PRINTER'S NO. 1272
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1073
Session of
2017
INTRODUCED BY TOBASH, KAMPF, MILLARD, JAMES, FEE, GREINER,
IRVIN, BLOOM, CUTLER, DUNBAR, CHARLTON, A. HARRIS AND HELM,
APRIL 7, 2017
REFERRED TO COMMITTEE ON STATE GOVERNMENT, APRIL 7, 2017
AN ACT
Amending Titles 24 (Education), 51 (Military Affairs) and 71
(State Government) of the Pennsylvania Consolidated Statutes,
extensively revising pension provisions: for the Public
School Employees' Retirement System, in the areas of
preliminary provisions, of membership, contributions and
benefits, of School Employees' Defined Contribution Plan, of
administration and miscellaneous provisions and of health
insurance for retired school employees; for military
pensions, in the area of military leave of absence; for the
State Employees' Retirement System, in the areas of
preliminary provisions, of membership, credited service,
classes of service and eligibility for benefits, of
contributions, of benefits, of State Employees' Defined
Contribution Plan, of administration, funds, accounts,
general provisions; providing, as to the revisions, for
reservation of legislative authority, for construction, for
accrued liability, for construction related to Federal law,
for immunity from personal liability, for restoration of
service credit or a retirement benefit, for recertification
of contribution rates, for transfer of assets and for
severability; and making editorial changes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
ARTICLE I
Section 101. The definitions of "active member," "alternate
payee," "basic contribution rate," "beneficiary," "class of
service multiplier," "compensation," "creditable nonschool
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
service," "credited service," "date of termination of service,"
"distribution," "domestic relations order," "final average
salary," "inactive member," "intervening military service,"
"irrevocable beneficiary," "leave for service with a collective
bargaining organization," "member's annuity," "multiple
service," "reemployed from USERRA leave," "required beginning
date," "salary deductions," "shared risk contribution rate,"
"standard single life annuity," "superannuation or normal
retirement age," "valuation interest" and "vestee" in section
8102 of Title 24 of the Pennsylvania Consolidated Statutes,
amended or added December 28, 2015 (P.L.529, No.93), are amended
and the section is amended by adding definitions to read:
ยง 8102. Definitions.
The following words and phrases when used in this part shall
have, unless the context clearly indicates otherwise, the
meanings given to them in this section:
* * *
"Accumulated employer defined contributions." The total of
the employer-defined contributions paid into the trust on
account of a participant's school service, together with any
investment earnings and losses and adjustments for fees, costs
and expenses credited or charged thereon.
"Accumulated mandatory participant contributions." The total
of the mandatory pickup participant contributions paid into the
trust on account of a participant's school service, together
with any investment earnings and losses and adjustments for
fees, costs and expenses credited or charged thereon.
"Accumulated total defined contributions." The total of the
accumulated mandatory participant contributions, accumulated
employer-defined contributions and accumulated voluntary
20170HB1073PN1272 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
contributions, reduced by any distributions, standing to the
credit of a participant in an individual investment account in
the trust.
"Accumulated voluntary contributions." The total of any
amounts rolled over by a participant or transferred by a direct
trustee-to-trustee transfer into the trust, together with any
investment earnings and losses and adjustments for fees, costs
and expenses credited or charged thereon.
* * *
"Active member." A school employee for whom pickup
contributions are being made to the fund or for whom such
contributions otherwise required for current school service are
not being made solely by reason of any provision of this part
relating to the limitations under section 401(a)(17) or 415 of
the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C.
ยง 401(a)(17) or 415)[.], or limitations on contributions to the
system applicable to Class T-G members when the Class T-G member
is making mandatory pickup participant contributions to the
trust.
"Active participant." A school employee for whom mandatory
pickup participant contributions are being made to the trust or
for whom such contributions otherwise required for school
service required to be credited in the plan are not being made
solely by reason of any provision of this part relating to the
limitations under section 401(a)(17) or 415 of the Internal
Revenue Code of 1986.
* * *
"Alternate payee." Any spouse, former spouse, child or
dependent of a member or participant who is recognized by a
domestic relations order as having a right to receive all or a
20170HB1073PN1272 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
portion of the moneys payable to that member or participant
under this part.
* * *
"Basic contribution rate." For Class T-A, T-B and T-C
service, the rate of 6 1/4%. For Class T-D service, the rate of
7 1/2%. For all active members on the effective date of this
provision who are currently paying 5 1/4% and elect Class T-D
service, the rate of 6 1/2%. For Class T-E service, the rate of
7 1/2%. For Class T-F service, the rate of 10.30%. For Class T-G
service for members with less than 25 eligibility points accrued
as a Class T-G member, the rate of 6%, up to the defined benefit
compensation limit. For Class T-G service for members with more
than 25 eligibility points accrued as a Class T-G member, the
rate of zero.
"Beneficiary." [The] In the case of the system, the person
or persons last designated in writing to the board by a member
to receive his accumulated deductions or a lump sum benefit upon
the death of such member. In the case of the plan, the person or
persons last designated in writing to the board by a participant
to receive the participant's vested accumulated total defined
contributions or a lump sum benefit upon the death of the
participant.
* * *
"Class of service multiplier."
Class of service Multiplier
T-A .714
T-B .625
T-C 1.000
20170HB1073PN1272 - 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
T-D 1.000
T-E 1.000
T-F 1.000
T-G 1.000
* * *
"Compensation." Pickup contributions and mandatory pickup
participant contributions plus any remuneration received as a
school employee excluding reimbursements for expenses incidental
to employment and excluding any bonus, severance payments, any
other remuneration or other emolument received by a school
employee during his school service which is not based on the
standard salary schedule under which he is rendering service,
payments for unused sick leave or vacation leave, bonuses or
other compensation for attending school seminars and
conventions, payments under health and welfare plans based on
hours of employment or any other payment or emolument which may
be provided for in a collective bargaining agreement which may
be determined by the Public School Employees' Retirement Board
to be for the purpose of enhancing compensation as a factor in
the determination of final average salary, and excluding
payments for military leave and any other payments made by an
employer while on USERRA leave, leave of absence granted under
51 Pa.C.S. ยง 4102 (relating to leaves of absence for certain
government employees), military leave of absence granted under
51 Pa.C.S. ยง 7302 (relating to granting military leaves of
absence), leave granted under section 1178 of the act of March
10, 1949 (P.L.30, No.14), known as the Public School Code of
1949, or other types of military leave, including other types of
leave payments, stipends, differential wage payments as defined
in IRC ยง 414(u)(12) and any other payments, provided, however,
20170HB1073PN1272 - 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
that the limitation under section 401(a)(17) of the Internal
Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. ยง 401(a)(17))
taken into account for the purpose of member contributions,
including regular or joint coverage member contributions,
regardless of class of service, shall apply to each member who
first became a member of the Public School Employes' Retirement
System on or after July 1, 1996, and who by reason of such fact
is a noneligible member subject to the application of the
provisions of section 8325.1 (relating to annual compensation
limit under IRC ยง 401(a)(17)), and shall apply to each
participant pertaining to his participation in the plan.
* * *
"Creditable nonschool service." Service [other than service
as a school employee] for which an active member may obtain
credit in the system other than service as a school employee.
"Credited service." School or creditable nonschool service
for which the required contributions have been made to the fund,
or for which the contributions otherwise required for such
service were not made solely by reason of any provision of this
part relating to the limitations under section 401(a)(17) or 415
of the Internal Revenue Code of 1986 (Public Law 99-514, 26
U.S.C. ยง 401(a)(17) or 415), or limitations on contributions to
the system applicable to a Class T-G member when the Class T-G
member is making mandatory pickup participant contributions to
the trust or for which salary deductions or lump sum payments to
the system have been agreed upon in writing.
