RULES AND REGULATIONS
Title 22--EDUCATION
PUBLIC EMPLOYEES' RETIREMENT BOARD
[ 22 PA. CODE CHS. 201, 211, 213 AND 215 ]
Formalization and Clarification of Current Practices
[38 Pa.B. 4083]
[Saturday, August 2, 2008]The Public School Employees' Retirement Board (Board) is submitting this final-form rulemaking under 24 Pa.C.S. § 8502(h) (relating to administrative duties of board) to amend its Chapters 201, 211, 213 and 215 to read as set forth in Annex A.
Statutory Authority
This final-form rulemaking is promulgated under 24 Pa.C.S. § 8502(h).
Purpose
The primary purpose of this final-form rulemaking is to formalize and clarify current practices, remedy problems that have arisen and reflect issues unique to the Public School Employees' Retirement System (PSERS). A definition is deleted if it merely repeats the definition in 24 Pa.C.S. Part IV (relating to Public School Employees' Retirement Code) (Retirement Code). Outdated regulations were deleted and new regulations were added to provide a clear, concise understanding of the Board's policies and procedures in accordance with the Retirement Code. In addition, editorial amendments have been made for improved readability.
Summary of Amendments
Chapter 201. Applicability of General Rules
Amendments to § 201.1 (relating to applicability of general rules) were made for the purpose of addressing grammatical errors and clarity.
Sections 201.2--201.5 are rescinded.
Final-form § 201.2a (relating to definitions) contains terms used only in the hearing and appeal process. The definition section of the Retirement Code does not provide a definition of the terms used in the hearing and appeal process. The definitions were added in the beginning of this chapter to provide clarification and understanding of the terms regarding the hearing and appeal process. The distinction between a matter before the Executive Staff Review Committee (ESRC) and a matter appealed to the Board is made through the use of the terms ''adjudicatory benefit appeal'' and ''nonadjudicatory benefit appeal.''
Final-form § 201.3a (relating to nonadjudicatory benefit appeal) sets out the procedure before the ESRC for a nonadjudicatory benefit appeal.
Final-form § 201.4a (relating to adjudicatory benefit appeal and request for administrative hearing) clarifies the procedure required of a claimant to file an adjudicatory benefit appeal within the prescribed time.
Final-form § 201.5 (relating to authorization of Secretary of the Board) was taken from an existing Board resolution and added to clarify the Secretary's powers and duties regarding the appeal process in approving uncontested orders.
Final-form § 201.6 (relating to motions practice) provides for the Board to rule directly on a preliminary objection or summary judgment or to delegate the recommendation to the hearing examiner. This section provides more flexibility and clarity in the motions process.
Final-form § 201.7 (relating to service and return of subpoenas) conforms the method of service of subpoenas to the Pennsylvania Rules of Civil Procedure. See 231 Pa. Code.
Final-form § 201.8 (relating to dismissal for nonappearance) was moved from § 201.4 for organizational purposes.
Final-form § 201.9 (relating to introduction of documents from the System's records) clarifies the method of authenticating PSERS' documents to be admitted as evidence in an adjudicatory benefit appeal hearing.
Final-form § 201.10 (relating to briefs) clarifies the process of filing briefs after a hearing. Section (a) supplements 1 Pa. Code Part II (relating to General Rules of Administrative Practice and Procedure) in requiring that the claimant shall file the first brief.
Final-form § 201.11 (relating to proposed opinion and recommendation) clarifies the requirements of the hearing examiner's proposed opinion.
Final-form § 201.12 (relating to oral argument before the Board) was added to clarify the process for requesting oral argument before the Board and the procedure to be followed when presenting oral argument. It is adopted from an existing Board resolution.
Chapter 211. Preliminary Provisions
Section 211.1(a) (relating to short title of part) is amended to clarify the chapters to which the definitions are applied.
Section 211.2 (relating to definitions) is amended to delete definitions that repeat the Retirement Code definitions or that are outdated. Some existing definitions are amended to correct grammatical errors. Some definitions are amended to conform to the Internal Revenue Code of 1986 (26 § U.S.C.A.). Some definitions are added or amended for clarification.
Final-form § 211.3 (relating to construction) is moved from § 215.35 (relating to general regulations) for organizational purposes. Section 215.35 is rescinded in this final-form rulemaking.
Chapter 213. Contributions and Benefits
Section 213.1(a) (relating to mandatory and optional membership) is amended to correct grammatical errors. Subsection (b) was moved from § 215.36 (relating to optional alternate retirement programs) for organizational purposes. Section 215.36 is rescinded in this final-form rulemaking.
Sections 213.2 and 213.3 (relating to credited school service; and eligibility points for retention and reinstatement of service credits) are amended to correct grammatical errors and for clarification.
Final-form § 213.3a (relating to waiver of adjustments) reflects the Board's policies in interpreting 24 Pa.C.S. § 8303.1 (relating to waiver of adjustments) regarding adjustments to a member's account that would cause an undue hardship for the member.
Amendments to § 213.4 (relating to creditable nonschool service) correct grammatical errors and the deletion of outdated provisions.
Section 213.5 (relating to classes of service) is to be rescinded because it is outdated.
Section 213.6 (relating to eligibility points) is amended to correct grammatical errors.
