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Contributions for the purchase of credit for creditable nonstate service - 71 Pa. Cons. Stat. § 5505

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     § 5505.  Contributions for the purchase of credit for creditable
                nonstate service.
        (a)  Source of contributions.--The total contributions to
     purchase credit for creditable nonstate service of an active
     member or eligible school employee shall be paid either by the
     member, the member's previous employer, or by some agreed upon
     combination of the member, his previous employer, and, if
     specifically provided, the Commonwealth.
        (b)  Nonintervening military service.--
            (1)  The amount due for the purchase of credit for
        military service other than intervening military service
        shall be determined by applying the member's basic
        contribution rate, the additional contribution rate plus the
        Commonwealth normal contribution rate for active members at
        the time of entry, subsequent to such military service, of
        the member into State service to his average annual rate of
        compensation over the first three years of such subsequent
        State service and multiplying the result by the number of
        years and fractional part of a year of creditable
        nonintervening military service being purchased together with
        statutory interest during all periods of subsequent State and
        school service to date of purchase. Upon application for
        credit for such service, payment shall be made in a lump sum
        within 30 days or in the case of an active member or eligible
        school employee who is an active member of the Public School
        Employees' Retirement System it 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 members 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 an eligible school employee who is an active member of the
        Public School Employees' Retirement System, the agreed upon
        salary deductions shall be remitted to the Public School
        Employees' Retirement Board, which shall certify and transfer
        to the board the amounts paid. Application may be filed for
        all such military service credit upon completion of three
        years of subsequent State service and shall be credited as
        Class A service.
            (2)  Applicants may purchase credit as follows:
                (i)  one purchase of the total amount of creditable
            nonintervening military service; or
                (ii)  one purchase per 12-month period of a portion
            of creditable nonintervening military service.
        The amount of each purchase shall be not less than one year
        of creditable nonintervening military service.
        (c)  Intervening military service.--Contributions on account
     of credit for intervening military service shall be determined
     by the member's contribution rate, the additional contribution
     rate which shall be applied only to those members who began
     service on or after the effective date of this amendatory act
     and compensation at the time of entry of the member into active
     military service, together with statutory interest during all
     periods of subsequent State and school service to date of
     purchase. Upon application for such credit the amount due shall
     be certified in the case of each member by the board in
     accordance with methods approved by the actuary, and
     contributions may be made by:
            (1)  regular monthly payments during active military
        service; or
            (2)  a lump sum payment within 30 days of certification;
        or
            (3)  salary deductions in amounts agreed upon by the
        member or eligible school employee who is an active member of
        the Public School Employees' Retirement System and the board.
     The salary deduction amortization plans agreed to by members 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 an eligible school employee who is an active member
     of the Public School Employees' Retirement System, the agreed
     upon salary deductions shall be remitted to the Public School
     Employees' Retirement Board, which shall certify and transfer to
     the board the amounts paid.
        (d)  Nonmilitary and nonmagisterial service.--Contributions
     on account of credit for creditable nonstate service other than
     military and magisterial service shall be determined by applying
     the member's basic contribution rate, the additional
     contribution rate plus the Commonwealth normal contribution rate
     for active members at the time of entry subsequent to such
     creditable nonstate service of the member into State service to
     his compensation at the time of entry into State service and
     multiplying the result by the number of years and fractional
     part of a year of creditable nonstate service being purchased
     together with statutory interest during all periods of
     subsequent State and school service to the date of purchase.
     Upon application for credit for such service payment shall be
     made in a lump sum within 30 days or in the case of an active
     member or eligible school employee who is an active member of
     the Public School Employees' Retirement System it 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 members 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 an
     eligible school employee who is an active member of the Public
     School Employees' Retirement System, the agreed upon salary
     deduction shall be remitted to the Public School Employees'
     Retirement Board, which shall certify and transfer to the board
     the amounts paid.
        (e)  Philadelphia magisterial service.--Contributions on
     account of credit for service as a magistrate of the City of
     Philadelphia shall be determined by the board to be equal to the
     amount he would have paid as employee contributions together
     with statutory interest to date of purchase had he been a State
     employee during his period of service as a magistrate of the
     City of Philadelphia. The amount so determined by the State
     Employees' Retirement Board to be paid into the State Employees'