"Date of termination of service." The latest of the
following dates:
(1) the last [date] day of service for which pickup
contributions are made for an active member or[,] for which
20170HB1073PN1272 - 6 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
the contributions otherwise required for such service were
not made solely by reason of any provision of this part
relating to the limitations under section 401(a)(17) or 415
of the Internal Revenue Code of 1986 (Public Law 99-514, 26
U.S.C. ยง 401(a)(17) or 415), or limitations on contributions
applicable to a Class T-G member;
(2) in the case of an inactive member or an inactive
participant, the effective date of his resignation or the
date his employment is formally discontinued by his employer
or two years following the last day of service for which
contributions were made, whichever is earliest[.]; or
(3) the last day of service for which mandatory pickup
participant contributions are made for an active participant.
"Defined benefit compensation limit." For fiscal year 2018-
2019, the amount of $50,000. For each subsequent fiscal year,
this amount shall be increased by 1% per year, compounded
annually, rounded to the nearest $100.
* * *
"Distribution." Payment of all or any portion of a person's
interest in either the Public School Employees' Retirement Fund
or the School Employees' Defined Contribution Trust, or both,
which is payable under this part.
"Domestic relations order." Any judgment, decree or order,
including approval of a property settlement agreement, entered
on or after the effective date of this definition by a court of
competent jurisdiction pursuant to a domestic relations law
which relates to the marital property rights of the spouse or
former spouse of a member or participant, including the right to
receive all or a portion of the moneys payable to that member or
participant under this part in furtherance of the equitable
20170HB1073PN1272 - 7 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
distribution of marital assets. The term includes orders of
support as that term is defined by 23 Pa.C.S. ยง 4302 (relating
to definitions) and orders for the enforcement of arrearages as
provided in 23 Pa.C.S. ยง 3703 (relating to enforcement of
arrearages).
* * *
"Employer defined contributions." Contributions made to an
active participant's account by an employer to the trust to be
credited in the active participant's individual investment
account as follows:
(1) For participants who have less than 25 eligibility
points credited as a member of Class T-G, or if a multiple
service member in Class A-5 of the State Employees'
Retirement System, contributions shall equal to 0.5% of
compensation up to the defined benefit compensation limit and
4% of compensation above such limit.
(2) For participants who have more than 25 eligibility
points credited as a member of Class T-G, or if a multiple
service member in Class A-5 of the State Employees'
Retirement System, contributions shall equal to 4% of
compensation.
"Final average salary." [The] As follows:
(1) For purposes of calculating all annuities and
benefits from the system attributable to a class of service
other than Class T-G, the highest average compensation
received as an active member during any three nonoverlapping
periods of 12 consecutive months months, excluding
compensation received from school service credited as a
member of Class T-G, with the compensation for part-time
service being annualized on the basis of the fractional
20170HB1073PN1272 - 8 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
portion of the school year for which credit is received;
except, if the employee was not a member in a class of
service other than Class T-G for three such periods, the
total compensation received as an active member in a class of
service other than Class T-G annualized in the case of part-
time service divided by the number of such periods of
membership in a class of service other than Class T-G; in the
case of a member with multiple service credit, the final
average salary, for purposes of calculating all annuities and
benefits from the system attributable to a class of service
other than Class T-G, shall be determined by reference to
compensation received by him as a school employee or a State
employee or both, excluding compensation received for service
performed as a member of Class T-G or Class A-5 in the State
Employees' Retirement System; and, in the case of a
noneligible member, subject to the application of the
provisions of section 8325.1 (relating to annual compensation
limit under IRC ยง 401(a)(17)). [Final]
(2) For purposes of calculating all annuities and
benefits from the system attributable to service as a member
of Class T-G, the highest average compensation received as an
active member of Class T-G during any five fiscal years, as
limited each fiscal year by the defined benefit compensation
limit, with the limited compensation for part-time service
being annualized on the basis of the fractional portion of
the school year for which credit is received; except, if the
employee was not a member of Class T-G for five such periods,
the total compensation received as an active member of Class
T-G annualized in the case of part-time service divided by
the number of such periods of membership in Class T-G; in the
20170HB1073PN1272 - 9 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
case of a member with multiple service credit, the final
average salary, for purposes of calculating all annuities and
benefits from the system attributable to Class T-G service,
shall be determined by reference to compensation received by
him as a school employee for service credited as Class T-G or
as a State employee for service credited as Class A-5, or
both; and, in the case of a noneligible member, subject to
the application of the provisions of section 8325.1.
(3) For all members, final average salary shall be
determined by including in compensation, payments deemed to
have been made to a member reemployed from USERRA leave to
the extent member contributions have been made as provided in
section 8302(d)(2) (relating to credited school service) and
payments made to a member on leave of absence under 51
Pa.C.S. ยง 4102 (relating to leaves of absence for certain
government employees) as provided in section 8302(d)(6).
* * *
"Holding vehicle trust." The School Employees' Defined
Contribution Holding Vehicle Trust.
"Inactive member." A member for whom no pickup contributions
are being made to the fund, except in the case of an active
member for whom such contributions otherwise required for
current school service are not being made solely by reason of
any provision of this part relating to the limitations under
section 401(a)(17) or 415 of the Internal Revenue Code of 1986
(Public Law 99-514, 26 U.S.C. ยง 401(a)(17) or 415) or because
the member is on USERRA leave, or limitations on contributions
to the system applicable to a Class T-G member who is making
mandatory pickup participant contributions to the trust, but who
has accumulated deductions standing to his credit in the fund
20170HB1073PN1272 - 10 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
and for whom contributions have been made within the last two
school years or a multiple service member who is active in the
State Employees' Retirement System.
"Inactive participant." A participant for whom no mandatory
pickup participant contributions are being made to the trust,
except in the case of an active participant for whom such
contributions otherwise required for current school service are
not being made solely by reason of any provision of this part
relating to limitations under section 401(a)(17) or 415 of the
Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. ยง
401(a)(17) or 415), but who has vested accumulated total defined
contributions standing to his credit in the trust and who has
not filed an application for an annuity.
"Individual investment account." The account in the trust to
which are credited the amounts of the contributions made by a
participant and the participant's employer in accordance with
the provisions of this part, together with all investment
earnings after deduction for fees, costs and expenses,
investment losses and charges for distributions.
"Intervening military service." Active military service of a
member who was a school employee and an active member of the
system immediately preceding his induction into the armed
services or forces of the United States in order to meet a draft
obligation excluding any voluntary extension of such
obligational service and who becomes a school employee and an
active member of the system within 90 days of the expiration of
such service.
* * *
"Irrevocable beneficiary." The person or persons permanently
designated by a member or participant in writing to the board
20170HB1073PN1272 - 11 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
pursuant to an approved domestic relations order to receive all
or a portion of the accumulated deductions, vested accumulated
total defined contributions or lump sum benefit payable upon the
death of such member or participant.
"Irrevocable successor payee." The person permanently
designated in writing by a participant receiving distributions
to the board pursuant to an approved domestic relations order to
receive one or more distributions from the plan upon the death
of such participant.
* * *
"Leave for service with a collective bargaining
organization." Paid leave granted to an active member or active
participant by an employer for purposes of working full time for
or serving full time as an officer of a Statewide employee
organization or a local collective bargaining representative
under the act of July 23, 1970 (P.L.563, No.195), known as the
Public Employe Relations Act: Provided, That greater than one-
half of the members of the employee organization are active
members of the system or active participants of the plan; that
the employer shall fully compensate the member or participant,
including, but not limited to, salary, wages, pension and
retirement contributions and benefits, employer defined
contributions, other benefits and seniority, as if he were in
full-time active service; and that the employee organization
shall fully reimburse the employer for such salary, wages,
pension and retirement contributions and benefits, employer
defined contributions, and other benefits and seniority.
"Mandatory pickup participant contributions." Either of the
following:
(1) For participants who have accrued less than 25
20170HB1073PN1272 - 12 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
eligibility points credited as a member of Class T-G or, if a
multiple service member, of Class A-5 in the State Employees'
Retirement System, contributions shall equal 1.5% of
compensation required to be credited in the plan up to the
defined benefit compensation limit and 7.5% of compensation
above such limit.
