2012 Pa. Act 181 | Pennsylvania Act 2012-181 — MILITARY AND VETERANS CODE (51 PA.C.S.) AND STATE GOVERNMENT (71 PA.C.S.) - CALCULATION OF MILITARY MEMBERS' STATE EMPLOYEES' RETIREMENT SYSTEM BENEFITS

Act text

MILITARY AND VETERANS CODE (51 PA.C.S.) AND STATE GOVERNMENT (71 PA.C.S.) - CALCULATION OF MILITARY MEMBERS' STATE EMPLOYEES' RETIREMENT SYSTEM BENEFITS
	Act of Oct. 24, 2012, P.L. 1436, No. 181	Cl. 51

Session of 2012

No. 2012-181

HB 2591

AN ACT

Amending Titles 51 (Military Affairs) and 71 (State Government) of the Pennsylvania Consolidated Statutes, further providing for the calculation of military members' State Employees' Retirement System benefits.

The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:

Section 1. Section 7306(a) of Title 51 of the Pennsylvania Consolidated Statutes is amended and the section is amended by adding a subsection to read:

§ 7306. Retirement rights.

(a) Options available to employees.--Any employee who is a member of a retirement system other than an active member or inactive member on leave without pay of the State Employees' Retirement System at the time he is granted a military leave of absence shall be entitled to exercise any one of the following options in regard thereto:

(1) He may continue to make regular payments into the fund during the period of his military leave of absence. The amount of such payments shall be the same as they would have been, had he not been granted a military leave of absence, but had instead remained actively in his employment. The time of making such payments shall be mutually agreed upon by the employee and the retirement association of which he is a member, but in no event shall be less frequent than semiannually. The employer shall make its contributions on the same basis as is used to compute the employee's contributions. In this case, his retirement rights shall be determined on the basis that he was in the active, continuous and uninterrupted employ of his employer for the period during which he was on military leave of absence.

(2) He may discontinue making payments into the fund during the period of his military leave of absence. In such event, the employer shall also discontinue making its contributions during this period. In this case, his retirement rights shall be determined by completely disregarding the period of his military leave of absence for all purposes.

(d) Members of State Employees ' Retirement System.--An employee who is an active member or inactive member on leave without pay of the State Employees' Retirement System at the time he is granted a military leave of absence shall be entitled to receive credit in the State Employees ' Retirement System for the leave as provided in 71 Pa.C.S. Pt. XXV (relating to retirement for State employees and officers).

Section 2. The definitions of "compensation," "eligibility points" and "final average salary" in section 5102 of Title 71 are amended and the section is amended by adding definitions to read:

§ 5102. Definitions.

The following words and phrases as used in this part, unless a different meaning is plainly required by the context, shall have the following meanings:

"Compensation." Pickup contributions plus remuneration actually received as a State employee excluding refunds for expenses, contingency and accountable expense allowances[, and] ; excluding any severance payments or payments for unused vacation or sick leave ; and excluding payments for military leave and any other payments made by an employer while on USERRA leave, leave of absence granted under 51 Pa.C.S. § 4102 (relating to leaves of absence for certain government employees), military leave of absence granted under 51 Pa.C.S. § 7302 (relating to granting military leaves of absence) or other types of military leave, including other types of leave payments, stipends, differential wage payments as defined in IRC § 414(u)(12) and any other payments : Provided, however, That compensation received prior to January 1, 1973, shall be subject to the limitations for retirement purposes in effect December 31, 1972, if any: Provided further, That the limitation under section 401(a)(17) of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(17)) taken into account for the purpose of member contributions, including any additional member contributions in addition to regular or joint coverage member contributions and Social Security integration contributions, regardless of class of service, shall apply to each member who first became a member of the State Employees' Retirement System on or after January 1, 1996, and who by reason of such fact is a noneligible member subject to the application of the provisions of section 5506.1(a) (relating to annual compensation limit under IRC § 401(a)(17)).

