[Adopted 4-10-1985 by Ord. No. 729[1]]
[1]
Editor's Note: This ordinance also superseded
former Art. II, Police Pension Fund, adopted 12-12-1956 by Ord. No.
416, as amended.
The Township of Springfield hereby restates
and adopts a pension plan trust for its full-time police employees.
The plan restated is the Springfield Township
Police Employees Pension Plan and Trust in effect on the date of the
within article and as amended from time to time in the future.
The Board of Commissioners of the Township of
Springfield is hereby directed and authorized to execute the Springfield
Township Police Employees Pension Plan and Trust and shall perform
all of the duties and responsibilities assigned to it and may, at
the discretion of the Board of Commissioners, exercise all powers
vested in it by the Trust Agreement.
The police employees of the Township shall have
all rights and duties and may exercise any or all options granted
them by the terms of the Trust Agreement as follows:
A.
Eligibility. A police officer may become a participant
in the Township of Springfield Police Pension Plan immediately upon
employment. A police officer must agree to make the necessary employee
contributions and must work at least a minimum of 40 hours a week.
B.
Contributions. All members of the plan shall make
contributions to the plan which shall equal 5% of their total compensation.
The Board of Commissioners may, on an annual basis, by ordinance or
resolution, reduce or eliminate contributions to the plan by the members.
The Township may, but need not, have an actuarial study performed
prior to reducing or eliminating members' contributions into the plan.
[Amended 9-9-1987 by Ord. No. 751; 2-11-2004 by Ord. No.
862]
C.
Conditions for retirement.
[Amended 9-9-1987 by Ord. No. 751; 10-9-1996 by Ord. No.
818; 6-13-2001 by Ord. No. 847]
(1)
Normal retirement. A member of the Township of Springfield
Police Pension Plan is eligible to retire upon the attainment of age
50 and the completion of 25 years of credited service.
(2)
Early retirement. An early retirement benefit may be provided to a member of the Township of Springfield Police Pension Plan with 20 or more years of service who terminates employment prior to superannuation retirement age and service requirements, and shall be the actuarial equivalent of a partial superannuation retirement benefit calculated as set forth below in Subsections C(2)(a) and (b).
(a)
A partial superannuation retirement benefit
shall be determined by applying the percentage that the member's years
of service bear to the years of service that the member would have
rendered had the member continued to be employed until the member's
superannuation retirement date, to the gross pension amount calculated
using the monthly average salary during the appropriate period prior
to the member's termination of employment.
(b)
The actuarial equivalent of the partial superannuation
retirement benefit shall be determined by actuarially reducing the
partial superannuation retirement benefit to reflect that it will
commence on the effective date of the early retirement rather than
on the date on which the member would have completed superannuation
age and service requirements. The actuarial reduction shall be calculated
using the actuarial assumptions reported in the last actuarial valuation
report filed with the Public Employee Retirement Commission under
the act of December 18, 1984 (P.L. 1005, No. 205), known as the "Municipal
Pension Plan Funding Standard and Recovery Act."[1]
[1]
Editor's Note: See 53 P.S. § 895.101
et seq.
(c)
The member shall file a written application
for an early retirement benefit with the Board of Commissioners. The
early retirement benefit shall become effective as of the filing date
of the application or the date designated on the application, whichever
is later.
D.
The retirement plan benefits for the Township of Springfield
Police Pension Plan shall be 50% of the average annual considered
compensation for the final three years of employment. Additionally,
a service increment shall be provided to retired officers of $20 per
month, for each completed year of service in excess of 25 years, subject
to a maximum of $100 per month.
[2]
Editor's Note: This ordinance also provided
that it would be effective 1-1-1989.
F.
Death benefit.
[Amended 2-11-2004 by Ord. No. 862]
(1)
The surviving spouse of a plan member or of a plan
member who retires on pension and dies, or if no spouse survives or
if the spouse survives and subsequently dies, then the child or children
under the age of 18 years or if attending college, 23 years of age
or younger, of a plan member or a plan member who retires on pension
who dies, shall, during the lifetime of the surviving spouse or in
the case of the child or children described in this subsection, shall
be entitled to receive a pension calculated at 50% of the pension
the member was receiving, or would have been receiving had the plan
member been retired at the time of the plan member's death.