(2) For participants who have accrued more than 25
eligibility points credited as a member of Class T-G or, if a
multiple service member, of Class A-5 in the State Employees'
Retirement System, contributions shall equal 7.5% of
compensation required to be credited in the plan.
* * *
"Member's annuity." The single life annuity which is
actuarially equivalent on the effective date of retirement and
taking into account any delay in the receipt of the portion of
the annuity based on Class T-G service, if the effective date of
retirement is under superannuation age applicable to Class T-G
service, to the sum of the accumulated deductions and the
shared-risk member contributions and statutory interest credited
on the deductions and contributions standing to the member's
credit in the members' savings account.
* * *
"Multiple service." Credited service of a member who has
elected to combine his credited service in both the Public
School Employees' Retirement System and the State Employees'
Retirement System. A Class T-G member is eligible to elect
multiple service membership only for service credited as Class
A-5 service in the State Employees' Retirement System.
* * *
"Participant." An active participant, inactive participant
20170HB1073PN1272 - 13 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
or participant receiving distributions.
"Participant receiving distributions." A participant in the
plan who has commenced receiving distributions from his
individual investment account, but who has not received a total
distribution of his vested interest in the individual investment
account.
* * *
"Plan." The School Employees' Defined Contribution Plan as
established by the provisions of this part and the board.
"Plan document." The documents created by the board under
section 8402 (relating to plan document) that contain the terms
and provisions of the plan and trust as established by the board
regarding the establishment, administration and investment of
the plan and trust.
* * *
"Reemployed from USERRA leave." Resumption of active
membership or active participation as a school employee after a
period of USERRA leave, if the resumption of active membership
or active participation was within the time period and under
conditions and circumstances such that the school employee was
entitled to reemployment rights under 38 U.S.C. Ch. 43 (relating
to employment and reemployment rights of members of the
uniformed services).
* * *
"Required beginning date." The [beginning date] latest date
by which distributions of a member's interest or a participant's
interest in his individual investment account must commence
under section 401(a)(9) of the Internal Revenue Code of 1986
(Public Law 99-514, 26 U.S.C. ยง 401(a)(9)).
* * *
20170HB1073PN1272 - 14 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
"Salary deductions." The amounts certified by the board,
deducted from the compensation of an active member or active
participant or the State service compensation of a multiple
service member who is an active member of the State Employees'
Retirement System and paid into the fund or trust.
* * *
"Shared-risk contribution rate." The additional contribution
rate that is added to the basic contribution rate for Class T-E
[and], T-F and T-G members, as provided for in section 8321(b)
(relating to regular member contributions for current service).
"Standard single life annuity." For Class T-A, T-B and T-C
credited service of a member, an annuity equal to 2% of the
final average salary, multiplied by the total number of years
and fractional part of a year of credited service of a member.
For Class T-D credited service of a member, an annuity equal to
2.5% of the final average salary, multiplied by the total number
of years and fractional part of a year of credited service. For
Class T-E credited service of a member, an annuity equal to 2%
of the final average salary, multiplied by the total number of
years and fractional part of a year of credited service of a
member. For Class T-F credited service of a member, an annuity
equal to 2.5% of the final average salary, multiplied by the
total number of years and fractional part of a year of credited
service of a member. For Class T-G credited service of a member,
an annuity equal to 2% of the final average salary, multiplied
by the total number of years and fractional part of a year of
credited service of a member, except that such total number of
years shall not exceed 25.
"State Employees' Defined Contribution Plan." The defined
contribution plan for State employees established by 71 Pa.C.S.
20170HB1073PN1272 - 15 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Pt. XXV (relating to retirement for State employees and
officers).
* * *
"Successor payee." The person or persons last designated in
writing by a participant receiving distributions to the board to
receive one or more distributions upon the death of the
participant.
* * *
"Superannuation or normal retirement age."
Class of service Age
T-A 62 or any age upon accrual of
35 eligibility points
T-B 62
T-C and T-D 62 or age 60 provided the
member has at least 30
eligibility points or any
age upon accrual of 35
eligibility points,
excluding any eligibility
points accrued as a
member of Class T-G, and
if a multiple service
member, Class A-5
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
20170HB1073PN1272 - 16 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
points, excluding any
eligibility points
accrued as a member of
Class T-G, and if a
multiple service member,
Class A-5
T-G 65 with accrual of at least
three eligibility points
accrued solely as a
result of Class T-G
service or, if a multiple
service member, Class A-5
service
* * *
"Trust." The School Employees' Defined Contribution Trust
established under Chapter 84 (relating to School Employees'
Defined Contribution Plan).
* * *
"Valuation interest." Interest at 5 1/2% per annum,
compounded annually and applied to all accounts of the fund
other than the members' savings account.
"Vestee." A member with five or more eligibility points in a
class of service other than Class T-E, Class T-F, Class T-G or
Class A-5 in the State Employees' Retirement System who has
terminated school service, has left his accumulated deductions
in the fund and is deferring filing of an application for
receipt of an annuity. For Class T-E [and], Class T-F and Class
T-G members, a member with ten or more eligibility points who
has terminated school service, has left his accumulated
deductions in the fund and is deferring filing of an application
20170HB1073PN1272 - 17 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
for receipt of an annuity.
"Voluntary contributions." Contributions made by a
participant to the trust and credited to his individual
investment account in excess of his mandatory pickup participant
contributions by an eligible rollover or direct trustee-to-
trustee transfer.
Section 102. Section 8103 of Title 24 is amended by adding
subsections to read:
ยง 8103. Construction of part.
* * *
(f) Exclusive source of rights and benefits.--Regardless of
any other provision of law, pension and benefit rights of school
employees shall be determined solely by this part, or the plan
document established by the board, and no collective bargaining
agreement nor any arbitration award between the employer and its
employees or their collective bargaining representatives shall
be construed to change any of the provisions in this part, to
require the board to administer pension or retirement benefits
not set forth in this part or not established by the board in
the plan document, to require the board to modify, amend or
change any of the terms and provisions of the plan document or
otherwise require action by any other government body pertaining
to pension or retirement benefits or rights of school employees.
(g) References to certain Federal statutes.--References in
this part to the IRC or the Uniformed Services Employment and
Reemployment Rights Act of 1994 (Public Law 103-353, 38 U.S.C. ยง
4301-4333, including administrative regulations promulgated
under the IRC or the Uniformed Services Employment and
Reemployment Rights Act of 1994, are intended to include laws
and regulations in effect on or after the effective date of this
20170HB1073PN1272 - 18 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
subsection.
(h) Construction.--
(1) This part may not be construed to mean that the
limitations on benefits or other requirements under IRC ยง
401(a) or other applicable provisions of the IRC that are
applicable to participants in the plan do not apply to the
participants or to the members of the system and the benefits
payable under this part.
(2) This part may not be construed to mean that an
interpretation or application of a provision of this part or
benefits available to members of the Public School Employees'
Retirement System was not in accordance with the provisions
of Part IV or other applicable law, including the IRC and the
Uniformed Services Employment and Reemployment Rights Act of
1994 before the effective date of this subsection.
(3) This part may not be construed to mean that the
release or publicizing of a record, material or data that
would not constitute a public record under section 8502(e)(2)
(relating to administrative duties of board) is a violation
of the fiduciary duties of the board.
(i) Applicability.--The following shall apply:
(1) The provisions of this part regarding the
establishment of and participation in the plan shall apply to
current and former members of the system who return to school
service on or after July 1, 2018, after a termination of
school service, notwithstanding the following:
(i) Whether the termination occurred before, on or
after July 1, 2018.
(ii) Whether the school employee was an annuitant,
inactive member or vestee or withdrew accumulated
20170HB1073PN1272 - 19 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
deductions during the period of termination.