     Retirement System shall be the obligation of the judge who
     requested credit for previous service as a magistrate of the
     City of Philadelphia; in no event shall such amount be an
     obligation of the City of Philadelphia or the City of
     Philadelphia retirement system.
        (f)  Temporary Federal service.--Contributions on account of
     credit for service as a temporary Federal employee assigned to
     an air quality control complement for the Department of
     Environmental Resources during the period of 1970 through 1975,
     as authorized in section 5304(c)(5) (relating to creditable
     nonstate service), shall be equal to the full actuarial cost of
     the increased benefit obtained by virtue of the purchase. The
     increased benefit attributable to the purchased service shall be
     the difference between:
            (1)  the annual amount of a standard single life annuity,
        beginning at the earliest possible superannuation age,
        calculated assuming no future salary increases, assuming
        credit for the service to be purchased; and
            (2)  the annual amount of a standard single life annuity,
        calculated on the same basis, but excluding credit for the
        service to be purchased.
     The earliest possible superannuation age shall be the age at
     which the member becomes first eligible for superannuation
     retirement assuming continued full-time service and credit for
     the amount of service which the member has elected to purchase,
     or the current attained age of the member, whichever is later.
     The full actuarial cost of the increased benefit attributable to
     the purchased service shall be the actuarial present value of a
     deferred annuity equal to the amount of the increased benefit
     determined above, beginning at the earliest possible
     superannuation age and payable for life, calculated using a
     preretirement interest assumption of 1.5%, a postretirement
     interest assumption of 4%, no preretirement mortality assumption
     and standard postretirement mortality assumptions. The purchase
     payment shall be made in lump sum by the member within 30 days
     of certification by the board of the required purchase amount or
     may be amortized through salary deductions in amounts agreed
     upon by the member and the board with interest payable on the
     unpaid balance at the rate applicable to the most recently
     issued 30-year bonds of the United States Treasury Department.
        (g)  Justice of the peace service.--Contributions on account
     of credit for service as a justice of the peace shall be
     determined by the board to be equal to the amount he would have
     paid as employee contributions together with statutory interest
     to date of purchase had he been a State employee during his
     period of service as a justice of the peace for the Commonwealth
     plus the amount determined by applying the Commonwealth normal
     contribution rate for active members at the beginning of the
     district justice system as of January 1970 to the starting
     salary of the district justice for the magisterial district in
     which the member was elected dating from the beginning of the
     district justice system as of January 1970 and multiplying the
     result by the number of years and fractional part of a year of
     creditable service being purchased together with statutory
     interest from entry into State service as a district justice to
     the date of purchase. The amount so determined by board to be
     paid into the system shall be the obligation of the justice who
     requested credit for previous service as a justice of the peace
     for the Commonwealth prior to 1970. A justice of the peace
     desiring to purchase his or her service time prior to 1970 shall
     have been elected or appointed a district justice any time
     during or after 1970. The class of service credit a member shall
     receive upon entry into the system shall be determined by the
     time of his entry into the district justice system. It shall be
     incumbent upon the district justice to certify to the board with
     a copy of his commission or commissions the amount of time that
     he served the Commonwealth as a justice of the peace. The salary
     dollar amount that shall be used in the formula for determining
     the member's contributions shall be equal to the starting salary
     of the district justice for the magisterial district in which he
     was elected, dating from the beginning of the district justice
     system as of January 1970. In no event shall such an amount be
     the obligation of the Commonwealth or the county in which the
     justice served.
        (h)  County service.--For purposes of this section, Class G,
     Class H, Class I, Class J, Class K, Class L, Class M and Class N
     service shall be disregarded in determining when a member enters
     State service or the period of subsequent State service.
     (Oct. 7, 1975, P.L.348, No.101, eff. imd.; July 22, 1983,
     P.L.104, No.31, eff. imd.; June 13, 1985, P.L.40, No.19, eff.
     imd.; Oct. 21, 1988, P.L.844, No.112, eff. Jan. 1, 1989; Aug. 5,
     1991, P.L.183, No.23, eff. imd.; Apr. 29, 1994, P.L.159, No.29,
     eff. 60 days; June 22, 1999, P.L.75, No.12, eff. imd.; May 17,
     2001, P.L.26, No.9, eff. July 1, 2001)

        2001 Amendment.  Act 9 amended subsecs. (b), (c) and (d).
        1999 Amendment.  Act 12 added subsec. (h). See section 26 of
     Act 12 in the appendix to this title for special provisions
     relating to Federal, State and local tax laws.
        1991 Amendment.  Act 23 added subsec. (g).
        1988 Amendment.  Act 112 added subsec. (f).
        1983 Amendment.  See section 10 of Act 31 in the appendix to
     this title for special provisions relating to waiver of
     actuarial note requirement for retirement bills.
        References in Text.  The Department of Environmental
     Resources, referred to in subsec. (f), was abolished by Act 18
     of 1995. Its functions were transferred to the Department of
     Conservation and Natural Resources and the Department of
     Environmental Protection.
        Cross References.  Section 5505 is referred to in sections
     5303, 5304, 5903, 5904, 5933 of this title.

Last modified: November 27, 2007