PRIOR PRINTER'S NO. 292 PRINTER'S NO. 2346
No. 295 Session of 1999
INTRODUCED BY HERMAN, CURRY, HUTCHINSON, SEYFERT, STRITTMATTER,
ARMSTRONG, BAKER, BELARDI, BELFANTI, BUNT, CORRIGAN, COY,
GEIST, GEORGE, HARHAI, HORSEY, MAHER, McCALL, MICOZZIE,
NICKOL, RAMOS, READSHAW, ROSS, SAYLOR, SCHULER, SHANER,
B. SMITH, STABACK, STERN, SURRA, E. Z. TAYLOR, TIGUE,
TRAVAGLIO, TULLI, VANCE, WOGAN, GRUCELA, M. COHEN AND VAN
HORNE, FEBRUARY 2, 1999
AS REPORTED FROM COMMITTEE ON STATE GOVERNMENT, HOUSE OF
REPRESENTATIVES, AS AMENDED, SEPTEMBER 29, 1999
AN ACT
1 Amending Titles 24 (Education) and 71 (State Government) of the
2 Pennsylvania Consolidated Statutes, providing for
3 contributions for creditable State service, for nonschool
4 service, for incomplete payments, for annuity termination,
5 FOR MEMBERSHIP OF THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT <--
6 BOARD AND THE STATE EMPLOYEES' RETIREMENT BOARD, for
7 regulations and procedures, for member contributions, for
8 payroll deductions, for elections of members, for multiple
9 service status, FOR MANAGEMENT OF FUND AND ACCOUNTS, for <--
10 duties of employers, for creditable non-State service, for
11 purchase of credit, for incomplete payments, for termination
12 of annuities, for regulations and procedures, for member
13 contributions, for duties of board and heads of departments
14 and for election as multiple service member.
15 The General Assembly of the Commonwealth of Pennsylvania
16 hereby enacts as follows:
17 Section 1. Sections 8323(d), 8324(b) and (d), 8325, 8346,
18 8502(h) and (m) 8501(A) AND (B), 8502(M) and 8504(b) of Title 24 <--
19 of the Pennsylvania Consolidated Statutes are amended to read:
20 § 8323. Member contributions for creditable school service.
21 * * *
1 (d) Certification and payment of contributions.--
2 (1) In all cases other than for the purchase of credit
3 for sabbatical leave and activated military service leave
4 beginning before the effective date of paragraph (2), the
5 amount payable shall be certified by the board in accordance
6 with methods approved by the actuary and may be paid in a
7 lump sum within 90 days or, in the case of an active member
8 or eligible State employee who is an active member of the
9 State Employees' Retirement System, may be amortized with
10 statutory interest through salary deductions or by personal
11 checks in amounts agreed upon by the member and the board. In
12 the case of an eligible State employee who is an active
13 member of the State Employees' Retirement System, the agreed
14 upon salary deductions shall be remitted to the State
15 Employees' Retirement Board, which shall certify and transfer
16 to the board the amounts paid.
17 (2) In the case of activated military service leave
18 beginning before the effective date of this paragraph, the
19 amount payable may be paid according to this subsection or
20 subsection (c.1), but all lump sum payments must be made and
21 all amortization payments commenced within one year of the
22 termination of activated military service leave.
23 § 8324. Contributions for purchase of credit for creditable
24 nonschool service.
25 * * *
26 (b) Nonintervening military service.--The amount due for the
27 purchase of credit for military service other than intervening
28 military service shall be determined by applying the member's
29 basic contribution rate plus the normal contribution rate as
30 provided in section 8328 (relating to actuarial cost method) at
19990H0295B2346 - 2 -
1 the time of entry of the member into school service subsequent
2 to such military service to one-third of his total compensation
3 received during the first three years of such subsequent
4 credited school service and multiplying the product by the
5 number of years and fractional part of a year of creditable
6 nonintervening military service being purchased together with
7 statutory interest during all periods of subsequent school and
8 State service to date of purchase. Upon certification of the
9 amount due, payment may be made in a lump sum within 90 days or
10 in the case of an active member or eligible State employee who
11 is an active member of the State Employees' Retirement System it
12 may be amortized with statutory interest through salary
13 deductions or by personal checks in amounts agreed upon by the
14 member and the board. In the case of an eligible State employee
15 who is an active member of the State Employees' Retirement
16 System, the agreed upon salary deductions shall be remitted to
17 the State Employees' Retirement Board, which shall certify and
18 transfer to the board the amounts paid. Application may be filed
19 for all such military service credit upon completion of three
20 years of subsequent credited school service and shall be
21 credited as Class T-C service.
22 * * *
23 (d) Other creditable nonschool service.--Contributions on
24 account of Class T-C credit for creditable nonschool service
25 other than military service shall be determined by applying the
26 member's basic contribution rate plus the normal contribution
27 rate as provided in section 8328 at the time of the member's
28 entry into school service subsequent to such creditable
29 nonschool service to his total compensation received during the
30 first year of subsequent credited school service and multiplying
19990H0295B2346 - 3 -
1 the product by the number of years and fractional part of a year
2 of creditable nonschool service being purchased together with
3 statutory interest during all periods of subsequent school or
4 State service to the date of purchase, except that in the case
5 of purchase of credit for creditable nonschool service as set
6 forth in section 8304(b)(5) (relating to creditable nonschool
7 service) the member shall pay only the employee's share unless
8 otherwise provided by law. Upon certification of the amount due,
9 payment may be made in a lump sum within 90 days or in the case
10 of an active member or eligible State employee who is an active
11 member of the State Employees' Retirement System it may be
12 amortized with statutory interest through salary deductions or
13 by personal checks in amounts agreed upon by the member and the
14 board. In the case of an eligible State employee who is an
15 active member of the State Employees' Retirement System, the
16 agreed upon salary deductions shall be remitted to the State
17 Employees' Retirement Board, which shall certify and transfer to
18 the board the amounts paid.
19 * * *
20 § 8325. Incomplete payments.
21 In the event that a member terminates school service or a
22 multiple service member who is an active member of the State
23 Employees' Retirement System terminates State service before any
24 agreed upon payments or return of benefits on account of
25 returning to school service or entering State service and
26 electing multiple service have been completed the member or
27 multiple service member who is an active member of the State
28 Employees' Retirement System shall have the right to pay within
29 30 days of termination of school service or State service the
30 balance due, including interest, in a lump sum and the annuity
19990H0295B2346 - 4 -
1 shall be calculated including full credit for the previous
2 school service, creditable nonschool service, or full-coverage
3 membership. In the event a member does not pay the balance due
4 within 30 days of termination of school service or in the event
5 a member dies in school service or within 30 days of termination
6 of school service or in the case of a multiple service member
7 who is an active member of the State Employees' Retirement
8 System, does not pay the balance due within 30 days of
9 termination of State service or dies in State service or within
10 30 days of termination of State service and before the agreed
11 upon payments have been completed, the present value of the
12 benefit otherwise payable shall be reduced by the balance due,
13 including interest, and the benefit payable shall be calculated
14 as the actuarial equivalent of such reduced present value.
15 § 8346. Termination of annuities.
