Borough of Bridgeport, PA Article II Nonuniformed Employees Pension Plan

[Adopted 2-8-2000 by Ord. No. 20-2000[1]]

[1] Editor's Note: This ordinance superseded former Ch. 20, Nonuniformed Employees Pension Plan, of the 1975 Code, adopted 10-18-1977 by Ord. No. 445, approved 10-18-1977, as amended.

§ 72-2 Establishment of plan and fund.

There is hereby established in the Borough of Bridgeport for the benefit of full-time employees of the Borough a pension plan and pension fund. The pension plan shall be known as the "Borough of Bridgeport Nonuniformed Employees Pension Plan" but hereafter in this article shall be referred to as the "pension plan" or "plan." The pension fund shall be known as the "Borough of Bridgeport Nonuniformed Employees Pension Fund" but hereafter in this article shall be referred to as the "pension fund."

§ 72-3 Agreement of trust.

The Borough Council is hereby authorized to enter into an agreement of trust with a trustee, which agreement of trust shall permit the trustee to manage and operate the pension fund and to receive, hold, invest and disburse any sum or sums as may be necessary to carry out the pension plan. The Borough Council will determine the form and terms of any such agreement of trust.

§ 72-4 Definitions and word usage.

A. As used in this article, the following terms shall have the meanings indicated.

ACTUARIAL EQUIVALENT

A benefit of equal value computed in accordance with actuarial tables adopted on a nondiscriminatory basis by the Pension Committee of the plan.

ANNIVERSARY DATE

January 1 of each year.

AVERAGE COMPENSATION

The average of compensation during the highest five consecutive years of service of the last 10 plan years.

AVERAGE MONTHLY COMPENSATION

One-twelfth of the participant's average gross compensation defined above.

BENEFICIARY

Any person or persons designated by a participant to receive any benefits which may be due under this plan on his/her death. If there should be no such designation or if the designated person or persons predecease the participant, "beneficiary" shall mean the spouse, children, parents, brothers and sisters or estate of the participant, in the order listed.

COMMITTEE

The Pension Committee appointed as the committee to administer this plan.

COMPENSATION

As to each employee, his/her basic earnings, including overtime, for a plan year. As used herein, "earnings" means payment pursuant to prior agreement for the performance of an assigned duty. Compensation shall not include contributions to or benefits under this plan. For those employees who retire on or after December 31, 2014, compensation shall include all accrued sick time accumulated over the average monthly compensation period.

[Amended 2-28-2017 by Ord. No. 2017-002, approved 2-28-2017]

EFFECTIVE DATE OF THIS AMENDMENT

February 8, 2000.

EFFECTIVE DATE OF THIS PLAN

January 10, 1972.

EMPLOYEE

Any person in the employ of the employer (except police officers, who are excluded), whose employment contemplates the rendition of service to his/her employer and who is customarily employed for at least 40 hours per week for at least 12 months per year.

EMPLOYER

Borough of Bridgeport or any other entity which may assume the obligations of this plan with respect to its employees by becoming a party to this plan. Each such employer shall be deemed to be the "employer" only as to persons who are on its payroll.

[Amended 1-24-2012 by Ord. No. 2012-001, approved 1-24-2012]

PARTICIPANT

An employee of the employer who is eligible to be and does enter the plan as provided in §§ 72-5 and 72-6.

[Amended 10-24-2000, approved 10-24-2000]

PENSIONER

A participant who has been certified to the trustee by the Committee as one entitled to receive benefits hereunder.

PLAN YEAR

The period of 12 consecutive months beginning on January 1 and ending on the next December 31.

RESERVE LIABILITY

The amount required under the actuarial assumptions of the plan as of a particular time to meet all future benefits provided for participants which will not be met by expected future contributions to the trust fund.

TRUSTEE

Any trustee duly appointed by the Borough Council.

YEARS OF SERVICE

With respect to an employee, the number of years from the date of employment to the date of severance of employment, measured in years and completed in months.

[Amended 10-24-2000, approved 10-24-2000]

(1) "Years of service" shall include any period of time during which an employee is absent due to:

(a) Temporary illness, disability or vacation;

(b) Employer-approved leave of absence; or

(c) Military duty, either with the consent of the employer or as required by law, provided that the employee returns to the service of the employer within the time his/her employment rights are protected by law.

(2) An employee whose employment has been severed and later resumed shall be deemed a new employee as of the date of reemployment. Previous employment shall not be counted if:

(a) The employee's employment was severed before acquiring any vested benefit in the plan; and

(b) The period of time from the date of severance of employment and the date of resumption of employment equals or exceeds the years of service before the date of severance of employment.