(2) A terminated school employee who returns to school
service on or after July 1, 2018, is subject to the
provisions of this part regarding participation in the plan
or membership in the system that are in effect on the
effective date of reemployment, including, but not limited
to, benefit formulas and accrual rates, eligibility for
annuities and distributions, contribution rates, definitions,
purchase of creditable school and nonschool service
provisions, purchase of creditable State and nonstate service
provisions, and actuarial and funding assumptions.
Section 103. Section 8103.1 of Title 24 is amended to read:
ยง 8103.1. Notice to members.
Notice by publication, including, but not limited to,
newsletters, newspapers, forms, first class mail, letters,
manuals and electronic notice, including, but not limited to, e-
mail or publicly accessible Internet websites, distributed or
made available to members in a manner reasonably calculated to
give actual notice of the provisions of this part that require
notice to members and participants shall be deemed sufficient
notice for all purposes.
Section 104. Title 24 is amended by adding a section to
read:
ยง 8103.2. Reference to Public School Employees' Retirement
System.
(a) General rule.--Unless the context clearly indicates
otherwise, a reference to the Public School Employees'
Retirement System in a statutory provision, other than this part
and 71 Pa.C.S. Pt. XXV (relating to retirement for State
employees and officers), shall include a reference to the plan,
20170HB1073PN1272 - 20 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
and a reference to the Public School Employees' Retirement Fund
shall include a reference to the trust.
(b) Certain agreements.--The agreement of an employer to
make contributions to the fund or to enroll its employees as
members in the system shall be deemed to be an agreement to make
contributions to the trust or to enroll its employees in the
plan.
Section 105. Section 8301 of Title 24 is amended to read:
ยง 8301. Mandatory and optional membership in the system and
participation in the plan.
(a) Mandatory membership.--Membership in the system shall be
mandatory as of the effective date of employment for all school
employees except the following:
(1) Any officer or employee of the [Department of
Education] department, State-owned educational institutions,
community colleges, area vocational-technical schools,
technical institutes, or [the] The Pennsylvania State
University and who is a member of the State Employees'
Retirement System or a member of another retirement program
approved by the employer.
(2) Any school employee who is not a member of the
system and who is employed on a per diem or hourly basis for
less than 80 full-day sessions or 500 hours in any fiscal
year or annuitant who returns to school service under the
provisions of section 8346(b) (relating to termination of
annuities).
(3) Any officer or employee of a governmental entity who
subsequent to December 22, 1965 and prior to July 1, 1975
administers, supervises, or teaches classes financed wholly
or in part by the Federal Government so long as he continues
20170HB1073PN1272 - 21 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
in such service.
(4) Any part-time school employee who has an individual
retirement account pursuant to the Federal act of September
2, 1974 (Public Law 93-406, 88 Stat. 829), known as the
Employee Retirement Income Security Act of 1974.
(b) Prohibited membership in system.--The school employees
categorized in subsection (a)(1) and (2) shall not have the
right to elect membership in the system.
(c) Optional membership in system.--The school employees
categorized in subsection (a)(3) and, if otherwise eligible,
subsection (a)(4) shall have the right to elect membership in
the system. Once such election is exercised, membership shall
commence from the original date of eligibility and shall
continue until the termination of such service.
(d) Mandatory participation in plan.--The school employees
who are mandatory members of Class T-G shall be mandatory
participants in the plan as of the effective date of membership
in the system.
(e) Optional participation in plan.--The school employees
who are optional members of the system as members of Class T-G
shall be optional participants in the plan. The school employees
who elect membership in the system as members of Class T-G also
elect participation in the plan as of the effective date of
membership in the system.
Section 106. Section 8302(a), (b)(1) and (2), (c) and (d) of
Title 24 are amended and the section is amended by adding a
subsection to read:
ยง 8302. Credited school service.
(a) Computation of credited service.--In computing credited
school service of a member for the determination of benefits, a
20170HB1073PN1272 - 22 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
full-time salaried school employee shall receive one year of
credit for each school year or the corresponding fraction
thereof, in accordance with the proportion of the full school
year for which the required regular member contributions have
been made to the fund, or for which such contributions otherwise
required for such service were not made to the fund solely by
reason of any provision of this part relating to the limitations
under IRC ยง 401(a)(17) or 415 or limitations on contributions
applicable to a Class T-G member. A per diem or hourly school
employee shall receive one year of credited service for each
nonoverlapping period of 12 consecutive months in which he is
employed and for which contributions are made to the fund, or
would have been made to the fund but for such limitations under
the IRC, or limitations on contributions applicable to a Class
T-G member for at least 180 full-day sessions or 1,100 hours of
employment. If such member was employed and contributions were
made to the fund for less than 180 full-day sessions or 1,100
hours, he shall be credited with a fractional portion of a year
determined by the ratio of the number of full-day sessions or
hours of service actually rendered to 180 full-day sessions or
1,100 hours, as the case may be. A part-time salaried employee
shall be credited with the fractional portion of the year which
corresponds to the service actually rendered and for which
contributions are or would have been made to the fund except for
the limitations under the IRC or limitations applicable to a
Class T-G member in relation to the service required as a
comparable full-time salaried employee. In no case shall a
member receive more than one year of credited service for any 12
consecutive months or a member who has elected multiple service
receive an aggregate in the two systems of more than one year of
20170HB1073PN1272 - 23 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
credited service for any 12 consecutive months.
(b) Approved leaves of absence.--An active member shall
receive credit, and an active participant shall receive
eligibility points, for an approved leave of absence provided
that:
(1) the member returns for a period at least equal to
the length of the leave or one year as a member of the system
and, for Class T-G members, the participant returns to school
service as an active participant in the plan, whichever is
less, to the school district which granted his leave, unless
such condition is waived by the employer; and
(2) the proper contributions are made by the member and
the employer and, for Class T-G members, by the active
participant and the employer.
* * *
(c) Cancellation of credited service.--
(1) All credited service in the system shall be
[cancelled] canceled if a member withdraws his accumulated
deductions[.] except that:
(i) a member with Class T-G service credit and one
or more other classes of service credit shall not have
his service credit in the classes of service other than
Class T-G canceled when the member receives a lump sum
payment of accumulated deductions relating to the Class
T-G service; and
(ii) a member with Class T-G service credit and one
or more other classes of service credit shall not have
his service credit as a member of Class T-G canceled when
the member receives a lump sum payment of accumulated
deductions resulting from the other classes of service.
20170HB1073PN1272 - 24 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(2) A partial or total distribution of accumulated total
defined contributions to a participant who also is a member
shall not cancel service credited in the system.
(d) Credit for military service.--A school employee who has
performed USERRA leave may receive credit in the system as
follows:
(1) For purposes of determining whether a member is
eligible to receive credited service in the system for a
period of active military service, other than active duty
service to meet periodic training requirements, rendered
after August 5, 1991, and that began before the effective
date of this paragraph, the provisions of 51 Pa.C.S. Ch. 73
(relating to military leave of absence) shall apply to all
individuals who were active members of the system when the
period of military service began, notwithstanding if the
member is not defined as an employee under 51 Pa.C.S. ยง 7301
(relating to definitions).
(1.1) School employees may not receive service credit or
exercise the options under 51 Pa.C.S. ยง 7306(a), (b) and (c)
(relating to retirement rights) for military leaves that
begin on or after the effective date of this subsection,
except otherwise provided under this subsection.
(2) A school employee who has performed USERRA leave may
receive credit as provided by this paragraph.
