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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY BOYD, OCTOBER 18, 2010 |
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| REFERRED TO COMMITTEE ON FINANCE, OCTOBER 18, 2010 |
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| AN ACT |
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1 | Amending Titles 24 (Education) and 71 (State Government) of the |
2 | Pennsylvania Consolidated Statutes, in Title 24, further |
3 | providing for definitions, for construction of part, for |
4 | mandatory and optional membership, for credited school |
5 | service, for eligibility points for retention and |
6 | reinstatement of service credits, for creditable nonschool |
7 | service, for classes of service, for eligibility for |
8 | annuities, for eligibility for vesting, for eligibility for |
9 | death benefits, for regular member contributions for current |
10 | service, for pickup contributions, for member contributions |
11 | for creditable school service, for payments by employers, for |
12 | actuarial cost method, for return of accumulated deductions, |
13 | for maximum single life annuity, for disability annuities, |
14 | for member's options, for termination of annuities, for death |
15 | benefits, for administrative duties of board; providing for |
16 | long-term disability group insurance program; further |
17 | providing for duties of board to report to State Employees' |
18 | Retirement Board, for duties of board regarding applications |
19 | and elections of members, for installment payments of |
20 | accumulated deductions, for duties of employers, for rights |
21 | and duties of school employees and members, for members' |
22 | savings account, for State accumulation account and for |
23 | annuity reserve account; and in Title 71, further providing |
24 | for definitions, for mandatory and optional membership, for |
25 | retention and reinstatement of service credits, for classes |
26 | of service, for eligibility for annuities, for eligibility |
27 | for vesting, for eligibility for death benefits, for regular |
28 | member contributions for current service, for pickup |
29 | contributions, for contributions by the Commonwealth and |
30 | other employers, for actuarial cost method, for return of |
31 | total accumulated deductions, for maximum single life |
32 | annuity, for disability annuities, for termination of |
33 | annuities, for death benefits, for administrative duties of |
34 | the board, for duties of the board to report to the Public |
35 | School Employees' Retirement Board, for duties of the board |
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1 | regarding applications and elections of members, for |
2 | installment payments of accumulated deductions, for duties of |
3 | heads of departments, for rights and duties of State |
4 | employees and members, for members' savings account, for |
5 | State accumulation account and for annuity reserve account. |
6 | The General Assembly of the Commonwealth of Pennsylvania |
7 | hereby enacts as follows: |
8 | Section 1. The definitions of "accumulated deductions," |
9 | "basic contribution rate," "beneficiary," "eligible annuitants," |
10 | "employer," "full coverage member," "irrevocable beneficiary," |
11 | "public school," "standard single life annuity," "statutory |
12 | interest," "superannuation or normal retirement age" and |
13 | "vestee" in section 8102 of Title 24 of the Pennsylvania |
14 | Consolidated Statutes are amended and the section is amended by |
15 | adding definitions to read: |
16 | § 8102. Definitions. |
17 | The following words and phrases when used in this part shall |
18 | have, unless the context clearly indicates otherwise, the |
19 | meanings given to them in this section: |
20 | "Accumulated deductions." The total of pickup contributions |
21 | and the contributions paid into the fund by the member on |
22 | account of current school service, previous school service, or |
23 | creditable nonschool service, including after-tax contributions, |
24 | and the statutory interest credited on all such contributions. |
25 | * * * |
26 | "After-tax contributions." The optional contributions paid |
27 | into the fund by the member from the member's salary after all |
28 | applicable taxes have been deducted. |
29 | * * * |
30 | "Basic contribution rate." For Class T-A, T-B and T-C |
31 | service, the rate of 6 1/4%. For Class T-D service, the rate of |
32 | 7 1/2%. For all active members on the effective date of this |
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1 | provision who are currently paying 5 1/4% and elect Class T-D |
2 | service, the rate of 6 1/2%. For Class T-E service, the rate of |
3 | 6%. |
4 | "Beneficiary." The person or persons last designated in |
5 | writing to the board by a member to receive his accumulated |
6 | deductions or a lump sum benefit upon the death of such member |
7 | or for Class T-E members, the balance of the member's savings |
8 | account maintained in accordance with section 8523 (relating to |
9 | members' savings account). |
10 | * * * |
11 | "Eligible annuitants." All current and prospective |
12 | annuitants with 24 1/2 or more eligibility points and all |
13 | current and prospective disability annuitants. Beginning January |
14 | 1, 1995, "eligible annuitants" shall include members with 15 or |
15 | more eligibility points who terminated or who terminate school |
16 | service on or after attaining superannuation retirement age and |
17 | who are annuitants with an effective date of retirement after |
18 | superannuation age. An annuitant with Class T-E credited service |
19 | shall not qualify as an eligible annuitant. |
20 | * * * |
21 | "Employer." Any governmental entity directly responsible for |
22 | the employment and payment of the school employee and charged |
23 | with the responsibility of providing public education within |
24 | this Commonwealth, including but not limited to: State-owned |
25 | colleges and universities, the Pennsylvania State University, |
26 | community colleges, area vocational-technical schools, |
27 | intermediate units, the State Board of Education, Scotland |
28 | School for Veterans' Children, Thaddeus Stevens [State School] |
29 | College of Technology, and the [Pennsylvania State Oral] Western |
30 | School for the Deaf. |
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1 | "Excess interest." The investment earnings attributable to |
2 | Class T-E members in excess of that required for allocation to |
3 | statutory interest to Class T-E members and expenses |
4 | attributable to Class T-E members. |
5 | * * * |
6 | "Full coverage member." Any member, other than a Class T-E |
7 | member, for whom regular member pickup contributions are being |
8 | picked up or who has paid or has agreed to pay to the fund the |
9 | actuarial equivalent of regular member contributions due on |
10 | account of service prior to January 1, 1983. |
11 | * * * |
12 | "Irrevocable beneficiary." The person or persons permanently |
13 | designated by a member in writing to the board pursuant to an |
14 | approved domestic relations order to receive all or a portion of |
15 | the accumulated deductions or lump sum benefit payable upon the |
16 | death of such member or for Class T-E members, the balance of |
17 | the member's savings account maintained in accordance with |
18 | section 8523 (relating to members' savings account). |
19 | * * * |
20 | "Public school." Any or all classes or schools within this |
21 | Commonwealth conducted under the order and superintendence of |
22 | the Department of Education including, but not limited to: all |
23 | educational classes of any employer charged with the |
24 | responsibility of public education within this Commonwealth as |
25 | well as those classes financed wholly or in part by the Federal |
26 | Government, State-owned colleges and universities, [the] The |
27 | Pennsylvania State University, community colleges, area |
28 | vocational-technical schools, intermediate units, the State |
29 | Board of Education, Scotland School for Veterans' Children, |
30 | Thaddeus Stevens [State School] College of Technology, and the |
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1 | [Pennsylvania State Oral] Western School for the Deaf. |
2 | * * * |
3 | "Standard single life annuity." For Class T-A, T-B and T-C |
4 | credited service of a member, an annuity equal to 2% of the |
5 | final average salary, multiplied by the total number of years |
6 | and fractional part of a year of credited service of a member. |
7 | For Class T-D credited service of a member, an annuity equal to |
8 | 2.5% of the final average salary, multiplied by the total number |
9 | of years and fractional part of a year of credited service. For |
10 | Class T-E credited service of a member, an annuity with a |
11 | present value equal to the balance of the member's saving |
12 | account maintained in accordance with section 8523 (relating to |
13 | members' savings account). |
14 | * * * |
15 | "Statutory interest." [Interest] For Class T-A, T-B, T-C and |
16 | T-D credited service, interest at 4% per annum, compounded |
17 | annually. For Class T-E credited service, interest at 6% per |
18 | annum, compounded annually. |
19 | * * * |
20 | "Superannuation or normal retirement age." |
21 | Class of service | Age | 22 | T-A | 62 or any age upon accrual of 35 eligibility points | 23 | T-B | 62 | 24 | T-C and T-D | 62 or age 60 provided the member has at least 30 eligibility points or any age upon accrual of | 25 | T-E | 55 or any age upon accrual of 35 eligibility points |
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1 | * * * |
2 | "Vestee." A Class T-A, T-B, T-C and T-D member with five or |
3 | more eligibility points who has terminated school service, has |
4 | left his accumulated deductions in the fund and is deferring |
5 | filing of an application for receipt of an annuity. A Class T-E |
6 | member who terminates school service, has left accumulated |
7 | deductions in the fund and is deferring the filing of an |
8 | application for receipt of an annuity. |
9 | Section 2. Sections 8103 and 8301 of Title 24 are amended by |
10 | adding subsections to read: |
11 | § 8103. Construction of part. |
12 | * * * |
13 | (c) Pension rights.--Notwithstanding any other provision of |
14 | law, pension rights of school employees shall be determined |
15 | solely under this part or any amendment to this part, and no |
16 | collective bargaining agreement nor any arbitration award |
17 | between the school employer and its employees or their |
18 | collective bargaining representatives shall be construed to |
19 | change any of the provisions in this part, to require the board |
20 | to administer pension or retirement benefits not set forth under |
21 | this part or to require action by any other government body |
22 | pertaining to pension or retirement benefits or rights of school |
23 | employees. |
24 | § 8301. Mandatory and optional membership. |
25 | * * * |
26 | (a.1) Mandatory membership for certain employees.-- |
27 | Notwithstanding any other provision of this part, membership in |
28 | the system shall be mandatory as of the effective date of |
29 | employment for any person who first becomes a school employee on |
30 | or after the effective date of this subsection regardless of the |
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1 | number of hours or days worked. |
2 | * * * |
3 | (b.1) Prohibited membership for certain employees.--Any |
4 | officer or employee of the Department of Education who is first |
5 | employed following the effective date of this subsection shall |
6 | not have the right to elect membership in the system. |
7 | * * * |
8 | (c.1) Optional membership for certain employees.-- |
9 | (1) Notwithstanding any other provision of this part, a |
10 | school employee who first becomes an officer or employee of |
11 | any State-owned educational institution, community college, |
12 | area vocational-technical school, technical institute or The |
13 | Pennsylvania State University, on or after the effective date |
14 | of this subsection, may elect to become a member of the |
15 | system or another retirement program approved by the employer |
16 | regardless of the number of hours or days worked. |
17 | (2) Once a school employee categorized under paragraph |
18 | (1) makes an election to become either a member of the system |
19 | or a member of another retirement program approved by the |
20 | employer, the election shall be irrevocable, regardless of |
21 | any break in service and subsequent reemployment. |
22 | (3) The employer contribution rate on account of school |
23 | employees who have elected membership in another retirement |
24 | program approved by the employer rather than membership in |
25 | Class T-E shall be 6%. |
26 | Section 3. Section 8302(b.1)(3) of Title 24 is amended by |
27 | adding a subparagraph to read: |
28 | § 8302. Credited school service. |
29 | * * * |
30 | (b.1) Optional credit for leave of absence for activated |
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1 | military service.-- |
2 | * * * |
3 | (3) Any member who has exercised option (ii) in |
4 | paragraph (1), but who, upon the expiration of his leave of |
5 | absence for activated military service, returns to his |
6 | employment and desires to receive the benefits of option (i), |
7 | shall have the right to receive such benefits if he shall |
8 | comply with the following requirements: |
9 | * * * |
10 | (iii) Notwithstanding any other provision of this |
11 | part, any Class T-E member who elects under this |
12 | subsection to receive the benefits under subparagraph |
13 | (i), shall not receive any excess interest that may have |
14 | been awarded during the period of leave of absence for |
15 | military service. |
16 | * * * |
17 | Section 4. Section 8303 of Title 24 is amended by adding |
18 | subsections to read: |
19 | § 8303. Eligibility points for retention and reinstatement of |
20 | service credits. |
21 | * * * |
22 | (d) Purchase prohibited.--Notwithstanding any other |
23 | provision of this part, a Class T-E member shall not be |
24 | permitted to purchase previous school service or creditable |
25 | nonschool service except for an approved leave of absence, |
26 | including military service in accordance with section 8304(b)(1) |
27 | and (2) (relating to creditable nonschool service). |
28 | (e) Accumulated deductions.--A Class T-E member who elects |
29 | to receive his accumulated deductions in lieu of any benefit to |
30 | which he may be entitled in accordance with sections 8310 |
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1 | (relating to eligibility of refunds) and 8341 (relating to |
2 | return of accumulated deductions) shall be prohibited from |