B. Wherever appropriate, words used in the singular may include the plural or the plural may be read as a singular, and the masculine may include the feminine.

§ 72-5 Plan participation.

[Amended 10-24-2000, approved 10-24-2000; 10-25-2011 by Ord. No. 2011-006, approved 10-25-2011; 2-23-2021 by Ord. No. 2021-001, approved 2-23-2021]

A. Eligibility. An employee shall be eligible to become a participant on the date of hire.

B. Any eligible employee may elect not to participate in the pension plan by giving written notice of such election to the Pension Committee and Borough Manager. If an eligible employee elects not to participate, they still reserve the right to opt into the pension plan at a later date by again giving written notice to the Pension Committee and Borough Manager.

§ 72-6 Continuing eligibility; termination.

A participant shall continue to be a member of the plan so long as his/her employment has not been severed. His/her participation shall terminate on the date of severance of employment.

§ 72-7 Years of service.

[Amended 10-24-2000, approved 10-24-2000]

For the purpose of §§ 72-8 through 72-17, an employee's years of service shall be counted, except for service disregarded under Subsection A(2) of the definition of "years of service" in § 72-4.

§ 72-8 Normal retirement.

A. Normal retirement date. The normal retirement date for each participant is the first day of the month coinciding with or next following the later of the participant's 62nd birthday. For those employees who are at least 58 years of age and have completed at least 20 years of service with the Borough on or before December 31, 2014, the normal retirement date shall be the first day of the month coinciding with or next following the later of the employee's 58th birthday or the completion of 20 years of service. For those employees who are employed by the Borough of Bridgeport as of the date of this amendment, the normal retirement date shall be the first day of the month coinciding with or next following the employee's 62nd birthday. For those employees hired by the Borough after the date of this amendment, the normal retirement date shall be the later of the first day of the month coinciding with or next following the employee's 62nd birthday and the completion of 10 years of service.

[Amended 10-24-2000, approved 10-24-2000; 9-27-2011 by Ord. No. 2011-003, approved 9-27-2011; 3-13-2012, approved 3-13-2012]

B. Normal retirement benefits.

(1) The normal retirement benefit for every participant shall be a level monthly pension for life based on the following calculation: 2% multiplied by the retiring employee's final average compensation as defined in § 72-4 of the article, multiplied by years of service. Average compensation is based upon the highest five consecutive years of service of the last 10 plan years. This calculation is subject to a maximum benefit of 50% of the retiring employee's final average compensation. For those employees who are at least 58 years of age and have completed at least 20 years of service with the Borough on or before December 31, 2014, the normal retirement benefit shall be 50% of final average compensation.

[Amended 3-25-2008 by Ord. No. 2008-001, approved 3-25-2008; 9-27-2011 by Ord. No. 2011-003, approved 9-27-2011]

(2) For those employees who are hired after January 1, 2016, normal retirement benefits shall be provided under a defined contribution arrangement. The arrangement shall provide for a Borough contribution of 5% of compensation on a yearly basis. Those said employees shall not be eligible for any benefits provided under the defined benefit arrangement of § 72-8B(1). Under the defined contribution arrangement, employee contributions are mandatory per § 72-18. In addition, vesting of the Borough contribution shall be immediate and shall supersede the requirements of § 72-15 for those employees hired after January 1, 2016. Finally, all benefits shall be paid as a lump sum to the participant upon termination or retirement.

[Added 2-28-2017 by Ord. No. 2017-002, approved 2-28-2017]

C. Accrued benefit. The amount of monthly pension accrued at a date other than the participant's normal retirement date shall be the projected normal retirement benefit multiplied by a fraction (not exceeding one), the numerator of which is the actual number of years of service to date and the denominator of which is the total number of years of service the participant would have completed if he/she had continued in service until his/her normal retirement date. The "projected normal retirement benefit" shall be the pension computed in accordance with the normal retirement benefit formula in Subsection B based upon compensation to date.

[Amended 10-24-2000, approved 10-24-2000]

§ 72-9 Late retirement.

A participant may remain in the employer's employ after his/her normal retirement date, but the retirement benefits to which he/she may be entitled shall not commence until such participant actually retires. The amount of the participant's late retirement pension shall be equal to the greater of the benefit accrued to the late retirement date or the actuarial equivalent of the normal retirement benefit until the age of 65.

§ 72-10 Early retirement.

