2010 Pennsylvania Code
Title 24 - EDUCATION
Chapter 83 - Membership, Contributions and Benefits
8328 - Actuarial cost method.

     § 8328.  Actuarial cost method.
        (a)  Employer contribution rate on behalf of active
     members.--The amount of the total employer contributions on
     behalf of all active members shall be computed by the actuary as
     a percentage of the total compensation of all active members
     during the period for which the amount is determined and shall
     be so certified by the board. The total contribution rate on
     behalf of all active members shall consist of the normal
     contribution rate as defined in subsection (b), the accrued
     liability contribution rate as defined in subsection (c) and the
     supplemental annuity contribution rate as defined in subsection
     (d). Beginning July 1, 2004, the total contribution rate shall
     be modified by the experience adjustment factors as calculated
     in subsection (e) but in no case shall it be less than 4% plus
     the premium assistance contribution rate.
        (b)  Normal contribution rate.--The normal contribution rate
     shall be determined after each actuarial valuation. Until all
     accrued liability contributions have been completed, the normal
     contribution rate shall be determined, on the basis of an annual
     interest rate and such mortality and other tables as shall be
     adopted by the board in accordance with generally accepted
     actuarial principles, as a level percentage of the compensation
     of the average new active member, which percentage, if
     contributed on the basis of his prospective compensation through
     the entire period of active school service, would be sufficient
     to fund the liability for any prospective benefit payable to
     him, in excess of that portion funded by his prospective member
     contributions, except for the supplemental benefits provided in
     sections 8348 (relating to supplemental annuities), 8348.1
     (relating to additional supplemental annuities), 8348.2
     (relating to further additional supplemental annuities), 8348.3
     (relating to supplemental annuities commencing 1994), 8348.4
     (relating to special supplemental postretirement adjustment),
     8348.5 (relating to supplemental annuities commencing 1998),
     8348.6 (relating to supplemental annuities commencing 2002) and
     8348.7 (relating to supplemental annuities commencing 2003).
        (c)  Accrued liability contribution rate.--
            (1)  For the fiscal year beginning July 1, 2002, the
        accrued liability contribution rate shall be computed as the
        rate of total compensation of all active members which shall
        be certified by the actuary as sufficient to fund over a
        period of ten years from July 1, 2002, the present value of
        the liabilities for all prospective benefits of active
        members, except for the supplemental benefits provided in
        sections 8348, 8348.1, 8348.2, 8348.3, 8348.4, 8348.5, 8348.6
        and 8348.7, in excess of the total assets in the fund
        (calculated by recognizing the actuarially expected
        investment return immediately and recognizing the difference
        between the actual investment return and the actuarially
        expected investment return over a five-year period),
        excluding the balance in the annuity reserve account, and of
        the present value of normal contributions and of member
        contributions payable with respect to all active members on
        July 1, 2002, during the remainder of their active service.
            (2)  Thereafter, the amount of each annual accrued
        liability contribution shall be equal to the amount of such
        contribution for the fiscal year, beginning July 1, 2002,
        except that, if the accrued liability is increased by
        legislation enacted subsequent to June 30, 2002, but before
        July 1, 2003, such additional liability shall be funded over
        a period of ten years from the first day of July, coincident
        with or next following the effective date of the increase.
        The amount of each annual accrued liability contribution for
        such additional legislative liabilities shall be equal to the
        amount of such contribution for the first annual payment.
            (3)  Notwithstanding any other provision of law,
        beginning July 1, 2004, the outstanding balance of the
        increase in accrued liability due to the change in benefits
        enacted in 2001 and the outstanding balance of the net
        actuarial loss incurred in fiscal year 2000-2001 shall be
        amortized in equal dollar annual contributions over a period
        that ends 30 years after July 1, 2002, and the outstanding
        balance of the net actuarial loss incurred in fiscal year
        2001-2002 shall be amortized in equal dollar annual
        contributions over a period that ends 30 years after July 1,
        2003. For fiscal years beginning on or after July 1, 2004, if
        the accrued liability is increased by legislation enacted
        subsequent to June 30, 2003, such additional liability shall
        be funded in equal dollar annual contributions over a period
        of ten years from the first day of July coincident with or
        next following the effective date of the increase.
