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Termination of annuities - 71 Pa. Cons. Stat. § 5706Legal Research Home > Pennsylvania Statutes
§ 5706. Termination of annuities.
(a) General rule.--If the annuitant returns to State service
or enters or has entered school service and elects multiple
service membership, any annuity payable to him under this part
shall cease effective upon the date of his return to State
service or entering school 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
Class A and Class C service as provided in section 5302(c)
(relating to credited State service) and who returns to State
service 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. This subsection shall not apply in the case
of any annuitant who may render services to the Commonwealth in
the capacity of an independent contractor or as a member of an
independent board or commission or as a member of a departmental
administrative or advisory board or commission when such members
of independent or departmental boards or commissions are
compensated on a per diem basis for not more than 150 days per
calendar year or as a member of an independent board or
commission requiring appointment by the Governor, with advice
and consent of the Senate, where the annual salary payable to
the member does not exceed $35,000 and where the member has been
an annuitant for at least six months immediately preceding the
appointment. Such service shall not be subject to member
contributions or be eligible for qualification as creditable
State service.
(a.1) Return to State 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, an annuitant may be returned to State
service for a period not to exceed 95 days in any calendar year
without loss of his annuity. In computing the number of days an
annuitant has returned to State service, any amount of time less
than one-half of a day shall be counted as one-half of a day.
For agencies, boards and commissions under the Governor's
jurisdiction, the approval of the Governor that an emergency
exists shall be required before an annuitant may be returned to
State service.
(a.2) 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 5705
(relating to member's options) on or after the date of his
return to State service or entering school 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 30 days or in
the case of an active member or school employee who is an active
member of the Public School 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 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.
(b) 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 (c) 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 State and school service.
(c) Elimination of the effect of frozen present value.--
(1) An annuitant who returns to State service and earns
three eligibility points by performing credited State service
following the most recent period of receipt of an annuity
under this part, or an annuitant who enters school 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 A State service as Class AA
service as provided for in section 5306(a.1) (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 Public School
Employees' Retirement System who retired under a
provision of law granting additional service credit if
termination of State or school 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 of 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 fiscal
year by the board for the calculation of the normal
contribution rate pursuant to section 5508(b) (relating to
actuarial cost method).
(Oct. 7, 1975, P.L.348, No.101, eff. imd.; July 12, 1981,
P.L.261, No.87, eff. imd.; Mar. 4, 1982, P.L.141, No.45, eff.
imd.; Aug. 5, 1991, P.L.183, No.23, eff. imd.; Apr. 29, 1994,
P.L.159, No.29; 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.)
2002 Amendment. Act 38 amended subsec. (a.2).
2001 Amendment. Act 9 amended subsecs. (a), (a.1) and (c)
and added subsec. (a.2). See section 22(b) in the appendix to
this title for special provisions relating to calculation of
return to service days.
1995 Amendment. Section 15(7) of Act 77 provided that the
amendment 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 State 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. Act 29 amended the entire section, effective
January 1, 1995, as to subsec. (a), 60 days as to subsec. (a.1)
and July 1, 1994, as to subsecs. (b) and (c). See section 24 in
the appendix to this title for special provisions relating to
effective date and funding of accrued liability.
Applicability of Provisions. Section 4(2) of Act 31 of 1974
provided that the provisions of section 5706(b), relating to the
calculation of annuities of annuitants who return to State
service and subsequently retire, shall not apply to former
annuitants who are active members of the system on the effective
date of the act.
Cross References. Section 5706 is referred to in sections
5301, 5303, 5902, 5906 of this title.
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Last modified: November 27, 2007 |