3 | reinstating the withdrawal upon a subsequent return to service. |
4 | (f) Previous election.--A current Class T-E member who |
5 | previously elected to become a member of another retirement |
6 | program approved by the employer in accordance with section |
7 | 8301(c.1) (relating to mandatory and optional membership) shall |
8 | not be permitted to purchase the optional membership time |
9 | previously declined. |
10 | Section 5. Section 8304(a) is amended to read: |
11 | § 8304. Creditable nonschool service. |
12 | (a) Eligibility.--An active member or a multiple service |
13 | member who is an active member of the State Employees' |
14 | Retirement System shall be eligible to receive Class T-C service |
15 | credit for creditable nonschool service and Class T-D service |
16 | for intervening military service, provided the member becomes a |
17 | Class T-D member pursuant to section 8305.1 (relating to |
18 | election to become a Class T-D member) or 8305 (relating to |
19 | classes of service), Class T-E service for military service, |
20 | provided that the member is a Class T-E member under section |
21 | 8305, as set forth in subsection (b) provided that he is not |
22 | entitled to receive, eligible to receive now or in the future, |
23 | or is receiving retirement benefits for such service under a |
24 | retirement system administered and wholly or partially paid for |
25 | by any other governmental agency or by any private employer, or |
26 | a retirement program approved by the employer in accordance with |
27 | section 8301(a)(1) (relating to mandatory and optional |
28 | membership), and further provided that such service is certified |
29 | by the previous employer and the manner of payment of the amount |
30 | due is agreed upon by the member, the employer, and the board. |
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1 | * * * |
2 | Section 6. Section 8305 is amended by adding a subsection to |
3 | read: |
4 | § 8305. Classes of service. |
5 | * * * |
6 | (d) Class T-E membership.--Notwithstanding any other |
7 | provision of this part, a person who first becomes a school |
8 | employee and an active member on or after the effective date of |
9 | this subsection shall be classified as a Class T-E member upon |
10 | payment of regular member contributions. |
11 | Section 7. Sections 8307(b) and (c), 8308, 8309, 8321, |
12 | 8322.1(a) and 8323(a) and (c.1) are amended to read: |
13 | § 8307. Eligibility for annuities. |
14 | * * * |
15 | (b) Withdrawal annuity.--A Class T-C or Class T-D vestee |
16 | with five or more eligibility points or an active or inactive |
17 | Class T-C or Class T-D member who terminates school service |
18 | having five or more eligibility points shall, upon filing a |
19 | proper application, be entitled to receive an early annuity. |
20 | (c) Disability annuity.--An active or inactive Class T-C or |
21 | Class T-D member who has credit for at least five years of |
22 | service shall, upon filing of a proper application, be entitled |
23 | to a disability annuity if he becomes mentally or physically |
24 | incapable of continuing to perform the duties for which he is |
25 | employed and qualifies for an annuity in accordance with the |
26 | provisions of section 8505(c)(1) (relating to duties of board |
27 | regarding applications and elections of members). |
28 | § 8308. Eligibility for vesting. |
29 | (a) Eligibility points.--Any Class T-C or Class T-D member |
30 | who terminates school service with five or more eligibility |
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1 | points shall be entitled to vest his retirement benefits until |
2 | attainment of superannuation age. |
3 | (b) Vesting.--Any Class T-E member who terminates school |
4 | service shall be immediately vested and shall be eligible to |
5 | receive a retirement benefit upon attainment of superannuation |
6 | age. |
7 | § 8309. Eligibility for death benefits. |
8 | (a) Entitlement.--In the event of the death of a member who |
9 | is eligible for an annuity in accordance with section 8307(a) or |
10 | (b) (relating to eligibility for annuities) his beneficiary |
11 | shall be entitled to a death benefit as provided in section 8347 |
12 | (relating to death benefits). |
13 | (b) Accumulated deductions.--In the event of the death of a |
14 | Class T-C or Class T-D member not eligible for an annuity his |
15 | beneficiary shall receive the accumulated deductions standing to |
16 | the member's credit in the fund. |
17 | (c) Balance.--In the event of the death of a Class T-E |
18 | member not eligible for an annuity in accordance with section |
19 | 8307(a) (relating to eligibility for annuities), his beneficiary |
20 | shall receive the balance of the member's savings account |
21 | maintained in accordance with section 8523 (relating to members' |
22 | savings account) regardless of whether the member has attained |
23 | superannuation retirement age. |
24 | § 8321. Regular member contributions for current service. |
25 | (a) Current service.--Regular member contributions shall be |
26 | made to the fund on behalf of each active member for current |
27 | service except for any period of current service in which the |
28 | making of such contributions has ceased solely by reason of any |
29 | provision of this part relating to the limitations under IRC § |
30 | 401(a)(17) or 415(b). |
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1 | (b) After-tax contributions.-- |
2 | (1) After-tax contributions may be made by Class T-E |
3 | active members for current service up to but no more than the |
4 | applicable limits under the IRC. |
5 | (2) After-tax contributions shall be made by payroll |
6 | deductions and transmitted to the system by the school |
7 | employer. |
8 | (3) After-tax contributions shall be treated as taxed at |
9 | the time they are made to the system, shall be tracked |
10 | separately and shall not be treated as taxable when paid out |
11 | to the member. |
12 | (4) After-tax contributions may be changed or stopped by |
13 | a Class T-E member upon notice to the school employer. |
14 | § 8322.1. Pickup contributions. |
15 | (a) Treatment for purposes of IRC § 414(h).--All |
16 | contributions required to be made under sections 8321(a) |
17 | (relating to regular member contributions for current service) |
18 | and 8322 (relating to joint coverage member contributions), with |
19 | respect to current school service rendered by an active member |
20 | on or after January 1, 1983, shall be picked up by the employer |
21 | and shall be treated as the employer's contribution for purposes |
22 | of IRC § 414(h). |
23 | * * * |
24 | § 8323. Member contributions for creditable school service. |
25 | (a) Previous school service, sabbatical leave and full |
26 | coverage.--The contributions to be paid by an active member or |
27 | an eligible State employee for credit for reinstatement of all |
28 | previously credited school service, school service not |
29 | previously credited, sabbatical leave as if he had been in full- |
30 | time daily attendance, or full-coverage membership shall be |
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1 | sufficient to provide an amount equal to the accumulated |
2 | deductions which would have been standing to the credit of the |
3 | member for such service had regular member contributions been |
4 | made with full coverage at the rate of contribution necessary to |
5 | be credited as Class T-C service [or], Class T-D service if the |
6 | member is a Class T-D member or Class T-E service if the member |
7 | is a Class T-E member and had such contributions been credited |
8 | with statutory interest during the period the contributions |
9 | would have been made and during all periods of subsequent school |
10 | and State service up to the date of purchase. |
11 | * * * |
12 | (c.1) Activated military service leave.--The contributions |
13 | to be paid by an active member for credit for all activated |
14 | military service leave as if he had been in regular attendance |
15 | in the duties for which he is employed shall be sufficient to |
16 | provide an amount equal to the accumulated deductions which |
17 | would have been standing to the credit of the member for such |
18 | service had regular member contributions been made with full |
19 | coverage at the rate of contribution necessary to be credited as |
20 | Class T-C service [or], Class T-D service if the member is a |
21 | Class T-D member or Class T-E service if the member is a Class |
22 | T-E member and had such contributions been credited with |
23 | statutory interest during the period the contributions would |
24 | have been made and during all periods of subsequent State and |
25 | school service up to the date of purchase. In the case of |
26 | activated military service leave beginning after the date of |
27 | enactment of this subsection, contributions due from the member |
28 | shall be made as if he is in regular attendance in the duties |
29 | for which he is employed. |
30 | * * * |
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1 | Section 8. Section 8327(a) and (c) introductory paragraph of |
2 | Title 24 are amended and the section is amended by adding a |
3 | subsection to read: |
4 | § 8327. Payments by employers. |
5 | (a) General rule.--Each employer, including the Commonwealth |
6 | as employer of employees of the Department of Education, State- |
7 | owned colleges and universities, Thaddeus Stevens [State School] |
8 | College of Technology, [Pennsylvania State Oral] Western School |
9 | for the Deaf, Scotland School for Veterans' Children, and [the] |
10 | The Pennsylvania State University, shall make payments to the |
11 | fund each quarter in an amount equal to one-half the sum of the |
12 | percentages, as determined under section 8328 (relating to |
13 | actuarial cost method), applied to the total compensation during |
14 | the pay periods in the preceding quarter of all its employees |
15 | who were members of the system during such period, including |
16 | members on activated military service leave. In the event a |
17 | member on activated military service leave does not return to |
18 | service for the necessary time or receives an undesirable, bad |
19 | conduct or dishonorable discharge or does not elect to receive |
20 | credit for activated military service under section 8302(b.1)(3) |
21 | (relating to credited school service), the contributions made by |
22 | the employer on behalf of such member shall be returned with |
23 | valuation interest upon application by the employer. |
24 | * * * |
25 | (c) Payments by employers after June 30, 1995.--After June |
26 | 30, 1995, each employer, including the Commonwealth as employer |
27 | of employees of the Department of Education, State-owned |
28 | colleges and universities, Thaddeus Stevens [State School] |
29 | College of Technology, [Pennsylvania State Oral] Western School |
30 | for the Deaf, Scotland School for Veterans' Children and The |
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1 | Pennsylvania State University, shall make payments to the fund |
2 | each quarter in an amount computed in the following manner: |
3 | * * * |
4 | (d) Payments by employers for Class T-E members.--Each |
5 | employer, including the Commonwealth as employer of employees of |
6 | State-owned colleges and universities, Thaddeus Stevens College |
7 | of Technology, Western School for the Deaf, Scotland School for |
8 | Veterans' Children and The Pennsylvania State University, shall |
9 | make payments to the fund each quarter in an amount computed in |
10 | the following manner: |
11 | (1) For any employer, whether or not a school entity, an |
12 | amount equal to 6% of the compensation of each active Class |
13 | T-E member, including members on activated military service |
14 | leave. |
15 | (2) If a member on activated military service leave does |
16 | not return to service for the necessary time, receives an |
17 | undesirable, bad conduct or dishonorable discharge or does |
18 | not elect to receive credit for activated military service |
19 | under section 8302(b.1)(3), the contribution made by the |
20 | employer on behalf of the member shall be returned with |
21 | valuation interest upon application by the employer. |
22 | (3) In computing the amount of payment due each quarter |
23 | for any employer, whether or not a school entity, any amount |
24 | of compensation of a noneligible member on the basis of which |
25 | member contributions have not been made by reason of the |
26 | limitation under IRC § 401(a)(17) shall be excluded from the |
27 | total compensation referred to under this subsection. Any |
28 | amount of contribution to the fund paid by the employer on |
29 | behalf of a noneligible member on the basis of compensation |
30 | which was subject to exclusion from total compensation in |
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1 | accordance with this paragraph shall, upon the board's |
2 | determination or upon application by the employer, be |
3 | returned to the employer with valuation interest. |
4 | Section 9. Sections 8328(a) and (b) and 8341 of Title 24 are |
5 | amended to read: |
6 | § 8328. Actuarial cost method. |
7 | (a) Employer contribution rate on behalf of active |
8 | members.--The amount of the total employer contributions on |
9 | behalf of all active Class T-C and Class T-D members shall be |
10 | computed by the actuary as a percentage of the total |
11 | compensation of all active members, including active Class T-E |
12 | members, during the period for which the amount is determined |
13 | and shall be so certified by the board. The total contribution |
14 | rate on behalf of all active Class T-C and Class T-D members |
15 | shall consist of the normal contribution rate as defined in |
16 | subsection (b), the accrued liability contribution rate as |
17 | defined in subsection (c) and the supplemental annuity |
18 | contribution rate as defined in subsection (d). Beginning July |
19 | 1, 2004, the total contribution rate shall be modified by the |
20 | experience adjustment factors as calculated in subsection (e) |
21 | but in no case shall it be less than 4% plus the premium |
22 | assistance contribution rate. |
23 | (b) Normal contribution rate.--The normal contribution rate |
24 | shall be determined after each actuarial valuation. Until all |
25 | accrued liability contributions have been completed, the normal |
26 | contribution rate shall be determined, on the basis of an annual |
27 | interest rate and such mortality and other tables as shall be |
28 | adopted by the board in accordance with generally accepted |
29 | actuarial principles, as a level percentage of the compensation |
30 | of the average new active Class T-D member, which percentage, if |
