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PRINTER'S NO. 1032
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
862
Session of
2023
INTRODUCED BY KANE, AUGUST 1, 2023
REFERRED TO STATE GOVERNMENT, AUGUST 1, 2023
AN ACT
Amending Title 71 (State Government) of the Pennsylvania
Consolidated Statutes, in benefits, providing for
supplemental annuity commencing 2023.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 71 of the Pennsylvania Consolidated
Statutes is amended by adding a section to read:
ยง 5708.9. Supplemental annuity commencing 2023.
(a) Benefits.--Commencing with the first monthly annuity
payment after July 1, 2023, an eligible benefit recipient under
this section shall be entitled to receive an additional monthly
supplemental annuity from the system. The additional monthly
supplemental annuity under this section shall be in addition to
the supplemental annuities provided for in sections 5708
(relating to supplemental annuities), 5708.1 (relating to
additional supplemental annuities), 5708.2 (relating to further
additional supplemental annuities), 5708.3 (relating to
supplemental annuities commencing 1994), 5708.5 (relating to
supplemental annuities commencing 1998), 5708.6 (relating to
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supplemental annuities commencing 2002) and 5708.7 (relating to
supplemental annuities commencing 2003) and the special
supplemental postretirement adjustments provided for in sections
5708.4 (relating to special supplemental postretirement
adjustment) and 5708.8 (relating to special supplemental
postretirement adjustment of 2002).
(b) Amount of additional supplemental annuity.--The amount
of the supplemental annuity payable under this section shall be
a percentage of the amount of the monthly annuity payment on
July 1, 2023, determined on the basis of the most recent
effective date of retirement, as follows:
Most recent effective date of
retirement Percentage factor
July 2, 2000, through July 1, 2001 4.5%
July 2, 1999, through July 1, 2000 4.6%
July 2, 1998, through July 1, 1999 4.7%
July 2, 1997, through July 1, 1998 4.8%
July 2, 1996, through July 1, 1997 5.0%
July 2, 1995, through July 1, 1996 5.2%
July 2, 1994, through July 1, 1995 5.4%
July 2, 1993, through July 1, 1994 5.8%
July 2, 1992, through July 1, 1993 6.2%
July 2, 1991, through July 1, 1992 6.6%
July 2, 1990, through July 1, 1991 7.2%
July 2, 1989, through July 1, 1990 7.8%
July 2, 1988, through July 1, 1989 8.4%
July 2, 1987, through July 1, 1988 9.2%
July 2, 1986, through July 1, 1987 10.0%
July 2, 1985, through July 1, 1986 10.8%
July 2, 1984, through July 1, 1985 11.8%
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July 2, 1983, through July 1, 1984 12.8%
July 2, 1982, through July 1, 1983 13.8%
Prior to July 2, 1982 15.0%
(c) Payment.--The supplemental annuity provided under this
section shall be paid automatically unless the annuitant files a
written notice with the board requesting that the additional
monthly supplemental annuity not be paid.
(d) Conditions.--The supplemental annuity provided under
this section shall be payable under the same terms and
conditions as provided under the option plan in effect as of
July 1, 2023, and shall be subject to any subsequent
modification of that option plan.
(e) Benefits to beneficiaries or survivors.--No supplemental
annuity provided under this section shall be payable to the
beneficiary or survivor annuitant of a member who dies before
July 1, 2023.
(f) Funding.--Notwithstanding any other provision of law,
the additional liability for the increase in benefits provided
under this section shall be funded in equal dollar annual
installments over a period of 10 years beginning July 1, 2024.
(g) Eligible benefit recipient.--
(1) An eligible benefit recipient is an individual:
(i) who is receiving a superannuation, withdrawal or
disability annuity on July 1, 2023; and
(ii) whose most recent effective date of retirement
is prior to July 2, 2001.
(2) A supplemental annuity provided under this section
shall not be payable to an annuitant receiving a withdrawal
annuity prior to the first day of July coincident with or
following the annuitant's attainment of superannuation age.
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(h) Automatic cost of living adjustment.--
(1) Notwithstanding any other provision of law,
beginning July 1, 2024, and every three years thereafter, the
annuity of an individual who is receiving a superannuation,
withdrawal or disability annuity, has at least 10 years of
credited service and has been receiving an annuity for at
least five years shall be increased by a cost-of-living
factor which shall be determined by increasing the
individual's annuity by the average percentage change in the
Consumer Price Index for All Urban Consumers (CPI-U) for the
Pennsylvania, New Jersey, Delaware and Maryland area,
officially reported by the United States Department of Labor,
Bureau of Labor Statistics for the preceding three-year
period, immediately prior to the date that the adjustment is
due to take effect and calculated on a July 1 cycle for the
applicable period .
(2) For an individual who becomes eligible for the cost-
of-living factor under paragraph (1) after July 1, 2024, the
cost-of-living factor shall be applied beginning July 1
following the fifth anniversary of the individual's effective
date of retirement under section 5702 (relating to maximum
single life annuity), and every three years thereafter.
(3) The cost-of-living factor under this subsection may
never exceed 7% or be less than 1%.
(4) If an annuitant's annual payment exceeds the median
income of PA wage earners based on data from the 2020 and
then most current thereafter Federal decennial census at the
time that the cost-of-living factor is being added, the cost-
of-living factor may only be added to that portion of the
annuity that is below the median income.
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(5) Notwithstanding any other provision of law, the
additional liability for the automatic cost-of-living
adjustment shall be funded as part of the employer
contribution rate set annually.
(6) As used in this subsection, the term "annuity" shall
include an individual's initial annuity under section 5702 as
well as all prior supplemental annuities and cost-of-living
adjustments.
Section 2. This act shall take effect immediately.
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