PRINTER'S NO. 4189
No. 2868 Session of 2000
INTRODUCED BY MICHLOVIC, CAPPABIANCA, M. COHEN, BELARDI, HESS,
LESCOVITZ, CAWLEY, HARHAI, MANDERINO, McCALL, MYERS,
SCRIMENTI, SHANER, TIGUE, VAN HORNE AND YOUNGBLOOD,
NOVEMBER 15, 2000
REFERRED TO COMMITTEE ON STATE GOVERNMENT, NOVEMBER 15, 2000
AN ACT
1 Amending Title 71 (State Government) of the Pennsylvania
2 Consolidated Statutes, further providing for definitions and
3 for benefit accrual rates, eligibility for annuities, class
4 of service multipliers, benefits and member contributions.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. The definitions of "active member," "basic
8 contribution rate," "class of service multiplier," "credited
9 service," "inactive member" and "vestee" in section 5102 of
10 Title 71 of the Pennsylvania Consolidated Statutes are amended
11 to read:
12 § 5102. Definitions.
13 The following words and phrases as used in this part, unless
14 a different meaning is plainly required by the context, shall
15 have the following meanings:
16 * * *
17 "Active member." A State employee, or a member on leave
18 without pay, for whom pickup contributions are being made to the
1 fund or for whom such contributions otherwise required for
2 current State service are not being made solely by reason of any
3 provision of this part relating to the [limitation] limitations
4 under section 401(a)(17) or 415(b) of the Internal Revenue Code
5 of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(17) or 415(b)).
6 * * *
7 "Basic contribution rate." Five percent (5%), except that in
8 no case shall any member's rate, excluding the rate for social
9 security integration credit, be greater than his contribution
10 rate on the effective date of this part so long as he does not
11 elect additional coverage or membership in another class of
12 service. For purposes of this definition, failure to elect to
13 remain a member of Class A as provided for in section 5306.1
14 (relating to election to retain Class A service) shall be deemed
15 an election to be a member of Class AA and acceptance of the
16 Class AA contribution rate.
17 * * *
18 "Class of service multiplier."
19 Class of Service Multiplier
20 A 1
21 AA
22 for all purposes
23 except calculating
24 regular member
25 contributions on
26 compensation paid prior
27 to January 1, 2002 1.25
28 AA
29 for purposes of
30 calculating regular
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1 member contributions
2 on compensation paid
3 prior to January 1,
4 2002 1
5 B .625
6 C 1
7 D 1.25
8 D-1 prior to
9 January 1, 1973 1.875
10 D-1 on and
11 subsequent to
12 January 1, 1973 1.731
13 D-2 prior to
14 January 1, 1973 2.5
15 D-2 on and
16 subsequent to
17 January 1, 1973 1.731
18 D-3 prior to
19 January 1, 1973 3.75
20 D-3 on and
21 subsequent to
22 January 1, 1973 1.731 except prior to December
23 1, 1974 as applied to any
24 additional legislative
25 compensation as an officer
26 of the General Assembly
27 3.75
28 E, E-1 prior to
29 January 1, 1973 2 for each of the first ten
30 years of judicial service,
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1 and
2 1.5 for each subsequent year
3 of judicial service
4 E, E-1 on and
5 subsequent to
6 January 1, 1973 1.50 for each of the first
7 ten years of judicial
8 service and
9 1.125 for each subsequent year
10 of judicial service
11 E-2 prior to
12 September 1, 1973 1.5
13 E-2 on and
14 subsequent to
15 September 1, 1973 1.125
16 G 0.417
17 H 0.500
18 I 0.625
19 J 0.714
20 K 0.834
21 L 1.000
22 M 1.100
23 N 1.250
24 T-C (Public School 1
25 Employees'
26 Retirement Code)
27 * * *
28 "Credited service." State or creditable nonstate service for
29 which the required contributions have been made, or for which
30 the contributions otherwise required for such service were not
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1 made solely by reason of any provision of this part relating to
2 the [limitation] limitations under section 401(a)(17) or 415(b)
3 of the Internal Revenue Code of 1986 (Public Law 99-514, 26
4 U.S.C. § 401(a)(17) or 415(b)), or for which salary deductions
5 or lump sum payments have been agreed upon in writing.
6 * * *
7 "Inactive member." A member for whom no pickup contributions
8 are being made, except in the case of an active member for whom
9 such contributions otherwise required for current State service
10 are not being made solely by reason of any provision of this
11 part relating to the [limitation] limitations under section
12 401(a)(17) or 415(b) of the Internal Revenue Code of 1986
13 (Public Law 99-514, 26 U.S.C. § 401(a)(17) or 415(b)), but who
14 has accumulated deductions standing to his credit in the fund
15 and who is not eligible to become or has not elected to become a
16 vestee or has not filed an application for an annuity.
17 * * *
18 "Vestee." A member with [ten] five or more eligibility
19 points, or a member with Class G, Class H, Class I, Class J,
20 Class K, Class L, Class M or Class N service with [eight] five
21 or more eligibility points, who has terminated State service and
22 has elected to leave his total accumulated deductions in the
23 fund and to defer receipt of an annuity.
24 Section 2. Sections 5302, 5305 and 5306 of Title 71 are
25 amended to read:
26 § 5302. Credited State service.
27 (a) Computation of credited service.--In computing credited
28 State service of a member for the determination of benefits, a
29 full-time salaried State employee including any member of the
30 General Assembly, shall receive credit for service in each
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1 period for which contributions as required are made, or for
2 which contributions otherwise required for such service were not
3 made solely by reason of any provision of this part relating to
4 the [limitation] limitations under IRC § 401(a)(17) or 415(b),
5 but in no case shall he receive more than one year's credit for
6 any 12 consecutive months or 26 consecutive biweekly pay
7 periods. A per diem or hourly State employee shall receive one
8 year of credited service for each nonoverlapping period of 12
9 consecutive months or 26 consecutive biweekly pay periods in
10 which he is employed and for which contributions are made or
11 would have been made but for such [limitation] limitations under
12 the IRC for at least 220 days or 1,650 hours of employment. If
13 the member was employed and contributions were made for less
14 than 220 days or 1,650 hours, he shall be credited with a
15 fractional portion of a year determined by the ratio of the
16 number of days or hours of service actually rendered to 220 days
17 or 1,650 hours, as the case may be. A part-time salaried
18 employee shall be credited with the fractional portion of the
19 year which corresponds to the number of hours or days of service
20 actually rendered in relation to 1,650 hours or 220 days, as the
21 case may be. In no case shall a member who has elected multiple
22 service receive an aggregate in the two systems of more than one
23 year of credited service for any 12 consecutive months.
