SB 721 — An Act amending Titles 24 (Education), 71 (State Government) and 72 (Taxation and Fiscal Affairs) of the Pennsylvania Consolidated Statutes, in membership, contributions and benefits, providing for supplemental annuity commencing 2025; in benefits, providing for supplemental annuity commencing 2025; providing for special funds and for disposition of Budget Stabilization Reserve Fund; establishing the Budget Stabilization Reserve Fund Interest Account; and making a repeal.

PRINTER'S NO.   943

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        SENATE BILL
                        No. 721
                                               Session of
                                                 2025

     INTRODUCED BY FARRY, PENNYCUICK, BROWN, ROBINSON, BAKER,
        BARTOLOTTA, FONTANA, SCHWANK, KANE, SAVAL AND CULVER,
        JUNE 11, 2025

     REFERRED TO FINANCE, JUNE 11, 2025


                                    AN ACT
 1   Amending Titles 24 (Education), 71 (State Government) and 72
 2      (Taxation and Fiscal Affairs) of the Pennsylvania
 3      Consolidated Statutes, in membership, contributions and
 4      benefits, providing for supplemental annuity commencing 2025;
 5      in benefits, providing for supplemental annuity commencing
 6      2025; providing for special funds and for disposition of
 7      Budget Stabilization Reserve Fund; establishing the Budget
 8      Stabilization Reserve Fund Interest Account; and making a
 9      repeal.
10      The General Assembly of the Commonwealth of Pennsylvania
11   hereby enacts as follows:
12      Section 1.    Title 24 of the Pennsylvania Consolidated
13   Statutes is amended by adding a section to read:
14   § 8348.8.   Supplemental annuity commencing 2025.
15      (a)   Benefits.--Commencing with the first monthly annuity
16   payment after July 1, 2025, an eligible benefit recipient shall
17   be entitled to receive an additional monthly supplemental
18   annuity from the system. The additional monthly supplemental
19   annuity under this section shall be in addition to the
20   supplemental annuities provided for under sections 8348
21   (relating to supplemental annuities), 8348.1 (relating to
 1   additional supplemental annuities), 8348.2 (relating to further
 2   additional supplemental annuities), 8348.3 (relating to
 3   supplemental annuities commencing 1994), 8348.4 (relating to
 4   special supplemental postretirement adjustment), 8348.5
 5   (relating to supplemental annuities commencing 1998), 8348.6
 6   (relating to supplemental annuities commencing 2002) and 8348.7
 7   (relating to supplemental annuities commencing 2003).
 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            15%
16      July 2, 1999, through July 1, 2000            15.5%
17      July 2, 1998, through July 1, 1999            16%
18      July 2, 1997, through July 1, 1998            16.5%
19      July 2, 1996, through July 1, 1997            17%
20      July 2, 1995, through July 1, 1996            17.5%
21      July 2, 1994, through July 1, 1995            18%
22      July 2, 1993, through July 1, 1994            18.5%
23      July 2, 1992, through July 1, 1993            19%
24      July 2, 1991, through July 1, 1992            19.5%
25      July 2, 1990, through July 1, 1991            20%
26      July 2, 1989, through July 1, 1990            20.5%
27      July 2, 1988, through July 1, 1989            21%
28      July 2, 1987, through July 1, 1988            21.5%
29      July 2, 1986, through July 1, 1987            22%
30      July 2, 1985, through July 1, 1986            22.5%

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 1      July 2, 1984, through July 1, 1985                23%
 2      July 2, 1983, through July 1, 1984                23.5%
 3      July 2, 1982, through July 1, 1983                24%
 4      Prior to July 2, 1982                             24.5%
 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, or the effective date of this subsection,
18   whichever is later.
19      (f)   Funding.--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 beginning
22   July 1, 2026, unless a different funding source is otherwise
23   provided by State law.
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 July 1, 2025;
28                  (ii)    whose most recent effective date of retirement
29            is prior to July 2, 2001;
30                  (iii)   whose credited service does not include any

