RULES AND REGULATIONS
Title 4—ADMINISTRATION
STATE EMPLOYEES' RETIREMENT BOARD
[ 4 PA. CODE CH. 249 ]
Rights and Duties of Employees and Members
[40 Pa.B. 2015]
[Saturday, April 17, 2010]This final-form rulemaking will amend 4 Pa. Code § 249.7 (relating to rights and duties of employees and members) by adding subsection (h). This additional subsection is being added to clarify that a nomination of beneficiary must be on a form supplied by the State Employees' Retirement Board (Board). This clarification is being made to ensure that the State Employees' Retirement System (SERS) can adequately identify persons named as beneficiaries on SERS members' retirement accounts.
A. Effective Date
The amendment will be effective upon publication in the Pennsylvania Bulletin as a final rulemaking.
B. Contact Person
For further information contact Robert Gentzel, Director of Communications and Policy, State Employees' Retirement System, 30 North Third Street, Suite 150, Harrisburg, PA 17101-1716, (717) 787-9657; or Jill S. Vecchio, Counsel, State Employees' Retirement System, 30 North Third Street, Suite 150, Harrisburg, PA 17101-1716, (717) 783-7317.
C. Statutory Authority
This final rulemaking is being made under the authority of 71 Pa.C.S. § 5902(h) (relating to administrative duties of the board) of the State Employees' Retirement Code (Retirement Code).
D. Summary of the Final-Form Rulemaking
This additional subsection is being added to clarify that a nomination of beneficiary must be on a form supplied by the Board. This clarification is being made to ensure that the SERS can adequately identify persons named as beneficiaries on SERS members' retirement accounts.
E. Summary of Comments and Responses
No comments were received from the House State Government Committee and the Senate Finance Committe (Committees) or the public for the Board to consider in preparing this final-form regulation. One comment was received from the Independent Regulatory Review Commission (IRRC). After receiving IRRC's comment and completing an internal review of the final-form regulation, the Board made additional changes to the final-form regulation, which are explained as follows.
IRRC's Comment—§ 247.7. Death Benefits.—Clarity.
The Board was proposing to add subsection (c) to provide additional guidance on what must be contained on the Board's nomination of beneficiary form. The new language did not create a binding requirement because all provisions included the word ''should.'' The term ''should'' is nonregulatory language which indicates that the provisions are optional. It is inappropriate to include optional provisions in a regulation. If the Board wants the new language to be binding, the word ''should'' must be changed to ''shall.'' If the new language is intended to be a recommendation and not a requirement, the Board should withdraw the regulation and place the language in a policy statement or guidance document.
Response:
After review of IRRC's comment regarding the clarity of subsection (c), it was determined that as originally drafted, the final-form regulation was too constricting on SERS members when filing a nomination of beneficiary form. It was not the intent to so tightly constrain the regulation as to not permit inadvertent errors that would act to invalidate entire beneficiary nomination forms. The new language is in accordance with the Board's original review of the purpose of this regulation, which is to state what needs to be on a SERS beneficiary form for it to be approved by SERS. Therefore, all language contained in the regulation has been removed and replaced with language that will not so tightly constrain SERS members in filing nominations of beneficiary forms with the Board. The new language is in accordance with section 5907(e) of the Retirement Code (relating to rights and duties of State employees and members) and acts to clarify for SERS members that a nomination of beneficiary must be in writing and on a form to be supplied by and filed with the Board.
Additional Amendments:
SERS, after review of the original final-form regulation, determined that a regulation such as this would be better located in § 249.7 which pertains to the rights and duties of employees and members of SERS. As such, a regulation that mandates that a nomination of beneficiary must be in writing and on a form to be supplied by and filed with the Board is better situated in § 249.7, rather than as previously suggested to be contained in § 247.7, which deals with death benefits.
Therefore, this final-form regulation has been amended so that upon passage, it will be included in § 249.7.
F. Benefits, Costs and Compliance
Executive Order 1996-1 requires a cost/benefit analysis of the final-form regulation.
Benefits
The regulation is intended to alleviate confusion and prevent possible disputes with regard to proper naming of beneficiaries by members.
Costs
There are no costs to the Commonwealth, its citizens or State employees associated with this proposal.
Compliance Costs
The final-form regulation is not expected to impose any additional compliance costs.
G. Sunset Review
A sunset review is not applicable.
H. Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on January 18, 2008, the Board submitted a copy of the proposed rulemaking, published at 38 Pa.B. 613 (February 2, 2008), to IRRC and to the Committees for review and comment.
Under section 5(c) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), the Board is required to provide IRRC and the Committees with copies of the comments received during the public comment period, as well as other documents requested. No comments from the Committees or the public were received. The Board received one comment from IRRC, as illustrated and discussed previously.
Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on February 24, 2010, this final-form regulation was deemed approved by the Committees. Under section 5.1(e) of the Regulatory Review Act, IRRC met on February 25, 2010, and approved the final-form regulation.
