PRINTER'S NO. 988
No. 129 Session of 2001
INTRODUCED BY BENNINGHOFF, HANNA, ARGALL, ALLEN, ARMSTRONG, BASTIAN, BEBKO-JONES, BELARDI, BROWNE, CALTAGIRONE, CAPPELLI, CASORIO, M. COHEN, COSTA, DeWEESE, FAIRCHILD, FEESE, FICHTER, FLEAGLE, FRANKEL, GEIST, GEORGE, GORDNER, GRUCELA, HALUSKA, HARHAI, HARHART, HENNESSEY, HERMAN, HERSHEY, HORSEY, HUTCHINSON, LAUGHLIN, LEH, MANN, MARSICO, McCALL, McILHATTAN, MUNDY, ORIE, PETRONE, PIPPY, PISTELLA, READSHAW, SAINATO, SATHER, SHANER, B. SMITH, SOLOBAY, STABACK, STERN, E. Z. TAYLOR, J. TAYLOR, TRAVAGLIO, VEON, WALKO, WANSACZ, WILT, WOJNAROSKI AND YOUNGBLOOD, MARCH 12, 2001
REFERRED TO COMMITTEE ON STATE GOVERNMENT, MARCH 12, 2001
AN ACT 1 Amending Title 71 (State Government) of the Pennsylvania 2 Consolidated Statutes, further providing for definitions and 3 for benefits for employees of the Department of Corrections. 4 The General Assembly of the Commonwealth of Pennsylvania 5 hereby enacts as follows: 6 Section 1. The definition of "class of service multiplier" 7 in section 5102 of Title 71 of the Pennsylvania Consolidated 8 Statutes is amended and the section is amended by adding 9 definitions to read: 10 § 5102. Definitions. 11 The following words and phrases as used in this part, unless 12 a different meaning is plainly required by the context, shall 13 have the following meanings: 14 * * *
1 "Class of service multiplier." 2 Class of Service Multiplier 3 A 1 4 B .625 5 C 1 6 D 1.25 7 D-1 prior to 8 January 1, 1973 1.875 9 D-1 on and 10 subsequent to 11 January 1, 1973 1.731 12 D-2 prior to 13 January 1, 1973 2.5 14 D-2 on and 15 subsequent to 16 January 1, 1973 1.731 17 D-3 prior to 18 January 1, 1973 3.75 19 D-3 on and 20 subsequent to 21 January 1, 1973 1.731 except prior to December 22 1, 1974 as applied to any 23 additional legislative 24 compensation as an officer 25 of the General Assembly 26 3.75 27 E, E-1 prior to 28 January 1, 1973 2 for each of the first ten 29 years of judicial service, 30 and 20010H0129B0988 - 2 -
1 1.5 for each subsequent year 2 of judicial service 3 E, E-1 on and 4 subsequent to 5 January 1, 1973 1.50 for each of the first 6 ten years of judicial 7 service and 8 1.125 for each subsequent year 9 of judicial service 10 E-2 prior to 11 September 1, 1973 1.5 12 E-2 on and 13 subsequent to 14 September 1, 1973 1.125 15 G 0.417 16 H 0.500 17 I 0.625 18 J 0.714 19 K 0.834 20 L 1.000 21 M 1.100 22 N 1.250 23 P 1 24 T-C (Public School 1 25 Employees' 26 Retirement Code) 27 * * * 28 "Highest annual salary." The highest compensation received 29 for service as a prison security officer during any calendar 30 year during which the member was employed as a prison security 20010H0129B0988 - 3 -
1 officer for the entire calendar year. In the case of a member 2 who first became a member on or after January 1, 1996, the 3 highest annual salary shall be determined as hereinabove 4 provided but subject to the application of the provisions of 5 section 5506.1(a) (relating to annual compensation limit under 6 IRC § 401(a)(17)). 7 * * * 8 "Prison security officer." A full coverage member who is a 9 correction officer who has not been an officer of the 10 Pennsylvania State Police on or after July 1, 1989, and is 11 classified under the Commonwealth's employee classification plan 12 as either a corrections officer trainee, corrections officer 1, 13 corrections officer 2, corrections officer 3, corrections 14 officer 4, or such predecessor or successor classifications as 15 determined by the board to be functionally the same as the 16 classifications listed here. 17 * * * 18 Section 2. Sections 5303(b)(1), 5304(a), 5306(a) and (b) and 19 5308(c) of Title 71 are amended to read: 20 § 5303. Retention and reinstatement of service credits. 21 * * * 22 (b) Eligibility points for prospective credited service.-- 23 (1) Every active member of the system or a multiple 24 service member who is a school employee and a member of the 25 Public School Employees' Retirement System on or after the 26 effective date of this part shall receive eligibility points 27 in accordance with section 5307 for current State service, 28 previous State service, or creditable nonstate service upon 29 compliance with sections 5501 (relating to regular member 30 contributions for current service), 5504 (relating to member 20010H0129B0988 - 4 -