(2)
The surviving spouse of a plan member who dies before the member's pension has vested or if no spouse survives or if the spouse survives and subsequently dies, the child or children of the plan member as described in § 63-8F shall be entitled to receive repayment of all money which the member invested in the pension plan, plus interest or other increases in value of the member's investment in the pension fund, unless the member has designated another beneficiary for this purpose.
(3)
For purposes of this section, the phrase "attending
college" shall mean the eligible children are registered at an accredited
institution of higher learning and are carrying a minimum course load
of seven credit hours per semester.[4]
[4]
Editor’s Note: Former Subsection F(4), regarding provisions
for the families of plan members killed in service, which immediately
followed this subsection, was repealed 3-14-2012 by Ord. No. 917.
G.
Vesting benefits. The Township of Springfield shall
provide the following vesting benefits: A member with less than 12
years of service, who terminates employment for reasons other than
retirement, death or in service disability, shall receive a refund
of his own contributions with fund interest. If a member has 12 or
more years of service at termination, he shall be entitled to a vested
retirement benefit, payable at normal retirement date, equal to 50%
of his final considered compensation times the ratio of his completed
years of service to the years of service he would have had if he had
continued in service to the Township up to his normal retirement date.
H.
Postretirement cost-of-living benefits. The Township
of Springfield Police Pension Plan shall provide for a cost-of-living
increase for members of the police force receiving retirement benefits,
who retired on or after January 1, 1986; provided that such adjustments
shall be made to reflect the cost-of-living change in the preceding
year for the twelve-month period from October to October of each calendar
year and that such cost-of-living increase shall not exceed the percentage
increase in the consumer price index as measured for the period of
October to October of the preceding year; provided, further, that
in no case shall the total police pension benefits exceed 75% of the
salary for computing retirement benefits; and provided, further, that
the total cost-of-living increase shall not exceed 30%.
[5]
Editor's Note: This ordinance also provided
that the effective date is retroactive to January 1, 1995.
I.
Service-related disability benefit. In the case of
the payment of pensions for permanent injuries incurred in service,
the amount and commencement of the payments shall be fixed by regulations
of the Board of Commissioners of Springfield Township and shall be
calculated at a rate of 50% of the plan member's salary at the time
the disability was incurred, provided that any plan member who receives
benefits for the same injuries under the Social Security Act (49 Stat.
620, 42 U.S.C. #301 et seq.) shall have his/her disability benefits
offset or reduced by the amount of such benefits.
[6]
Editor's Note: This ordinance also provided
that the effective date is retroactive to January 1, 1995.
J.
Intervening military service. A police officer who
has been employed as such for at least six months, and who enters
active military service for the United States, must receive retirement
credit for the period of active military service. To be eligible for
the credit, the police officer must return to employment with Springfield
Township within six months of separation from such military service,
and be ineligible to receive military retirement pay as a result of
that service.
[Added 2-11-2004 by Ord. No. 862]
[Added 12-12-2001 by Ord. No. 849]
The Police Pension Plan is intended to be tax
qualified under the applicable provisions of Section 401(a) of the
Internal Revenue Code, as amended, and shall be construed and applied
in a manner consistent with such intent. The plan and its trust fund
are for the exclusive benefit of plan members and their beneficiaries.
A.
CODE
COMPENSATION
MUNICIPALITY
PLAN
PLAN YEAR
REGULATION(S)
Definitions. As used in this section, the following
terms shall have the meanings indicated:
The Internal Revenue Code, as amended periodically.
Plan member's wages as defined in Code Section 3401(a) for
a plan year for which the municipality is required to provide the
plan member a written statement under Code Sections 6041(d), 6051(a)(3)
and 6052. Such 415 compensation shall include any elective deferrals
defined in Code Section 402(g)(3) and all amounts contributed or deferred
at the election of the plan members which are not includible in the
gross income of the plan member by reason of either Code Sections
125, 402(e)(3), 402(h)(1)(B), 403(b), 414(h)(2) or 457.
The Township of Springfield.
The Police Pension Plan.
The calendar year.
The Income Tax Regulations, as amended periodically.
B.
Distribution of benefits.