        (d)  Supplemental annuity contribution rate.--Contributions
     from the Commonwealth and other employers required to provide
     for the payment of the supplemental annuities provided for in
     sections 8348, 8348.1, 8348.2, 8348.4 and 8348.5 shall be paid
     over a period of ten years from July 1, 2002. The funding for
     the supplemental annuities commencing 2002 provided for in
     section 8348.6 shall be as provided in section 8348.6(f). The
     funding for the supplemental annuities commencing 2003 provided
     for in section 8348.7 shall be as provided in section 8348.7(f).
     The amount of each annual supplemental annuities contribution
     shall be equal to the amount of such contribution for the fiscal
     year beginning July 1, 2002. In the event that supplemental
     annuities are increased by legislation enacted subsequent to
     June 30, 2002, the additional liability for the increased
     benefits to be amortized shall be funded in equal dollar annual
     installments over a period of ten years.
        (e)  Experience adjustment factor.--
            (1)  For each year after the establishment of the accrued
        liability contribution rate for the fiscal year beginning
        July 1, 2002, any increase or decrease in the unfunded
        accrued liability, excluding the gains or losses on the
        assets of the health insurance account, due to actual
        experience differing from assumed experience, changes in
        actuarial assumptions, changes in the terms and conditions of
        the benefits provided by the system by judicial,
        administrative or other processes other than legislation,
        including, but not limited to, reinterpretation of the
        provisions of this part, shall be amortized in equal dollar
        annual contributions over a period of ten years beginning
        with the July 1 second succeeding the actuarial valuation.
            (2)  Notwithstanding the provisions of paragraph (1), for
        each year after the establishment of the accrued liability
        contribution rate for the fiscal year beginning July 1, 2003,
        any increase or decrease in the unfunded accrued liability,
        excluding the gains or losses on the assets of the health
        insurance account, due to actual experience differing from
        assumed experience, changes in actuarial assumptions, changes
        in the terms and conditions of the benefits provided by the
        system by judicial, administrative or other processes other
        than legislation, including, but not limited to,
        reinterpretation of the provisions of this part, shall be
        amortized in equal dollar annual contributions over a period
        of 30 years beginning with the July 1 second succeeding the
        actuarial valuation determining said increases and decreases.
        (f)  Premium assistance contribution rate.--For each fiscal
     year beginning with July 1, 1991, the total contribution rate as
     calculated according to this section shall be increased annually
     in the full amount certified by the board as necessary to fund
     the premium assistance program in accordance with section 8509
     (relating to health insurance premium assistance program),
     notwithstanding any other provisions of this section.
     (Dec. 18, 1979, P.L.566, No.130, eff. imd.; June 29, 1984,
     P.L.450, No.95, eff. imd.; Oct. 21, 1988, P.L.844, No.112, eff.
     Jan. 1, 1989; Aug. 5, 1991, P.L.183, No.23, eff. imd.; Apr. 29,
     1994, P.L.159, No.29, eff. 60 days; May 17, 2001, P.L.26, No.9,
     eff. July 1, 2001; Apr. 23, 2002, P.L.272, No.38, eff. imd.;
     Dec. 10, 2003, P.L.228, No.40, eff. imd.)

        2003 Amendment.  Act 40 amended subsecs. (a), (c) and (e).
        2002 Amendment.  See section 20 of Act 38 in the appendix to
     this title for special provisions relating to calculation of
     actuarial value.
        Cross References.  Section 8328 is referred to in sections
     8323, 8324, 8326, 8327, 8346, 8502, 8509, 8525, 8526, 8535 of
     this title.