Borough of Heidelberg, PA Pensions

In the event a participant "retires on pension" (within the meaning of Act 30 of 2002) and dies, a benefit shall be paid to the surviving spouse or if no spouse survives, or if he or she survives and subsequently dies, then the child or children under the age of 18 years or if attending college, under or attaining the age of 23 years in the case of a child or children, in the amount of 50% of the pension the participant was receiving or would have been receiving had he been retired at the time of his death. For purposes of this section, a participant who has attained normal retirement age and dies prior to retiring shall be treated as if he had retired on the day before his death. Notwithstanding anything to the contrary in this Plan, if anyone receives benefits under this section, no one shall receive any other benefits under this Plan on account of the death or retirement of the participant.

To the extent required by law, the survivor of a participant who dies after receiving a deferred vested benefit or eligible to receive a deferred vested benefit will be paid a survivor benefit to the survivors determined by law in an amount no greater than the minimum required by law. Anyone receiving benefits under this subsection shall not be entitled to any other benefits on account of the death or retirement of the participant.

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.

To the extent required by Act 30 of 2002, this section applies to the surviving spouse of a participant who died on or before April 17, 2002, and who was not remarried as of April 17, 2002.

Death of participant prior to retirement.

If a participant shall die before payment of a benefit has commenced and without eligibility for payment of a survivor benefit under § 21-6B, the beneficiary shall be eligible to receive a distribution in an amount equal to the accumulated contributions of the participant as of the date of death of the participant.

The surviving spouse of a participant who dies before his pension has vested, and whose survivors are entitled to no benefits under any other sections of this Plan, or if no spouse survives or if he or she survives and subsequently dies, the child or children under the age of 18 years, or if attending college, under or attaining the age of 23 years, of a participant shall be entitled to receive repayment of accumulated contributions unless the member has designated a beneficiary for this purpose.[1]

[1]

Editor's Note: Former Subsection D, Killed in service benefit, which immediately followed this subsection, was repealed 1-19-2010 by Ord. No. 589.

§ 21-7 Termination of employment.

Rights of terminated employees. A participant who shall cease to be an employee except as otherwise hereinbefore provided shall have all interest and rights under this Plan limited to those contained in the following sections of this article.

Distribution of accumulated contributions. A participant whose employment with the employer shall terminate for any reason other than death or total and permanent disability prior to attainment of normal retirement age shall be entitled to receive a distribution of accumulated contributions. Upon receipt of such accumulated contributions, said participant and beneficiary shall not be entitled to any further payments from the Plan.

Deferred vested benefit. A participant who has completed at least 12 years of aggregate service and whose employment with the employer shall terminate for any reason other than death or total and permanent disability prior to attainment of normal retirement age shall be entitled to elect, by giving written notice of such election to the Plan Administrator within 90 days following the date that the participant's employment terminated, to receive a deferred vested benefit in lieu of a distribution of accumulated contributions under § 21-7B. Such a deferred vested benefit shall be in an amount equal to the participant's Accrued benefit as of the date employment terminates and shall commence after application pursuant to § 21-4F as of the first day of the month coincident with or next following the date on which the participant's normal retirement age would be attained if the participant continued in employment until such date.

§ 21-8 Administration.

Plan Administrator. The Plan Administrator shall have the power and authority to do all acts and to execute, acknowledge and deliver all instruments necessary to implement and effectuate the purpose of this Plan. The Plan Administrator may delegate authority to act on its behalf to any persons it deems appropriate.

Police Pension Committee. The Borough may establish a Police Pension Committee. The Committee shall be advisory only.

Authority and Duties of the Plan Administrator.

The Plan Administrator shall have full power and authority to do whatever shall, in its judgment, be reasonably necessary for the proper administration and operation of the Plan. The interpretation or construction placed upon any term or provision of the Plan by the Plan Administrator or any action of the Plan Administrator taken in good faith shall, upon Council's review and approval thereof, be final and conclusive upon all parties hereto, whether employees, participants or other persons concerned. By way of specification and not limitation and except as specifically limited hereafter, the Plan Administrator is authorized:

To construe this Plan;

To determine all questions affecting the eligibility of any employee to participate herein;

(c)

To compute the amount and source of any benefit payable hereunder to any participant or beneficiary;

(d)

To authorize any and all disbursements;

(e)

To prescribe any procedure to be followed by any participant and/or other person in filing any application or Election;

(f)

To prepare and distribute, in such manner as may be required by law or as the Plan Administrator deems appropriate, information explaining the Plan;

(g)

To require from the employer or any participant such information as shall be necessary for the proper administration of the Plan; and

(h)

To appoint and retain any individual to assist in the administration of the Plan, including such legal, clerical, accounting and actuarial services as may be required by any applicable law or laws.