(1)
Unless the plan member otherwise elects, the payment
of benefits under the plan to the plan member will begin not later
than the 60th day after the latest of the close of the plan year in
which:
(2)
In the case of a plan which provides for the payment
of an early retirement benefit, a plan member who satisfied the service
requirements for such early retirement benefit, but separated from
the service (with any nonforfeitable right to an accrued benefit)
before satisfying the age requirement for such early retirement benefit,
is entitled upon satisfaction of such age requirement to receive a
benefit not less than the benefit to which he would be entitled at
the normal retirement age, actuarially reduced under regulations prescribed
by the Secretary.
(3)
A plan member's benefits must commence to be paid
not later than April 1 of the calendar year following the later of
the calendar year in which the member attains age 70 1/2 or the
calendar year in which the member retires. Such distributions must
equal or exceed the required minimum distribution, and otherwise be
made in a manner consistent with the requirements of Code Section
401(a)(9) and the regulations thereunder.
(4)
Required distributions must be made over the lifetime
or the life expectancy of the plan member or the joint lifetimes or
joint life expectancy of the plan member and the plan member's designated
beneficiary. The life expectancy of the plan member and the plan member's
spouse may be redetermined at the election of the plan member or the
plan member's spouse. Such an election is irrevocable, once made.
If no such election is made by the date benefit distributions must
commence, then the life expectancy of the plan member and the plan
member's spouse shall not be recalculated. Tables V and VI of Regulation
1.72-9 shall be used for computing life expectancy or joint and survivor
life expectancy.
(5)
All benefit distributions to a plan member or the
plan member's beneficiary shall be in accordance with the incidental
death benefit requirements of Code Section 401(a)(9)(G) and the related
regulations.
C.
Compensation and benefit limitations. The limitations
and other requirements outlined below are intended to comply with
Code Section 415 and the regulations thereunder, the terms of which
are specifically incorporated herein by reference. The maximum compensation
limit and benefits limitations under the Code are as follows:
(1)
The compensation used in calculating a plan member'
s benefit cannot exceed the limits of Code Section 401(a)(17), as
adjusted for cost-of-living increases, per Code Section 415(d).
(2)
General rule. In no event shall the annual retirement
benefit payable to a plan member under this plan, together with retirement
benefits provided under all qualified benefit plans maintained or
previously maintained by the municipality, for any "limitation year,"
which shall be the calendar year, exceed the maximum benefit permitted,
as adjusted annually per Code Section 415(d), under Code Section 415(b)
(including any applicable grandfathering rules). This plan section
shall be applied in accordance with Code Section 415 and the regulations
thereunder.
(3)
Adjustments of limits.
(a)
Where a retirement benefit commences before
age 62, the Code Section 415(b)(1)(A) dollar limit shall be reduced
in accordance with Code Section 415(b)(2)(F). This reduction shall
not result in a limit that is less than:
(b)
Where a retirement benefit commences after age
65, the Code Section 415(b)(1)(A) dollar limit shall be increased
as described in Code Section 415(b)(2)(F).
(c)
The maximum benefit limit of Code Section 415(b)(1)
shall be applied to benefits in the form of a straight life annuity
(with no ancillary benefits) without regard to benefits attributed
to plan member contributions and rollover contributions. If the form
payable to a plan member is other than a single life annuity or a
Code Section 417(b) qualified joint and survivor annuity, the plan
member's benefit shall not exceed the actuarial equivalent of the
Code Section 415(b)(1) maximum payable in the form of a single life
annuity unless no such adjustment is required under Code Section 415
and related regulations.
(d)
Notwithstanding the other rules of the plan
and Code Section 415, if the plan member has not participated in a
defined contribution plan of the municipality, the member's annual
retirement benefit shall not be deemed to exceed the maximum benefit
limit if it does not exceed the Code Section 415(b)(4) limit of $10,000
as adjusted for plan participation or service of less than 10 years
in accordance with Code Section 415(b)(5).
(4)
Special Limitation for Qualified Police Officers:
For any plan member who is a "qualified participant" as defined under
Code Section 415(b)(2)(14), the limitation under Code Section 415(b)(2)(C)
shall not be reduced to an amount less than $50,000 [as adjusted per
Code Section 415(d)] as required by Code Section 415(b)(2)(G).
