[Adopted 10-6-1975 by Ord. No. 148; amended
in its entirety 8-24-2006 by Ord. No. 264 (Ch. 1, Part 2, of the
1995 Code)]
The Board of Commissioners of this Township
hereby establishes and agrees to pay length-of-service increments
equal to 2% of the final the 36 months' average salary of such member
per month for each completed year of service in excess of 25 years;
however, in no event will the total of all such monthly length-of-service
increments exceed $100. Such length-of-service increments will be
paid in addition to other monthly pension or retirement allowances.
The expense of administering this Police Pension
Fund Program, including, but not limited to, compensation of an actuary,
any custodian of the fund and any other charges or expenses related
thereto, exclusive of the payment of pension benefits, at the sole
discretion of the Board of Commissioners, may be paid from the fund
established under this article or may be paid by appropriations made
by the Board of Commissioners of the Township.
All contracts, agreements or funds held by the
Township for the purpose of providing pensions, annuities or retirement
income, or any of them, of any policeman who shall be a participant
in the program herein established shall be and hereby are transferred
and assigned to the fund herein created. After such transfer, the
Police Pension Fund shall assume the liability, if any, of continuing
the payment of pensions to members of the police force retired prior
to such transfer in accordance with the laws and regulations under
which such members were retired.
A policeman or a beneficiary who alleges that
an official, officer, employee, agent or representative of the Township
has made a requirement, order or decision which incorrectly interprets,
administers, applies or enforces a provision of this article or a
provision of Act 600 shall have the right to appeal the matter to
the Township Board of Commissioners or its designee for a decision
and shall have the right to have the Township Board of Commissioners
or its designee hear the appeal pursuant to the provisions of the
Pennsylvania Local Agency Law, 2 Pa.C.S.A. § 101 et seq.
[Added 4-3-2017 by Ord.
No. 334]
A. Definitions. For purposes of this section only, the words and phrases
used in this section shall have meaning ascribed below:
BENEFICIARY
The individual identified by a police officer to receive
the contents of an officer's DROP account in the event of the
death of an officer during the period in which the officer is participating
in the DROP, but before the officer separates from employment.
DROP
The Deferred Retirement Option Plan pursuant to the Municipal
Pension Plan Funding Standard and Recovery Act, Act 205 of 1984, as
amended by Act 44 of 2009, and subject to the terms and conditions
of this section.
DROP ACCOUNT
The separate account created to accept DROP participants'
monthly pension check while a DROP participant.
DROP PARTICIPANT
A retired police officer who is eligible to participate in
a DROP under this section and who has elected to participate in a
DROP under the terms of this section.
DROP PARTICIPANT ACCOUNT
A pension trust fund ledger account established under the
terms of this section. A DROP participation account shall be established
as an interest-bearing ledger account of the fund of the plan. The
account balance shall be accounted for separately but need not be
physically segregated from other pension trust fund assets.
FUND or PLAN
The Police Pension Plan for Lower Pottsgrove Township.
B. Eligibility. As of the effective date of this section, police officers
who have not retired prior to the implementation of the DROP program
may enter into the DROP on the first day of any month following completion
of 25 years of credited service and attaining the age of 50.
C. Written election. A police officer electing to participate in the
DROP must complete and execute a DROP option form prepared by the
Township, which shall evidence the member's participation in
the DROP. The form must be signed by the member and notarized and
submitted to the Township prior to the date on which the member wishes
the DROP option to be effective. The DROP option notice shall include
an irrevocable notice to the Township, by the member, that the member
shall resign from employment with the Lower Pottsgrove Township Police
Department effective on a specific date (the "resignation date").
In no event shall the resignation date be longer than 24 months from
the execution of the DROP option form. A DROP participant may change
the resignation date to an earlier date without penalty. 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. In addition, all retirement documents
required by the Police Pension Plan Administrator must be filed and
presented to the Township for approval of retirement and payment of
pension. Once a retirement application has been approved by the Township,
it is irrevocable.
D. Pension contributions. A police officer shall not be required to
make any contributions to the fund during his or her DROP period.
E. Limitation on pension accrual. After the effective date of the DROP
option, the police officer shall no longer earn or accrue additional
years of continuous service for pension purposes.
F. Benefit calculation. For all retirement fund purposes, continuous
service of a police officer participating in the DROP shall remain
as it existed on the effective date of commencement of participation
in the DROP. Service thereafter shall not be recognized or used for
the calculation or determination of any benefits payable by the Police
Pension Plan of Lower Pottsgrove Township. The average monthly compensation
of the police officer for pension calculation purposes shall remain
as it existed on the effective date of commencement of participation
in the DROP. Earnings or increases in earnings thereafter shall not
be recognized or used for the calculation or determination of any
benefits payable by the Pension Plan.
G. Payments to DROP participation account. The monthly retirement benefits
that would have been payable had the DROP participant elected to cease
employment and receive a normal retirement benefit and interest thereon
shall, upon the police officer commencing participation in DROP, be
paid into the DROP participation account. The DROP participation account
shall earn interest at the same rate as the Police Pension Plan, provided
that the minimum interest earnings shall be 0% and the maximum interest
earnings shall be 4 1/2%.