"Eligibility points." Points which are accrued by an active member or a multiple service member who is an active member in the Public School Employees' Retirement System for credited service or a member who has been reemployed from USERRA leave or a member who dies while performing USERRA leave and are used in the determination of eligibility for benefits.

"Final average salary." The highest average compensation received as a member during any three nonoverlapping periods of four consecutive calendar quarters during which the member was a State employee, with the compensation for part-time service being annualized on the basis of the fractional portion of the year for which credit is received; except if the employee was not a member for three nonoverlapping periods of four consecutive calendar quarters, the total compensation received as a member, annualized in the case of part-time service, divided by the number of nonoverlapping periods of four consecutive calendar quarters of membership; in the case of a member with multiple service, the final average salary shall be determined on the basis of the compensation received by him as a State employee or as a school employee, or both; in the case of a member with Class A-3 or Class A-4 service and service in one or more other classes of service, the final average salary shall be determined on the basis of the compensation received by him in all classes of State service; and, in the case of a member who first became a member on or after January 1, 1996, the final average salary shall be determined as hereinabove provided but subject to the application of the provisions of section 5506.1(a) (relating to annual compensation limit under IRC § 401(a)(17)). Final average salary shall be determined by including in compensation payments deemed to have been made to a member reemployed from USERRA leave to the extent member contributions have been made as provided in section 5302(f)(2) (relating to credited State service) and payments made to a member on leave of absence under 51 Pa.C.S. § 4102 (relating to leaves of absence for certain government employees) as provided in section 5302(f)(6).

"Reemployed from USERRA leave." Resumption of active membership as a State employee after a period of USERRA leave, provided, however, that the resumption of active membership was within the time period and under conditions and circumstances such that the State employee was entitled to reemployment rights under 38 U.S.C. Ch. 43 (relating to employment and reemployment rights of members of the uniformed services).

"USERRA leave." Any period of time for service in the uniformed services as defined in 38 U.S.C. Ch. 43 (relating to employment and reemployment rights of members of the uniformed services) by a State employee or former State employee who terminated State service to perform such service in the uniformed services, if the current or former State employee is entitled to reemployment rights under 38 U.S.C. Ch. 43 with respect to the uniformed service.

Section 3. Section 5302(d) of Title 71 is amended and the section is amended by adding a subsection to read:

§ 5302. Credited State service.

[(d) Enlargement of coverage of Military Code.--For purposes of determining whether a member is eligible to receive credited service for active military service rendered after the date of this act, other than active duty service to meet periodic training requirements, the provisions of 51 Pa.C.S. Ch. 73 (relating to military leave of absence) shall apply to all individuals who were active members of the system, even if not defined as an employee pursuant to 51 Pa.C.S. § 7301 (relating to definitions).]

(f) Credit for military service.--

(1) For purposes of determining whether a member is eligible to receive credited service for a period of active military service, other than active duty service to meet periodic training requirements, rendered after August 5, 1991, and that began before the effective date of this paragraph, the provisions of 51 Pa.C.S. Ch. 73 (relating to military leave of absence) shall apply to all individuals who were active members of the system when the period of military service began, even if not defined as an employee pursuant to 51 Pa.C.S. § 7301 (relating to definitions). State employees may not receive service credit or exercise the options under 51 Pa.C.S. § 7306 (relating to retirement rights) for military leaves that begin on or after the effective date of this subsection, except as otherwise provided by this subsection.

(2) A State employee who has performed USERRA leave may receive credit as provided by this paragraph. The following shall apply:

(i) A State employee who is reemployed from USERRA leave shall be treated as not having incurred a break in State service by reason of the USERRA leave and shall be granted eligibility points as if the State employee had not been on the USERRA leave. If a State employee who is reemployed from USERRA leave subsequently makes regular member contributions, additional member contributions, Social Security integration member contributions, shared-risk member contributions and any other member contributions in the amounts and in the time periods required by 38 U.S.C. Ch. 43 (relating to employment and reemployment rights of members of the uniformed services) and IRC § 414(u) as if the State employee had continued in State office or employment and performed State service and was compensated during the period of USERRA leave, then the State employee shall be granted State service credit for the period of USERRA leave. The State employee shall have the State employee's benefits, rights and obligations determined under this part as if the State employee was an active member who performed creditable State service during the USERRA leave in the job position that the State employee would have held had the State employee not been on USERRA leave and received the compensation on which the member contributions to receive State service credit for the USERRA leave were determined.