The Plan Administrator shall have no power to add to, subtract from or modify the terms of the Plan or change or add to any benefits provided by the Plan, or to waive or fail to apply any requirements of eligibility for benefits under the Plan. Further, the Plan Administrator shall have no power to adopt, amend, or terminate the Plan, to select or appoint any trustee or to determine or require any contributions to the Plan, said powers being exclusively reserved to Council.

Plan Administrator costs. The Plan Administrator shall serve without compensation for services unless otherwise agreed by Council in writing. All reasonable expenses incident to the functioning of the Plan Administrator, including, but not limited to, fees of accountants, counsel, actuaries and other specialists and other costs of administering the Plan, may be paid from the Pension Fund upon approval by Council to the extent permitted under applicable law and not otherwise paid by the employer.

Hold harmless. No Councilperson, the Plan Administrator, nor any other officer or employee of the Borough involved in the administration of the Plan shall be liable to any person on account of any act or failure to act which is taken or omitted to be taken in good faith in performing their respective duties under the terms of this Plan. To the extent permitted by law, the employer shall, and hereby does agree to, indemnify and hold harmless the Plan Administrator and each successor and each of any such individual's heirs, executors and administrators, and the delegates and appointees (other than any person, bank, firm or corporation which is independent of the employer and which renders services to the Plan for a fee) from any and all liability and expenses, including counsel fees, reasonably incurred in any action, suit or proceeding to which he is or may be made a party by reason of being or having been a member, delegate or appointee of the Plan Administrator, except in matters involving criminal liability, intentional or willful misconduct. If the employer purchases insurance to cover claims of a nature described above, then there shall be no right of indemnification except to the extent of any deductible amount under the insurance coverage or to the extent of the amount the claims exceed the insured amount.

Approval of benefits. The Plan Administrator shall review and approve or deny any application for retirement benefits within 30 days following receipt thereof or within such longer time as may be necessary under the circumstances. Any denial of an application for retirement benefits shall be in writing and shall specify the reason for such denial.

Appeal procedure. Any person whose application for retirement benefits is denied, who questions the amount of benefit paid, who believes a benefit should have commenced which did not so commence or who has some other claim arising under the Plan ("claimant") shall first seek a resolution of such claim under the procedure hereinafter set forth.

Any claimant shall file a notice of the claim with the Plan Administrator which shall fully describe the nature of the claim. The Plan Administrator shall review the claim and make an initial determination approving or denying the claim.

If the claim is denied in whole or in part, the Plan Administrator shall, within 90 days (or such other period as may be established by applicable law) from the time the application is received, mail notice of such denial to the claimant. Such ninety-day period may be extended by the Plan Administrator if special circumstances so require for up to 90 additional days by the Plan Administrator's delivering notice of such extension to the claimant within the first ninety-day period. Any notice hereunder shall be written in a manner calculated to be understood by the claimant and, if a notice of denial, shall set forth (i) the specific Plan provisions on which the denial is based, (ii) an explanation of additional material or information, if any necessary, to perfect such claim and a statement of why such material or information is necessary, and (iii) an explanation of the review procedure.

Upon receipt of notice denying the claim, the claimant shall have the right to request a full and fair review by Council of the initial determination. Such request for review must be made by notice to Council within 60 days of receipt of such notice of denial. During such review, the claimant or a duly authorized representative shall have the right to review any pertinent documents and to submit any issues or comments in writing. Council shall, within 60 days after receipt of the notice requesting such review (or in special circumstances, such as where Council in its sole discretion holds a hearing, within 120 days of receipt of such notice), submit its decision in writing to the person or persons whose claim has been denied, written in a manner calculated to be understood by the claimant and shall contain specific references to the pertinent Plan provisions on which the decision is based. The claimant shall have the right to appeal the decision of Council pursuant to the Local Agency Law, 2 Pa.C.S.A. § 101 et seq. If not so appealed, the decision shall be final, conclusive and binding on all parties.

Any notice of a claim questioning the amount of a benefit in pay status shall be filed within 90 days following the date of the first payment which would be adjusted if the claim is granted unless the Plan Administrator allows a later filing for good cause shown.

(5)

A claimant who does not submit a notice of a claim or a notice requesting a review of a denial of a claim within the time limitations specified above shall be deemed to have waived such claim or right to review.

§ 21-9 Applicable provisions of Internal Revenue Code.

Definitions.

The following definitions apply for purposes of this section only:

LEASED EMPLOYEE

Effective as of January 1, 1997, any person (other than an employee of the recipient) who pursuant to an agreement between the recipient and any other person ("leasing organization") has performed services for the recipient [or for the recipient and related persons determined in accordance with Code Section 414(n)(6)] on a substantially full-time basis for a period of at least one year, and such services are performed under primary direction or control by the recipient.