1 contributions for the purchase of credit for previous State 2 service or to become a full coverage member), 5505 (relating 3 to contributions for the purchase of credit for creditable 4 nonstate service), 5505.1 (relating to additional member 5 contributions) or 5506 (relating to incomplete payments). The 6 class or classes of service in which the member may be 7 credited for previous State service prior to the effective 8 date of this part shall be the class or classes in which he 9 was or could have at any time elected to be credited for such 10 service, provided that eligibility for Class P credit shall 11 be limited in accordance with section 5306 (relating to 12 classes of service). The class of service in which a member 13 shall be credited for service subsequent to the effective 14 date of this part shall be determined in accordance with 15 section 5306 [(relating to classes of service)]. 16 * * * 17 § 5304. Creditable nonstate service. 18 (a) Eligibility.--An active member or a multiple service 19 member who is a school employee and an active member of the 20 Public School Employees' Retirement System shall be eligible for 21 Class A service credit for creditable nonstate service as set 22 forth in subsections (b) and (c) except that intervening 23 military service shall be credited in the class of service for 24 which the member was eligible at the time of entering into 25 military service and for which he makes the required 26 contributions[.] and except that military service credited 27 pursuant to subsection (c)(2) to a member who is a prison 28 security officer at the time the military service is credited 29 shall be Class P service. 30 * * * 20010H0129B0988 - 5 -
1 § 5306. Classes of service. 2 (a) Class A membership.--A State employee, other than a 3 prison security officer, who is a member of Class A on the 4 effective date of this part or who becomes a member of the 5 system subsequent to the effective date of this part shall be 6 classified as a Class A member and receive credit for Class A 7 service upon payment of regular and additional member 8 contributions for Class A service. 9 (b) Other class membership.-- 10 (1) A State employee who is a member of a class of 11 service other than Class A on the effective date of this part 12 shall retain his membership in that class until such service 13 is discontinued; any service other than service as a prison 14 security officer thereafter shall be credited as Class A 15 service. 16 (2) (i) A prison security officer shall be classified 17 as a Class P member and any service performed as a prison 18 security officer on or after the effective date of this 19 paragraph shall be credited as Class P service. 20 (ii) An active member or inactive member on leave 21 without pay who is a prison security officer on the 22 effective date of this paragraph, shall have all service 23 as a prison security officer prior to the effective date 24 of this paragraph credited as Class P service. 25 (iii) An active member or inactive member on leave 26 without pay who is a prison security officer on the 27 effective date of this paragraph and who prior to the 28 effective date of this paragraph had military service 29 credited as creditable nonstate service pursuant to 30 section 5304 (relating to creditable nonstate service) or 20010H0129B0988 - 6 -
1 credited as State service pursuant to the laws of this 2 Commonwealth or the United States, shall have all such 3 military service credited as Class P service instead of 4 the class in which it was previously credited. 5 (iv) In the event a member has Class P service and 6 service other than Class P service credited in the same 7 calendar year and the aggregate amount of each class of 8 service calculated without regard to any other class of 9 service totals more than one year, then each class of 10 service shall be credited proportionally, not to exceed 11 one year in total service. 12 * * * 13 § 5308. Eligibility for annuities. 14 * * * 15 (c) Disability annuity.--An active member or inactive member 16 on leave without pay who has credit for at least five years of 17 service or any active member or inactive member on leave without 18 pay who is an officer of the Pennsylvania State Police, a prison 19 security officer or an enforcement officer shall, upon 20 compliance with section 5907(k), be entitled to a disability 21 annuity if he becomes mentally or physically incapable of 22 continuing to perform the duties for which he is employed and 23 qualifies in accordance with the provisions of section 24 5905(c)(1) (relating to duties of the board regarding 25 applications and elections of members). 26 Section 3. Section 5508 of Title 71 is amended by adding a 27 subsection to read: 28 § 5508. Actuarial cost method. 29 * * * 30 (h) Determination of liability for Class P service.-- 20010H0129B0988 - 7 -