(ii) For purposes of determining whether a State employee has made the required employee contributions for State service credit for USERRA leave, if an employee who is reemployed from USERRA leave terminates State service or dies in State service before the expiration of the allowed payment period, then State service credit for the USERRA leave will be granted as if the required member contributions were paid the day before termination or death. The amount of the required member contributions will be treated as an incomplete payment subject to the provisions of section 5506 (relating to incomplete payments). Upon a subsequent return to State service or to school service as a multiple service member, the required member contributions treated as incomplete payments shall be treated as member contributions that were either withdrawn in a lump sum at termination or paid as a lump sum pursuant to section 5705(a)(4) (relating to member's options), as the case may be.

(iii) A State employee who is reemployed from USERRA leave who does not make the required member contributions or makes only part of the required member contributions within the allowed payment period shall not be granted credited service for the period of USERRA leave for which the required member contributions were not timely made, shall not be eligible to subsequently make contributions and shall not be granted either State service credit or nonstate service credit for the period of USERRA leave for which the required member contributions were not timely made.

(3) A State employee who performs USERRA leave from which the employee could have been reemployed from USERRA leave had the State employee returned to State service in the time frames required by 38 U.S.C. Ch. 43 for reemployment rights, but did not do so, shall be able to receive creditable nonstate service as nonintervening military service for the period of USERRA leave should the employee later return to State service and is otherwise eligible to purchase the service as nonintervening military service.

(4) A State employee who on or after the effective date of this subsection is granted a leave of absence under 51 Pa.C.S. § 4102 (relating to leaves of absence for certain government employees) or a military leave under 51 Pa.C.S. Ch. 73, that is not USERRA leave shall be able to receive creditable nonstate service as nonintervening military service should the employee return to State service and is otherwise eligible to purchase the service as nonintervening military service.

(5) If a member dies while performing USERRA leave, then the beneficiaries or survivor annuitants, as the case may be, of the deceased member are entitled to any additional benefits, including eligibility points, other than benefit accruals relating to the period of qualified military service, provided under this part had the member resumed and then terminated employment on account of death.

(6) A State employee who is on a leave of absence from his duties as a State employee for which 51 Pa.C.S. § 4102 provides that he is not to suffer a loss of pay, time or efficiency rating shall not be an active member, receive service credit or make member contributions for the leave of absence, except as provided for in this part. Notwithstanding this paragraph, any pay the member receives pursuant to 51 Pa.C.S. § 4102 shall be included in the determination of final average salary and other calculations utilizing compensation as if the payments were compensation under this part.

Section 3.1. Section 5303(b) of Title 71 is amended by adding a paragraph to read:

§ 5303. Retention and reinstatement of service credits.

(b) Eligibility points for prospective credited service.--

(1.3) A member of the system who is reemployed from USERRA leave or who dies while performing USERRA leave shall receive eligibility points in accordance with section 5307 for the State service that would have been performed had the member not performed USERRA leave.

Section 3.2. Sections 5304(c) and 5306.3(b) of Title 71 are amended to read:

§ 5304. Creditable nonstate service.

[(1) intervening military service;

(2) military service other than intervening military service and military service purchasable under section 5302(d) (relating to credited State service) not exceeding five years, provided that a member with multiple service may not purchase more than a total of five years of military service in both the system and the Public School Employees' Retirement System;]

(1) intervening military service if the member returned to State service before January 1, 2012;

(2) (i) military service other than:

(A) intervening military service;

(B) military service purchasable under former section 5302(d) (relating to credited State service) or 5302(f)(1); and

(ii) the total creditable nonstate service under this paragraph may not exceed five years, provided that a member with multiple service may not purchase more than a total of five years of military service in both the system and the Public School Employees' Retirement System;