(i) A school employee who is reemployed from USERRA
leave as an active member of the system shall be treated
as not having incurred a break in school service by
reason of the USERRA leave and shall be granted
eligibility points as if the school employee had not been
on the USERRA leave. If a school employee who is
20170HB1073PN1272 - 25 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
reemployed from USERRA leave as an active member of the
system subsequently makes regular member contributions,
shared-risk member contributions and any other member
contributions in the amounts and in the time periods
required by 38 U.S.C. Ch. 43 (relating to employment and
reemployment rights of members of the uniformed services)
and IRC ยง 414(u) as if the school employee had continued
in his school office or employment and performed school
service and been compensated during the period of USERRA
leave, then the school employee shall be granted school
service credit for the period of USERRA leave. The
employee shall have his benefits, rights and obligations
determined under this part as if he was an active member
who performed creditable school service during the USERRA
leave in the job position that he would have held had he
not been on USERRA leave and received the compensation on
which the member contributions to receive school service
credit for the USERRA leave were determined.
(ii) For purposes of determining whether a school
employee has made the required employee contributions for
school service credit for USERRA leave, if an employee
who is reemployed from USERRA leave as an active member
of the system terminates school service or dies in school
service before the expiration of the allowed payment
period, school service credit for the USERRA leave shall
be granted as if the required member contributions were
paid the day before termination or death. The amount of
the required member contributions shall be treated as an
incomplete payment subject to the provisions of section
8325 (relating to incomplete payments). Upon a subsequent
20170HB1073PN1272 - 26 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
return to school service or to State service as a
multiple service member, the required member
contributions treated as incomplete payments shall be
treated as member contributions that were either
withdrawn in a lump sum at termination or paid as a lump
sum under section 8345(a)(4) (relating to member's
options). For this purpose, the exclusion of Class T-E
and Class T-F members from electing a form of payment
under section 8345(a)(4)(iii) shall be ignored.
(iii) A school employee who is reemployed from
USERRA leave as an active member of the system and who
does not make the required member contributions or makes
only part of the required member contributions within the
allowed payment period shall not be:
(A) Granted credited service for the period of
USERRA leave for which the required member
contributions were not timely made.
(B) Eligible to subsequently make contributions.
(C) Granted either school service credit or
nonschool service credit for the period of USERRA
leave for which the required member contributions
were not timely made.
(3) A school employee who is a member of the system and
performs USERRA leave from which the employee could have been
reemployed from USERRA leave had the school employee returned
to school service in the time frames required by 38 U.S.C.
Ch. 43 for reemployment rights, but did not do so, shall be
able to receive creditable nonschool service as
nonintervening military service for the period of USERRA
leave if the employee later returns to school service and is
20170HB1073PN1272 - 27 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
otherwise eligible to purchase the service as nonintervening
military service.
(4) [A school employee] An active or inactive member
who, on or after the effective date of this subsection, is
granted a leave of absence under section 1178 of the Public
School Code, a leave of absence under 51 Pa.C.S. ยง 4102
(relating to leaves of absence for certain government
employees) or a military leave under 51 Pa.C.S. Ch. 73, that
is not USERRA leave shall be able to receive creditable
nonschool service as nonintervening military service should
the employee return to school service as an active member of
the system and is otherwise eligible to purchase the service
as nonintervening military service.
(5) If a member dies while performing USERRA leave, the
beneficiaries or survivor annuitants of the deceased member
shall be entitled to any additional benefits, including
eligibility points, other than benefit accruals relating to
the period of qualified military service, provided under this
part as if the member resumed and then terminated employment
on account of death.
(6) A school employee who is on a leave of absence from
his duties as a school employee and for which 51 Pa.C.S. ยง
4102 provides that he is not to suffer a loss of pay, time or
efficiency shall not be an active member, receive service
credit or make member contributions for the leave of absence
except as provided for in this part. Notwithstanding this
paragraph, any pay the member receives under section 1178 of
the Public School Code or 51 Pa.C.S. ยง 4102 shall be included
in the determination of final average salary and other
calculations in the system utilizing compensation as if the
20170HB1073PN1272 - 28 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
payments were compensation under this part.
(e) Military service by participant.--A participant who has
performed USERRA leave shall be treated and may make
contributions as follows:
(1) A participant who is reemployed from USERRA leave
shall be treated as not having incurred a break in school
service by reason of the USERRA leave and shall be granted
eligibility points as if the participant had not been on
USERRA leave. If a participant who is reemployed from USERRA
leave subsequently makes mandatory pickup participant
contributions in the amounts and in the time periods required
by 38 U.S.C. Ch. 43 and IRC ยง 414(u) as if the participant
had continued in his school employment and performed school
service and been compensated during the period of USERRA
leave, the participant's employer shall make the
corresponding employer defined contributions. The employee
shall have his contributions, benefits, rights and
obligations determined under this part as if he was an active
participant who performed school service during the USERRA
leave in the job position that he would have held had he not
been on USERRA leave and received the compensation on which
the mandatory pickup participant contributions to receive
school service credit for the USERRA leave were determined,
including the right to make voluntary contributions as
permitted by law.
(2) A participant who is reemployed from USERRA leave
and does not make the mandatory pickup participant
contributions or makes only part of the mandatory pickup
participant contributions within the allowed payment period
shall not be eligible to make mandatory pickup participant
20170HB1073PN1272 - 29 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
contributions and voluntary contributions at a later date for
the period of USERRA leave for which the mandatory pickup
participant contributions were not timely made.
(3) A participant who performs USERRA leave from which
the employee could have been reemployed from USERRA leave had
the school employee returned to school service in the time
frames required by 38 U.S.C. Ch. 43 for reemployment rights,
but did not do so, shall not be eligible to make mandatory
pickup participant contributions or voluntary contributions
for the period of USERRA leave should the employee later
return to school service and be a participant in the plan.
(4) An active participant or inactive participant who,
on or after the effective date of this subsection, is granted
a leave of absence under 51 Pa.C.S. ยง 4102 or a military
leave under 51 Pa.C.S. Ch. 73 that is not USERRA leave shall
not be eligible to make mandatory pickup participant
contributions or voluntary contributions during or for the
leave of absence or military leave and shall not have
employer defined contributions made during such leave,
without regard to whether or not the participant received
salary, wages, stipends, differential wage payments or other
payments from his employer during the leave, notwithstanding
any provision to the contrary in 51 Pa.C.S. ยง 4102 or Ch. 73.
(5) If a participant dies while performing USERRA leave,
then the beneficiaries or successor payees, as the case may
be, of the deceased participant are entitled to any
additional benefits, other than benefit accruals relating to
the period of qualified military service, provided under this
part had the participant resumed and then terminated
employment on account of death.
20170HB1073PN1272 - 30 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Section 107. Section 8303(c) of Title 24 is amended and the
section is amended by adding a subsection to read:
ยง 8303. Eligibility points for retention and reinstatement of
service credits.
* * *
(c) Purchase of previous creditable service.--[Every]
Subject to the limitations in subsection (c.1), an active member
of the system or a multiple service member who is an active
member of the State Employees' Retirement System on or after the
effective date of this part may purchase credit and receive
eligibility points:
(1) as a member of Class T-C, Class T-E or Class T-F for
previous creditable school service or creditable nonschool
service; [or]
(2) as a member of Class T-D for previous creditable
school service, provided the member elects to become a Class
T-D member pursuant to section 8305.1 (relating to election
to become a Class T-D member); or
(3) as a member of Class T-G for previous creditable
school service performed as a Class T-G member;
upon written agreement by the member and the board as to the
manner of payment of the amount due for credit for such service;
except, that any purchase for reinstatement of service credit
shall be for all service previously credited.
(c.1) Ineligibility to purchase previous school service
credit.--An active member of Class T-G, or a multiple service
member who is an active member of Class A-5 in the State
Employees' Retirement System, shall not be eligible to purchase
service credit for previous school service, whether or not
previously credited in the system, except to reinstate
20170HB1073PN1272 - 31 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
previously credited Class T-G service credit for which
accumulated deductions were withdrawn, and except to the extent
that any other provision of law requires or allows the crediting
of any period of leave to be purchased as school service after
the member returns from the leave to school service.
* * *
Section 108. Section 8304(a) of Title 24 is amended to read:
ยง 8304. Creditable nonschool service.