[Amended 10-24-2000, approved 10-24-2000]

Retirement benefits may begin in a reduced amount on the first day of any month on or after the 55th birthday. The reduction is 1/2 of 1% for each month that early retirement precedes normal retirement. There is no provision for retirement earlier than the 55th birthday except as is provided in § 72-11 (disability retirement).

§ 72-11 Disability retirement.

A. If a participant becomes disabled (as described in Subsection B below) and remains so for six or more months, he/she may retire by reason of disability (whether service-related or non-service-related). The disability benefit shall commence as of the first day of the month on or after the physician chosen by the Committee makes the determination of such disability (to be effective as of the first day of the month after the six-month waiting period). The disability benefit shall terminate with the payment which is the earlier to occur of the payment made on the first day of the month in which recovery from disability occurs or the payment made in the month of death.

[Amended 10-24-2000, approved 10-24-2000]

B. "Disabled" shall mean that the participant is unable, by reason of illness (physical or mental) or injury, to perform the majority of the duties which were his/her before the occurrence of such illness or injury and shall be determined by the Committee after consultation with a physician chosen by the Committee. Notwithstanding such definition, a participant eligible for social security disability benefits shall automatically satisfy the requirements for determining disability. In the administration of this section, all employees shall be treated in a uniform manner in similar circumstances.

C. Amount of disability benefit. The disabled participant shall be entitled to receive the greater of: (1) the accrued benefit described in § 72-8C, reduced by 1/2 of 1% for each month that the disability benefit commencement date precedes the normal retirement date; or (2) $20 per month for each year of service up to a maximum of $400 per month. The benefit, whether (1) or (2), shall be further reduced by any benefits received under the workers' compensation laws and/or the Pennsylvania Occupational Disease Act.

[Added 10-24-2000, approved 10-24-2000]

§ 72-12 Optional forms of pension.

A. Automatic joint and survivor option. In the case of a participant who is married on his/her pension starting date, his/her pension, unless he/she elects otherwise, shall be an actuarially equivalent joint and fifty-percent survivor pension. Under such joint and fifty-percent survivor pension, payments shall continue after the participant's death during the lifetime of his/her spouse at the rate of 50% of the actuarially adjusted amount payable during the participant's lifetime.

B. Election not to take joint and survivor annuity.

(1) Election period. A participant may elect not to take the automatic joint and survivor option at any time during the election period. An election period is the period of six months ending on the date on which benefit payments commence hereunder.

(2) Information to be provided to the participant. Within 30 days after the first day of the election period, the Committee shall furnish to the participant a written notification, in nontechnical terms, of:

(a) The availability of the election provided by this Subsection B.

(b) The terms and conditions of the joint and survivor annuity.

(c) The financial effect upon the participant's pension (in terms of dollars per pension payment) of making an election under this Subsection B.

(3) Form of election. The election shall be in writing and clearly indicate that the participant is electing to receive his/her benefits and survivor annuity.

(4) Election is revocable. This election may be revoked, in writing, during the election period. After an election is revoked, another election under this Subsection B may be made during the election period.

C. Other option. Upon written request of a participant filed with the Committee and upon the Committee's approval of such request, a participant may elect, prior to the payment of the first retirement benefit hereunder, to receive the actuarial equivalent of his/her normal pension in the following form:

(1) A monthly pension payable as long as the participant or his/her designated contingent beneficiary is alive, with the amount of pension continued after the participant's death at 100% or 50% of the actuarially adjusted amount payable during the participant's lifetime.

§ 72-13 Preretirement death benefits for surviving spouse.

A. If a vested participant who continues at work and has been married for at least one year dies after the plan's earliest retirement age, the participant's surviving spouse (if any) shall receive the same benefit that would be payable if the participant had retired with an immediate qualified joint and fifty-percent survivor pension on the day before the participant's date of death.

B. If a vested participant who continues at work and has been married for at least one year dies on or before the plan's earliest retirement age, the participant's surviving spouse (if any) shall receive the same benefit that would be payable if the participant had:

(1) Separated from service on the date of death;

(2) Survived to the earliest retirement age;

(3) Retired with an immediate qualified joint and fifty-percent survivor pension at the earliest retirement age; and

(4) Died on the day after the earliest retirement age.

C. For purposes of the preceding subsection, a surviving spouse shall begin to receive payments at the earliest retirement age unless such surviving spouse elects a later date. For purposes of this section, "qualified joint and fifty-percent survivor pension" means the automatic joint and survivor option in § 72-13A.

D. The survivor benefit set forth above shall not be payable unless the participant and spouse have been married throughout the one-year period ending on the date of the participant's death.

