Hoerner v. Public School Employees' Retirement Board

In Hoerner v. Public School Employees' Retirement Board, 546 Pa. 215, 224, 684 A.2d 112, 116 (1996), our Supreme Court explained that the definition of compensation set forth in the Retirement Code "reflects the Legislature's intention to preserve the actuarial soundness of the retirement fund by excluding from the computation of employes' final average salary all payments which may artificially inflate compensation for the purposes of enhancing retirement benefits." The Court went on to apply the following test to determine whether remuneration constituted a severance payment: Under the Code, all payments, other than for regular professional salary, which are part of an agreement in which a professional member agrees to terminate school service by a date certain, are prima facie severance payments. The Retiree may rebut a prima facie case only by showing that the payment is in accord with the scheduled customary salary scale within the School District for personnel with the same education and experience qualifications who are not terminating service. Id.