(5)
Order of defined benefit plan reductions. If the plan
member participates or participated in any other defined benefit plan
of the municipality, and the plan member's aggregate annual retirement
benefit under this plan and such other plan exceeds the limits permitted
under Code Section 415, such plan member's benefit shall be first
reduced under this plan.
D.
Vesting.
(1)
Notwithstanding the plan's vesting schedule, upon
any amendment or restatement of the plan, a plan member's vested accrued
benefit shall not be less than the vested accrued benefit immediately
preceding such amendment or restatement.
(2)
Notwithstanding the plan's vesting schedule, a plan
member shall be 100% vested when the plan member completes the age
and service requirements for normal retirement at his normal retirement
date under the plan.
(3)
Notwithstanding the plan's vesting schedule, a plan
member shall be 100% vested in his accrued benefit (to the extend
funded) as of the date of partial or complete plan termination.
E.
Qualified domestic relations order. Notwithstanding § 63-8.1F below, the plan shall recognize any qualified domestic relations order (QDRO) set forth under Code Section 414(p). Any plan member's benefits, rights or elections shall be subject to any rights afforded to the alternate payee by a QDRO. Further, a distribution to an alternate payee is permitted if authorized by a QDRO, even if the plan member involved has not separated from service and has not reached the earliest retirement age under the plan.
F.
Alienation. No plan member or beneficiary shall have any benefit subject to any type of alienation, anticipation, assignment, charge, encumbrance, pledge, sale or transfer. Further, no benefits shall be subject to or liable for any debts, contracts, engagements, liabilities or torts. The only exceptions to this subsection are those in § 63-8.1E, above and those referenced in Code Sections 401(a)(13)(C) and (D).
G.
Unlocatable member or beneficiary. If any portion
of a plan benefit is payable to a plan member or beneficiary at the
later of the plan member's 62nd birthday or his normal retirement
age and such benefit remains unpaid solely by reason that the municipality,
after sending a registered letter, to the last known address, return
receipt requested, and after diligent effort fails to locate the plan
member or beneficiary, the actuarial value of the benefit shall be
forfeited and applied towards reducing plan costs. If, subsequent
to the forfeiture, a plan member or beneficiary is located, the actuarial
value of the forfeiture at the time it was forfeited (no adjustments
for gains or losses) shall be restored.
H.
Forfeitures. Forfeitures must not be applied to increase
the benefits any municipal employee would otherwise receive under
the plan.
I.
Merger or consolidation. In the case of any merger
or consolidation with, or transfer of plan assets or liabilities to,
any other plan, each plan member would (if the plan then terminated)
receive a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he would have
been entitled to receive immediately before the merger, consolidation,
or transfer (if the plan had then terminated).
J.
Actuarial assumptions. As required by Code Section
401(a)(25), the actuarial assumptions used to calculate plan benefits
shall not be subject to the municipality's discretion.
K.
Optional direct transfer of eligible rollover distributions.
(1)
If any distributee of any eligible rollover distribution:
(a)
Elects to have such distribution paid directly
to an eligible retirement plan; and
(b)
Specifies the eligible retirement plan to which
such distribution is to be paid (in such form and at such time as
the plan administrator may prescribe), such distribution shall be
made in the form of a direct trustee-to-trustee transfer to the eligible
retirement plan so specified.
(3)
Eligible rollover distribution. For purposes of this
subsection, the term "eligible rollover distribution" has the meaning
given such term by Code Section 402(f)(2)(A).
(4)
Eligible retirement plan. For purposes of this subsection,
the term "eligible retirement plan" has the meaning given such term
by Code Section 402(c)(8)(B), except that a qualified trust shall
be considered an eligible retirement plan only if it is a defined
contribution plan, the terms of which permit the acceptance of rollover
distributions.
[Added 11-9-2011 by Ord. No. 915; amended 3-14-2012 by Ord. No.
917]
A.