24 (b) Creditable leaves of absence.--
25 (1) A member on leave without pay who is studying under
26 a Federal grant approved by the head of his department or who
27 is engaged up to a maximum of two years of temporary service
28 with the United States Government, another state or a local
29 government under the Intergovernmental Personnel Act of 1970,
30 5 U.S.C. §§ 1304, 3371-3376; 42 U.S.C. §§ 4701-4772, shall be
20000H2868B4189 - 6 -
1 eligible for credit for such service: Provided, That
2 contributions are made in accordance with sections 5501
3 (relating to regular member contributions for current
4 service), 5505.1 (relating to additional member
5 contributions) and 5507 (relating to contributions by the
6 Commonwealth and other employers), the member returns from
7 leave without pay to active State service for a period of at
8 least one year, and he is not entitled to retirement benefits
9 for such service under a retirement system administered by
10 any other governmental agency.
11 (2) An active member on paid leave granted by an
12 employer for purposes of serving as an elected full-time
13 officer for a Statewide employee organization which is a
14 collective bargaining representative under the act of July
15 23, 1970 (P.L.563, No.195), known as the Public Employe
16 Relations Act: Provided, That such leave shall not be for
17 more than three consecutive terms of the same office; that
18 the employer shall fully compensate the member, including,
19 but not limited to, salary, wages, pension and retirement
20 contributions and benefits, other benefits and seniority, as
21 if he were in full-time active service; and that the
22 Statewide employee organization shall fully reimburse the
23 employer for all expenses and costs of such paid leave,
24 including, but not limited to, contributions and payment in
25 accordance with sections 5501, 5505.1 and 5507, if the
26 employee organization either directly pays, or reimburses the
27 Commonwealth or other employer for, contributions made in
28 accordance with section 5507.
29 (c) Credited service as retirement incentive.--
30 Notwithstanding any provisions of this title to the contrary,
20000H2868B4189 - 7 -
1 for the period February 1, 1991, to December 31, 1991, a member
2 who was not an annuitant on February 1, 1991, who terminates
3 State service between February 1, 1991, and December 31, 1991,
4 inclusive, who is, during such period, 55 years of age or older
5 or will attain 55 years of age between January 1, 1992, and
6 January 31, 1992, inclusive, with ten or more eligibility
7 points, and who files an application for retirement prior to
8 January 1, 1992, shall be credited with an additional 10% of his
9 Class A and Class C service. This provision shall not apply in
10 the case of active members who are justices, judges or district
11 justices, legislators, other elected officials and officers of
12 the Pennsylvania State Police.
13 (d) Enlargement of coverage of Military Code.--For purposes
14 of determining whether a member is eligible to receive credited
15 service for active military service rendered after the date of
16 this act, other than active duty service to meet periodic
17 training requirements, the provisions of 51 Pa.C.S. Ch. 73
18 (relating to military leave of absence) shall apply to all
19 individuals who were active members of the system, even if not
20 defined as an employee pursuant to 51 Pa.C.S. § 7301 (relating
21 to definitions).
22 (d.1) Effect of converting county service to State
23 service.--A county employee transferred to State employment
24 pursuant to 42 Pa.C.S. § 1905 (relating to county-level court
25 administrators) who elects to convert county service to State
26 service pursuant to section 5303.1 (relating to election to
27 convert county service to State service) shall receive one year
28 or fractional part of a year of State service credit for each
29 year or fractional part of a year, as the case may be, of county
30 service credited in the county retirement system or pension
20000H2868B4189 - 8 -
1 plan, provided, however, that no more than one year of State
2 service of all classes will be credited in any one calendar year
3 and that no State service credit shall be received for county
4 service that is already credited in the system or in the Public
5 School Employees' Retirement System.
6 (e) Cancellation of credited service.--All credited service
7 shall be cancelled if a member withdraws his total accumulated
8 deductions.
9 § 5305. Social security integration credits.
10 (a) Crediting of accrued credits.--Any member shall be
11 credited with the social security integration credits which he
12 has accrued up to the effective date of this part.
13 (b) Accrual of subsequent credits.--Any member who has
14 social security integration accumulated deductions to his credit
15 or is receiving a benefit on account of social security
16 integration credits may accrue one social security integration
17 credit for each year of service as a State employee on or
18 subsequent to March 1, 1974 and a fractional credit for a
19 corresponding fractional year of service provided that
20 contributions are made, or would have been made but for the
21 limitations under IRC § 401(a)(17) or 415(b), in accordance with
22 section 5502 (relating to social security integration member
23 contributions), and he:
24 (1) continues subsequent to March 1, 1974 as an active
25 member in either the State or school system;
26 (2) terminates such continuous service in the State or
27 school system and returns to active membership in the State
28 system within six months; or
29 (3) terminates his status as a vestee or an annuitant
30 and returns to State service.
20000H2868B4189 - 9 -
1 (c) Ineligibility by amount of annuity entitlement.--No
2 social security integration credits shall accrue for that period
3 of consecutive calendar years immediately prior to retirement
4 and after January 1, 1975 and during which for each such year
5 the maximum single life annuity to which the member would have
6 been entitled as of December 31 exceeds his highest annual
7 compensation as of such time. In such event, the contributions
8 made on behalf of the member on account of social security
9 integration credits for such years shall be returned to the
10 member together with statutory interest upon termination of
11 service of the member.
12 (d) Purchased nonstate service ineligible for credit.--No
13 social security integration credits shall accrue for any
14 nonstate service purchased in this system after March 1, 1974,
15 regardless of when such service may have been performed.
16 § 5306. Classes of service.
17 (a) Class A membership.--A State employee who is a member of
18 Class A on the effective date of this part or who becomes a
19 member of the system subsequent to the effective date of this
20 part shall be classified as a Class A member and receive credit
21 for Class A service upon payment of regular and additional
22 member contributions for Class A service[.], provided that the
23 State employee does not become a member of Class AA pursuant to
24 subsection (a.1).
25 (a.1) Class AA membership.--
26 (1) A person who becomes a State employee and an active
27 member of the system on or after the effective date of this
28 subsection and who is not a Pennsylvania State Police officer
29 or not employed in a position for which a class of service
30 other than Class A could be elected shall be classified as a
20000H2868B4189 - 10 -
1 Class AA member and receive credit for Class AA State service
2 upon payment of regular member contributions for Class AA
3 service and if previously a member of Class A shall have all
4 Class A State service (other than State service performed as
5 a Pennsylvania State Police officer or for which a class of
6 service other than Class A was or could have been elected)
7 classified as Class AA service.
8 (2) A State employee, other than a State employee who is
9 a Pennsylvania State Police officer on or after July 1, 1989,
10 who on the effective date of this subsection is:
11 (i) a member of Class A, other than a member of
12 Class A who could elect membership in a class of service
13 other than Class A; or
14 (ii) an inactive member on leave without pay from a
15 position in which the State employee would be a Class A
16 active member if the employee was not on leave without
17 pay, other than a position in which the State employee
18 could elect membership in a class of service other than
19 Class A;
20 shall be classified as a Class AA member and receive credit
21 for Class AA State service performed on or after the
22 effective date of this subsection upon payment of regular
23 member contributions for Class AA service and shall receive
24 Class AA service credit for all Class A State service (other
25 than State service performed as a Pennsylvania State Police
26 officer or as a State employee in a position in which the
27 member could have elected a class of service other than Class
28 A) performed before the effective date of this subsection,
29 unless the member elects to remain a Class A member pursuant
30 to section 5306.1 (relating to election to retain Class A
20000H2868B4189 - 11 -
1 service).