16 (a) General rule.--If an annuitant returns to school service
17 or enters or has entered State service and elects multiple
18 service membership, any annuity payable to him under this part
19 shall cease effective upon the date of his return to school
20 service or entering State service and in the case of an annuity
21 other than a disability annuity the present value of such
22 annuity, adjusted for full coverage in the case of a joint
23 coverage member who makes the appropriate back contributions for
24 full coverage, shall be frozen as of the date such annuity
25 ceases. An annuitant who is credited with an additional 10% of
26 membership service as provided in section 8302(b.2) (relating to
27 credited school service) and who returns to school service,
28 except as provided in subsection (b), shall forfeit such
29 credited service and shall have his frozen present value
30 adjusted as if his 10% retirement incentive had not been applied
19990H0295B2346 - 5 -
1 to his account. In the event that the cost-of-living increase
2 enacted December 18, 1979, occurred during the period of such
3 State or school employment, the frozen present value shall be
4 increased, on or after the member attains superannuation age, by
5 the percent applicable had he not returned to service.
6 (a.1) Return of benefits.--In the event an annuitant whose
7 annuity ceases pursuant to this section receives any annuity
8 payment, including a lump sum payment pursuant to section 8345
9 (relating to member's options) on or after the date of his
10 return to school service or entering State service, he shall
11 return to the board the amount so received plus statutory
12 interest. The amount payable shall be certified in each case by
13 the board in accordance with methods approved by the actuary and
14 shall be paid in a lump sum within 90 days or in the case of an
15 active member or State employee who is an active member of the
16 State Employees' Retirement System may be amortized with
17 statutory interest through salary deductions in amounts agreed
18 upon by the member and the board. In the case of a State
19 employee who is an active member of the State Employees'
20 Retirement System, the agreed upon salary deductions shall be
21 remitted to the State Employees' Retirement Board, which shall
22 certify and transfer to the board the amounts paid.
23 (b) Return to school service during emergency.--When, in the
24 judgment of the employer, an emergency creates an increase in
25 the work load such that there is serious impairment of service
26 to the public or in the event of a shortage of appropriate
27 subject certified teachers, an annuitant may be returned to
28 school service for a period not to exceed 95 full-day sessions
29 in any school year without loss of his annuity. In computing the
30 number of days an annuitant has returned to school service, any
19990H0295B2346 - 6 -
1 amount of time less than one-half of a day shall be counted as
2 one-half of a day.
3 (c) Subsequent discontinuance of service.--Upon subsequent
4 discontinuance of service, such member other than a former
5 annuitant who had the effect of his frozen present value
6 eliminated in accordance with subsection (d) or a former
7 disability annuitant shall be entitled to an annuity which is
8 actuarially equivalent to the sum of the present value as
9 determined under subsection (a) and the present value of a
10 maximum single life annuity based on years of service credited
11 subsequent to reentry in the system and his final average salary
12 computed by reference to his compensation during his entire
13 period of school and State service.
14 (d) Elimination of the effect of frozen present value.--
15 (1) An annuitant who returns to school service and earns
16 three eligibility points by performing credited school
17 service following the most recent period of receipt of an
18 annuity under this part, or an annuitant who enters State
19 service and:
20 (i) is a multiple service member; or
21 (ii) who elects multiple service membership, and
22 earns three eligibility points by performing credited State
23 service or credited school service following the most recent
24 period of receipt of an annuity under this part, and who had
25 the present value of his annuity frozen in accordance with
26 subsection (a), shall qualify to have the effect of the
27 frozen present value resulting from all previous periods of
28 retirement eliminated, provided that all payments under
29 Option 4 and annuity payments payable during previous periods
30 of retirement plus interest as set forth in paragraph (3)
19990H0295B2346 - 7 -
1 shall be returned to the fund in the form of an actuarial
2 adjustment to his subsequent benefits or in such form as the
3 board may otherwise direct.
4 (2) Upon subsequent discontinuance of service and the
5 filing of an application for an annuity, a former annuitant
6 who qualifies to have the effect of a frozen present value
7 eliminated under this subsection shall be entitled to receive
8 the higher of either:
9 (i) an annuity (prior to optional modification)
10 calculated as if the freezing of the former annuitant's
11 account pursuant to subsection (a) had not occurred,
12 adjusted according to paragraph (3), provided that a
13 former annuitant of the system or a former annuitant of
14 the State Employees' Retirement System who retired under
15 a provision of law granting additional service credit if
16 termination of school or State service or retirement
17 occurred during a specific period of time shall not be
18 permitted to retain the additional service credit under
19 the prior law when the annuity is computed for his most
20 recent retirement; or
21 (ii) an annuity (prior to optional modification)
22 calculated as if the former annuitant did not qualify to
23 have the effect on the frozen present value eliminated,
24 unless the former annuitant notifies the board in writing by
25 the later of the date the application for annuity is filed or
26 the effective date of retirement that the former annuitant
27 wishes to receive the lower annuity.
28 (3) In addition to any other adjustment to the present
29 value of the maximum single life annuity that a member may be
30 entitled to receive that occurs as a result of any other
19990H0295B2346 - 8 -
1 provision of law, the present value of the maximum single
2 life annuity shall be reduced by all amounts paid or payable
3 to him during all previous periods of retirement plus
4 interest on these amounts until the date of subsequent
5 retirement. The interest for each year shall be calculated
6 based upon the annual interest rate adopted for that school
7 year by the board for the calculation of the normal
8 contribution rate pursuant to section 8328(b) (relating to
9 actuarial cost method).