Section 213.9 (relating to eligibility for death benefits) is amended to comply with the wording of 20 Pa.C.S. § 3101 (relating to payments to family and funeral directors).
Section 213.23 (relating to member contributions for creditable school service) is rescinded because it is outdated and does not supplement 24 Pa.C.S. § 8323 (relating to member contributions for creditable school service).
Section 213.24 (relating to contributions for the purchase of credit for creditable school and nonschool service) is amended to correct grammatical errors and clarification. Subsection (b) is amended to clarify the requirements of 24 Pa.C.S. § 8324(b) (relating to contributions for purchase of credit for creditable nonschool service) to receive credit for nonintervening military service. The section was also amended to reflect changes in legislation to include service as a Class T-D member.
The amendments to § 213.25 (relating to incomplete payments) clarify that a member's estate may not complete payments of purchasable service but that the annuity benefit will be reduced by the debt, provided that in the case of nonschool service, which purchase is discretionary, the reduction does not negatively impact the present value.
Section 213.27 (relating to payments by employers) is amended to correct grammatical errors and for clarity. Subsection (a) reduces the time for an employer to file monthly reports from 15 days to 10 days following the end of the month to comport with PSERS' current practice. An amendment has also been made to comply with 24 Pa.C.S. § 8535 (relating to payments to school entities by Commonwealth) that requires the employer to pay the bill issued by the Board within 5 business days.
Section 213.30 (relating to appropriations by the Commonwealth) is amended to correct grammatical errors.
Section 213.41 (relating to return of accumulated deductions) is amended to clarify that the member must also qualify for membership into PSERS upon return to service.
Section 213.44 (relating to disability annuities) is amended to be consistent with amendments to the pertinent sections of the Retirement Code.
Section 213.45 (relating to change in benefit payment plan) is amended to correct grammatical errors and to provide consistency with the Retirement Code. Subsection (h)(1) provides that an annuitant has 30 days following certification of the amount due to return money received by PSERS or elect an actuarial reduction to the annuitant's account, in default of which, an actuarial reduction shall be applied.
Section 213.46 (relating to termination of annuities) is amended to reflect changes in the Retirement Code.
Sections 213.47 and 213.49 (relating to death benefits; and payment of benefits) are amended to correct grammatical errors and for clarification.
Chapter 215. General Administration
Section 215.2(a) (relating to administrative duties of the Board) is deleted because it is inconsistent with act of June 21, 1957 (P. L. 390, No. 212) (65 P. S. §§ 66.1--66.9), known as the Right-to-Know Law, which controls the subject matter.
Section 215.5 (relating to duties of the Board) is amended for clarification and correction of grammatical errors. This section is also generally amended for consistency with the Retirement Code to clarify that the effective date of a member's disability will be the day after the last day of compensation. Subsections (a)(5) and (b) were amended for purposes of clarity.
Section 215.6 and 215.7 (relating to duties of employers; and rights and duties of school employees and members) are amended to correct grammatical errors. Amendments and deletions were also made to be consistent with changes made to the Retirement Code. Section 215.7(d) is also amended to clarify that a nomination of beneficiary must be in writing but is not required to be on a form issued by the Board.
Section 215.33 (relating to taxation, attachment and assignment of funds) is amended because it is outdated.
Fiscal Impact
The final-form rulemaking is not expected to have significant negative fiscal impact upon the Commonwealth, its political subdivisions or the general public.
Comment and Response Summary
No comments were received from the Committees or the public for the Board to consider in preparing these final-form regulations.
The PSERS received comments from Independent Regulatory Review Commission (IRRC) on the proposed rulemaking. Those comments were reviewed and are discussed in detail as follows.
IRRC's Comments: § 201.2a. Definitions.--Clarity.
The definition of ''nonadjudicatory benefit appeal'' states in part, ''the action of the ESRC will be deemed final unless a claimant files a timely adjudicatory benefit appeal from that action and seeks an administrative hearing.'' This portion of the definition is substantive. Substantive provisions in definitional sections are unenforceable. Moreover, this substantive rule is also expressed in § 201.4a(c). In the final-form regulation, the Board should strike the last sentence from this definition.
Response:
The PSERS has deleted the second sentence from the definition of ''nonadjudicatory benefit appeal.''
IRRC's Comments: § 201.3a. Nonadjudicatory benefit appeal.--Reasonableness; Clarity.
Subsection (e) provides that the ESRC will meet ''as necessary to review and decide'' appeals under this section; the claimant will be notified if the appeal is granted; and the claimant will be notified by means of a denial letter if the appeal is denied. The provision is vague and, consequently, fails to impart useful information to members of the regulated community or their representatives. What is the allowable time period for the ESRC to make a determination regarding an appeal and notify the claimant? If the appeal is granted, how will the claimant be notified? Also, must the claimant exercise his right to appeal within 30 days of the denial letter being written, or within 30 days of the denial letter being postmarked? IRRC recommended that the Board amend this provision for clarity.