(3) in the case of an academic administrator, teacher or instructor employed in the Department of Education, the State System of Higher Education, any State-owned educational institution or The Pennsylvania State University, provided that the total amount of service creditable under this paragraph shall not exceed the lesser of ten years or the number of years of active membership in the system as an academic administrator, teacher or instructor in the Department of Education, State System of Higher Education, any State-owned educational institution or The Pennsylvania State University:

(i) nonstudent service as an academic administrator, teacher or instructor in any public school or public educational institution in any state other than this Commonwealth; or

(ii) nonstudent service as an academic administrator, teacher or instructor in the field of education for any agency or department of the Federal Government, whether or not such area was under the jurisdiction of the United States;

(4) previous service with a governmental agency other than the Commonwealth which employment with said agency was terminated because of the transfer by statute of the administration of such service or of the entire agency to the Commonwealth;

(5) service as a temporary Federal employee assigned to an air quality control complement for the Pennsylvania Department of Environmental Resources at any time during the period of 1970 through 1975. This service time may be purchased only if the member makes an election to purchase within one year of the effective date of this paragraph, and the member shall pay an amount which is equal to the full actuarial cost of the increased benefit obtained by virtue of the purchase as provided in section 5505(f);

(6) service in the Cadet Nurse Corps with respect to any period of training as a student or graduate nurse under a plan approved under section 2 of the act of June 15, 1943 (Public Law 78-73, 57 Stat. 153), if the total period of training under such plan was at least two years, the credit for such service not to exceed three years;

(7) service prior to July 1, 1971, at a community college established under the act of August 24, 1963 (P.L.1132, No.484), known as the Community College Act of 1963; or

(8) service as a justice of the peace prior to January 1970.

§ 5306.3. Election to become a Class A-4 member.

(b) Time for making election.--The election to become a Class A-4 member must be made by the member filing written notice with the board in a form and manner determined by the board no later than 45 days after notice from the board of the member's eligibility to elect Class A-4 membership. A State employee who is eligible to elect to become a Class A-4 member who begins USERRA leave during the election period without having elected Class A-4 membership may make the election within 45 days after being reemployed from USERRA leave.

Section 4. Section 5307(b)(1) of Title 71 is amended and the section is amended by adding a subsection to read:

§ 5307. Eligibility points.

(a.1) USERRA leave.--A member of the system who is reemployed from USERRA leave or who dies while performing USERRA leave shall be granted the eligibility points that he would have accrued had he continued in his State office or employment instead of performing USERRA leave. In the event that a State employee who is reemployed from USERRA leave makes the member contributions to be granted State service credit for the USERRA leave, no additional eligibility points will be granted.

(b) Transitional rule.--

(1) In determining whether a member who is not a State employee or school employee on June 30, 2001, and July 1, 2001, and who has previous State service (except a disability annuitant who returns to State service after June 30, 2001, upon termination of the disability annuity) has the five eligibility points required by sections 5102 (relating to definitions), 5308(b) (relating to eligibility for annuities), 5309 (relating to eligibility for vesting), 5704(b) (relating to disability annuities) and 5705(a) (relating to member's options), only eligibility points earned by performing credited State service , USERRA leave or credited school service after June 30, 2001, shall be counted until such member earns one eligibility point by performing credited State service or credited school service after June 30, 2001, at which time all eligibility points as determined pursuant to subsection (a) shall be counted.

Section 5. Sections 5308(a) and (c), 5505(b) and (i) and 5506 of Title 71 are amended to read:

§ 5308. Eligibility for annuities.

(a) Superannuation annuity.--Attainment of superannuation age by an active member or an inactive member on leave without pay with three or more [years of credited State or school service] eligibility points other than eligibility points resulting from nonstate service or nonschool service shall entitle him to receive a superannuation annuity upon termination of State service and compliance with section 5907(f) (relating to rights and duties of State employees and members).

