PRINTER'S NO. 130
No. 146 Session of 1999
INTRODUCED BY M. N. WRIGHT, JANUARY 26, 1999
REFERRED TO COMMITTEE ON EDUCATION, JANUARY 26, 1999
AN ACT 1 Amending Title 24 (Education) of the Pennsylvania Consolidated 2 Statutes, further providing for termination of annuities. 3 The General Assembly of the Commonwealth of Pennsylvania 4 hereby enacts as follows: 5 Section 1. Section 8346 of Title 24 of the Pennsylvania 6 Consolidated Statutes is amended by adding a subsection to read: 7 § 8346. Termination of annuities. 8 * * * 9 (e) Elimination of the effect of frozen present value as 10 applied to annuitants.-- 11 (1) A member who was an annuitant on July 1, 1994, and 12 who is not a member with multiple service credit and who had 13 returned to school service and earned three eligibility 14 points by performing credited school service between the 15 termination of school service most recently before July 1, 16 1994, and most recent commencement of an annuity before such 17 termination of school service and the calculation of whose
1 annuity included a frozen present value calculation in 2 accordance with subsections (a) and (b) shall have that 3 annuitant's annuity adjusted as follows: 4 (i) The system shall calculate the maximum single 5 life annuity that the member would have been entitled to 6 receive on that member's effective date of retirement, 7 calculated as if the member had been a vestee during all 8 periods as an annuitant which resulted in the present 9 value of that annuity being frozen in accordance with 10 subsection (a). Such calculated maximum single life 11 annuity shall then be modified by the optional 12 modification of annuity actually selected by the 13 annuitant and such actual postretirement adjustments to 14 that annuity as the annuitant had been eligible to 15 receive as of the effective date of this subsection. 16 (ii) The present value of the recalculated annuity 17 as modified under subparagraph (i), as of the effective 18 date of this subsection, shall be reduced by all amounts 19 paid or payable to that annuitant during all previous 20 periods as an annuitant during which the member is being 21 treated as a vestee plus interest on these amounts until 22 the effective date of this subsection. The interest for 23 each year shall be calculated based upon the annual 24 interest rate adopted for that fiscal year by the board 25 for the calculation of the normal contribution rate 26 pursuant to section 8328(b). 27 (iii) If the annuity produced by the resulting 28 present value, modified for the optional benefit payment 29 plan selected by the member, is greater than the annuity 30 being received by the member on the effective date of 19990H0146B0130 - 2 -
1 this subsection, then the member shall be entitled to 2 receive the greater annuity beginning with the effective 3 date of this subsection. If the annuity produced by the 4 resulting present value, modified for the optional 5 benefit payment plan selected by the member, is less than 6 the annuity being received by the member on the effective 7 date of this subsection, then the annuity being received 8 by the member will remain unchanged. 9 (2) No payments shall be made for any period of time 10 before the effective date of this subsection. 11 (3) A member who has the member's benefit adjusted 12 pursuant to this subsection shall not be entitled to reelect 13 an option unless otherwise permitted to do so pursuant to 14 section 8507(j) (relating to rights and duties of school 15 employees and members). 16 (4) This subsection shall not apply to the beneficiaries 17 and survivor annuitants of any annuitant who died prior to 18 the effective date of this subsection. 19 Section 2. The amendment of 24 Pa.C.S. § 8346 shall be 20 applicable on July 1 coincident with or following the effective 21 date of this act. 22 Section 3. This act shall take effect immediately. L28L24JS/19990H0146B0130 - 3 -