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.

SB 565 adds two new supplemental retirement annuities for eligible Pennsylvania state employees. Starting July 2025, retirees who retired before July 2, 2001 (and meet specific service criteria) receive a one-time percentage-based supplement (4.5% to 14% of their July 2025 payment, depending on retirement date). Starting July 2026, eligible retirees receive an annual inflation-adjusted supplement tied to the CPI-U index (capped between 1% and 7% of their monthly payment). The Commonwealth funds both supplements over 10 years, with school districts not liable for the costs. This directly affects current retirees, not new hires or active employees.