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1 | contributed on the basis of his prospective compensation through |
2 | the entire period of active school service, would be sufficient |
3 | to fund the liability for any prospective benefit payable to |
4 | him, in excess of that portion funded by his prospective member |
5 | contributions, except for the supplemental benefits provided in |
6 | sections 8348 (relating to supplemental annuities), 8348.1 |
7 | (relating to additional supplemental annuities), 8348.2 |
8 | (relating to further additional supplemental annuities), 8348.3 |
9 | (relating to supplemental annuities commencing 1994), 8348.4 |
10 | (relating to special supplemental postretirement adjustment), |
11 | 8348.5 (relating to supplemental annuities commencing 1998), |
12 | 8348.6 (relating to supplemental annuities commencing 2002) and |
13 | 8348.7 (relating to supplemental annuities commencing 2003). |
14 | * * * |
15 | § 8341. Return of accumulated deductions. |
16 | (a) Election.--Any member upon termination of service may, |
17 | in lieu of all benefits payable under this chapter to which he |
18 | may be entitled, elect to receive his accumulated deductions. |
19 | (b) Class T-E.--Any Class T-E member who elects under this |
20 | section to receive his accumulated deductions in lieu of all |
21 | benefits to which he may be entitled shall forfeit the |
22 | contributions made on behalf of the school employer as well as |
23 | any excess interest. |
24 | Section 10. Sections 8342(a) introductory paragraph and |
25 | 8344(a) are amended and the sections are amended by adding |
26 | subsections to read: |
27 | § 8342. Maximum single life annuity. |
28 | (a) General rule.--Upon termination of service, any full |
29 | coverage Class T-C or Class T-D member who is eligible to |
30 | receive an annuity pursuant to the provisions of section 8307(a) |
|
1 | or (b) (relating to eligibility for annuities) and has made an |
2 | application in accordance with the provisions of section 8507(f) |
3 | (relating to rights and duties of school employees and members) |
4 | shall be entitled to receive a maximum single life annuity |
5 | attributable to his credited service and equal to the sum of the |
6 | following single life annuities beginning at the effective date |
7 | of retirement and, in case the member on the effective date of |
8 | retirement is under superannuation age, multiplied by a |
9 | reduction factor calculated to provide benefits actuarially |
10 | equivalent to an annuity starting at superannuation age: |
11 | Provided however, That on or after July 1, 1976, in the case of |
12 | any Class T-C or Class T-D member who has attained age 55 and |
13 | has 25 or more eligibility points such sum of single life |
14 | annuities shall be reduced by a percentage determined by |
15 | multiplying the number of months, including a fraction of a |
16 | month as a full month, by which the effective date of retirement |
17 | precedes superannuation age by 1/4%: |
18 | * * * |
19 | (a.1) Maximum single life annuity for Class T-E members.-- |
20 | Upon termination of service, any Class T-E member who is |
21 | eligible to receive an annuity under section 8307(a) and has |
22 | made an application in accordance with section 8507(f) shall be |
23 | entitled to receive a maximum single life annuity with a present |
24 | value equal to the balance of the member's savings account |
25 | maintained in accordance with section 8523 (relating to members' |
26 | savings account) standing to his credit as of his effective date |
27 | of retirement. |
28 | * * * |
29 | § 8344. Disability annuities. |
30 | (a) Amount of annuity.--A Class T-C or Class T-D member who |
|
1 | has made application for a disability annuity as provided in |
2 | section 8507(k) (relating to rights and duties of school |
3 | employees and members) and has been found to be eligible in |
4 | accordance with the provisions of sections 8307(c) (relating to |
5 | eligibility for annuities) and 8505(c)(1) (relating to duties of |
6 | board regarding applications and elections of members) shall |
7 | receive a disability annuity payable from the effective date of |
8 | disability and continued until a subsequent determination by the |
9 | board that the annuitant is no longer entitled to a disability |
10 | annuity. The disability annuity shall be equal to a standard |
11 | single life annuity if the total number of years of credited |
12 | service is greater than 16.667, otherwise the standard single |
13 | life annuity shall be multiplied by the lesser of the following |
14 | ratios: |
15 | Y*/Y or 16.667/Y |
16 | where Y = number of years of credited service and Y* = total |
17 | years of credited service if the member were to continue as a |
18 | school employee until attaining superannuation age, or if the |
19 | member has attained superannuation age then the number of years |
20 | of credited service. In no event shall the disability annuity |
21 | plus any cost-of-living increases be less than $100 for each |
22 | full year of credited service. The member shall be entitled to |
23 | the election of a joint and survivor annuity on that portion of |
24 | the disability annuity to which he is entitled under section |
25 | 8342 (relating to maximum single life annuity). |
26 | * * * |
27 | (f) Class T-E member.--Notwithstanding any other provision, |
28 | a Class T-E member shall not be eligible to receive a disability |
29 | annuity provided under this part, but shall be eligible to |
30 | participate in any long-term disability group insurance program |
|
1 | established by the board in accordance with section 8502.3 |
2 | (relating to long-term disability group insurance program). In |
3 | all cases, a Class T-E member shall be eligible to receive an |
4 | annuity upon attainment of superannuation age in accordance with |
5 | section 8307(a) or may elect to receive a return of accumulated |
6 | deductions in accordance with section 8341 (relating to return |
7 | of accumulated deductions). |
8 | Section 11. Sections 8345(a) introductory paragraph and |
9 | 8346(c) and (d)(1) introductory paragraph of Title 24 are |
10 | amended to read: |
11 | § 8345. Member's options. |
12 | (a) General rule.--Any vestee [with five or more eligibility |
13 | points] or any other eligible member upon termination of school |
14 | service who has not withdrawn his accumulated deductions as |
15 | provided in section 8341 (relating to return of accumulated |
16 | deductions) may apply for and elect to receive either a maximum |
17 | single life annuity, as calculated in accordance with the |
18 | provisions of section 8342 (relating to maximum single life |
19 | annuity), or a reduced annuity certified by the actuary to be |
20 | actuarially equivalent to the maximum single life annuity and in |
21 | accordance with one of the following options, except that no |
22 | member shall elect an annuity payable to one or more survivor |
23 | annuitants other than his spouse or alternate payee of such a |
24 | magnitude that the present value of the annuity payable to him |
25 | for life plus any lump sum payment he may have elected to |
26 | receive is less than 50% of the present value of his maximum |
27 | single life annuity. |
28 | * * * |
29 | § 8346. Termination of annuities. |
30 | * * * |
|
1 | (c) Subsequent discontinuance of service.--Upon subsequent |
2 | discontinuance of service, such member other than a former |
3 | annuitant who had the effect of his frozen present value |
4 | eliminated in accordance with subsection (d) or a former |
5 | disability annuitant shall be entitled to an annuity which is |
6 | actuarially equivalent to the sum of the present value as |
7 | determined under subsection (a) [and]: |
8 | (1) For Class T-C and Class T-D members the present |
9 | value of a maximum single life annuity based on years of |
10 | service credited subsequent to reentry in the system and his |
11 | final average salary computed by reference to his |
12 | compensation during his entire period of school and State |
13 | service. |
14 | (2) For Class T-E members the present value of a maximum |
15 | single life annuity for all subsequent credited service. |
16 | (d) Elimination of the effect of frozen present value.-- |
17 | (1) An annuitant who returns to school service and earns |
18 | three eligibility points as a Class T-C or Class T-D member |
19 | by performing credited school service following the most |
20 | recent period of receipt of an annuity under this part, or an |
21 | annuitant who enters State service and: |
22 | * * * |
23 | Section 12. Sections 8347(a) and (b) and 8502(k) and (m) of |
24 | Title 24 are amended and the sections are amended by adding |
25 | subsections to read: |
26 | § 8347. Death benefits. |
27 | (a) Members eligible for annuities.--Any Class T-C or Class |
28 | T-D member, other than an annuitant, who dies and was eligible |
29 | for an annuity in accordance with section 8307(a) or (b) |
30 | (relating to eligibility for annuities) shall be considered as |
|
1 | having applied for an annuity to become effective the day before |
2 | his death; and, in the event he has not elected an option, it |
3 | shall be assumed that he elected Option 1 and assigned as |
4 | beneficiary that person last designated in writing to the board. |
5 | (b) Members ineligible for annuities.--In the event of the |
6 | death of any Class T-C or Class T-D member, other than an |
7 | annuitant, who is not entitled to a death benefit as provided in |
8 | subsection (a), his designated beneficiary shall be paid the |
9 | full amount of his accumulated deductions. |
10 | * * * |
11 | (e) Class T-E members.--In the event of the death of a Class |
12 | T-E member, other than a Class T-E annuitant, his beneficiary |
13 | shall receive the balance of the member's savings account |
14 | maintained in accordance with section 8523 (relating to members' |
15 | savings account) regardless of whether the member has attained |
16 | superannuation retirement age. |
17 | § 8502. Administrative duties of board. |
18 | * * * |
19 | (k) Certification of employer contributions.--The board |
20 | shall, each year in addition to the itemized budget required |
21 | under section 8330 (relating to appropriations by the |
22 | Commonwealth), certify to the employers and the Commonwealth the |
23 | employer contribution rate expressed as a percentage of members' |
24 | payroll necessary for the funding of prospective annuities for |
25 | active members and the annuities of annuitants, and certify the |
26 | rates and amounts of the normal contributions as determined |
27 | pursuant to section 8328(b) (relating to actuarial cost method), |
28 | accrued liability contributions as determined pursuant to |
29 | section 8328(c), supplemental annuities contribution rate as |
30 | determined pursuant to section 8328(d) and the experience |
|
1 | adjustment factor as determined pursuant to section 8328(e) and |
2 | premium assistance contributions as determined pursuant to |
3 | section 8328(f), which shall be paid to the fund and credited to |
4 | the appropriate accounts. These certifications shall be regarded |
5 | as final and not subject to modification by the [Budget] |
6 | Secretary of the Budget. |
7 | * * * |
8 | (m) Member contributions and interest.--[The board shall |
9 | cause each member's contributions, including payroll deductions, |
10 | pickup contributions and all other payments, including, but not |
11 | limited to, amounts collected by the State Employees' Retirement |
12 | System for the reinstatement of previous school service or |
13 | creditable nonschool service and amounts paid to return benefits |
14 | paid after the date of return to school service or entering |
15 | State service representing lump sum payments made pursuant to |
16 | section 8345(a)(4)(iii) (relating to member's options) and |
17 | member's annuity payments, but not including other benefits |
18 | returned pursuant to section 8346(a.1) (relating to termination |
19 | of annuities) to be credited to the account of such member and |
20 | shall pay all such amounts into the fund. Such contributions |
21 | shall be credited with statutory interest until date of |
22 | termination of service, except in the case of a vestee, who |
23 | shall have such interest credited until the effective date of |
24 | retirement or until the return of his accumulated deductions, if |
25 | he so elects; and in the case of a multiple service member who |
26 | shall have such interest credited until termination of service |
27 | in both the school and the State systems.] |
28 | (1) The board shall cause all of the following of each |
29 | member to be credited to the account of each member and shall |
30 | pay all of the amounts into the fund: |
|
1 | (i) Contributions, including payroll deductions, |
2 | pickup contributions and all other payments, including, |
3 | but not limited to, amounts collected by the State |
4 | Employees' Retirement System for the reinstatement of |
5 | previous school service or creditable nonschool service |
6 | and amounts paid to return benefits paid after the date |
7 | of return to school service or entering State service |
8 | representing lump sum payments made under section 8345(a) |
9 | (4)(iii) (relating to member's options). |
10 | (ii) Member's annuity payments, not including other |
11 | benefits returned under section 8346(a.1) (relating to |
12 | termination of annuities). |
13 | (iii) Amounts paid by school employers on behalf of |
14 | Class T-E members under section 8327(d). |
15 | (2) (i) Except as provided under subparagraph (ii), |
16 | contributions under paragraph (1), including amounts paid |
17 | by school employers on behalf of Class T-E members under |
18 | section 8327(d), shall be credited with statutory |
19 | interest until the date of termination of service. |
20 | (ii) In the case of a vestee, interest shall be |
21 | credited until the effective date of retirement or until |
22 | the return of his accumulated deductions, if the vestee |
23 | so elects. In the case of a multiple service member, |
24 | interest shall be credited until termination of service |
25 | in both the school and the State systems. |
26 | * * * |
27 | (q) Excess interest.-- |
28 | (1) The board may, after deducting money to pay for |
29 | expenses attributable to Class T-E members, annually allow |
30 | excess interest to be credited to the members' savings |
|
1 | account for active Class T-E members as provided under |
2 | section 8523(d) (relating to members' savings account), to |
3 | the State accumulation account as provided under section |
4 | 8524(b) (relating to State accumulation account) and to the |
5 | annuity reserve account for Class T-E annuitants as provided |