2 (3) A former State employee, other than a former State
3 employee who was a Pennsylvania State Police officer on or
4 after July 1, 1989, who on the effective date of this
5 subsection is:
6 (i) a vestee;
7 (ii) a special vestee; or
8 (iii) a multiple service member who is a school
9 employee and a member of the Public School Employees'
10 Retirement System;
11 shall receive Class AA service credit for all Class A State
12 service (other than State service performed as a Pennsylvania
13 State Police officer or as a State employee in a position in
14 which the former State employee could have elected a class of
15 service other than Class A) performed before the effective
16 date of this subsection, unless the former State employee
17 elects to remain a Class A member pursuant to section 5306.1
18 (relating to election to retain Class A service).
19 (4) State service performed as Class A service before
20 the effective date of this subsection shall be credited as
21 Class AA service only upon the completion of all acts
22 necessary for the State service to be credited as Class A
23 service had this subsection not been enacted.
24 (5) A State employee, who on or after the effective date
25 of this subsection, becomes a Pennsylvania State Police
26 officer or who is employed in a position in which the member
27 could elect membership in a class of service other than Class
28 A shall retain any Class AA service credited prior to
29 becoming a Pennsylvania State Police officer or being so
30 employed, but shall be ineligible to receive Class AA credit
20000H2868B4189 - 12 -
1 thereafter, but instead shall receive Class A credit unless
2 another class of membership other than Class A is elected.
3 (b) Other class membership.--A State employee who is a
4 member of a class of service other than Class A on the effective
5 date of this part shall retain his membership in that class
6 until such service is discontinued; any service thereafter shall
7 be credited as Class A service.
8 (c) Class membership for county service.--Notwithstanding
9 subsection (a), county service that is converted to State
10 service pursuant to section 5303.1 (relating to election to
11 convert county service to State service) shall be credited as
12 the following class of service:
13 Class of service in a county of the
14 second class A, third class, fourth
15 class, fifth class, sixth class,
16 seventh class or eighth class
17 maintaining a retirement system or
18 pension plan under the act of August
19 31, 1971 (P.L.398, No.96), known as
20 the County Pension Law
21 System Class of
22 Service
23 Class 1-120 G
24 Class 1-100 H
25 Class 1-80 I
26 Class 1-70 J
27 Class 1-60 K
28 Rate of accrual of benefit for each
29 year of service in a county of the
30 first class or second class or
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1 credited in the Pennsylvania
2 Municipal Retirement System
3 System Class of
4 Service
5 .833% G
6 1.00% H
7 1.250% I
8 1.428% J
9 1.667% K
10 2.000% L
11 2.200% M
12 2.500% N
13 Section 3. Title 71 is amended by adding a section to read:
14 § 5306.1. Election to retain Class A service.
15 (a) General rule.--A person who is:
16 (1) a member of the system; or
17 (2) a multiple service member who is a school employee
18 and a member of the Public School Employees' Retirement
19 System;
20 who on the effective date of this section is eligible for Class
21 AA membership may elect to remain a member of Class A.
22 (b) Time for making election.--The election to remain a
23 Class A member must be made by the member filing written notice
24 with the board on or before December 31, 2001, or before the
25 member terminates State service, whichever occurs first.
26 (c) Effect of election.--An election to remain a Class A
27 member shall remain in effect until the termination of
28 employment and shall result in all service credited as Class AA
29 service being credited as Class A service. Upon subsequent
30 reemployment, a member shall not have the election to remain a
20000H2868B4189 - 14 -
1 Class A member and all State service shall be credited in the
2 class of service otherwise provided for in this part.
3 (d) Effect of failure to make election.--Failure to elect to
4 remain a Class A member within the election period set forth in
5 subsection (b) shall result in all of the member's Class A State
6 service other than service performed as a Pennsylvania State
7 Police officer or in a position in which the member could elect
8 a class of membership other than Class A being credited as Class
9 AA service as set forth in this part and shall be deemed
10 acceptance by the member of the limitations on benefits from the
11 system under IRC § 415(b).
12 Section 4. Sections 5308(b), 5309, 5501, 5502, 5702, 5704,
13 5705(a), 5706, 5903, 5906 and 5937 of Title 71 are amended to
14 read:
15 § 5308. Eligibility for annuities.
16 * * *
17 (b) Withdrawal annuity.--Any vestee or any active member or
18 inactive member on leave without pay who terminates State
19 service having [ten] five or more eligibility points, or who has
20 Class G, Class H, Class I, Class J, Class K, Class L, Class M or
21 Class N service and terminates State service having [eight] five
22 or more eligibility points, upon compliance with section
23 5907(f), (g) or (h) shall be entitled to receive an annuity.
24 * * *
25 § 5309. Eligibility for vesting.
26 Any member who terminates State service with [ten] five or
27 more eligibility points, or any member with Class G, Class H,
28 Class I, Class J, Class K, Class L, Class M or Class N service
29 with [eight] five or more eligibility points, shall be eligible
30 until attainment of superannuation age to vest his retirement
20000H2868B4189 - 15 -
1 benefits.
2 § 5501. Regular member contributions for current service.
3 Regular member contributions shall be made to the fund on
4 behalf of each active member for current service except for any
5 period of current service in which the making of such
6 contributions has ceased solely by reason of any provision of
7 this part relating to the [annual compensation limit under IRC §
8 401(a)(17)] limitations under IRC § 401(a)(17) or 415(b).
9 § 5502. Social Security integration member contributions.
10 [Contributions] Except for any period of current service in
11 which the making of regular member contributions has ceased
12 solely by reason of any provision of this part relating to
13 limitations under IRC § 401(a)(17) or 415(b), contributions
14 shall be made on behalf of a member of any class who prior to
15 March 1, 1974, has elected Social Security integration coverage.
16 The amount of such contributions shall be 6 1/4% of that portion
17 of his compensation in excess of the maximum wages taxable under
18 the provisions of the Social Security Act (49 Stat. 620, 42
19 U.S.C. § 301 et seq.), in addition to the regular member
20 contributions which, after such election, shall be determined on
21 the basis of the basic contribution rate of 5% and the
22 additional member contribution of 1 1/4%: Provided, That a
23 member may elect to discontinue Social Security integration
24 coverage and shall thereafter be ineligible to accrue any
25 further Social Security integration credits or any additional
26 benefits on account of Social Security integration membership.
27 § 5702. Maximum single life annuity.