1 Notwithstanding any other provision of this part or other law, 2 the total additional accrued actuarial liability resulting from 3 Class P service shall be determined by the actuary as part of 4 the first annual valuation made after the effective date of this 5 subsection. The resulting additional accrued actuarial liability 6 shall be paid by the Department of Corrections in annual 7 payments over a period of 20 years from the first day of July, 8 coincident with or next following the first valuation made after 9 the effective date of this subsection. The amount of each annual 10 accrued liability contribution for Class P service shall be 5% 11 greater than the amount of such contribution for the previous 12 fiscal year. 13 Section 4. Section 5702(a) of Title 71 is amended to read: 14 § 5702. Maximum single life annuity. 15 (a) General rule.--Any full coverage member who is eligible 16 to receive an annuity pursuant to the provisions of section 17 5308(a) or (b) (relating to eligibility for annuities) shall be 18 entitled to receive a maximum single life annuity attributable 19 to his credited service and equal to the sum of the following 20 single life annuities beginning at the effective date of 21 retirement: 22 (1) [A] One of the following single life annuities: 23 (i) If a member has less than ten years of credited 24 Class P service, then a standard single life annuity 25 multiplied by the sum of the products, determined 26 separately for each class of service, obtained by 27 multiplying the appropriate class of service multiplier 28 by the ratio of years of service credited in that class 29 to the total credited service. In case the member on the 30 effective date of retirement is under superannuation age 20010H0129B0988 - 8 -
1 for any service, a reduction factor calculated to provide 2 benefits actuarially equivalent to an annuity starting at 3 superannuation age shall be applied to the product 4 determined for that service. The class of service 5 multiplier for any period of concurrent service shall be 6 multiplied by the proportion of total State and school 7 compensation during such period attributable to State 8 service. In the event a member has two multipliers for 9 one class of service the class of service multiplier to 10 be used for calculating benefits for that class shall be 11 the average of the two multipliers weighted by the 12 proportion of compensation attributable to each 13 multiplier during the three years of highest annual 14 compensation in that class of service: Provided, That in 15 the case of a member of Class E-1, a portion but not all 16 of whose three years of highest annual judicial 17 compensation is prior to January 1, 1973, two class of 18 service multipliers shall be calculated on the basis of 19 his entire judicial service, the one applying the 20 judicial class of service multipliers effective prior to 21 January 1, 1973 and the second applying the class of 22 service multipliers effective subsequent to January 1, 23 1973. The average class of service multiplier to be used 24 for calculating benefits for his judicial service shall 25 be the average of the two calculated multipliers weighted 26 by the proportion of compensation attributable to each of 27 the calculated multipliers during the three years of 28 highest annual compensation in that class of service. 29 (ii) If the member has ten or more years, but less 30 than 20 years, of credited Class P service, then a single 20010H0129B0988 - 9 -
1 life annuity equal to the sum of: 2 (A) a standard single life annuity calculated 3 pursuant to subparagraph (i) on all credited service 4 other than Class P service; and 5 (B) an annuity equal to 2% of the highest annual 6 salary, multiplied by the total number of years and 7 fractional part of a year of credited Class P service 8 of the member. In case the member on the effective 9 date of retirement is under the superannuation age 10 applicable to Class P service, a reduction factor 11 calculated to provide benefits actuarially equivalent 12 to an annuity starting at superannuation age shall be 13 applied to the product determined for the Class P 14 service. 15 (iii) If the member has 20 or more years, but less 16 than 25 years, of credited Class P service, then a single 17 life annuity equal to the sum of: 18 (A) a standard single life annuity calculated 19 pursuant to subparagraph (i) on all credited service 20 other than Class P service; and 21 (B) 50% of the highest annual salary, unreduced 22 if the member is under superannuation age. 23 (iv) If the member has 25 or more years of credited 24 Class P service, then a single life annuity equal to the 25 sum of: 26 (A) a standard single life annuity calculated 27 pursuant to subparagraph (i) on all credited service 28 other than Class P service; and 29 (B) 75% of the highest annual salary, unreduced 30 if the member is under superannuation age. 20010H0129B0988 - 10 -
