(a) General rule.--Any full coverage member who is eligible to receive an annuity pursuant to the provisions of section 5308(a) or (b) (relating to eligibility for annuities) who terminates State service, or if a multiple service member who is a school employee who is an active member of the Public School Employees' Retirement System who terminates school service, before attaining age 70 shall be entitled to receive a maximum single life annuity attributable to his credited service and equal to the sum of the following single life annuities beginning at the effective date of retirement:
(1) A single life annuity that is the sum of the standard single life annuities determined separately for each class of service multiplied by the appropriate class of service multiplier applicable to each standard single life annuity. In case the member on the effective date of retirement is under superannuation age for any service, a reduction factor calculated to provide benefits actuarially equivalent to an annuity starting at superannuation age and subject to the provisions of subsection (f) shall be applied to the product determined for that service: Provided, however, That any standard single life annuity resulting from Class A-5 service shall be reduced by a percentage determined by multiplying the number of months, including a fraction of a month as a full month, by which the effective date of retirement precedes superannuation age by 0.25% if the effective date of retirement is on or after the date the member has attained age 57 and the member has 25 or more eligibility points, and that any standard single life annuity resulting from Class A-6 service shall be reduced by a percentage determined by multiplying the number of months, including a fraction of a month as a full month, by which the effective date of retirement precedes superannuation age by 0.25% if the effective date of retirement is on or after the date the member has attained age 62 and the member has 25 or more eligibility points. The class of service multiplier for any period of concurrent service shall be multiplied by the proportion of total State and school compensation during such period attributable to State service as a member of the system. In the event a member has two multipliers for one class of service, separate standard single life annuities shall be calculated for the portion of service in the class applicable to each class of service multiplier.
(2) If eligible, a single life annuity of 2% of his average noncovered salary for each year of social security integration credit as provided for in section 5305 (relating to social security integration credits) multiplied, if on the effective date of retirement the member is under superannuation age for any service, by the actuarially determined reduction factor for that service.
(3) If eligible, a single life annuity which is actuarially equivalent to the regular and additional accumulated deductions attributable to contributions as a member of Class C, but not less than such annuity determined as if the member were age 60 on the effective date of retirement, actuarially reduced in the event the member is under superannuation age on the effective date of retirement.
(4) If eligible, a single life annuity which is actuarially equivalent to the amount by which his regular and additional accumulated deductions attributable to any credited service other than as a member of Class A-3, Class A-4, Class A-5, Class A-6 and Class C are greater than one-half of the actuarially equivalent value on the effective date of retirement of the annuity as provided in paragraph (1) attributable to service other than Class A-3, Class A-4, Class A-5, Class A-6 and Class C for which regular or joint coverage member contributions were made.
(5) If eligible, a single life annuity which is actuarially equivalent to the amount by which his social security integration accumulated deductions are greater than one-half of the actuarially equivalent value on the effective date of retirement of the annuity provided for under paragraph (2).
(6) If eligible, a single life annuity sufficient together with the annuity provided for in paragraph (1) as a Class A, Class AA, Class A-3, Class A-4, Class A-5 or Class A-6 member and the highest annuity provided for in paragraph (2) to which he is entitled, or at his option could have been entitled, to produce that percentage of the sums of the standard single life annuities adjusted by the application of the class of service multiplier for Class A, Class AA, Class A-3, Class A-4, Class A-5 or Class A-6 as set forth in paragraph (1) in the case where any service is credited as a member of Class A, Class AA, Class A-3, Class A-4, Class A-5 or Class A-6 on the effective date of retirement as determined by his total years of credited service as a member of Class A, Class AA, Class A-3, Class A-4, Class A-5 or Class A-6 and by the following table:
(a.1) Rule for terminations after attaining age 70.--
(1) Any full coverage member who is eligible to receive an annuity pursuant to the provisions of section 5308(a) who terminates State service, or if a multiple service member who is a school employee and an active member of the Public School Employees' Retirement System who terminates school service, on or after attaining age 70 and who applies for a superannuation annuity to be effective the day after the termination of State service or school service, as the case may be, shall be entitled to receive a maximum single life annuity as of a determination date that is equal to the greater of subparagraph (i) or (ii):
(i) the sum of the annuities provided in subsection (a)(1) through (6) calculated as of the determination date; and
(ii) the greater of clause (A) or (B):
(A) the sum of the annuities provided in subsection (a)(1), (3), (4) and (6) as of the preceding determination date adjusted by the actuarial increase factor, plus the annuities provided in subsection (a)(2) and (5) as of the determination date; and
(B) the maximum single life annuity as of the preceding determination date adjusted by the actuarial increase factor.