28 (a) General rule.--Any full coverage member who is eligible
29 to receive an annuity pursuant to the provisions of section
30 5308(a) or (b) (relating to eligibility for annuities) shall be
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1 entitled to receive a maximum single life annuity attributable
2 to his credited service and equal to the sum of the following
3 single life annuities beginning at the effective date of
4 retirement:
5 (1) A standard single life annuity multiplied by the sum
6 of the products, determined separately for each class of
7 service, obtained by multiplying the appropriate class of
8 service multiplier by the ratio of years of service credited
9 in that class to the total credited service. In case the
10 member on the effective date of retirement is under
11 superannuation age for any service, a reduction factor
12 calculated to provide benefits actuarially equivalent to an
13 annuity starting at superannuation age shall be applied to
14 the product determined for that service. The class of service
15 multiplier for any period of concurrent service shall be
16 multiplied by the proportion of total State and school
17 compensation during such period attributable to State
18 service. In the event a member has two multipliers for one
19 class of service the class of service multiplier to be used
20 for calculating benefits for that class shall be the average
21 of the two multipliers weighted by the proportion of
22 compensation attributable to each multiplier during the three
23 years of highest annual compensation in that class of
24 service: Provided, That in the case of a member of Class E-1,
25 a portion but not all of whose three years of highest annual
26 judicial compensation is prior to January 1, 1973, two class
27 of service multipliers shall be calculated on the basis of
28 his entire judicial service, the one applying the judicial
29 class of service multipliers effective prior to January 1,
30 1973 and the second applying the class of service multipliers
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1 effective subsequent to January 1, 1973. The average class of
2 service multiplier to be used for calculating benefits for
3 his judicial service shall be the average of the two
4 calculated multipliers weighted by the proportion of
5 compensation attributable to each of the calculated
6 multipliers during the three years of highest annual
7 compensation in that class of service.
8 (2) If eligible, a single life annuity of 2% of his
9 average noncovered salary for each year of social security
10 integration credit as provided for in section 5305 (relating
11 to social security integration credits) multiplied, if on the
12 effective date of retirement the member is under
13 superannuation age for any service, by the actuarially
14 determined reduction factor for that service.
15 (3) If eligible, a single life annuity which is
16 actuarially equivalent to the regular and additional
17 accumulated deductions attributable to contributions as a
18 member of Class C, but not less than such annuity determined
19 as if the member were age 60 on the effective date of
20 retirement, actuarially reduced in the event the member is
21 under superannuation age on the effective date of retirement.
22 (4) If eligible, a single life annuity which is
23 actuarially equivalent to the amount by which his regular and
24 additional accumulated deductions attributable to any
25 credited service other than as a member of Class C are
26 greater than one-half of the actuarially equivalent value on
27 the effective date of retirement of the annuity as provided
28 in paragraph (1) attributable to service other than Class C
29 for which regular or joint coverage member contributions were
30 made.
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1 (5) If eligible, a single life annuity which is
2 actuarially equivalent to the amount by which his social
3 security integration accumulated deductions are greater than
4 one-half of the actuarially equivalent value on the effective
5 date of retirement of the annuity provided for under
6 paragraph (2).
7 (6) If eligible, a single life annuity sufficient
8 together with the annuity provided for in paragraph (1) as a
9 Class A and Class AA member and the highest annuity provided
10 for in paragraph (2) to which he is entitled, or at his
11 option could have been entitled, to produce that percentage
12 of a standard single life annuity on the effective date of
13 retirement as determined by his total years of credited
14 service as a member of Class A and Class AA and by the
15 following table:
16 Total Years of Percentage of
17 Credited Service Standard
18 as a Member of Single Life
19 Class A and Annuity
20 Class AA
21 35-40 100%
22 41 102%
23 42 104%
24 43 106%
25 44 108%
26 45 or more 110%
27 (b) Present value of annuity.--The present value of the
28 maximum single life annuity as calculated in accordance with
29 subsection (a) of this section shall be determined by
30 multiplying the maximum single life annuity by the cost of a
20000H2868B4189 - 19 -
1 dollar annuity on the effective date of retirement. Such present
2 value shall be decreased only as required under the provisions
3 of section 5506 (relating to incomplete payments), 5509(c)
4 (relating to appropriations and assessments by the Commonwealth)
5 or 5703 (relating to reduction of annuities on account of social
6 security old-age insurance benefits).
7 (c) Limitation on amount of annuity.--The annuity paid to a
8 member under subsection (a) and reduced in accordance with the
9 option elected under section 5705 (relating to member's options)
10 shall not exceed the highest compensation received during any
11 period of twelve consecutive months of credited service:
12 Provided, That the portion of any annuity paid to a member on
13 account of Class D-3 service under subsection (a)(1) and reduced
14 in accordance with the option elected under section 5705 shall
15 not exceed the greater of $12,000 or his highest annual
16 compensation as a member of the General Assembly. No limit shall
17 be applied in the case of a member who served as a
18 constitutional officer of the General Assembly prior to January
19 1, 1973.
20 (d) Limitation regarding annual benefit under IRC § 415.--
21 Notwithstanding any provision of this part to the contrary, no
22 benefit shall be payable to the extent, if any, that such
23 benefit exceeds any limitation under IRC § 415(b) in effect with
24 respect to governmental plans (as such term is defined in IRC §
25 414(d)) on the date the benefit payment becomes effective.
26 § 5704. Disability annuities.
27 (a) Amount of annuity.--A member who has made application
28 for a disability annuity and has been found to be eligible in
29 accordance with the provisions of section 5905(c)(1) (relating
30 to duties of the board regarding applications and elections of
20000H2868B4189 - 20 -
1 members) shall receive a disability annuity payable from the
2 effective date of disability as determined by the board and
3 continued until a subsequent determination by the board that the
4 annuitant is no longer entitled to a disability annuity. The
5 disability annuity shall be equal to a standard single life
6 annuity multiplied by the class of service multiplier applicable
7 to the class of service at the time of disability if the product
8 of such class of service multiplier and the total number of
9 years of credited service is greater than 16.667, otherwise the
10 standard single life annuity shall be multiplied by the lesser
11 of the following ratios:
12 MY*/Y or 16.667/Y
13 where Y = number of years of credited service, Y* = total years
14 of credited service if the member were to continue as a State
15 employee until attaining superannuation age as applicable at the
16 time of disability, or if the member has attained superannuation
17 age, as applicable at the time of disability, then the number of
18 years of credited service and M = the class of service
19 multiplier as applicable at the effective date of disability. A
20 member of Class C shall receive, in addition, any annuity to
21 which he may be eligible under section 5702(a)(3) (relating to
22 maximum single life annuity). 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 5702.
26 (b) Benefit attributable to social security integration
27 credit.--If the member has been found to be eligible for a
28 disability annuity and has social security integration credits
29 as provided in section 5305 (relating to social security
30 integration credits), he may elect to withdraw his social
20000H2868B4189 - 21 -
1 security integration accumulated deductions or if he has [ten]
2 five or more eligibility points to his credit and does not
3 withdraw his social security integration accumulated deductions
4 he may execute an application to be filed with the board to
5 receive, in addition to his disability annuity, an annuity
6 calculated in accordance with section 5702(a)(2).
