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Termination of annuities - 24 Pa. Cons. Stat. § 8346Legal Research Home > Pennsylvania Statutes
§ 8346. Termination of annuities.
(a) General rule.--If an annuitant returns to school service
or enters or has entered State service and elects multiple
service membership, any annuity payable to him under this part
shall cease effective upon the date of his return to school
service or entering State service and in the case of an annuity
other than a disability annuity the present value of such
annuity, adjusted for full coverage in the case of a joint
coverage member who makes the appropriate back contributions for
full coverage, shall be frozen as of the date such annuity
ceases. An annuitant who is credited with an additional 10% of
membership service as provided in section 8302(b.2) (relating to
credited school service) and who returns to school service,
except as provided in subsection (b), shall forfeit such
credited service and shall have his frozen present value
adjusted as if his 10% retirement incentive had not been applied
to his account. In the event that the cost-of-living increase
enacted December 18, 1979, occurred during the period of such
State or school employment, the frozen present value shall be
increased, on or after the member attains superannuation age, by
the percent applicable had he not returned to service.
(a.1) Return of benefits.--In the event an annuitant whose
annuity ceases pursuant to this section receives any annuity
payment, including a lump sum payment pursuant to section 8345
(relating to member's options) on or after the date of his
return to school service or entering State service, the
annuitant shall return to the board the amount so received plus
statutory interest. The amount payable shall be certified in
each case by the board in accordance with methods approved by
the actuary and shall be paid in a lump sum within 90 days or in
the case of an active member or a State employee who is an
active member of the State Employees' Retirement System may be
amortized with statutory interest through salary deductions in
amounts agreed upon by the member and the board. The salary
deduction amortization plans agreed to by the member and the
board may include a deferral of payment amounts and statutory
interest until the termination of school service or State
service as the board in its sole discretion decides to allow.
The board may limit salary deduction amortization plans to such
terms as the board in its sole discretion determines. In the
case of a State employee who is an active member of the State
Employees' Retirement System, the agreed upon salary deductions
shall be remitted to the State Employees' Retirement Board,
which shall certify and transfer to the board the amounts paid.
(b) Return to school service during emergency.--When, in the
judgment of the employer, an emergency creates an increase in
the work load such that there is serious impairment of service
to the public or in the event of a shortage of appropriate
subject certified teachers or other personnel, an annuitant may
be returned to school service for a period not to extend beyond
the school year during which the emergency or shortage occurs,
without loss of his annuity. The annuitant shall not be entitled
to earn any credited service, and no contributions may be made
by the annuitant, the employer or the Commonwealth on account of
such employment.
(b.1) Return to school service in an extracurricular
position.--
(1) An annuitant may be employed under separate contract
by a public school or charter school in an extracurricular
position performed primarily outside regular instructional
hours and not part of mandated curriculum without loss of
annuity. Neither the annuitant nor the employer shall make
contributions to the member's savings account or State
accumulation account respectively for such service. Further,
such contract shall contain a waiver whereby the annuitant
waives any potential retirement benefits that could arise
from the contract and releases the employer and the board
from any liability for such benefits.
(2) Nothing in this subsection shall be construed to
abridge or limit any rights provided under a collective
bargaining agreement or any rights provided under the act of
July 23, 1970 (P.L.563, No.195), known as the Public Employe
Relations Act.
(3) For purposes of this subsection, the term
"extracurricular position" means a contract position filled
by an annuitant that is separate from the established
academic course structure, including the position of athletic
director.
(c) Subsequent discontinuance of service.--Upon subsequent
discontinuance of service, such member other than a former
annuitant who had the effect of his frozen present value
eliminated in accordance with subsection (d) or a former
disability annuitant shall be entitled to an annuity which is
actuarially equivalent to the sum of the present value as
determined under subsection (a) and the present value of a
maximum single life annuity based on years of service credited
subsequent to reentry in the system and his final average salary
computed by reference to his compensation during his entire
period of school and State service.