E. In all circumstances, benefits may be provided under § 72-18 on behalf of the deceased participant.

[Amended 10-24-2000, approved 10-24-2000]

§ 72-14 Post-retirement death benefits.

[Amended 3-25-2008 by Ord. No. 2008-001, approved 3-25-2008; 4-11-2023 by Ord. No. 2023-003, approved 4-11-2023]

A. For all teamsters hired prior to January 1, 2016: Upon the death of a participant after retirement, pension payments are guaranteed for a maximum period of 120 months to the beneficiary specified by the participant.

B. For all teamsters hired after January 1, 2016: Upon the death of a participant after retirement, pension payments are guaranteed for a maximum period of 60 months to the beneficiary specified by the participant.

§ 72-15 Vesting.

[Amended 10-24-2000, approved 10-24-2000]

Upon termination of participation other than by retirement or death and after completion of at least 10 years of service, the terminated participant shall be entitled to a vested, deferred pension equal to the benefit accrued up to the date of termination (determined as in § 72-8 based upon complete years of service to the date of termination of participation). The vesting for any employee who was a participant as of January 10, 1972, shall be 100% after 10 years of service.

§ 72-16 Payment of benefits.

A. Time of payment. Payment of such vested deferred pension shall begin no later than the participant's normal retirement date. Payment may, upon request of the terminated participant, begin as early as age 55.

B. Form and manner of payment. The vested deferred pension shall be payable in the same optional forms and in the same manner as provided for retirement benefits in § 72-13.

§ 72-17 Employer contributions.

The employer shall make contributions on an annual basis to the trustee for the purpose of providing the benefits to which participants are entitled under the plan. The amount of the annual contribution shall be based upon an actuarial valuation.

§ 72-18 Employee contributions.

[Amended 10-24-2000, approved 10-24-2000; 5-28-2013 by Ord. No. 2013-004, approved 5-28-2013]

Employee contributions shall be in the amount of 3% of compensation for all paychecks received through December 2014 and 3 1/2% thereafter. The interest rate to be credited on employee contributions shall be 4.5% through 1985 and 5% thereafter. Interest is credited from the end of the year in which contributions were made to the last day of the month in which the participant's employment was terminated. When benefits are paid pursuant to §§ 72-11 through 72-16, the employee or his beneficiary is guaranteed a full refund of all employee contributions made plus interest, less any payments made to him during his lifetime.

§ 72-19 Pension Committee.

A. The Pension Committee shall consist of five members appointed by Borough Council who shall jointly oversee the nonuniform and uniform pension funds. Those members shall consist of one uniform member, one nonuniform member, one representative of the community, one representative of the Borough administration and the Borough Manager.

[Amended 9-27-2011 by Ord. No. 2011-003, approved 9-27-2011]

B. The Committee shall choose from its members a Chairman. It shall also select a Secretary, who may or may not be a member of the Committee. The Secretary shall keep minutes of the Committee's proceedings and all dates, records and documents pertaining to the Committee's administration of the plan. The Committee may employ and suitably compensate such attorneys, actuarial and consulting services and advisory, clerical or other employees as it may deem necessary to the performance of its duties.

C. The action of the Committee shall be determined by the vote or other affirmative expression of a majority of its members. Either the Chairman or the Secretary may execute any certificates or other written direction on behalf of the Committee.

D. A member of the Committee who is a participant shall not vote on any question relating specifically to himself, and in the event that the remaining members of the Committee by majority vote hereof are unable to come to a determination of any such question, the same shall be determined by a majority of Commissioners.

E. The members of the Committee shall serve without bond and without compensation for their service as such. All reasonable expenses of the Committee shall be submitted to the employer for payment.

F. No member of the Committee shall be liable for any act or omission of any other member of the Committee nor for any act or omission on his/her own part, excepting only his/her own willful misconduct. The employer shall indemnify and save harmless each and every member of the Committee against any and all expenses and liabilities arising out of his/her membership on the Committee, excepting only expenses and liabilities arising out of such Committee member's own willful misconduct.

G. The Committee shall make available to participants for examination during business hours such of its records as pertain only to the participant involved.

H. Powers and duties.

(1) The Committee on behalf of the participants shall enforce the plan in accordance with the terms of the trust agreement and shall have all powers necessary to accomplish that purpose, including, but not by way of limitation, the following:

(a) To determine all questions relating to the eligibility of employees to become participants.

(b) To compute and certify to the trustee the amount and kind of benefits payable to participants.

(c) To select an issuing company and annuity contracts which, in the opinion of the Committee, will best carry out the purposes of the plan.

(d) To make and publish such rules for the regulation of the plan as are not inconsistent with the terms of this article.

