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PENNSYLVANIA CONSOLIDATED STATUTES
TITLE 71. PA.C.S. STATE GOVERNMENT
PART XXV. RETIREMENT FOR STATE EMPLOYEES AND OFFICERS
CHAPTER 57. BENEFITS
Date:
08/31/2009
Document:
§ 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).
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