(c) Disability annuity.--An active member or inactive member on leave without pay who has [credit for at least five years of service] five or more eligibility points other than eligibility points resulting from membership in the Public School Employees ' Retirement System or any active member or inactive member on leave without pay who is an officer of the Pennsylvania State Police or an enforcement officer shall, upon compliance with section 5907(k), be entitled to a disability annuity if he becomes mentally or physically incapable of continuing to perform the duties for which he is employed and qualifies in accordance with the provisions of section 5905(c)(1) (relating to duties of the board regarding applications and elections of members).

§ 5505. Contributions for the purchase of credit for creditable nonstate service.

(b) Nonintervening military service.--

(1) The amount due for the purchase of credit for military service other than intervening military service [by State employees who first become members of the system before January 1, 2011, or before December 1, 2010, as a member of the General Assembly] 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.

(i) Purchases of nonstate service credit by State employees who first became members of the system on or after December 1, 2010.--

(1) Contributions on account of credit for creditable nonstate service other than intervening military service , nonintervening military service and magisterial service by State employees who first become members of the system on or after January 1, 2011, or on or after December 1, 2010, as a member of the General Assembly shall be equal to the full actuarial cost of the increased benefit obtained by virtue of such service.

(2) The full actuarial cost of the increased benefit attributable to the purchased nonstate service credit shall be the difference between:

(i) the present value of a standard single life annuity, beginning at the earliest possible superannuation age assuming Class A-3 service credit for the nonstate service to be purchased; and

(ii) the present value of a standard single life annuity, beginning at the earliest possible superannuation age, excluding the nonstate service credit to be purchased.

(3) The full actuarial cost under paragraph (2) shall be calculated using future salary increases, mortality tables, interest rates and other actuarial assumptions as adopted by the board with the advice of the actuary. The earliest possible superannuation age shall be the current attained age of the member if the member has attained superannuation age for his current class of service or, if the member has not attained superannuation age, the age upon which the member would attain superannuation age as a member in the current class of service assuming continued full-time State service through the attainment of superannuation age and credit for the amount of service which the member has elected to purchase.

(4) The payment for credit purchased under this subsection 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 eligible 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 members and the board may include a deferral of payment amounts and interest until the termination of school service or State service as the board in its sole discretion decides to allow. The board may limit the 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.

§ 5506. Incomplete payments.

In the event that a member terminates State service or a multiple service member who is an active member of the Public School Employees' Retirement System terminates school service before the agreed upon payments for credit for previous State service, USERRA leave, creditable nonstate service, social security integration, full coverage membership or return of benefits on account of returning to State service or entering school service and electing multiple service have been completed, the member or multiple service member who is an active member of the Public School Employees' Retirement System shall have the right to pay within 30 days of termination of State service or school service the balance due, including interest, in a lump sum and the annuity shall be calculated including full credit for the previous State service, creditable nonstate service, social security integration, or full coverage membership. In the event a member does not pay the balance due within 30 days of termination of State service or in the event a member dies in State service or within 30 days of termination of State service or in the case of a multiple service member who is an active member of the Public School Employees' Retirement System does not pay the balance due within 30 days of termination of school service or dies in school service or within 30 days of termination of school service and before the agreed upon payments have been completed, the present value of the benefit otherwise payable shall be reduced by the balance due, including interest, and the benefit payable shall be calculated as the actuarial equivalent of such reduced present value.

Section 6. Section 5507 of Title 71 is amended by adding a subsection to read:

§ 5507. Contributions by the Commonwealth and other employers.

(f) Contributions resulting from members reemployed from USERRA leave.--When a State employee reemployed from USERRA leave makes the member contributions required to be granted State service credit for the USERRA leave, either by actual payment or by actuarial debt under section 5506 (relating to incomplete payments), then the Commonwealth employer or other employer by whom the State employee is employed at the time the member contributions are made, or the last employer before termination in the case of payment under section 5506, shall make whatever employer contributions would have been made under this section had the employee making the member contributions after being reemployed from USERRA leave continued to be employed in his State office or position instead of performing USERRA leave.

Section 7. Section 5509(c) of Title 71 is amended to read:

§ 5509. Appropriations and assessments by the Commonwealth.