H. Accrual of nonpension benefits. After a police officer elects to
participate in the DROP program, all other contractual benefits shall
continue to accrue with the exception of those provisions relating
to the Police Pension Plan, and the DROP participant shall forgo active
membership in the Police Pension Plan.
I. Payout.
(1)
Upon the resignation date set forth in the police officer's
DROP option notice, early termination date, or such date as the Township
separates the member from employment, the retirement benefits payable
to the DROP participant or the DROP participant's designated
beneficiary, if applicable, shall no longer be paid to the DROP participant
account. At the option of the DROP participant or the DROP participant's
beneficiary, the balance in the DROP participation account accrued
by the DROP participant shall be:
(a)
Paid within 45 days of the separation of employment to the DROP
participant or the DROP participant's beneficiary after withholding
taxes to the Internal Revenue Service (IRS); or
(b)
Paid within 45 days directly to the custodian of an eligible
retirement plan as defined by the Internal Revenue Code (IRC) or,
in the case of an eligible rollover distribution to the surviving
spouse of a deceased DROP participant, an eligible retirement plan
that is an individual retirement account of an individual retirement
account as defined in the IRC.
(2)
If the DROP participant or beneficiary fails to elect a method of payment within 60 days of the police officer's date of resignation, the Township shall pay the balance in a lump sum, as provided in Subsection
I(1)(a) of this section.
(3)
The form of payment selected by the DROP participant or beneficiary
shall comply with the minimum distribution requirements of the IRC.
J. Disability during DROP. If a police officer becomes temporarily incapacitated
during his participation in DROP, that police officer shall continue
to participate in the DROP program as if fully employed. The police
officer shall receive disability pay in the same amount as disabled
police officers who are not participating in DROP. In no event shall
a police officer on temporary disability have the ability to draw
from his DROP account. However, notwithstanding any other provision
in this subsection, if a police officer is disabled and has not returned
to work as of his required resignation date, then such resignation
shall take precedence over all other provisions herein, and said officer
shall be required to resign. If a police officer becomes permanently
disabled during the DROP period, the officer shall be honorably discharged
from employment; on such date, the police officer shall obtain the
contents of his DROP account and, thereafter, commence receiving his
normal pension benefit.
K. Death. A DROP participant's eligibility to participate in the
DROP terminates upon the death of the DROP participant. If a DROP
participant dies before the DROP account balances are paid, the DROP
participant's designated beneficiary shall have the same rights
as the police officer to withdraw the account balance.
(1)
The monthly plan benefit accrued in the DROP participant's
DROP participant account during the month of a DROP participant's
death shall be the final monthly retirement system benefit credited
for DROP participation.
(2)
If the DROP participant dies on or after the effective date
of participation in the DROP but before the plan benefit of the DROP
participant accruable for the month has accrued in the DROP participant
account, the Township shall pay the monthly plan benefit as though
the police officer had not elected to participate in DROP and had
died after the police officer's effective date of retirement.
(3)
In the event of the death of a DROP participant prior to the
resignation date, the DROP participant's survivor or beneficiary
shall only be eligible to receive plan benefits, if any, normally
payable in the event of the death of a retired employee.
L. Forfeiture of benefits. Notwithstanding a police officer's participation
in the DROP plan, a police officer who is convicted or pleads guilty
to engaging in criminal misconduct which constitutes a "crime related
to public office or public employment," as that phrase is defined
in Pennsylvania's Pension Forfeiture Act, 43 P.S. §§ 1311
through 1314 and interpreted thereunder, shall forfeit his or her
right to receive a pension, including any amounts currently deposited
in the DROP account. In such a case, the police officer shall only
be entitled to receive the contributions, if any, made by the police
officer to the fund, without interest.
M. Reenrollment. After the expiration of the DROP participation period,
a former DROP participant shall under no circumstances be permitted
to reenroll or elect to participate in the DROP.
N. Amendment. Any amendments to the DROP plan shall be consistent with
the provisions covering DROP plans as set forth in the applicable
state law and/or the 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, not by any oral agreement or past
practice.
O. Construal of provisions. A police 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 to terminate a police officer
for just cause or to grant the police officer an honorable discharge
based upon a physical or mental inability to perform his or her duties.
P. Administration and audit. The administration of the Lower Pottsgrove
Township DROP and audits of the DROP shall be in accordance with the
Municipal Pension Plan Funding Standard and Recovery Act, Act 205
of 1984, as amended by Act 44 of 2009.
Q. Severability. The provisions of this section shall be severable,
and if any of its provisions shall be held to be unconstitutional
or illegal, the validity of any of the remaining provisions of the
section shall not be affected thereby. It is hereby expressly declared
as the intent of the Township that this section would have been adopted
had such unconstitutional or illegal provision or provisions not been
included herein. In the event that the DROP provision is declared
invalid or illegal by a court of competent jurisdiction or through
an administrative determination of the Office of the Auditor General,
the police officers shall have the right to bargain in accordance
with Act 111 over deletion of this benefit. It is expressly understood
that any such bargaining shall not involve bargaining over a replacement
provision.
[Adopted 6-22-2006 by Ord. No. 263; amended
in its entirety 7-7-2014 by Ord.
No. 313]
The following document, entitled "Lower Pottsgrove
Township Nonuniformed Employees' Pension Plan," shall be the governing
document for the nonuniformed plan, setting forth the benefits available
to current and future nonuniformed Township employees.