The following words and phrases when used in this part shall have, unless the context clearly indicates otherwise, the meanings given to them in this section:
"Accumulated deductions."The total of pickup contributions and the contributions paid into the fund by the member on account of current school service, previous school service, or creditable nonschool service and the statutory interest credited on all such contributions.
"Accumulated employer defined contributions."The total of the employer defined contributions paid into the trust on account of a participant's school service, together with any investment earnings and losses and adjustments for fees, costs and expenses credited or charged thereon and reduced by any distributions.
"Accumulated mandatory participant contributions."The total of the mandatory pickup participant contributions paid into the trust on account of a participant's school service, together with any investment earnings and losses and adjustments for fees, costs and expenses credited or charged thereon and reduced by any distributions.
"Accumulated total defined contributions."The total of the accumulated mandatory participant contributions, accumulated employer defined contributions and accumulated voluntary contributions standing to the credit of a participant in an individual investment account in the trust.
"Accumulated voluntary contributions."The total of voluntary contributions paid into the trust by a participant and any amounts rolled over by a participant or transferred by a direct trustee-to-trustee transfer into the trust, together with any investment earnings and losses and adjustments for fees, costs and expenses credited or charged thereon and reduced by any distributions.
"Activated military service."Military service by a member of a reserve component of the armed forces, pursuant to an order on or after July 1, 1990, and prior to July 1, 2013, to enter into active military service, other than an order to enter into active duty to meet periodic training requirements, who was an active member of the system immediately preceding the order into active military service and to whom the military leave provisions of 51 Pa.C.S. Ch. 73 (relating to military leave of absence) do not apply.
"Active member."A school employee for whom pickup contributions are being made to the fund or for whom such contributions otherwise required for current school service are not being made solely by reason of any provision of this part relating to the limitations under section 401(a)(17) or 415 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(17) or 415).
"Active participant."A school employee for whom mandatory pickup participant contributions are being made to the trust or for whom contributions otherwise required are not being made solely by reason of any provision of this part relating to the limitations under section 401(a)(17) or 415 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(17) or 415).
"Actuarially equivalent."Equal present values, computed on the basis of statutory interest and the mortality tables adopted by the board.
"Actuary."The consultant to the board who shall be:
(1) a member of the American Academy of Actuaries;
(2) an individual who has demonstrated to the satisfaction of the Insurance Commissioner of Pennsylvania that he has the educational background necessary for the practice of actuarial science and has had at least seven years of actuarial experience; or
(3) a firm, partnership, or corporation of which at least one member meets the requirements of paragraph (1) or (2).
"Alternate payee."Any spouse, former spouse, child or dependent of a member or participant who is recognized by a domestic relations order as having a right to receive all or a portion of the moneys payable to that member or participant under this part.
"Alternative investment."An investment in a private equity fund, private debt fund, venture fund, real estate fund, hedge fund or absolute return fund.
"Alternative investment vehicle."A limited partnership, limited liability company or any other legal vehicle for authorized investments under section 8521(i) (relating to management of fund and accounts) through which the system makes an alternative investment.
"Annuitant."Any member on or after the effective date of retirement until his annuity is terminated.
"Approved domestic relations order."Any domestic relations order which has been determined to be approved in accordance with section 8533.1 (relating to approval of domestic relations orders).
"Approved leave of absence."A leave of absence for activated military service or which has been approved by the employer for sabbatical leave, service as an exchange teacher, service with a collective bargaining organization or professional study.
"Basic contribution rate."For Class T-A, T-B and T-C service, the rate of 6 1/4%. For Class T-D service, the rate of 7 1/2%. For all active members on the effective date of this provision who are currently paying 5 1/4% and elect Class T-D service, the rate of 6 1/2%. For Class T-E service, the rate of 7 1/2%. For Class T-F service, the rate of 10.30%. For Class T-G service, the rate of 5.5%. For Class T-H service, the rate of 4.5%.