(a) Eligibility.--An active member in a class other than
Class T-G, or a multiple service member who is an active member
of the State Employees' Retirement System in a class other than
Class A-5, shall be eligible to receive Class T-C, Class T-E or
Class T-F service credit for creditable nonschool service and
Class T-D, Class T-E or Class T-F service for intervening
military service, provided the member becomes a Class T-D member
pursuant to section 8305.1 (relating to election to become a
Class T-D member) or Class T-F member pursuant to section 8305.2
(relating to election to become a Class T-F member) or 8305
(relating to classes of service), as set forth in subsection (b)
provided that he is not entitled to receive, eligible to receive
now or in the future, or is receiving retirement benefits for
such service under a retirement system administered and wholly
or partially paid for by any other governmental agency or by any
private employer, or a retirement program approved by the
employer in accordance with section 8301(a)(1) (relating to
mandatory and optional membership), and further provided that
such service is certified by the previous employer and the
manner of payment of the amount due is agreed upon by the
member, the employer, and the board. An active member who is a
member of Class T-G or a multiple service member who is a State
20170HB1073PN1272 - 32 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
employee and an active member of the State Employees' Retirement
System as a member of Class A-5 shall be eligible for Class T-G
service credit for creditable nonschool service as set forth in
subsection (b)(2) for which the member makes the required
contributions to the fund.
* * *
Section 109. Section 8305(a), (b), (c)(1) and (4), (d) and
(e) of Title 24 are amended and the section is amended by adding
a subsection to read:
ยง 8305. Classes of service.
(a) Class T-C membership.--A school employee who is a member
of Class T-C on the effective date of this part or who becomes a
member of the system subsequent to the effective date of this
part shall be classified as a Class T-C member, provided the
school employee does not become a member of Class T-D pursuant
to subsection (c) and does not become a member of Class T-G
pursuant to subsection (f).
(b) Other class membership.--A school employee who is a
member of a class of service other than Class T-C on the
effective date of this part may elect to become a member of
Class T-C or Class T-D or may retain his membership in such
other class until the service is discontinued or he elects to
become a full coverage member or elects to purchase credit for
previous school or creditable nonschool service. Any service
thereafter as a member of the system shall be credited as Class
T-C [or], T-D or T-G service as applicable.
(c) Class T-D membership.--
(1) A person who becomes a school employee and an active
member, or a person who becomes a multiple service member who
is a State employee and a member of the State Employees'
20170HB1073PN1272 - 33 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Retirement System, on or after the effective date of this
subsection shall be classified as a Class T-D member upon
payment of regular member contributions. Any prior school
service credited as Class T-C service shall be credited as
Class T-D service, subject to the limitations contained in
paragraph (4) and section 8303(c.1) (relating to eligibility
points for retention and reinstatement of service credits).
* * *
(4) (i) School service performed as Class T-C service
before the effective date of this subsection shall be
credited as Class T-D service only upon completion of all
acts necessary for the school service to be credited as
Class T-C service had this subsection not been enacted.
(ii) A person who is not a school employee or a
State employee on June 30, 2001, and July 1, 2001, and
who has previous school service shall not receive Class
T-D service credit for school service performed before
July 1, 2001, until the person becomes an active member
or an active member of the State Employees' Retirement
System and a multiple service member and earns three
eligibility points by performing credited school service
in a class other than Class T-G or State service in a
class other than Class A-5 after June 30, 2001. This
subparagraph does not apply to a disability annuitant who
returns to school service after June 30, 2001, upon
termination of the disability annuity.
(d) Class T-E membership.--Notwithstanding any other
provision, a person who first becomes a school employee and an
active member, or a person who first becomes a multiple service
member who is a State employee and a member of the State
20170HB1073PN1272 - 34 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Employees' Retirement System, on or after the effective date of
this subsection shall be classified as a Class T-E member upon
payment of regular member contributions and the shared-risk
contributions, provided the member does not terminate service
and then return to service on or after July 1, 2018.
(e) Class T-F membership.--Notwithstanding any other
provision, a person who first becomes a school employee and an
active member, or a person who first becomes a multiple service
member who is a State employee and a member of the State
Employees' Retirement System, on or after the effective date of
this subsection and who is eligible to become a Class T-E member
shall have the right to elect into Class T-F membership,
provided the person elects to become a Class T-F member pursuant
to section 8305.2 (relating to election to become a Class T-F
member), upon written election filed with the board and payment
of regular member contributions and the shared-risk
contributions, provided the member does not terminate service
and then return to service on or after July 1, 2018.
(f) Class T-G membership.--A person who first becomes a
school employee and an active member, or a person who first
becomes a multiple service member who is a State employee and a
member of the State Employees' Retirement System, on or after
July 1, 2018, shall be classified as a Class T-G member upon
payment of regular member contributions and the shared risk
contributions.
Section 110. Sections 8305.1(c) and 8305.2(c) of Title 24
are amended to read:
ยง 8305.1. Election to become a Class T-D member.
* * *
(c) Effect of election.--An election to become a Class T-D
20170HB1073PN1272 - 35 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
member shall remain in effect until the termination of
employment. Those members who, on the effective date of this
section, contribute at the rate of 5 1/4% shall be deemed to
have accepted the basic contribution rate of 6 1/2% for all
Class T-D service performed on or after January 1, 2002. Those
members who, on the effective date of this section, contribute
at the rate of 6 1/4% shall be deemed to have accepted the basic
contribution rate of 7 1/2% for all Class T-D service performed
on or after January 1, 2002. Upon termination and a subsequent
reemployment that occurs before July 1, 2018, the class of
service of the school employee shall be credited in the class of
service otherwise provided for in this part. If the reemployment
occurs on or after July 1, 2018, the school employee's
eligibility for membership and class of service in the system or
participation in the plan shall be as provided in this part.
* * *
ยง 8305.2. Election to become a Class T-F member.
* * *
(c) Effect of election.--An election to become a Class T-F
member shall be irrevocable and shall commence from the original
date of eligibility[. A member who elects Class T-F membership
shall receive Class T-F service credit on any and all future
service, regardless of whether the member terminates service or
has a break in service.] and shall remain in effect for all
future school service creditable in the system that otherwise
would not be credited as Class T-G service.
* * *
Section 111. Title 24 is amended by adding a section to
read:
ยง 8305.3. Election to become a Class T-G member.
20170HB1073PN1272 - 36 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(a) General rule.--A member who returns to school service on
or after July 1, 2018, may make a one-time election to become a
member of Class T-G.
(b) Time for making election.--A member must elect to become
a Class T-G member by filing a written election with the board
within 45 days of notification by the board of the member's
eligibility to elect Class T-G membership and participation. A
school employee who is eligible to become a Class T-G member who
begins USERRA leave during the election period without having
elected Class T-G membership may make the election within 45
days after being reemployed from USERRA leave.
(c) Effect of election.--An election to become a Class T-G
member shall be irrevocable and shall commence from the original
date of the member's return to service. A member who elects
Class T-G membership shall receive Class T-G service credit on
any and all future service, regardless of whether the member
terminates service or has a break in service.
(d) Effect of failure to make election.--A member who fails
to timely file an election to become a Class T-G member shall
never be able to elect Class T-G service, regardless of whether
the member terminates service or has a break in service.
Section 112. Sections 8306, 8307(b) and (c) and 8308 of
Title 24 are amended to read:
ยง 8306. Eligibility points.
(a) General rule.--An active member of the system shall
accrue one eligibility point for each year of credited service
as a member of the [school or State retirement] system or, if a
multiple service member, as a member of the State Employees'
Retirement system. A member shall accrue an additional two-
thirds of an eligibility point for each year of Class D-3
20170HB1073PN1272 - 37 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
credited service under the State Employees' Retirement System.
In the case of a fractional part of a year of credited service,
a member shall accrue the corresponding fractional portion of an
eligibility point.