(d) Elimination of the effect of frozen present value.--
(1) An annuitant who returns to school service and earns
three eligibility points by performing credited school
service following the most recent period of receipt of an
annuity under this part, or an annuitant who enters State
service and:
(i) is a multiple service member; or
(ii) who elects multiple service membership, and
earns three eligibility points by performing credited State
service or credited school service following the most recent
period of receipt of an annuity under this part, and who had
the present value of his annuity frozen in accordance with
subsection (a), shall qualify to have the effect of the
frozen present value resulting from all previous periods of
retirement eliminated, provided that all payments under
Option 4 and annuity payments payable during previous periods
of retirement plus interest as set forth in paragraph (3)
shall be returned to the fund in the form of an actuarial
adjustment to his subsequent benefits or in such form as the
board may otherwise direct.
(2) Upon subsequent discontinuance of service and the
filing of an application for an annuity, a former annuitant
who qualifies to have the effect of a frozen present value
eliminated under this subsection shall be entitled to receive
the higher of either:
(i) an annuity (prior to optional modification)
calculated as if the freezing of the former annuitant's
account pursuant to subsection (a) had not occurred,
adjusted by crediting Class T-C school service as Class
T-D service as provided for in section 8305(c) (relating
to classes of service) and further adjusted according to
paragraph (3), provided that a former annuitant of the
system or a former annuitant of the State Employees'
Retirement System who retired under a provision of law
granting additional service credit if termination of
school or State service or retirement occurred during a
specific period of time shall not be permitted to retain
the additional service credit under the prior law when
the annuity is computed for his most recent retirement;
or
(ii) an annuity (prior to optional modification)
calculated as if the former annuitant did not qualify to
have the effect on the frozen present value eliminated,
unless the former annuitant notifies the board in writing by
the later of the date the application for annuity is filed or
the effective date of retirement that the former annuitant
wishes to receive the lower annuity.
(3) In addition to any other adjustment to the present
value of the maximum single life annuity that a member may be
entitled to receive that occurs as a result of any other
provision of law, the present value of the maximum single
life annuity shall be reduced by all amounts paid or payable
to him during all previous periods of retirement plus
interest on these amounts until the date of subsequent
retirement. The interest for each year shall be calculated
based upon the annual interest rate adopted for that school
year by the board for the calculation of the normal
contribution rate pursuant to section 8328(b) (relating to
actuarial cost method).
(July 12, 1981, P.L.261, No.87, eff. imd.; Feb. 18, 1982,
P.L.78, No.27, eff. 60 days; Aug. 5, 1991, P.L.183, No.23, eff.
imd.; Dec. 22, 1992, P.L.1686, No.186, eff. imd.; Apr. 29, 1994,
P.L.159, No.29, eff. July 1, 1994; Dec. 20, 1995, P.L.689,
No.77, eff. 60 days; May 17, 2001, P.L.26, No.9, eff. July 1,
2001; Apr. 23, 2002, P.L.272, No.38, eff. imd.; Dec. 30, 2002,
P.L.2082, No.234, eff. imd.; July 4, 2004, P.L.504, No.63, eff.
imd.)
2004 Amendment. Act 63 amended subsecs. (b) and (b.1).
2002 Amendments. Act 38 amended subsec. (a.1) and carried
without amendment subsec. (b) and Act 234 added subsec. (b.1),
retroactive to July 1, 2001.
2001 Amendment. Act 9 amended subsecs. (a) and (d) and added
subsec. (a.1). See section 22(a) of Act 9 in the appendix to
this title for special provisions relating to calculation of
return to service days.
1995 Amendment. Section 15(3) of Act 77 provided that the
amendment of section 8346 shall be retroactive to July 1, 1994,
and provided that no annuities or other benefits greater than
those payable shall be payable to the beneficiary or survivor
annuitant of a deceased member of the Public School Employees'
Retirement System if the death of the member is on or before 60
days after the enactment of Act 77. See section 13(c) of Act 77
in the appendix to this title for special provisions relating to
applicability of provisions relating to termination of
annuities.
1994 Amendment. See section 24 of Act 29 in the appendix to
this title for special provisions relating to effective date and
funding of accrued liability.
Applicability of Provisions. See section 3(1) of Act 96 of
1975 in the appendix to this title for applicability of
provisions relating to calculation of annuities for certain
annuitants who return to school service and subsequently retire.
Cross References. Section 8346 is referred to in sections
8301, 8502, 8506 of this title.
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Last modified: November 27, 2007 |