(c) Contributions from funds other than General Fund.--The amounts assessed other employers who are required to make the necessary contributions out of funds other than the General Fund shall be paid by such employers into the fund in accordance with requisitions presented by the board. The General Fund of the Commonwealth shall not be held liable to appropriate the moneys required to build up the reserves necessary for the payment of benefits to employees of such other employers. In case any such other employer shall fail to provide the moneys necessary for such purpose, then the service of such members for such period for which money is not so provided shall be credited and pickup contributions with respect to such members shall continue to be credited to the members' savings account. The annuity to which such member is entitled shall be determined as actuarially equivalent to the present value of the maximum single life annuity of each such member reduced by the amount of employer contributions payable on account and attributable to his compensation during such service , except that no reduction shall be made as a result of the failure of an employer to make contributions required for a period of USERRA leave .

Section 8. Section 5706 of Title 71 is amended by adding a subsection to read:

§ 5706. Termination of annuities.

(a.3) Return of benefits paid during USERRA leave.--In the event that a former State employee is reemployed from USERRA leave who had received any payments or annuity from the system during the USERRA leave, the employee 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 may be amortized with statutory interest through salary deductions in amounts agreed upon by the member and the board, but not longer than a period that starts with the date of reemployment and continuing for up to three times the length of the member's immediate past period of USERRA leave, with the repayment period not to exceed five years or such longer time as may be agreed to between the board and the member.

Section 9. Sections 5707(a) and (b) of Title 71 are amended to read:

§ 5707. Death benefits.

(a) Members eligible for annuities.--Any active member, inactive member on leave without pay [or] , vestee or current or former State employee performing USERRA leave who dies and was eligible for an annuity in accordance with section 5308(a) or (b) (relating to eligibility for annuities) or special vestee who has attained superannuation age and dies before applying for a superannuation annuity shall be considered as having applied for an annuity to become effective the day before his death and in the event he has not elected an option or such election has not been approved prior to his death, it shall be assumed that he elected Option 1.

(b) Members ineligible for annuities.--In the event of the death of a special vestee, an active member [or] , an inactive member on leave without pay or a current or former State employee performing USERRA leave who is not entitled to a death benefit as provided in subsection (a), his designated beneficiary shall be paid the full amount of his total accumulated deductions.

Section 9.1. Section 5902(l) of Title 71 is amended and the section is amended by adding a subsection to read:

§ 5902. Administrative duties of the board.

(l) Member contributions.--The board shall cause all pickup contributions made on behalf of a member to be credited to the account of the member and credit to his account any other payment made by such member, including, but not limited to, amounts collected by the Public School Employees' Retirement System for the reinstatement of previous State service or creditable nonstate service and amounts paid to return benefits paid after the date of return to State service or entering school service representing lump sum payments made pursuant to section 5705(a)(4)(iii) (relating to member's options) and member's annuity payments, but not including other benefits returned pursuant to section 5706(a.2) or (a.3) (relating to termination of annuities), and shall pay all such amounts into the fund.

(o) USERRA leave.--The board shall have the authority to take whatever action is necessary for the implementation of the requirements of this part pertaining to State employees on USERRA leave or who have been granted a leave of absence under 51 Pa.C.S. § 4102 (relating to leaves of absence for certain government employees) or a military leave of absence under 51 Pa.C.S. § 7302 (relating to granting military leaves of absence) and to establish administrative, reporting and payment requirements and processes pertaining to the leaves applicable to heads of departments and members.

Section 9.2. Section 5905(g) of Title 71 is amended to read:

§ 5905. Duties of the board regarding applications and elections of members.

(g) Death benefits.--Upon receipt of notification from the head of a department of the death of an active member , a member performing USERRA leave or a member on leave without pay, the board shall advise the designated beneficiary of the benefits to which he is entitled, and shall make the first payment to the beneficiary within 60 days of receipt of certification of death and other necessary data. If no beneficiary designation is in effect at the date of the member's death or no notice has been filed with the board to pay the amount of the benefits to the member's estate, the board is authorized to pay the benefits to the executor, administrator, surviving spouse or next of kin of the deceased member, and payment pursuant hereto shall fully discharge the fund from any further liability to make payment of such benefits to any other person. If the surviving spouse or next of kin of the deceased member cannot be found for the purpose of paying the benefits for a period of seven years from the date of death of the member, then the benefits shall be escheated to the Commonwealth for the benefit of the fund.