1 (2) If eligible, a single life annuity of 2% of his 2 average noncovered salary for each year of social security 3 integration credit as provided for in section 5305 (relating 4 to social security integration credits) multiplied, if on the 5 effective date of retirement the member is under 6 superannuation age for any service, by the actuarially 7 determined reduction factor for that service. 8 (3) If eligible, a single life annuity which is 9 actuarially equivalent to the regular and additional 10 accumulated deductions attributable to contributions as a 11 member of Class C, but not less than such annuity determined 12 as if the member were age 60 on the effective date of 13 retirement, actuarially reduced in the event the member is 14 under superannuation age on the effective date of retirement. 15 (4) If eligible, a single life annuity which is 16 actuarially equivalent to the amount by which his regular and 17 additional accumulated deductions attributable to any 18 credited service other than as a member of Class C are 19 greater than one-half of the actuarially equivalent value on 20 the effective date of retirement of the annuity as provided 21 in paragraph (1) attributable to service other than Class C 22 for which regular or joint coverage member contributions were 23 made. 24 (5) If eligible, a single life annuity which is 25 actuarially equivalent to the amount by which his social 26 security integration accumulated deductions are greater than 27 one-half of the actuarially equivalent value on the effective 28 date of retirement of the annuity provided for under 29 paragraph (2). 30 (6) If eligible, a single life annuity sufficient 20010H0129B0988 - 11 -
1 together with the annuity provided for in paragraph (1) as a 2 Class A member and the highest annuity provided for in 3 paragraph (2) to which he is entitled, or at his option could 4 have been entitled, to produce that percentage of a standard 5 single life annuity on the effective date of retirement as 6 determined by his total years of credited service as a member 7 of Class A and by the following table: 8 Total Years of Percentage of 9 Credited Service Standard 10 as a Member of Single Life 11 Class A Annuity 12 35-40 100% 13 41 102% 14 42 104% 15 43 106% 16 44 108% 17 45 or more 110% 18 * * * 19 Section 5. Section 5706(b) of Title 71 is amended and the 20 section is amended by adding a subsection to read: 21 § 5706. Termination of annuities. 22 * * * 23 (b) Subsequent discontinuance of service.--Upon subsequent 24 discontinuance of service, such member other than a former 25 annuitant who had the effect of his frozen present value 26 eliminated in accordance with subsection (c), or a member who 27 does not earn enough service to have the effect of his frozen 28 present value eliminated in accordance with subsection (c) but 20010H0129B0988 - 12 -
1 who earns Class P service credit after his return to service, or 2 a former disability annuitant shall be entitled to an annuity 3 which is actuarially equivalent to the sum of the present value 4 as determined under subsection (a) and the present value of a 5 maximum single life annuity based on years of service credited 6 subsequent to reentry in the system and his final average salary 7 computed by reference to his compensation during his entire 8 period of State and school service. 9 (b.1) Subsequent discontinuance of service by members who 10 earned Class P service credit.--Upon subsequent discontinuance 11 of service by a member who does not earn enough service to have 12 the effect of his frozen present value eliminated in accordance 13 with subsection (c) but who earns Class P service credit after 14 his return to service, such a member shall be entitled to an 15 annuity which is actuarially equivalent to the sum of: 16 (1) the present value as determined under subsection 17 (a); 18 (2) the present value of the maximum single life annuity 19 based on years of service other than Class P service credited 20 subsequent to reentry in the system and his final average 21 salary computed by reference to his compensation during his 22 entire period of State and school service; and 23 (3) the present value of one of the following annuities: 24 (i) If the additional Class P service makes the 25 total of Class P service less than ten years, then a 26 maximum single life annuity based on years of Class P 27 service credited subsequent to reentry in the system and 28 his final average salary computed by reference to his 29 compensation during his entire period of State and school 30 service. 20010H0129B0988 - 13 -
