *

4

"Pickup contributions."  Regular or joint coverage member

5

contributions and shared risk member contributions which are

6

made by the employer for active members for current service on

7

and after January 1, 1983.

8

* * *

9

"Shared risk contribution rate."  The additional contribution

10

rate that is added to the basic contribution rate for Class T-E

11

and T-F members, as provided for in section 8321(b) (relating to

12

regular member contributions for current service).

13

"Standard single life annuity."  For Class T-A, T-B and T-C

14

credited service of a member, an annuity equal to 2% of the

15

final average salary, multiplied by the total number of years

16

and fractional part of a year of credited service of a member.

17

For Class T-D credited service of a member, an annuity equal to

18

2.5% of the final average salary, multiplied by the total number

19

of years and fractional part of a year of credited service. For

20

Class T-E credited service of a member, an annuity equal to 2%

21

of the final average salary, multiplied by the total number of

22

years and fractional part of a year of credited service of a

23

member. For Class T-F credited service of a member, an annuity

24

equal to 2.5% of the final average salary, multiplied by the

25

total number of years and fractional part of a year of credited

26

service of a member.

27

* * *

28

"Superannuation or normal retirement age."

29

Class of service

Age

30

T-A

62 or any age upon accrual of

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1

  

35 eligibility points

2

T-B

62

3

4

5

6

7

T-C and T-D

  

  

  

  

62 or age 60 provided the member has at least 30 eligibility points or any age upon accrual of 35 eligibility points

8

9

10

11

T-E and T-F

  

  

  

65 with accrual of at least three eligibility points or any age upon accrual of 35 eligibility points

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12

13

14

15

16

17

18

19

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

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20

* * *

21

"Total member contribution rate."  The sum of the basic

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22

contribution rate and the shared risk contribution rate.

23

* * *

24

"Vestee."  A member with five or more eligibility points who

25

has terminated school service, has left his accumulated

26

deductions in the fund and is deferring filing of an application

27

for receipt of an annuity. For Class T-E and Class T-F members,

28

a member with ten or more eligibility points who has terminated

29

school service, has left his accumulated deductions in the fund

30

and is deferring filing of an application for receipt of an

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1

annuity.

2

Section 2.  Sections 8303(c) and 8304(a) of Title 24 are

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3

amended to read:

4

Section 1.1.  Section 8301(a)(2) of Title 24 is amended to

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5

read:

6

§ 8301.  Mandatory and optional membership.

7

(a)  Mandatory membership.--Membership in the system shall be

8

mandatory as of the effective date of employment for all school

9

employees except the following:

10

* * *

11

(2)  Any school employee who is not a member of the

12

system and who is employed on a per diem or hourly basis for

13

less than 80 full-day sessions or 500 hours in any fiscal

14

year or annuitant who returns to school service under the

15

provisions of section 8346(b) (relating to termination of

16

annuities).

17

* * *

18

Section 2.  Section 8303(c) of Title 24 is amended and the

19

section is amended by adding a subsection to read:

20

§ 8303.  Eligibility points for retention and reinstatement of

21

service credits.

22

* * *

23

(c)  Purchase of previous creditable service.--Every active

24

member of the system or a multiple service member who is an

25

active member of the State Employees' Retirement System on or

26

after the effective date of this part may purchase credit and

27

receive eligibility points:

28

(1)  as a member of Class T-C, Class T-E or Class T-F for

29

previous creditable school service or creditable nonschool

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30

service; or

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1

(2)  as a member of Class T-D for previous creditable 

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2

school service, provided the member elects to become a Class

3

T-D member pursuant to section 8305.1 (relating to election

4

to become a Class T-D member);

5

upon written agreement by the member and the board as to the

6

manner of payment of the amount due for credit for such service;

7

except, that any purchase for reinstatement of service credit

8

shall be for all service previously credited.

9

(d)  Purchase of previous noncreditable service.--Class T-C

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10

and Class T-D members who are active members on the effective

11

date of this subsection shall have three years from the

12

effective date of this subsection to file a written application

13

with the board to purchase any previous noncreditable school

14

service. Class T-C and Class T-D members who are not active

15

members on the effective date of this subsection but who become

16

active members after the effective date of this subsection and

17

Class T-E and class T-F members shall have 365 days from entry

18

into the system to file a written application with the board to

19

purchase any previous noncreditable school service.

20

Section 2.1.  Section 8304(a) of Title 24 is amended to read:

21

§ 8304.  Creditable nonschool service.

22

(a)  Eligibility.--An active member or a multiple service

23

member who is an active member of the State Employees'

24

Retirement System shall be eligible to receive Class T-C, Class

25

T-E or Class T-F service credit for creditable nonschool service

26

and Class T-D, Class T-E or Class T-F service for intervening

27

military service, provided the member becomes a Class T-D member

28

pursuant to section 8305.1 (relating to election to become a

29

Class T-D member) or Class T-F member pursuant to section 8305.2

30

(relating to election to become a Class T-F member) or 8305

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1

(relating to classes of service), as set forth in subsection (b)

2

provided that he is not entitled to receive, eligible to receive

3

now or in the future, or is receiving retirement benefits for

4

such service under a retirement system administered and wholly

5

or partially paid for by any other governmental agency or by any

6

private employer, or a retirement program approved by the

7

employer in accordance with section 8301(a)(1) (relating to

8

mandatory and optional membership), and further provided that

9

such service is certified by the previous employer and the

10

manner of payment of the amount due is agreed upon by the

11

member, the employer, and the board.

12

* * *

13

Section 3.  Section 8305 of Title 24 is amended by adding

14

subsections to read:

15

§ 8305.  Classes of service.

16

* * *

17

(d)  Class T-E membership.--Notwithstanding any other

18

provision, a person who first becomes a school employee and an

19

active member, or a person who first becomes a multiple service

20

member who is a State employee and a member of the State

21

Employees' Retirement System, on or after the effective date of

22

this subsection shall be classified as a Class T-E member upon

23

payment of regular member contributions and the shared risk

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24

contributions.

25

(e)  Class T-F membership.--Notwithstanding any other

26

provision, a person who first becomes a school employee and an

27

active member, or a person who first becomes a multiple service

28

member who is a State employee and a member of the State

29

Employees' Retirement System, on or after the effective date of

30

this subsection, and who is eligible to become a Class T-E

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1

member, shall have the right to elect into Class T-F membership,

2

provided the person elects to become a Class T-F member pursuant

3

to section 8305.2 (relating to election to become a Class T-F

4

member), upon written election filed with the board and payment

5

of regular member contributions and the shared risk

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6

contributions.

7

Section 4.  Title 24 is amended by adding a section to read:

8

§ 8305.2.  Election to become a Class T-F member.

9

(a)  General rule.--A person who first becomes a school

10

employee and an active member, or a person who first becomes a

11

multiple service member who is a State employee and a member of

12

the State Employees' Retirement System, on or after the

13

effective date of this subsection and who is eligible to become

14

a Class T-E member may elect to become a member of Class T-F.

15

(b)  Time for making election.--A member must elect to become

16

a Class T-F member by filing a written election with the board

17

within 45 days of notification by the board that such member is

18

eligible for such election.

19

(c)  Effect of election.--An election to become a Class T-F

20

member shall be irrevocable and shall commence from the original

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21

date of eligibility. A member who elects Class T-F membership

22

shall receive Class T-F service credit on any and all future

23

service, regardless of whether the member terminates service or

24

has a break in service.

25

(d)  Effect of failure to make election.--If a member fails

26

to timely file an election to become a Class T-F member, then

27

the member shall be enrolled as a member of Class T-E and the

28

member shall never be able to elect Class T-F service,

29

regardless of whether the member terminates service or has a

30

break in service.

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1

Section 5.  Sections 8307(b), 8308, 8323(a), (c) and (c.1),

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2

8324(a), (b), (d), (e) and (f), 8326(a), 8327(a) and (c), 8328,

3

8342(a), 8344(d), 8345(a), 8348.1(f), 8348.2(f), 8348.3(f),

4

8348.5(f), 8348.6(f), 8348.7(f) and 8502(k) of Title 24 are

5

amended to read:

6

Section 5.  Sections 8307(b), 8308, 8321, 8323(a), (c) and

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7

(c.1), 8324 heading, (a), (b), (d), (e) and (f), 8326(a),

8

8327(a) and (c), 8328, 8342(a), 8344(d), 8345(a), 8348.1(f),

9

8348.2(f), 8348.3(f), 8348.5(f), 8348.6(f), 8348.7(f) and

10

8502(k) of Title 24 are amended to read:

11

§ 8307.  Eligibility for annuities.

12

* * *

13

(b)  Withdrawal annuity.--A vestee in Class T-C or Class T-D 

14

with five or more eligibility points or an active or inactive

15

Class T-C or Class T-D member who terminates school service

16

having five or more eligibility points shall, upon filing a

17

proper application, be entitled to receive an early annuity. A

18

vestee in Class T-E or Class T-F with ten or more eligibility

19

points or an active or inactive Class T-E or Class T-F member

20

who terminates school service having ten or more eligibility

21

points shall, upon filing a proper application, be entitled to

22

receive an early annuity.

23

* * *

24

§ 8308.  Eligibility for vesting.

25

Any Class T-C or Class T-D member who terminates school

26

service with five or more eligibility points shall be entitled

27

to vest his retirement benefits until attainment of

28

superannuation age. Any Class T-E or Class T-F member who

29

terminates school service with ten or more eligibility points

30

shall be entitled to vest his retirement benefits until

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1

attainment of superannuation age.

2

§ 8321.  Regular member contributions for current service.

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3

(a)  General.--Regular member contributions shall be made to

4

the fund on behalf of each active member for current service

5

except for any period of current service in which the making of

6

such contributions has ceased solely by reason of any provision

7

of this part relating to the limitations under IRC § 401(a)(17)

8

or 415(b).

9

(b)  Class T-E and Class T-F shared risk contributions.--

10

Commencing with the annual actuarial valuation performed under

11

section 8502(j) (relating to administrative duties of board),

12

for the period ending June 30, 2014, and every three years

13

thereafter, the board shall compare the actual investment rate

14

of return, net of fees, to the annual interest rate adopted by

15

the board for the calculation of the normal contribution rate,

16

based on the market value of assets, for the prior ten-year

17

period. If the actual investment rate of return, net of fees, is

18

less than the annual interest rate adopted by the board by an

19

amount of 1% or more, the shared risk contribution rate of Class

20

T-E and T-F members will increase by .5%. If the actual

21

investment rate of return, net of fees, is equal to or exceeds

22

the annual interest rate adopted by the board, the shared risk

23

contributions rate of Class T-E and T-F members will decrease by

24

.5%. Class T-E and T-F members will contribute at the total

25

member contribution rate in effect when they are hired. The

26

total member contribution rate for Class T-E members shall not

27

be less than 7.5%, nor more than 9.5%. The total member

28

contribution rate for Class T-F members shall not be less than

29

10.3%, nor more than 12.3%. Notwithstanding this subsection, if

30

the system's actuarial funded status is 100% or more as of the

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1

date used for the comparison required under this subsection, as

2

determined in the current annual actuarial valuation, the shared

3

risk contribution rate shall be zero. In the event that the

4

annual interest rate adopted by the board for the calculation of

5

the normal contribution rate is changed during the period used

6

to determine the shared risk contribution rate, the board, with

7

the advice of the actuary, shall determine the applicable rate

8

during the entire period, expressed as an annual rate.

9

(1)  Until the system has a ten-year period of investment

10

rate of return experience following the effective date of

11

this subsection, the look-back period shall begin not earlier

12

than the effective date of this subsection.

13

(2)  For any fiscal year in which the employer

14

contribution rate is lower than the final contribution rate

15

under section 8328(h) (relating to actuarial cost method),

16

the total member contribution rate for Class T-E and T-F

17

members shall be prospectively reset to the basic

18

contribution rate.

19

(3)  There shall be no increase in the member

20

contribution rate if there has not been an equivalent

21

increase to the employer contribution rate over the previous

22

three-year period.

23

§ 8323.  Member contributions for creditable school service.

24

(a)  Previous school service, sabbatical leave and full

25

coverage.--The contributions to be paid by an active member or

26

an eligible State employee for credit for reinstatement of all

27

previously credited school service, school service not

28

previously credited, sabbatical leave as if he had been in full-

29

time daily attendance, or full-coverage membership shall be

30

sufficient to provide an amount equal to the accumulated

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1

deductions which would have been standing to the credit of the

2

member for such service had regular member contributions been

3

made with full coverage at the rate of contribution necessary to

4

be credited as Class T-C service [or], Class T-D service if the

5

member is a Class T-D member, or Class T-E service if the member

6

is a Class T-E member, or Class T-F service if the member is a

7

Class T-F member, and had such contributions been credited with

8

statutory interest during the period the contributions would

9

have been made and during all periods of subsequent school and

10

State service up to the date of purchase.

11

* * *

12

(c)  Approved leave of absence other than sabbatical leave

13

and activated military service leave.--The contributions to be

14

paid by an active member for credit for an approved leave of

15

absence, other than sabbatical leave and activated military

16

service leave, shall be sufficient to transfer his membership to

17

Class T-C or to Class T-D if the member is a Class T-D member or

18

to Class T-E if the member is a Class T-E member or to Class T-F

19

if the member is a Class T-F member and further to provide an

20

annuity as a Class T-C member or Class T-D member if the member

21

is a Class T-D member or Class T-E if the member is a Class T-E

22

member or to Class T-F if the member is a Class T-F member for 

23

such additional credited service. Such amount shall be the sum

24

of the amount required in accordance with the provisions of

25

subsection (b) and an amount determined as the sum of the

26

member's basic contribution rate and the normal contribution

27

rate as provided in section 8328 (relating to actuarial cost

28

method) during such period multiplied by the compensation which

29

was received or which would have been received during such

30

period and with statutory interest during all periods of

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1

subsequent school and State service up to the date of purchase.

2

(c.1)  Activated military service leave.--The contributions

3

to be paid by an active member for credit for all activated

4

military service leave as if he had been in regular attendance

5

in the duties for which he is employed shall be sufficient to

6

provide an amount equal to the accumulated deductions which

7

would have been standing to the credit of the member for such

8

service had regular member contributions been made with full

9

coverage at the rate of contribution necessary to be credited as

10

Class T-C service or Class T-D service if the member is a Class

11

T-D member or Class T-E service if the member is a Class T-E

12

member or Class T-F if the member is a Class T-F member and had

13

such contributions been credited with statutory interest during

14

the period the contributions would have been made and during all

15

periods of subsequent State and school service up to the date of

16

purchase. In the case of activated military service leave

17

beginning after the date of enactment of this subsection,

18

contributions due from the member shall be made as if he is in

19

regular attendance in the duties for which he is employed.

20

* * *

21

§ 8324.  Contributions for purchase of credit for creditable

22

nonschool service and noncreditable school service.

