SB 565 — An Act amending Titles 24 (Education) and 71 (State Government) of the Pennsylvania Consolidated Statutes, in membership, contributions and benefits, providing for supplemental annuity commencing 2025 and for supplemental annuity commencing 2026; and, in benefits, providing for supplemental annuity commencing 2025 and for supplemental annuity commencing 2026.

PRINTER'S NO.   578

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        SENATE BILL
                        No. 565
                                               Session of
                                                 2025

     INTRODUCED BY KANE, MUTH, TARTAGLIONE, SCHWANK, FONTANA,
        SANTARSIERO, COSTA, HAYWOOD, COLLETT, COMITTA, L. WILLIAMS
        AND MILLER, APRIL 9, 2025

     REFERRED TO FINANCE, APRIL 9, 2025


                                    AN ACT
 1   Amending Titles 24 (Education) and 71 (State Government) of the
 2      Pennsylvania Consolidated Statutes, in membership,
 3      contributions and benefits, providing for supplemental
 4      annuity commencing 2025 and for supplemental annuity
 5      commencing 2026; and, in benefits, providing for supplemental
 6      annuity commencing 2025 and for supplemental annuity
 7      commencing 2026.
 8      The General Assembly of the Commonwealth of Pennsylvania
 9   hereby enacts as follows:
10      Section 1.    Title 24 of the Pennsylvania Consolidated
11   Statutes is amended by adding sections to read:
12   § 8348.8.   Supplemental annuity commencing 2025.
13      (a)   Benefits.--Commencing with the first monthly annuity
14   payment after July 1, 2025, an eligible benefit recipient shall
15   be entitled to receive an additional monthly supplemental
16   annuity from the system. The additional monthly supplemental
17   annuity under this section shall be in addition to the
18   supplemental annuities provided for under sections 8348
19   (relating to supplemental annuities), 8348.1 (relating to
20   additional supplemental annuities), 8348.2 (relating to further
 1   additional supplemental annuities), 8348.3 (relating to
 2   supplemental annuities commencing 1994), 8348.4 (relating to
 3   special supplemental postretirement adjustment), 8348.5
 4   (relating to supplemental annuities commencing 1998), 8348.6
 5   (relating to supplemental annuities commencing 2002), 8348.7
 6   (relating to supplemental annuities commencing 2003) and 8348.9
 7   (relating to supplemental annuity commencing 2026).
 8      (b)   Amount of additional supplemental annuity.--The amount
 9   of the supplemental annuity payable under this section shall be
10   a percentage of the amount of the monthly annuity payment on
11   July 1, 2025, determined on the basis of the most recent
12   effective date of retirement as follows:
13      Most recent effective date              Percentage factor
14            of retirement
15      July 2, 2000, through July 1, 2001            4.5%
16      July 2, 1999, through July 1, 2000            5%
17      July 2, 1998, through July 1, 1999            5.5%
18      July 2, 1997, through July 1, 1998            6%
19      July 2, 1996, through July 1, 1997            6.5%
20      July 2, 1995, through July 1, 1996            7%
21      July 2, 1994, through July 1, 1995            7.5%
22      July 2, 1993, through July 1, 1994            8%
23      July 2, 1992, through July 1, 1993            8.5%
24      July 2, 1991, through July 1, 1992            9%
25      July 2, 1990, through July 1, 1991            9.5%
26      July 2, 1989, through July 1, 1990            10%
27      July 2, 1988, through July 1, 1989            10.5%
28      July 2, 1987, through July 1, 1988            11%
29      July 2, 1986, through July 1, 1987            11.5%
30      July 2, 1985, through July 1, 1986            12%