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 1            service credited as Class T-D service;
 2                  (iii.1)   who is not a multiple service member with
 3            Class D-4 or Class AA service credited in the State
 4            Employees' Retirement System; and
 5                  (iv)   who has not died before the effective date of
 6            this subparagraph.
 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 2.      Title 71 is amended by adding a section to read:
12   § 5708.9.      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 5708
19   (relating to supplemental annuities), 5708.1 (relating to
20   additional supplemental annuities), 5708.2 (relating to further
21   additional supplemental annuities), 5708.3 (relating to
22   supplemental annuities commencing 1994), 5708.4 (relating to
23   special supplemental postretirement adjustment), 5708.5
24   (relating to supplemental annuities commencing 1998), 5708.6
25   (relating to supplemental annuities commencing 2002), 5708.7
26   (relating to supplemental annuities commencing 2003) and 5708.8
27   (relating to special supplemental postretirement adjustment of
28   2002).
29      (b)   Amount of additional supplemental annuity.--The amount
30   of the supplemental annuity under this section shall be a

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 1   percentage of the amount of the monthly annuity payment on July
 2   1, 2025, determined on the basis of the most recent effective
 3   date of retirement as follows:
 4      Most recent effective date               Percentage factor
 5            of retirement
 6      July 2, 2000, through July 1, 2001             15%
 7      July 2, 1999, through July 1, 2000             15.5%
 8      July 2, 1998, through July 1, 1999             16%
 9      July 2, 1997, through July 1, 1998             16.5%
10      July 2, 1996, through July 1, 1997             17%
11      July 2, 1995, through July 1, 1996             17.5%
12      July 2, 1994, through July 1, 1995             18%
13      July 2, 1993, through July 1, 1994             18.5%
14      July 2, 1992, through July 1, 1993             19%
15      July 2, 1991, through July 1, 1992             19.5%
16      July 2, 1990, through July 1, 1991             20%
17      July 2, 1989, through July 1, 1990             20.5%
18      July 2, 1988, through July 1, 1989             21%
19      July 2, 1987, through July 1, 1988             21.5%
20      July 2, 1986, through July 1, 1987             22%
21      July 2, 1985, through July 1, 1986             22.5%
22      July 2, 1984, through July 1, 1985             23%
23      July 2, 1983, through July 1, 1984             23.5%
24      July 2, 1982, through July 1, 1983             24%
25      Prior to July 2, 1982                          24.5%
26      (c)   Payment.--The supplemental annuity provided under this
27   section shall be paid automatically unless the annuitant files a
28   written notice with the board requesting that the additional
29   monthly supplemental annuity not be paid.
30      (d)   Conditions.--The supplemental annuity provided under

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 1   this section shall be payable under the same terms and
 2   conditions as provided under the option plan in effect as of
 3   July 1, 2025, and shall be subject to any subsequent
 4   modification of that option plan.
 5      (e)   Benefits to beneficiaries or survivors.--No supplemental
 6   annuity provided under this section shall be payable to the
 7   beneficiary or survivor annuitant of a member who dies before
 8   July 1, 2025, or the effective date of this subsection,
 9   whichever is later.
10      (f)   Funding.--The additional liability for the increase in
11   benefits provided under this section shall be funded as provided
12   in section 5508(e)(2) (relating to actuarial cost method).
13      (g)   Eligible benefit recipient.--
14            (1)   An eligible benefit recipient is an individual:
15                  (i)    who is receiving a superannuation, withdrawal or
16            disability annuity on July 1, 2025;
17                  (ii)    whose most recent effective date of retirement
18            is prior to July 2, 2001;
19                  (iii)    whose credited service does not include any
20            service credited as either Class D-4 or Class AA service;
21                  (iii.1)    who is not a multiple service member with
22            Class T-D service credited in the Public School
23            Employees' Retirement System; and
24                  (iv)    who has not died before the effective date of
25            this subparagraph.
26            (2)   A supplemental annuity provided under this section
27      shall not be payable to an annuitant receiving a withdrawal
28      annuity prior to the first day of July coincident with or
29      following the annuitant's attainment of superannuation age.
30      Section 3.        Title 72 is amended by adding a chapter to read:

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 1                                  CHAPTER 19
 2                                SPECIAL FUNDS
 3   Subchapter
 4      A.     Preliminary Provisions
 5      B.     Budget Stabilization Reserve Fund
 6                                 SUBCHAPTER A
 7                            PRELIMINARY PROVISIONS
 8                                  (Reserved)
 9                                 SUBCHAPTER B
10                      BUDGET STABILIZATION RESERVE FUND
11   Sec.
12   1911.    Disposition of Budget Stabilization Reserve Fund.
13   § 1911.    Disposition of Budget Stabilization Reserve Fund.
14      (a)     Purpose.--It is the intent of the General Assembly that:
15             (1)   Money from the Budget Stabilization Reserve Fund be
16      appropriated only when emergencies involving the health,
17      safety or welfare of the residents of this Commonwealth or
18      downturns in the economy resulting in significant
19      unanticipated revenue shortfalls cannot be dealt with through
20      the normal budget process.
21             (2)   Money in the Budget Stabilization Reserve Fund shall
22      not be used to begin new programs but to provide for the
23      continuation of vital public programs in danger of being
24      eliminated or severely reduced due to financial problems
25      resulting from the economy.
26      (b)    Appropriation.--Except as provided under subsections (c)
27   and (d), whenever the Governor determines that an appropriation
28   from the Budget Stabilization Reserve Fund is necessary to meet
29   emergencies involving the health, safety or welfare of the
30   residents of this Commonwealth or to counterbalance downturns of

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 1   the economy which result in significant unanticipated revenue
 2   shortfalls, the Governor shall present a request for an
 3   appropriation which may include the specifics of the proposal
 4   and suggested ancillary and substantive legislation as may be
 5   necessary to the chairperson of the Appropriations Committee of
 6   the Senate and the chairperson of the Appropriations Committee
 7   of the House of Representatives. The General Assembly may then
 8   through approval of a separate appropriation bill by a vote of
 9   two-thirds of the members elected to the Senate and the House of
10   Representatives appropriate money from the Budget Stabilization
11   Reserve Fund to meet the needs identified in the Governor's
12   proposal. Any money appropriated according to this section which
13   has then lapsed shall be returned to the Budget Stabilization
14   Reserve Fund.
15      (c)   Transfer.--No later than November 30, 2020, $100,000,000
16   shall be transferred from the Budget Stabilization Reserve Fund
17   to the General Fund and shall be available for appropriation by
18   the General Assembly.
19      (d)   Interest account.--
20            (1)   The Budget Stabilization Reserve Fund Interest
21      Account is established as a restricted account within the
22      Budget Stabilization Reserve Fund.
23            (2)   Interest accruing on money in the Budget
24      Stabilization Reserve Fund shall be transferred to the Budget
25      Stabilization Reserve Fund Interest Account on a continuing
26      basis.
27            (3)   On July 1, 2025, and on July 1 of each year
28      thereafter, money in the Budget Stabilization Reserve Fund
29      Interest Account shall be transferred to the General Fund and
30      shall be available for appropriation by the General Assembly

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 1      for the payment of supplemental annuities under 24 Pa.C.S. §
 2      8348.8 (relating to supplemental annuity commencing 2025) and
 3      71 Pa.C.S. § 5708.9 (relating to supplemental annuity
 4      commencing 2025).
 5      Section 4.    Repeals are as follows:
 6            (1)   The General Assembly declares that the repeal under
 7      paragraph (2) is necessary to effectuate the addition of 72
 8      Pa.C.S. § 1911.
 9            (2)   Section 1703-A of the act of April. 9, 1929
10      (P.L.343, No.176), known as The Fiscal Code, is repealed.
11      Section 5.    The addition of 72 Pa.C.S. § 1911 is a
12   continuation of section 1703-A of the act of April. 9, 1929
13   (P.L.343, No.176), known as The Fiscal Code. The following
14   apply:
15            (1)   Except as otherwise provided in 72 Pa.C.S. § 1911,
16      all activities initiated under section 1703-A of The Fiscal
17      Code shall continue and remain in full force and effect and
18      may be completed under 72 Pa.C.S. § 1911. Orders,
19      regulations, rules and decisions which were made under
20      section 1703-A of The Fiscal Code and which are in effect on
21      the effective date of section 4(2) of this act shall remain
22      in full force and effect until revoked, vacated or modified
23      under 72 Pa.C.S. § 1911. Contracts, obligations and
24      collective bargaining agreements entered into under section
25      1703-A of The Fiscal Code are not affected nor impaired by
26      the repeal of section 1703-A of The Fiscal Code.
27            (2)   Except as specified in paragraph (3), any difference
28      in language between 72 Pa.C.S. § 1911 and section 1703-A of
29      The Fiscal Code is intended only to conform to the style of
30      the Pennsylvania Consolidated Statutes and is not intended to

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1     change or affect the legislative intent, judicial
2     construction or administration and implementation of section
3     1703-A of The Fiscal Code.
4         (3)   Paragraph (2) does not apply to the addition of 72
5     Pa.C.S. § 1911(b) and (d).
6     Section 6.    This act shall take effect immediately.




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