Section 10. Section 5906 of Title 71 is amended by adding subsections to read:

§ 5906. Duties of heads of departments.

(l) State employees performing USERRA or military-related leave of absence.--The head of department shall report to the board any State employee who ceases to be an active member to perform USERRA service, or who is granted a leave of absence under 51 Pa.C.S. § 4102 (relating to leaves of absence for certain government employees) or a military leave of absence under 51 Pa.C.S. § 7302 (relating to granting military leaves of absence), the date on which the USERRA service, leave of absence or military leave of absence began, the date on which the State employee is reemployed from USERRA leave or returns after the leave of absence or military leave of absence, if the event occurs, and any other information the board may require or direct.

(m) Differential wage payments and military leave of absence payments.--Notwithstanding the exclusion of differential wage payments as defined in IRC § 414(u)(12) from compensation under this part, the head of department of any State employee on USERRA leave shall report differential wage payments made to the employee to the board, and the head of department of any State employee on leave of absence pursuant to 51 Pa.C.S. § 4102 shall report any payment made to the employee, in the form and manner established by the board.

Section 11. Section 5907(c) of Title 71 is amended and the section is amended by adding a subsection to read:

§ 5907. Rights and duties of State employees and members.

(c) Multiple service membership.--Any active member who was formerly an active member in the Public School Employees' Retirement System may elect to become a multiple service member. Such election shall occur no later than 365 days after becoming an active member in this system. A State employee who is eligible to elect to become a multiple service member who begins USERRA leave during the election period without having elected multiple service membership may make the election within 365 days after being reemployed from USERRA leave.

(d.1) State service for USERRA leave.--Any active member or inactive member on leave without pay who was reemployed from USERRA leave who desires to receive State service credit for his USERRA leave shall so notify the board within the time period required under 38 U.S.C. Ch. 43 (relating to employment and reemployment rights of members of the uniformed services) and IRC § 414(u) of his desire to make the required member contributions. Upon making the required member contributions within the allowed time period, the member shall receive credit for such service as of the date the contributions are made.

Section 12. This act shall apply as follows:

(1) The amendment or addition of 51 Pa.C.S. § 7306(a) and (d) shall apply only to leaves of absence or military leaves of absence that are granted on or after the effective date of this section.

(2) The amendment of 71 Pa.C.S. Pt. XXV shall apply only to leaves of absence, military leaves of absence and leaves pursuant to 38 U.S.C. Ch. 43 (relating to employment and reemployment rights of members of the uniformed services) that are granted on or after the effective date of this act, except in the case of a member who died performing uniformed service under 38 U.S.C. Ch. 43, which shall be retroactive to January 1, 2007.

Section 13. Upon the effective date of this section, the State Employees' Retirement Board shall recompute the retirement benefits of former State employees who died before the effective date of this section and on or after January 1, 2007, while performing uniformed service pursuant to 38 U.S.C. Ch. 43 (relating to employment and reemployment rights of members of the uniformed services).

Section 14. Notwithstanding the provisions of 71 Pa.C.S. § 5903(b), the statement for each member prepared by the State Employees' Retirement Board for the period ending December 31, 2012, and any other statements or estimates of benefits prepared by the board pursuant to the provisions of 71 Pa.C.S. Pt. XXV from the effective date of this section to June 30, 2013, need not reflect the provisions of this act.

Section 15. Notwithstanding the provisions of 71 Pa.C.S. Pt. XXV, the obligation of the State Employees' Retirement Board to make payments to any individual whose rights, benefits and obligations are affected by this act within specified time periods of the receipt of applications for benefits or other information shall not apply from the effective date of this section to June 30, 2013.