(a.1) USERRA leave.--A member or participant who is
reemployed from USERRA leave or who dies while performing USERRA
leave shall be granted the eligibility points that he would have
accrued had he continued in his school office or employment
instead of performing USERRA leave. If a school employee who is
reemployed from USERRA leave makes the member or mandatory
pickup participant contributions to be granted school service
credit for the USERRA leave, no additional eligibility points
may be granted.
(b) Transitional rule.--For the purposes of the transition:
(1) In determining whether a member, other than a
disability annuitant who returns to school service after June
30, 2001, upon termination of the disability annuity, who is
not a school employee or a State employee on June 30, 2001,
and July 1, 2001, and who has previous school service, has
the five eligibility points required by the definition of
"vestee" in sections 8102 (relating to definitions), 8307
(relating to eligibility for annuities), 8308 (relating to
eligibility for vesting) and 8345 (relating to member's
options), only eligibility points earned by performing
credited school service, USERRA leave credited as an active
member of the system in a class of service other than Class
T-G or credited State service as an active member of the
State Employees' Retirement System in a class other than
Class A-5 after June 30, 2001, shall be counted until such
member earns one such eligibility point by performing
20170HB1073PN1272 - 38 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
credited school service or credited State service after June
30, 2001, at which time all eligibility points, other than
eligibility points in classes of service other than Class T-G
or Class A-5, as determined under subsection (a) shall be
counted.
(2) A member subject to paragraph (1) shall be
considered to have satisfied any requirement for five
eligibility points contained in this part if the member has
at least ten eligibility points determined under subsection
(a).
(c) Transitional rule for members with Class T-G service
credit.--
(1) Any provision of this part pertaining to eligibility
points applicable to the eligibility for or calculation of
annuities or benefits attributable to classes of service
other than Class T-G shall not include any eligibility points
attributable to service credited in Class T-G or as a member
of Class A-5 in the State Employees' Retirement System.
(2) Any provision of this part pertaining to eligibility
points applicable to the eligibility for or calculation of
annuities or benefits attributable to service in Class T-G
shall include only eligibility points attributable to service
credited in Class T-G or, if a multiple service member as a
member of Class A-5, in the State Employees' Retirement
System.
(3) Only eligibility points earned as a member of Class
T-G or, if a multiple service member as a member of Class A-
5, in the State Employees' Retirement System, shall be
applicable to any provision in this part requiring
eligibility points for the determination or payment of
20170HB1073PN1272 - 39 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
benefits from the plan.
ยง 8307. Eligibility for annuities.
* * *
(b) Withdrawal annuity.--
(1) A vestee in Class T-C or Class T-D with five or more
eligibility points or an active or inactive Class T-C or
Class T-D member who terminates school service having five or
more eligibility points in classes of service other than
Class T-G or, if a multiple service member, Class A-5, shall,
upon filing a proper application, be entitled to receive an
early annuity based on the service credited as a Class T-C or
T-D member.
(2) A vestee in Class T-E or Class T-F with ten or more
eligibility points or an active or inactive Class T-E or
Class T-F member who terminates school service having ten or
more eligibility points in classes of service other than
Class T-G or, if a multiple service member, Class A-5, shall,
upon filing a proper application, be entitled to receive an
early annuity based on the service credited as a Class T-E or
T-F member.
(3) A vestee in Class T-G with ten or more eligibility
points or an active or inactive Class T-G member who
terminates school service having ten or more eligibility
points credited as a Class T-G member or, if a multiple
service member, as Class A-5, shall, upon filing a proper
application, be entitled to receive an early annuity from the
system based on the eligibility points credited as a Class T-
G or Class A-5 member.
(4) A member who is vested with Class T-C, T-D, T-E, T-F
or T-G credited service, shall, upon filing a proper
20170HB1073PN1272 - 40 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
application, be entitled to receive an early annuity based on
the credited service in each class.
(c) Disability annuity.--An active or inactive member who
has [credit for at least five years of service] five or more
eligibility points other than eligibility points resulting from
service as a member of Class T-G, or has five or more
eligibility points as a member of Class T-G, shall, upon filing
of a proper application, be entitled to a disability annuity
based on service and compensation in classes other than Class T-
G if he is eligible for a disability annuity on service and
compensation other than Class T-G or a disability annuity based
on service and compensation as a member of Class T-G if he is
eligible for a disability annuity on service and compensation as
a member of Class T-G if he becomes mentally or physically
incapable of continuing to perform the duties for which he is
employed and qualifies for an annuity in accordance with the
provisions of section 8505(c)(1) (relating to duties of board
regarding applications and elections of members).
ยง 8308. Eligibility for vesting.
Eligibility for vesting shall be as follows:
(1) Any Class T-C or Class T-D member who terminates
school service with five or more eligibility points shall be
entitled to vest his retirement benefits until the member's
required beginning date. Any Class T-E [or], Class T-F or
Class T-G member who terminates school service with ten or
more eligibility points shall be entitled to vest his
retirement benefits until his required beginning date.
(2) Any member who has Class T-G service credit and
service credited in one or more other classes of service and
terminates school service, or if a multiple service member
20170HB1073PN1272 - 41 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
and an active member of the State Employees' Retirement
System terminates State service, shall be eligible to vest
his retirement benefits in each class in accordance with the
requirements for that class of service.
Section 113. Sections 8310, 8321, 8322.1(a), 8323(a), (c)
and (d)(1), 8324(a), (b), (c) and (d), 8325.1(a), 8326(a) and
(c) and 8327 of Title 24 are amended to read:
ยง 8310. Eligibility for refunds.
Upon termination of service any active member, regardless of
eligibility for benefits, may elect to receive his accumulated
deductions by his required beginning date in lieu of any benefit
from the system to which he is entitled.
ยง 8321. Regular member contributions for current service.
(a) General.--Regular member contributions shall be made to
the fund on behalf of each active member for current service
except for any period of current service in which the making of
such contributions has ceased solely by reason of any provision
of this part relating to the limitations under IRC ยง 401(a)(17)
or 415[.] or limitations on contributions to the system
applicable to a Class T-G member when the Class T-G member is
making mandatory pickup participant contributions to the trust.
(b) Class T-E [and], Class T-F and Class T-G shared-risk
contributions.--Commencing with the annual actuarial valuation
performed under section 8502(j) (relating to administrative
duties of board), for the period ending June 30, 2014, and every
three years thereafter, the board shall compare the actual
investment rate of return, net of fees, to the annual interest
rate adopted by the board for the calculation of the normal
contribution rate, based on the market value of assets, for the
prior ten-year period. If the actual investment rate of return,
20170HB1073PN1272 - 42 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
net of fees, is less than the annual interest rate adopted by
the board by an amount of 1% or more, the shared-risk
contribution rate of Class T-E [and], Class T-F and Class T-G
members will increase by .5%. If the actual investment rate of
return, net of fees, is equal to or exceeds the annual interest
rate adopted by the board, the shared-risk contributions rate of
Class T-E [and], Class T-F and Class T-G members will decrease
by .5%. Class T-E [and], Class T-F and Class T-G members will
contribute at the total member contribution rate in effect when
they are hired. The total member contribution rate for Class T-E
members shall not be less than 7.5%, nor more than 9.5%. The
total member contribution rate for Class T-F members shall not
be less than 10.3%, nor more than 12.3%. The total member
contribution rate for Class T-G members shall not be less than
6% nor more than 8%. Notwithstanding this subsection, if the
system's actuarial funded status is 100% or more as of the date
used for the comparison required under this subsection, as
determined in the current annual actuarial valuation, the
shared-risk contribution rate shall be zero. In the event that
the annual interest rate adopted by the board for the
calculation of the normal contribution rate is changed during
the period used to determine the shared-risk contribution rate,
the board, with the advice of the actuary, shall determine the
applicable rate during the entire period, expressed as an annual
rate. The following provisions shall apply:
(1) Until the system has a ten-year period of investment
rate of return experience following the effective date of
this subsection, the look-back period shall begin not earlier
than the effective date of this subsection.