Response:
The PSERS has inserted the words ''in writing'' in § 201.3a(e) after the word ''will be notified'' in the third line. As to the other questions raised by IRRC, PSERS has made no changes. There is no specific allowable time for the ESRC to make a determination. In addition, the regulations continually use the term ''the date of the letter,'' which we believe makes clear that it is the date on the letter not the date of postmark or receipt that governs. The PSERS internally has procedures in place to ensure that the date of an ESRC letter coincides with the date of the postmark.
IRRC's Comments: § 201.4a. Adjudicatory benefit appeal and request for administrative hearing.--Clarity.
Subsection (a) requires that the Board must receive an appeal and request for administrative hearing under this section ''within 30 days after the date of the ESCR denial letter.'' The regulation should specify whether the 30-day time period for appeal begins on the date noted on the letter, or the date the letter is postmarked.
Response:
The same comment applies as to ''the date of the letter'' under § 201.4(a).
IRRC's Comments: § 201.7. Service and return of subpoenas.--Reasonableness; Clarity.
Subsection (a) requires a subpoenaing party to ''furnish the fees promptly upon the written request of the witness after service of the subpoena.'' IRRC had three concerns. First, the term ''promptly'' was vague. In the final-form regulation, the Board should provide a specific time period for response.
Second, the final-form regulation should address how a witness will be notified of his obligation to request fees in writing. Will the subpoenaing party be required to alert the witness to the requirement?
Third, the final sentence of subsection (a) is a run-on sentence and is unclear. The Board should revise it in the final-form regulation.
Response:
The PSERS have taken into consideration IRRC's comments, and have revised the proposed rulemaking in response to the comments, as follows:
§ 201.7 Service and return of subpoenas.(a) Service of subpoenas will be made by any of the methods authorized by Pa.R.C.P. No. 234.2(b) (relating to Subpoena. Issuance. Service. Compliance. Fees. Prisoners.). It will not be necessary that witness fees be tendered at the time of service of the subpoena, but the subpoena shall include a notice that the witness may request in writing the payment of the witness fees provided in Pa.R.C.P. No. 234.2(c). The written request shall be made to the party (or his counsel) on whose behalf the subpoena is issued. The party (or his counsel) on whose behalf the subpoena is issued shall remit the witness fees to the witness within 14 days after the date of the letter requesting payment of witness fees or before the date of the hearing, whichever comes first.(b) This section supersedes 1 Pa. Code § 35.142(b) (relating to service and return of subpoenas) and supplements 1 Pa. Code §§ 35.139 and 35.142(c) (relating to fees of witnesses; and subpoenas).In response to the first comment, PSERS has inserted the requirement that the party on whose behalf the subpoena is issued must remit the witness fee within 14 days of written request from the subpoenaed witness seeking the fees, or prior to the hearing, whichever comes first.
In response to the second comment, PSERS has added the requirement that the subpoena itself contain a notice of the right of the witness to make a written request to receive the witness fees.
In response to the third comment, PSERS has revised the referenced run-on sentence.
Finally, to stress the mandatory requirements of the regulation, we have substituted the word ''shall'' for the word ''will'' in the final form regulation.
IRRC's Comments: § 201.11. Proposed opinion and recommendation.--Clarity.
Subsection(c) stated, ''[w]hen exceptions are filed, the Board will rule on the exceptions.'' This is the sole mention of exceptions in this chapter. With which entity should exceptions be filed, and within what time limitations? What information and documentation must be included with the exceptions? How long does the Board have to rule on exceptions? The final-form regulation should provide clear guidance on the substance and procedure of the exceptions process. It should also provide a definition of ''exceptions'' in the definitional section or a cross-reference to a definition located elsewhere.
Response:
The intention was to incorporate the exceptions procedure already set forth in the General Rules of Administrative Practice and Procedure (GRAPP). IRRC's comment is well-taken and a new § 201.11(e) has been inserted that provides: ''(e). Any party may file exceptions in accordance with 1 Pa. Code §§ 35.211--35.212.''
The cited GRAPP provisions will answer the question as to the entity with which exceptions should be filed and what information and documentation must be included. As to the question how long the Board has to rule on exceptions, the GRAPP does not address this issue and PSERS does not believe it is appropriate to impose such a requirement. The Board has authority to review recommended decisions, to table them, to require additional information and take other actions within its plenary power. It would, therefore, be inappropriate to impose a requirement that does not otherwise exist in the Retirement Code, GRAPP or other applicable law or regulations.
No change in the application of 1 Pa. Code §§ 35.211 and 35.213 (relating to procedure to except to proposed report; and effect of failure to except to proposed report) is intended. The regulation, however, preserves the Board's discretion to accept, reject or supplement the opinion and recommendation of the hearing examiner, or to issue its own opinion and order, without having to ''initiate'' the review set forth in 1 Pa. Code § 35.226(a)(2) (relating to final orders). This provision is not intended to relieve the parties from filing exceptions to the proposed opinion and recommendation of the hearing examiner.
IRRC's Comments: § 201.12. Oral argument before the Board.--Clarity.
Subsection (a) stated, ''[t]he right to oral argument will be discretionary with the Board.'' This provision was vague and therefore provided insufficient guidance to the regulated community. The final-form regulation should include criteria the Board will consider in determining whether oral argument is necessary or appropriate in a given case.
Subsection (b) requires a party requesting oral argument in a case when exceptions have been filed to file the request for oral argument ''with the exceptions.'' As noted previously, the Board should provide further detail concerning the exceptions process.