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 1      July 2, 1984, through July 1, 1985             12.5%
 2      July 2, 1983, through July 1, 1984             13%
 3      July 2, 1982, through July 1, 1983             13.5%
 4      Prior to July 2, 1982                          14%
 5      (c)   Payment.--The supplemental annuity provided under this
 6   section shall be paid automatically unless the annuitant files a
 7   written notice with the board requesting that the additional
 8   monthly supplemental annuity not be paid.
 9      (d)   Conditions.--The supplemental annuity provided under
10   this section shall be payable under the same terms and
11   conditions as provided under the option plan in effect as of
12   July 1, 2025, and shall be subject to any subsequent
13   modification of that option plan.
14      (e)   Benefits to beneficiaries or survivors.--No supplemental
15   annuity provided under this section shall be payable to the
16   beneficiary or survivor annuitant of a member who dies before
17   July 1, 2025.
18      (f)   Funding.--
19            (1)   The additional liability for the increase in
20      benefits provided under this section shall be funded in equal
21      dollar annual installments over a period of 10 years
22      beginning July 1, 2026.
23            (2)   The additional liability for the increase in
24      benefits provided under this section shall be paid by the
25      Commonwealth. A school district of any class, intermediate
26      unit or an area career and technical school under the act of
27      March 10, 1949 (P.L.30, No.14), known as the Public School
28      Code of 1949, shall not be liable for the increase in
29      benefits provided under this section.
30      (g)   Eligible benefit recipient.--

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 1            (1)    An eligible benefit recipient is an individual:
 2                  (i)    who is receiving a superannuation, withdrawal or
 3            disability annuity on July 1, 2025;
 4                  (ii)    whose most recent effective date of retirement
 5            is prior to July 2, 2001; and
 6                  (iii)   whose credited service does not include any
 7            service credited as either Class T-D, Class D-4 or Class
 8            AA service.
 9            (2)    A supplemental annuity provided under this section
10      shall not be payable to an annuitant receiving a withdrawal
11      annuity prior to the first day of July coincident with or
12      following the annuitant's attainment of superannuation age.
13   § 8348.9.      Supplemental annuity commencing 2026.
14      (a)   Benefits.--Commencing with the first monthly annuity
15   payment after July 1, 2026, any eligible benefit recipient shall
16   be entitled to receive an additional monthly supplemental
17   annuity from the system. This shall be in addition to the
18   supplemental annuities provided for in sections 8348 (relating
19   to supplemental annuities), 8348.1 (relating to additional
20   supplemental annuities), 8348.2 (relating to further additional
21   supplemental annuities), 8348.3 (relating to supplemental
22   annuities commencing 1994), 8348.4 (relating to special
23   supplemental postretirement adjustment), 8348.5 (relating to
24   supplemental annuities commencing 1998), 8348.6 (relating to
25   supplemental annuities commencing 2002), 8348.7 (relating to
26   supplemental annuities commencing 2003) and 8348.8 (relating to
27   supplemental annuity commencing 2025).
28      (b)   Amount of supplemental annuity.--
29            (1)    Except as provided under paragraph (2), the amount
30      of the supplemental annuity payable under this section shall

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 1      be equal to the average percentage increase in the Consumer
 2      Price Index for All Urban Consumers (CPI-U) for the
 3      Pennsylvania, New Jersey, Delaware and Maryland area during
 4      the prior calendar year. The supplemental annuity payable
 5      under this section shall apply with the first monthly annuity
 6      payment after July 1, 2026, and shall be adjusted every three
 7      years thereafter in accordance with the average percentage
 8      increase in the Consumer Price Index for All Urban Consumers
 9      (CPI-U) for the Pennsylvania, New Jersey, Delaware and
10      Maryland area during the prior calendar year.
11            (2)   The amount of the supplemental annuity payable under
12      this section and calculated under paragraph (1) may not
13      exceed 7% of the amount of the monthly annuity payment or be
14      less than 1% of the amount of the monthly annuity payment
15      after July 1, 2026.
16      (c)   Payment.--The supplemental annuity provided under this
17   section shall be paid automatically unless the annuitant files a
18   written notice with the board requesting that the additional
19   monthly supplemental annuity not be paid.
20      (d)   Conditions.--The supplemental annuity provided under
21   this section shall be payable under the same terms and
22   conditions as provided under the option plan in effect as of
23   July 1, 2026.
24      (e)   Benefits to beneficiaries or survivors.--No supplemental
25   annuity provided under this section shall be payable to the
26   beneficiary or survivor annuitant of a member who dies before
27   July 1, 2026.
28      (f)   Funding.--
29            (1)   The additional liability for the increase in
30      benefits provided under this section shall be funded in equal