BENEFICIARY OR BENEFICIARIES
DROP
DROP ACCOUNTS
DROP NOTICE
DROP PARTICIPANT or PARTICIPANT
DROP PARTICIPATION PERIOD
DROP PERIOD
DROP PROGRAM
FORMER DROP PARTICIPANT
MEMBER OR OFFICER
PLAN ADMINISTRATOR
PLAN OR PENSION PLAN
POLICE BARGAINING UNIT
RESIGNATION DATE
TOWNSHIP
Definitions. As used in this section, the following terms shall have
the meanings indicated:
The individual or individuals identified by a DROP participant
to receive the balance of such DROP participant's DROP account
in the event of the death of the DROP participant during the DROP
participation period.
Deferred Retirement Option Plan.
Separate accounts created for the exclusive purpose of accepting
monthly pension checks of DROP participants while they are participating
in the DROP program.
The form prescribed by the Township and Police Bargaining
Unit upon which a member or officer informs the Township of his or
her irrevocable intent to participate in the DROP program pursuant
to the terms of this Agreement. Once submitted to the Township and
approved by the Township, the DROP notice is irrevocable, except as
otherwise provided herein.
A member or officer who has properly submitted a DROP notice
to participate in the DROP or look-back DROP option (described below),
which has been approved by the Township's Board of Commissioners,
and who has commenced his or her DROP participation period.
The period from the time of the commencement of the officer's
(i.e., participant's) participation in the DROP as stated in
the officer's DROP notice which has been approved by the employer
(i.e., the commencement date) until the officer's separation
from employment as a police officer of employer (i.e., the resignation
date), which in no event shall be less than 12 months and shall not
exceed 36 months. The parties further agree that pursuant to their
negotiations, any officer or member who was employed by the Township
on January 1, 2007, and who is or becomes eligible for a normal retirement
during the express term of the collective bargaining agreement in
effect from January 1, 2007, to December 31, 2010, and who also notifies
the Township of his or her intention to retire before the expiration
of that collective bargaining agreement on December 31, 2010, either
by its terms or by application of law until a successor agreement
or arbitration award is issued (i.e., before the effective date of
the successor arbitration award/collective bargaining agreement),
whichever is longer, shall have the option of electing to retire and
resign from employment immediately and designate a retroactive DROP
commencement date (the "look-back commencement date") from 12 months
to 36 months prior to his/her actual retirement date and to receive
a benefit from the Pension Plan, without any gain or loss thereto,
as if such officer or member had been a DROP participant for a deemed
DROP participation period beginning on the designated look-back commencement
date and ending on his or her actual resignation date, as more fully
described herein. This option shall be known as the look-back Drop
option. In no case shall the commencement of the look-back DROP option
participation period be prior to January 1, 2007. Any individual selecting
this look-back DROP option must resign from employment within 30 days
of submitting to the Township his or her notice of selecting look-back
Drop option. Eligibility to elect this option shall terminate 60 days
after the expiration of the 2007-2010 collective bargaining agreement,
as described above in this definition. The parties acknowledge that
the look-back DROP option shall not renew in any subsequent collective
bargaining agreement after expiration the 2007-2010 collective bargaining
agreement (as defined above) unless it is specifically and expressly
agreed upon by the Township and the Police Bargaining Unit and expressly
so stated in the subsequent agreement.
The period of time during which an officer can participate
in a DROP, which in no event shall be less than 12 months or exceed
more than 36 months.
The program implemented by the Township and Police Bargaining
Unit pursuant to which members of the Township's Police Department
may establish DROP accounts while continuing to provide police service
for the Township as described herein. The DROP program is an integral
component of the Plan.
A DROP participant who is currently receiving his or her
pension following his or her resignation date.
A duly sworn police officer employed by the Township who
works, or worked, in the Police Bargaining Unit.
The individual(s) charged with supervising the administration
of the Plan.
The Springfield Township Police Pension Plan.
The bargaining unit of employees represented by the Springfield
Township Police Bargaining Unit, consisting of all eligible full-time
police officers of the Springfield Township Police Department.
The date specified in the participant's irrevocable
DROP notice approved by the Township on which the member or participant
shall resign from employment with the Springfield Township Police
Department, which shall be no less than 12 months and no more than
36 months from the commencement of the officer's DROP participation
period (or look-back DROP participation period as defined herein).
Any individual selecting this look-back DROP option must have a resignation
date and resign from employment with the Township within 30 days of
submitting to the Township his or her DROP notice, identifying his
or her selection look-back DROP option.
