§ 8321 — Regular member contributions for current service

Pennsylvania § 8321

• Jurisdiction: Pennsylvania
• Title 24: EDUCATION
• Part: PART IV
• Ch. 83: MEMBERSHIP, CONTRIBUTIONS AND BENEFITS
• Subch.: CONTRIBUTIONS

Text

(a) General.--Regular member contributions shall be made to the fund on behalf of each active member for current service except for any period of current service in which the making of such contributions has ceased solely by reason of any provision of this part relating to the limitations under IRC § 401(a)(17) or 415.

(b) Class T-E, Class T-F, Class T-G and Class T-H shared-risk contributions.--

(1) Commencing with the annual actuarial valuation performed under section 8502(j) (relating to administrative duties of board), for the period ending June 30, 2014, and every three years thereafter, the board shall compare the actual investment rate of return, net of fees, to the annual interest rate adopted by the board for the calculation of the normal contribution rate, based on the market value of assets, for the prior ten-year period. If the actual investment rate of return, net of fees, is less than the annual interest rate adopted by the board by an amount of 1% or more, then the shared-risk contribution rate of Class T-E and T-F members will increase by .5% and the shared-risk contribution rate of Class T-G and Class T-H members will increase by .75%. If the actual investment rate of return, net of fees, is equal to or exceeds the annual interest rate adopted by the board by less than 1%, then the shared-risk contributions rate of Class T-E and T-F members will decrease by .5% and the shared-risk contribution rate of Class T-G and Class T-H members will decrease by .75%, provided the total member contribution rate on the date of the actuarial valuation is above the member's basic contribution rate. If the actual investment rate of return, net of fees, is more than the annual interest rate adopted by the board by an amount of 1% or more, then the shared-risk contribution rate of Class T-E and Class T-F members will decrease by .5% and the shared-risk contribution rate of Class T-G and Class T-H members will decrease by .75%. If the actual investment rate of return, net of fees, is equal to or below the annual interest rate adopted by the board by less than 1%, then:

(i) the shared-risk contribution rate of Class T-E and Class T-F members will increase by .5%; and

(ii) the shared-risk contribution rate of Class T-G and Class T-H members will increase by .75%, provided the total member contribution rate on the date of the actuarial valuation is below the member's basic contribution rate.

(2) Notwithstanding paragraph (1), the total member contribution rate for Class T-E members shall not be less than 5.5%, nor more than 9.5%. The total member contribution rate for Class T-F members shall not be less than 8.3%, nor more than 12.3%. The total member contribution rate for Class T-G members shall not be less than 2.5% nor more than 8.5%. The total member contribution rate for Class T-H members shall not be less than 1.5% nor more than 7.5%. Notwithstanding this subsection, if the system's actuarial funded status is 100% or more as of the date used for the comparison required under this subsection, as determined in the current annual actuarial valuation, the shared-risk contribution rate shall not be greater than zero. In the event that the annual interest rate adopted by the board for the calculation of the normal contribution rate is changed during the period used to determine the shared-risk contribution rate, the board, with the advice of the actuary, shall determine the applicable rate during the entire period, expressed as an annual rate. The following provisions apply:

(i) Until the system has a ten-year period of investment rate of return experience following the effective date of this subsection, the look-back period shall begin not earlier than the effective date of this subsection.

(ii) For any fiscal year in which the employer contribution rate is lower than the final contribution rate under section 8328(h) (relating to actuarial cost method), the total member contribution rate for Class T-E, Class T-F, Class T-G and Class T-H members shall be prospectively reset to the basic contribution rate, provided the total member contribution rate is at or above the basic contribution rate.

(iii) There shall be no increase in the member contribution rate if there has not been an equivalent increase to the employer contribution rate over the previous three-year period.

(3) Notwithstanding paragraph (1), shared-risk member contributions for Class T-E, Class T-F, Class T-G and Class T-H service shall not be made in any fiscal year in which the Commonwealth fails to make the annually required contribution to the fund as provided under section 8328.

Legislative History

(July 22, 1983, P.L.104, No.31, eff. imd.; Dec. 19, 1984, P.L.1191, No.226, eff. imd.; Dec. 20, 1995, P.L.689, No.77, eff. July 1, 1996; May 17, 2001, P.L.26, No.9, eff. imd.; Nov. 23, 2010, P.L.1269, No.120; Dec. 28, 2015, P.L.529, No.93, eff. imd.; June 12, 2017, P.L.11, No.5, eff. imd.) 2010 Amendment.Act 120 amended the entire section, effective July 1, 2011, as to subsec. (b) and immediately as to the remainder of the section. See section 21 of Act 120 in the appendix to this title for special provisions relating to changes in accrued liability of Public School Employees' Retirement System. Special Provisions in Appendix.See section 3(3) of Act 96 of 1975 in the appendix to this title for the continuation of rights of members of Class T-B under former provisions of law relating to contributions for current service. Cross References.Section 8321 is referred to in sections 8102, 8305.5, 8322, 8322.1, 8502, 8536 of this title.