(2) Such powers as are given to the Committee under Subsection H(1)(a) and (b) hereof shall be applied in a nondiscriminatory manner.

I. To enable the Committee to perform its functions, the employer shall supply full and timely information to the Committee of all matters relating to the pay of all participants, their retirement, death or other cause for termination of employment and such other pertinent data as the Committee may require, and the Committee shall advise the trustee with reasonable dispatch of such of the foregoing facts as may be pertinent to the trustee's administration of the plan.

J. Pension Fund Advisory Committee. A Pension Fund Advisory Committee shall be established ("Advisory Committee"). The Advisory Committee shall serve only in an advisory capacity, and it shall consist of the President and Vice President of Borough Council and the Mayor. The Advisory Committee is to assist the Borough Council in adopting rules and regulations to administer the pension plan.

[Added 9-27-2011 by Ord. No. 2011-003, approved 9-27-2011]

§ 72-20 Continuance of plan.

It is the expectation of the employer that it will continue this pension plan indefinitely and make the required payments of its contributions hereunder, but the continuance of the plan is not assumed as a contractual obligation of the employer, and the right is reserved by the employer at any time to reduce or discontinue its contributions hereunder.

§ 72-21 Amendment of plan.

Except as herein limited, the employer shall have the right to amend this article at any time to any extent that it may deem advisable. Such amendment shall be in the form of an ordinance and approved by the Borough Council. Upon delivery of such ordinance to the trustee, the Committee and the issuing companies, this article shall be deemed to have been amended in the manner therein set forth, and all participants shall be bound thereby; provided, however, that:

A. No amendment shall increase the duties or liabilities of the trustee, the Committee or the Secretary of the Committee without their respective written consents;

B. No amendment shall have the effect of vesting in the employer any interest in or control over any contracts issued pursuant hereto or any other property subject to the terms of this plan; and

C. No amendment shall have any retroactive effect so as to deprive any participant of any benefit already created.

§ 72-22 Termination of plan.

This plan shall terminate upon the happening of any of the following events:

A. Legal adjudication of the employer as bankrupt, a general assignment by the employer to or for the benefit of its creditors, or the legal dissolution of the employer.

B. Discontinuance by the employer upon notice delivered to the trustee and the other proper parties.

§ 72-23 Allocation of funds upon termination or discontinuance of plan.

A. Upon such termination or upon complete discontinuance of contributions by the employer, the trustee shall allocate the funds held in trust as follows:

(1) First, there shall be allocated to each pensioner and to each beneficiary of a deceased pensioner the reserve liability attributable to him/her or, if contracts had been held for such persons, a suitable transfer and delivery of all such contracts shall be made; and

(2) Second, the balance in the trust fund remaining after the allocations provided for in Subsection A(1) above shall be allocated to each of the remaining participants in proportion to which the reserve liability bears to the total of such reserve liability for all participants.

B. Such distribution having been made, the trustee shall be discharged from his/her obligations under the plan, and no participants shall have any further right or claim therein.

§ 72-24 Purpose and interpretation.

The plan is created for the exclusive benefit of the employees of the employer and shall be interpreted in a manner consistent with its being an employees' trust.

§ 72-25 Use of plan funds restricted.

Under no circumstances shall any funds contributed to this plan or any assets of this plan ever revert to or be used or enjoyed by the employer, nor shall any such fund or assets ever be used other than for the benefit of the employees of the employer prior to the satisfaction of all liabilities under this plan to the participants.

§ 72-26 Effect on contracts; rights of employer.

This plan is not to be construed as creating or changing any contract of employment between the employer and its employees, and the employer retains the right to deal with its employees and to terminate their employment at any time to the same extent as though this plan had not been created. Nothing in this plan shall be construed as limiting the right of the employer to change the compensation, salary or remuneration of any employee at any time.

§ 72-27 Agreement to be binding.

This agreement shall be binding on the heirs, executors, administrators, successors and assigns, as such terms may be applicable on any or all parties hereto, and of any participants, present or future.

§ 72-28 Applicable laws.

[Amended 10-24-2000, approved 10-24-2000]

The plan and any trust created hereunder shall be construed and applied under the laws of the Commonwealth of Pennsylvania where not in conflict with federal laws, which shall prevail. All ordinances or resolutions, or portions thereof, inconsistent herewith are replaced.

§ 72-29 Execution in counterparts.

This article may be executed in any number of counterparts, each of which shall be deemed as an original, and said counterparts shall constitute but one and the same instrument, which may be sufficiently evidenced by any one counterpart.