10 § 8501. PUBLIC SCHOOL EMPLOYEES' RETIREMENT BOARD. <--
11 (A) STATUS AND MEMBERSHIP.--THE BOARD SHALL BE AN
12 INDEPENDENT ADMINISTRATIVE BOARD AND SHALL CONSIST OF 15
13 MEMBERS: THE SECRETARY OF EDUCATION, EX OFFICIO; THE STATE
14 TREASURER, EX OFFICIO; TWO SENATORS; TWO MEMBERS OF THE HOUSE OF
15 REPRESENTATIVES; THE EXECUTIVE SECRETARY OF THE PENNSYLVANIA
16 SCHOOL BOARDS ASSOCIATION, EX OFFICIO; TWO TO BE APPOINTED BY
17 THE GOVERNOR, AT LEAST ONE OF WHOM SHALL NOT BE A SCHOOL
18 EMPLOYEE OR AN OFFICER OR EMPLOYEE OF THE STATE; THREE TO BE
19 ELECTED BY THE ACTIVE PROFESSIONAL MEMBERS OF THE SYSTEM FROM
20 AMONG THEIR NUMBER; ONE TO BE ELECTED BY ANNUITANTS FROM AMONG
21 THEIR NUMBER; ONE TO BE ELECTED BY THE ACTIVE NONPROFESSIONAL
22 MEMBERS OF THE SYSTEM FROM AMONG THEIR NUMBER; AND ONE TO BE
23 ELECTED BY MEMBERS OF PENNSYLVANIA PUBLIC SCHOOL BOARDS FROM
24 AMONG THEIR NUMBER. THE APPOINTMENTS MADE BY THE GOVERNOR SHALL
25 BE CONFIRMED BY THE SENATE AND EACH ELECTION SHALL BE CONDUCTED
26 IN A MANNER APPROVED BY THE BOARD. THE TERMS OF THE APPOINTED
27 AND NONLEGISLATIVE ELECTED MEMBERS SHALL BE THREE YEARS. THE
28 MEMBERS FROM THE SENATE SHALL BE APPOINTED BY THE PRESIDENT PRO
29 TEMPORE OF THE SENATE AND SHALL CONSIST OF ONE MEMBER FROM THE
30 MAJORITY AND ONE MEMBER FROM THE MINORITY. THE MEMBERS FROM THE
19990H0295B2346 - 9 -
1 HOUSE OF REPRESENTATIVES SHALL BE APPOINTED BY THE SPEAKER OF
2 THE HOUSE OF REPRESENTATIVES AND SHALL CONSIST OF ONE MEMBER
3 FROM THE MAJORITY AND ONE MEMBER FROM THE MINORITY. [THE
4 LEGISLATIVE MEMBERS SHALL SERVE ON THE BOARD FOR THE DURATION OF
5 THE TERMS FOR WHICH THEY WERE ELECTED] THE TERM OF EACH
6 LEGISLATIVE MEMBER SHALL RUN FROM THE DATE OF HIS RESPECTIVE
7 APPOINTMENT UNTIL 30 DAYS AFTER THE CONVENING OF THE NEXT
8 REGULAR SESSION OF THE GENERAL ASSEMBLY IN ODD NUMBERED YEARS OR
9 UNTIL HIS SUCCESSOR IS APPOINTED AND QUALIFIED. THE CHAIRMAN OF
10 THE BOARD SHALL BE ELECTED BY THE BOARD MEMBERS. EACH EX OFFICIO
11 MEMBER OF THE BOARD AND EACH LEGISLATIVE MEMBER OF THE BOARD MAY
12 APPOINT A DULY AUTHORIZED DESIGNEE TO ACT IN HIS STEAD.
13 (B) [APPOINTMENT AND TERMS OF INITIAL MEMBERS.--FOR THE
14 PURPOSES OF SECURING AN ORDERLY TRANSITION AND STAGGERED TERMS,
15 THE ELECTED MEMBERS OF THE BOARD SERVING ON THE EFFECTIVE DATE
16 OF THIS PART SHALL SERVE UNTIL THE EXPIRATION OF THEIR
17 RESPECTIVE TERMS. THE BOARD MEMBER INITIALLY ELECTED BY MEMBERS
18 OF PENNSYLVANIA PUBLIC SCHOOL BOARDS SHALL SERVE UNTIL JANUARY
19 1, 1976. THE BOARD MEMBER INITIALLY ELECTED BY THE ACTIVE
20 NONPROFESSIONAL MEMBERS OF THE SYSTEM SHALL SERVE UNTIL JANUARY
21 1, 1977. ONE OF THE INITIAL BOARD MEMBERS APPOINTED BY THE
22 GOVERNOR AFTER THE EFFECTIVE DATE OF THIS PART SHALL SERVE UNTIL
23 JANUARY 1, 1976 AND THE SECOND APPOINTED BOARD MEMBER SHALL
24 SERVE UNTIL JANUARY 1, 1977.] VACANCIES.--A VACANCY OCCURRING
25 DURING THE TERM OF ANY MEMBER SHALL BE FILLED FOR THE UNEXPIRED
26 TERM BY A SUCCESSOR APPOINTED OR ELECTED AS THE CASE MAY BE IN
27 THE SAME MANNER AS HIS PREDECESSOR.
28 * * *
29 § 8502. Administrative duties of board.
30 * * *
19990H0295B2346 - 10 -
1 (h) Regulations and procedures.--The board shall, with the <--
2 advice of the Attorney General and the actuary, adopt and
3 promulgate rules and regulations for the uniform administration
4 of the system. No regulation establishing a period of time to
5 elect multiple service shall allow any such election more than
6 365 days after entry into the system as an active member. The
7 actuary shall approve in writing all computational procedures
8 used in the calculation of contributions and benefits, and the
9 board shall by resolution adopt such computational procedures,
10 prior to their application by the board. Such rules, regulations
11 and computational procedures as so adopted from time to time and
12 as in force and effect at any time, together with such tables as
13 are adopted and published pursuant to subsection (j) as
14 necessary for the calculation of annuities and other benefits,
15 shall be as effective as if fully set forth in this part. Any
16 actuarial assumption specified in or underlying any such rule,
17 regulation or computational procedure and utilized as a basis
18 for determining any benefit shall be applied in a uniform
19 manner.
20 * * *
21 (m) Member contributions and interest.--The board shall
22 cause each member's contributions, including payroll deductions,
23 pickup contributions and all other payments, including, but not
24 limited to, amounts collected by the State Employees' Retirement
25 System for the reinstatement of previous school service or
26 creditable nonschool service, and amounts paid to return
27 benefits paid after the date of return to school service or
28 entering State service representing lump sum payments made
29 pursuant to section 8345(a)(4)(iii) (relating to member's
30 options) and member's annuity payments, but not including other
19990H0295B2346 - 11 -
1 benefits returned pursuant to section 8346(a.1) (relating to
2 termination of annuities) to be credited to the account of such
3 member and shall pay all such amounts into the fund. Such
4 contributions shall be credited with statutory interest until
5 date of termination of service, except in the case of a vestee,
6 who shall have such interest credited until the effective date
7 of retirement or until the return of his accumulated deductions,
8 if he so elects; and in the case of a multiple service member
9 who shall have such interest credited until termination of
10 service in both the school and the State systems.
11 * * *
12 § 8504. Duties of board to report to State Employees'
13 Retirement Board.
14 * * *
15 (b) Multiple service membership of State employees.--Upon
16 receipt of notification from the State Employees' Retirement
17 Board that a former school employee has become an active member
18 in the State Employees' Retirement System and has elected to
19 receive credit for multiple service, the board shall certify to
20 the State Employees' Retirement Board and concurrently to the
21 member:
22 (1) The total credited service in the system and the
23 number of years and fractional part of a year of service
24 credited in each class of service.
25 (2) The annual compensation received each school year by
26 the member for credited school service.
27 (3) If the member has elected payroll deductions
28 pursuant to section 8323 (relating to member contributions
29 for creditable school service) or 8324 (relating to
30 contributions for purchase of credit for creditable nonschool
19990H0295B2346 - 12 -
1 service), the amount of the deductions and the period over
2 which they are to be made.
3 * * *
4 Section 2. Section 8505(b) of Title 24 is amended and the
5 section is amended by adding a subsection to read:
6 § 8505. Duties of board regarding applications and elections of
7 members.