The Township of Springfield, County of Montgomery, Commonwealth
of Pennsylvania, including its elected and appointed officials. The
Township is also referred to as "employer."
B.
Eligibility. Any member who has reached his/her normal Retirement
Date (as defined by the Pension Plan) may elect to become a DROP participant
on the first day of any month following satisfaction of the requirements
for receipt of normal pension benefits under the Plan, which is a
minimum of 25 years of service and attaining at least the age of 50.
In addition, in order to be eligible to participate in the DROP, an
officer must:
(1)
Written DROP notice. An officer electing to participate in the DROP
must complete and execute a DROP notice. The DROP notice must be signed
by the officer and notarized and submitted to the Township at least
45 days prior to the date on which the officer wishes his/her DROP
participation period to commence or a shorter period of time if approved
by the Township in its sole discretion, which shall be specified on
the DROP notice. In the case of a look-back DROP, the DROP notice
containing the officer's intent to select the look-back DROP
option (if applicable) must have a resignation date no more than 30
days from the date such DROP notice is submitted to the Township (and
the officer must actually resign his or her employment on or by that
resignation date). The DROP notice shall include a notice to the Township
by the member that the member shall resign from employment with the
Springfield Township Police Department effective on a specific date
(the "resignation date") which shall be no less than 12 months and
no more than 36 months from the commencement of the officer's
DROP participation period. Once approved by the Township, an officer's
resignation date shall be irrevocable. An officer shall cease to work
as a police officer on the officer's resignation date, unless
the Township terminates or honorably discharges the officer prior
to the resignation date.
(a)
Finality of election and approval by Township. All retirement
documents required by the Police Pension Plan Administrator must be
filed and presented to the Township for approval of retirement, participation
in the DROP and payment of pension benefits. Once the Township approves
a DROP notice, it is irrevocable.
C.
Pension contributions. After an officer's DROP participation
period commences, the officer shall not be required to make any contributions
to the Plan during his/her DROP participation period.
D.
Accrual of nonpension benefits. After an officer elects to participate
in the DROP program, all other contractual benefits shall continue
to accrue in accordance with the Collective Bargaining Agreement with
the exception of those provisions relating to the Plan. The DROP participant's
benefits, if any, to which he or she is entitled during retirement,
after the DROP participation period ends, if any, shall be those in
effect on the DROP participant's resignation date.
E.
Disability during DROP period. If a DROP participant becomes temporarily
incapacitated during his/her DROP participation period, the following
shall apply:
(1)
The DROP participant shall continue to participate in the DROP program
as if fully employed. Such participant shall receive disability benefits
(including heart and lung benefits, if eligible and such benefits
are applicable) in the same amount and under the same terms as disabled
police officers that are not participating in DROP.
(2)
In no event shall a DROP participant who is temporarily disabled
be entitled to draw from his or her DROP account.
(3)
If an officer who is a DROP participant is disabled (but not permanently
disabled) and has not returned to work as of his required resignation
date (as defined above), such officer shall be required to resign
on his or her resignation date and such resignation shall take precedence
over all other provisions of the collective bargaining agreement.
Such officer shall immediately receive his or her predetermined retirement
pension benefit under the Plan in lieu of further receipt of disability
benefits and shall not be entitled to any other disability payment
or a monthly disability pension benefit from the Township or the Plan
on or after his or her resignation date. Such DROP participant agrees
as a condition of participating in the DROP to waive any right he
may have to receive a disability pension benefit under the Police
Pension Plan, pursuant to the terms of this DROP as negotiated between
the Township and the Police Bargaining Unit.
(4)
If it is determined that the officer is permanently disabled prior
to his or her resignation date, such participant shall be required
to resign on the date such officer is determined to be permanently
disabled. Thereafter, such member shall continue receive his or her
predetermined pension benefit and shall not be entitled to any other
disability payment or monthly disability pension benefit from the
Township or the Plan. Such DROP participant agrees as a condition
of participating in the DROP to waive any right he may have to receive
a disability pension benefit under the Police Pension Plan, pursuant
to the terms of this DROP as negotiated between the Township and the
Police Bargaining Unit.
F.