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 1      dollar annual installments over a period of 10 years
 2      beginning July 1, 2027.
 3            (2)    The additional liability for the increase in
 4      benefits provided under this section shall be paid by the
 5      Commonwealth. A school district of any class, intermediate
 6      unit or an area career and technical school under the act of
 7      March 10, 1949 (P.L.30, No.14), known as the Public School
 8      Code of 1949, shall not be liable for the increase in
 9      benefits provided under this section.
10      (g)   Eligible benefit recipient.--
11            (1)    An eligible benefit recipient is an individual:
12                  (i)    who is receiving a superannuation, withdrawal or
13            disability annuity on July 1, 2026; and
14                  (ii)    whose credited service does not include any
15            service credited as either Class T-D, Class D-4 or Class
16            AA service.
17            (2)    A supplemental annuity provided under this section
18      shall not be payable to an annuitant receiving a withdrawal
19      annuity prior to the first day of July coincident with or
20      following the annuitant's attainment of superannuation age.
21      Section 2.        Title 71 is amended by adding sections to read:
22   § 5708.9.      Supplemental annuity commencing 2025.
23      (a)   Benefits.--Commencing with the first monthly annuity
24   payment after January 1, 2026, an eligible benefit recipient
25   shall be entitled to receive an additional monthly supplemental
26   annuity from the system. The additional monthly supplemental
27   annuity under this section shall be in addition to the
28   supplemental annuities provided for under sections 5708
29   (relating to supplemental annuities), 5708.1 (relating to
30   additional supplemental annuities), 5708.2 (relating to further

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 1   additional supplemental annuities), 5708.3 (relating to
 2   supplemental annuities commencing 1994), 5708.4 (relating to
 3   special supplemental postretirement adjustment), 5708.5
 4   (relating to supplemental annuities commencing 1998), 5708.6
 5   (relating to supplemental annuities commencing 2002), 5708.7
 6   (relating to supplemental annuities commencing 2003), 5708.8
 7   (relating to special supplemental postretirement adjustment of
 8   2002) and 5708.10 (relating to supplemental annuity commencing
 9   2026).
10      (b)   Amount of additional supplemental annuity.--The amount
11   of the supplemental annuity under this section shall be a
12   percentage of the amount of the monthly annuity payment on
13   January 1, 2025, determined on the basis of the most recent
14   effective date of retirement as follows:
15      Most recent effective date              Percentage factor
16            of retirement
17      July 2, 2000, through July 1, 2001            4.5%
18      July 2, 1999, through July 1, 2000            5%
19      July 2, 1998, through July 1, 1999            5.5%
20      July 2, 1997, through July 1, 1998            6%
21      July 2, 1996, through July 1, 1997            6.5%
22      July 2, 1995, through July 1, 1996            7%
23      July 2, 1994, through July 1, 1995            7.5%
24      July 2, 1993, through July 1, 1994            8%
25      July 2, 1992, through July 1, 1993            8.5%
26      July 2, 1991, through July 1, 1992            9%
27      July 2, 1990, through July 1, 1991            9.5%
28      July 2, 1989, through July 1, 1990            10%
29      July 2, 1988, through July 1, 1989            10.5%
30      July 2, 1987, through July 1, 1988            11%

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 1      July 2, 1986, through July 1, 1987                11.5%
 2      July 2, 1985, through July 1, 1986                12%
 3      July 2, 1984, through July 1, 1985                12.5%
 4      July 2, 1983, through July 1, 1984                13%
 5      July 2, 1982, through July 1, 1983                13.5%
 6      Prior to July 2, 1982                             14%
 7      (c)   Payment.--The supplemental annuity provided under this
 8   section shall be paid automatically unless the annuitant files a
 9   written notice with the board requesting that the additional
10   monthly supplemental annuity not be paid.
11      (d)   Conditions.--The supplemental annuity provided under
12   this section shall be payable under the same terms and
13   conditions as provided under the option plan in effect as of
14   January 1, 2025, and shall be subject to any subsequent
15   modification of that option plan.
16      (e)   Benefits to beneficiaries or survivors.--No supplemental
17   annuity provided under this section shall be payable to the
18   beneficiary or survivor annuitant of a member who dies before
19   January 1, 2025.
20      (f)   Funding.--The additional liability for the increase in
21   benefits provided under this section shall be funded in equal
22   dollar annual installments over a period of 10 years beginning
23   July 1, 2025.
24      (g)   Eligible benefit recipient.--
25            (1)   An eligible benefit recipient is an individual:
26                  (i)    who is receiving a superannuation, withdrawal or
27            disability annuity on January 1, 2025;
28                  (ii)    whose most recent effective date of retirement
29            is prior to July 2, 2001; and
30                  (iii)   whose credited service does not include any