<--

23

(a)  Source of contributions.--The total contributions to

24

purchase credit as a member of Class T-C, Class T-E or Class T-F 

25

for creditable nonschool service of an active member or an

26

eligible State employee shall be paid either by the member, the

27

member's previous employer, the Commonwealth, or a combination

28

thereof, as provided by law.

29

(b)  Nonintervening military service.--The amount due for the

30

purchase of credit for military service other than intervening

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1

military service shall be determined by applying the member's

2

basic contribution rate plus the normal contribution rate as

3

provided in section 8328 (relating to actuarial cost method) at

4

the time of entry of the member into school service subsequent

5

to such military service to one-third of his total compensation

6

received during the first three years of such subsequent

7

credited school service and multiplying the product by the

8

number of years and fractional part of a year of creditable

9

nonintervening military service being purchased together with

10

statutory interest during all periods of subsequent school and

11

State service to date of purchase. Upon certification of the

12

amount due, payment may be made in a lump sum within 90 days or

13

in the case of an active member or an eligible State employee

14

who is an active member of the State Employees' Retirement

15

System it may be amortized with statutory interest through

16

salary deductions in amounts agreed upon by the member and the

17

board. The salary deduction amortization plans agreed to by

18

members and the board may include a deferral of payment amounts

19

and statutory interest until the termination of school service

20

or State service as the board in its sole discretion decides to

21

allow. The board may limit salary deduction amortization plans

22

to such terms as the board in its sole discretion determines. In

23

the case of an eligible State employee who is an active member

24

of the State Employees' Retirement System, the agreed upon

25

salary deductions shall be remitted to the State Employees'

26

Retirement Board, which shall certify and transfer to the board

27

the amounts paid. Application may be filed for all such military

28

service credit upon completion of three years of subsequent

29

credited school service and shall be credited as Class T-C

30

service. In the event that a Class T-E member makes a purchase

- 15 -

 


1

of credit for such military service, then such service shall be

2

credited as Class T-E service. In the event that a Class T-F

3

member makes a purchase of credit for such military service,

4

then such service shall be credited as Class T-F service.

5

* * *

6

(d)  Other creditable nonschool service.--Contributions on

<--

7

(d)  Other creditable nonschool service[.--] and

<--

8

noncreditable school service.--

9

(1)  Contributions on account of Class T-C, Class T-E or

<--

10

Class T-F credit for creditable nonschool service other than

11

military service shall be determined by applying the member's

12

basic contribution rate plus the normal contribution rate as

13

provided in section 8328 at the time of the member's entry

14

into school service subsequent to such creditable nonschool

15

service to his total compensation received during the first

16

year of subsequent credited school service and multiplying

17

the product by the number of years and fractional part of a

18

year of creditable nonschool service being purchased together

19

with statutory interest during all periods of subsequent

20

school or State service to the date of purchase, except that

21

in the case of purchase of credit for creditable nonschool

22

service as set forth in section 8304(b)(5) (relating to

23

creditable nonschool service) the member shall pay only the

24

employee's share unless otherwise provided by law. Upon

25

certification of the amount due, payment may be made in a

26

lump sum within 90 days or in the case of an active member or

27

an eligible State employee who is an active member of the

28

State Employees' Retirement System it may be amortized with

29

statutory interest through salary deductions in amounts

30

agreed upon by the member and the board. The salary deduction

- 16 -

 


1

amortization plans agreed to by the members and the board may

2

include a deferral of payment amounts and statutory interest

3

until the termination of school service or State service as

4

the board in its sole discretion decides to allow. The board

5

may limit salary deduction amortization plans to such terms

6

as the board in its sole discretion determines. In the case

7

of an eligible State employee who is an active member of the

8

State Employees' Retirement System, the agreed upon salary

9

deductions shall be remitted to the State Employees'

10

Retirement Board, which shall certify and transfer to the

11

board the amounts paid.

12

(2)  Contributions on account of Class T-E or Class T-F

<--

13

credit for creditable nonschool service other than military

14

service shall be the present value of the full actuarial cost

15

of the increase in the projected superannuation annuity

16

caused by the additional service credited on account of the

17

purchase. Upon certification of the amount due, payment may

18

be made in a lump sum within 90 days or, in the case of an

19

active member or an eligible State employee who is an active

20

member of the State Employees' Retirement System, it may be

21

amortized with statutory interest through salary deductions

22

in amounts agreed upon by the member and the board. The

23

salary deduction amortization plans agreed to by the members

24

and the board may include a deferral of payment amounts and

25

statutory interest until the termination of school service or

26

State service as the board in its sole discretion decides to

27

allow. The board may limit salary deduction amortization

28

plans to the terms as the board in its sole discretion

29

determines. In the case of an eligible State employee who is

30

an active member of the State Employees' Retirement System,

- 17 -

 


1

the agreed upon salary deductions shall be remitted to the

2

State Employees' Retirement Board, which shall certify and

3

transfer to the board the amounts paid.

4

(3)  Contributions on account of Class T-E or Class T-F

5

credit for noncreditable school service other than military

6

service shall be the present value of the full actuarial cost

7

of the increase in the projected superannuation annuity

8

caused by the additional service credited on account of the

9

purchase. Upon certification of the amount due, payment may

10

be made in a lump sum within 90 days or, in the case of an

11

active member or an eligible State employee who is an active

12

member of the State Employees' Retirement System, it may be

13

amortized with statutory interest through salary deductions

14

in amounts agreed upon by the member and the board. The

15

salary deduction amortization plans agreed to by the members

16

and the board may include a deferral of payment amounts and

17

statutory interest until the termination of school service or

18

State service as the board in its sole discretion decides to

19

allow. The board may limit salary deduction amortization

20

plans to the terms as the board in its sole discretion

21

determines. In the case of an eligible State employee who is

22

an active member of the State Employees' Retirement System,

23

the agreed upon salary deductions shall be remitted to the

24

State Employees' Retirement Board, which shall certify and

25

transfer to the board the amounts paid.

26

(e)  Creditable work experience.--Contributions on account of

27

Class T-C, Class T-E or Class T-F credit for creditable work

28

experience pursuant to section 8304(b)(6) shall be the present

29

value of the full actuarial cost of the increase in the

30

projected superannuation annuity caused by the additional

- 18 -

 


1

service credited on account of the purchase of creditable work

2

experience. The amount paid for the purchase of credit for

3

creditable work experience shall not be payable as a lump sum

4

under section 8345(a)(4)(iii) (relating to member's options).

5

Any individual eligible to receive an annuity, excluding an

6

annuity received under the Federal Social Security Act (42

7

U.S.C. § 301 et seq.), in another pension system, other than a

8

military pension system, shall not be eligible to purchase this

9

service.

10

(f)  Creditable maternity leave.--Contributions on account of

11

Class T-C, Class T-E or Class T-F credit for creditable

12

maternity leave pursuant to section 8304(b)(7) shall be

13

determined by applying the member's basic contribution rate plus

14

the normal contribution rate as provided in section 8328 at the

15

time of the member's return to school service to the total

16

compensation received during the first year of subsequent school

17

service and multiplying the product by the number of years and

18

fractional part of a year of creditable service being purchased,

19

together with statutory interest during all periods of

20

subsequent school or State service to the date of purchase. The

21

amount paid for the purchase of credit for creditable maternity

22

leave shall not be eligible for withdrawal as a lump sum under

23

section 8345(a)(4)(iii).

24

§ 8326.  Contributions by the Commonwealth.

25

(a)  Contributions on behalf of active members.--The

26

Commonwealth shall make contributions into the fund on behalf of

27

all active members, including members on activated military

28

service leave, in an amount equal to one-half the amount

29

certified by the board as necessary to provide, together with

30

the members' contributions, annuity reserves on account of

- 19 -

 


1

prospective annuities as provided in this part in accordance

2

with section 8328[(a), (b), (c) and (e)] (relating to actuarial

3

cost method). In case a school employee has elected membership

4

in a retirement program approved by the employer, the

5

Commonwealth shall contribute to such program on account of his

6

membership an amount no greater than the amount it would have

7

contributed had the employee been a member of the Public School

8

Employees' Retirement System.

9

* * *

10

§ 8327.  Payments by employers.

11

(a)  General rule.--Each employer, including the Commonwealth

12

as employer of employees of the Department of Education, State-

13

owned colleges and universities, Thaddeus Stevens [State School] 

14

College of Technology, [Pennsylvania State Oral] Western

15

Pennsylvania School for the Deaf, Scotland School for Veterans'

16

Children, and the Pennsylvania State University, shall make

17

payments to the fund each quarter in an amount equal to one-half

18

the sum of the percentages, as determined under section 8328

19

(relating to actuarial cost method), applied to the total

20

compensation during the pay periods in the preceding quarter of

21

all its employees who were members of the system during such

22

period, including members on activated military service leave.

23

In the event a member on activated military service leave does

24

not return to service for the necessary time or receives an

25

undesirable, bad conduct or dishonorable discharge or does not

26

elect to receive credit for activated military service under

27

section 8302(b.1)(3) (relating to credited school service), the

28

contributions made by the employer on behalf of such member

29

shall be returned with valuation interest upon application by

30

the employer.

- 20 -

 


1

* * *

2

(c)  Payments by employers after June 30, 1995.--After June

3

30, 1995, each employer, including the Commonwealth as employer

4

of employees of the Department of Education, State-owned

5

colleges and universities, Thaddeus Stevens [State School]

6

College of Technology, [Pennsylvania State Oral] Western

7

Pennsylvania School for the Deaf, Scotland School for Veterans'

8

Children and The Pennsylvania State University, shall make

9

payments to the fund each quarter in an amount computed in the

10

following manner:

11

(1)  For an employer that is a school entity, the amount

12

shall be the sum of the percentages as determined under

13

section 8328 applied to the total compensation during the pay

14

periods in the preceding quarter of all employees who were

15

active members of the system during such period, including

16

members on activated military service leave. In the event a

17

member on activated military service leave does not return to

18

service for the necessary time or receives an undesirable,

19

bad conduct or dishonorable discharge or does not elect to

20

receive credit for activated military service under section

21

8302(b.1)(3), the contribution made by the employer on behalf

22

of such member shall be returned with valuation interest upon

23

application by the employer.

24

(2)  For an employer that is not a school entity, the

25

amount computed under subsection (a).

26

(3)  For any employer, whether or not a school entity, in

27

computing the amount of payment due each quarter, there shall

28

be excluded from the total compensation referred to in this

29

subsection and subsection (a) any amount of compensation of a

30

noneligible member on the basis of which member contributions

- 21 -

 


1

have not been made by reason of the limitation under IRC §

2

401(a)(17). Any amount of contribution to the fund paid by

3

the employer on behalf of a noneligible member on the basis

4

of compensation which was subject to exclusion from total

5

compensation in accordance with the provisions of this

6

paragraph shall, upon the board's determination or upon

7

application by the employer, be returned to the employer with

8

valuation interest.

9

§ 8328.  Actuarial cost method.

10

(a)  Employer contribution rate [on behalf of active

11

members].--The amount of the total employer contributions [on

12

behalf of all active members] shall be computed by the actuary

13

as a percentage of the total compensation of all active members

14

during the period for which the amount is determined and shall

15

be so certified by the board. The total employer contribution

16

rate shall be the sum of the final contribution rate as computed

17

in subsection (h) plus the premium assistance contribution rate

18

as computed in subsection (f). The [total] actuarially required 

19

contribution rate [on behalf of all active members] shall

20

consist of the normal contribution rate as defined in subsection

21

(b), the accrued liability contribution rate as defined in

22

subsection (c) and the supplemental annuity contribution rate as

23

defined in subsection (d). Beginning July 1, 2004, the [total] 

24

actuarially required contribution rate shall be modified by the

25

experience adjustment factors as calculated in subsection (e)

26

[but in no case shall it be less than 4% plus the premium

27

assistance contribution rate].

28

(b)  Normal contribution rate.--The normal contribution rate

29

shall be determined after each actuarial valuation. [Until all

<--

30

accrued liability contributions have been completed, the] The 

<--

- 22 -

 


1

normal contribution rate shall be determined, on the basis of

2

the actuarial cost method, an annual interest rate and such

<--

3

mortality and other tables as shall be adopted by the board in

4

accordance with generally accepted actuarial principles, as a

5

level percentage of the compensation of the average new active

6

member, which percentage, if contributed on the basis of his

7

prospective compensation through the entire period of active

8

school service, would be sufficient to fund the liability for

9

any prospective benefit payable to him, in excess of that

10

portion funded by his prospective member contributions[, except

11

for the supplemental benefits provided in sections 8348

12

(relating to supplemental annuities), 8348.1 (relating to

13

additional supplemental annuities), 8348.2 (relating to further

14

additional supplemental annuities), 8348.3 (relating to

15

supplemental annuities commencing 1994), 8348.4 (relating to

16

special supplemental postretirement adjustment), 8348.5

17

(relating to supplemental annuities commencing 1998), 8348.6

18

(relating to supplemental annuities commencing 2002) and 8348.7

19

(relating to supplemental annuities commencing 2003)], excluding

<--

20

the shared risk contributions.

21

(c)  Accrued liability contribution rate.--

22

(1)  For the fiscal [year] years beginning July 1, 2002,

23

and ending June 30, 2011, the accrued liability contribution

24

rate shall be computed as the rate of total compensation of

25

all active members which shall be certified by the actuary as

26

sufficient to fund over a period of ten years from July 1,

27

2002, the present value of the liabilities for all

28

prospective benefits of active members, except for the

29

supplemental benefits provided in sections 8348 (relating to

30

supplemental annuities), 8348.1 (relating to additional

- 23 -

 


1

supplemental annuities), 8348.2 (relating to further

2

additional supplemental annuities), 8348.3 (relating to

3

supplemental annuities commencing 1994), 8348.4 (relating to

4

special supplemental postretirement adjustment), 8348.5

5

(relating to supplemental annuities commencing 1998), 8348.6

6

(relating to supplemental annuities commencing 2002) and

7

8348.7 (relating to supplemental annuities commencing 2003),

8

in excess of the total assets in the fund (calculated by

9

recognizing the actuarially expected investment return

10

immediately and recognizing the difference between the actual

11

investment return and the actuarially expected investment

12

return over a five-year period), excluding the balance in the

13

annuity reserve account, and of the present value of normal

14

contributions and of member contributions payable with

15

respect to all active members on July 1, 2002, during the

16

remainder of their active service.

17

(2)  [Thereafter] For the fiscal years beginning July 1,

18

2003, and ending June 30, 2011, the amount of each annual

19

accrued liability contribution shall be equal to the amount

20

of such contribution for the fiscal year, beginning July 1,

21

2002, except that, if the accrued liability is increased by

22

legislation enacted subsequent to June 30, 2002, but before

23

July 1, 2003, such additional liability shall be funded over

24

a period of ten years from the first day of July, coincident

25

with or next following the effective date of the increase.