8 * * *
9 (b) State employees electing multiple service status.--Upon
10 receipt of notification from the State Employees' Retirement
11 Board that a former school employee has become an active member
12 in the State Employees' Retirement System and has elected to
13 become a member with multiple service status, the board shall:
14 (1) In case of a member who is receiving an annuity from
15 the system, discontinue payments, transfer the present
16 value[, at that time,] of the member's annuity at the time of
17 entering State service, plus the amount withdrawn in a lump
18 sum payment, on or after the date of entering State service,
19 pursuant to section 8345 (relating to member's options), with
20 statutory interest to date of transfer, minus the amount to
21 be returned to the board on account of return to service that
22 the board has determined is to be credited in the member's
23 savings account, from the annuity reserve account to the
24 [members'] member's savings account and resume crediting of
25 statutory interest on the amount restored to his credit
26 [and], transfer the balance of the present value of the total
27 annuity, minus the amount to be returned to the board on
28 account of return to service that the board has determined is
29 to be credited in the State accumulation account, from the
30 annuity reserve account to the State accumulation account,
19990H0295B2346 - 13 -
1 and certify to the member the amount of lump sum and annuity
2 payments with statutory interest to be returned to the board
3 by him, and of those amounts, which amount shall be credited
4 to the member's savings account and credited with statutory
5 interest as such payments are returned and which amount shall
6 be credited to the State accumulation account.
7 (2) In case of a member who is not receiving an annuity
8 from the system and who has not withdrawn his accumulated
9 deductions, continue or resume the crediting of statutory
10 interest on his accumulated deductions.
11 (3) In case of a member who is not receiving an annuity
12 from the system and his accumulated deductions were
13 withdrawn, certify to the member the accumulated deductions
14 as they would have been at the time of his separation had he
15 been a full coverage member together with statutory interest
16 for all periods of subsequent State and school service to the
17 date of repayment. Such amount shall be restored by him and
18 shall be credited with statutory interest as such payments
19 are restored.
20 * * *
21 (k) School employees electing multiple service status.--Upon
22 receipt of notification from the State Employees' Retirement
23 Board that a member who has elected multiple service membership
24 has elected to restore State service or purchase creditable non-
25 State service in the State Employees' Retirement System or is
26 obligated to return benefits to the State Employees' Retirement
27 Board on account of electing multiple service membership has
28 elected to pay all or part of the amount due to the State
29 Employees' Retirement Board by salary deductions, the board
30 shall collect from the employee the amounts certified by the
19990H0295B2346 - 14 -
1 State Employees' Retirement Board as due and owing by the member
2 and certify and transfer to the State Employees' Retirement
3 Board the amounts so collected.
4 Section 3. Sections 8506(c), (g) and (h) and 8507(c), <--
5 8507(C) AND 8521(I) of Title 24 are amended to read:
6 § 8506. Duties of employers.
7 * * *
8 (c) Member and employer contributions.--The employer shall
9 certify to its treasurer the required member contributions
10 picked up and any other contributions, including, but not
11 limited to, amounts collected for the State Employees'
12 Retirement Board for the reinstatement of previous State service
13 or creditable non-State service and amounts paid to return
14 benefits paid after the date of return to State service or
15 entering school service, deducted from each payroll. On July 1,
16 1996, and upon any later effective date of employment of any
17 noneligible member to whom limitation under IRC § 401(a)(17)
18 applies or is expected to apply, the employer shall identify to
19 its treasurer or other payroll administrator the member or
20 members to whom such limit applies or may apply and shall cause
21 any such member's contributions deducted from payroll and the
22 employer's contribution on his behalf to cease at the limitation
23 under IRC § 401(a)(17) on the payroll date if and when such
24 limit shall be reached. The treasurer shall remit to the
25 secretary of the board each month the total of the member
26 contributions and the amount due from the employer determined in
27 accordance with section 8327 (relating to payments by
28 employers). If, upon crediting the remittance of a noneligible
29 member's contributions to the member's savings account, the
30 board shall determine that such account shall have been credited
19990H0295B2346 - 15 -
1 with pickup contributions attributable to compensation which is
2 in excess of the annual compensation limit under IRC §
3 401(a)(17), or with total member contributions for such member
4 which would cause such member's contributions or benefits to
5 exceed any applicable limitation on contributions or benefits
6 under IRC § 401(a)(17), the board shall as soon as practicable
7 refund to the member from his individual member account such
8 amount, together with the statutory interest thereon, as will
9 cause the member's total member contributions not to exceed the
10 applicable limit. The payment of any such refund to the member
11 shall be charged to the member's savings account.
12 * * *
13 (g) Former State employee contributors.--The employer shall,
14 upon the employment of a former member of the State Employees'
15 Retirement System who is not an annuitant of the State
16 Employees' Retirement System, advise such employee of his right
17 to elect multiple service membership within [30] 365 days of
18 entry into the system or such other period as the board may by <--
19 regulation establish and, in the case any such employee who so
20 elects has withdrawn his accumulated deductions, require him to
21 restore his accumulated deductions as they would have been at
22 the time of his separation had he been a full coverage member,
23 together with statutory interest for all periods of subsequent
24 State and school service to date of repayment. The employer
25 shall advise the board of such election.
26 (h) Former State employee annuitants.--The employer shall,
27 upon the employment of an annuitant of the State Employees'
28 Retirement System who applies for membership in the system,
29 advise such employee that he may elect multiple service
30 membership within [30] 365 days of entry into the system or such <--
19990H0295B2346 - 16 -
1 other period as the board may by regulation establish and that
2 if he so elects his annuity from the State Employees' Retirement
3 System will be discontinued effective upon the date of his
4 return to school service and, upon termination of school service
5 and application for an annuity, the annuity will be adjusted in
6 accordance with section 8346 (relating to termination of
7 annuities). The employer shall advise the board of such
8 election.
9 * * *
10 § 8507. Rights and duties of school employees and members.
11 * * *
12 (c) Multiple service membership.--Any active member who was
13 formerly an active member in the State Employees' Retirement
14 System may elect to become a multiple service member. Such
15 election shall occur no later than [30] 365 days after becoming
16 an active member in this system or such other period as the <--
17 board may by regulation establish.
18 * * *
19 § 8521. MANAGEMENT OF FUND AND ACCOUNTS. <--
20 * * *
21 (I) VEHICLES FOR AUTHORIZED INVESTMENTS.--THE BOARD IN ITS
22 PRUDENT DISCRETION MAY MAKE ANY INVESTMENTS WHICH MEET THE
23 STANDARD OF PRUDENCE SET FORTH IN SUBSECTION (A) BY [BECOMING A
24 LIMITED PARTNER IN PARTNERSHIPS THAT WILL HOLD SUCH INVESTMENTS,
25 OR BY ACQUIRING SHARES OR UNITS OF PARTICIPATION OR OTHERWISE
26 PARTICIPATING BENEFICIALLY IN BANK COLLECTIVE TRUSTS OR IN THE
27 SEPARATE ACCOUNTS OF ANY INSURANCE COMPANY AUTHORIZED TO DO
28 BUSINESS IN THIS COMMONWEALTH, OR BY ACQUIRING STOCKS OR SHARES
29 OR UNITS OF PARTICIPATION OR OTHERWISE PARTICIPATING
30 BENEFICIALLY IN THE FUND OF ANY CORPORATION OR TRUST ORGANIZED
19990H0295B2346 - 17 -
1 OR CREATED AND EXISTING UNDER THE LAWS OF THE UNITED STATES OR
2 OF ANY STATE, DISTRICT OR TERRITORY THEREOF WHICH FUND IS
3 MAINTAINED FOR AND CONSISTS OF ASSETS OF EMPLOYEES' BENEFIT
4 TRUSTS, INCLUDING GOVERNMENTAL PLANS AS DEFINED IN IRC § 414(D)
5 OR WHICH MEET THE REQUIREMENTS FOR QUALIFICATION UNDER IRC §
6 401] ACQUIRING ANY TYPE OF INTEREST IN A BUSINESS ORGANIZATION
7 EXISTING UNDER THE LAWS OF ANY JURISDICTION, PROVIDED THAT, IN
8 ANY SUCH CASE, THE LIABILITY OF THE PUBLIC SCHOOL EMPLOYEES'
9 RETIREMENT FUND SHALL BE LIMITED TO THE AMOUNT OF ITS
10 INVESTMENT.
11 * * *
12 Section 4. Sections 5304(a), 5504(b), 5505(b) and (d), 5506,
13 5706, 5902(h) and (l) 5901(B), 5902(L) and 5904(b) of Title 71 <--
14 are amended to read:
15 § 5304. Creditable nonstate service.