Subsection (e) provided that, following oral argument, the Board ''may table the case for further consideration at its next meeting.'' If the Board does choose to table a case, must it decide the case at the next meeting? In other words, may the Board table the case for multiple meetings, or does it have a finite time period during which it must act?
Subsection (f) required that, in accordance with the Board's decision in a case, the ''Board's counsel will draft a proposed adjudication'' that ''will be presented for the Board's approval'' at the Board meeting immediately following the meeting in which the Board made its determination in the case. Must the Board vote on the proposed adjudication in the meeting when it is presented, or may it table the matter for one or more meetings? Is there a time period during which the Board is required to act?
Response:
The PSERS notes that § 201.12, the provision in question, supersedes 1 Pa. Code § 35.214 (relating to oral argument on exception). That GRAPP provision states simply that the agency head may order oral argument, without giving any additional guidance. The PSERS therefore does not believe it is necessary to add anything to this provision, but will accede to IRRC's request by amending the first sentence of § 201.12(a) to read:
''The right to oral argument is discretionary with the Board and will be granted to the extent the Board believes it will be helpful in enabling the Board to acquire an understanding of and to resolve the issues.'' This standard is taken from Pa.R.A.P. 2315(a) (relating to oral arguments).The comment regarding § 201.12(b) has been addressed in the response previously.
The next comment questioned how long a case may be tabled. As set forth previously, the Board has discretion as to when it will decide a case and can continue tabling a case if it cannot get a consensus to vote on a matter. To resolve any question, the PSERS has deleted the words ''at its next meeting'' from § 201.12(e).
The next comment questioned whether under § 201.12(f), the Board must vote on a proposed adjudication at the meeting where it is presented. The answer is no. There is no time period. To address IRRC's concerns, PSERS has deleted the words ''for the Board's approval'' and have inserted the words ''to the Board'' in § 201.12(f).
IRRC's Comments: § 211.2. Definitions.--Clarity. Certified members.
The final sentence of the definition of this term stated, ''[a]ll other members are noncertified members.'' The definition of ''nonprofessional members'' also refers to the meaning of ''noncertified members'' found in this definition. The final-form regulation should strike the final sentence from this definition and provide for a separate and distinct definition of ''noncertified members.''
Nonprofessional members. The Board should clarify the purpose and meaning of the final sentence of this definition. It is unclear whether the Board intended ''noncertified members'' to be included in the definition of ''nonprofessional members,'' or whether the Board intended the terms to have the same meaning.
Pickup contributions. The Board proposed to delete the definition of ''pickup contributions'' currently included in this section. However, this term is used in the definition of ''inactive member.'' The final-form regulation should either maintain this definition, provide a cross-reference to when an applicable definition of the term is found elsewhere, or delete the use of the term in the definition of ''inactive member.''
Professional members. The Board should clarify the purpose and meaning of the final sentence of this definition. It is unclear whether the Board intended ''certified'' member to be included in the definition of ''professional members,'' or whether the Board intended the terms to have the same meaning.
School year. The final sentence of this definition was substantive. Substantive provisions in definitional sections are unenforceable. The Board should strike this sentence from the definition and relocate it to a substantive section of the final-form regulation.
Response:
Addressing the first, second and fourth comments, relating to certified members, nonprofessional members and professional members, the intention is that professional members and certified members are the same and nonprofessional members and noncertified members are the same. To clarify this, PSERS has changed the defined words and definitions to read as follows:
Nonprofessional members or noncertified members--The term includes all school [employes] employees who are not ''professional [members] employees,'' as defined in section 1101 of the Public School Code of 1949, 24 P. S. § 11-1101, and who also qualify for membership in the System under section 8301 of the Retirement Code (relating to mandatory and optional membership).Professional members or certified members--[As] ''Professional employees,'' as defined in section 1101 of the Public School Code of 1949, 24 P. S. § 11-1101, including all temporary professional [employes] employees, professional [employes] employees, substitutes and commissioned officers currently employed by a school district or intermediate unit and qualifying for membership in the System under section 8301 of the Retirement Code (relating to mandatory and optional membership).The third comment related to the deletion of ''pickup contributions,'' a term defined in the Retirement Code and used in the definition of an ''inactive member'' and an ''active member.'' The recommendation of IRRC has been accepted, and the phrase: '', as defined in section 8102 of the Retirement Code,'' has been inserted after ''pickup contributions'' in the definitions for ''inactive member'' and ''active member.''
The fifth comment related to the definition of ''school year'' and states this is substantive and should be moved to a substantive section. The PSERS has moved this provision to § 211.3(h) (relating to construction).
IRRC's Comments: § 213.1. Mandatory and optional membership.--Clarity.
Subsection (b)(2) required that the remittance of certain contributions or the reinstatement of former credited service ''shall be made in accordance with the applicable provisions of the Retirement Code.'' The final-form regulation should specify the applicable Retirement Code provisions.
Response:
This recommendation has been adopted. The penulti- mate sentence now reads:
Remittance of contributions or reinstatement of former credited service shall be made in accordance with 24 Pa.C.S. §§ 8303(c) and 8323(a) (relating to eligibility points for retention and reinstatement of service credit; and contributes for purchase of credit for creditable nonschool service).IRRC's Comments: § 213.3a. Waiver of adjustments.--Clarity; Protection of the public welfare.