26

The amount of each annual accrued liability contribution for

27

such additional legislative liabilities shall be equal to the

28

amount of such contribution for the first annual payment.

29

(3)  Notwithstanding any other provision of law,

30

beginning July 1, 2004, and ending June 30, 2011, the

- 24 -

 


1

outstanding balance of the increase in accrued liability due

2

to the change in benefits enacted in 2001 and the outstanding

3

balance of the net actuarial loss incurred in fiscal year

4

2000-2001 shall be amortized in equal dollar annual

5

contributions over a period that ends 30 years after July 1,

6

2002, and the outstanding balance of the net actuarial loss

7

incurred in fiscal year 2001-2002 shall be amortized in equal

8

dollar annual contributions over a period that ends 30 years

9

after July 1, 2003. For fiscal years beginning on or after

10

July 1, 2004, if the accrued liability is increased by

11

legislation enacted subsequent to June 30, 2003, such

12

additional liability shall be funded in equal dollar annual

13

contributions over a period of ten years from the first day

14

of July coincident with or next following the effective date

15

of the increase.

16

(4)  For the fiscal year beginning July 1, 2011, the

17

accrued liability contribution rate shall be computed as the

18

rate of total compensation of all active members which shall

19

be certified by the actuary as sufficient to fund as a level

20

percentage of compensation over a period of 30 24 years from

<--

21

July 1, 2011, the present value of the liabilities for all

22

prospective benefits calculated as of June 30, 2010,

23

including the supplemental benefits as provided in sections

24

8348, 8348.1, 8348.2, 8348.3, 8348.4, 8348.5, 8348.6 and

25

8348.7, in excess of the actuarially calculated assets in the

26

fund (calculated recognizing all realized and unrealized

27

investment gains and losses each year in level annual

28

installments over a ten-year period). In the event that the

29

accrued liability is increased by legislation enacted

30

subsequent to June 30, 2010, such additional liability shall

- 25 -

 


1

be funded as a level percentage of compensation over a period

2

of ten years from the July 1 second succeeding the date such

3

legislation is enacted.

4

(d)  Supplemental annuity contribution rate.--[Contributions]

5

(1)  For the period of July 1, 2002, to June 30, 2011,

6

contributions from the Commonwealth and other employers

7

required to provide for the payment of the supplemental

8

annuities provided for in sections 8348, 8348.1, 8348.2,

9

8348.4 and 8348.5 shall be paid over a period of ten years

10

from July 1, 2002. The funding for the supplemental annuities

11

commencing 2002 provided for in section 8348.6 shall be as

12

provided in section 8348.6(f). The funding for the

13

supplemental annuities commencing 2003 provided for in

14

section 8348.7 shall be as provided in section 8348.7(f). The

15

amount of each annual supplemental annuities contribution

16

shall be equal to the amount of such contribution for the

17

fiscal year beginning July 1, 2002. [In the event that

18

supplemental annuities are increased by legislation enacted

19

subsequent to June 30, 2002, the additional liability for the

20

increased benefits to be amortized shall be funded in equal

21

dollar annual installments over a period of ten years.]

22

(2)  For fiscal years beginning July 1, 2011,

23

contributions from the Commonwealth and other employers whose

24

employees are members of the system required to provide for

25

the payment of supplemental annuities as provided in sections

26

8348, 8348.1, 8348.2, 8348.3, 8348.4, 8348.5, 8348.6 and

27

8348.7 shall be paid as part of the accrued liability

28

contribution rate as provided for in subsection (c)(4), and

29

there shall not be a separate supplemental annuity

30

contribution rate attributable to those supplemental

- 26 -

 


1

annuities. In the event that supplemental annuities are

2

increased by legislation enacted subsequent to June 30, 2010,

3

the additional liability for the increase in benefits shall

4

be funded as a level percentage of compensation over a period

5

of ten years from the July 1 second succeeding the date such

6

legislation is enacted.

7

(e)  Experience adjustment factor.--

8

(1)  For each year after the establishment of the accrued

9

liability contribution rate for the fiscal year beginning

10

July 1, [2002] 2011, any increase or decrease in the unfunded

11

accrued liability, excluding the gains or losses on the

12

assets of the health insurance account, due to actual

13

experience differing from assumed experience, changes in

14

actuarial assumptions, changes in contributions caused by the

15

final contribution rate being different from the actuarially

16

required contribution rate, active members making shared risk

<--

17

contributions or changes in the terms and conditions of the

18

benefits provided by the system by judicial, administrative

19

or other processes other than legislation, including, but not

20

limited to, reinterpretation of the provisions of this part,

21

shall be amortized [in equal dollar annual contributions] as

22

a level percentage of compensation over a period of [ten] 30 

<--

23

24 years beginning with the July 1 second succeeding the

<--

24

actuarial valuation determining said increases or decreases.

25

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

26

for each year after the establishment of the accrued

27

liability contribution rate for the fiscal year beginning

28

July 1, 2003, any increase or decrease in the unfunded

29

accrued liability, excluding the gains or losses on the

30

assets of the health insurance account, due to actual

- 27 -

 


1

experience differing from assumed experience, changes in

2

actuarial assumptions, changes in the terms and conditions of

3

the benefits provided by the system by judicial,

4

administrative or other processes other than legislation,

5

including, but not limited to, reinterpretation of the

6

provisions of this part, shall be amortized in equal dollar

7

annual contributions over a period of 30 years beginning with

8

the July 1 second succeeding the actuarial valuation

9

determining said increases and decreases] (Reserved).

10

(f)  Premium assistance contribution rate.--For each fiscal

11

year beginning with July 1, 1991, the total contribution rate as

12

calculated according to this section shall be increased annually

13

in the full amount certified by the board as necessary to fund

14

the premium assistance program in accordance with section 8509

15

(relating to health insurance premium assistance program),

16

notwithstanding any other provisions of this section.

17

(g)  Temporary application of collared contribution rate.--

18

(1)  The collared contribution rate for each year shall

19

be determined by comparing the actuarially required

20

contribution rate, calculated without regard for the costs

21

added by legislation, to the prior year's final contribution

22

rate.

23

(2)  If, for any of the fiscal years beginning July 1,

24

2011, July 1, 2012, and on or after July 1, 2013, the

25

actuarially required contribution rate, calculated without

26

regard for the costs added by legislation, is more than 3%,

27

3.5% and 4.5%, respectively, of the total compensation of all

28

active members greater than the prior year's final

29

contribution rate, then the collared contribution rate shall

30

be applied and be equal to the prior year's final

- 28 -

 


1

contribution rate increased by 3%, 3.5% and 4.5%,

2

respectively, of total compensation of all active members.

3

Otherwise, and for all other fiscal years, the collared

4

contribution rate shall not be applicable. In no case shall

5

the collared contribution rate be less than 4% of the total

6

compensation of all active members.

7

(h)  Final contribution rate.--

8

(1)  For the fiscal year beginning July 1, 2010, the

9

final contribution rate shall be is 5% of the total

<--

10

compensation of all active members. For each subsequent

11

fiscal year for which the collared contribution rate is

12

applicable, the final contribution rate shall be the collared

13

contribution rate as calculated in subsection (g), plus the

14

costs added by legislation.

15

(2)  For all other fiscal years, the final contribution

16

rate shall be the actuarially required contribution rate,

17

provided that the final contribution rate shall not be less

18

than the normal contribution rate as provided in subsection

19

(b).

20

(i)  Definitions.--As used in this section, the following

21

words and phrases shall have the meanings given to them in this

22

subsection unless the context clearly indicates otherwise:

23

"Actuarially required contribution rate."  The sum of the

24

following:

25

(1)  the normal contribution rate as calculated in

26

subsection (b);

27

(2)  the accrued liability contribution rate as

28

calculated in subsection (c);

29

(3)  the supplemental annuity contribution rate as

30

calculated in subsection (d);

- 29 -

 


1

(4)  the experience adjustment factor as calculated in

2

subsection (e); and

3

(5)  any costs added by legislation enacted prior to the

4

last actuarial valuation.

5

"Costs added by legislation."  The sum, if positive, of all

6

changes in the actuarially required contribution rate resulting

7

from legislation enacted in the year since the last actuarial

8

valuation and not included in the determination of the prior

9

year's final contribution rate, computed as the rate of total

10

compensation of all active members certified by the actuary as

11

sufficient to make the employer normal contributions and

12

sufficient to amortize legislatively created changes in the

13

unfunded actuarial liability as a level percentage of

14

compensation over a period of ten years from the July 1 second

15

succeeding the date of enactment.

16

§ 8342.  Maximum single life annuity.

17

(a)  General rule.--Upon termination of service, any full

18

coverage member who is eligible to receive an annuity pursuant

19

to the provisions of section 8307(a) or (b) (relating to

20

eligibility for annuities) and has made an application in

21

accordance with the provisions of section 8507(f) (relating to

22

rights and duties of school employees and members) shall be

23

entitled to receive a maximum single life annuity attributable

24

to his credited service and equal to the sum of the following

25

single life annuities beginning at the effective date of

26

retirement and, in case the member on the effective date of

27

retirement is under superannuation age, multiplied by a

28

reduction factor calculated to provide benefits actuarially

29

equivalent to an annuity starting at superannuation age:

30

Provided however, That on or after July 1, 1976, in the case of

- 30 -

 


1

any Class T-C, T-D, T-E or T-F member who has attained age 55

<--

2

and has 25 or more eligibility points such sum of single life

3

annuities shall be reduced by a percentage determined by

4

multiplying the number of months, including a fraction of a

5

month as a full month, by which the effective date of retirement

6

precedes superannuation age by 1/4%:

7

Further provided, In no event shall a Class T-E or Class T-F

<--

8

member receive an annual benefit, calculated as of the effective

9

date of retirement, greater than the member's final average

10

salary:

11

(1)  A standard single life annuity multiplied by the

12

class of service multiplier and calculated on the basis of

13

the number of years of credited school service other than

14

concurrent service.

15

(2)  A standard single life annuity multiplied by the

16

class of service multiplier and calculated on the basis of

17

the number of years of concurrent service and multiplied by

18

the ratio of total compensation received in the school system

19

during the period of concurrent service to the total

20

compensation received during such period.

21

(3)  A supplemental annuity such that the total annuity

22

prior to any optional modification or any reduction due to

23

retirement prior to superannuation age shall be at least $100

24

for each full year of credited service.

25

* * *

26

§ 8344.  Disability annuities.

27

* * *

28

(d)  Withdrawal of accumulated deductions.--Upon termination

29

of disability annuity payments in excess of an annuity

30

calculated in accordance with section 8342, a disability

- 31 -

 


1

annuitant who:

2

(1)  is a Class T-C or Class T-D member; or

3

(2)  is a Class T-E or Class T-F member with less than

4

ten eligibility points

5

and who does not return to school service may file an

6

application with the board for an amount equal to the

7

accumulated deductions, shared risk member contributions and

<--

8

statutory interest standing to his credit at the effective date

9

of disability less the total payments received on account of his

10

member's annuity.

11

* * *

12

§ 8345.  Member's options.

13

(a)  General rule.--Any Class T-C or Class T-D member who is

14

a vestee with five or more eligibility points, any Class T-E or

15

Class T-F member who is a vestee with ten or more eligibility

16

points, or any other eligible member upon termination of school

17

service who has not withdrawn his accumulated deductions as

18

provided in section 8341 (relating to return of accumulated

19

deductions) may apply for and elect to receive either a maximum

20

single life annuity, as calculated in accordance with the

21

provisions of section 8342 (relating to maximum single life

22

annuity), or a reduced annuity certified by the actuary to be

23

actuarially equivalent to the maximum single life annuity and in

24

accordance with one of the following options, except that no

25

member shall elect an annuity payable to one or more survivor

26

annuitants other than his spouse or alternate payee of such a

27

magnitude that the present value of the annuity payable to him

28

for life plus any lump sum payment he may have elected to

29

receive is less than 50% of the present value of his maximum

30

single life annuity. In no event shall a Class T-E or Class T-F

<--

- 32 -

 


1

member receive an annual benefit, calculated as of the effective

2

date of retirement, greater than the member's final average

3

salary.

4

(1)  Option 1.--A life annuity to the member with a

5

guaranteed total payment equal to the present value of the

6

maximum single life annuity on the effective date of

7

retirement with the provision that, if, at his death, he has

8

received less than such present value, the unpaid balance

9

shall be payable to his beneficiary.

10

(2)  Option 2.--A joint and survivor annuity payable

11

during the lifetime of the member with the full amount of

12

such annuity payable thereafter to his survivor annuitant, if

13

living at his death.

14

(3)  Option 3.--A joint and fifty percent (50%) survivor

15

annuity payable during the lifetime of the member with one-

16

half of such annuity payable thereafter to his survivor

17

annuitant, if living at his death.

18

(4)  Option 4.--Some other benefit which shall be

19

certified by the actuary to be actuarially equivalent to the

20

maximum single life annuity, subject to the following

21

restrictions:

22

(i)  Any annuity shall be payable without reduction

23

during the lifetime of the member.

24

(ii)  The sum of all annuities payable to the

25

designated survivor annuitants shall not be greater than

26

one and one-half times the annuity payable to the member.

27

(iii)  A portion of the benefit may be payable as a

28

lump sum, except that such lump sum payment shall not

29

exceed an amount equal to the accumulated deductions

30

standing to the credit of the member. The balance of the

- 33 -

 


1

present value of the maximum single life annuity adjusted

2

in accordance with section 8342(b) shall be paid in the

3

form of an annuity with a guaranteed total payment, a

4

single life annuity, or a joint and survivor annuity or

5

any combination thereof but subject to the restrictions

6

of subparagraphs (i) and (ii) of this paragraph. This

7

subparagraph shall not apply to a Class T-E or Class T-F

8

member.

9

* * *

10

§ 8348.1.  Additional supplemental annuities.

11

* * *

12

(f)  Funding.--The actuary shall annually certify the amount

13

of Commonwealth appropriations for the next fiscal year needed

14

to fund, over a period of ten years from July 1, 2002, the

15

additional monthly supplemental annuity provided for in this

16

section[. The board shall submit the actuary's certification to

17

the Secretary of the Budget on or before November 1 of each

18

year. If, in any year after 1984, the amount certified is

19

disapproved under section 610 of the act of April 9, 1929

20

(P.L.177, No.175), known as The Administrative Code of 1929, as

21

insufficient to meet the funding requirements of this subsection

22

or is not appropriated on or before July 1, the additional

23

supplemental annuity provided for in this section shall be

24

suspended until such time as an amount certified and approved as

25

sufficient is appropriated], which amounts shall be paid during

26

the period beginning July 1, 2002, and ending June 30, 2011. For

27

fiscal years beginning on or after July 1, 2011, the additional

28

liability provided in this section shall be funded as part of

29

the actuarial accrued liability as provided in section 8328

30

(relating to actuarial cost method).

- 34 -

 


1

* * *

2

§ 8348.2.  Further additional supplemental annuities.