16 (a) Eligibility.--An active member or a multiple service
17 member who is a school employee and an active member of the
18 Public School Employees' Retirement System shall be eligible for
19 Class A service credit for creditable nonstate service as set
20 forth in subsections (b) and (c) except that intervening
21 military service shall be credited in the class of service for
22 which the member was eligible at the time of entering into
23 military service and for which he makes the required
24 contributions and except that a multiple service member who is a
25 school employee and an active member of the Public School
26 Employees' Retirement System shall not be eligible to purchase
27 service credit for creditable nonstate service set forth in
28 subsection (c)(5).
29 * * *
30 § 5504. Member contributions for the purchase of credit for
19990H0295B2346 - 18 -
1 previous State service or to become a full coverage
2 member.
3 * * *
4 (b) Certification and method of payment.--The amount payable
5 shall be certified in each case by the board in accordance with
6 methods approved by the actuary and shall be paid in a lump sum
7 within 30 days or in the case of an active member or eligible
8 school employee who is an active member of the Public School
9 Employees' Retirement System may be amortized with statutory
10 interest through salary deductions in amounts agreed upon by the
11 member and the board. In the case of an eligible school employee
12 who is an active member of the Public School Employees'
13 Retirement System, the agreed upon salary deductions shall be
14 remitted to the Public School Employees' Retirement Board, which
15 shall certify and transfer to the board the amounts paid.
16 § 5505. Contributions for the purchase of credit for creditable
17 nonstate service.
18 * * *
19 (b) Nonintervening military service.--
20 (1) The amount due for the purchase of credit for
21 military service other than intervening military service
22 shall be determined by applying the member's basic
23 contribution rate, the additional contribution rate plus the
24 Commonwealth normal contribution rate for active members at
25 the time of entry, subsequent to such military service, of
26 the member into State service to his average annual rate of
27 compensation over the first three years of such subsequent
28 State service and multiplying the result by the number of
29 years and fractional part of a year of creditable
30 nonintervening military service being purchased together with
19990H0295B2346 - 19 -
1 statutory interest during all periods of subsequent State and
2 school service to date of purchase. Upon application for
3 credit for such service, payment shall be made in a lump sum
4 within 30 days or in the case of an active member or eligible
5 school employee who is an active member of the Public School
6 Employees' Retirement System it may be amortized with
7 statutory interest through salary deductions in amounts
8 agreed upon by the member and the board. In the case of an
9 eligible school employee who is an active member of the
10 Public School Employees' Retirement System, the agreed upon
11 salary deductions shall be remitted to the Public School
12 Employees' Retirement Board, which shall certify and transfer
13 to the board the amounts paid. Application may be filed for
14 all such military service credit upon completion of three
15 years of subsequent State service and shall be credited as
16 Class A service.
17 (2) Applicants may purchase credit as follows:
18 (i) one purchase of the total amount of creditable
19 nonintervening military service; or
20 (ii) one purchase per 12-month period of a portion
21 of creditable nonintervening military service.
22 The amount of each purchase shall be not less than one year
23 of creditable nonintervening military service.
24 * * *
25 (d) Nonmilitary and nonmagisterial service.--Contributions
26 on account of credit for creditable nonstate service other than
27 military and magisterial service shall be determined by applying
28 the member's basic contribution rate, the additional
29 contribution rate plus the Commonwealth normal contribution rate
30 for active members at the time of entry subsequent to such
19990H0295B2346 - 20 -
1 creditable nonstate service of the member into State service to
2 his compensation at the time of entry into State service and
3 multiplying the result by the number of years and fractional
4 part of a year of creditable nonstate service being purchased
5 together with statutory interest during all periods of
6 subsequent State and school service to the date of purchase.
7 Upon application for credit for such service payment shall be
8 made in a lump sum within 30 days or in the case of an active
9 member or eligible school employee who is an active member of
10 the Public School Employees' Retirement System it may be
11 amortized with statutory interest through salary deductions in
12 amounts agreed upon by the member and the board. In the case of
13 an eligible school employee who is an active member of the
14 Public School Employees' Retirement System, the agreed upon
15 salary deductions shall be remitted to the Public School
16 Employees' Retirement Board, which shall certify and transfer to
17 the board the amounts paid.
18 * * *
19 § 5506. Incomplete payments.
20 In the event that a member terminates State service or a
21 multiple service member who is an active member of the Public
22 School Employees' Retirement System terminates school service
23 before the agreed upon payments for credit for previous State
24 service, creditable nonstate service, social security
25 integration, [or] full coverage membership or return of benefits
26 on account of returning to State service or entering school
27 service and electing multiple service have been completed, the
28 member or multiple service member who is an active member of the
29 Public School Employees' Retirement System shall have the right
30 to pay within 30 days of termination of State service or school
19990H0295B2346 - 21 -
1 service the balance due, including interest, in a lump sum and
2 the annuity shall be calculated including full credit for the
3 previous State service, creditable nonstate service, social
4 security integration, or full coverage membership. In the event
5 a member does not pay the balance due within 30 days of
6 termination of State service or in the event a member dies in
7 State service or within 30 days of termination of State service
8 or in the case of a multiple service member who is an active
9 member of the Public School Employees' Retirement System, does
10 not pay the balance due within 30 days of termination of school
11 service or dies in school service or within 30 days of
12 termination of school service and before the agreed upon
13 payments have been completed, the present value of the benefit
14 otherwise payable shall be reduced by the balance due, including
15 interest, and the benefit payable shall be calculated as the
16 actuarial equivalent of such reduced present value.
17 § 5706. Termination of annuities.
18 (a) General rule.--If the annuitant returns to State service
19 or enters or has entered school service and elects multiple
20 service membership, any annuity payable to him under this part
21 shall cease effective upon the date of his return to State
22 service or entering school service and in the case of an annuity
23 other than a disability annuity the present value of such
24 annuity, adjusted for full coverage in the case of a joint
25 coverage member who makes the appropriate back contributions for
26 full coverage, shall be frozen as of the date such annuity
27 ceases. An annuitant who is credited with an additional 10% of
28 Class A and Class C service as provided in section 5302(c)
29 (relating to credited State service) and who returns to State
30 service shall forfeit such credited service and shall have his
19990H0295B2346 - 22 -
1 frozen present value adjusted as if his 10% retirement incentive
2 had not been applied to his account. In the event that the cost-
3 of-living increase enacted December 18, 1979 occurred during the
4 period of such State or school employment, the frozen present
5 value shall be increased, on or after the member attains
6 superannuation age, by the percent applicable had he not
7 returned to service. This subsection shall not apply in the case
8 of any annuitant who may render services to the Commonwealth in
9 the capacity of an independent contractor or as a member of an
10 independent board or commission or as a member of a departmental
11 administrative or advisory board or commission when such members
12 of independent or departmental boards or commissions are
13 compensated on a per diem basis for not more than 150 days per
14 calendar year.