"Beneficiary."In the case of the system, the person or persons last designated in writing to the board by a member to receive his accumulated deductions or a lump sum benefit upon the death of such member. In the case of the plan, the person or persons last designated in writing to the board by a participant to receive the participant's vested accumulated total defined contributions or a lump sum benefit upon the death of the participant.
"Board."The Public School Employees' Retirement Board or the Public School Employes' Retirement Board.
"Class of service multiplier."
"Commissioner."The Commissioner of the Internal Revenue Service.
"Compensation."Pickup contributions and mandatory pickup participant contributions plus any remuneration received as a school employee excluding reimbursements for expenses incidental to employment and excluding any bonus, severance payments, any other remuneration or other emolument received by a school employee during his school service which is not based on the standard salary schedule under which he is rendering service, payments for unused sick leave or vacation leave, bonuses or other compensation for attending school seminars and conventions, payments under health and welfare plans based on hours of employment or any other payment or emolument which may be provided for in a collective bargaining agreement which may be determined by the Public School Employees' Retirement Board to be for the purpose of enhancing compensation as a factor in the determination of final average salary, 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), leave granted under section 1178 of the act of March 10, 1949 (P.L.30, No.14), known as the Public School Code of 1949, 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 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 regular or joint coverage member contributions, regardless of class of service, shall apply to each member who first became a member of the Public School Employes' Retirement System on or after July 1, 1996, and who by reason of such fact is a noneligible member subject to the application of the provisions of section 8325.1 (relating to annual compensation limit under IRC § 401(a)(17)), and shall apply to each participant pertaining to the participant's participation in the plan.
"Concurrent service."Simultaneously credited school and State service.
"Creditable nonschool service."Service other than service as a school employee for which an active member may obtain credit in the system.
"Credited service."School or creditable nonschool service for which the required contributions have been made to the fund, or for which the contributions otherwise required for such service were not made solely by reason of any provision of this part relating to the limitations under section 401(a)(17) or 415 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(17) or 415), or for which salary deductions to the system or lump sum payments have been agreed upon in writing.
"Date of termination of service."The latest of the following dates:
(1) The last day of service for which pickup contributions are made for an active member or for which the contributions otherwise required for service were not made solely by reason of any provision of this part relating to the limitations under section 401(a)(17) or 415 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(17) or 415);
(2) in the case of an inactive member or an inactive participant, the effective date of his resignation or the date his employment is formally discontinued by his employer or two years following the last day of service for which contributions were made, whichever is earliest; or
(3) the last day of service for which mandatory pickup participant contributions are made for an active participant.
"Disability annuitant."A member on or after the effective date of disability until his disability annuity or the portion of his disability annuity payments in excess of any annuity to which he may otherwise be entitled is terminated.
"Distribution."Payment of all or any portion of a person's interest in either the Public School Employees' Retirement Fund or the School Employees' Defined Contribution Trust, or both, which is payable under this part.
"Domestic relations order."Any judgment, decree or order, including approval of a property settlement agreement, entered on or after the effective date of this definition by a court of competent jurisdiction pursuant to a domestic relations law which relates to the marital property rights of the spouse or former spouse of a member or participant, including the right to receive all or a portion of the moneys payable to that member or participant under this part in furtherance of the equitable distribution of marital assets. The term includes orders of support as that term is defined by 23 Pa.C.S. § 4302 (relating to definitions) and orders for the enforcement of arrearages as provided in 23 Pa.C.S. § 3703 (relating to enforcement of arrearages).
"Effective date of retirement."The first day following the date of termination of service of a member if he has properly filed an application for an annuity within 90 days of such date or:
(1) In the case of a member who applies for an annuity subsequent to 90 days after termination of service, the date of filing such application or the date specified on the application, whichever is later.
(2) In the case of a vestee who files an application for an annuity within 90 days of his superannuation age, the attainment of such age.