3

* * *

4

(f)  Funding.--The actuary shall annually estimate the amount

5

of Commonwealth appropriations for the next fiscal year needed

6

to fund, over a period of ten years from July 1, 2002, the

7

additional monthly supplemental annuity provided for in this

8

section[. The board shall submit the actuary's estimation to the

9

Secretary of the Budget on or before November 1 of each year.

10

If, in any year after 1988, the amount estimated is disapproved

11

under section 610 of the act of April 9, 1929 (P.L.177, No.175),

12

known as The Administrative Code of 1929, as insufficient to

13

meet the funding requirements of this subsection or is not

14

appropriated on or before July 1, the additional supplemental

15

annuity provided for in this section shall be suspended until

16

such time as an amount certified and approved as sufficient is

17

appropriated], which amounts shall be paid during the period

18

beginning July 1, 2002, and ending June 30, 2011. For fiscal

19

years beginning on or after July 1, 2011, the additional

20

liability provided in this section shall be funded as part of

21

the actuarial accrued liability as provided in section 8328

22

(relating to actuarial cost method).

23

* * *

24

§ 8348.3.  Supplemental annuities commencing 1994.

25

* * *

26

(f)  Funding.--[The]

27

(1)  For the period beginning July 1, 2002, and ending

28

June 30, 2011, the additional liability for the increase in

29

benefits provided in this section shall be funded in equal

30

dollar annual installments over a period of ten years

- 35 -

 


1

beginning July 1, 2002.

2

(2)  For fiscal years beginning on or after July 1, 2011,

3

the additional liability provided in this section shall be

4

funded as part of the actuarial accrued liability as provided

5

in section 8328 (relating to actuarial cost method).

6

* * *

7

§ 8348.5.  Supplemental annuities commencing 1998.

8

* * *

9

(f)  Funding.--[The]

10

(1)  For the period beginning July 1, 2002, and ending

11

June 30, 2011, the additional liability for the increase in

12

benefits provided in this section shall be funded in equal

13

dollar annual installments over a period of ten years

14

beginning July 1, 2002.

15

(2)  For fiscal years beginning on or after July 1, 2011,

16

the additional liability provided in this section shall be

17

funded as part of the actuarial accrued liability as provided

18

in section 8328 (relating to actuarial cost method).

19

(3)  Notwithstanding the provisions of section 212 of the

20

act of April 22, 1998 (P.L.1341, No.6A), known as the General

21

Appropriation Act of 1998, regarding payment for cost-of-

22

living increases for annuitants, payments for cost-of-living

23

increases for annuitants shall be made under section 8535

24

(relating to payments to school entities by Commonwealth).

25

* * *

26

§ 8348.6.  Supplemental annuities commencing 2002.

27

* * *

28

(f)  Funding.--[The]

29

(1)  For the period beginning July 1, 2002, and ending

30

June 30, 2011, the additional liability for the increase in

- 36 -

 


1

benefits provided in this section shall be funded in equal

2

dollar annual installments over a period of ten years

3

beginning July 1, 2003.

4

(2)  For fiscal years beginning on or after July 1, 2011,

5

the additional liability provided in this section shall be

6

funded as part of the actuarial accrued liability as provided

7

in section 8328 (relating to actuarial cost method).

8

* * *

9

§ 8348.7.  Supplemental annuities commencing 2003.

10

* * *

11

(f)  Funding.--[The]

12

(1)  For the period beginning July 1, 2002, and ending

13

June 30, 2011, the additional liability for the increase in

14

benefits provided in this section shall be funded in equal

15

dollar annual installments over a period of ten years

16

beginning July 1, 2004.

17

(2)  For fiscal years beginning on or after July 1, 2011,

18

the additional liability provided in this section shall be

19

funded as part of the actuarial accrued liability as provided

20

in section 8328 (relating to actuarial cost method).

21

* * *

22

§ 8502.  Administrative duties of board.

23

* * *

24

(k)  Certification of employer contributions.--The board

25

shall, each year in addition to the itemized budget required

26

under section 8330 (relating to appropriations by the

27

Commonwealth), certify to the employers and the Commonwealth the

28

employer contribution rate expressed as a percentage of members'

29

payroll necessary for the funding of prospective annuities for

30

active members and the annuities of annuitants, and certify the

- 37 -

 


1

rates and amounts of the normal contributions as determined

2

pursuant to section 8328(b) (relating to actuarial cost method),

3

accrued liability contributions as determined pursuant to

4

section 8328(c), supplemental annuities contribution rate as

5

determined pursuant to section 8328(d) [and], the experience

6

adjustment factor as determined pursuant to section 8328(e)

7

[and], premium assistance contributions as determined pursuant

8

to section 8328(f), the costs added by legislation as determined

9

pursuant to section 8328(i), the actuarial required contribution

10

rate as determined pursuant to section 8328(i), the collared

11

contribution rate as determined pursuant to section 8328(g) and, 

<--

12

the final contribution rate as determined pursuant to section

13

8328(h) and the shared risk contribution rate as determined

<--

14

under section 8321(b) (relating to regular member contributions

15

for current service), which shall be paid to the fund and

16

credited to the appropriate accounts. These certifications shall

17

be regarded as final and not subject to modification by the

18

[Budget Secretary] Secretary of the Budget.

19

* * *

20

Section 6.  Section 8505 of Title 24 is amended by adding a

21

subsection to read:

22

§ 8505.  Duties of board regarding applications and elections of

23

members.

24

* * *

25

(l)  Notification of Class T-F membership.--The board shall

26

inform any eligible school employee of the right to elect Class

27

T-F membership.

28

Section 7 6.1.  Sections 8507(f) and (g) and 8535(3) of Title

<--

29

24 are amended to read:

30

§ 8507.  Rights and duties of school employees and members.

- 38 -

 


1

* * *

2

(f)  Termination of service.--Each member who terminates

3

school service and who is not then a disability annuitant shall

4

execute on or before the date of termination of service a

5

written application, duly attested by the member or his legally

6

constituted representative, electing to do one of the following:

7

(1)  Withdraw his accumulated deductions.

8

(2)  Vest his retirement rights and if he is a joint

9

coverage member, and so desires, elect to become a full

10

coverage member and agree to pay within 30 days of the date

11

of termination of service the lump sum required.

12

(3)  Receive an immediate annuity, if eligible, and may,

13

if he is a joint coverage member, elect to become a full

14

coverage member and agree to pay within 30 days of date of

15

termination of service the lump sum required.

16

(g)  Vesting of retirement rights.--If a member elects to

17

vest his retirement rights, he shall nominate a beneficiary by

18

written designation filed with the board and he may anytime

19

thereafter withdraw the accumulated deductions standing to his

20

credit or[, if he has five or more eligibility points,] apply

21

for an annuity if eligible as provided in section 8307(a) or (b)

22

(relating to eligibility for annuitants).

23

* * *

24

§ 8535.  Payments to school entities by Commonwealth.

25

For each school year beginning with the 1995-1996 school

26

year, each school entity shall be paid by the Commonwealth for

27

contributions based upon school service of active members of the

28

system after June 30, 1995, as follows:

29

* * *

30

(3)  School entities shall have up to five days after

- 39 -

 


1

receipt of the Commonwealth's portion of the employer's

2

liability to make payment to the Public School Employees'

3

Retirement Fund. School entities are expected to make the

4

full payment to the Public School Employees' Retirement Fund

5

in accordance with section 8327 (relating to payments by

6

employers) in the event the receipt of the Commonwealth's

7

portion of the employer's liability is delayed because of

8

delinquent salary reporting or other conduct by the school

9

entities.

10

Section 7.  Title 24 is amended by adding a section to read:

<--

11

§ 8536.  Independent Fiscal Office study.

12

The Independent Fiscal Office shall study and analyze the

13

implementation of shared risk contributions under section

14

8321(b) (relating to regular member contributions for current

15

service) and its impact on the system. The study shall be

16

completed by December 31, 2015, and shall be transmitted to the

17

Appropriations Committee and the Finance Committee of the Senate

18

and the Appropriations Committee and the Finance Committee of

19

the House of Representatives and to the Governor.

20

Section 7.1.  The definitions of "class of service

21

multiplier," "final average salary," "superannuation age" 

<--

22

"member's annuity," "pickup contributions," "superannuation

<--

23

age," "total accumulated deductions" and "vestee" in section

24

5102 of Title 71 are amended and the section is amended by

<--

25

adding definitions to read:

26

§ 5102.  Definitions.

27

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

28

a different meaning is plainly required by the context, shall

29

have the following meanings:

30

* * *

- 40 -

 


1

"Class of service multiplier."

2

Class of Service

  

Multiplier

  

3

A

  

1

  

4

5

6

7

8

9

10

11

AA

  

  

  

  

  

  

  

for all purposes  except calculating regular member contributions on compensation paid prior to January 1, 2002

   1.25

  

12

13

14

15

16

17

18

AA

  

  

  

  

  

  

for purposes of calculating regular member contributions   on compensation paid prior to January 1, 2002

  

  

  

  

  

  

1

  

19

20

21

22

23

24

25

26

27

A-3

  

  

  

  

  

  

  

  

for all purposes except the calculation of regular member contributions and contributions for creditable nonstate service

  

  

  

  

  

  

  

  

1

  

28

29

30

A-3

  

  

for purposes of

calculating regular member

  

  

  

  

- 41 -

 


1

2

3

4

5

  

  

  

  

  

contributions

and contributions for creditable nonstate service

  

  

  

  

   1.25

6

7

8

9

10

A-4

  

  

  

  

for all purposes except the calculation of regular member contributions

  

  

  

  

   1.25

  

11

12

13

14

A-4

  

  

  

for purposes of calculating regular member contributions

  

  

  

   1.86

  

15

B

  

    .625

  

16

C

  

1

  

17

D

  

   1.25

  

18

19

D-1

  

prior to January 1, 1973

  

   1.875

  

20

21

22

D-1

  

  

on and subsequent to January 1, 1973

  

  

   1.731

  

23

24

D-2

  

prior to January 1, 1973

  

 2.5

  

25

26

27

D-2

  

  

on and subsequent to   January 1, 1973

  

  

   1.731

  

28

29

D-3

  

prior to January 1, 1973

  

  3.75

  

30

D-3

on and   

  

except prior to

- 42 -

 


1

2

3

4

5

6

7

8

  

  

  

  

  

  

  

  

subsequent to   January 1, 1973

  

   1.731

December 1, 1974 as applied to any additional legislative   compensation as an officer of the General Assembly

9

  

  

  3.75

  

10

11

12

13

14

15

16

17

D-4

  

  

  

  

  

  

  

for all purposes except calculating regular member contributions   on compensation paid prior to July 1, 2001

  

  

  

  

  

  

  

  1.5

  

18

19

20

21

22

23

24

D-4

  

  

  

  

  

  

for purposes of   calculating regular member   contributions on compensation   paid prior to  July 1, 2001

  

  

  

  

  

  

1

  

25

26

27

28

E, E-1

  

  

  

prior to January 1, 1973

  

2

for each of the first ten years of judicial service, and

29

30

  

  

  

  1.5

for each

subsequent year  

- 43 -

 


1

2

  

  

of judicial

service

3

4

5

6

E, E-1

  

  

  

on and  subsequent to   January 1, 1973

  

  

   1.50

for each of the first ten years of judicial  service and

7

8

E-2

  

prior to September 1 1973

  

  1.5

  

9

10

11

12

E-2

  

  

  

on and subsequent to September 1, 1973

  

  

  

    1.125

  

13

G

  

    0.417

  

14

H

  

    0.500

  

15

I

  

    0.625

  

16

J

  

    0.714

  

17

K

  

    0.834

  

18

L

  

   1.000

  

19

M

  

   1.100

  

20

N

  

   1.250

  

21

22

23

24

T-C (Public

School

Employees'

Retirement Code)

  

1

  

25

26

27

28

T-E (Public 

School

Employees'

Retirement Code)

  

1

  

29

30

T-F (Public 

School

  

1

  

- 44 -

 


1

2

Employees'

Retirement Code)

3

* * * 

4

"Final average salary."  The highest average compensation

5

received as a member during any three nonoverlapping periods of

6

four consecutive calendar quarters during which the member was a

7

State employee, with the compensation for part-time service

8

being annualized on the basis of the fractional portion of the

9

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

10

not a member for three nonoverlapping periods of four

11

consecutive calendar quarters, the total compensation received

12

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

13

divided by the number of nonoverlapping periods of four

14

consecutive calendar quarters of membership; in the case of a

15

member with multiple service, the final average salary shall be

16

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

17

State employee or as a school employee, or both; in the case of

18

a member with Class A-3 or Class A-4 service and service in one

19

or more other classes of service, the final average salary shall

20

be determined on the basis of the compensation received by him

21

in all classes of State service; and, in the case of a member

22

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

23

average salary shall be determined as hereinabove provided but

24

subject to the application of the provisions of section

25

5506.1(a) (relating to annual compensation limit under IRC §

26

401(a)(17)).

27

* * *

28

"Member's annuity."  The single life annuity which is

<--

29

actuarially equivalent, at the effective date of retirement, to

30

the sum of the regular accumulated deductions, shared risk

- 45 -

 


1

accumulated deductions, the additional accumulated deductions

2

and the social security integration accumulated deductions

3

standing to the member's credit in the members' savings account.

4

* * *

5

"Pickup contributions."  Regular or joint coverage member

6

contributions, shared risk member contributions, social security

7

integration contributions and additional member contributions

8

which are made by the Commonwealth or other employer for active

9

members for current service on and after January 1, 1982.

10

* * *

11

"Shared risk accumulated deductions."  The total of the

12

shared risk member contributions paid into the fund on account

13

of current service or previous State service or creditable

14

nonstate service, together with the statutory interest credited

15

on the contributions until the date of termination of service.

16

In the case of a vestee, statutory interest shall be credited

17

until the effective date of retirement. A member's account shall

18

not be credited with statutory interest for more than two years

19

during a leave without pay.

20

"Shared risk member contributions."  The product of the

21

shared risk contribution rate and the compensation of a member

22

for service credited as Class A-3 or Class A-4.

23

* * *

24

"Superannuation age."  [Any] For classes of service other

25

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

26

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

27

Assembly, an enforcement officer, a correction officer, a

28

psychiatric security aide, a Delaware River Port Authority

29

policeman or an officer of the Pennsylvania State Police, age

30

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

- 46 -

 


1

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

2

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

3

A-4 service, any age upon accrual of 35 eligibility points 

<--

4

attainment of a superannuation score of 92, provided the member

<--

5

has accrued 35 eligibility points or age 65, or for park rangers

6

or capitol police officers, age 55 with 20 years of service as a

7

park ranger or capitol police officer, except for a member of

8

the General Assembly, an enforcement officer, a correction

9

officer, a psychiatric security aide, a Delaware River Port

10

Authority policeman or an officer of the Pennsylvania State

11

Police, age 55. A vestee with Class A-3 or Class A-4 service

<--

12

credit attains superannuation age on the birthday the vestee

13

attains the age resulting in a superannuation score of 92,

14

provided the vestee has at least 35 eligibility points, or

15

attains another applicable superannuation age, whichever occurs

16

first.

