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ASSOCIATION PENNSYLVANIA STATE COLLEGE AND UNIVERSITY FACULTIES v. STATE SYSTEM HIGHER EDUCATION (07/06/84)

decided: July 6, 1984.

THE ASSOCIATION OF PENNSYLVANIA STATE COLLEGE AND UNIVERSITY FACULTIES, ET AL., APPELLEES,
v.
THE STATE SYSTEM OF HIGHER EDUCATION, ET AL., APPELLANTS. AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, AFL-CIO, ETC., APPELLEES, V. COMMONWEALTH OF PENNSYLVANIA, ET AL., APPELLANTS. JOINT BARGAINING COMMITTEE OF THE PENNSYLVANIA SOCIAL SERVICES UNION, ET AL., APPELLEES, V. COMMONWEALTH OF PENNSYLVANIA, ET AL., APPELLANTS. DENNIS J. SOLECKI, ET AL., APPELLEES, V. COMMONWEALTH OF PENNSYLVANIA, ET AL., APPELLANTS



No. 22 M.D. Appeal Docket 1984, Appeal from the Order of the Commonwealth Court dated March 7, 1984, entered at No. 2172 C.D. 1983; No. 25 M.D. Appeal Docket 1984, Appeal from the Order of the Commonwealth Court dated March 7, 1984, entered at No. 2064 C.D. 1983; No. 26 M.D. Appeal Docket 1984, Appeal from the Order of the Commonwealth Court dated March 7, 1984, entered at No. 2133 C.D. 1983; No. 27 M.D. Appeal Docket 1984, Appeal from the Order of the Commonwealth Court dated March 7, 1984, entered at No. 2160 C.D. 1983, Pa. Commw. , Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ. Hutchinson, J., filed a concurring and dissenting opinion.

Author: Nix

[ 505 Pa. Page 371]

OPINION

This is a direct appeal from an order of the Commonwealth Court declaring unconstitutional and permanently enjoining the enforcement of an amendment to the State Employees' Retirement Code ("Code"), 71 Pa.C.S. § 5101 et seq., requiring each member of the State Employees' Retirement System ("System") to contribute an additional one and one-quarter percent (1 1/4%) of his or her wages to the System's Retirement Fund, insofar as it applied to employees who were members of the System prior to that amendment's effective date. We agree with the Commonwealth Court that the enactment unconstitutionally impaired the contract rights of all existing members of the System and, therefore, we affirm.

I.

A.

The Code mandates that all state employees not explicitly exempted participate in the System. 71 Pa.C.S. § 5301(a). Section 5501 of the Code provides that "[r]egular member contributions shall be made to the [State Employees' Retirement F]und on behalf of each active member for current service." 71 Pa.C.S. § 5501. The "regular member contribution" rate is defined as "[t]he product of the basic contribution rate [X] the class of service multiplier if greater than one [X] the compensation of the member." 71 Pa.C.S. § 5102. The "basic contribution rate" is set at five percent (5%) with the proviso that "in no case shall any member's rate, excluding the rate for social security integration credit, be greater than his contribution rate on the effective

[ 505 Pa. Page 372]

    date of [the Code] so long as he does not elect additional coverage or membership in another class of service." Id. Contributions are deducted from each member's wages and deposited in the Retirement Fund. Active members of the System accrue one "eligibility point" per year of service, 71 Pa.C.S. § 5307,*fn1 and become eligible to vest their retirement benefits upon the accumulation of ten such "points." 71 Pa.C.S. § 5309 (Supp.1984-85).

The Commonwealth and other employers whose employees are members of the System are required to make such contributions to the Retirement Fund on behalf of all active members as may be necessary to maintain the actuarial soundness of the Fund. 71 Pa.C.S. §§ 5507-5508.

B.

Act 31 was signed into law on July 22, 1983. Section 7 of that Act, which amended the Code,*fn2 provided as follows:

§ 5505.1. Additional member contributions

In addition to regular or joint coverage member contributions and social security integration contributions, contributions shall be made on behalf of each active member, regardless of class of service, at the rate of 1 1/4% of compensation until such time as the actuary certifies that all accrued liability contributions have been completed in accordance ...


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