I. Findings
The Board finds that:
(1) Public notice of intention to amend this regulation was given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) Commonwealth Documents Law (CDL) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2 by publication at 38 Pa.B. 613.
(2) The final-form rulemaking is necessary and appropriate for the administration of the Retirement Code.
J. Order
The Board, acting under 71 Pa. C.S. § 5902(h) and the CDL, orders that:
(a) The regulations of the Board, 4 Pa. Code Chapter 249, are amended by amending § 249.7 to read as set forth in Annex A.
(b) The amendment shall be submitted to the Office of Attorney General for approval as to legality as required by law.
(c) The Secretary of the Board shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(d) This order shall take effect immediately upon publication in the Pennsylvania Bulletin.
LEONARD KNEPP,
Secretary(Editor's Note: The proposal to amend § 247.7 (relating to death benefits), included in the proposal at 38 Pa.B. 613, has been withdrawn by the Board.)
(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 40 Pa.B. 1471 (March 13, 2010).)
Fiscal Note: 31-11. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 4. ADMINISTRATION
PART X. STATE EMPLOYEES' RETIREMENT BOARD
CHAPTER 249. ADMINISTRATION, FUNDS ACCOUNTS, GENERAL PROVISIONS
Subchapter A. ADMINISTRATION § 249.7. Rights and duties of employees and members.
(a) Proof of date of birth. The Board will accept certification from the employing agency as to the proof of the date of birth for purposes of this section, which shall also include certification by the member, as required by the Board. The proof of date of birth shall be furnished concurrently with the Application for Membership. Under section 5907(a) of the code (relating to rights and duties of State employees and members) each new State employee shall furnish proof of his date of birth. The following, in the order of preference, will be acceptable:
(1) Birth certificate.
(2) Baptismal record.
(3) Selective service record.
(4) Armed forces discharge.
(5) Passport.
(6) School record.
(7) Life insurance policy.
(8) Naturalization record.
(9) Alien registration record.
(10) Another record that may be submitted by the member, which is acceptable to the Board.
(b) Time when service purchase is paid. Under section 5907(d) of the code, an eligible school employee who desires to receive credit for service in this System or to become a full coverage member shall, upon written agreement to do so, make payment for the purchase in a lump sum and not by payroll deductions within 30 days after billing.
(c) Full coverage election. In the event a joint coverage member elects to vest his retirement rights, under section 5907(f)(2) of the code, the member shall concurrently elect to become a full coverage member and agree to pay, within 30 days of certification, the amount due. In the absence of an election, an election for full coverage membership shall be irrevocably forfeited unless the member returns to service, whereupon membership shall be mandatory and shall be retroactive for all periods of State service, with appropriate statutory interest added to the charges therefor.
(d) Effect of election to receive a benefit. A member who terminates State service, who is eligible to elect to withdraw his total accumulated deductions, or vest his retirement rights, or receive an immediate annuity, shall, by exercising the election, be deemed to have made an irrevocable choice which may not be changed unless the change was made prior to the effective date of termination of service. For the purposes of this section there may be no termination of service if a person transfers between departments or returns to the same department within 2 weeks after the last day of compensation. In the event a member has filed an application to withdraw his total accumulated deductions and has returned to State service prior to receipt of payment therefore, the member will not be deemed to be eligible for a withdrawal of the accumulated deductions. An election to receive any of the three benefits made after the effective date of termination of service shall be deemed to be irrevocable and no change may be permitted, except to elect early retirement from vesting.
(e) Ineligibility to select any benefit. When a member enters upon retirement, the member shall either execute the application on his own behalf or, in the case when the member is mentally incompetent to do so, the application shall be executed by a guardian appointed by a court. In the case of a member who is physically unable to file the application, it may be filed by anyone possessing a power of attorney. In all instances, the Board will be furnished and will review the legal documents designating persons who are eligible to act on behalf of eligible members.
(f) Effect of election of benefits. A member who is eligible for a maximum annuity or a reduced annuity under Option 1, 2, 3 or 4, upon filing an application to receive the benefits, shall, subsequent to termination of service, be deemed to have irrevocably selected the benefit and no change may be permitted, except as provided in section 5907(j) of the code.
(g) Rights and duties of State employees—members—disability applicants. A disability applicant who is required by the Board to furnish additional medical documentation to support his application, shall provide the documentation within 30 days of the request, or the Board may render the disability applicant null and void. In that event, or in the event the Board denies a disability applicant for insufficient medical evidence, the applicant may still file, within 90 days after notification, an application to vest or take an annuity, if the applicant is eligible for same. The filing shall be considered timely, as of the original eligibility date, for the purposes of payment of other benefits or vesting, as the case may be.
(h) Beneficiary nomination. Every member shall nominate a beneficiary and, if desired, a contingent beneficiary, in writing on a form to be supplied by and filed with the Board.
[Pa.B. Doc. No. 10-684. Filed for public inspection April 16, 2010, 9:00 a.m.]
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