6 | under section 8525(c) (relating to annuity reserve account). |
7 | (2) The crediting of excess interest shall be made, with |
8 | the advice of the actuary, on a fully funded basis employing |
9 | actuarial assumptions which reflect the nature of the |
10 | liability. |
11 | (3) Notwithstanding paragraphs (1) and (2), in no event |
12 | shall excess interest be allocated to the members' savings |
13 | account for active Class T-E members as provided under |
14 | section 8523(d) or to the annuity reserve account for Class |
15 | T-E annuitants as provided under section 8525(c) if the |
16 | system's funded status as a whole for all classes of |
17 | membership is less than 100% funded as determined by the |
18 | actuary in its most recent filing under subsection (j). |
19 | (4) In the event that the system's funding status is |
20 | less than 100% funded as determined by the actuary in its |
21 | most recent filing under subsection (j), all excess interest |
22 | awarded by the board shall be allocated to the State |
23 | accumulation account. |
24 | Section 13. Title 24 is amended by adding a section to read: |
25 | § 8502.3. Long-term disability group insurance program. |
26 | (a) Authority.--The board may sponsor a participant-funded |
27 | long-term disability group insurance program to be funded by and |
28 | for Class T-E members. The board may administer the program |
29 | itself or through any legal entity authorized by law to do so. |
30 | The program may be administered in whole or in part on a fully |
|
1 | insured or self-funded basis at the board's sole discretion. The |
2 | board shall have the authority to establish accounts, adopt any |
3 | policy statement or promulgate regulations as may be required |
4 | for the proper administration of the long-term disability group |
5 | insurance program. |
6 | (b) Hold harmless.--Neither the Commonwealth nor the board, |
7 | including their respective officers, directors and employees, |
8 | shall be liable for any claims, demands, actions or liability of |
9 | any nature, including, but not limited to, attorney fees and |
10 | court costs, based upon or arising out of the operation of the |
11 | program, whether incurred directly or indirectly. The eligible |
12 | participants who enroll and participate in the program shall be |
13 | deemed to agree, on behalf of themselves and their heirs, |
14 | successors and assigns, to hold harmless the Commonwealth and |
15 | the board, including their respective officers, directors and |
16 | employees, from any claims, demands, actions or liability of any |
17 | nature, whether directly or indirectly, including attorney fees |
18 | and court costs, based upon or arising out of the operation of |
19 | the program. |
20 | (c) No recourse.--The assets of the Commonwealth or those |
21 | that comprise the Public School Employees' Retirement Fund as |
22 | set forth under section 8522 (relating to Public School |
23 | Employees' Retirement Fund) shall not be liable for or used to |
24 | pay any claims, demands, actions or liability of any nature, |
25 | whether directly or indirectly, including, but not limited to, |
26 | attorney fees and court costs, based upon or arising out of the |
27 | operation of the program. |
28 | (d) Reservation of immunities.--Nothing contained in this |
29 | part shall be construed as a waiver of the Commonwealth's or |
30 | board's immunities, defenses or rights or actions arising out of |
|
1 | their sovereign status or from the Eleventh Amendment to the |
2 | Constitution of the United States. |
3 | (e) Nature of rights.--Any termination or other modification |
4 | of the program, including, but not limited to, a change in |
5 | benefit options or structure or insurance providers, shall not |
6 | give rise to any contractual rights or claims by any eligible |
7 | persons or any other person claiming an interest, either |
8 | directly or indirectly, in the program. No provision of this |
9 | part nor any rule or regulation adopted under this part shall |
10 | create in any person a contractual right in that provision. |
11 | (f) Additional requirements.--The assets of the fund shall |
12 | not be liable or utilized for payment of any expenses or claims |
13 | incurred by the long-term disability group insurance program. |
14 | The program shall not be subject to the provisions of section |
15 | 8531 (relating to State guarantee). |
16 | Section 14. Sections 8504(a) and (b) and 8505(c) of Title 24 |
17 | are amended to read: |
18 | § 8504. Duties of board to report to State Employees' |
19 | Retirement Board. |
20 | (a) Multiple service membership of school employees.--Upon |
21 | receipt of an application for membership in the system of a |
22 | school employee, other than a Class T-E member, who is a former |
23 | State employee and who has elected multiple service membership, |
24 | the board shall advise the State Employees' Retirement Board |
25 | accordingly. |
26 | (b) Multiple service membership of State employees.--[Upon] |
27 | (1) If a former school employee was previously credited |
28 | with Class T-C or Class T-D service, upon receipt of |
29 | notification from the State Employees' Retirement Board that |
30 | [a] the former school employee has become an active member in |
|
1 | the State Employees' Retirement System and has elected to |
2 | receive credit for multiple service, the board shall certify |
3 | to the State Employees' Retirement Board and concurrently to |
4 | the member: |
5 | [(1)] (i) The total credited service in the system and |
6 | the number of years and fractional part of a year of |
7 | service credited in each class of service. |
8 | [(2)] (ii) The annual compensation received each school |
9 | year by the member for credited school service. |
10 | [(3)] (iii) The amount of the deductions and the period |
11 | over which they are to be made if the member has elected |
12 | payroll deductions pursuant to section 8323 (relating to |
13 | member contributions for creditable school service) or |
14 | 8324 (relating to contributions for purchase of credit |
15 | for creditable nonschool service). |
16 | (2) In the event that the former school employee was |
17 | previously credited with Class T-E service, the board shall |
18 | certify the class of service to the State Employees' |
19 | Retirement Board and to the member. |
20 | * * * |
21 | § 8505. Duties of board regarding applications and elections of |
22 | members. |
23 | * * * |
24 | (c) Disability annuities.--In every case where the board has |
25 | received an application duly executed by the member or by a |
26 | person legally authorized to act in his behalf for a disability |
27 | annuity provided for under section 8344 (relating to disability |
28 | annuities) based upon the member's physical or mental incapacity |
29 | for the performance of the job for which he is employed, the |
30 | board shall: |
|
1 | (1) Through the medical examiner, have the application |
2 | and any supporting medical records and other documentation |
3 | submitted with the application reviewed and, on the basis of |
4 | said review and the subsequent recommendation by the medical |
5 | examiner regarding the applicant's medical qualification for |
6 | a disability annuity along with such other recommendations |
7 | which he may make with respect to the permanency of |
8 | disability or the need for subsequent reviews, make a finding |
9 | of disability or nondisability and, in the case of |
10 | disability, establish an effective date of disability and the |
11 | terms and conditions regarding subsequent reviews. |
12 | (2) Upon the recommendation of the medical examiner on |
13 | the basis of a review of subsequent medical reports submitted |
14 | with an application for continuance of disability, make a |
15 | finding of disability or nondisability and, in the case of a |
16 | finding of nondisability, establish the date of termination |
17 | of disability and at that time discontinue any annuity |
18 | payments in excess of any annuity to which he may be |
19 | otherwise entitled under section 8342 (relating to maximum |
20 | single life annuity). |
21 | (3) Upon receipt of a written statement from a |
22 | disability annuitant of his earned income of the previous |
23 | year, adjust the payments of the disability annuity for the |
24 | following year in accordance with the provisions for a |
25 | reduction of disability payments of section 8344 [(relating |
26 | to disability annuities)]. |
27 | * * * |
28 | Section 15. Section 8505.1 of Title 24 is amended by adding |
29 | a subsection to read: |
30 | § 8505.1. Installment payments of accumulated deductions. |
|
1 | * * * |
2 | (e) Excess interest.--Any lump sum or installment payable to |
3 | a Class T-E member shall not include any excess interest that |
4 | may have been credited to the members' savings account for |
5 | active Class T-E members as provided for under section 8523(d) |
6 | (relating to members' savings account) after the member's |
7 | effective date of termination or the member's effective date of |
8 | retirement, whichever is later. |
9 | Section 16. Section 8506(g) and (h) of Title 24 are amended |
10 | to read: |
11 | § 8506. Duties of employers. |
12 | * * * |
13 | (g) Former State employee contributors.-- |
14 | (1) The employer shall, upon the employment of a former |
15 | member of the State Employees' Retirement System who is not |
16 | an annuitant of the State Employees' Retirement System, |
17 | advise such employee of his right to elect multiple service |
18 | membership within 365 days of entry into the system and, in |
19 | the case any such employee who so elects has withdrawn his |
20 | accumulated deductions, require him to restore his |
21 | accumulated deductions as they would have been at the time of |
22 | his separation had he been a full coverage member, together |
23 | with statutory interest for all periods of subsequent State |
24 | and school service to date of repayment. The employer shall |
25 | advise the board of such election. |
26 | (2) Notwithstanding any other provision of this part, |
27 | notice under this subsection shall not be required for any |
28 | Class T-E member. |
29 | (h) Former State employee annuitants.-- |
30 | (1) The employer shall, upon the employment of an |
|
1 | annuitant of the State Employees' Retirement System who |
2 | applies for membership in the system, advise such employee |
3 | that he may elect multiple service membership within 365 days |
4 | of entry into the system and that if he so elects his annuity |
5 | from the State Employees' Retirement System will be |
6 | discontinued effective upon the date of his return to school |
7 | service and, upon termination of school service and |
8 | application for an annuity, the annuity will be adjusted in |
9 | accordance with section 8346 (relating to termination of |
10 | annuities). The employer shall advise the board of such |
11 | election. |
12 | (2) Notwithstanding any other provision of this part, |
13 | notice under this subsection shall not be required for any |
14 | Class T-E member. |
15 | * * * |
16 | Section 17. Sections 8507(c) and (k) and 8523(a) of Title 24 |
17 | are amended and the sections are amended by adding subsections |
18 | to read: |
19 | § 8507. Rights and duties of school employees and members. |
20 | * * * |
21 | (c) Multiple service membership.--Any active member, other |
22 | than a Class T-E member, who was formerly an active member in |
23 | the State Employees' Retirement System may elect to become a |
24 | multiple service member. Such election shall occur no later than |
25 | 365 days after becoming an active member in this system. |
26 | * * * |
27 | (d.1) Eligible roll-in.--A member may make full or partial |
28 | payment for credited military service with an eligible rollover |
29 | distribution from a qualified plan. The system shall only accept |
30 | the amount of money needed to cover the cost of purchasing the |
|
1 | military service. |
2 | * * * |
3 | (k) Disability annuities.--If service of a Class T-C or |
4 | Class T-D member is terminated due to his physical or mental |
5 | incapacity for the performance of duty, in lieu of an |
6 | application and election under subsection (f), an application |
7 | for a disability annuity may be executed by him or by a person |
8 | legally authorized to act on his behalf. |
9 | § 8523. Members' savings account. |
10 | (a) Credits to account.--The members' savings account shall |
11 | be the ledger account to which shall be credited the amounts of |
12 | the pickup contributions made by the employer [and], |
13 | contributions or lump sum payments made by active members in |
14 | accordance with the provisions of Chapter 83 (relating to |
15 | membership, contributions and benefits) and contributions made |
16 | by the employer under section 8327(d) (relating to payments by |
17 | employers) on behalf of Class T-E members. |
18 | * * * |
19 | (d) Excess interest.--One-half of the excess interest |
20 | allocated under section 8502(q) (relating to administrative |
21 | duties of board) shall be proportionately divided based on the |
22 | individual assets credited to each account between the annuity |
23 | reserve account for Class T-E annuitants and the members' |
24 | savings account for Class T-E members. |
25 | Section 18. Section 8524 of Title 24 is amended to read: |
26 | § 8524. State accumulation account. |
27 | (a) General.--The State accumulation account shall be the |
28 | ledger account to which shall be credited all contributions of |
29 | the Commonwealth and other employers as well as the earnings of |
30 | the fund, except the premium assistance contributions and |
|
1 | earnings thereon in the health insurance account. Valuation |
2 | interest shall be allowed on the total amount of such account |
3 | less any earnings of the fund credited during the year. The |
4 | reserves necessary for the payment of annuities and death |
5 | benefits as approved by the board and as provided in Chapter 83 |
6 | (relating to membership, contributions and benefits) shall be |
7 | transferred from the State accumulation account to the annuity |
8 | reserve account. At the end of each year the required interest |
9 | shall be transferred from the State accumulation account to the |
10 | credit of the members' savings account and the annuity reserve |
11 | account. The administrative expenses of the board shall be |
12 | charged to the State accumulation account. |
13 | (b) Excess interest.--The amount of excess interest to be |
14 | credited to the State accumulation account shall be in an amount |
15 | equal to half of the excess interest allocated under section |
16 | 8502(q) (relating to administrative duties of board) and shall |
17 | be credited against any unfunded liability of the system. |