17

"Superannuation score."  The sum of the member's age in whole

18

years on his last birthday and the amount of the member's total

19

eligibility points on the member's effective date of retirement,

20

expressed in whole years and whole eligibility points and

21

disregarding fractions of a year and fractions of total

22

eligibility points.

23

* * *

24

"Total accumulated deductions."  The sum of the regular

25

accumulated deductions, additional accumulated deductions, the

26

social security integration accumulated deductions, shared risk

27

member contributions and all other contributions paid into the

28

fund for the purchase, transfer or conversion of credit for

29

service or other coverage together with all statutory interest

30

credited thereon until the date of termination of service. In

- 47 -

 


1

the case of a vestee or a special vestee, statutory interest

2

shall be credited until the effective date of retirement. A

3

member's account shall not be credited with statutory interest

4

for more than two years during a leave without pay.

5

* * *

6

"Vestee."  A member with five or more eligibility points[,

7

or] in a class of service other than Class A-3 or Class A-4 or

8

Class T-E or Class T-F in the Public School Employees'

9

Retirement System, a member with Class G, Class H, Class I,

10

Class J, Class K, Class L, Class M or Class N service with five

11

or more eligibility points, or a member with Class A-3 or Class

12

A-4 service with ten or more eligibility points who has

13

terminated State service and has elected to leave his total

14

accumulated deductions in the fund and to defer receipt of an

15

annuity.

16

Section 7.2.  Sections 5302(e) 5302(b) and (e), 5303(b)(1)

<--

17

and 5304(a) of Title 71 are amended to read:

18

§ 5302.  Credited State service.

19

* * *

20

(b)  Creditable leaves of absence.--

<--

21

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

22

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

23

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

24

with the United States Government, another state or a local

25

government under the Intergovernmental Personnel Act of 1970,

26

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

27

eligible for credit for such service: Provided, That

28

contributions are made in accordance with sections 5501

29

(relating to regular member contributions for current

30

service), 5501.1 (relating to shared risk member

- 48 -

 


1

contributions), 5505.1 (relating to additional member

2

contributions) and 5507 (relating to contributions by the

3

Commonwealth and other employers), the member returns from

4

leave without pay to active State service for a period of at

5

least one year, and he is not entitled to retirement benefits

6

for such service under a retirement system administered by

7

any other governmental agency.

8

(2)  An active member on paid leave granted by an

9

employer for purposes of serving as an elected full-time

10

officer for a Statewide employee organization which is a

11

collective bargaining representative under the act of June 

12

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

13

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

14

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

15

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

16

employee organization that represents correction officers

17

employed at State correctional institutions: Provided, That

18

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

19

more than three consecutive terms of the same office and for

20

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

21

organization that represents correction officers employed at

22

State correctional institutions no more than three

23

consecutive terms of the same office; that the employer shall

24

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

25

salary, wages, pension and retirement contributions and

26

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

27

full-time active service; and that the Statewide employee

28

organization shall fully reimburse the employer for all

29

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

30

limited to, contributions and payment in accordance with

- 49 -

 


1

sections 5501, 5501.1, 5505.1 and 5507, if the employee

2

organization either directly pays, or reimburses the

3

Commonwealth or other employer for, contributions made in

4

accordance with section 5507.

5

* * *

6

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

7

shall be cancelled if a member withdraws his total accumulated

8

deductions except that a member with Class A-3 or Class A-4

9

service credit and one or more other classes of service credit

10

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

<--

11

service other than as a member of Class A-3 or Class A-4

12

cancelled when the member receives a lump sum payment of

13

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

14

service pursuant to section 5705.1 (relating to payment of

15

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

16

service).

17

§ 5303.  Retention and reinstatement of service credits.

18

* * *

19

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

20

(1)  Every active member of the system or a multiple

21

service member who is a school employee and a member of the

22

Public School Employees' Retirement System on or after the

23

effective date of this part shall receive eligibility points

24

in accordance with section 5307 for current State service,

25

previous State service, or creditable nonstate service upon

26

compliance with sections 5501 (relating to regular member

27

contributions for current service), 5501.1 (relating to

<--

28

shared risk contributions), 5504 (relating to member

29

contributions for the purchase of credit for previous State

30

service or to become a full coverage member), 5505 (relating

- 50 -

 


1

to contributions for the purchase of credit for creditable

2

nonstate service), 5505.1 (relating to additional member

3

contributions) or 5506 (relating to incomplete payments).

4

Subject to the limitations in sections 5306.1 (relating to

5

election to become a Class AA member) and 5306.2 (relating to

6

elections by members of the General Assembly), the class or

7

classes of service in which the member may be credited for

8

previous State service prior to the effective date of this

9

part shall be the class or classes in which he was or could

10

have at any time elected to be credited for such service,

11

except that a State employee who first becomes a member of

12

the system on or after January 1, 2011, or on or after

13

December 1, 2010, as a member of the General Assembly and:

14

(i)  is credited with Class A-3 service for such

15

membership, shall be credited only with Class A-3 service

16

for previous State service performed before January 1,

17

2011, that was not previously credited in the system; or

18

(ii)  is credited with Class A-4 service for such

19

membership, shall be credited only with Class A-3 A-4 

<--

20

service for previous State service performed before

21

January 1, 2011, that was not previously credited in the

22

system. The class of service in which a member shall be

<--

23

credited for

24

The class of service in which a member shall be credited for 

<--

25

service subsequent to the effective date of this part shall

26

be determined in accordance with section 5306 (relating to

27

classes of service).

28

* * *

29

§ 5304.  Creditable nonstate service.

30

(a)  Eligibility.--

- 51 -

 


1

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

2

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

3

member of the General Assembly, or a multiple service member

4

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

5

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

6

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

7

Public School Employees' Retirement System shall be eligible

8

for Class A service credit for creditable nonstate service as

9

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

10

military service shall be credited in the class of service

11

for which the member was eligible at the time of entering

12

into military service and for which he makes the required

13

contributions and except that a multiple service member who

14

is a school employee and an active member of the Public

15

School Employees' Retirement System shall not be eligible to

16

purchase service credit for creditable nonstate service set

17

forth in subsection (c)(5).

18

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

19

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

20

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

21

member who first becomes an active member on or after January

22

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

23

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

24

member of the Public School Employees' Retirement System

25

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

26

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

27

except that intervening military service shall be credited in

28

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

29

time of entering into military service and for which he makes

30

the required contributions and except that a multiple service

- 52 -

 


1

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

2

Public School Employees' Retirement System shall not be

3

eligible to purchase service credit for creditable nonstate

4

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

5

* * *

6

Section 7.3.  Section 5306(a), (a.1)(1), (2), (5) and (6) and

7

(a.2) of Title 71 are amended and the section is amended by

8

adding a subsection to read:

9

§ 5306.  Classes of service.

10

(a)  Class A and Class A-3 membership.--

11

(1)  A State employee who is a member of Class A on the

12

effective date of this part or who first becomes a member of

13

the system subsequent to the effective date of this part and

14

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

15

member of the General Assembly, shall be classified as a

16

Class A member and receive credit for Class A service upon

17

payment of regular and additional member contributions for

18

Class A service, provided that the State employee does not

19

become a member of Class AA pursuant to subsection (a.1) or a

20

member of Class D-4 pursuant to subsection (a.2).

21

(2)  A State employee who first becomes a member of the

22

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

23

1, 2010, as a member of the General Assembly, shall be

24

classified as a Class A-3 member and receive credit for Class

25

A-3 service upon payment of regular member contributions and

<--

26

shared risk member contributions for Class A-3 service

27

provided that the State employee does not become a member of

28

Class A-4 pursuant to subsection (a.3), except that a member

29

of the judiciary shall be classified as a member of such

30

other class of service for which the member of the judiciary

- 53 -

 


1

is eligible, shall elect, and make regular member

2

contributions.

3

(a.1)  Class AA membership.--

4

(1)  A person who becomes a State employee and an active

5

member of the system after June 30, 2001, and who first

6

became an active member before January 1, 2011, or before

7

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

8

who is not a State police officer and not employed in a

9

position for which a class of service other than Class A is

10

credited or could be elected shall be classified as a Class

11

AA member and receive credit for Class AA State service upon

12

payment of regular member contributions for Class AA service

13

and, subject to the limitations contained in paragraph (7),

14

if previously a member of Class A or previously employed in a

15

position for which Class A service could have been earned,

16

shall have all Class A State service (other than State

17

service performed as a State police officer or for which a

18

class of service other than Class A was earned or could have

19

been elected) classified as Class AA service.

20

(2)  A person who is a State employee on June 30, 2001,

21

and July 1, 2001, but is not an active member of the system

22

because membership in the system is optional or prohibited

23

pursuant to section 5301 (relating to mandatory and optional

24

membership) and who first becomes an active member after June

25

30, 2001, and before January 1, 2011, or before December 1,

26

2010, as a member of the General Assembly, and who is not a

27

State police officer and not employed in a position for which

28

a class of service other than Class A is credited or could be

29

elected shall be classified as a Class AA member and receive

30

credit for Class AA State service upon payment of regular

- 54 -

 


1

member contributions for Class AA service and, subject to the

2

limitations contained in paragraph (7), if previously a

3

member of Class A or previously employed in a position for

4

which Class A service could have been earned, shall have all

5

Class A State service (other than State service performed as

6

a State Police officer or for which a class of service other

7

than Class A was earned or could have been elected)

8

classified as Class AA service.

9

* * *

10

(5)  A former State employee who first becomes a member

11

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

12

member of the General Assembly, other than a former State

13

employee who was a State police officer on or after July 1,

14

1989, who is a school employee and who on or after July 1,

15

2001, becomes a multiple service member, subject to the

16

limitations contained in paragraph (7), shall receive Class

17

AA service credit for all Class A State service other than

18

State service performed as a State employee in a position in

19

which the former State employee could have elected a class of

20

service other than Class A.

21

(6)  A State employee who after June 30, 2001, becomes a

22

State police officer or who is employed in a position in

23

which the member could elect membership in a class of service

24

other than Class AA or Class D-4 shall retain any Class AA

25

service credited prior to becoming a State police officer or

26

being so employed but shall be ineligible to receive Class AA

27

credit thereafter and instead shall receive Class A credit

28

for service as a member of the judiciary or if he first

29

became a member before January 1, 2011, or December 1, 2010,

30

as a member of the General Assembly, or Class A-3 credit for

- 55 -

 


1

service other than as a member of the judiciary and he first

2

became a member on or after January 1, 2011, or December 1,

3

2010, as a member of the General Assembly, unless a class of

4

membership other than Class A is elected.

5

* * *

6

(a.2)  Class of membership for members of the General

7

Assembly.--

8

(1)  A person who:

9

(i)  becomes a member of the General Assembly and an

10

active member of the system after June 30, 2001, and

11

before December 1, 2010; or

12

(ii)  is a member of the General Assembly on July 1,

13

2001, but is not an active member of the system because

14

membership in the system is optional pursuant to section

15

5301 and who becomes an active member after June 30,

16

2001, and before December 1, 2010;

17

and who was not a State police officer on or after July 1,

18

1989, shall be classified as a Class D-4 member and receive

19

credit as a Class D-4 member for all State service as a

20

member of the General Assembly upon payment of regular member

21

contributions for Class D-4 service and, subject to the

22

limitations contained in subsection (a.1)(7), if previously a

23

member of Class A or employed in a position for which Class A

24

service could have been earned, shall receive Class AA

25

service credit for all Class A State service, other than

26

State service performed as a State police officer or for

27

which a class of service other than Class A or Class D-4 was

28

or could have been elected or credited.

29

(2)  Provided an election to become a Class D-4 member is

30

made pursuant to section 5306.2 (relating to elections by

- 56 -

 


1

members of the General Assembly), a State employee who was

2

not a State police officer on or after July 1, 1989, who on

3

July 1, 2001, is a member of the General Assembly and an

4

active member of the system and not a member of Class D-3

5

shall be classified as a Class D-4 member and receive credit

6

as a Class D-4 member for all State service performed as a

7

member of the General Assembly not credited as another class

8

other than Class A upon payment of regular member

9

contributions for Class D-4 service and, subject to the

10

limitations contained in paragraph (a.1)(7), shall receive

11

Class AA service credit for all Class A State service, other

12

than State service performed as a State police officer or as

13

a State employee in a position in which the member could have

14

elected a class of service other than Class A, performed

15

before July 1, 2001.

16

(3)  A member of the General Assembly who after June 30,

17

2001, becomes a State police officer shall retain any Class

18

AA service or Class D-4 service credited prior to becoming a

19

State police officer or being so employed but shall be

20

ineligible to receive Class AA or Class D-4 credit thereafter

21

and instead shall receive Class A credit or Class A-3 credit

22

if he first becomes a member of the system on or after

23

January 1, 2011.

24

(4)  Notwithstanding the provisions of this subsection,

25

no service as a member of the General Assembly performed

26

before December 1, 2010, that is not credited as Class D-4

27

service on November 30, 2010, shall be credited as Class D-4

28

service, unless such service was previously credited in the

29

system as Class D-4 service and the member withdrew his total

30

accumulated deductions as provided in section 5311 (relating

- 57 -

 


1

to eligibility for refunds) or 5701 (relating to return of

2

total accumulated deductions). No service as a member of the

3

General Assembly performed on or after December 1, 2010,

4

shall be credited as Class D-4 service unless the member

5

previously was credited with Class D-4 service credits.

6

(a.3)  Class A-4 membership.--Provided that an election to

7

become a Class A-4 member is made pursuant to section 5306.3

8

(relating to election to become a Class A-4 member), a State

9

employee who otherwise would be a member of Class A-3 shall be

10

classified as a Class A-4 member and receive Class A-4 credit

<--

11

for all creditable State service performed after the effective

12

date of membership in the system, except as a member of the

13

judiciary, upon payment of regular member contributions and

<--

14

shared risk member contributions for Class A-4 service.

15

* * *

16

Section 7.4.  Title 71 is amended by adding a section to

17

read:

18

§ 5306.3.  Election to become a class Class A-4 member.

<--

19

(a)  General rule.--A person who otherwise is eligible for

20

Class A-3 membership who has not previously elected or declined

21

to elect Class A-4 membership may elect to become a member of

22

Class A-4.

23

(b)  Time for making election.--The election to become a

24

Class A-4 member must be made by the member filing written

25

notice with the board in a form and manner determined by the

26

board no later than 45 days after notice from the board of the

27

member's eligibility to elect Class A-4 membership.