1 (ii) If the additional Class P service makes the 2 total of Class P service more than ten but less than 20 3 years, then a maximum single life annuity based on years 4 of Class P service credited subsequent to reentry in the 5 system and his highest annual salary computed by 6 reference to his compensation during his entire period of 7 prison security officer service. 8 (iii) If the member had less than 20 years of Class 9 P service before returning to State service and the 10 additional Class P service makes the total of Class P 11 service 20 or more years, but less than 25 years, then a 12 single life annuity equal to 2.5% of his highest annual 13 salary computed by reference to his compensation during 14 his entire period of prison security officer service for 15 each year or fractional part of a year of Class P service 16 credited after reentry into State service. 17 (iv) If the member had less than 25 years of Class P 18 service before returning to service and the additional 19 Class P service makes the total of Class P service 25 or 20 more than 25 years, then a single life annuity equal to 21 5% of his highest annual salary computed by reference to 22 his compensation during his entire period of prison 23 security officer service for each year or fractional part 24 of a year of Class P service credited after reentry into 25 State service. 26 If the member had 20 or more years, but less than 25 years, of 27 Class P service before returning to State service and the 28 additional Class P service does not make the total of Class P 29 service more than 25 years, or if the member had 25 or more 30 years of Class P service before returning to State service, then 20010H0129B0988 - 14 -
1 no annuity shall be paid under paragraph (3). 2 * * * 3 Section 6. Section 5902(k) of Title 71 is amended to read: 4 § 5902. Administrative duties of the board. 5 * * * 6 (k) Certification of employer contributions.--The board 7 shall, each year in addition to the itemized budget required 8 under section 5509 (relating to appropriations and assessments 9 by the Commonwealth), certify, as a percentage of the members' 10 payroll, the employers' contributions as determined pursuant to 11 section 5508 (relating to actuarial cost method) necessary for 12 the funding of prospective annuities for active members and the 13 annuities of annuitants and certify the rates and amounts of the 14 employers' normal contributions as determined pursuant to 15 section 5508(b), accrued liability contributions as determined 16 pursuant to section 5508(c) and (h), supplemental annuities 17 contribution rate as determined pursuant to section 5508(e) and 18 the experience adjustment factor as determined pursuant to 19 section 5508(f), which shall be paid to the fund and credited to 20 the appropriate accounts. These certifications shall be regarded 21 as final and not subject to modification by the Budget 22 Secretary. 23 * * * 24 Section 7. Section 5903 of Title 71 is amended by adding a 25 subsection to read: 26 § 5903. Duties of the board to advise and report to heads of 27 departments and members. 28 * * * 29 (f) Transfer to Class P membership certifications.--The 30 board shall certify to each prison security officer who is 20010H0129B0988 - 15 -
1 transferred from Class A to Class P the amount of Class A 2 service that is so transferred. 3 Section 8. The provisions of this act are severable to the 4 extent that if any of its provisions shall be held to be legally 5 or unconstitutionally impermissible as applied to any State 6 employee with Class P service, the decision of the court shall 7 not affect or impair the application of the provisions of this 8 act to other State employees with Class P service. Those members 9 against whom the provision is legally or unconstitutionally 10 impermissible shall have their pension and retirement benefits 11 calculated under 71 Pa.C.S. Part XXV as if this act had not been 12 enacted. 13 Section 9. This act shall take effect in 90 days. B7L71JS/20010H0129B0988 - 16 -