7 (c) Reduction on account of earned income.--Subsequent to
8 January 1, 1972, payments on account of disability shall be
9 reduced by that amount by which the earned income of the
10 annuitant, as reported in accordance with section 5908(b)
11 (relating to rights and duties of annuitants), for the preceding
12 calendar quarter together with the disability annuity payments
13 provided in this section other than subsection (b), for the
14 quarter, exceeds the product of:
15 (i) the greater of $1,250 or one-quarter of the last
16 year's salary of the annuitant as a State employee;
17 (ii) the ratio of the current monthly payment to the
18 monthly payment at the effective date of disability; and
19 (iii) the percentage factor determined by the
20 following table for the calendar year of the member's
21 effective date of disability:
22 Calendar Year of
23 Effective Date of Percentage
24 Disability Factor
25 1966 or earlier 135%
26 1967 130%
27 1968 125%
28 1969 120%
29 1970 115%
30 1971 110%
20000H2868B4189 - 22 -
1 1972 105%
2 Provided, That the annuitant shall not receive less than his
3 member's annuity or the amount to which he may be entitled under
4 section 5702 whichever is greater.
5 (d) Reduction on account of ineligibility.--Payment of that
6 portion of the disability annuity in excess of the annuity to
7 which the annuitant was entitled at the effective date of
8 disability calculated in accordance with section 5702 shall
9 cease if the annuitant is no longer eligible under the
10 provisions of sections 5905(c)(2) or 5908(b) or (c).
11 (e) Termination of State service.--Upon termination of
12 disability annuity payments in excess of an annuity calculated
13 in accordance with section 5702, a disability annuitant who does
14 not return to State service may file an application with the
15 board for an amount equal to the excess, if any, of the sum of
16 the regular and additional accumulated deductions standing to
17 his credit at the effective date of disability over one-third of
18 the total disability annuity payments received. If the annuitant
19 on the date of termination of service was eligible for an
20 annuity as provided in section 5308(b) (relating to eligibility
21 for annuities), he may file an application with the board for an
22 election of an optional modification of his annuity.
23 (f) Supplement for service connected disability.--If a
24 member has been found to be eligible for a disability annuity
25 and if the disability has been found to be a service connected
26 disability, such member shall receive a supplement equal to 70%
27 of his final average salary less the sum of the annuity as
28 determined under subsection (a) and any payments paid or payable
29 on account of such disability under the act of June 2, 1915
30 (P.L.736, No.338), known as ["]The [Pennsylvania Workmen's]
20000H2868B4189 - 23 -
1 Workers' Compensation Act["], the act of June 21, 1939 (P.L.566,
2 No.284), known as ["]The Pennsylvania Occupational Disease
3 Act["] and the [Federal] Social Security Act, [42 U.S.C.A. § 301
4 et seq] (49 Stat. 620, 42 U.S.C. § 301 et seq.). Such supplement
5 shall continue as long as he is determined to be disabled on
6 account of his service connected disability in accordance with
7 ["]The [Pennsylvania Workmen's] Workers' Compensation Act["], or
8 ["]The Pennsylvania Occupational Disease Act["].
9 (g) Limitation regarding annual benefit under IRC § 415.--
10 Notwithstanding any provision of this part to the contrary, no
11 benefit shall be payable to the extent, if any, that such
12 benefit exceeds any limitation under IRC § 415(b) in effect with
13 respect to governmental plans (as such term is defined in IRC §
14 414(d)) on the date the benefit payment becomes effective.
15 § 5705. Member's options.
16 (a) General rule.--Any special vestee who has attained
17 superannuation age, any vestee having [ten] five or more
18 eligibility points, any member with Class G, Class H, Class I,
19 Class J, Class K, Class L, Class M or Class N service having
20 [eight] five or more eligibility points or any other eligible
21 member upon termination of State service who has not withdrawn
22 his total accumulated deductions as provided in section 5701
23 (relating to return of total accumulated deductions) may apply
24 for and elect to receive either a maximum single life annuity,
25 as calculated in accordance with the provisions of section 5702
26 (relating to maximum single life annuity), or a reduced annuity
27 certified by the actuary to be actuarially equivalent to the
28 maximum single life annuity and in accordance with one of the
29 following options; except that no member shall elect an annuity
30 payable to one or more survivor annuitants other than his spouse
20000H2868B4189 - 24 -
1 or alternate payee of such a magnitude that the present value of
2 the annuity payable to him for life plus any lump sum payment he
3 may have elected to receive is less than 50% of the present
4 value of his maximum single life annuity:
5 (1) Option 1.--A life annuity to the member with a
6 guaranteed total payment equal to the present value of the
7 maximum single life annuity on the effective date of
8 retirement with the provision that, if, at his death, he has
9 received less than such present value, the unpaid balance
10 shall be payable to his beneficiary.
11 (2) Option 2.--A joint and survivor annuity payable
12 during the lifetime of the member with the full amount of
13 such annuity payable thereafter to his survivor annuitant, if
14 living at his death.
15 (3) Option 3.--A joint and fifty percent (50%) survivor
16 annuity payable during the lifetime of the member with one-
17 half of such annuity payable thereafter to his survivor
18 annuitant, if living at his death.
19 (4) Option 4.--Some other benefit which shall be
20 certified by the actuary to be actuarially equivalent to the
21 maximum single life annuity, subject to the following
22 restrictions:
23 (i) any annuity shall be payable without reduction
24 during the lifetime of the member;
25 (ii) the sum of all annuities payable to the
26 designated survivor annuitants shall not be greater than
27 one and one-half times the annuity payable to the member;
28 and
29 (iii) a portion of the benefit may be payable as a
30 lump sum, except that such lump sum payment shall not
20000H2868B4189 - 25 -
1 exceed an amount equal to the total accumulated
2 deductions standing to the credit of the member. The
3 balance of the present value of the maximum single life
4 annuity adjusted in accordance with section 5702(b) shall
5 be paid in the form of an annuity with a guaranteed total
6 payment, a single life annuity, or a joint and survivor
7 annuity or any combination thereof but subject to the
8 restrictions of subparagraphs (i) and (ii) under this
9 option.
10 * * *
11 § 5706. Termination of annuities.
12 (a) General rule.--If the annuitant returns to State service
13 or enters school service and elects multiple service membership,
14 any annuity payable to him under this part shall cease and in
15 the case of an annuity other than a disability annuity the
16 present value of such annuity, adjusted for full coverage in the
17 case of a joint coverage member who makes the appropriate back
18 contributions for full coverage, shall be frozen as of the date
19 such annuity ceases. An annuitant who is credited with an
20 additional 10% of Class A and Class C service as provided in
21 section 5302(c) (relating to credited State service) and who
22 returns to State service shall forfeit such credited service and
23 shall have his frozen present value adjusted as if his 10%
24 retirement incentive had not been applied to his account. In the
25 event that the cost-of-living increase enacted December 18, 1979
26 occurred during the period of such State or school employment,
27 the frozen present value shall be increased, on or after the
28 member attains superannuation age, by the percent applicable had
29 he not returned to service. This subsection shall not apply in
30 the case of any annuitant who may render services to the
20000H2868B4189 - 26 -
1 Commonwealth in the capacity of an independent contractor or as
2 a member of an independent board or commission or as a member of
3 a departmental administrative or advisory board or commission
4 when such members of independent or departmental boards or
5 commissions are compensated on a per diem basis for not more
6 than 150 days per calendar year.