28

(c)  Effect of election.--An election to become a Class A-4

29

member shall be irrevocable and shall become effective on the

30

effective date of membership in the system and shall remain in

- 58 -

 


1

effect for all future creditable State service, other than

2

service performed as a member of the judiciary. Payment of

3

regular member contributions for Class A-4 State service

4

performed prior to the election of Class A-4 service membership 

<--

5

shall be made in a form, manner and time determined by the

6

board. Upon termination and subsequent reemployment, a member

7

who elected Class A-4 membership shall be credited as a Class

8

A-4 member for creditable State service performed after

9

reemployment, except as a member of the judiciary, regardless of

10

termination of employment, termination of membership by

11

withdrawal of accumulated deductions or status as an annuitant,

12

vestee or inactive member after the termination of service.

13

(d)  Effect of failure to make election.--Failure to elect to

14

become a Class A-4 member within the election period set forth

15

in subsection (b) shall result in all of the member's State

16

service, other than service performed as a member of the

17

judiciary, being credited as Class A-3 service and not subject

18

to further election or crediting as Class A-4 service. Upon

19

termination and subsequent employment, a member who failed to

20

elect to become a Class A-4 member shall not be eligible to make

21

another election to become a Class A-4 member for either past or

22

future State service.

23

Section 7.5.  Sections 5308(b) and 5309 of Title 71 are

24

amended to read:

25

§ 5308.  Eligibility for annuities.

26

* * *

27

(b)  Withdrawal annuity.--

28

(1)  Any vestee or any active member or inactive member

29

on leave without pay who terminates State service having five

30

or more eligibility points and who does not have Class A-3 or

- 59 -

 


1

Class A-4 service credit or Class T-E or Class T-F service

2

credit in the Public School Employees' Retirement System, or

3

who has Class G, Class H, Class I, Class J, Class K, Class L,

4

Class M or Class N service and terminates State service

5

having five or more eligibility points, upon compliance with

6

section 5907(f), (g) or (h) shall be entitled to receive an

7

annuity.

8

(2)  Any vestee, active member or inactive member on

9

leave without pay who has Class A-3 or Class A-4 service

10

credit or Class T-E or Class T-F service credit in the Public

11

School Employees' Retirement System who terminates State

12

service having ten or more eligibility points, upon

13

compliance with section 5907(f), (g) or (h), shall be

14

entitled to receive an annuity.

15

(3)  Any vestee, active member or inactive member on

16

leave without pay who has either Class A-3 or Class A-4

17

service credit or Class T-E or Class T-F service credit in

18

the Public School Employees' Retirement System and also has

19

service credited in the system in one or more other classes

20

of service who has five or more, but fewer than ten,

21

eligibility points, upon compliance with section 5907(f), (g)

22

or (h) shall be eligible to receive an annuity calculated on

23

his service credited in classes of service other than Class

24

A-3 or Class A-4, provided that the member has five or more

25

eligibility points resulting from service in classes other

26

than Class A-3 or Class A-4 or Class T-E or Class T-F service

27

in the Public School Employees' Retirement System.

28

* * *

29

§ 5309.  Eligibility for vesting.

30

Any member who:

- 60 -

 


1

(1)  Does not have Class A-3 or Class A-4 service credit

2

or Class T-E or Class T-F service credit in the Public School

3

Employees' Retirement System and terminates State service

4

with five or more eligibility points, or any member with

5

Class G, Class H, Class I, Class J, Class K, Class L, Class M

6

or Class N service with five or more eligibility points,

7

shall be eligible until attainment of superannuation age to

8

vest his retirement benefits.

9

(2)  Has Class A-3 or Class A-4 service credit or Class

10

T-E or Class T-F service credit in the Public School

11

Employees' Retirement System and terminates State service

12

with ten or more eligibility points shall be eligible until

13

attainment of superannuation age to vest his retirement

14

benefits.

15

(3)  Has either Class A-3 or Class A-4 service credit or

16

Class T-E or Class T-F service credit in the Public School

17

Employees' Retirement System, also has service credited in

18

the system in one or more other classes of service and has

19

five or more, but fewer than ten, eligibility points shall be

20

eligible until the attainment of superannuation age to vest

21

his retirement benefits calculated on his service credited in

22

classes of service other than Class A-3 or Class A-4 and to

23

be credited with statutory interest on total accumulated

24

deductions, regardless of whether or not any part of his

25

accumulated deductions are a result of Class A-3 or Class A-4

26

service credit.

27

Section 8.  Title 71 is amended by adding a section sections 

<--

28

to read:

29

§ 5501.1.  Shared risk member contributions for Class A-3 and

<--

30

Class A-4 service.

- 61 -

 


1

(a)  General.--Shared risk member contributions shall be made

2

to the fund on behalf of each member of Class A-3 or Class A-4

3

for current service credited as Class A-3 or Class A-4 as

4

provided under this section, except for any period of current

5

service in which the making of the contributions has ceased

6

solely by reason of any provision of this part relating to the

7

limitations under IRC § 401(a)(17) or 415. Shared risk member

8

contributions shall be credited to the members' savings account.

9

(b)  Determination of shared risk contribution rate.--

10

(1)  For the period from the effective date of this

11

section until June 30, 2014, the shared risk contribution

12

rate shall be zero.

13

(2)  For the period from July 1, 2014, to June 30, 2017,

14

if the annual interest rate adopted by the board for use

15

during the period from January 1, 2011, to December 31, 2013,

16

for the calculation of the normal contribution rate is more

17

than 1% greater than the actual rate of return, net of fees,

18

of the investments of the fund based on market value over the

19

period, the shared risk contribution rate shall be .5%. In

20

all other situations, the shared risk contribution rate shall

21

be zero.

22

(3)  For each subsequent three-year period, the shared

23

risk contribution rate shall be increased by .5% if the

24

annual interest rate adopted by the board for use during the

25

previous ten-year period for the calculation of the normal

26

contribution rate is more than 1% greater than the actual

27

rate of return, net of fees, of the investments of the fund

28

based on market value over the period. The shared risk

29

contribution rate shall be decreased by .5% if the annual

30

interest rate adopted by the board for use during the

- 62 -

 


1

previous ten-year period for the calculation of the normal

2

contribution rate is equal to or less than the actual rate of

3

return, net of fees, of the investments of the fund based on

4

market value over that period.

5

(4)  Notwithstanding paragraphs (2) and (3), the shared

6

risk contribution rate shall not be less than zero and shall

7

not be more than the experience adjustment factor resulting

8

from investment gains or losses in effect on the first day

9

when the new rate would be applied, expressed as a percentage

10

of member compensation and shall not be more than 2%. For the

11

determination of the shared risk contribution rate to be

12

effective July 1, 2017, the determination period shall be

13

January 1, 2011, through December 31, 2016. For the

14

determination of the shared risk contribution rate to be

15

effective July 1, 2020, the determination period shall be

16

January 1, 2011, through December 31, 2019.

17

(5)  The shared risk contribution rate and the factors

18

entering into its calculation shall be certified by the

19

actuary as part of the annual valuations and the actuarial

20

investigation and evaluation of the system conducted every

21

five years under section 5902(j) (relating to administrative

22

duties of the board).

23

(6)  In the event that the annual interest rate adopted

24

by the board for the calculation is changed during the period

25

used to determine the shared risk contribution rate, the

26

board with the advice of the actuary shall determine the

27

applicable rate during the entire period, expressed as an

28

annual rate.

29

(7)  For any fiscal year in which the actual

30

contributions by the Commonwealth or an employer are lower

- 63 -

 


1

than those required to be made under section 5507(d)

2

(relating to contributions by the Commonwealth and other

3

employers), the prospective shared risk contribution rate for

4

those employees whose employers are not making the

5

contributions required by section 5507(d) shall be zero and

6

shall not subsequently be increased except as otherwise

7

provided in this section.

8

(8)  If the actuary certifies that the accrued liability

9

contributions calculated in accordance with the actuarial

10

cost method provided in section 5508(b) (relating to

11

actuarial cost method), as adjusted by the experience

12

adjustment factor, are zero or less, then the shared risk

13

contribution rate for the next fiscal year shall be zero and

14

shall not subsequently be increased except as otherwise

15

provided in this section.

16

§ 5501.1 5501.2.  Definitions.

<--

17

The following words and phrases when used in this chapter

18

shall have the meanings given to them in this section unless the

19

context clearly indicates otherwise:

20

"Actuarially required contribution rate."  The employer

21

contribution rate as calculated pursuant to section 5508(a),

22

(b), (c), (e) and (f) (relating to actuarial cost method).

23

"Costs added by legislation."  The sum, if positive, of all

24

changes in the actuarially required contribution rate resulting

25

from legislation enacted in the year since the last actuarial

26

valuation and not included in the determination of the prior

27

year's final contribution rate, computed as the rate of total

28

compensation of all active members certified by the actuary as

29

sufficient to make the employer normal contributions and

30

sufficient to amortize legislatively created changes in the

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1

unfunded actuarial liability as a level percentage of

<--

2

compensation in equal dollar annual installments over a period

<--

3

of ten years from the July 1 following the valuation date.

4

Section 9.  Sections 5502.1, 5504(a), 5505(b) and (d), 5507,

<--

5

5508, 5702(a)(4) and (6), 5704(e) and 5705(a) of Title 71 are

6

amended to read:

7

Section 9.  Sections 5502.1, 5503.1(a), 5504(a), 5505, 5507,

<--

8

5508, 5702(a)(4) and (6), 5704(e) and 5705(a) of Title 71 are

9

amended to read:

10

§ 5502.1.  Waiver of regular member contributions and Social

11

Security integration member contributions.

12

(a)  General rule.--Notwithstanding the provisions of

13

sections 5501 (relating to regular member contributions for

14

current service) and 5502 (relating to Social Security

15

integration member contributions), no regular member

16

contributions or Social Security integration member

17

contributions shall be made by an active member for the period

18

from July 1 to the following June 30 if the maximum single life

19

annuity to which the member would have been entitled to receive

20

had the member retired with an effective date of retirement on

21

the preceding January 1 is greater than 110% of the highest

22

calendar year compensation of the member, provided the member

23

files a written election as prescribed by the board.

24

(b)  Applicability.--This section shall not apply to any

25

member who has Class A-3 or Class A-4 service credit.

26

§ 5503.1.  Pickup contributions.

<--

27

(a)  Treatment for purposes of IRC § 414(h).--All

28

contributions required to be made under sections 5501 (relating

29

to regular member contributions for current service), 5501.1

30

(relating to shared risk member contributions), 5502 (relating

- 65 -

 


1

to Social Security integration member contributions), 5503

2

(relating to joint coverage member contributions) and section

3

5505.1 (relating to additional member contributions), with

4

respect to current State service rendered by an active member on

5

or after January 1, 1982, shall be picked up by the Commonwealth

6

or other employer and shall be treated as the employer's

7

contribution for purposes of IRC § 414(h).

8

* * *

9

§ 5504.  Member contributions for the purchase of credit for

10

previous State service or to become a full coverage

11

member.

12

(a)  Amount of contributions for service in other than Class

13

G through N.--

14

(1)  The contributions to be paid by an active member or

15

eligible school employee for credit for total previous State

16

service other than service in Class G, Class H, Class I,

17

Class J, Class K, Class L, Class M and Class N or to become a

18

full coverage member shall be sufficient to provide an amount

19

equal to the regular and additional accumulated deductions

20

which would have been standing to the credit of the member

21

for such service had regular and additional member

22

contributions been made with full coverage in the class of

23

service and at the rate of contribution applicable during

24

such period of previous service and had his regular and

25

additional accumulated deductions been credited with

26

statutory interest during all periods of subsequent State and

27

school service up to the date of purchase.

28

(2)  Notwithstanding paragraph (1), members with Class

29

A-3 State service shall make contributions and receive credit

30

as if the previous State service was Class A-3 service, and

- 66 -

 


1

members with Class A-4 State service shall make contributions

2

and receive credit as if the previous State service was Class

3

A-4 service, even if it would have been credited as a

4

different class of service had the State employee been a

5

member of the system at the time the service was performed

6

unless it was mandatory that the State employee be an active

7

member of the system and the previous State service is being

8

credited as the result of a mandatory active membership

9

requirement.

10

* * *

11

§ 5505.  Contributions for the purchase of credit for creditable

12

nonstate service.

13

* * *

<--

14

(a)  Source of contributions.--The total contributions to

<--

15

purchase credit for creditable nonstate service of an active

16

member or eligible school employee shall be paid either by the

17

member, the member's previous employer, or by some agreed upon

18

combination of the member, his previous employer, and, if

19

specifically provided, the Commonwealth.

20

(b)  Nonintervening military service.--

21

(1)  The amount due for the purchase of credit for

22

military service other than intervening military service by

<--

23

State employees who first become members of the system before

24

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

25

the General Assembly shall be determined by applying the

26

product of the member's basic contribution rate and the class

<--

27

of service multiplier applicable to contributions for the

28

class of service to which the military service will be

29

credited, the additional contribution rate plus the

30

Commonwealth normal contribution rate for active members at

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1

the time of entry, subsequent to such military service, of

2

the member into State service to his average annual rate of

3

compensation over the first three years of such subsequent

4

State service and multiplying the result by the number of

5

years and fractional part of a year of creditable

6

nonintervening military service being purchased together with

7

statutory interest during all periods of subsequent State and

8

school service to date of purchase. Upon application for

9

credit for such service, payment shall be made in a lump sum

10

within 30 days or in the case of an active member or eligible

11

school employee who is an active member of the Public School

12

Employees' Retirement System it may be amortized with

13

statutory interest through salary deductions in amounts

14

agreed upon by the member and the board. The salary deduction

15

amortization plans agreed to by members and the board may

16

include a deferral of payment amounts and statutory interest

17

until the termination of school service or State service as

18

the board in its sole discretion decides to allow. The board

19

may limit salary deduction amortization plans to such terms

20

as the board in its sole discretion determines. In the case

21

of an eligible school employee who is an active member of the

22

Public School Employees' Retirement System, the agreed upon

23

salary deductions shall be remitted to the Public School

24

Employees' Retirement Board, which shall certify and transfer

25

to the board the amounts paid. Application may be filed for

26

all such military service credit upon completion of three

27

years of subsequent State service and shall be credited as

<--

28

Class A-3 service for State employees who first become

29

members of the system on or after January 1, 2011, or on or

30

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

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1

and as Class A service for all other members.

<--

2

(2)  Applicants may purchase credit as follows:

3

(i)  one purchase of the total amount of creditable

4

nonintervening military service; or

5

(ii)  one purchase per 12-month period of a portion

6

of creditable nonintervening military service.

7

The amount of each purchase shall be not less than one year

8

of creditable nonintervening military service.