(3) In the case of a vestee who defers the filing of an application for an annuity to a date later than 90 days following attainment of superannuation age, the date of filing or the date specified on the application, whichever is later.
(4) In the case of a finding of disability, the date certified by the board as the effective date of disability.
"Eligible annuitants."All current and prospective annuitants of the system with 24 1/2 or more eligibility points and all current and prospective disability annuitants. Beginning January 1, 1995, "eligible annuitants" shall include members with 15 or more eligibility points who terminated or who terminate school service on or after attaining superannuation retirement age and who are annuitants with an effective date of retirement after superannuation age. Beginning July 1, 2019, "eligible annuitants" shall include:
(1) Class DC participants with 24 1/2 or more eligibility points who have terminated school service, who are Medicare eligible and who received all or a part of their distributions; and
(2) Class DC participants with 15 or more eligibility points who terminate school service on or after attaining age 67 and receive all or a part of their distributions.
"Eligibility points."Points which are accrued by an active member, a participant, a multiple service member who is an active member of the State Employees' Retirement System for credited service or by a member or participant who has been reemployed from USERRA leave or dies while performing USERRA leave and are used in the determination of eligibility for benefits as provided in section 8306 (relating to eligibility points). A participant shall earn one eligibility point for each fiscal year in which the participant contributes to the trust. Eligibility points earned as Class T-G or Class T-H participants shall apply only for purposes of determining vesting of employer defined contributions under section 8409(b) (relating to vesting).
"Employer."Any governmental entity directly responsible for the employment and payment of the school employee and charged with the responsibility of providing public education within this Commonwealth, including but not limited to: State-owned colleges and universities, the Pennsylvania State University, community colleges, area vocational-technical schools, intermediate units, the State Board of Education, Scotland School for Veterans' Children, Thaddeus Stevens College of Technology, and the Western Pennsylvania School for the Deaf.
"Employer defined contributions."For Class T-G service, contributions equal to 2.25% of an active participant's compensation that are made by an employer to the trust, to be credited in the active participant's individual investment account. For Class T-H service and Class DC participants, contributions equal to 2.0% of an active participant's compensation that are made by an employer to the trust, to be credited in the active participant's individual investment account.
"Final average salary."As follows:
(1) For purposes of calculating annuities and benefits from the system attributable to a class of service other than Class T-G and Class T-H, the highest average compensation received as an active member during any three nonoverlapping periods of 12 consecutive months with the compensation for part-time service being annualized on the basis of the fractional portion of the school year for which credit is received; except, if the employee was not a member for three such periods, the total compensation received as an active member annualized in the case of part-time service divided by the number of such periods of membership; in the case of a member with multiple service credit, the final average salary shall be determined by reference to compensation received by him as a school employee or a State employee or both; and, in the case of a noneligible member, subject to the application of the provisions of section 8325.1 (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 8302(d)(2) (relating to credited school 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 8302(d)(6).
(2) For purposes of calculating annuities and benefits from the system attributable to Class T-G and Class T-H service, the following shall apply:
(i) The highest average compensation received as an active member during any five nonoverlapping periods of 12 consecutive months, with the compensation for part-time service being annualized on the basis of the fractional portion of the school year for which credit is received, shall be used or the calculation shall be made in accordance with the following:
(A) If the employee was not a member for five periods, the total compensation received as an active member annualized in the case of part-time service divided by the number of periods of membership.
(B) In the case of a member with multiple service credit, the final average salary shall be determined by reference to compensation received by the member as a school employee or a State employee or both.
(C) In the case of a noneligible member, subject to the application of the provisions of section 8325.1.
(ii) 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 8302(d)(2) and payments made to a member on leave of absence under 51 Pa.C.S. § 4102 as provided in section 8302(d)(6).
"Full coverage member."Any member for whom regular member pickup contributions are being picked up or who has paid or has agreed to pay to the fund the actuarial equivalent of regular member contributions due on account of service prior to January 1, 1983.
