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PA Bulletin, Doc. No. 01-1413




[4 PA. CODE CHS. 243 AND 245]

Retirement Contributions

[31 Pa.B. 4170]

   The State Employees' Retirement Board (Board) is amending §§ 243.6, 245.4, 245.5 and 245.6. The amendments are being made to remove restrictions for purchasing retirement credit, thereby allowing the costs of purchase to be deducted from the actuarial value of the retirement account.

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 Sean Sanderson, Director of Communications, State Employees' Retirement System, 30 North Third Street, P. O. Box 1147, Harrisburg, PA, (717) 787-9657; or Brian E. McDonough, Deputy Chief Counsel, State Employees' Retirement System, 30 North Third Street, P. O. Box 1147, Harrisburg, PA, 17108-1147, (717) 787-9657.

C.  Statutory Authority

   These amendments are authorized under 71 Pa.C.S. § 5907(d) and (h) (relating to State Employees' Retirement Code) (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 that purchase by eligible members, that is, their contributions. Although the act of May 17, 2001 (P. L. ____ , No. 9) amended the code to authorize the contributions to be made in a manner that permits the purchase price to be subtracted from the actuarial value of the member's account, the current regulations limit payment methods. Deletion of these regulations will allow the Board to authorize the actuarial debiting of the member's account as an agreed upon way to make these contributions.

   The purpose of this final repeal of these restrictions is to permit the Board to allow member contributions for the purchase of service to be made from the value of their retirement account. Members would still have the options 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 purchase authorized by the code. A sister agency, the Public School Employees' Retirement System, currently permits the actuarial reduction of school member accounts for service purchases. These regulatory repeals would enable the Board to offer similar opportunities to State employees.

E.  Benefits, Costs and Compliance

   Executive Order 1996-1 requires a cost/benefit analysis of the proposed rulemaking.


   These amendments would benefit State 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 State Employees' Retirement System (SERS). Customer service would be improved together with a corresponding reduction in bookkeeping and record keeping to the extent that payroll deductions would be reduced.


   There are no additional costs to the Commonwealth, its citizens or State employees associated with this final-form rulemaking.

   Compliance Costs

   The final-form rulemaking is not expected to impose any additional compliance costs on State employees.

F.  Sunset Review

   A sunset date has not been established by the Board for these regulations.

G.  Regulatory Review

   Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on June 15, 2001, the Board submitted a copy of the notice of proposed rulemaking, published at 31 Pa.B. 1587 (March 24, 2001), to the Independent Regulatory Review Commission (IRRC) and the Chairpersons of the House State Government Committee and the Senate Finance Committee. In addition to submitting the final-form amendments, the Board has provided IRRC and the Committees with a detailed regulatory analysis form prepared by the Department in compliance with Executive Order 1996-1, ''Regulatory Review and Promulgation.'' A copy of this material is available to the public upon request.

   Under section 5.1(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)), on July 5, 2001, this final-form rulemaking was deemed approved by the House and Senate Committees. Under section 5.1(e) of the Regulatory Review Act, the final-form rulemaking was deemed approved by IRRC effective July 6, 2001.

H.  Public Comments

   There have been no public comments.


   The Board finds that:

   (1)  Public notice of intention to delete these regulations herein was given under 1 Pa. Code § 7.1 (relating to notice of proposed rulemaking required) by publication at 31 Pa.B. 1587.

   (2)  The amendments to the rules and procedures deleted herein are necessary and appropriate for the administration of the code.


   The Board, acting under The Administrative Code of 1929 and the Commonwealth Documents Law, including particularly those sections specified in the several authority citations herein specified with respect to each provision of the rules and procedures of SERS deleted by this order, orders:

   (a)  The regulations for the Board, 4 Pa. Code Chapters 243 and 245, are amended by amending §§ 243.6, 245.4 and 245.6 and deleting § 245.5 to read as set at 31 Pa.B. 1587.

   (b)  The 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 31 Pa.B. 1587 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 31 Pa.B. 4136 (July 28, 2001).)

   Fiscal Note: Fiscal Note 31-1 remains valid for the final adoption of the subject regulations.

[Pa.B. Doc. No. 01-1413. Filed for public inspection August 3, 2001, 9:00 a.m.]

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