7 (a.1) Return to State service during emergency.--When, in
8 the judgment of the employer, an emergency creates an increase
9 in the work load such that there is serious impairment of
10 service to the public, an annuitant may be returned to State
11 service for a period not to exceed 95 days in any fiscal year
12 without loss of his annuity. In computing the number of days an
13 annuitant has returned to State service, any amount of time less
14 than one-half of a day shall be counted as one-half of a day.
15 For agencies, boards and commissions under the Governor's
16 jurisdiction, the approval of the Governor that an emergency
17 exists shall be required before an annuitant may be returned to
18 State service.
19 (b) Subsequent discontinuance of service.--Upon subsequent
20 discontinuance of service, such member other than a former
21 annuitant who had the effect of his frozen present value
22 eliminated in accordance with subsection (c) or a former
23 disability annuitant shall be entitled to an annuity which is
24 actuarially equivalent to the sum of the present value as
25 determined under subsection (a) and the present value of a
26 maximum single life annuity based on years of service credited
27 subsequent to reentry in the system and his final average salary
28 computed by reference to his compensation during his entire
29 period of State and school service.
30 (c) Elimination of the effect of frozen present value.--
20000H2868B4189 - 27 -
1 (1) An annuitant who returns to State service and earns
2 three eligibility points by performing credited State service
3 following the most recent period of receipt of an annuity
4 under this part, or an annuitant who enters school service
5 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 State
9 service or credited school service following the most recent
10 period of receipt of an annuity under this part, and who had
11 the present value of his annuity frozen in accordance with
12 subsection (a), shall qualify to have the effect of the
13 frozen present value resulting from all previous periods of
14 retirement eliminated, provided that all payments under
15 Option 4 and annuity payments payable during previous periods
16 of retirement plus interest as set forth in paragraph (3)
17 shall be returned to the fund in the form of an actuarial
18 adjustment to his subsequent benefits or in such form as the
19 board may otherwise direct.
20 (2) Upon subsequent discontinuance of service and the
21 filing of an application for an annuity, a former annuitant
22 who qualifies to have the effect of a frozen present value
23 eliminated under this subsection shall be entitled to receive
24 the higher of either:
25 (i) an annuity (prior to optional modification)
26 calculated as if the freezing of the former annuitant's
27 account pursuant to subsection (a) had not occurred,
28 adjusted by crediting Class A State service as Class AA
29 service as provided for in section 5306(a.1) (relating to
30 classes of service) and further adjusted according to
20000H2868B4189 - 28 -
1 paragraph (3), provided that a former annuitant of the
2 system or a former annuitant of the Public School
3 Employees' Retirement System who retired under a
4 provision of law granting additional service credit if
5 termination of State or school service or retirement
6 occurred during a specific period of time shall not be
7 permitted to retain the additional service credit under
8 the prior law when the annuity is computed for his most
9 recent retirement; or
10 (ii) an annuity (prior to optional modification)
11 calculated as if the former annuitant did not qualify to
12 have the effect of the frozen present value eliminated,
13 unless the former annuitant notifies the board in writing by
14 the later of the date the application for annuity is filed or
15 the effective date of retirement that the former annuitant
16 wishes to receive the lower annuity.
17 (3) In addition to any other adjustment to the present
18 value of the maximum single life annuity that a member may be
19 entitled to receive that occurs as a result of any other
20 provision of law, the present value of the maximum single
21 life annuity shall be reduced by all amounts paid or payable
22 to him during all previous periods of retirement plus
23 interest on these amounts until the date of subsequent
24 retirement. The interest for each year shall be calculated
25 based upon the annual interest rate adopted for that fiscal
26 year by the board for the calculation of the normal
27 contribution rate pursuant to section 5508(b) (relating to
28 actuarial cost method).
29 § 5903. Duties of the board to advise and report to heads of
30 departments and members.
20000H2868B4189 - 29 -
1 (a) Manual of regulations.--The board shall, with the advice
2 of the Attorney General and the actuary, prepare and provide,
3 within 90 days of the effective date of this part, a manual
4 incorporating rules and regulations consistent with the
5 provisions of this part to the heads of departments who shall
6 make the information contained therein available to the general
7 membership. The board shall thereafter advise the heads of
8 departments within 90 days of any changes in such rules and
9 regulations due to changes in the law or due to changes in
10 administrative policies. As soon as practicable after the
11 commissioner's announcement with respect thereto, the board
12 shall also advise the heads of departments as to any cost-of-
13 living adjustment for the succeeding calendar year in the amount
14 of the limitation under IRC § 401(a)(17) and the dollar amounts
15 of the limitations under IRC § 415(b).
16 (b) Member status statements and certifications.--The board
17 shall furnish annually to the head of each department on or
18 before April 1, a statement for each member employed in such
19 department showing the total accumulated deductions standing to
20 his credit as of December 31 of the previous year and requesting
21 the member to make any necessary corrections or revisions
22 regarding his designated beneficiary. In addition, for each
23 member employed in any department and for whom the department
24 has furnished the necessary information, the board shall certify
25 the number of years and fractional part of a year of credited
26 service attributable to each class of service, the number of
27 years and fractional part of a year attributable to social
28 security integration credits in each class of service and, in
29 the case of a member eligible to receive an annuity, the benefit
30 to which he is entitled upon the attainment of superannuation
20000H2868B4189 - 30 -
1 age.
2 (c) Purchase of credit and full coverage membership
3 certifications.--Upon receipt of an application from an active
4 member or eligible school employee to purchase credit for
5 previous State or creditable nonstate service, or an election to
6 become a full coverage member, the board shall determine and
7 certify to the member the amount required to be paid by the
8 member. When necessary, the board shall certify to the previous
9 employer the amount due in accordance with sections 5504
10 (relating to member contributions for the purchase of credit for
11 previous State service or to become a full coverage member) and
12 5505 (relating to contributions for the purchase of credit for
13 creditable nonstate service).
14 (d) Transfer from joint coverage membership
15 certifications.--Upon receipt of an application from a joint
16 coverage member who elects to become a full coverage member, the
17 board shall certify to the member the effective date of such
18 transfer and the prospective rate for regular and additional
19 member contributions.
20 (e) Former county employees.--Upon receipt of an election by
21 a county employee transferred to State employment pursuant to 42
22 Pa.C.S. § 1905 (relating to county-level court administrators)
23 to convert county service to State service, the board shall
24 certify to the member the amount of service so converted and the
25 class at which such service is credited.