18 | (c) Underfunding.--In the event that the system's funding |
19 | status is less than 100% funded as determined by the actuary in |
20 | its most recent filing under section 8502(j) (relating to |
21 | administrative duties of board), all excess interest awarded by |
22 | the board shall be allocated to the State accumulation account |
23 | and shall be credited against any unfunded liability of the |
24 | system existing in the year in which excess interest is |
25 | credited. |
26 | (d) Transfer prohibited.--Notwithstanding any other |
27 | provision of this part, all contributions made by the employer |
28 | under section 8327(d)(1) (relating to payments by employers) on |
29 | behalf of Class T-E members shall not be transferred to the |
30 | members' savings account and credited to the individual member |
|
1 | accounts for Class T-E members. |
2 | (e) Refund.--In the event of a refund under section 8341(b) |
3 | (relating to return of accumulated deductions), the employer |
4 | contributions and excess interest forfeited by the Class T-E |
5 | member shall be transferred to the State accumulation account. |
6 | Section 19. Section 8525 of Title 24 is amended by adding a |
7 | subsection to read: |
8 | § 8525. Annuity reserve account. |
9 | * * * |
10 | (c) Excess Interest.--One-half of the excess interest |
11 | allocated under section 8502(q) (relating to administrative |
12 | duties of board) shall be proportionately divided based on the |
13 | individual assets credited to each account between the annuity |
14 | reserve account for Class T-E annuitants and the members' |
15 | savings account for Class T-E members. |
16 | Section 20. The definitions of "beneficiary," "class of |
17 | service multiplier," "full coverage member," "irrevocable |
18 | beneficiary," "standard single life annuity," "statutory |
19 | interest," "superannuation age" and "vestee" in section 5102 of |
20 | Title 71 are amended and the section is amended by adding |
21 | definitions to read: |
22 | § 5102. Definitions. |
23 | The following words and phrases as used in this part, unless |
24 | a different meaning is plainly required by the context, shall |
25 | have the following meanings: |
26 | * * * |
27 | "After-tax contributions." The optional contributions paid |
28 | into the fund by the member from the member's salary after all |
29 | applicable taxes have been deducted. |
30 | * * * |
|
1 | "Beneficiary." The person or persons last designated in |
2 | writing to the board by a member to receive his accumulated |
3 | deductions or a lump sum benefit upon the death of such member |
4 | or for Class QC members, the balance of the members savings |
5 | account maintained in accordance with section 5933 (relating to |
6 | members' savings account). |
7 | * * * |
8 | "Class of service multiplier." |
9 | Class of Service | Multiplier |
|
10 | A | | 1 | | 11 12 13 14 15 | AA | for all purposes except calculating regular member contributions on compensation paid prior to January 1, 2002 | 1.25 | | 16 17 18 19 20 | AA | for purposes of calculating regular member contributions on compensation paid prior to January 1, 2002 | 1 | | 21 22 23 24 25 26 27 | A-3 | for all purposes except the calculation of regular member contributions and contributions for creditable nonstate service | 1 | | 28 29 30 | A-3 | for purposes of calculating regular member contributions and | | | | 1 2 3 | | contributions for creditable nonstate service | 1.25 | | 4 5 6 7 | A-4 | for all purposes except the calculation of regular member contributions | 1.25 | | 8 9 10 | A-4 | for purposes of calculating regular member contributions | 1.86 | | 11 | B | | .625 | | 12 | C | | 1 | | 13 | D | | 1.25 | | 14 15 | D-1 | prior to January 1, 1973 | 1.875 | | 16 17 | D-1 | on and subsequent to January 1, 1973 | 1.731 | | 18 | D-2 | prior to January 1, 1973 | 2.5 | | 19 20 | D-2 | on and subsequent to January 1, 1973 | 1.731 | | 21 | D-3 | prior to January 1, 1973 | 3.75 | | 22 23 24 25 26 27 28 29 | D-3 | on and subsequent to January 1, 1973 | 1.73 | except prior to December 1, 1974 as applied to any additional legislative compensation as an officer of the General Assembly | 30 | | | 3.75 | | | 1 2 3 4 5 | D-4 | for all purposes except calculating regular member contributions on compensation paid prior to July 1, 2001 | 1.5 | | 6 7 8 9 10 | D-4 | for purposes of calculating regular member contributions on compensation paid prior to July 1, 2001 | 1 | | 11 12 13 14 15 16 17 | E, E-1 | prior to January 1, 1973 | 2 1.5 | for each of the first ten years of judicial service, and for each subsequent year of judicial service | 18 19 20 21 22 23 | E, E-1 | on and subsequent to January 1, 1973 | 1.50 1.125 | for each of the first ten years of judicial service and for each subsequent year of judicial service | 24 25 | E-2 | prior to September 1, 1973 | 1.5 | | 26 27 | E-2 | on and subsequent to September 1, 1973 | 1.125 | | 28 | G | | 0.417 | | 29 | H | | 0.500 | | | 1 | I | | 0.625 | | 2 | J | | 0.714 | | 3 | K | | 0.834 | | 4 | L | | 1.000 | | 5 | M | | 1.100 | | 6 | N | | 1.250 | | 7 8 9 10 | QC | for all purposes except the calculation of regular member contributions | 1 | | 11 12 13 | QC | for purposes of calculating regular member contributions | 1.2 | | 14 15 | T-C | (Public School Employees' Retirement Code) | 1 | | 16 17 | T-E | (Public School Employees' Retirement Code) | 1 | | 18 19 | T-F | (Public School Employees' Retirement Code) | 1 | |
|
20 | * * * |
21 | "Excess interest." The investment earnings attributable to |
22 | Class QC members in excess of that required for allocation to |
23 | statutory interest to Class QC members and expenses attributable |
24 | to Class QC members. |
25 | * * * |
26 | "Full coverage member." Any member, other than a Class QC |
27 | member, for whom member pickup contributions are being picked up |
28 | or who has paid or has agreed to pay to the fund the actuarial |
29 | equivalent of regular member contributions due on account of |
30 | service prior to January 1, 1982. |
|
1 | * * * |
2 | "Irrevocable beneficiary." The person or persons permanently |
3 | designated by a member in writing to the State Employees' |
4 | Retirement Board pursuant to an approved domestic relations |
5 | order to receive all or a portion of the accumulated deductions |
6 | or lump sum benefit payable upon the death of such member or for |
7 | Class QC members the balance of the member's savings account |
8 | maintained in accordance with section 5933 (relating to members' |
9 | savings account). |
10 | * * * |
11 | "Standard single life annuity." An annuity equal to 2% of |
12 | the final average salary, multiplied by the total number of |
13 | years and fractional part of a year of credited service of a |
14 | member. For Class QC credited service of a member, an annuity |
15 | with a present value equal to the balance of the member's |
16 | savings account maintained in accordance with section 5933 |
17 | (relating to members' savings account). |
18 | * * * |
19 | "Statutory interest." Interest at 4% per annum, compounded |
20 | annually, except that for Class QC credited service, interest at |
21 | 6% per annum, compounded annually. |
22 | "Superannuation age." Any age upon accrual of 35 eligibility |
23 | points or age 60, except for a member of the General Assembly, |
24 | an enforcement officer, a correction officer, a psychiatric |
25 | security aide, a Delaware River Port Authority policeman or an |
26 | officer of the Pennsylvania State Police, age 50, and, except |
27 | for a member with Class G, Class H, Class I, Class J, Class K, |
28 | Class L, Class M or Class N service, age 55 upon accrual of 20 |
29 | eligibility points and, except for a member with Class QC |
30 | service, age 55 or any age upon accrual of 35 eligibility |
|
1 | points. |
2 | * * * |
3 | "Vestee." A member with five or more eligibility points, or |
4 | a member with Class G, Class H, Class I, Class J, Class K, Class |
5 | L, Class M or Class N service with five or more eligibility |
6 | points, who has terminated State service and has elected to |
7 | leave his total accumulated deductions in the fund and to defer |
8 | receipt of an annuity and any member with Class QC service who |
9 | has elected to leave his total accumulated deductions in the |
10 | fund and to defer receipt of an annuity. |
11 | Section 21. Section 5301(a)(12) of Title 71 is amended and |
12 | the section is amended by adding subsections to read: |
13 | § 5301. Mandatory and optional membership. |
14 | (a) Mandatory membership.--Membership in the system shall be |
15 | mandatory as of the effective date of employment for all State |
16 | employees except the following: |
17 | * * * |
18 | (12) School employees who have elected membership in an |
19 | independent retirement program approved by the employer, |
20 | provided that in no case, except as hereinafter provided, |
21 | shall the employer contribute on account of such elected |
22 | membership at a rate greater than the employer normal |
23 | contribution rate as determined in section 5508(b) (relating |
24 | to actuarial cost method). For the fiscal year 1986-1987 an |
25 | employer may contribute on account of such elected membership |
26 | at a rate which is the greater of 7% or the employer normal |
27 | contribution rate as determined in section 5508(b) and for |
28 | the fiscal year 1992-1993 and all years after that at a rate |
29 | of 9.29%, except for employees who elect participation in an |
30 | independent retirement program instead of membership in Class |
|
1 | QC or Class T-E in the Public School Employees' Retirement |
2 | System, 6%. |
3 | * * * |
4 | (a.1) Mandatory membership for certain employees.-- |
5 | Notwithstanding any other provision of this part, membership in |
6 | the system shall be mandatory as of the effective date of |
7 | employment for any person who first becomes a State employee, |
8 | other than a State employee as described under subsection (a) |
9 | (1), (2), (3), (4), (5), (6), (7), (8), (9) and (11) or (c.1), |
10 | on or after the effective date of this subsection regardless of |
11 | the number of hours or days worked. |
12 | * * * |
13 | (c.1) Prohibited membership for certain employees.--Any |
14 | officer or employee of a State-owned educational institution or |
15 | The Pennsylvania State University, who is first employed |
16 | following the effective date of this subsection, shall not have |
17 | the right to elect membership in the system. |
18 | * * * |
19 | Section 22. Sections 5303 and 5306 of Title 71 are amended |
20 | by adding subsections to read: |
21 | § 5303. Retention and reinstatement of service credits. |
22 | * * * |
23 | (i) Purchase prohibited.--Notwithstanding any other |
24 | provision of this part, a Class QC member shall not be permitted |
25 | to purchase previous State service or creditable nonstate |
26 | service except for an approved leave of absence in accordance |
27 | with section 5302 or as otherwise required by law. |
28 | (j) Election.--A Class QC member who elects to receive his |
29 | accumulated deductions in lieu of any benefit to which he may be |
30 | entitled in accordance with sections 5311 and 5701 shall be |
|
1 | prohibited from reinstating such withdrawal upon a subsequent |
2 | return to service. |
3 | § 5306. Classes of service. |
4 | * * * |
5 | (e) Class QC membership.--Notwithstanding any other |
6 | provision of this part and except for a State police officer, |
7 | Capitol police officer or park ranger, a person who first |
8 | becomes a State employee and an active member on or after the |
9 | effective date of this subsection shall be classified as a Class |
10 | QC member upon payment of regular member contributions. A State |
11 | police officer, Capitol police officer or park ranger who first |
12 | becomes a State employee and an active member on or after the |
13 | effective date of the first collective bargaining agreement |
14 | commencing after the effective date of this subsection shall be |
15 | classified as a Class QC member upon payment of regular member |
16 | contributions. |
17 | Section 23. Sections 5308, 5309, 5310, 5501 and 5503.1(a) of |
18 | Title 71 are amended to read: |
19 | § 5308. Eligibility for annuities. |
20 | (a) Superannuation annuity.--Attainment of superannuation |
21 | age by an active member or an inactive member on leave without |
22 | pay with three or more years of credited State or school service |
23 | shall entitle him to receive a superannuation annuity upon |
24 | termination of State service and compliance with section 5907(f) |
25 | (relating to rights and duties of State employees and members). |
26 | No minimum number of eligibility points shall be required by a |
27 | member of Class QC. |
28 | (b) Withdrawal annuity.--Any vestee or any active member or |
29 | inactive member on leave without pay, other than a Class QC |
30 | member, who terminates State service having five or more |
|
1 | eligibility points, or who has Class G, Class H, Class I, Class |
2 | J, Class K, Class L, Class M or Class N service and terminates |
3 | State service having five or more eligibility points, upon |
4 | compliance with section 5907(f), (g) or (h) shall be entitled to |
5 | receive an annuity. |
6 | (c) Disability annuity.--An active member or inactive member |
7 | on leave without pay, other than a Class QC member, who has |
8 | credit for at least five years of service or any active member |
9 | or inactive member on leave without pay who is an officer of the |
10 | Pennsylvania State Police or an enforcement officer shall, upon |
11 | compliance with section 5907(k), be entitled to a disability |
12 | annuity if he becomes mentally or physically incapable of |
13 | continuing to perform the duties for which he is employed and |
14 | qualifies in accordance with the provisions of section 5905(c) |
15 | (1) (relating to duties of the board regarding applications and |
16 | elections of members). |
17 | § 5309. Eligibility for vesting. |
18 | (a) General.--Any member who terminates State service with |
19 | five or more eligibility points, or any member with Class G, |
20 | Class H, Class I, Class J, Class K, Class L, Class M or Class N |
21 | service with five or more eligibility points, shall be eligible |
22 | until attainment of superannuation age to vest his retirement |
23 | benefits. |
24 | (b) Class QC members.--Any Class QC member who terminates |
25 | State service shall be immediately vested in his retirement |
26 | benefit until attainment of superannuation age. |
27 | § 5310. Eligibility for death benefits. |
28 | (a) General.--In the event of the death of a member who is |
29 | eligible for an annuity in accordance with section 5308(a) or |
30 | (b) (relating to eligibility for annuities), his beneficiary |
|
1 | shall be entitled to a death benefit. |