Section 16. Nothing in this act shall be deemed to permit the restoration of service credit or retirement benefits which were or are subject to section 16 of Article V of the Constitution of Pennsylvania or 42 Pa.C.S. § 3352 or the subject of an order of forfeiture pursuant to the act of July 8, 1978 (P.L.752, No.140), known as the Public Employee Pension Forfeiture Act.

Section 17. To the extent that any officer or member of the Pennsylvania State Police is eligible to retire after June 30, 1989, as provided in a binding arbitration award issued before July 1, 1989, pursuant to the act of June 24, 1968 (P.L.237, No.111), referred to as the Policemen and Firemen Collective Bargaining Act, as implemented by the State Employees' Retirement Board based on accruing 20 or more years of credited State service or nonstate service in the State Employees' Retirement System, the eligibility shall be based on 20 or more eligibility points granted as a result of State service, nonstate service or reemployment as a State employee from uniformed service pursuant to 38 U.S.C. Ch. 43 (relating to employment and reemployment rights of members of the uniformed services).

Section 18. Nothing in this act shall be construed or deemed to imply that any interpretation or application of the provisions of 71 Pa.C.S. Pt. XXV or benefits available to members of the State Employees' Retirement System was not in accordance with the provisions of 71 Pa.C.S. Pt. XXV or other applicable law, including the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.) prior to the effective date of this section. It is the express intent of the General Assembly that nothing in this act shall be construed to grant to or be deemed to imply that this act expands, contracts or otherwise affects any contractual rights, either expressed or implied, or any other constitutionally protected rights, in the terms and conditions of the State Employees' Retirement System or other pension or retirement benefits as a State employee, including, but not limited to, benefits, options, rights or privileges established by 71 Pa.C.S. Pt. XXV for any current or former State employees.

Section 19. This act shall be construed and administered in such a manner that the State Employees' Retirement System will satisfy the requirements necessary to qualify as a qualified pension plan under section 401(a) and other applicable provisions of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.) and 38 U.S.C. Ch. 43 (relating to employment and reemployment rights of members of the uniformed services). The rules, regulations and procedures adopted and promulgated by the State Employees' Retirement Board under 71 Pa.C.S. § 5902(h) may include those necessary to accomplish the purpose of this section.

Section 20. Nothing in this act which amends or supplements provisions of 51 Pa.C.S. or 71 Pa.C.S. Pt. XXV shall create in any member of the State Employees' Retirement System or in any other person claiming an interest in the account of any member a contractual right, either expressed or implied, in relation to requirements for qualification of the State Employees' Retirement System as a qualified pension plan under the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.), compliance with nor any construction of 38 U.S.C. Ch. 43 (relating to employment and reemployment rights of members of the uniformed services), known as the Uniformed Services Employment and Reemployment Rights Act or 71 Pa.C.S. Pt. XXV, as amended or supplemented, or any rules or regulations adopted under 71 Pa.C.S. Pt. XXV. The provisions of 71 Pa.C.S. Pt. XXV shall remain subject to the Internal Revenue Code of 1986, and the General Assembly reserves to itself the further exercise of its legislative power to amend or supplement the provisions as may from time to time be required in order to maintain the qualification of the system as a qualified pension plan under section 401(a) and other applicable provisions of the Internal Revenue Code of 1986 and 38 U.S.C. Ch. 43.

Section 21. References in this act to the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.) or 38 U.S.C. Ch. 43 (relating to employment and reemployment rights of members of the uniformed services), including for this purpose administrative regulations promulgated under those acts, are intended to include laws and regulations in effect on the effective date of this section and as they may be amended or supplemented or supplanted by successor provisions after the effective date of this section.

Section 22. This act shall take effect December 31, 2012.

APPROVED--The 24th day of October, A.D. 2012.

TOM CORBETT

Pennsylvania Act 2012-181 — MILITARY AND VETERANS CODE (51 PA.C.S.) AND STATE GOVERNMENT (71 PA.C.S.) - CALCULATION OF MILITARY MEMBERS' STATE EMPLOYEES' RETIREMENT SYSTEM BENEFITS

Act text

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