9

* * *

<--

10

(c)  Intervening military service.--Contributions on account

<--

11

of credit for intervening military service shall be determined

12

by the member's regular contribution rate, shared risk

13

contribution rate, Social Security integration contribution

14

rate, the additional contribution rate which shall be applied

15

only to those members who began service on or after the

16

effective date of this amendatory act and compensation at the

17

time of entry of the member into active military service,

18

together with statutory interest during all periods of

19

subsequent State and school service to date of purchase. Upon

20

application for such credit the amount due shall be certified in

21

the case of each member by the board in accordance with methods

22

approved by the actuary, and contributions may be made by:

23

(1)  regular monthly payments during active military

24

service; or

25

(2)  a lump sum payment within 30 days of certification;

26

or

27

(3)  salary deductions in amounts agreed upon by the

28

member or eligible school employee who is an active member of

29

the Public School Employees' Retirement System and the board.

30

The salary deduction amortization plans agreed to by members and

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1

the board may include a deferral of payment amounts and

2

statutory interest until the termination of school service or

3

State service as the board in its sole discretion decides to

4

allow. The board may limit salary deduction amortization plans

5

to such terms as the board in its sole discretion determines. In

6

the case of an eligible school employee who is an active member

7

of the Public School Employees' Retirement System, the agreed

8

upon salary deductions shall be remitted to the Public School

9

Employees' Retirement Board, which shall certify and transfer to

10

the board the amounts paid.

11

(d)  Nonmilitary and nonmagisterial service.--Contributions

12

on account of credit for creditable nonstate service other than

13

military and magisterial service by State employees who first

<--

14

become members of the system before January 1, 2011, or before

15

December 1, 2010, as a member of the General Assembly shall be

16

determined by applying the product of the member's basic

<--

17

contribution rate and the class of service multiplier applicable

<--

18

to contributions for the class of service to which such nonstate

19

service will be credited, the additional contribution rate plus

20

the Commonwealth normal contribution rate for active members at

21

the time of entry subsequent to such creditable nonstate service

22

of the member into State service to his compensation at the time

23

of entry into State service and multiplying the result by the

24

number of years and fractional part of a year of creditable

25

nonstate service being purchased together with statutory

26

interest during all periods of subsequent State and school

27

service to the date of purchase. Upon application for credit for

28

such service payment shall be made in a lump sum within 30 days

29

or in the case of an active member or eligible school employee

30

who is an active member of the Public School Employees'

- 70 -

 


1

Retirement System it may be amortized with statutory interest

2

through salary deductions in amounts agreed upon by the member

3

and the board. The salary deduction amortization plans agreed to

4

by members and the board may include a deferral of payment

5

amounts and statutory interest until the termination of school

6

service or State service as the board in its sole discretion

7

decides to allow. The board may limit salary deduction

8

amortization plans to such terms as the board in its sole

9

discretion determines. In the case of an eligible school

10

employee who is an active member of the Public School Employees'

11

Retirement System, the agreed upon salary deduction shall be

12

remitted to the Public School Employees' Retirement Board, which

13

shall certify and transfer to the board the amounts paid.

14

* * *

<--

15

(e)  Philadelphia magisterial service.--Contributions on

<--

16

account of credit for service as a magistrate of the City of

17

Philadelphia shall be determined by the board to be equal to the

18

amount he would have paid as employee contributions together

19

with statutory interest to date of purchase had he been a State

20

employee during his period of service as a magistrate of the

21

City of Philadelphia. The amount so determined by the State

22

Employees' Retirement Board to be paid into the State Employees'

23

Retirement System shall be the obligation of the judge who

24

requested credit for previous service as a magistrate of the

25

City of Philadelphia; in no event shall such amount be an

26

obligation of the City of Philadelphia or the City of

27

Philadelphia retirement system.

28

(f)  Temporary Federal service.--Contributions on account of

29

credit for service as a temporary Federal employee assigned to

30

an air quality control complement for the Department of

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1

Environmental Resources during the period of 1970 through 1975,

2

as authorized in section 5304(c)(5) (relating to creditable

3

nonstate service), shall be equal to the full actuarial cost of

4

the increased benefit obtained by virtue of the purchase. The

5

increased benefit attributable to the purchased service shall be

6

the difference between:

7

(1)  the annual amount of a standard single life annuity,

8

beginning at the earliest possible superannuation age,

9

calculated assuming no future salary increases, assuming

10

credit for the service to be purchased; and

11

(2)  the annual amount of a standard single life annuity,

12

calculated on the same basis, but excluding credit for the

13

service to be purchased.

14

The earliest possible superannuation age shall be the age at

15

which the member becomes first eligible for superannuation

16

retirement assuming continued full-time service and credit for

17

the amount of service which the member has elected to purchase,

18

or the current attained age of the member, whichever is later.

19

The full actuarial cost of the increased benefit attributable to

20

the purchased service shall be the actuarial present value of a

21

deferred annuity equal to the amount of the increased benefit

22

determined above, beginning at the earliest possible

23

superannuation age and payable for life, calculated using a

24

preretirement interest assumption of 1.5%, a postretirement

25

interest assumption of 4%, no preretirement mortality assumption

26

and standard postretirement mortality assumptions. The purchase

27

payment shall be made in lump sum by the member within 30 days

28

of certification by the board of the required purchase amount or

29

may be amortized through salary deductions in amounts agreed

30

upon by the member and the board with interest payable on the

- 72 -

 


1

unpaid balance at the rate applicable to the most recently

2

issued 30-year bonds of the United States Treasury Department.

3

(g)  Justice of the peace service.--Contributions on account

4

of credit for service as a justice of the peace shall be

5

determined by the board to be equal to the amount he would have

6

paid as employee contributions together with statutory interest

7

to date of purchase had he been a State employee during his

8

period of service as a justice of the peace for the Commonwealth

9

plus the amount determined by applying the Commonwealth normal

10

contribution rate for active members at the beginning of the

11

district justice system as of January 1970 to the starting

12

salary of the district justice for the magisterial district in

13

which the member was elected dating from the beginning of the

14

district justice system as of January 1970 and multiplying the

15

result by the number of years and fractional part of a year of

16

creditable service being purchased together with statutory

17

interest from entry into State service as a district justice to

18

the date of purchase. The amount so determined by board to be

19

paid into the system shall be the obligation of the justice who

20

requested credit for previous service as a justice of the peace

21

for the Commonwealth prior to 1970. A justice of the peace

22

desiring to purchase his or her service time prior to 1970 shall

23

have been elected or appointed a district justice any time

24

during or after 1970. The class of service credit a member shall

25

receive upon entry into the system shall be determined by the

26

time of his entry into the district justice system. It shall be

27

incumbent upon the district justice to certify to the board with

28

a copy of his commission or commissions the amount of time that

29

he served the Commonwealth as a justice of the peace. The salary

30

dollar amount that shall be used in the formula for determining

- 73 -

 


1

the member's contributions shall be equal to the starting salary

2

of the district justice for the magisterial district in which he

3

was elected, dating from the beginning of the district justice

4

system as of January 1970. In no event shall such an amount be

5

the obligation of the Commonwealth or the county in which the

6

justice served.

7

(h)  County service.--For purposes of this section, Class G,

8

Class H, Class I, Class J, Class K, Class L, Class M and Class N

9

service shall be disregarded in determining when a member enters

10

State service or the period of subsequent State service.

11

(i)  Purchases of nonstate service credit by State employees

12

who first became members of the system on or after December 1,

13

2010.--

14

(1)  Contributions on account of credit for creditable

15

nonstate service other than intervening military service and

16

magisterial service by State employees who first become

17

members of the system on or after January 1, 2011, or on or

18

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

19

shall be equal to the full actuarial cost of the increased

20

benefit obtained by virtue of such service.

21

(2)  The full actuarial cost of the increased benefit

22

attributable to the purchased nonstate service credit shall

23

be the difference between:

24

(i)  the present value of a standard single life

25

annuity, beginning at the earliest possible

26

superannuation age assuming Class A-3 service credit for

27

the nonstate service to be purchased; and

28

(ii)  the present value of a standard single life

29

annuity, beginning at the earliest possible

30

superannuation age, excluding the nonstate service credit

- 74 -

 


1

to be purchased.

2

(3)  The full actuarial cost under paragraph (2) shall be

3

calculated using future salary increases, mortality tables,

4

interest rates and other actuarial assumptions as adopted by

5

the board with the advice of the actuary. The earliest

6

possible superannuation age shall be the current attained age

7

of the member if the member has attained superannuation age

8

for his current class of service or if the member has not

9

attained superannuation age, the age upon which the member

10

would attain superannuation age as a member in the current

11

class of service assuming continued full-time State service

12

through the attainment of superannuation age and credit for

13

the amount of service which the member has elected to

14

purchase.

15

(4)  The payment for credit purchased under this

16

subsection shall be certified in each case by the board in

17

accordance with methods approved by the actuary and shall be

18

paid in a lump sum within 30 days or in the case of an active

19

member or eligible school employee who is an active member of

20

the Public School Employees' Retirement System may be

21

amortized with statutory interest through salary deductions

22

in amounts agreed upon by the member and the board. The

23

salary deduction amortization plans agreed to by members and

24

the board may include a deferral of payment amounts and

25

interest until the termination of school service or State

26

service as the board in its sole discretion decides to allow.

27

The board may limit the salary deduction amortization plans

28

to such terms as the board in its sole discretion determines.

29

In the case of an eligible school employee who is an active

30

member of the Public School Employees' Retirement System, the

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1

agreed upon salary deductions shall be remitted to the Public

2

School Employees' Retirement Board, which shall certify and

3

transfer to the board the amounts paid.

4

§ 5507.  Contributions by the Commonwealth and other employers.

5

(a)  Contributions on behalf of active members.--The

6

Commonwealth and other employers whose employees are members of

7

the system shall make contributions to the fund on behalf of all

8

active members in such amounts as shall be certified by the

9

board as necessary to provide, together with the members' total

10

accumulated deductions, annuity reserves on account of

11

prospective annuities other than those provided in [section] 

<--

12

sections 5708 (relating to supplemental annuities), 5708.1

13

(relating to additional supplemental annuities), 5708.2

14

(relating to further additional supplemental annuities), 5708.3

15

(relating to supplemental annuities commencing 1994), 5708.4

16

(relating to special supplemental postretirement adjustment),

17

5708.5 (relating to supplemental annuities commencing 1998),

18

5708.6 (relating to supplemental annuities commencing 2002),

19

5708.7 (relating to supplemental annuities commencing 2003) and

20

5708.8 (relating to special supplemental postretirement

21

adjustment of 2002), in accordance with the actuarial cost

22

method provided in section 5508(a), (b), (c), (d) and (f)

23

(relating to actuarial cost method).

24

(b)  Contributions on behalf of annuitants.--The Commonwealth

25

and other employers whose employees are members of the system 

26

shall make contributions on behalf of annuitants in such amounts

27

as shall be certified by the board as necessary to fund the

28

liabilities for supplemental annuities in accordance with the

29

actuarial cost method provided in section 5508(e) (relating to

30

actuarial cost method).

- 76 -

 


1

(c)  Contributions transferred by county retirement

2

systems.--

3

(1)  Each county retirement system or pension plan which

4

is notified by certification from the board that a former

5

contributor who was transferred to State employment pursuant

6

to 42 Pa.C.S. § 1905 (relating to county-level court

7

administrators) has elected to convert county service to

8

State service in accordance with section 5303.1 (relating to

9

election to convert county service to State service) shall

10

transfer to the board an amount equal to the actuarial

11

liability for the additional benefits that result in the

12

system as a result of the conversion as certified by the

13

board. This amount shall be calculated in such a manner and

14

using such actuarial factors and assumptions as the board,

15

after obtaining the advice of its actuary, shall determine

16

and shall be calculated by determining the present value of

17

the future benefits for the former county contributors and

18

subtracting from that present value the present value of

19

future employee contributions and future employer normal cost

20

contributions.

21

(2)  The transfer shall occur no later than 180 days

22

after the certification by the board of the actuarial

23

liability for the additional benefits or 30 days following

24

the date of termination of service if the member terminates

25

State service after making the election to convert service,

26

whichever occurs first.

27

(3)  If any county retirement system or pension plan

28

fails to transfer, within the required time, the money

29

certified by the board under this subsection, then the

30

service of such members for the period of converted service

- 77 -

 


1

shall be credited, and the board shall notify the county

2

which employed the employee who is converting the county

3

service and the State Treasurer of the amount due. The State

4

Treasurer shall withhold out of any grants, subsidies or

5

other payments from the State General Fund appropriation or

6

appropriations next due such county an amount equal to the

7

amount which the county retirement system or pension plan

8

failed to pay and shall pay the amount so withheld to the

9

board for the payment of the amount due from that county's

10

retirement system or pension plan for the converted service.

11

(d)  Payment of final contribution rate.--Notwithstanding the

12

calculation of the actuarially required contribution rate and

13

the provisions of subsections (a) and (b), the Commonwealth and

14

other employers whose employees are members of the system shall

15

make contributions to the fund on behalf of all active members

16

and annuitants in such amounts as shall be certified by the

17

board in accordance with section 5508(i).

18

(e)  Benefits completion plan contributions.--In addition to

19

all other contributions required under this section and section

20

5508, the Commonwealth and other employers whose employees are

<--

21

members of the system shall make contributions as certified by

22

the board pursuant to section 5941 (relating to benefits

23

completion plan).

24

§ 5508.  Actuarial cost method.

25

(a)  Employer contribution rate on behalf of active

26

members.--The amount of the Commonwealth and other employer

27

contributions on behalf of all active members shall be computed

28

by the actuary as a percentage of the total compensation of all

29

active members during the period for which the amount is

30

determined and shall be so certified by the board. The [total

- 78 -

 


1

employer] actuarially required contribution rate on behalf of

2

all active members shall consist of the employer normal

3

contribution rate, as defined in subsection (b), and the accrued

4

liability contribution rate as defined in subsection (c). The

5

[total employer] actuarially required contribution rate on

6

behalf of all active members shall be modified by the experience

7

adjustment factor as calculated in subsection (f) [but in no

8

case shall it be less than zero. The total employer contribution

9

rate shall be modified by the experience adjustment factor as

10

calculated in subsection (f), but in no case shall it be less

11

than:

12

(1)  2% for the fiscal year beginning July 1, 2004;

13

(2)  3% for the fiscal year beginning July 1, 2005; and

14

(3)  4% for the fiscal year beginning July 1, 2006, and

15

thereafter].

16

(b)  Employer normal contribution rate.--The employer normal

17

contribution rate shall be determined after each actuarial

18

valuation on the basis of an annual interest rate and such

19

mortality and other tables as shall be adopted by the board in

20

accordance with generally accepted actuarial principles. The

21

employer normal contribution rate shall be determined as a level

22

percentage of the compensation of the average new active member,

23

which percentage, if contributed on the basis of his prospective

24

compensation through his entire period of active State service,

25

would be sufficient to fund the liability for any prospective

26

benefit payable to him[, except for the supplemental benefits

27

provided for in sections 5708 (relating to supplemental

28

annuities), 5708.1 (relating to additional supplemental

29

annuities), 5708.2 (relating to further additional supplemental

30

annuities), 5708.3 (relating to supplemental annuities

- 79 -

 


1

commencing 1994), 5708.4 (relating to special supplemental

2

postretirement adjustment), 5708.5 (relating to supplemental

3

annuities commencing 1998), 5708.6 (relating to supplemental

4

annuities commencing 2002), 5708.7 (relating to supplemental

5

annuities commencing 2003) and 5708.8 (relating to special

6

supplemental postretirement adjustment of 2002),] in excess of

7

that portion funded by his prospective member contributions, 

<--

8

excluding shared risk member contributions.

