Section 1704-N. Supplemental annuities for public school employees commencing 2026.
(a) Benefits.--Commencing with the first monthly annuity payment on or after July 1, 2026, an eligible benefit recipient shall be entitled to receive an additional monthly supplemental annuity from the Public School Employees' Retirement System. The additional monthly supplemental annuity under this section shall be in addition to the supplemental annuities provided for under 24 Pa.C.S. §§ 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).
(b) Amount of additional supplemental annuity.--The amount of the supplemental annuity payable under this section shall be a percentage of the amount of the monthly annuity payment on July 1, 2026, determined on the basis of the most recent effective date of retirement as follows:
Most recent effective date Percentage factor
of retirement
July 2, 2000, through July 1, 2001 15%
July 2, 1999, through July 1, 2000 15.5%
July 2, 1998, through July 1, 1999 16%
July 2, 1997, through July 1, 1998 16.5%
July 2, 1996, through July 1, 1997 17%
July 2, 1995, through July 1, 1996 17.5%
July 2, 1994, through July 1, 1995 18%
July 2, 1993, through July 1, 1994 18.5%
July 2, 1992, through July 1, 1993 19%
July 2, 1991, through July 1, 1992 19.5%
July 2, 1990, through July 1, 1991 20%
July 2, 1989, through July 1, 1990 20.5%
July 2, 1988, through July 1, 1989 21%
July 2, 1987, through July 1, 1988 21.5%
July 2, 1986, through July 1, 1987 22%
July 2, 1985, through July 1, 1986 22.5%
July 2, 1984, through July 1, 1985 23%
July 2, 1983, through July 1, 1984 23.5%
July 2, 1982, through July 1, 1983 24%
Prior to July 2, 1982 24.5%
(c) Payment.--The supplemental annuity provided under this section shall be paid automatically unless the annuitant files a written notice with the board requesting that the additional monthly supplemental annuity not be paid. The board shall make the initial payment of the supplemental annuity provided under this section and any retroactive payments due under this section to each eligible benefit recipient as soon as administratively feasible.
(d) Conditions.--The supplemental annuity provided under this section shall be payable under the same terms and conditions as provided under the option plan in effect as of July 1, 2026, and shall be subject to any subsequent modification of that option plan.
(e) Benefits to beneficiaries or survivors.--No supplemental annuity provided under this section shall be payable to the beneficiary or survivor annuitant of a member who dies before July 1, 2026.
(f) Funding.--The increase in the unfunded actuarial accrued liability attributable to the supplemental annuity provided under this section shall be funded in equal dollar annual installments amortized over a period of 10 years beginning in fiscal year 2027-2028 in accordance with the following:
(1) By June 1, 2027, and each June 1 thereafter through 2036, the board shall certify to the Department of Revenue and the State Treasurer the amount of the annual installment to be paid in the subsequent fiscal year.
(2) The board shall use the money paid under section 1706-N(2)(i) to pay the annual installment for the year in which payment is received.
(3) The board shall not consider the increase in the unfunded actuarial accrued liability attributable to the supplemental annuity provided under this section when setting and accepting an annual employer contribution rate.
(g) Eligible benefit recipient.--
(1) An eligible benefit recipient is an individual:
(i) who is receiving a superannuation, withdrawal or disability annuity on July 1, 2026;
(ii) whose most recent effective date of retirement is prior to July 2, 2001;
(iii) whose credited service does not include any service credited as Class T-D service; and
(iv) who is not a multiple service member with Class D-4 service or Class AA service credited in the State Employees' Retirement System.
(2) A supplemental annuity provided under this section shall not be payable to an annuitant receiving a withdrawal annuity prior to the first day of July coincident with or following the annuitant's attainment of superannuation or normal retirement age.
(h) Exclusion from income.--A supplemental annuity provided under this section shall be excluded from income for eligibility determinations for State benefits and programs unless otherwise prohibited by law.
(i) Definitions.--As used in this section, the following words and phrases shall have the meanings given to them in this subsection:
"Annuitant." As defined in 24 Pa.C.S. § 8102 (relating to definitions).
"Beneficiary." As defined in 24 Pa.C.S. § 8102.
"Board." As defined in 24 Pa.C.S. § 8102.
"Superannuation or normal retirement age." As defined in 24 Pa.C.S. § 8102.
"Survivor annuitant." As defined in 24 Pa.C.S. § 8102.
(1704-N added July 12, 2026, P.L.265, No.21)