2 | (b) Class QC members.--In the event of the death of a Class |
3 | QC member, his beneficiary shall receive the balance of the |
4 | member's savings account maintained in accordance with section |
5 | 5933 (relating to members' savings account) regardless of |
6 | whether the member has attained superannuation retirement age. |
7 | § 5501. Regular member contributions for current service. |
8 | (a) General.--Regular member contributions shall be made to |
9 | the fund on behalf of each active member for current service |
10 | except for any period of current service in which the making of |
11 | such contributions has ceased solely by reason of section 5502.1 |
12 | (relating to waiver of regular member contributions and Social |
13 | Security integration member contributions) or any provision of |
14 | this part relating to the limitations under IRC § 401(a)(17) or |
15 | 415(b). |
16 | (b) After-tax contributions.-- |
17 | (1) After-tax contributions may be made by Class QC |
18 | active members for current service up to, but no more than, |
19 | the applicable limits under the IRC. |
20 | (2) After-tax contributions shall be made by payroll |
21 | deductions and transmitted to the system by the State |
22 | employer. |
23 | (3) After-tax contributions shall not be picked up by |
24 | the employer. |
25 | (4) After-tax contributions may be changed or stopped by |
26 | a Class QC member upon notice to the State employer. |
27 | § 5503.1. Pickup contributions. |
28 | (a) Treatment for purposes of IRC § 414(h).--All |
29 | contributions required to be made under sections 5501 (relating |
30 | to regular member contributions for current service), including |
|
1 | member contributions for Class QC, 5502 (relating to Social |
2 | Security integration member contributions), 5503 (relating to |
3 | joint coverage member contributions) and section 5505.1 |
4 | (relating to additional member contributions), with respect to |
5 | current State service rendered by an active member on or after |
6 | January 1, 1982, shall be picked up by the Commonwealth or other |
7 | employer and shall be treated as the employer's contribution for |
8 | purposes of IRC § 414(h). |
9 | * * * |
10 | Section 24. Section 5507(a) and (b) of Title 71 are amended |
11 | and the section is amended by adding a subsection to read: |
12 | § 5507. Contributions by the Commonwealth and other employers. |
13 | (a) Contributions on behalf of active members.--The |
14 | Commonwealth and other employers whose employees are members of |
15 | the system shall make contributions to the fund on behalf of all |
16 | active members in such amounts as shall be certified by the |
17 | board as necessary to provide, together with the members' total |
18 | accumulated deductions, annuity reserves on account of |
19 | prospective annuities other than those provided in [section] |
20 | sections 5708 (relating to supplemental annuities), 5708.1 |
21 | (relating to additional supplemental annuities), 5708.2 |
22 | (relating to further additional supplemental annuities), 5708.3 |
23 | (relating to supplemental annuities commencing 1994), 5708.4 |
24 | (relating to special supplemental postretirement adjustment), |
25 | 5708.5 (relating to supplemental annuities commencing 1998), |
26 | 5708.6 (relating to supplemental annuities commencing 2002), |
27 | 5708.7 (relating to supplemental annuities commencing 2003) and |
28 | 5708.8 (relating to special supplemental postretirement |
29 | adjustment of 2002), in accordance with the actuarial cost |
30 | method provided in section 5508(a), (b), (c), (d) and (f) |
|
1 | (relating to actuarial cost method). |
2 | (b) Contributions on behalf of annuitants.--The Commonwealth |
3 | and other employers whose employees are members of the system |
4 | shall make contributions on behalf of annuitants in such amounts |
5 | as shall be certified by the board as necessary to fund the |
6 | liabilities for supplemental annuities in accordance with the |
7 | actuarial cost method provided in section 5508(e) (relating to |
8 | actuarial cost method). |
9 | * * * |
10 | (d) Benefits completion plan contributions.--In addition to |
11 | all other contributions required under this section and section |
12 | 5508, the Commonwealth and other employers whose employees are |
13 | members of the system shall make contributions as certified by |
14 | the board pursuant to section 5941 (relating to benefits |
15 | completion plan). |
16 | Section 25. Section 5508 of Title 71 is amended to read: |
17 | § 5508. Actuarial cost method. |
18 | (a) Employer contribution rate on behalf of active |
19 | members.--The amount of the Commonwealth and other employer |
20 | contributions on behalf of all active members shall be computed |
21 | by the actuary as a percentage of the total compensation of all |
22 | active members during the period for which the amount is |
23 | determined and shall be so certified by the board. The total |
24 | employer contribution rate on behalf of all active members shall |
25 | consist of the employer normal contribution rate, as defined in |
26 | subsection (b), and the accrued liability contribution rate as |
27 | defined in subsection (c). The total employer contribution rate |
28 | shall be modified by the experience adjustment factor as |
29 | calculated in subsection (f) but in no case shall it be less |
30 | than zero. The total employer contribution rate shall be |
|
1 | modified by the experience adjustment factor as calculated in |
2 | subsection (f), but in no case shall it be less than: |
3 | (1) 2% for the fiscal year beginning July 1, 2004; |
4 | (2) 3% for the fiscal year beginning July 1, 2005; [and] |
5 | (3) 4% for the fiscal year beginning July 1, 2006[, and |
6 | thereafter.]; and |
7 | (4) 6% for the fiscal year beginning July 1, 2011, and |
8 | thereafter. |
9 | (b) Employer normal contribution rate.--The employer normal |
10 | contribution rate shall be determined after each actuarial |
11 | valuation on the basis of an annual interest rate and such |
12 | mortality and other tables as shall be adopted by the board in |
13 | accordance with generally accepted actuarial principles. The |
14 | employer normal contribution rate shall be determined as a level |
15 | percentage of the compensation of the average new active member, |
16 | which percentage, if contributed on the basis of his prospective |
17 | compensation through his entire period of active State service, |
18 | would be sufficient to fund the liability for any prospective |
19 | benefit payable to him[, except for the supplemental benefits |
20 | provided for in sections 5708 (relating to supplemental |
21 | annuities), 5708.1 (relating to additional supplemental |
22 | annuities), 5708.2 (relating to further additional supplemental |
23 | annuities), 5708.3 (relating to supplemental annuities |
24 | commencing 1994), 5708.4 (relating to special supplemental |
25 | postretirement adjustment), 5708.5 (relating to supplemental |
26 | annuities commencing 1998), 5708.6 (relating to supplemental |
27 | annuities commencing 2002), 5708.7 (relating to supplemental |
28 | annuities commencing 2003) and 5708.8 (relating to special |
29 | supplemental postretirement adjustment of 2002),] in excess of |
30 | that portion funded by his prospective member contributions. |
|
1 | (c) Accrued liability contribution rate.-- |
2 | (1) For the fiscal [year] years beginning July 1, 2002, |
3 | and July 1, 2003, the accrued liability contribution rate |
4 | shall be computed as the rate of total compensation of all |
5 | active members which shall be certified by the actuary as |
6 | sufficient to fund over a period of ten years from July 1, |
7 | 2002, the present value of the liabilities for all |
8 | prospective benefits, except for the supplemental benefits as |
9 | provided in sections 5708 (relating to supplemental |
10 | annuities), 5708.1 (relating to additional supplemental |
11 | annuities), 5708.2 (relating to further additional |
12 | supplemental annuities), 5708.3 (relating to supplemental |
13 | annuities commencing 1994), 5708.4 (relating to special |
14 | supplemental postretirement adjustment), 5708.5 (relating to |
15 | supplemental annuities commencing 1998), 5708.6 (relating to |
16 | supplemental annuities commencing 2002), 5708.7 (relating to |
17 | supplemental annuities commencing 2003) and 5708.8 (relating |
18 | to special supplemental postretirement adjustment of 2002), |
19 | in excess of the total assets in the fund (calculated |
20 | recognizing all investment gains and losses over a five-year |
21 | period), excluding the balance in the supplemental annuity |
22 | account, and the present value of employer normal |
23 | contributions and of member contributions payable with |
24 | respect to all active members on December 31, 2001, and |
25 | excluding contributions to be transferred by county |
26 | retirement systems or pension plans pursuant to section |
27 | 5507(c) (relating to contributions by the Commonwealth and |
28 | other employers). The amount of each annual accrued liability |
29 | contribution shall be equal to the amount of such |
30 | contribution for the fiscal year beginning July 1, 2002, |
|
1 | except that, if the accrued liability is increased by |
2 | legislation enacted subsequent to June 30, 2002, but before |
3 | July 1, 2003, such additional liability shall be funded over |
4 | a period of ten years from the first day of July, coincident |
5 | with or next following the effective date of the increase. |
6 | The amount of each annual accrued liability contribution for |
7 | such additional legislative liabilities shall be equal to the |
8 | amount of such contribution for the first annual payment. |
9 | (2) Notwithstanding any other provision of law, |
10 | beginning July 1, 2004, the outstanding balance of the |
11 | increase in accrued liability due to the change in benefits |
12 | enacted in 2001 shall be amortized in equal dollar annual |
13 | contributions over a period that ends 30 years after July 1, |
14 | 2002, and the outstanding balance of the net actuarial loss |
15 | incurred in calendar year 2002 shall be amortized in equal |
16 | dollar annual contributions over a period that ends 30 years |
17 | after July 1, 2003. For fiscal years beginning on or after |
18 | July 1, 2004, if the accrued liability is increased by |
19 | legislation enacted subsequent to June 30, 2003, such |
20 | additional liability shall be funded in equal dollar annual |
21 | contributions over a period of ten years from the first day |
22 | of July coincident with or next following the effective date |
23 | of the increase. |
24 | (d) Special provisions on calculating contributions.--In |
25 | calculating the contributions required by subsections (a), (b) |
26 | and (c), the active members of Class C shall be considered to be |
27 | members of Class A. In addition, the actuary shall determine the |
28 | Commonwealth or other employer contributions required for active |
29 | members of Class C and officers of the Pennsylvania State Police |
30 | and enforcement officers and investigators of the Pennsylvania |
|
1 | Liquor Control Board who are members of Class A to finance their |
2 | benefits in excess of those to which other members of Class A |
3 | are entitled. Such additional contributions shall be determined |
4 | separately for officers and employees of the Pennsylvania State |
5 | Police and for enforcement officers and investigators of the |
6 | Pennsylvania Liquor Control Board. Such contributions payable on |
7 | behalf of officers and employees of the Pennsylvania State |
8 | Police shall include the amounts received by the system under |
9 | the provisions of the act of May 12, 1943 (P.L.259, No.120), |
10 | referred to as the Foreign Casualty Insurance Premium Tax |
11 | Allocation Law, and on behalf of enforcement officers or |
12 | investigators of the Pennsylvania Liquor Control Board, the |
13 | amounts received by the system under the provisions of the act |
14 | of April 12, 1951 (P.L.90, No.21), known as the Liquor Code. |
15 | (e) Supplemental annuity contribution rate.--Contributions |
16 | from the Commonwealth and other employers whose employees are |
17 | members of the system required to provide for the payment of |
18 | supplemental annuities as provided in sections 5708, 5708.1, |
19 | 5708.2, 5708.3, 5708.4 and 5708.5 shall be paid over a period of |
20 | ten years from July 1, 2002. The funding for the supplemental |
21 | annuities commencing 2002 provided for in section 5708.6 shall |
22 | be as provided in section 5708.6(f). The funding for the |
23 | supplemental annuities commencing 2003 provided for in section |
24 | 5708.7 shall be as provided in section 5708.7(f). The funding |
25 | for the special supplemental postretirement adjustment of 2002 |
26 | under section 5708.8 shall be as provided in section 5708.8(g). |
27 | The amount of each annual supplemental annuities contribution |
28 | shall be equal to the amount of such contribution for the fiscal |
29 | year beginning July 1, 2002. In the event that supplemental |
30 | annuities are increased by legislation enacted subsequent to |
|
1 | June 30, 2002, the additional liability for the increase in |
2 | benefits shall be funded in equal dollar annual installments |
3 | over a period of ten years from the July first, coincident with |
4 | or next following the effective date of such legislation. |
5 | (f) Experience adjustment factor.-- |
6 | (1) For each year after the establishment of the accrued |
7 | liability contribution rate for the fiscal year beginning |
8 | July 1, 2002, any increase or decrease in the unfunded |
9 | liability, including liability for supplemental annuities, |
10 | due to actual experience differing from assumed experience, |
11 | changes in actuarial assumptions, changes in the terms and |
12 | conditions of the benefits provided by the system by |
13 | judicial, administrative or other processes other than |
14 | legislation, including, but not limited to, reinterpretation |
15 | of the provisions of this part, shall be amortized in equal |
16 | dollar annual contributions over a period of ten years |
17 | beginning with the July 1 succeeding the actuarial valuation. |
18 | (2) Notwithstanding the provisions of paragraph (1), for |
19 | each year after the establishment of the accrued liability |
20 | contribution rate for the fiscal year beginning July 1, 2003, |
21 | any increase or decrease in the unfunded accrued liability |
22 | due to actual experience differing from assumed experience, |
23 | changes in actuarial assumptions, changes in the terms and |
24 | conditions of the benefits provided by the system by |
25 | judicial, administrative or other processes other than |
26 | legislation, including, but not limited to, reinterpretation |