(2) For any fiscal year in which the employer
20170HB1073PN1272 - 43 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
contribution rate is lower than the final contribution rate
under section 8328(h) (relating to actuarial cost method),
the total member contribution rate for Class T-E [and], Class
T-F and Class T-G members shall be prospectively reset to the
basic contribution rate.
(3) There shall be no increase in the member
contribution rate if there has not been an equivalent
increase to the employer contribution rate over the previous
three-year period.
ยง 8322.1. Pickup contributions.
(a) Treatment for purposes of IRC ยง 414(h).--All
contributions to the fund required to be made under sections
8321 (relating to regular member contributions for current
service), 8322 (relating to joint coverage member contributions)
and 8305 (relating to classes of service), with respect to
current school service rendered by an active member on or after
January 1, 1983, shall be picked up by the employer and shall be
treated as the employer's contribution for purposes of IRC ยง
414(h).
* * *
ยง 8323. Member contributions for creditable school service.
(a) Previous school service, sabbatical leave and full
coverage.--The contributions to be paid by an active member or
an eligible State employee for credit in the system for
reinstatement of [all] the portion of previously credited school
service, school service not previously credited, sabbatical
leave as if he had been in full-time daily attendance that a
member is eligible to have credited, or full-coverage membership
shall be sufficient to provide an amount equal to the
accumulated deductions which would have been standing to the
20170HB1073PN1272 - 44 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
credit of the member for such service had regular member
contributions been made with full coverage at the rate of
contribution necessary to be credited as Class T-C service,
Class T-D service if the member is a Class T-D member, Class T-E
service if the member is a Class T-E member or Class T-F service
if the member is a Class T-F member and had such contributions
been credited with statutory interest during the period the
contributions would have been made and during all periods of
subsequent school service as an active member or inactive member
and State service as an active member or inactive member on
leave without pay up to the date of purchase.
* * *
(c) Approved leave of absence other than sabbatical leave
and activated military service leave.--The contributions to be
paid by an active member for credit for an approved leave of
absence, other than sabbatical leave and activated military
service leave, shall be sufficient to transfer his membership to
Class T-C or to Class T-D if the member is a Class T-D member,
to Class T-E if the member is a Class T-E member [or], to Class
T-F if the member is a Class T-F member or to Class T-G if the
member is a Class T-G member, and further to provide an annuity
as a Class T-C member or Class T-D member if the member is a
Class T-D member, to Class T-E if the member is a Class T-E
member [or], to Class T-F if the member is a Class T-F member or
to Class T-G if the member is a Class T-G member for such
additional credited service. Such amount shall be the sum of the
amount required in accordance with the provisions of subsection
(b) and an amount determined as the sum of the member's basic
contribution rate and the normal contribution rate as provided
in section 8328 (relating to actuarial cost method) during such
20170HB1073PN1272 - 45 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
period multiplied by the compensation which was received or
which would have been received during such period and with
statutory interest during all periods of subsequent school and
State service up to the date of purchase.
* * *
(d) Certification and payment of contributions.--
(1) In all cases other than for the purchase of credit
for sabbatical leave and activated military service leave
beginning before the effective date of paragraph (2), the
amount payable shall be certified by the board in accordance
with methods approved by the actuary and may be paid in a
lump sum within 90 days or in the case of an active member or
an eligible State employee who is an active member of the
State Employees' Retirement System it may be amortized with
statutory interest through salary deductions to the system in
amounts agreed upon by the member and the board. The salary
deduction amortization plans agreed to by members and the
board may include a deferral of payment amounts and statutory
interest until the termination of school service or State
service as the board in its sole discretion decides to allow.
The board may limit salary deduction amortization plans to
such terms as the board in its sole discretion determines. In
the case of an eligible State employee who is an active
member of the State Employees' Retirement System, the agreed
upon salary deductions shall be remitted to the State
Employees' Retirement Board, which shall certify and transfer
to the board the amounts paid.
* * *
ยง 8324. Contributions for purchase of credit for creditable
nonschool service and noncreditable school service.
20170HB1073PN1272 - 46 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(a) Source of contributions.--The total contributions to
purchase credit as a member of Class T-C, Class T-E [or], Class
T-F or Class T-G for creditable nonschool service of an active
member or an eligible State employee shall be paid either by the
member, the member's previous employer, the Commonwealth, or a
combination thereof, as provided by law.
(b) Nonintervening military service.--
(1) The amount due for the purchase of credit for
military service other than intervening military service by a
member not in Class T-G shall be determined by applying the
member's basic contribution rate plus the normal contribution
rate as provided in section 8328 (relating to actuarial cost
method) at the time of entry of the member into school
service subsequent to such military service to one-third of
his total compensation received during the first three years
of such subsequent credited school service, excluding
compensation received for Class T-G service, and multiplying
the product by the number of years and fractional part of a
year of creditable nonintervening military service being
purchased together with statutory interest during all periods
of subsequent school service as an active member or inactive
member and State service as an active member or inactive
member on leave without pay to date of purchase.
(2) The amount due for the purchase of credit for
military service other than intervening military service by a
member who is eligible to make the purchase under section
8304 (relating to creditable nonschool service) shall be
determined by applying the member's basic contribution rate,
plus the Commonwealth's normal contribution rate for active
members at the time of entry, subsequent to such military
20170HB1073PN1272 - 47 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
service, of the member into Class T-G service to his average
annual rate of compensation received for Class T-G service
subject to any limit each year by the application of the
Class T-G defined benefit compensation limit, over the first
three years of such subsequent Class T-G service and
multiplying the result by the number of years and fractional
part of a year of creditable nonintervening military service
being purchased together with statutory interest during all
periods of subsequent school service as an active member or
inactive member and State service as an active member or
inactive member on leave without pay of the State Employees'
Retirement System to date of purchase.
(3) Upon certification of the amount due, payment may be
made in a lump sum within 90 days or in the case of an active
member or an eligible State employee who is an active member
of the State Employees' Retirement System it may be amortized
with statutory interest through salary deductions to the
system in amounts agreed upon by the member and the board.
The salary deduction amortization plans agreed to by members
and the board may include a deferral of payment amounts and
statutory interest until the termination of school service or
State service as the board in its sole discretion decides to
allow. The board may limit salary deduction amortization
plans to such terms as the board in its sole discretion
determines. In the case of an eligible State employee who is
an active member of the State Employees' Retirement System,
the agreed upon salary deductions shall be remitted to the
State Employees' Retirement Board, which shall certify and
transfer to the board the amounts paid. Application may be
filed for all such military service credit upon completion of
20170HB1073PN1272 - 48 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
three years of subsequent credited school service and shall
be credited as Class T-C service. In the event that a Class
T-E member makes a purchase of credit for such military
service, then such service shall be credited as Class T-E
service. In the event that a Class T-F member makes a
purchase of credit for such military service, then such
service shall be credited as Class T-F service.
(c) Intervening military service.--Contributions on account
of credit for intervening military service shall be determined
by the member's basic contribution rate and compensation at the
time of entry of the member into active military service,
together with statutory interest during all periods of
subsequent school service as an active member or inactive member
and State service as an active member or inactive member on
leave without pay to date of purchase. Upon application for such
credit the amount due shall be certified in the case of each
member by the board, in accordance with methods approved by the
actuary, and contributions may be made by one of the following
methods:
(1) Regular monthly payments during active military
service.
(2) A lump sum payment within 90 days of certification
of the amount due.
(3) Salary deductions to the system in amounts agreed
upon by the member and the board. The salary deduction
amortization plans agreed to by the members and the board may
include a deferral of payment amounts and statutory interest
until the termination of school service or State service as
the board in its sole discretion decides to allow. The board
may limit salary deduction amortization plans to such terms
20170HB1073PN1272 - 49 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27</