Subsection (a) provided the standard for determining whether an adjustment meets the undue hardship test under section 8303.1(a)(l) of the Retirement Code. Under subsection (a)(l), the undue hardship test is met if the ''adjustment causes a reduction in excess of 5% of the monthly annuity or other relevant amount.'' How and why did the Board determine that a 5% reduction was the appropriate benchmark for ''undue hardship''? What effect, if any, will this provision have on members who have already experienced an adjustment under section 8534(b) of the Retirement Code (relating to fraud and adjustment of errors) leading to a 5% reduction in monthly benefit?
Additionally, PSERS has a clarity concern. Section (a)(l) references a reduction of the monthly annuity ''or other relevant amount.'' The final-form regulation should clarify whether ''other relevant amount'' modifies 5%, or whether it modifies ''monthly annuity.'' At a minimum, the final-form regulation should provide criteria to assist the regulated community in ascertaining what might be a ''relevant amount.''
Response:
Section 213.45(b)(1) of the Board's current regulations uses 5% as the difference between a finally-calculated monthly annuity and an originally-estimated monthly annuity as the significant difference that will allow an annuitant to change an otherwise irrevocable benefit payment plan election. The Board has utilized the 5% difference, by analogy, to determine undue hardship under section 8303.1 of the Retirement Code.
In answer to what effect this provision will have, if a person seeks a waiver, under section 8303.1 of the Retirement Code, of an adjustment made by PSERS under section 8534(b) of the Retirement Code, the Board will apply this percentage to determine whether the undue hardship test under section 8303.1(a)(1) of the Retirement Code (one of the four tests that must be met) has been met. The PSERS has already been applying this standard as a policy and is now seeking to make it a regulation to gain added legal support.
With respect to the second paragraph, the PSERS noted IRRC's concern, and since any adjustment will ultimately impact the annuity, has changed § 213.3.1(a)(1) to read:
(1) The adjustment causes a reduction in excess of five percent of the monthly annuity;IRRC's Comments: § 213.25. Incomplete payments--Clarity; Protection of the public welfare.
Subsection (c) provided that if a member applies for the purchase of service and dies prior to certification by the Board, ''purchase of service shall be completed . . . by reducing the annuity benefit by the actuarial equivalent of the debt . . . provided, in the case of nonschool service, the purchase does not negatively impact the present value.'' There were two concerns.
First, the regulation currently states that if a member dies after applying for the purchase of service but before certification by the Board, ''the members legally constituted representative may purchase the service by payment of a lump sum'' or by reducing the annuity benefit. (Emphasis added.) Will the change from permissive to mandatory language prevent a deceased member's legally constituted representative from opting out of the transaction?
Second, while § 213.24 allowed members to purchase creditable school service as well as nonschool service, the amendment only protected against a purchase of nonschool service that would negatively impact the present value. Why does the final clause not address the purchase creditable school service that would negatively affect the present value?
The preamble did not provide a clear explanation of the reason for either of these changes. In the submittal of the final-form regulation, the Board should further explain the amendments to this section.
Response:
In answer to the first concern, the intent was to prevent a member's legally constituted representative from opting out of a nonschool purchase transaction unless the transaction has a negative impact on present value. The current regulation already is mandatory as to school service, as provided in section 8325 of the Retirement Code. The existing permissive language relates only to how the representative may purchase the service.
Regarding the second concern, PSERS has amended the preamble to read:
The amendments to § 213.25 (relating to incomplete payments) clarify that a member's estate may not complete payments of purchasable service but that the annuity benefit will be reduced by the debt, provided that in the case of nonschool service, which purchase is discretionary, the reduction does not negatively impact the present value.IRRC's Comments: § 213.27. Payments by employers.--Clarity; Reasonableness.
This section reduced the time period for employers to file reports with the Board and to pay the amount billed by the Board. The preamble does not provide a clear explanation of the reason for the reduction of the time period or whether the time period is reasonable. In the submittal of the final-form regulation, the Board should further explain the amendments to this section.
Response:
The time in which to file reports with the Board is not statutorily mandated; however, PSERS' current standard practice requires that the reports to be filed within 10 days instead of 15 days because PSERS' computer system in place allows the employers to streamline the process of reporting. The employers have consistently been filing their reports within 10 days without delay or problems. The Board is merely seeking to solidify the current practice.
Section 8535, which was added to the Retirement Code in 1994, requires school entities to make payment for the employer's liability within 5 days after receipt of the Commonwealth's portion. The Board has already been applying this statutory requirement and is now updating the regulations.
IRRC's Comments: § 213.46. Termination of annuities.--Clarity.
Subsection (d) included a definition of ''extracurricular position.'' IRRC recommended that the Board move the definition from this section to § 211.2. Moreover, the definition of ''extracurricular position'' references an ''established academic course structure.'' The final-form regulation should specify criteria for what the ''established academic course structure'' includes. For instance, does it include fine arts electives?
