(a) General rule.--Any Class T-C or Class T-D member who is a vestee with five or more eligibility points, any Class T-E, Class T-F, Class T-G or Class T-H member who is a vestee with ten or more eligibility points, or any eligible member upon termination of school service who is eligible to receive an annuity, may apply for and elect to receive either a maximum single life annuity, as calculated in accordance with the provisions of section 8342 (relating to maximum single life annuity), or a reduced annuity certified by the actuary to be actuarially equivalent to the maximum single life annuity and in accordance with one of the following options, except that no member shall elect an annuity payable to one or more survivor annuitants other than his spouse or alternate payee of such a magnitude that the present value of the annuity payable to him for life plus any lump sum payment he may have elected to receive is less than 50% of the present value of his maximum single life annuity and no member may elect a payment option that would provide benefits that do not satisfy the minimum distribution requirements or would violate the incidental death benefit rules of IRC § 401(a)(9). In no event shall a Class T-E or Class T-F member receive an annual benefit, calculated as of the effective date of retirement, greater than the member's final average salary.
(1) Option 1.--A life annuity to the member with a guaranteed total payment equal to the present value of the maximum single life annuity on the effective date of retirement with the provision that, if, at his death, he has received less than such present value, the unpaid balance shall be payable to his beneficiary.
(2) Option 2.--A joint and survivor annuity payable during the lifetime of the member with the full amount of such annuity payable thereafter to his survivor annuitant, if living at his death.
(3) Option 3.--A joint and fifty percent (50%) survivor annuity payable during the lifetime of the member with one-half of such annuity payable thereafter to his survivor annuitant, if living at his death.
(4) Option 4.--Some other benefit which shall be certified by the actuary to be actuarially equivalent to the maximum single life annuity, subject to the following restrictions:
(i) Any annuity shall be payable without reduction during the lifetime of the member.
(ii) The sum of all annuities payable to the designated survivor annuitants shall not be greater than the annuity payable to the member.
(iii) A portion of the benefit may be payable as a lump sum, except that such lump sum payment shall not exceed an amount equal to the accumulated deductions standing to the credit of the member. The balance of the present value of the maximum single life annuity adjusted in accordance with section 8342(b) shall be paid in the form of an annuity with a guaranteed total payment, a single life annuity, or a joint and survivor annuity or any combination thereof but subject to the restrictions of subparagraphs (i) and (ii) of this paragraph. For purposes of this subparagraph:
(A) The term "actuarially equivalent," as applied to any lump sum withdrawal attributable to contributions credited to the member's savings account of Class T-C and Class T-D members who elected membership in Class T-G or Class T-H pursuant to section 8305.5 (relating to election to become Class T-G, Class T-H or Class DC), on or after July 1, 2019, together with statutory interest thereon, shall mean equal present values, computed on the basis of the interest rate and such mortality and other tables as adopted by the board under section 8328(b) (relating to actuarial cost method) in effect on the effective date of retirement of the member.
(B) the term "actuarially equivalent," as applied to any lump sum withdrawal attributable to contributions credited to the member's savings account of Class T-E, Class T-F, Class T-G or Class T-H members, together with statutory interest thereon, shall mean equal present values, computed on the basis of the interest rate and such mortality and other tables as adopted by the board under section 8328(b) in effect on the effective date of retirement of the member.
(b) Present value of joint coverage annuity.--The present value of an annuity payable to a member of the joint coverage group shall be determined by taking into account prospectively the reduction applicable upon the attainment of the age at which full social security benefits are payable.
(June 13, 1985, P.L.40, No.19, eff. imd.; Apr. 29, 1994, P.L.159, No.29, eff. Jan. 1, 1995; May 17, 2001, P.L.26, No.9, eff. July 1, 2001; Nov. 23, 2010, P.L.1269, No.120, eff. July 1, 2011; Dec. 28, 2015, P.L.529, No.93, eff. imd.; June 12, 2017, P.L.11, No.5, eff. imd.)
2017 Amendment. Act 5 amended subsec. (a).
2001 Amendment. See section 36.1 of Act 9 in the appendix to this title for special provisions relating to applicability of amendment to Public School Employees' Retirement System members.
Cross References. Section 8345 is referred to in sections 8302, 8305.5, 8306, 8324, 8346, 8349, 8502, 8505, 8505.1 of this title.