"Fund."The Public School Employees' Retirement Fund.
"Governmental entity."Board of school directors, board of public education, intermediate unit board of directors, area vocational-technical board, any governing board of any agency or authority created by them, and the Commonwealth.
"Inactive member."A member for whom no pickup contributions are being made to the fund, except in the case of an active member for whom such contributions otherwise required for current school service are not being made solely by reason of any provision of this part relating to the limitations under section 401(a)(17) or 415 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(17) or 415) or because the member is on USERRA leave, who has accumulated deductions standing to his credit in the fund and for whom contributions have been made within the last two school years or a multiple service member who is active in the State Employees' Retirement System.
"Inactive participant."A participant for whom no mandatory pickup participant contributions are being made to the trust, except in the case of an active participant for whom the contributions otherwise required for current school service are not being made solely by reason of any provision of this part relating to limitations under section 401(a)(17) or 415 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(17) or 415), but who has vested accumulated total defined contributions standing to the participant's credit in the trust and who has not filed an application for a distribution.
"Individual investment account."The account in the trust to which are credited the amounts of the contributions made by a participant and the participant's employer in accordance with the provisions of this part, together with all investment earnings after deduction for fees, costs and expenses, investment losses and charges for distributions.
"Intervening military service."Active military service of a member who was a school employee and an active member of the system immediately preceding his induction into the armed services or forces of the United States in order to meet a draft obligation excluding any voluntary extension of such obligational service and who becomes a school employee and an active member of the system within 90 days of the expiration of such service.
"IRC."The Internal Revenue Code of 1986, as designated and referred to in section 2 of the Tax Reform Act of 1986 (Public Law 99-514, 100 Stat. 2085, 2095). A reference in this part to "IRC § " shall be deemed to refer to the identically numbered section and subsection or other subdivision of such section in 26 United States Code (relating to Internal Revenue Code).
"Irrevocable beneficiary."The person or persons permanently designated by a member or participant in writing to the board pursuant to an approved domestic relations order to receive all or a portion of the accumulated deductions, vested accumulated total defined contributions or lump sum benefit payable upon the death of such member or participant.
"Irrevocable successor payee."The person permanently designated by a participant receiving distributions in writing to the board under an approved domestic relations order to receive one or more distributions from the plan upon the death of such participant.
"Irrevocable survivor annuitant."The person permanently designated by a member in writing to the board pursuant to an approved domestic relations order to receive an annuity upon the death of such member.
"Joint coverage member."Any member who agreed prior to January 1, 1966 to make joint coverage member contributions to the fund and has not elected to become a full coverage member.
"Joint coverage member contributions."Regular member contributions reduced for a joint coverage member.
"Leave for service with a collective bargaining organization."Paid leave granted to an active member or active participant by an employer for purposes of working full time for or serving full time as an officer of a Statewide employee organization or a local collective bargaining representative under the act of July 23, 1970 (P.L.563, No.195), known as the Public Employe Relations Act: Provided, That greater than one-half of the members of the employee organization are active members of the system or active participants of the plan; that the employer shall fully compensate the member or participant, including, but not limited to, salary, wages, pension and retirement contributions and benefits, employer defined contributions, other benefits and seniority, as if he were in full-time active service; and that the employee organization shall fully reimburse the employer for such salary, wages, pension and retirement contributions and benefits, employer defined contributions and other benefits and seniority.
"Mandatory pickup participant contributions."Contributions equal to a percentage of compensation that are made by the employer for active participants for current school service that are picked up by the employer and credited in the plan as follows:
(1) For Class T-G members, 2.75%, and Class T-H members, 3.0%.
(2) For Class DC participants, 7.5%.
"Maternity leave of absence."An involuntary leave of absence required by the employer because of the pregnancy of the member and commencing prior to May 17, 1975.