Response:
The definition of ''extracurricular position'' under subsection (d) questioned by IRRC is taken from the definition in section 8346(b.1) of the Retirement Code. The Board does not believe it is advisable, nor is it prepared, to develop specific criteria for this definition at this time, but will rather consider each case individually on its own merits to develop a consistent interpretation.
In preparing the final-form rulemaking, the Board has considered all comments from IRRC, the House and Senate Committees and the public.
Additional Amendments:
In addition to the previous amendments, the Board made some additional revisions.
The definition of ''beneficiary'' in § 211.2 was amended to read as follows:
Beneficiary--The person (as defined in the Statutory Construction Act, 1 Pa.C.S. § 1991) last designated by a member in writing to the Board to receive accumulated deductions or a lump sum benefit upon the member's death.In reviewing IRRC's comments to § 201.11, the PSERS noticed that the proposed regulation also supplements 1 Pa. Code § 35.226(a)(2) (relating to final orders). The PSERS has added this cross-reference to the final-form regulation in § 201.11(d).
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on July 6, 2007, the Board submitted a copy of the notice of proposed rulemaking, published at 37 Pa.B. 3423 (July 21, 2007) and a copy of a Regulatory Analysis Form to the IRRC and to the Chairpersons of the House Education Committee and the Senate Finance Committee for review and comment. A copy of this material is available to the public upon request.
Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on June 4, 2008 the final-form rulemaking was deemed approved by the Committees.
Under section 5.1(e) of the Regulatory Review Act, IRRC met on June 5, 2008 and approved the final-form rulemaking.
Effective Date
This final-form rulemaking will go into effect upon final-form publication in the Pennsylvania Bulletin.
Contact Person
For further information, contact Frank Ryder, Director of Government Relations, Public School Employees' Retirement System, 5 North Fifth Street, P. O. Box 125, Harrisburg, PA 17108, (717) 720-4733; or Charles K. Serine, Deputy Chief Counsel, Public School Employees' Retirement System, 5 North Fifth Street, P. O. Box 125, Harrisburg, PA 17108, (717) 720-4679.
Findings
The Board finds that:
(1) Public notice of intention to amend these chapters 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) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2.
(2) The final-form rulemaking is necessary and appropriate for the administration of the Retirement Code.
Order
The Board, acting under the authorizing statutes, orders that:
(a) The regulations of the Board, 22 Pa. Code Chapters 201, 211, 213 and 215, are amended by amending §§ 201.1, 211.1, 211.2, 213.1--213.4, 213.9, 213.24, 213.25, 213.27, 213.41, 213.44, 213.45--213.47, 213.49, 215.2, 215.5--215.7 and 215.33; by deleting §§ 201.2--201.5, 213.5, 213.23, 215.35 and 215.36; and by adding §§ 201.2a--201.5a, 201.6--201.12, 211.3 and 213.3a to read as set forth in Annex A, with ellispses referring to the existing text of the regulations.
(b) The final-form amendments 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 upon publication in the Pennsylvania Bulletin.
JEFFREY B. CLAY,
Secretary(Editor's Note: For the text of the order of the Independent Review Commission relating to this document, see 38 Pa.B. 3461 (June 21, 2008).)
Fiscal Note: Fiscal Note 43-10 remains valid for the final adoption of the subject regulations.
Annex A
TITLE 22. EDUCATION
PART XIII. PUBLIC SCHOOL EMPLOYEES' RETIREMENT BOARD
CHAPTER 201. PRACTICE AND PROCEDURE § 201.1. Applicability of general rules.
Under 1 Pa. Code § 31.1 (relating to scope of part), 1 Pa. Code Part II (relating to General Rules of Administrative Practice and Procedure), is applicable to the activities of and proceedings before the Board, except as provided in, or inconsistent with, this chapter.
§ 201.2. (Reserved).
§ 201.2a. Definitions.
(a) In addition to the definitions in 1 Pa. Code § 31.3 (relating to definitions), as used in this chapter, the following words and terms have the following meanings, unless the context clearly indicates otherwise:
Adjudicatory benefit appeal--An appeal from the ESRC to the Board in which a formal hearing is requested and in which an adjudication of the Board is issued under 2 Pa.C.S. §§ 501--508 and 701--704 (relating to Administrative Agency Law) and 1 Pa. Code Part II (relating to General Rules of Administrative Practice and Procedure).
Board--The Public School Employees' Retirement Board.
Claimant--An individual who, or entity that, has requested an adjudicatory benefit appeal.
Executive Director--The appointed executive director of the System. The Executive Director of the System is also the Secretary of the Board.
ESRC--The Executive Staff Review Committee, which consists of the Executive Director and additional senior staff members as appointed by the Executive Director.
Hearing examiner--A presiding officer appointed to hear an adjudicatory benefit appeal in accordance with 1 Pa. Code § 35.185 (relating to designation of presiding officers).
Nonadjudicatory benefit appeal--An appeal to the ESRC, which is resolved without conducting a hearing or issuing an adjudication.
Party--An individual or entity participating in an adjudicatory benefit appeal, including an intervenor and any person or entity joined to the appeal.
Retirement Code--The Public School Employees' Retirement Code (24 Pa.C.S. §§ 8101--8535).
Secretary of the Board--The appointed Secretary of the Board as provided in the Retirement Code. The Secretary of the Board is also the Executive Director of the System.
