5702 - Maximum single life annuity.
§ 5702. Maximum single life annuity. (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 standard single life annuity multiplied by the sum of the products, determined separately for each class of service, obtained by multiplying the appropriate class of service multiplier by the ratio of years of service credited in that class to the total credited service. 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 shall be applied to the product determined for that service. 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. In the event a member has two multipliers for one class of service the class of service multiplier to be used for calculating benefits for that class shall be the average of the two multipliers weighted by the proportion of compensation attributable to each multiplier during the three years of highest annual compensation in that class of service: Provided, That in the case of a member of Class E-1, a portion but not all of whose three years of highest annual judicial compensation is prior to January 1, 1973, two class of service multipliers shall be calculated on the basis of his entire judicial service, the one applying the judicial class of service multipliers effective prior to January 1, 1973 and the second applying the class of service multipliers effective subsequent to January 1, 1973. The average class of service multiplier to be used for calculating benefits for his judicial service shall be the average of the two calculated multipliers weighted by the proportion of compensation attributable to each of the calculated multipliers during the three years of highest annual compensation in that class of service. (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 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 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 and Class AA 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 a standard single life annuity on the effective date of retirement as determined by his total years of credited service as a member of Class A and Class AA and by the following table: Total Years of Percentage of Credited Service Standard as a Member of Single Life Class A and Annuity Class AA 35-40 100% 41 102% 42 104% 43 106% 44 108% 45 or more 110% (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 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(b) in effect with respect to governmental plans as such term is defined in IRC § 414(d) on the date the benefit payment becomes effective. (Oct. 7, 1975, P.L.348, No.101, eff. imd.; July 22, 1983, P.L.104, No.31, eff. imd.; May 17, 2001, P.L.26, No.9) 2001 Amendment. Act 9 amended subsecs. (a) and (c) and added subsecs. (a.1) and (d), effective immediately as to subsecs. (c) and (d), September 1, 2001, as to subsecs. (a) intro. par. and (a.1) and July 1, 2001, as to the remainder of the section. 1983 Amendment. See section 10 of Act 31 in the appendix to this title for special provisions relating to waiver of actuarial note requirement for retirement bills. 1975 Amendment. Act 101 amended subsecs. (a) and (b). Special Provisions in Appendix. See sections 2(c) and 3(1), (3) and (4) of Act 31 of 1974 in the appendix to this title for special provisions relating to limitations on salaries of members for retirement purposes and additional retirement benefits for judges and legislative officers. Cross References. Section 5702 is referred to in sections 5305.1, 5308.1, 5308.2, 5703, 5704, 5705, 5707, 5905 of this title.