27 | of the provisions of this part, shall be amortized in equal |
28 | dollar annual contributions over a period of 30 years |
29 | beginning with the July 1 succeeding the actuarial valuation |
30 | determining said increases and decreases. |
|
1 | (g) Determination of liability for special vestee.-- |
2 | Notwithstanding any other provision of this part or other law, |
3 | the total additional accrued actuarial liability resulting from |
4 | eligibility of special vestees for benefits upon the attainment |
5 | of superannuation age shall be determined by the actuary as part |
6 | of the first annual valuation made after June 30, 1997. The |
7 | resulting additional accrued actuarial liability shall be paid |
8 | by The Pennsylvania State University to the board in one lump |
9 | sum payment within 90 days of the board's certification of the |
10 | amount to The Pennsylvania State University. |
11 | Section 26. Section 5701 of Title 71 is amended to read: |
12 | § 5701. Return of total accumulated deductions. |
13 | (a) General.--Any member upon termination of service may, in |
14 | lieu of all benefits payable under this chapter to which he may |
15 | be entitled, elect to receive his total accumulated deductions. |
16 | (b) Class QC member.--Any Class QC member who elects under |
17 | this section to receive his accumulated deductions in lieu of |
18 | all benefits to which he may be entitled, shall forfeit the |
19 | contributions made on behalf of the school employer as well as |
20 | any excess interest. |
21 | Section 27. Section 5702(a) introductory paragraph and |
22 | 5704(a) and (e) of Title 71 are amended and the sections are |
23 | amended by adding subsections to read: |
24 | § 5702. Maximum single life annuity. |
25 | (a) General rule.--Any full coverage member, except for a |
26 | member of Class QC, who is eligible to receive an annuity |
27 | pursuant to the provisions of section 5308(a) or (b) (relating |
28 | to eligibility for annuities) who terminates State service, or |
29 | if a multiple service member who is a school employee who is an |
30 | active member of the Public School Employees' Retirement System |
|
1 | who terminates school service, before attaining age 70 shall be |
2 | entitled to receive a maximum single life annuity attributable |
3 | to his credited service and equal to the sum of the following |
4 | single life annuities beginning at the effective date of |
5 | retirement: |
6 | * * * |
7 | (a.2) Maximum single life annuity for Class QC members.-- |
8 | Upon termination of service, any Class QC member who is eligible |
9 | to receive an annuity under section 5308 and has made an |
10 | application in accordance with section 5907 (relating to rights |
11 | and duties of State employees and members) shall be entitled to |
12 | receive a maximum single life annuity with a present value equal |
13 | to the balance of the member's savings account maintained in |
14 | accordance with section 5933 (relating to members' savings |
15 | account) standing to his credit as of his effective date of |
16 | retirement. |
17 | * * * |
18 | § 5704. Disability annuities. |
19 | (a) Amount of annuity.--A member, except for a member of |
20 | Class QC, who has made application for a disability annuity and |
21 | has been found to be eligible in accordance with the provisions |
22 | of section 5905(c)(1) (relating to duties of the board regarding |
23 | applications and elections of members) shall receive a |
24 | disability annuity payable from the effective date of disability |
25 | as determined by the board and continued until a subsequent |
26 | determination by the board that the annuitant is no longer |
27 | entitled to a disability annuity. The disability annuity shall |
28 | be equal to a standard single life annuity multiplied by the |
29 | class of service multiplier applicable to the class of service |
30 | at the time of disability if the product of such class of |
|
1 | service multiplier and the total number of years of credited |
2 | service is greater than 16.667, otherwise the standard single |
3 | life annuity shall be multiplied by the lesser of the following |
4 | ratios: |
5 | MY*/Y or 16.667/Y |
6 | where Y = number of years of credited service, Y* = total years |
7 | of credited service if the member were to continue as a State |
8 | employee until attaining superannuation age as applicable at the |
9 | time of disability, or if the member has attained superannuation |
10 | age, as applicable at the time of disability, then the number of |
11 | years of credited service and M = the class of service |
12 | multiplier as applicable at the effective date of disability. A |
13 | member of Class C shall receive, in addition, any annuity to |
14 | which he may be eligible under section 5702(a)(3) (relating to |
15 | maximum single life annuity). The member shall be entitled to |
16 | the election of a joint and survivor annuity on that portion of |
17 | the disability annuity to which he is entitled under section |
18 | 5702. |
19 | * * * |
20 | (e) Termination of State service.--Upon termination of |
21 | disability annuity payments in excess of an annuity calculated |
22 | in accordance with section 5702, a disability annuitant, except |
23 | for a member of Class QC, who does not return to State service |
24 | may file an application with the board for an amount equal to |
25 | the excess, if any, of the sum of the regular and additional |
26 | accumulated deductions standing to his credit at the effective |
27 | date of disability over one-third of the total disability |
28 | annuity payments received. If the annuitant on the date of |
29 | termination of service was eligible for an annuity as provided |
30 | in section 5308(b) (relating to eligibility for annuities), he |
|
1 | may file an application with the board for an election of an |
2 | optional modification of his annuity. |
3 | * * * |
4 | (h) Ineligibility for disability annuity.--Notwithstanding |
5 | any other provision of this part, a Class QC member shall not be |
6 | eligible to receive a disability annuity provided under this |
7 | part. |
8 | Section 28. Section 5706(b) and (c)(1) of Title 71 are |
9 | amended to read: |
10 | § 5706. Termination of annuities. |
11 | * * * |
12 | (b) Subsequent discontinuance of service.--Upon subsequent |
13 | discontinuance of service, such member other than a former |
14 | annuitant who had the effect of his frozen present value |
15 | eliminated in accordance with subsection (c) [or], a former |
16 | disability annuitant or a member of Class QC shall be entitled |
17 | to an annuity which is actuarially equivalent to the sum of the |
18 | present value as determined under subsection (a) and the present |
19 | value of a maximum single life annuity based on years of service |
20 | credited subsequent to reentry in the system and his final |
21 | average salary computed by reference to his compensation during |
22 | his entire period of State and school service. Upon the |
23 | subsequent discontinuance of service by a member of Class QC, |
24 | the member shall be entitled to an annuity which is actuarially |
25 | equivalent to the sum of the present value as determined under |
26 | section 5702(a.2) and the present value of a maximum single life |
27 | annuity based on all contributions, statutory interest and |
28 | excess interest credited as a result of service performed after |
29 | his return to State service. |
30 | (c) Elimination of the effect of frozen present value.-- |
|
1 | (1) An annuitant who returns to State service and earns |
2 | three eligibility points by performing credited State |
3 | service, other than Class QC service, following the most |
4 | recent period of receipt of an annuity under this part, or an |
5 | annuitant who enters school service and: |
6 | (i) is a multiple service member; or |
7 | (ii) who elects multiple service membership, and |
8 | earns three eligibility points by performing credited |
9 | State service or credited school service following the |
10 | most recent period of receipt of an annuity under this |
11 | part, and who had the present value of his annuity frozen |
12 | in accordance with subsection (a), shall qualify to have |
13 | the effect of the frozen present value resulting from all |
14 | previous periods of retirement eliminated, provided that |
15 | all payments under Option 4 and annuity payments payable |
16 | during previous periods of retirement plus interest as |
17 | set forth in paragraph (3) shall be returned to the fund |
18 | in the form of an actuarial adjustment to his subsequent |
19 | benefits or in such form as the board may otherwise |
20 | direct. |
21 | * * * |
22 | Section 29. Sections 5707(a) and (b) and 5902(l) of Title 71 |
23 | are amended and the sections are amended by adding subsections |
24 | to read: |
25 | § 5707. Death benefits. |
26 | (a) Members eligible for annuities.--Any active member, |
27 | inactive member on leave without pay, other than a member of |
28 | Class QC, or vestee who dies and was eligible for an annuity in |
29 | accordance with section 5308(a) or (b) (relating to eligibility |
30 | for annuities) or special vestee who has attained superannuation |
|
1 | age and dies before applying for a superannuation annuity shall |
2 | be considered as having applied for an annuity to become |
3 | effective the day before his death and in the event he has not |
4 | elected an option or such election has not been approved prior |
5 | to his death, it shall be assumed that he elected Option 1. |
6 | (b) Members ineligible for annuities.--In the event of the |
7 | death of a special vestee, an active member or an inactive |
8 | member on leave without pay, other than a member of Class QC, |
9 | who is not entitled to a death benefit as provided in subsection |
10 | (a), his designated beneficiary shall be paid the full amount of |
11 | his total accumulated deductions. |
12 | * * * |
13 | (g) Class QC members.--In the event of the death of a Class |
14 | QC member, other than a Class QC annuitant, his beneficiary |
15 | shall receive the balance of the member's savings account |
16 | maintained in accordance with section 5933 (relating to members' |
17 | savings account) regardless of whether the member has attained |
18 | superannuation retirement age. |
19 | § 5902. Administrative duties of the board. |
20 | * * * |
21 | (l) Member contributions.--[The board shall cause all pickup |
22 | contributions made on behalf of a member to be credited to the |
23 | account of the member and credit to his account any other |
24 | payment made by such member, including, but not limited to, |
25 | amounts collected by the Public School Employees' Retirement |
26 | System for the reinstatement of previous State service or |
27 | creditable nonstate service and amounts paid to return benefits |
28 | paid after the date of return to State service or entering |
29 | school service representing lump sum payments made pursuant to |
30 | section 5705(a)(4)(iii) (relating to member's options) and |
|
1 | member's annuity payments, but not including other benefits |
2 | returned pursuant to section 5706(a.2) (relating to termination |
3 | of annuities), and shall pay all such amounts into the fund.] |
4 | The board shall cause all of the following of each member to be |
5 | credited to the account of each member and shall pay all of the |
6 | amounts into the fund: |
7 | (1) All pickup contributions made on behalf of a member. |
8 | (2) Any other payment made by the member, including, but |
9 | not limited to, amounts collected by the Public School |
10 | Employees' Retirement System for the reinstatement of |
11 | previous State service or creditable nonstate service and |
12 | amounts paid to return benefits paid after the date of return |
13 | to State service or entering school service representing lump |
14 | sum payments made under section 5705(a)(4)(iii) (relating to |
15 | member's options). |
16 | (3) Member's annuity payments, not including other |
17 | benefits returned under section 5706(a.2) (relating to |
18 | termination of annuities). |
19 | (4) Amounts paid by State employers on behalf of Class |
20 | QC members under section 5507 (relating to contributions by |
21 | the Commonwealth and other employers). |
22 | * * * |
23 | (o) Excess interest.—- |
24 | (1) The board may, after deducting money to pay for |
25 | expenses attributable to Class QC members, annually allow |
26 | excess interest to be credited to the members' savings |
27 | account for active Class QC members as provided for under |
28 | section 5933 (relating to members' savings account), to the |
29 | State accumulation account as provided for under section 5934 |
30 | (relating to State accumulation account) and to the annuity |
|
1 | reserve account for Class QC annuitants as provided for under |
2 | section 5935 (relating to annuity reserve account). |
3 | (2) The crediting of excess interest shall be made, with |
4 | the advice of the actuary, on a fully funded basis employing |
5 | actuarial assumptions which reflect the nature of the |
6 | liability. |
7 | (3) Notwithstanding paragraphs (1) and (2), in no event |
8 | shall excess interest be allocated to the members' savings |
9 | account for active Class QC members as provided for under |
10 | section 5933 or to the annuity reserve account for Class QC |
11 | annuitants as provided for in section 5935 if the system's |
12 | funded status as a whole for all classes of membership is |
13 | less than 100% funded as determined by the actuary in its |
14 | most recent filing under subsection (j). |
15 | (4) In the event that the system's funding status is |
16 | less than 100% funded as determined by the actuary in its |
17 | most recent filing under subsection (j), all excess interest |
18 | awarded by the board shall be allocated to the State |
19 | accumulation account. |
20 | Section 30. Sections 5904(a) and (b) and 5905(c) of Title 71 |
21 | are amended to read: |
22 | § 5904. Duties of the board to report to the Public School |
23 | Employees' Retirement Board. |
24 | (a) Multiple service membership of State employees.--Upon |
25 | receipt of an application for membership in the system of a |
26 | State employee, other than a Class QC member, who is a former |
27 | public school employee and who has elected multiple service |
28 | membership, the board shall advise the Public School Employees' |
29 | Retirement Board accordingly. |
30 | (b) Multiple service membership of school employees.--[Upon] |
|
1 | (1) If a former State employee was previously credited |
2 | in the system with other than Class QC service, upon receipt |
3 | of notification from the Public School Employees' Retirement |
4 | Board that a former State employee has become an active |