Subordinate officer--
(i) An officer or employee of the System.
(ii) The term does not include the Executive Director, Secretary of the Board or the Board.
System--The Public School Employees' Retirement System.
(b) This section supplements 1 Pa. Code § 31.3; the definition of ''subordinate officer'' supersedes the definition in 1 Pa. Code § 31.3.
§ 201.3. (Reserved).
§ 201.3a. Nonadjudicatory benefit appeal.
(a) Benefit appeals from actions of subordinate officers of the System shall be made to the ESRC and shall be nonadjudicatory.
(b) A letter from the System taking an action or making a determination on behalf of the System shall constitute action of a subordinate officer. A letter shall constitute action of a subordinate officer whether or not the letter states that an appeal must be taken within 30 days.
(c) An appeal to the ESRC shall be received by the System within 30 days after the date of the letter from the System taking an action or making a determination on behalf of the System. If a claimant fails to appeal an action or determination by a subordinate officer to the ESRC within the prescribed time, the action of the subordinate officer will become final.
(d) An appeal to the ESRC must be made in writing and addressed to:
Executive Staff Review Committee
Public School Employees'
Retirement System
P. O. Box 125
Harrisburg, Pennsylvania 17108-0125(e) The ESRC will meet as necessary to review and decide nonadjudicatory benefit appeals. If the appeal is granted, the claimant will be notified in writing and the matter will be closed. If the appeal is denied, in full or in part, the claimant shall have the right to appeal the denial to the Board. The ESRC will send the claimant a denial letter explaining why the appeal is denied, and advise the claimant of the right to appeal to the Board and request an adjudicatory benefit appeal and administrative hearing within 30 days after the date of the denial letter.
(f) The Executive Director or a designee will maintain a record of the decisions of the ESRC and report to the Board the results of each decision by the ESRC, which will include a brief summary of the issues involved.
(g) This section supersedes 1 Pa. Code § 35.20 (relating to appeals from actions of the staff).
§ 201.4. (Reserved).
§ 201.4a. Adjudicatory benefit appeal and request for administrative hearing.
(a) An adjudicatory benefit appeal and request for administrative hearing from a denial letter from the ESRC must be in writing and received by the Board within 30 days after the date of the ESRC denial letter.
(b) An adjudicatory benefit appeal and request for administrative hearing must be addressed to:
Appeal Docket Administrator
Public School Employees' Retirement Board
P. O. Box 125
Harrisburg, Pennsylvania 17108-0125(c) If a claimant fails to appeal a decision of the ESRC to the Board within the prescribed time, the decision of the ESRC is deemed final.
(d) Appeals to the Board from the ESRC as to which no motions are filed under § 201.6 (relating to motions practice) will be referred to a hearing examiner under 1 Pa. Code Chapter 35, Subchapter E (relating to presiding officers) to conduct a hearing and prepare a recommended decision to the Board under 1 Pa. Code §§ 35.202 and 35.205 (relating to proceedings in which proposed reports are prepared; and contents of proposed reports).
§ 201.5. (Reserved).
§ 201.5a. Authorization of Secretary of the Board.
The Secretary of the Board will be authorized to execute and issue routine and uncontested orders on behalf of the Board, including, but not limited to, the following:
(1) An order to dismiss when a claimant has withdrawn a request for an adjudication.
(2) An order granting an extension of time to file a document.
(3) An order granting the right of a third party to intervene in a pending appeal.
§ 201.6. Motions practice.
(a) Preliminary objections. The System may, before filing an answer, file preliminary objections directly with the Board. The preliminary objections will conform to Pa.R.C.P. No. 1028 (relating to preliminary objections).
(b) Summary judgment. The System or the claimant may file a motion for summary judgment directly with the Board. The motion must conform to Pa.R.C.P. Nos. 1035.1--1035.5.
(c) The Board will rule directly on preliminary objections or motions for summary judgment unless, by order, it delegates the matter to a hearing examiner to prepare a proposed opinion and recommendation under § 201.12 (relating to oral argument before the Board).
(d) This section supersedes 1 Pa. Code § 35.54 (relating to motions as to complaint).
§ 201.7. Service and return of subpoenas.
(a) Service of subpoenas will be made by any of the methods authorized by Pa.R.C.P. No. 234.2(b) (relating to Subpoena. Issuance. Service. Compliance. Fees. Prisoners.). It will not be necessary that witness fees be tendered at the time of service of the subpoena, but the subpoena must include a notice that the witness may request in writing the payment of the witness fees provided in Pa.R.C.P. No. 234.2(c). The written request shall be made to the party (or his counsel) on whose behalf the subpoena is issued. The party (or his counsel) on whose behalf the subpoena is issued shall remit the witness fees to the witness within 14 days after the date of the letter requesting payment of witness fees or before the date of the hearing, whichever comes first.
(b) This section supersedes 1 Pa. Code § 35.142(b) (relating to service and return of subpoenas) and supplements 1 Pa. Code §§ 35.139 and 35.142(c) (relating to fees of witnesses; and subpoenas).
§ 201.8. Dismissal for nonappearance.
