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PA Bulletin, Doc. No. 02-843




[22 PA. CODE CH. 213]

Contributions and Benefits

[32 Pa.B. 2326]

   The Public School Employees' Retirement Board (Board) has adopted this final-form rulemaking amending Chapter 213 (relating to contributions and benefits). The final-form amendments delete the restrictions for purchasing retirement credit thereby allowing the costs of purchase to be deducted from the actuarial value of the retirement account.

   These final-form amendments are being made to conform the Board's regulations with the policy adopted by the Board at its December 2, 1998, meeting allowing actuarial debt reduction for purchases of service.

A.  Effective Date

   These amendments will go into effect upon publication in the Pennsylvania Bulletin as a final-form rulemaking.

B.  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.

C.  Statutory Authority

   These final-form amendments are authorized under the authority of the Public School Employees' Retirement Code, 24 Pa.C.S. §§ 8502(h) and 8507(d) (code).

D.  Background and Purpose

   The Board is responsible for implementing the purchase of service provisions of the code and a component of that purchase program is a method of paying for the purchase by eligible members, that is, their contributions. Although the code authorizes the contributions to be made in any manner agreed upon by the Board and member, the current regulations limit payment methods. Deletion of these provisions will restore the Board's statutory authority to authorize the actuarial debiting of the member's account as an agreed upon way to make these contributions.

   The purpose of this rulemaking is to permit the member and Board to agree upon how member contributions for the purchase of service can be made. Members would still have the option of paying by lump sum or payroll deduction but also would have the option to authorize an actuarial reduction in the value of their account to pay for the requested purchase. This would substantially reduce or eliminate out-of-pocket costs for members to avail themselves of service purchases authorized by the code. As previously noted, by policy of the Board, the Public School Employees' Retirement System (PSERS) currently permits the actuarial reduction of school member accounts for service purchases. These regulatory actions will conform the regulations to the current administrative policy. The PSERS has promulgated a similar rescission of similar provisions published at 31 Pa.B. 4170 (August 4, 2001) that allows purchases of service to be paid by actuarial debt of State employees' accounts. This final-form rulemaking will harmonize the regulations of the PSERS and the State Employees' Retirement System, especially with regard to multiple service members.

E.  Benefits, Costs and Compliance

   Executive Order 1996-1, ''Regulatory Review and Promulgation'' requires a cost/benefit analysis of the rulemaking.


   This final-form rulemaking will benefit school employees eligible for service purchases under the code. By reducing the potential out-of-pocket costs to members with an offsetting actuarial reduction in the value of their accounts, easier access to statutorily authorized service purchases would ensue without any loss in the fiscal integrity of the PSERS. Customer service will be improved together with a corresponding reduction in bookkeeping and record keeping to the extent that payroll deductions are reduced.


   There are nominal additional costs to the Commonwealth, its citizens or school employees associated with these final-form amendments. There will be additional cost savings for both school employers and the PSERS associated with these final-form amendments.

Compliance Costs

   These final-form amendments are not expected to impose any additional compliance costs on school employees or employers.

F.  Sunset Review

   A sunset date has not been established by the Board for this final-form rulemaking.

G.  Regulatory Review

   Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on March 7, 2002, the Board submitted a copy of the notice of proposed rulemaking published at 31 Pa.B. 5711 (October 13, 2001), to IRRC and to the Chairpersons of the House Education Committee and the Senate Finance Committee for review and comment.

   No comments were received from the IRRC, the Committees or the public for the Board to consider in preparing this final-form rulemaking.

   Under section 5.1(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)), on March 27, 2002, this final-form rulemaking was deemed approved by the House and Senate Committees. Under section 5(g) of the Regulatory Review Act, the final-form rulemaking was deemed approved effecive April 4, 2002, by IRRC.

H.  Public Comments

   There were no public comments.

I.  Findings

   The Board finds that:

   (1)  Public notice of intention to amend these regulations was given under 1 Pa. Code § 7.1 (relating to notice of proposed rulemaking required) by publication at 31 Pa.B. 5711.

   (2)  The final-form amendments are necessary and appropriate for the administration of the code.

J.  Order

   The Board, acting under the authorizing statutes, orders that:

   (a)  The regulations of the Board, 22 Pa. Code Chapter 213, are amended by amending §§ 213.2 and 213.23--213.25 to read as set forth at 31 Pa.B. 5711.

   (b)  This order and 31 Pa.B. 5711 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 31 Pa.B. 5711 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.


   (Editor's Note:  For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 32 Pa.B. 2041 (April 20, 2002).)

   Fiscal Note:  Fiscal Note 43-8 remains valid for the final adoption of the subject regulations.

[Pa.B. Doc. No. 02-843. Filed for public inspection May 10, 2002, 9:00 a.m.]

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