"Member."Active member, inactive member, annuitant, or vestee.
"Member's annuity."The single life annuity which is actuarially equivalent on the effective date of retirement to the sum of the accumulated deductions and the shared-risk member contributions and statutory interest credited on the deductions and contributions standing to the member's credit in the members' savings account.
"Military service."All active military service for which a member has received a discharge other than an undesirable, bad conduct, or dishonorable discharge.
"Multiple service."Credited service of a member who has elected to combine his credited service in both the Public School Employees' Retirement System and the State Employees' Retirement System.
"Noneligible member."For the purposes of section 8325.1 (relating to annual compensation limit under IRC § 401(a)(17)), a member who first became a member on or after July 1, 1996.
"Normal retirement age."The age set forth in section 401(a)(36) of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(36)) and in 26 C.F.R. § 1.401(a)-1(b)(2) (relating to post-ERISA qualified plans and qualified trusts; in general).
"Participant."An active participant, inactive participant or participant receiving distributions.
"Participant receiving distributions."A participant in the plan who has commenced receiving distributions from the participant's individual investment account, but who has not received a total distribution of the vested interest in the individual investment account.
"Participating eligible annuitants."All eligible annuitants who are enrolled or elect to enroll in a health insurance program approved by the Public School Employees' Retirement Board.
"Pickup contributions."Regular or joint coverage member contributions and shared-risk member contributions which are made by the employer for active members for current service on and after January 1, 1983.
"Plan."The School Employees' Defined Contribution Plan as established by the provisions of this part and the board.
"Plan document."The documents created by the board under section 8402 (relating to plan document) that contain the terms and provisions of the plan and trust as established by the board regarding the establishment, administration and investment of the plan and trust.
"Previous school service."Service rendered as a school employee including service in any summer school conducted by a school district of the Commonwealth prior to the member's most recent entrance in the system.
"Public school."Any or all classes or schools within this Commonwealth conducted under the order and superintendence of the Department of Education including, but not limited to: all educational classes of any employer charged with the responsibility of public education within this Commonwealth as well as those classes financed wholly or in part by the Federal Government, State-owned colleges and universities, the Pennsylvania State University, community colleges, area vocational-technical schools, intermediate units, the State Board of Education, Scotland School for Veterans' Children, Thaddeus Stevens State School of Technology, and the Pennsylvania State Oral School for the Deaf.
"Public School Code."The act of March 10, 1949 (P.L.30, No.14), known as the Public School Code of 1949.
"Reemployed from USERRA leave."Resumption of active membership or active participation as a school employee after a period of USERRA leave, if the resumption of active membership or active participation was within the time period and under conditions and circumstances such that the school 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).
"Regular member contributions."The product of the basic contribution rate and the compensation of the member.
"Required beginning date."The latest date by which distributions of a member's interest or a participant's interest in the participant's individual investment account must commence under section 401(a)(9) of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 401(a)(9)).
"Reserve component of the armed forces."The United States Army Reserve, United States Navy Reserve, United States Marine Corps Reserve, United States Coast Guard Reserve, United States Air Force Reserve, Pennsylvania Army National Guard and Pennsylvania Air National Guard.
"Salaried employee."A school employee who is compensated on the basis of an annual salary.
"Salary deductions."The amounts certified by the board, deducted from the compensation of an active member or active participant or the State service compensation of a multiple service member who is an active member of the State Employees' Retirement System and paid into the fund or trust.
"School employee."Any person engaged in work relating to a public school for any governmental entity and for which work he is receiving regular remuneration as an officer, administrator or employee excluding, however, any independent contractor or a person compensated on a fee basis.
"School entity."A school district of any class, intermediate unit or an area vocational-technical school, as provided for under the act of March 10, 1949 (P.L.30, No.14), known as the Public School Code of 1949.
"School service."Service rendered as a school employee.
"School year."The 12-month period which the governmental entity uses for purposes of administration regardless of the actual time during which a member renders service.