(a) Whenever a claimant fails to appear, either in person or through counsel, for a scheduled hearing without good cause, the hearing examiner will issue a recommendation to dismiss the case, without considering the merits of the claim.
(b) This section supplements 1 Pa. Code §§ 35.125, 35.187 and 35.205 (relating to order of procedure; authority delegated to presiding officers; and contents of proposed reports).
§ 201.9. Introduction of documents from the System's records.
(a) Documents from the System's records need not be certified or authenticated under 42 Pa.C.S. §§ 6103 and 6104(a) (relating to proof of official records; and effect of official records generally) to be admitted into evidence in an administrative hearing.
(b) Any subordinate officer who has access to the System's records, and has knowledge regarding the identity and mode of preparation of the records prepared by the System and the filing with, and maintenance of records by the System in the regular course of the System's business will be qualified to identify any documents or other records on file with the System in any hearing and to testify regarding the documents or other records.
(c) This section supplements 1 Pa. Code §§ 35.161 and 35.164 (relating to form and admissibility of evidence; and documents on file with agency).
§ 201.10. Briefs.
(a) After the close of the testimony, the hearing examiner will fix a briefing schedule. Unless otherwise agreed to by all parties and the hearing examiner, the claimant, or other party upon whom rests the burden of proof, shall file the first brief, followed by the brief of the System and a reply brief by the claimant or other party who filed the first brief. Briefs must conform to 1 Pa. Code § 35.192 (relating to content and form of briefs). A party upon whom rests the burden of proof may not be denied the right to file a reply brief. Any party may waive the right to file a brief or reply brief, either on the record, or in writing to the hearing examiner, in either of which events, the hearing examiner will note that fact on the record, deduct the time allotted for the filing of the briefs from the briefing schedule and prepare an opinion and recommendation for the Board without the benefit of a brief on behalf of the party who elected to waive the filing of a brief.
(b) Both the claimant and the System shall be entitled to file letter briefs to the hearing examiner. The letter briefs need not conform to 1 Pa. Code §§ 35.191 and 35.192 (relating to proceedings in which briefs are to be filed; and content and form of briefs), but the letter briefs may not be more than 3 pages in length.
(c) This section supplements 1 Pa. Code §§ 35.191 and 35.192.
§ 201.11. Proposed opinion and recommendation.
(a) Unless otherwise ordered by the Board, the hearing examiner will file a proposed opinion and recommendation to the Board in cases when an administrative hearing has been held before a hearing examiner. The contents of the proposed opinion and recommendation will be in accordance with 1 Pa. Code § 35.205 (relating to contents of proposed reports) and will also include a discussion of the matter. The proposed opinion and recommendation will not become the opinion and order of the Board unless it is adopted by the Board.
(b) The proposed opinion and recommendation shall be filed with the System, together with the transcript of testimony, exhibits and briefs, all of which shall become part of the record. At the same time the proposed opinion and recommendation is filed with the System, the hearing examiner will serve copies upon all parties and staff counsel.
(c) The Board may adopt or reject, in whole or in part, or supplement the proposed opinion and recommendation or issue its own opinion and order, whether or not exceptions to the proposed opinion and recommendation are filed by any party. When exceptions are filed, the Board will rule on the exceptions.
(d) Any party may file exceptions in accordance with 1 Pa. Code §§ 35.211 and 35.212 (relating to procedure to except to proposed report; and content and form of briefs on exceptions).
(e) This section supplements 1 Pa. Code §§ 35.202, 35.207 and 35.226(a)(2) (relating to proceedings in which proposed reports are prepared; service of proposed reports; and relating to final orders).
§ 201.12. Oral argument before the Board.
(a) The right to oral argument is discretionary with the Board and will be granted to the extent the Board believes it will be helpful in enabling the Board to acquire an understanding of and to resolve the issues. When oral argument is granted, the Secretary of the Board will schedule the argument for the next available Board meeting.
(b) If a party filing exceptions to a recommendation of the hearing examiner wishes oral argument before the Board, the party shall file the request for oral argument with the exceptions.
(c) If a party seeks oral argument in a case in which exceptions have been filed by the System to a recommendation of the hearing examiner that is in favor of a claimant, the request for oral argument shall be filed with or before the party's response to the System's exceptions. In that case, the Secretary of the Board will grant oral argument and schedule it for the next available Board meeting.
(d) Oral argument will be limited to a maximum of 10 minutes for each party, unless otherwise directed by the Board. The claimant, as the party with the burden of proof, shall argue first. If there are more than two parties to the appeal, the Secretary of the Board will establish the order of argument consistent with who has the burden of proof. New evidence will not be accepted at the oral argument.
(e) At the conclusion of the oral argument, the Board will discuss and decide the case. The Board may table the case for further consideration at a future meeting. The Board may also elect to discuss all or part of the case in executive session in accordance with 65 Pa.C.S. Chapter 7 (relating to the Sunshine Act).
(f) The Board's counsel will draft a proposed adjudication in accordance with the Board's decision. The proposed adjudication will be presented to the Board at the Board meeting next following the Board's determination of the case, unless the Board agrees to have the proposed adjudication issued without further review by the Board.
(g) This section supersedes 1 Pa. Code §§ 35.214 and 35.226(a)(2) (relating to oral argument on exceptions; and final orders).
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