9

(c)  Accrued liability contribution rate.--

10

(1)  For the fiscal [year] years beginning July 1, 2002, 

11

and July 1, 2003, the accrued liability contribution rate

12

shall be computed as the rate of total compensation of all

13

active members which shall be certified by the actuary as

14

sufficient to fund over a period of ten years from July 1,

15

2002, the present value of the liabilities for all

16

prospective benefits, except for the supplemental benefits as

17

provided in sections 5708 (relating to supplemental

18

annuities), 5708.1 (relating to additional supplemental

19

annuities), 5708.2 (relating to further additional

20

supplemental annuities), 5708.3 (relating to supplemental

21

annuities commencing 1994), 5708.4 (relating to special

22

supplemental postretirement adjustment), 5708.5 (relating to

23

supplemental annuities commencing 1998), 5708.6 (relating to

24

supplemental annuities commencing 2002), 5708.7 (relating to

25

supplemental annuities commencing 2003) and 5708.8 (relating

26

to special supplemental postretirement adjustment of 2002),

27

in excess of the total assets in the fund (calculated

28

recognizing all investment gains and losses over a five-year

29

period), excluding the balance in the supplemental annuity

30

account, and the present value of employer normal

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1

contributions and of member contributions payable with

2

respect to all active members on December 31, 2001, and

3

excluding contributions to be transferred by county

4

retirement systems or pension plans pursuant to section

5

5507(c) (relating to contributions by the Commonwealth and

6

other employers). The amount of each annual accrued liability

7

contribution shall be equal to the amount of such

8

contribution for the fiscal year beginning July 1, 2002,

9

except that, if the accrued liability is increased by

10

legislation enacted subsequent to June 30, 2002, but before

11

July 1, 2003, such additional liability shall be funded over

12

a period of ten years from the first day of July, coincident

13

with or next following the effective date of the increase.

14

The amount of each annual accrued liability contribution for

15

such additional legislative liabilities shall be equal to the

16

amount of such contribution for the first annual payment.

17

(2)  Notwithstanding any other provision of law,

18

beginning July 1, 2004, and ending June 30, 2010, the

19

outstanding balance of the increase in accrued liability due

20

to the change in benefits enacted in 2001 shall be amortized

21

in equal dollar annual contributions over a period that ends

22

30 years after July 1, 2002, and the outstanding balance of

23

the net actuarial loss incurred in calendar year 2002 shall

24

be amortized in equal dollar annual contributions over a

25

period that ends 30 years after July 1, 2003. For fiscal

26

years beginning on or after July 1, 2004, and ending June 30,

27

2010, if the accrued liability is increased by legislation

28

enacted subsequent to June 30, 2003, but before January 1,

29

2009, such additional liability shall be funded in equal

30

dollar annual contributions over a period of ten years from

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1

the first day of July coincident with or next following the

2

effective date of the increase.

3

(3)  For the fiscal year beginning July 1, 2010, the

4

accrued liability contribution rate shall be computed as the

5

rate of total compensation of all active members which shall

6

be certified by the actuary as sufficient to fund as a level

<--

7

percentage of compensation in equal dollar installments over

<--

8

a period of 30 years from July 1, 2010, the present value of

9

the liabilities for all prospective benefits calculated as of

10

the immediately prior valuation date, including the

11

supplemental benefits as provided in sections 5708, 5708.1,

12

5708.2, 5708.3, 5708.4, 5708.5, 5708.6, 5708.7 and 5708.8,

13

but excluding the benefits payable from the retirement

14

benefit plan established pursuant to section 5941 (relating

15

to benefits completion plan), in excess of the actuarially

16

calculated assets in the fund (calculated recognizing all

17

realized and unrealized investment gains and losses each year

18

in level annual installments over five years), including the

19

balance in the supplemental annuity account, and the present

20

value of employer normal contributions and of member

21

contributions payable with respect to all active members,

22

inactive members on leave without pay, vestees and special

23

vestees on December 31, 2009. If the accrued liability is

24

changed by legislation enacted subsequent to December 31,

25

2009, such change in liability shall be funded as a level

<--

26

percentage of compensation in equal dollar installments over

<--

27

a period of ten years from the first day of July following

28

the valuation date coincident with or next following the date

29

such legislation is enacted.

30

(d)  Special provisions on calculating contributions.--In

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1

calculating the contributions required by subsections (a), (b)

2

and (c), the active members of Class C shall be considered to be

3

members of Class A. In addition, the actuary shall determine the

4

Commonwealth or other employer contributions required for active

5

members of Class C and officers of the Pennsylvania State Police

6

and enforcement officers and investigators of the Pennsylvania

7

Liquor Control Board who are members of Class A to finance their

8

benefits in excess of those to which other members of Class A

9

are entitled. Such additional contributions shall be determined

10

separately for officers and employees of the Pennsylvania State

11

Police and for enforcement officers and investigators of the

12

Pennsylvania Liquor Control Board. Such contributions payable on

13

behalf of officers and employees of the Pennsylvania State

14

Police shall include the amounts received by the system under

15

the provisions of the act of May 12, 1943 (P.L.259, No.120),

16

referred to as the Foreign Casualty Insurance Premium Tax

17

Allocation Law, and on behalf of enforcement officers or

18

investigators of the Pennsylvania Liquor Control Board, the

19

amounts received by the system under the provisions of the act

20

of April 12, 1951 (P.L.90, No.21), known as the Liquor Code.

21

(e)  Supplemental annuity contribution rate.--[Contributions]

22

(1)  For the period July 1, 2002, to June 30, 2010,

23

contributions from the Commonwealth and other employers whose

24

employees are members of the system required to provide for

25

the payment of supplemental annuities as provided in sections

26

5708, 5708.1, 5708.2, 5708.3, 5708.4 and 5708.5 shall be paid

27

over a period of ten years from July 1, 2002. The funding for

28

the supplemental annuities commencing 2002 provided for in

29

section 5708.6 shall be as provided in section 5708.6(f). The

30

funding for the supplemental annuities commencing 2003

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1

provided for in section 5708.7 shall be as provided in

2

section 5708.7(f). The funding for the special supplemental

3

postretirement adjustment of 2002 under section 5708.8 shall

4

be as provided in section 5708.8(g). The amount of each

5

annual supplemental annuities contribution shall be equal to

6

the amount of such contribution for the fiscal year beginning

7

July 1, 2002. [In the event that supplemental annuities are

8

increased by legislation enacted subsequent to June 30, 2002,

9

the additional liability for the increase in benefits shall

10

be funded in equal dollar annual installments over a period

11

of ten years from the July first, coincident with or next

12

following the effective date of such legislation.]

13

(2)  For fiscal years beginning on or after July 1, 2010,

14

contributions from the Commonwealth and other employers whose

15

employees are members of the system required to provide for

16

the payment of supplemental annuities as provided in sections

17

5708, 5708.1, 5708.2, 5708.3, 5708.4, 5708.5, 5708.6, 5708.7

18

and 5708.8 shall be paid as part of the accrued liability

19

contribution rate as provided for in subsection (c)(3) and

20

there shall not be a separate supplemental annuity

21

contribution rate attributable to those supplemental

22

annuities. In the event that supplemental annuities are

23

increased by legislation enacted subsequent to December 31,

24

2009, the additional liability for the increase in benefits

25

shall be funded as a level percentage of compensation in

<--

26

equal dollar installments over a period of ten years from the

27

first day of July following the valuation date coincident

28

with or next following the date such legislation is enacted.

29

(f)  Experience adjustment factor.--

30

(1)  For each year after the establishment of the accrued

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1

liability contribution rate and the supplemental annuity

2

contribution rate for the fiscal year beginning July 1,

3

[2002] 2010, any increase or decrease in the unfunded accrued 

4

liability[, including liability] and any increase or decrease

5

in the liabilities and funding for supplemental annuities,

6

due to actual experience differing from assumed experience[,] 

7

(recognizing all realized and unrealized investment gains and

8

losses over a five-year period), changes in contributions

9

caused by the final contribution rate being different from

10

the actuarially required contribution rate, State employees

<--

11

making shared risk member contributions, changes in actuarial

12

assumptions[,] or changes in the terms and conditions of the

13

benefits provided by the system by judicial, administrative

14

or other processes other than legislation, including, but not

15

limited to, reinterpretation of the provisions of this part,

16

shall be amortized [in equal dollar annual contributions] as

<--

17

a level percentage of compensation over a period of [ten] 30 

18

years beginning with the July 1 succeeding the actuarial

19

valuation determining said increases or decreases.

20

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

21

for each year after the establishment of the accrued

22

liability contribution rate for the fiscal year beginning

23

July 1, 2003, any increase or decrease in the unfunded

24

accrued liability due to actual experience differing from

25

assumed experience, changes in actuarial assumptions, changes

26

in the terms and conditions of the benefits provided by the

27

system by judicial, administrative or other processes other

28

than legislation, including, but not limited to,

29

reinterpretation of the provisions of this part, shall be

30

amortized in equal dollar annual contributions over a period

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1

of 30 years beginning with the July 1 succeeding the

2

actuarial valuation determining said increases and decreases] 

3

The actuarially required contribution rate shall be the sum

4

of the normal contribution rate, the accrued liability

5

contribution rate and the supplemental annuity contribution

6

rate, modified by the experience adjustment factor as

7

calculated in paragraph (1).

8

(g)  Determination of liability for special vestee.--

9

Notwithstanding any other provision of this part or other law,

10

the total additional accrued actuarial liability resulting from

11

eligibility of special vestees for benefits upon the attainment

12

of superannuation age shall be determined by the actuary as part

13

of the first annual valuation made after June 30, 1997. The

14

resulting additional accrued actuarial liability shall be paid

15

by The Pennsylvania State University to the board in one lump

16

sum payment within 90 days of the board's certification of the

17

amount to The Pennsylvania State University.

18

(h)  Temporary application of collared contribution rate.--

19

The collared contribution rate for each year shall be determined

20

by comparing the actuarially required contribution rate

21

calculated without regard for costs added by legislation to the

22

prior year's final contribution rate. If for any of the fiscal

23

years beginning July 1, 2011, July 1, 2012 and on or after July

24

1, 2013, the actuarially required contribution rate calculated

25

without regard for costs added by legislation is more than 3%,

26

3.5% and 4.5%, respectively, of the total compensation of all

27

active members greater than the prior year's final contribution

28

rate, then the collared contribution rate shall be applied and

29

be equal to the prior year's final contribution rate increased

30

by the respective percentage above of total compensation of all

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1

active members. Otherwise, and for all subsequent fiscal years,

2

the collared contribution rate shall not be applicable. In no

3

case shall the collared contribution rate be less than 4% of

4

total compensation of all active members.

5

(i)  Final contribution rate.--For the fiscal year beginning

6

July 1, 2010, the final contribution rate shall be 5% of total

7

compensation of all active members. For each subsequent fiscal

8

year for which the collared contribution rate is applicable, the

9

final contribution rate shall be the collared contribution rate

10

plus the costs added by legislation. For all other fiscal years,

11

the final contribution rate shall be the actuarially required

12

contribution rate, provided that the final contribution rate

13

shall not be less than the employer normal contribution rate, as

14

defined in subsection (b).

15

§ 5702.  Maximum single life annuity.

16

(a)  General rule.--Any full coverage member who is eligible

17

to receive an annuity pursuant to the provisions of section

18

5308(a) or (b) (relating to eligibility for annuities) who

19

terminates State service, or if a multiple service member who is

20

a school employee who is an active member of the Public School

21

Employees' Retirement System who terminates school service,

22

before attaining age 70 shall be entitled to receive a maximum

23

single life annuity attributable to his credited service and

24

equal to the sum of the following single life annuities

25

beginning at the effective date of retirement:

26

* * *

27

(4)  If eligible, a single life annuity which is

28

actuarially equivalent to the amount by which his regular and

29

additional accumulated deductions attributable to any

30

credited service other than as a member of Class C are

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1

greater than one-half of the actuarially equivalent value on

2

the effective date of retirement of the annuity as provided

3

in paragraph (1) attributable to service other than Class C

4

for which regular or joint coverage member contributions were

5

made. This paragraph shall not apply to any member with State

6

service credited as Class A-3 or Class A-4.

7

* * *

8

(6)  If eligible, a single life annuity sufficient

9

together with the annuity provided for in paragraph (1) as a

10

Class A [and], Class AA, Class A-3 and Class A-4 member and

11

the highest annuity provided for in paragraph (2) to which he

12

is entitled, or at his option could have been entitled, to

13

produce that percentage of a standard single life annuity

14

adjusted by the application of the class of service

15

multiplier for Class A, Class AA, Class A-3 or Class A-4 as

16

set forth in paragraph (1) in the case where any service is

17

credited as a member of Class A, Class AA, Class A-3 or Class

18

A-4 on the effective date of retirement as determined by his

19

total years of credited service as a member of Class A [and], 

20

Class AA, Class A-3 and Class A-4 and by the following table:

21

22

23

24

25

26

27

28

Total Years of

Credited Service

as a Member of

Class A [and],

Class AA, Class A-3

and Class A-4

  

  

Percentage of

Standard

Single Life

Annuity Adjusted for

Class A, Class AA,

Class A-3 and Class A-4

 Class of

Service Multipliers

29

35-40

100%

30

41

102%

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1

42

104%

2

43

106%

3

44

108%

4

45 or more

110%

5

* * *

6

§ 5704.  Disability annuities.

7

* * *

8

(e)  Termination of State service.--Upon termination of

9

disability annuity payments in excess of an annuity calculated

10

in accordance with section 5702, a disability annuitant who:

11

(1)  does not have Class A-3 or Class A-4 service credit;

12

or

13

(2)  has Class A-3 or Class A-4 service credit and fewer

14

than ten eligibility points;

15

and who does not return to State service may file an application

16

with the board for an amount equal to the excess, if any, of the

17

sum of the shared risk accumulated deductions plus the regular

<--

18

and additional accumulated deductions standing to his credit at

19

the effective date of disability over one-third of the total

20

disability annuity payments received. If the annuitant on the

21

date of termination of service was eligible for an annuity as

22

provided in section [5308(b)] 5308(a) or (b) (relating to

23

eligibility for annuities), he may file an application with the

24

board for an election of an optional modification of his

25

annuity.

26

* * *

27

§ 5705.  Member's options.

28

(a)  General rule.--Any special vestee who has attained

29

superannuation age, any vestee who does not have Class A-3 or

30