Death during DROP period. If a DROP participant dies during the DROP
participation period, his or her Survivor as defined by the Plan shall
be entitled to receive benefits and his or her DROP account shall
be handled according to the following:
(1)
If a DROP participant dies during his or her DROP participation period
and the killed-in-service death benefit is legally payable, the DROP
participant's legal beneficiary shall have the same rights as
the member to withdraw the account balance and the legally applicable
killed-in-service pension benefit shall be payable to the DROP participant's
survivors and future monthly pension payments under the Plan shall
cease.
(2)
If death occurs during the DROP period but the killed-in-service
death benefit is not legally payable (pursuant to the limitations
and requirement of the applicable killed-in-service benefit under
applicable law) to the participant's, the DROP participant's
DROP notice shall be revoked, the designated beneficiary shall be
entitled to a lump-sum payment of the DROP account balance and the
participant's survivors as defined by the Plan shall receive
the applicable survivor's benefit.
G.
The monthly pension benefit calculation and limitation on pension
accrual. After the commencement date (or look-back commencement date,
as applicable) of the DROP participation period effective date of
the DROP notice, the officer shall no longer earn or accrue additional
years of service for pension calculation purposes under the Plan.
No benefit increases that may occur after DROP participant's
commencement date (or look-back DROP commencement date), including
bargained pension enhancements, mandated pension enhancements through
arbitration or pension enhancements mandated by law, will apply to
the DROP participant and shall not increase the DROP participant's
frozen pension under the Plan, as calculated on the commencement date
(or look-back commencement date) of the DROP participation period
as stated in the DROP notice. For the period beginning on the commencement
date and ending on the officer's or member's resignation
date, the participant's monthly pension payment shall not be
paid to him or her but shall instead be transferred into the participant's
DROP account. The average monthly compensation of the participant
for pension calculation purposes shall remain, as it existed on the
commencement date (or look-back commencement date, as applicable)
as stated in the DROP notice. Earnings or increases in earnings thereafter
shall not be recognized or used for the calculation or determination
of any benefits payable by the Plan. The pension benefit payable to
the member shall increase only as a result of cost of living adjustments
that may be applicable and in effect under the Plan on the commencement
date (or look-back commencement date) of the member's participation
in the DROP program or by applicable cost of living adjustments specifically
granted to DROP participants or retirees therefor.
H.
Maximum participation. The maximum period of participation in the
DROP program, including the look-back DROP, is 36 months. On the participant's
resignation date, his or her employment with the Township (and DROP
participation period) shall terminate automatically.
I.
DROP pension payments.
(1)
Upon the commencement date of the officer's or member's
entry into the DROP program, a DROP participant's Service and
average monthly compensation (as each is defined under the Plan) will
be frozen and his or her pension payment will be calculated as if
they retired and ceased employment with the employer on the effective
date of such officer's DROP participation period as stated in
the DROP notice. The monthly pension payments that would have been
made on and after the commencement date and prior to the DROP participant's
resignation date shall be credited to the participant's DROP
account under the Pension Plan.
(2)
With respect to the look-back DROP option, the officer's or
member's retirement benefit under the Pension Plan shall consist
of a future monthly retirement pension benefit determined as if the
officer or member had retired on the look-back commencement date and
earned no additional service or compensation thereafter for purposes
of determining such retirement pension, and contributions to a DROP
account equal to the sum of:
(a)
An amount equal to the accumulated contributions the officer
or member made to the Pension Plan from the officer's or member's
look-back commencement date to his or her actual resignation, without
any gains or losses thereto; and
(b)
An amount equal to all monthly pension benefits that would have
been payable had the officer or member elected to cease employment
on the look-back commencement date and to receive an immediate retirement
benefit payable on and after the look-back commencement date to his
or her actual resignation date with applicable cost of living adjustments,
if any.
J.
Individual DROP investment account.
(1)
The Township and the Police Bargaining Unit shall agree on an investment
manager and the Township shall not be responsible for any investment
loss incurred in the DROP accounts of each DROP participant or for
the failure of an investment to earn a specific or expected return
or to earn as much as any other investment opportunity, whether or
not such other investment opportunity was offered or available to
the DROP participants.