15 (a.1) Return to State service during emergency.--When, in
16 the judgment of the employer, an emergency creates an increase
17 in the work load such that there is serious impairment of
18 service to the public, an annuitant may be returned to State
19 service for a period not to exceed 95 days in any fiscal year
20 without loss of his annuity. In computing the number of days an
21 annuitant has returned to State service, any amount of time less
22 than one-half of a day shall be counted as one-half of a day.
23 For agencies, boards and commissions under the Governor's
24 jurisdiction, the approval of the Governor that an emergency
25 exists shall be required before an annuitant may be returned to
26 State service.
27 (a.2) Return of benefits.--In the event an annuitant whose
28 annuity ceases pursuant to this section receives any annuity
29 payment, including a lump sum payment pursuant to section 5705
30 (relating to member's options) on or after the date of his
19990H0295B2346 - 23 -
1 return to State service or entering school service, he shall
2 return to the board the amount so received plus statutory
3 interest. The amount payable shall be certified in each case by
4 the board in accordance with methods approved by the actuary and
5 shall be paid in a lump sum within 30 days or in the case of an
6 active member or school employee who is an active member of the
7 Public School Employees' Retirement System may be amortized with
8 statutory interest through salary deductions in amounts agreed
9 upon by the member and the board. In the case of a school
10 employee who is an active member of the Public School Employees'
11 Retirement System, the agreed upon salary deductions shall be
12 remitted to the Public School Employees' Retirement Board, which
13 shall certify and transfer to the board the amounts paid.
14 (b) Subsequent discontinuance of service.--Upon subsequent
15 discontinuance of service, such member other than a former
16 annuitant who had the effect of his frozen present value
17 eliminated in accordance with subsection (c) or a former
18 disability annuitant shall be entitled to an annuity which is
19 actuarially equivalent to the sum of the present value as
20 determined under subsection (a) and the present value of a
21 maximum single life annuity based on years of service credited
22 subsequent to reentry in the system and his final average salary
23 computed by reference to his compensation during his entire
24 period of State and school service.
25 (c) Elimination of the effect of frozen present value.--
26 (1) An annuitant who returns to State service and earns
27 three eligibility points by performing credited State service
28 following the most recent period of receipt of an annuity
29 under this part, or an annuitant who enters school service
30 and:
19990H0295B2346 - 24 -
1 (i) is a multiple service member; or
2 (ii) who elects multiple service membership, and
3 earns three eligibility points by performing credited State
4 service or credited school service following the most recent
5 period of receipt of an annuity under this part, and who had
6 the present value of his annuity frozen in accordance with
7 subsection (a), shall qualify to have the effect of the
8 frozen present value resulting from all previous periods of
9 retirement eliminated, provided that all payments under
10 Option 4 and annuity payments payable during previous periods
11 of retirement plus interest as set forth in paragraph (3)
12 shall be returned to the fund in the form of an actuarial
13 adjustment to his subsequent benefits or in such form as the
14 board may otherwise direct.
15 (2) Upon subsequent discontinuance of service and the
16 filing of an application for an annuity, a former annuitant
17 who qualifies to have the effect of a frozen present value
18 eliminated under this subsection shall be entitled to receive
19 the higher of either:
20 (i) an annuity (prior to optional modification)
21 calculated as if the freezing of the former annuitant's
22 account pursuant to subsection (a) had not occurred,
23 adjusted according to paragraph (3), provided that a
24 former annuitant of the system or a former annuitant of
25 the Public School Employees' Retirement System who
26 retired under a provision of law granting additional
27 service credit if termination of State or school service
28 or retirement occurred during a specific period of time
29 shall not be permitted to retain the additional service
30 credit under the prior law when the annuity is computed
19990H0295B2346 - 25 -
1 for his most recent retirement; or
2 (ii) an annuity (prior to optional modification)
3 calculated as if the former annuitant did not qualify to
4 have the effect of the frozen present value eliminated,
5 unless the former annuitant notifies the board in writing by
6 the later of the date the application for annuity is filed or
7 the effective date of retirement that the former annuitant
8 wishes to receive the lower annuity.
9 (3) In addition to any other adjustment to the present
10 value of the maximum single life annuity that a member may be
11 entitled to receive that occurs as a result of any other
12 provision of law, the present value of the maximum single
13 life annuity shall be reduced by all amounts paid or payable
14 to him during all previous periods of retirement plus
15 interest on these amounts until the date of subsequent
16 retirement. The interest for each year shall be calculated
17 based upon the annual interest rate adopted for that fiscal
18 year by the board for the calculation of the normal
19 contribution rate pursuant to section 5508(b) (relating to
20 actuarial cost method).
21 § 5901. THE STATE EMPLOYEES' RETIREMENT BOARD. <--
22 * * *
23 (B) APPOINTMENTS AND TERMS.--THE TWO MEMBERS ELECTED BY THE
24 BOARD AND SERVING ON THE EFFECTIVE DATE OF THIS TITLE SHALL
25 CONTINUE TO SERVE UNTIL THE EXPIRATION OF THEIR RESPECTIVE
26 TERMS. THE MEMBERS OR FORMER MEMBERS OF THE SENATE SHALL BE
27 APPOINTED BY THE PRESIDENT PRO TEMPORE OF THE SENATE AND SHALL
28 CONSIST OF A MAJORITY AND A MINORITY MEMBER OR FORMER MEMBER.
29 THE MEMBERS OR FORMER MEMBERS OF THE HOUSE OF REPRESENTATIVES
30 SHALL BE APPOINTED BY THE SPEAKER OF THE HOUSE OF
19990H0295B2346 - 26 -
1 REPRESENTATIVES AND SHALL CONSIST OF A MAJORITY AND A MINORITY
2 MEMBER OR FORMER MEMBER. [THE LEGISLATIVE MEMBERS SHALL SERVE ON
3 THE BOARD FOR THE DURATION OF THE TERMS FOR WHICH THEY WERE
4 ELECTED AND FORMER LEGISLATIVE MEMBERS SHALL SERVE A TERM OF TWO
5 YEARS] THE TERM OF EACH LEGISLATIVE MEMBER SHALL RUN FROM THE
6 DATE OF HIS RESPECTIVE APPOINTMENT UNTIL 30 DAYS AFTER THE
7 CONVENING OF THE NEXT REGULAR SESSION OF THE GENERAL ASSEMBLY IN
8 ODD NUMBERED YEARS OR UNTIL HIS SUCCESSOR IS APPOINTED AND
9 QUALIFIED. OF THE REMAINING FOUR APPOINTEES, ONE SHALL BE
10 APPOINTED FOR AN INITIAL TERM OF TWO YEARS, ONE FOR AN INITIAL
11 TERM OF THREE YEARS, AND TWO FOR AN INITIAL TERM OF FOUR YEARS.
12 A VACANCY OCCURRING DURING THE TERM OF AN APPOINTED MEMBER SHALL
13 BE FILLED FOR THE UNEXPIRED TERM BY THE APPOINTMENT AND
14 CONFIRMATION OF A SUCCESSOR IN THE SAME MANNER AS HIS
15 PREDECESSOR.
16 * * *
17 § 5902. Administrative duties of the board.