26 § 5906. Duties of heads of departments.
27 (a) Status of members.--The head of department shall, at the
28 end of each pay period, notify the board in a manner prescribed
29 by the board of salary changes effective during that period for
30 any members of the department, the date of all removals from the
20000H2868B4189 - 31 -
1 payroll, and the type of leave of any members of the department
2 who have been removed from the payroll for any time during that
3 period, and:
4 (1) if the removal is due to leave without pay, he shall
5 furnish the board with the date of beginning leave and the
6 date of return to service, and the reason for leave; or
7 (2) if the removal is due to a transfer to another
8 department, he shall furnish such department and the board
9 with a complete State service record, including past State
10 service in other departments or agencies, or creditable
11 nonstate service; or
12 (3) if the removal is due to termination of State
13 service, he shall furnish the board with a complete State
14 service record, including service in other departments or
15 agencies, or creditable nonstate service and;
16 (i) in the case of death of the member the head of
17 the department shall so notify the board;
18 (ii) in the case of a service connected disability
19 the head of department shall, to the best of his ability,
20 investigate the circumstances surrounding the disablement
21 of the member and submit in writing to the board
22 information which shall include but not necessarily be
23 limited to the following: date, place and time of
24 disablement to the extent ascertainable; nature of duties
25 being performed at such time; and whether or not the
26 duties being performed were authorized and included among
27 the member's regular duties. In addition, the head of
28 department shall furnish in writing to the board all such
29 other information as may be related to the member's
30 disablement;
20000H2868B4189 - 32 -
1 (iii) in the case of a member terminating from The
2 Pennsylvania State University who is a member of the
3 system with five or more but less than ten eligibility
4 points and who has terminated State service on June 30,
5 1997, because of the transfer of his job position or
6 duties to a controlled organization of the Penn State
7 Geisinger Health System or because of the elimination of
8 his job position or duties due to the transfer of other
9 job positions or duties to a controlled organization of
10 the Penn State Geisinger Health System, the head of the
11 department shall so certify to the board.
12 (b) Records and information.--At any time at the request of
13 the board and at termination of service of a member, the head of
14 department shall furnish service and compensation records and
15 such other information as the board may require and shall
16 maintain and preserve such records as the board may direct for
17 the expeditious discharge of its duties.
18 (c) Member contributions.--The head of department shall
19 cause the required pickup contributions for current service to
20 be made and shall cause to be deducted any other required member
21 contributions from each payroll. The head of department shall
22 notify the board at times and in a manner prescribed by the
23 board of the compensation of any noneligible member to whom the
24 limitation under IRC § 401(a)(17) either applies or is expected
25 to apply and shall cause such member's contributions deducted
26 from payroll to cease at the limitation under IRC § 401(a)(17)
27 on the payroll date if and when such limit shall be reached. The
28 head of department shall certify to the State Treasurer the
29 amounts picked up and deducted and shall send the total amount
30 picked up and deducted together with a duplicate of such voucher
20000H2868B4189 - 33 -
1 to the secretary of the board every pay period. The head of
2 department shall pay pickup contributions from the same source
3 of funds which is used to pay other compensation to the
4 employee. On or before January 31, 1997, and on or before
5 January 31 of each year thereafter, the head of department
6 shall, at the time when the income and withholding information
7 required by law is furnished to each member, also furnish the
8 amount of pickup contributions made on his behalf and notify the
9 board, if it has not been previously notified, of any
10 noneligible member whose compensation in the preceding year
11 exceeded the annual compensation limit under IRC § 401(a)(17).
12 If the board shall determine that the member's savings account
13 shall have been credited with pickup contributions for a
14 noneligible member in the preceding year which are attributable
15 to compensation in excess of the limitation under IRC §
16 401(a)(17), or with total member contributions for such member
17 which would cause such member's contributions or benefits to
18 exceed any applicable limitation under IRC § 401(a)(17) or
19 415(b), the board shall as soon as practicable refund to the
20 member from his individual member account such amount, together
21 with the statutory interest thereon, as will cause the member's
22 total member contributions in the preceding year not to exceed
23 the applicable limit. The payment of any such refund to the
24 member shall be charged to the member's savings account.
25 (d) New employees subject to mandatory membership.--Upon the
26 assumption of duties of each new State employee whose membership
27 in the system is mandatory, the head of department shall cause
28 an application for membership and a nomination of beneficiary to
29 be made by such employee and filed with the board and shall make
30 pickup contributions from the effective date of State
20000H2868B4189 - 34 -
1 employment.
2 (e) New employees subject to optional membership.--The head
3 of department shall, upon the employment or entering into office
4 of any State employee whose membership in the system is not
5 mandatory, inform such employee of his opportunity to become a
6 member of the system. If such employee so elects, the head of
7 department shall cause an application for membership and a
8 nomination of beneficiary to be made by him and filed with the
9 board and shall cause proper contributions to be made from the
10 effective date of membership.
11 (e.1) Former county-level judicial employees transferred to
12 State employment.--In addition to the duties set forth in
13 subsections (d) and (e), the Court Administrator of
14 Pennsylvania, upon the transfer of county employees to State
15 employment pursuant to 42 Pa.C.S. § 1905 (relating to county-
16 level court administrators), shall advise such transferred
17 county employees of their opportunity to elect to convert county
18 service to State service in accordance with section 5303.1
19 (relating to election to convert county service to State
20 service), and, if such employee so elects, the Court
21 Administrator of Pennsylvania shall cause an election to be made
22 and filed with the board within 90 days after the transfer to
23 State employment.
24 (g) Former school employee contributors.--The head of
25 department shall, upon the employment of a former contributor to
26 the Public School Employees' Retirement System who is not an
27 annuitant of the Public School Employees' Retirement System,
28 advise such employee of his right to elect within 30 days of
29 entry into the system to become a multiple service member, and
30 in the case of any such employee who so elects and has withdrawn
20000H2868B4189 - 35 -
1 his accumulated deductions, require him to reinstate his credit
2 in the Public School Employees' Retirement System. The head of
3 the department shall advise the board of such election.
4 (h) Former school employee annuitants.--The head of
5 department shall, upon the employment of an annuitant of the
6 Public School Employees' Retirement System who applies for
7 membership in the system, advise such employee that he may elect
8 multiple service membership within 30 days of entry into the
9 system and if he so elects his public school employee's annuity
10 will be discontinued and, upon termination of State service and
11 application for an annuity, the annuity will be adjusted in
12 accordance with section 5706 (relating to termination of
13 annuities). The head of department shall advise the board of
14 such election.
15 (i) Annual statement to members.--Annually, upon receipt
16 from the board, the head of department shall furnish to each
17 member the statement specified in section 5903(b) (relating to
18 duties of the board to advise and report to heads of departments
19 and members).