The maximum single life annuity shall be calculated for each determination date.
(2) For purposes of this subsection, the determination date shall be:
(i) the member's birthday, provided that as of such date the member qualifies for a maximum single life annuity under this subsection; or
(ii) if the member's maximum single life annuity is being determined as of the member's effective date of retirement, then the determination date shall be the member's effective date of retirement.
(3) In the event an active member, an inactive member on leave without pay or a multiple service member who is a school employee and an active member of the Public School Employees' Retirement System has attained age 70 before the effective date of this subsection, or enters State service or school service, as the case may be, after attaining age 70, then section 5305.1 (relating to eligibility for actuarial increase factor) and subsections (a) and (a.1) shall be effective prospectively with respect to such member at the member's next birthday after the effective date of this subsection, entry into State service, or school service.
Nothing in this subsection shall be construed to provide an actuarial increase factor for any period of service prior to the effective date of this subsection.
(b) Present value of annuity.--The present value of the maximum single life annuity as calculated in accordance with subsection (a) of this section shall be determined by multiplying the maximum single life annuity by the cost of a dollar annuity on the effective date of retirement. Such present value shall be decreased only as required under the provisions of section 5506 (relating to incomplete payments), 5509(c) (relating to appropriations and assessments by the Commonwealth) or 5703 (relating to reduction of annuities on account of social security old-age insurance benefits).
(c) Limitation on amount of annuity.--The annuity paid to a member under subsection (a) and reduced in accordance with the option elected under section 5705 (relating to member's options) shall not exceed the highest compensation received as a member of the system during any period of twelve consecutive months of credited service. No limit on the total annuity paid to a member with Class D-3 service shall be applied in the case of a member who served as a constitutional officer of the General Assembly.
(d) Limitation regarding annual benefit under IRC § 415.--Notwithstanding any provision of this part to the contrary, including, but not limited to, subsection (c), no benefit shall be payable to the extent that such benefit exceeds any limitations under IRC § 415 in effect with respect to governmental plans as such term is defined in IRC § 414(d) on the date the benefit payment becomes effective, provided however, that any increase in any limitation under IRC § 415 shall be applicable to all current and future annuitants and survivor annuitants.
(e) Coordination of benefits.--The determination and payment of the maximum single life annuity under this section shall be in addition to any payments a member may be entitled to receive, has received or is receiving as a result of being a participant in the plan.
(f) Special calculation for Class A-5 and Class A-6.--For the calculation under subsection (a) for all Class A-5 and Class A-6 members the reduction factor used in the calculation for an annuity for a member, other than a Class A-5 member who has attained age 57 and 25 eligibility points, who has not attained the age of 62 shall be determined so that a maximum single life annuity with an effective date of retirement before the member attains age 62 shall be actuarially equivalent to the maximum single life annuity the member would receive if the member became a vestee and later applied for an annuity with an effective date of retirement on the date the member attained age 62. For purposes of this subsection, the annuity that the member would receive at age 62 shall not be determined using the 0.25% per month reduction in subsection (a)(1) based on having 25 years of service. For purposes of this subsection, the maximum single life annuity actually being received is actuarially equivalent to the maximum single life annuity with an effective date of attaining age 62 if the actual maximum single life annuity has the same present value as the maximum single life annuity at age 62, computed on the basis of interest at 7.375% per annum, compounded annually, and the mortality tables adopted by the board.