18 * * *
19 (h) Regulations and procedures.--The board shall, with the <--
20 advice of the Attorney General and the actuary, adopt and
21 promulgate rules and regulations for the uniform administration
22 of the system. No regulation establishing a period of time to
23 elect multiple service shall allow any such election more than
24 365 days after entry into the system as an active member. The
25 actuary shall approve in writing all computational procedures
26 used in the calculation of contributions and benefits, and the
27 board shall by resolution adopt such computational procedures,
28 prior to their application by the board. Such rules, regulations
29 and computational procedures as so adopted from time to time and
30 as in force and effect at any time, together with such tables as
19990H0295B2346 - 27 -
1 are adopted pursuant to subsection (j) as necessary for the
2 calculation of annuities and other benefits, shall be as
3 effective as if fully set forth in this part. Any actuarial
4 assumption specified in or underlying any such rule, regulation
5 or computational procedure and utilized as a basis for
6 determining any benefit shall be applied in a uniform manner.
7 * * *
8 (l) Member contributions.--The board shall cause all pickup
9 contributions made on behalf of a member to be credited to the
10 account of the member and credit to his account any other
11 payment made by such member including, but not limited to,
12 amounts collected by the Public School Employees' Retirement
13 System for the reinstatement of previous State service or
14 creditable nonstate service, and amounts paid to return benefits
15 paid after the date of return to State service or entering
16 school service representing lump sum payments made pursuant to
17 section 5705(a)(4)(iii) (relating to member's options) and
18 member's annuity payments, but not including other benefits
19 returned pursuant to section 5706(a.2) (relating to termination
20 of annuities) and shall pay all such amounts into the fund.
21 * * *
22 § 5904. Duties of the board to report to the Public School
23 Employees' Retirement Board.
24 * * *
25 (b) Multiple service membership of school employees.--Upon
26 receipt of notification from the Public School Employees'
27 Retirement Board that a former State employee has become an
28 active member in the Public School Employees' Retirement System
29 and has elected to receive credit for multiple service, the
30 board shall certify to the Public School Employees' Retirement
19990H0295B2346 - 28 -
1 Board and concurrently to the member:
2 (1) the total credited service in the system and the
3 number of years and fractional part of a year of service
4 credited in each class of service;
5 (2) the annual compensation received each calendar year
6 by the member for credited State service; [and]
7 (3) the social security integration credited service to
8 which the member is entitled and the average noncovered
9 salary upon which the single life annuity attributable to
10 such service will be computed[.]; and
11 (4) if the member has elected payroll deductions
12 pursuant to section 5504 (relating to member contributions
13 for the purchase of credit for previous State service or to
14 become a full coverage member) or 5505 (relating to
15 contributions for the purchase of credit for creditable
16 nonstate service), the amount of the deductions and the
17 period over which they are to be made.
18 * * *
19 Section 5. Section 5905(b) of Title 71 is amended and the
20 section is amended by adding a subsection to read:
21 § 5905. Duties of the board regarding applications and
22 elections of members.
23 * * *
24 (b) School employees electing multiple service status.--Upon
25 receipt of notification from the Public School Employees'
26 Retirement Board that a former State employee has become an
27 active member in the Public School Employees' Retirement System
28 and has elected to become a member with multiple service status
29 the board shall:
30 (1) in case of a member receiving an annuity from the
19990H0295B2346 - 29 -
1 system, discontinue payments, transfer the present value[, at
2 that time,] of the member's annuity at the time of entering
3 school service, plus the amount withdrawn in a lump sum
4 payment, on or after the date of entering school service,
5 pursuant to section 5705 (relating to member's option), with
6 statutory interest to date of transfer, minus the amount to
7 be returned to the board on account of return to service,
8 that the board has determined is to be credited in the
9 member's savings account, from the annuity reserve account to
10 the [members'] member's savings account and resume crediting
11 of statutory interest on the amount restored to his credit
12 [and], transfer the balance of the present value of the total
13 annuity, minus the amount to be returned to the board on
14 account of return to service that the board has determined is
15 to be credited in the State accumulation account, from the
16 annuity reserve account to the State accumulation account,
17 and certify to the member the amount of lump sum and annuity
18 payments with statutory interest to be returned to the board
19 by him, and of those amounts, which amount shall be credited
20 to the member's savings account and credited with statutory
21 interest as such payments are returned and which amount shall
22 be credited to the State accumulation account; or
23 (2) in case of a member who is not receiving an annuity
24 and has not withdrawn his total accumulated deductions,
25 continue or resume the crediting of statutory interest on his
26 total accumulated deductions during the period his total
27 accumulated deductions remain in the fund; or
28 (3) in case of a former State employee who is not
29 receiving an annuity from the system and his total
30 accumulated deductions were withdrawn, certify to the former
19990H0295B2346 - 30 -
1 State employee the accumulated deductions as they would have
2 been at the time of his separation had he been a full
3 coverage member together with statutory interest for all
4 periods of subsequent State and school service to the date of
5 repayment. Such amount shall be restored by him and shall be
6 credited with statutory interest as such payments are
7 restored.
8 * * *
9 (j) State employees' electing multiple service status.--Upon
10 receipt of notification from the Public School Employees'
11 Retirement Board that a member who has elected multiple service
12 membership has elected to restore school service or purchase
13 creditable nonschool service in the Public School Employees'
14 Retirement System or is obligated to return benefits to the
15 Public School Employees' Retirement Board on account of electing
16 multiple service membership has elected to pay all or part of
17 the amount due to the Public School Employees' Retirement Board
18 by salary deductions, the board shall collect from the employee
19 the amounts certified by the Public School Employees' Retirement
20 Board as due and owing by the member and certify and transfer to
21 the Public School Employees' Retirement Board the amounts so
22 collected.
23 Section 6. Sections 5906(c), (g) and (h) and 5907(c), <--
24 5907(C) AND 5931(I) of Title 71 are amended to read:
25 § 5906. Duties of heads of departments.