5 | member in the Public School Employees' Retirement System and |
6 | has elected to receive credit for multiple service, the board |
7 | shall certify to the Public School Employees' Retirement |
8 | Board and concurrently to the member: |
9 | [(1)] (i) the total credited service in the system and |
10 | the number of years and fractional part of a year of |
11 | service credited in each class of service; |
12 | [(2)] (ii) the annual compensation received each |
13 | calendar year by the member for credited State service; |
14 | [(3)] (iii) the social security integration credited |
15 | service to which the member is entitled and the average |
16 | noncovered salary upon which the single life annuity |
17 | attributable to such service will be computed; and |
18 | [(4)] (iv) the amount of the deductions and the period |
19 | over which they are to be made if the member has elected |
20 | payroll deductions pursuant to section 5504 (relating to |
21 | member contributions for the purchase of credit for |
22 | previous State service or to become a full coverage |
23 | member) or 5505 (relating to contributions for the |
24 | purchase of credit for creditable nonstate service). |
25 | (2) In the event the former school employee was |
26 | previously credited with Class QC service, the board shall |
27 | certify the class of service to the Public School Employees' |
28 | Retirement Board and to the member. |
29 | * * * |
30 | § 5905. Duties of the board regarding applications and |
|
1 | elections of members. |
2 | * * * |
3 | (c) Disability annuities.--In every case where the board has |
4 | received an application duly executed by the member or by a |
5 | person legally authorized to act in his behalf for a disability |
6 | annuity provided for under section 5704 (relating to disability |
7 | annuities) based upon the member's physical or mental incapacity |
8 | for the performance of the job for which he is employed, with or |
9 | without a supplement for a service-connected disability, taking |
10 | into account relevant decisions by The Pennsylvania Workmen's |
11 | Compensation Board, the board shall: |
12 | (1) through the medical examiner, have the application |
13 | and any supporting medical records and other documentation |
14 | submitted with the application reviewed and on the basis of |
15 | said review, and the subsequent recommendation by the medical |
16 | examiner regarding the applicant's medical qualification for |
17 | a disability annuity along with such other recommendations |
18 | which he may make with respect to the permanency of |
19 | disability or the need for subsequent reviews, make a finding |
20 | of disability and whether or not the disability is service |
21 | connected or nondisability and in the case of disability |
22 | establish an effective date of disability and the terms and |
23 | conditions regarding subsequent reviews; |
24 | (2) upon the recommendation of the medical examiner on |
25 | the basis of a review of subsequent medical reports submitted |
26 | with an application for continuance of disability, make a |
27 | finding of continued disability and whether or not the |
28 | disability continues to be service connected, or a finding of |
29 | nondisability; and in the case of a finding that the |
30 | disability is no longer service connected, discontinue any |
|
1 | supplemental payments on account of such service connected |
2 | disability as of the date of the finding; and in the case of |
3 | a finding of nondisability establish the date of termination |
4 | of disability and at that time discontinue any annuity |
5 | payments in excess of an annuity calculated in accordance |
6 | with section 5702 (relating to maximum single life annuity); |
7 | and |
8 | (3) upon receipt of a written statement from a |
9 | disability annuitant of his earned income of the previous |
10 | quarter, adjust the payments of the disability annuity for |
11 | the following quarter in accordance with the provisions of |
12 | section 5704(c) [(relating to disability annuities)]. |
13 | * * * |
14 | Section 31. Section 5905.1 of Title 71 is amended by adding |
15 | a subsection to read: |
16 | § 5905.1. Installment payments of accumulated deductions. |
17 | * * * |
18 | (e) Excess interest.--Any lump sum or installment payable to |
19 | a Class QC member shall not include any excess interest that may |
20 | have been credited to the members' savings account for active |
21 | Class QC members as provided for under section 5933 (relating to |
22 | members' savings account) after the member's effective date of |
23 | termination or the member's effective date of retirement, |
24 | whichever is later. |
25 | Section 32. Section 5906(g) and (h) of Title 71 are amended |
26 | and the section is amended by adding paragraphs to read: |
27 | § 5906. Duties of heads of departments. |
28 | * * * |
29 | (g) Former school employee contributors.-- |
30 | (1) The head of department shall, upon the employment of |
|
1 | a former contributor to the Public School Employees' |
2 | Retirement System who is not an annuitant of the Public |
3 | School Employees' Retirement System, advise such employee of |
4 | his right to elect within 365 days of entry into the system |
5 | to become a multiple service member, and in the case of any |
6 | such employee who so elects and has withdrawn his accumulated |
7 | deductions, require him to reinstate his credit in the Public |
8 | School Employees' Retirement System. The head of the |
9 | department shall advise the board of such election. |
10 | (2) Notwithstanding any other provision of this part, |
11 | notice under this subsection shall not be required for any |
12 | Class QC member. |
13 | (h) Former school employee annuitants.-- |
14 | (1) The head of department shall, upon the employment of |
15 | an annuitant of the Public School Employees' Retirement |
16 | System who applies for membership in the system, advise such |
17 | employee that he may elect multiple service membership within |
18 | 365 days of entry into the system and if he so elects his |
19 | public school employee's annuity will be discontinued |
20 | effective upon the date of his return to State service and, |
21 | upon termination of State service and application for an |
22 | annuity, the annuity will be adjusted in accordance with |
23 | section 5706 (relating to termination of annuities). The head |
24 | of department shall advise the board of such election. |
25 | (2) Notwithstanding any other provision of this part, |
26 | notice under this subsection shall not be required for any |
27 | Class QC member. |
28 | * * * |
29 | Section 33. Sections 5907(c) and (k) and 5933(a) of Title 71 |
30 | are amended and the sections are amended by adding subsections |
|
1 | to read: |
2 | § 5907. Rights and duties of State employees and members. |
3 | * * * |
4 | (c) Multiple service membership.--Any active member who was |
5 | formerly an active member in the Public School Employees' |
6 | Retirement System and not a member of Class T-E may elect to |
7 | become a multiple service member if the member is a member of |
8 | Class QC. Such election shall occur no later than [30] 360 days |
9 | after becoming an active member in this system. Members with |
10 | either Class QC service credit or Class T-E service credit in |
11 | the Public School Employees' Retirement System may not elect |
12 | multiple service. |
13 | * * * |
14 | (d.1) Eligible roll-in.--A member may make full or partial |
15 | payment for credited military service with an eligible rollover |
16 | distribution from a qualified plan. The system shall only accept |
17 | the amount of money needed to cover the cost of purchasing the |
18 | military service. |
19 | * * * |
20 | (k) Disability annuities.--If service of a member who is not |
21 | a member of Class QC is terminated due to his physical or mental |
22 | incapacity for the performance of duty, in lieu of an |
23 | application and election under subsection (f), an application |
24 | for a disability annuity with or without a supplement for a |
25 | service connected disability may be executed by him or by a |
26 | person legally authorized to act on his behalf. |
27 | § 5933. Members' savings account. |
28 | (a) Credits to account.--The members' savings account shall |
29 | be the ledger account to which shall be credited the amounts of |
30 | the pickup contributions made by the Commonwealth or other |
|
1 | employer and contributions or lump sum payments made by active |
2 | members in accordance with the provisions of sections 5501 |
3 | (relating to regular member contributions for current service), |
4 | 5502 (relating to social security integration member |
5 | contributions), 5503 (relating to joint coverage member |
6 | contributions), 5504 (relating to member contributions for the |
7 | purchase of credit for previous State service or to become a |
8 | full coverage member), 5505.1 (relating to additional member |
9 | contributions) and 5505 (relating to contributions for the |
10 | purchase of credit for creditable nonstate service) and |
11 | transferred from the members' savings account of the Public |
12 | School Employees' Retirement System in accordance with the |
13 | provisions of section 5303.2 (relating to election to convert |
14 | school service to State service) and contributions made by the |
15 | employer under section 5507(d) (relating to contributions by the |
16 | Commonwealth and other employers). |
17 | * * * |
18 | (d) Excess interest.--One-half of the excess interest |
19 | allocated under section 5902 (relating to administrative duties |
20 | of board) shall be proportionately divided based on the |
21 | individual assets credited to each account between the annuity |
22 | reserve account for Class QC annuitants and the members' savings |
23 | account for Class QC members. |
24 | Section 34. Section 5934 of Title 71 is amended to read: |
25 | § 5934. State accumulation account. |
26 | (a) General.--The State accumulation account shall be the |
27 | ledger account to which shall be credited all contributions of |
28 | the Commonwealth or other employers whose employees are members |
29 | of the system and made in accordance with the provisions of |
30 | section 5507(a) (relating to contributions by the Commonwealth |
|
1 | and other employers) except that the amounts received under the |
2 | provisions of the act of May 12, 1943 (P.L.259, No.120), and the |
3 | amounts received under the provisions of the Liquor Code, act of |
4 | April 12, 1951 (P.L.90, No.21), shall be credited to the State |
5 | Police benefit account or the enforcement officers' benefit |
6 | account as the case may be. All amounts transferred to the fund |
7 | by county retirement systems or pension plans in accordance with |
8 | the provisions of section 5507(c) also shall be credited to the |
9 | State accumulation account. All amounts transferred to the fund |
10 | by the Public School Employees' Retirement System in accordance |
11 | with section 5303.2(e) (relating to election to convert school |
12 | service to State service), except amounts credited to the |
13 | members' savings account, and all amounts paid by the Department |
14 | of Corrections in accordance with section 5303.2(f) also shall |
15 | be credited to the State accumulation account. The State |
16 | accumulation account shall be credited with valuation interest, |
17 | which shall not include earnings on employer contributions made |
18 | on behalf of Class QC members transferred in accordance with |
19 | subsection (d). The reserves necessary for the payment of |
20 | annuities and death benefits as approved by the board and as |
21 | provided in Chapter 57 (relating to benefits) shall be |
22 | transferred from the State accumulation account to the annuity |
23 | reserve account provided for in section 5935 (relating to |
24 | annuity reserve account), except that the reserves necessary on |
25 | account of a member who is an officer of the Pennsylvania State |
26 | Police or an enforcement officer shall be transferred from the |
27 | State accumulation account to the State Police benefit account |
28 | provided for in section 5936 (relating to State Police benefit |
29 | account) or to the enforcement officers' benefit account as |
30 | provided for in section 5937 (relating to enforcement officers' |
|
1 | benefit account) as the case may be. |
2 | (b) Amount of excess interest.--The amount of excess |
3 | interest to be credited to the State accumulation account shall |
4 | be in an amount equal to half of the excess interest allocated |
5 | under section 5902 (relating to administrative duties of board) |
6 | and shall be credited against any unfunded liability of the |
7 | system. |
8 | (c) Funded status.--In the event that the system's funding |
9 | status is less than 100% funded as determined by the actuary in |
10 | its most recent filing under section 5902(j) (relating to |
11 | administrative duties of the board), all excess interest awarded |
12 | by the board shall be allocated to the State accumulation |
13 | account and shall be credited against any unfunded liability of |
14 | the system existing in the year in which excess interest is |
15 | credited. |
16 | (d) Transfer to members' savings account.--Notwithstanding |
17 | any other provision of this part, all contributions made by the |
18 | employer under section 5933 (relating to members' savings |
19 | account) on behalf of Class QC members shall be transferred to |
20 | the members' savings account and credited to the individual |
21 | member accounts for Class QC members. |
22 | (e) Transfer to State accumulation account.--In the event of |
23 | a refund under section 5701(b) (relating to return of total |
24 | accumulated deductions), the employer contributions and excess |
25 | interest forfeited by the Class QC member shall be transferred |
26 | to the State accumulation account. |
27 | Section 35. Section 5935 of Title 71 is amended by adding a |
28 | subsection to read: |
29 | § 5935. Annuity reserve account. |
30 | * * * |
|
1 | (c) Excess interest.--One-half of the excess interest |
2 | allocated under section 5902(o) (relating to administrative |
3 | duties of board) shall be proportionately divided based on the |
4 | individual assets credited to each account between the annuity |
5 | reserve account for Class QC annuitants and the members' savings |
6 | account for Class QC members. |
7 | Section 36. Notwithstanding any other provision of law, any |
8 | change in accrued liability of the State Employees' Retirement |
9 | System created under this act as a result of changes in benefits |
10 | shall be funded in equal dollar annual contributions over a |
11 | period of 30 years beginning July 1, 2011. |
12 | Section 37. This act shall take effect in 60 days. |
|