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 1            service credited as either Class T-D, Class D-4 or Class
 2            AA service.
 3            (2)   A supplemental annuity provided under this section
 4      shall not be payable to an annuitant receiving a withdrawal
 5      annuity prior to the first day of July coincident with or
 6      following the annuitant's attainment of superannuation age.
 7   § 5708.10.     Supplemental annuity commencing 2026.
 8      (a)   Benefits.--Commencing with the first monthly annuity
 9   payment after January 1, 2027, an eligible benefit recipient
10   shall be entitled to receive an additional monthly supplemental
11   annuity from the system. The additional monthly supplemental
12   annuity under this section shall be in addition to the
13   supplemental annuities provided for under sections 5708
14   (relating to supplemental annuities), 5708.1 (relating to
15   additional supplemental annuities), 5708.2 (relating to further
16   additional supplemental annuities), 5708.3 (relating to
17   supplemental annuities commencing 1994), 5708.4 (relating to
18   special supplemental postretirement adjustment), 5708.5
19   (relating to supplemental annuities commencing 1998), 5708.6
20   (relating to supplemental annuities commencing 2002), 5708.7
21   (relating to supplemental annuities commencing 2003), 5708.8
22   (relating to special supplemental postretirement adjustment of
23   2002) and 5708.9 (relating to supplemental annuity commencing
24   2025).
25      (b)   Amount of supplemental annuity.--
26            (1)   Except as provided under paragraph (2), the amount
27      of the supplemental annuity under this section shall be equal
28      to the average percentage increase in the Consumer Price
29      Index for All Urban Consumers (CPI-U) for the Pennsylvania,
30      New Jersey, Delaware and Maryland area during the prior

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 1      calendar year. The supplemental annuity under this section
 2      shall apply with the first monthly annuity payment after
 3      January 1, 2027, and shall be adjusted every three years
 4      thereafter in accordance with the average percentage increase
 5      in the Consumer Price Index for All Urban Consumers (CPI-U)
 6      for the Pennsylvania, New Jersey, Delaware and Maryland area
 7      during the prior calendar year.
 8            (2)   The amount of the supplemental annuity under this
 9      section and calculated under paragraph (1) may not exceed 7%
10      of the amount of the monthly annuity payment or be less than
11      1% of the amount of the monthly annuity payment after January
12      1, 2027.
13      (c)   Payment.--The supplemental annuity provided under this
14   section shall be paid automatically unless the annuitant files a
15   written notice with the board requesting that the additional
16   monthly supplemental annuity not be paid.
17      (d)   Conditions.--The supplemental annuity provided under
18   this section shall be payable under the same terms and
19   conditions as provided under the option plan in effect as of
20   January 1, 2027, and shall be subject to any subsequent
21   modification of that option plan.
22      (e)   Benefits to beneficiaries or survivors.--No supplemental
23   annuity provided under this section shall be payable to the
24   beneficiary or survivor annuitant of a member who dies before
25   January 1, 2027.
26      (f)   Funding.--The additional liability for the increase in
27   benefits provided under this section shall be funded in equal
28   dollar annual installments over a period of 10 years beginning
29   July 1, 2027.
30      (g)   Eligible benefit recipient.--

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 1        (1)   An eligible benefit recipient is an individual:
 2              (i)    who is receiving a superannuation, withdrawal or
 3        disability annuity on January 1, 2027; and
 4              (ii)    whose credited service does not include any
 5        service credited as either Class T-D, Class D-4 or Class
 6        AA service.
 7        (2)   A supplemental annuity provided under this section
 8    shall not be payable to an annuitant receiving a withdrawal
 9    annuity prior to the first day of July coincident with or
10    following the annuitant's attainment of superannuation age.
11    Section 3.      This act shall take effect immediately.




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