(a) Amount of annuity.--A member who has made application for a disability annuity as provided in section 8507(k) (relating to rights and duties of school employees, members and participants) and has been found to be eligible in accordance with the provisions of sections 8307(c) (relating to eligibility for annuities) and 8505(c)(1) (relating to duties of board regarding applications and elections of members and participants) shall receive a disability annuity payable from the effective date of disability and continued until a subsequent determination by the board that the annuitant is no longer entitled to a disability annuity. The disability annuity shall be a single life annuity that is equal to a sum of the standard single life annuities determined separately for each class of service if the total number of years of credited service is greater than 16.667, otherwise each standard single life annuity shall be multiplied by the lesser of the following ratios:

Y*/Y or 16.667/Y

where Y = total number of years of credited service and Y* = total years of credited service if the member were to continue as a school employee until attaining superannuation age, or if the member has attained superannuation age then the number of years of credited service. For purposes of calculating a disability annuity for a member of Class T-G or Class T-H, the standard single life annuity shall equal 2% of the final average salary, multiplied by the total number of years and fractional part of a year of service credited for such class of service. In no event shall the disability annuity plus any cost-of-living increases be less than $100 for each full year of credited service. The member shall be entitled to the election of a joint and survivor annuity on that portion of the disability annuity to which he is entitled under section 8342 (relating to maximum single life annuity).

(b) Reduction on account of earned income.--Payments on account of disability shall be reduced by that amount by which the earned income of the annuitant, as reported in accordance with section 8508(b) (relating to rights and duties of annuitants) for the preceding year together with the disability annuity payments for the year, exceeds the greater of $5,000 or the last year's salary of the annuitant as a member of the system, provided that the annuitant shall not receive less than his member's annuity or the amount to which he may be entitled under section 8342, whichever is greater.

(c) Termination and modification of payments.--Payment of that portion of the disability annuity in excess of the annuity to which the annuitant was entitled on the effective date of disability calculated in accordance with section 8342 shall cease if the annuitant is no longer eligible under the provisions of section 8505(c)(2) or section 8508(b) or (c) and if such annuitant on the date of termination of service was eligible for an annuity, he may file an application with the board for an election of an optional modification of the annuity to which he was entitled in accordance with section 8342.

(d) Withdrawal of accumulated deductions.--Upon termination of disability annuity payments in excess of an annuity calculated in accordance with section 8342, a disability annuitant who does not return to school service may file an application with the board for an amount equal to the accumulated deductions, shared-risk member contributions and statutory interest standing to his credit at the effective date of disability less the total payments received on account of his member's annuity.

(e) Limitation regarding annual benefit under IRC § 415(b).--Notwithstanding any provision of this part to the contrary, no benefit shall be payable to the extent that such benefit exceeds any limitation under IRC § 415(b) in effect with respect to governmental plans, as such term is defined in IRC § 414(d), on the date the benefit payment becomes effective, provided that any increase in any limitation under IRC § 415 shall be applicable to all current and future annuitants and survivor annuitants.

(f) Coordination of benefits.--The determination and payment of a disability annuity under this section shall be in addition to any payments a school employee may be entitled to receive, has received or is receiving as a result of being a participant in the plan.

(Apr. 29, 1994, P.L.159, No.29, eff. 60 days; May 17, 2001, P.L.26, No.9, eff. imd.; Nov. 23, 2010, P.L.1269, No.120, eff. July 1, 2011; Dec. 28, 2015, P.L.529, No.93, eff. imd.; June 12, 2017, P.L.11, No.5, eff. imd.)

2017 Amendment. Act 5 amended subsecs. (a), (b) and (d) and added subsec. (f).

2015 Amendment. Act 93 amended subsec. (e).

Cross References. Section 8344 is referred to in section 8505 of this title.