26 * * *
27 (c) Member contributions.--The head of department shall
28 cause the required pickup contributions for current service to
29 be made and shall cause to be deducted any other required member
30 contributions including, but not limited to, contributions owed
19990H0295B2346 - 31 -
1 by an active member with multiple service membership for school
2 service and creditable nonschool service in the Public School
3 Employees' Retirement System, and amounts certified by the
4 Public School Employees' Retirement Board as due and owing on
5 account of termination of annuities from each payroll. The head
6 of department shall notify the board at times and in a manner
7 prescribed by the board of the compensation of any noneligible
8 member to whom the limitation under IRC § 401(a)(17) either
9 applies or is expected to apply and shall cause such member's
10 contributions deducted from payroll to cease at the limitation
11 under IRC § 401(a)(17) on the payroll date if and when such
12 limit shall be reached. The head of department shall certify to
13 the State Treasurer the amounts picked up and deducted and shall
14 send the total amount picked up and deducted together with a
15 duplicate of such voucher to the secretary of the board every
16 pay period. The head of department shall pay pickup
17 contributions from the same source of funds which is used to pay
18 other compensation to the employee. On or before January 31,
19 1997, and on or before January 31 of each year thereafter, the
20 head of department shall, at the time when the income and
21 withholding information required by law is furnished to each
22 member, also furnish the amount of pickup contributions made on
23 his behalf and notify the board, if it has not been previously
24 notified, of any noneligible member whose compensation in the
25 preceding year exceeded the annual compensation limit under IRC
26 § 401(a)(17). If the board shall determine that the member's
27 savings account shall have been credited with pickup
28 contributions for a noneligible member in the preceding year
29 which are attributable to compensation in excess of the
30 limitation under IRC § 401(a)(17), or with total member
19990H0295B2346 - 32 -
1 contributions for such member which would cause such member's
2 contributions or benefits to exceed any applicable limitation
3 under IRC § 401(a)(17), the board shall as soon as practicable
4 refund to the member from his individual member account such
5 amount, together with the statutory interest thereon, as will
6 cause the member's total member contributions in the preceding
7 year not to exceed the applicable limit. The payment of any such
8 refund to the member shall be charged to the member's savings
9 account.
10 * * *
11 (g) Former school employee contributors.--The head of
12 department shall, upon the employment of a former contributor to
13 the Public School Employees' Retirement System who is not an
14 annuitant of the Public School Employees' Retirement System,
15 advise such employee of his right to elect within [30] 365 days
16 of entry into the system or such other period as the board may <--
17 by regulation establish to become a multiple service member, and
18 in the case of any such employee who so elects and has withdrawn
19 his accumulated deductions, require him to reinstate his credit
20 in the Public School Employees' Retirement System. The head of
21 the department shall advise the board of such election.
22 (h) Former school employee annuitants.--The head of
23 department shall, upon the employment of an annuitant of the
24 Public School Employees' Retirement System who applies for
25 membership in the system, advise such employee that he may elect
26 multiple service membership within [30] 365 days of entry into
27 the system or such other period as the board may by regulation <--
28 establish and if he so elects his public school employee's
29 annuity will be discontinued effective upon the date of his
30 return to State service and, upon termination of State service
19990H0295B2346 - 33 -
1 and application for an annuity, the annuity will be adjusted in
2 accordance with section 5706 (relating to termination of
3 annuities). The head of department shall advise the board of
4 such election.
5 * * *
6 § 5907. Rights and duties of State employees and members.
7 * * *
8 (c) Multiple service membership.--Any active member who was
9 formerly an active member in the Public School Employees'
10 Retirement System may elect to become a multiple service member.
11 Such election shall occur no later than [30] 365 days after
12 becoming an active member in this system or such other period as <--
13 the board may by regulation establish.
14 * * *
15 § 5931. MANAGEMENT OF FUND AND ACCOUNTS. <--
16 * * *
17 (I) VEHICLES FOR AUTHORIZED INVESTMENTS.--THE BOARD IN ITS
18 PRUDENT DISCRETION MAY MAKE ANY INVESTMENTS WHICH MEET THE
19 STANDARD OF PRUDENCE SET FORTH IN SUBSECTION (A) BY [BECOMING A
20 LIMITED PARTNER IN PARTNERSHIPS THAT WILL HOLD SUCH INVESTMENTS;
21 OR BY ACQUIRING SHARES OR UNITS OF PARTICIPATION OR OTHERWISE
22 PARTICIPATING BENEFICIALLY IN BANK COLLECTIVE TRUSTS OR IN THE
23 SEPARATE ACCOUNTS OF ANY INSURANCE COMPANY AUTHORIZED TO DO
24 BUSINESS IN THIS COMMONWEALTH; OR BY ACQUIRING STOCKS OR SHARES
25 OR UNITS OF PARTICIPATION OR OTHERWISE PARTICIPATING
26 BENEFICIALLY IN THE FUND OF ANY CORPORATION OR TRUST ORGANIZED
27 OR CREATED AND EXISTING UNDER THE LAWS OF THE UNITED STATES OR
28 OF ANY STATE, DISTRICT OR TERRITORY THEREOF, WHICH FUND IS
29 MAINTAINED FOR AND CONSISTS OF ASSETS OF EMPLOYEES' BENEFIT
30 TRUSTS, INCLUDING GOVERNMENTAL PLANS AS DEFINED IN IRC § 414(D)
19990H0295B2346 - 34 -
1 OR WHICH MEET THE REQUIREMENTS FOR QUALIFICATION UNDER IRC §
2 401] ACQUIRING ANY TYPE OF INTEREST IN A BUSINESS ORGANIZATION
3 EXISTING UNDER THE LAWS OF ANY JURISDICTION, PROVIDED THAT, IN
4 ANY SUCH CASE, THE LIABILITY OF THE STATE EMPLOYEES' RETIREMENT
5 FUND SHALL BE LIMITED TO THE AMOUNT OF ITS INVESTMENT.
6 * * *
7 Section 7. (a) Notwithstanding the limitation contained in
8 24 Pa.C.S. § 8507(c), any active member of the Public School
9 Employees' Retirement System who was formerly an active member
10 in the State Employees' Retirement System AND WHOSE SERVICE <--
11 CREDIT IN THE STATE EMPLOYEES' RETIREMENT SYSTEM HAS NOT BEEN
12 CONVERTED TO SERVICE CREDITED IN ANOTHER PUBLIC PENSION PLAN OR
13 RETIREMENT SYSTEM IN THIS COMMONWEALTH may elect to become a
14 multiple service member on or before the fourth December 31, <--
15 coincident with or following the effective date of this act
16 DECEMBER 31, 2002. <--
17 (b) Notwithstanding the limitation contained in 71 Pa.C.S. §
18 5907(c), any active member of the State Employees' Retirement
19 System who was formerly an active member of the Public School
20 Employees' Retirement System AND WHOSE SERVICE CREDIT IN THE <--
21 PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM HAS NOT BEEN
22 CONVERTED TO SERVICE CREDITED IN ANOTHER PUBLIC PENSION PLAN OR
23 RETIREMENT SYSTEM IN THIS COMMONWEALTH may elect to become a
24 multiple service member on or before the fourth December 31, <--
25 coincident with or following the effective date of this act
26 DECEMBER 31, 2002. <--
27 Section 8. Upon becoming effective this act shall be
28 effective retroactive to the date of enactment, except that
29 deceased members of the State Employees' Retirement System or
30 Public School Employees' Retirement System with a date of death
19990H0295B2346 - 35 -
1 on or before 180 days after the enactment of this act, or their
2 personal representatives, may not elect multiple service
3 membership pursuant to this act.
4 Section 9. This act shall take effect in 180 days. AS <--
5 FOLLOWS:
6 (1) THE AMENDMENT OF 24 PA.C.S. § 8521(I) AND 71 PA.C.S.
7 § 5931(I) SHALL TAKE EFFECT IN 60 DAYS.
8 (2) THIS SECTION SHALL TAKE EFFECT IMMEDIATELY.
9 (3) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT IN 180
10 DAYS.
A20L24JS/19990H0295B2346 - 36 -