"Severance payments."Any payments for unused vacation or sick leave and any additional compensation contingent upon retirement including payments in excess of the scheduled or customary salaries provided for members within the same governmental entity with the same educational and experience qualifications who are not terminating service.
"Shared-risk contribution rate."The additional contribution rate that is added to the basic contribution rate for Class T-E, Class T-F, Class T-G and Class T-H members, as provided for in section 8321(b) (relating to regular member contributions for current service).
"Standard single life annuity."For Class T-A, T-B and T-C credited service of a member, an annuity equal to 2% of the final average salary, multiplied by the total number of years and fractional part of a year of credited service of a member. For Class T-D credited service of a member, an annuity equal to 2.5% of the final average salary, multiplied by the total number of years and fractional part of a year of credited service. For Class T-E credited service of a member, an annuity equal to 2% of the final average salary, multiplied by the total number of years and fractional part of a year of credited service of a member. For Class T-F credited service of a member, an annuity equal to 2.5% of the final average salary, multiplied by the total number of years and fractional part of a year of credited service of a member. For Class T-G credited service of a member, an annuity equal to 1.25% of the final average salary, multiplied by the total number of years and fractional part of a year of credited service of a member. For Class T-H credited service of a member, an annuity equal to 1.0% of the final average salary, multiplied by the total number of years and fractional parts of a year of credited service of a member.
"State Employees' Defined Contribution Plan."The defined contribution plan for State employees established by 71 Pa.C.S. Pt. XXV (relating to retirement for State employees and officers).
"State Employees' Retirement System."The retirement system established by the act of June 27, 1923 (P.L.858, No.331) and codified by the act of June 1, 1959 (P.L.392, No.78) and by Part XXV of Title 71 (relating to retirement for State employees and officers), added March 1, 1974 (P.L.125, No.31).
"State service."Service rendered as a State employee and credited as service in the State Employees' Retirement System.
"Statutory interest."Interest at 4% per annum, compounded annually.
"Successor payee."The person or persons last designated by a participant receiving distributions in writing to the board to receive one or more distributions upon the death of the participant.
"Superannuation annuitant."An annuitant whose annuity first became payable on or after the attainment of superannuation age and who is not a disability annuitant.
"Superannuation or normal retirement age."
"Survivor annuitant."The person or persons last designated by a member under a joint and survivor annuity option to receive an annuity upon the death of such member.
"System."The Public School Employes' Retirement System of Pennsylvania as established by the act of July 18, 1917 (P.L.1043, No.343), and codified by the act of June 1, 1959 (P.L.350, No.77).
"Total member contribution rate."The sum of the basic contribution rate and the shared-risk contribution rate.
"Trust."The School Employees' Defined Contribution Trust established under Chapter 84 (relating to School Employees' Defined Contribution Plan).
"USERRA."The Uniformed Services Employment and Reemployment Rights Act, 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 school employee or former school employee who terminated school service to perform the service in the uniformed services, if the current or former school employee is entitled to reemployment rights under 38 U.S.C. Ch. 43 with respect to the uniformed service.
"Valuation interest."Interest at 5 1/2% per annum, compounded annually and applied to all accounts of the fund other than the members' savings account.
"Vestee."A member with five or more eligibility points in a class of service other than Class T-E, Class T-F, Class T-G or Class T-H who has terminated school service, has left his accumulated deductions in the fund and is deferring filing of an application for receipt of an annuity. For Class T-E, Class T-F, Class T-G and Class T-H members, a member with ten or more eligibility points who has terminated school service, has left his accumulated deductions in the fund and is deferring filing of an application for receipt of an annuity.
"Voluntary contributions."Contributions made by a participant to the trust and credited to the participant's individual investment account in excess of the mandatory pickup participant contributions, either by after-tax salary deductions paid through the employer or by an eligible rollover or direct trustee-to-trustee transfers.