20 (j) Termination of service.--The head of department shall,
21 in the case of any member terminating State service who is
22 ineligible for an annuity before attainment of superannuation
23 age, advise such member in writing of any benefits to which he
24 may be entitled under the provisions of this part and shall have
25 the member prepare, on or before the date of termination of
26 State service, an application for the return of total
27 accumulated deductions or, on or before September 30, 1997, an
28 application to be vested as a special vestee, if eligible.
29 (k) Date of application for benefits.--Any application
30 properly executed and filed under subsection (j) with the
20000H2868B4189 - 36 -
1 department and not filed with the board within 30 days shall be
2 deemed to have been filed with the board on the date filed with
3 the department and in such case all required data shall be
4 furnished to the board immediately.
5 § 5937. Enforcement officers' benefit account.
6 (a) Credits and charges to account.--The enforcement
7 officers' benefit account shall be the ledger account to which
8 shall be credited moneys transferred from the enforcement
9 officers' retirement account in the State Stores Fund according
10 to the provisions of the [Liquor Code,] act of April 12, 1951
11 (P.L.90, No.21), known as the Liquor Code, and any additional
12 Commonwealth or other employer contributions provided for in
13 section 5507 (relating to contributions by the Commonwealth and
14 other employers) which are creditable to the enforcement
15 officers' benefit account. The enforcement officers' benefit
16 account shall be credited with the required interest. In
17 addition, upon the filing of an application for an annuity by a
18 member who is an enforcement officer of the Pennsylvania Liquor
19 Control Board, the total accumulated deductions standing to the
20 credit of the member in the members' savings account and the
21 necessary reserves from the State accumulation account shall be
22 transferred to the enforcement officers' benefit account.
23 Thereafter, the total annuity of such annuitant shall be charged
24 to the enforcement officers' benefit account and paid from the
25 fund.
26 (b) Transfers from account.--Should the said annuitant be
27 subsequently restored to active service, the present value of
28 the member's annuity at the time of reentry into State service
29 shall be transferred from the enforcement officers' benefit
30 account and placed to his individual credit in the members'
20000H2868B4189 - 37 -
1 savings account. In addition, the actuarial reserve for his
2 annuity calculated as if he had been a member of Class A if the
3 annuitant does not have any Class AA service credited and
4 calculated as if he had been a member of Class AA if the
5 annuitant does have Class AA service credited less the amount
6 transferred to the members' savings account shall be transferred
7 from the enforcement officers' benefit account to the State
8 accumulation account. Upon subsequent retirement other than as
9 an enforcement officer the actuarial reserve remaining in the
10 enforcement officers' benefit account shall be transferred to
11 the appropriate reserve account.
12 Section 5. As used in this act, the term "State police
13 officer" shall mean any officer or member of the Pennsylvania
14 State Police who on or after July 1, 1989, shall have been
15 subject to the terms of a collective bargaining agreement or
16 binding interest arbitration award established pursuant to the
17 act of June 24, 1968 (P.L.237, No.111), referred to as the
18 Policemen and Firemen Collective Bargaining Act, as amended.
19 Section 6. A member whose most recent period of employment
20 began before the effective date of this act shall not have his
21 or her benefits from the State Employees' Retirement System
22 reduced by the limitations on benefits under section 415 of the
23 Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
24 415), as amended, to less than he or she otherwise would have
25 received had this act not been enacted.
26 Section 7. Nothing in this act shall be construed or deemed
27 to imply that, but for the expressed applications of the
28 limitations on benefits under section 415 of the Internal
29 Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 415), as
30 amended, those limitations would not otherwise apply to members
20000H2868B4189 - 38 -
1 of the State Employees' Retirement System and the benefits
2 payable pursuant to 71 Pa.C.S. Pt. XXV.
3 Section 8. This act shall be construed and administered in
4 such manner that the State Employees' Retirement System will
5 satisfy the requirements necessary to qualify as a qualified
6 pension plan under section 415(b) of the Internal Revenue Code
7 of 1986 (Public Law 99-514, 26 U.S.C. § 415(b)).
8 Section 9. Except as may be otherwise specifically provided,
9 references in this act to provisions of the Internal Revenue
10 Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.),
11 including for this purpose administrative regulations
12 promulgated thereunder, are intended to include such laws and
13 regulations as in effect on the effective date of this section
14 and as they may hereafter be amended or supplemented or
15 supplanted by successor provisions.
16 Section 10. Nothing in this act which amends or supplements
17 provisions of 71 Pa.C.S. Pt. XXV in relation to requirements for
18 qualification of the State Employees' Retirement System as a
19 qualified pension plan under the Internal Revenue Code of 1986
20 (Public Law 99-514, 26 U.S.C. § 401(a) or 415(b)) nor any
21 construction of such provisions as so amended or supplemented or
22 any rules or regulations adopted under such part, shall create
23 in any member of the system or in any other person claiming an
24 interest in the account of any such member a contractual right,
25 either express or implied in such provision. Such provision
26 shall remain subject to the Internal Revenue Code of 1986, as
27 amended, and regulations thereunder as the same may hereafter be
28 amended, and the General Assembly reserves to itself such
29 further exercise of its legislative power to amend or supplement
30 such provisions as may from time to time be required in order to
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1 maintain the qualification of such system as a qualified pension
2 plan under section 401(a) of the Internal Revenue Code of 1986.
3 Section 11. Notwithstanding the provisions of 71 Pa.C.S.,
4 the statement for each member prepared by the State Employees'
5 Retirement Board for the period ending December 31, 2000, and
6 any other statements or estimates of benefits prepared by the
7 board pursuant to the State Employees' Retirement Code from the
8 effective date of this act to December 31, 2001, need not
9 reflect provisions of this act.
10 Section 12. Notwithstanding the provisions of 71 Pa.C.S.,
11 the obligation of the State Employees' Retirement Board to make
12 payments within specified time periods of the receipt of
13 applications for benefits or other information shall not apply
14 from the effective date of this act to December 31, 2001.
15 Section 13. The provisions of this act are severable to the
16 extent that if any of its provisions shall be held to be legally
17 or constitutionally impermissible as applied to any State
18 employee, the decision of the court shall not affect or impair
19 the application of the provisions of this act to other State
20 employees, except that if the basis for the holding that the
21 provisions of this act are legally or constitutionally
22 impermissible is the granting of benefits to some State
23 employees and not others, the legally or constitutionally
24 impermissible provisions shall be revoked. Those members against
25 whom the provision is legally or constitutionally impermissible
26 shall have their pension or retirement benefits calculated under
27 71 Pa.C.S. Pt. XXV as if this act had not been enacted.
28 Section 14. In the event that November 29, 2000, is the
29 effective date of this act, benefits shall be retroactively
30 recalculated and paid in accordance with the provisions of this
20000H2868B4189 - 40 -
1 act for those annuitants of the State Employees' Retirement
2 System who have an effective date of retirement on or after the
3 effective date of this act, provided, however, that no benefit
4 shall be recalculated or paid pursuant to this act for any
5 member who has died before the effective date of this act.
6 Section 15. This act shall take effect November 29, 2000, or
7 immediately, whichever occurs first.
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