(2)
Each participant shall select and direct the investments in his or
her DROP account from an array of options as selected by the Plan
Administrator. The Plan Administrator may select a third party to
provide mutual fund or other investment options, record-keeping and
reporting to the participants and the Plan. All investment and administrative
costs shall be charged against the participant's DROP accounts.
Accordingly, the participant shall bear the full responsibility for
obtaining appropriate investment advice, as well as for the consequences
of any investment of all or part of the contents of the DROP account.
The DROP account established for each participant will be considered
a tax-deferred account maintained as part of the Plan, and, as a result,
will be subject to the restrictions established under Section 401(a)
et seq. of the Internal Revenue Code ("Code"). As a condition of participation
in the DROP program, both the Police Bargaining Unit and the participants
collectively and individually acknowledge that the employer shall
have no responsibility for the financial impact and/or consequences
of an officer's participation in the DROP program, including,
but not limited to, the investment of the balance of an officer's
DROP account, the performance of any such investments, or any tax
consequences flowing from participation in the DROP program. The parties
also acknowledge that DROP accounts shall have no guaranteed interest
or rate of return, and that the employer shall not in any way be responsible
for any specific guaranteed rate of return.
(3)
The parties further acknowledge that as a condition of participation
in the DROP program, if the Internal Revenue Service or any other
governmental agency, department or branch of the federal, state or
local government determines that the DROP accounts do not conform
to the qualification requirements of the Internal Revenue Code with
respect to the governmental defined benefit pension plans under Section
401(a) et seq. of the Code, including without limitation any determination
that the DROP accounts are subject to the limitations of Section 415
of the Code with respect to defined contribution plans, such DROP
accounts shall be amended to comply with such law but all costs incurred
by such amendment shall be borne by the DROP participant.
K.
Distribution options. Commensurate with DROP program participation,
a member must make an election on forms designated by the Township
of the payout option(s) desired upon termination of the DROP Period.
This election may be changed at any time before termination. The distribution
options are as follows:
L.
Beneficiary designation. Commensurate with DROP program participation,
a member must make an election, on forms designated by the Township,
of the Beneficiary or Beneficiaries they intend to receive the balance
of the member's DROP account in the event of the member's
death before such balance has been distributed.
M.
Amendment. Any amendments to the DROP Plan shall be consistent with
the provisions covering deferred retirement option plan set forth
in any applicable collective bargaining agreement and shall be binding
upon all future DROP participants and upon all DROP participants who
have balances in their DROP accounts. The DROP Plan may only be amended
by a written instrument signed by an authorized representative of
the Township and the Police Bargaining Unit, not by any oral agreement
or past practice.
N.
Interpretation of provisions.
(1)
This document shall be interpreted under the laws of the Commonwealth
of Pennsylvania and applicable federal law. An officer's election
to participate in the DROP program shall in no way be construed as
a limitation on the Township's right to suspend or terminate
an officer for just cause or to grant the officer an honorable discharge
based upon a physical or mental inability to perform his or her duties.
Nothing provided hereunder shall be construed as a change to the parties'
practice of calculating pensionable compensation, and except for the
ability to establish a DROP account and participate in the DROP program,
nothing herein is intended to create new pension benefits of any kind
which did not exist as of December 31, 2007.
(2)
Nothing provided hereunder shall guarantee any officer or DROP participant
a specific term of employment. All DROP participants shall be subject
to the same terms and conditions of employment (except those relating
to benefits under the Plan and retiree benefits), rules and regulations
and disciplinary procedures as other officers and members who are
not DROP participants.
(3)
Except as provided in this DROP document, all DROP participants shall
be considered to be employees of the Township and subject to the same
terms and conditions of employment contained in all Township policies,
directives, and orders as well as in the collective bargaining agreement
between the Township and the Police, including but not limited to
the obligation to continue to make health care contributions, just
as all other Police officers employed by the Springfield Township
Police Department who are not DROP participants. Upon resignation,
the officer shall be entitled to only those benefit, after the DROP
participation period or look-back DROP period ends, that are in place
at the time of resignation, if any, as opposed to at the time the
DROP participation period commenced.
O.
Cost to participants. Participants will pay any costs of the Township
and the Plan as it relates to the administration of the DROP program
or DROP accounts.