LIMITATION YEAR

The Plan year.

Leased employees and independent contractors.

Leased employees and independent contractors are not eligible to participate in this Plan. Any person whom Council does not regard as being an employee shall not be eligible to participate.

Limit on compensation.

Compensation is subject to the limitation under Code Section 401(a)(17), which is $220,000 for the Plan Year beginning in 2006. The limit is automatically adjusted periodically, without formal amendment, for changes in the law and cost-of-living adjustments under Code Section 401(a)(17).

Provided that:

[Added 11-15-2011 by Ord. No. 598]

The annual compensation limit under Code Section 401(a)(17), as amended by OBRA '93, shall not apply to any eligible participant, in any future year, to the extent that the application of the annual compensation limit in Code Section 401(a)(17), as amended by OBRA '93, would reduce the amount of annual compensation that is allowed to be taken into account under the fund below the amount that was allowed to be taken into account under the fund as in effect on July 1, 1993. As used in this section, "eligible participants" includes all members who participated in the fund prior to July 1, 1996.

The annual compensation limit under Code Section 401(a)(17), as amended by OBRA '93, will be effective with respect to noneligible participants as of July 1, 1996. As used in this section, "noneligible participants" includes all members who did not participate in the fund prior to July 1, 1996. 401(a)(17) of the Code.

Maximum annual benefit.

General rule. Except as otherwise provided, this Plan shall at all times comply with the provisions of Code Section 415 and the regulations thereunder, the terms of which are specifically incorporated herein by reference. If a benefit payable to a participant under this Plan would otherwise exceed the limit under Code Section 415, the benefit will be reduced to the maximum permissible benefit.

Effective date. If there is more than one permissible effective date for any required change in the Code Section 415(b) provisions, then the change shall be effective as of the latest permissible effective date; however, any adjustment in the dollar limit under Code Section 415(b)(1)(A), whether required or permissible, shall take effect automatically as of the earliest permissible effective date. The "applicable mortality table" in Rev. Rul. 2001-62 is effective from December 31, 2002, through December 31, 2007. Effective as of January 1, 2008, the "applicable mortality table" and "applicable interest rate" are found in Rev. Rul. 2007-67.

[Amended 11-15-2011 by Ord. No. 598]

No reduction in accrued benefits. Notwithstanding the above, no change in the limits under this section shall reduce the benefit of any participant.

Multiple plans. If a participant also participates in one or more other plans that are required to be aggregated with this Plan for purposes of determining the limits under Code Section 415(b) or (e), and if the aggregated benefits would otherwise exceed the limit under Code Section 415(b) or (e), then benefits shall be reduced first under this Plan. [Historical Note: Code Section 415(e) applied for limitation years beginning prior to 2000.]

(5)

Mandatory contributions. Participant contributions are annual additions, and any benefit attributable to participant contributions is not included in the benefit subject to the limits of Code Section 415(b) or (e). This subsection does not apply to contributions "picked-up" in accordance with Code Section 414(h).

(6)

Permissive service credit. Effective as of January 1, 1998, if a participant makes a purchase of permissive service credit [within the meaning of Code Section 415(n)] under the Plan, the benefit derived from the contributions made to purchase the service credit shall be treated as part of the benefit subject to the limitations under this section.

Limit on annual additions.

Annual additions. Except as otherwise provided, annual additions (which include participant contributions) under this Plan shall at all times comply with the provisions of Code Section 415(c) and the regulations thereunder, the terms of which are specifically incorporated herein by reference. If an annual addition would otherwise exceed the limit under Code Section 415(c), the excess annual addition will be allocated in accordance with Reg. § 1.415-6(b)(6)(ii).

Multiple plans. If a participant also participates in one or more other plans that are required to be aggregated with this Plan for purposes of determining the limits under Code Section 415(c), and if the annual additions would otherwise exceed the limit under Code Section 415(c), annual additions will first be reduced under the other plan. If there is more than one other plan, annual additions will first be reduced under the plan with the greatest amount of annual additions.

Effective date. The limits under Code Section 415(c) are adjusted periodically in accordance with changes in the law or cost of living adjustments without the need for a plan amendment. If there is more than one permissible effective date for any required change relating to Code Section 415(c), then the change shall be effective as of the earliest permissible effective date. Effective as of January 1, 2009, to the extent required by the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act), differential wage payments shall be included in compensation.

[Amended 9-18-2012 by Ord. No. 604]

415(c) Compensation. For the purposes of this section, "compensation" includes only those items specified in Treas. Reg. § 1.415(c)-2(b)1 or (2) and excludes all items listed in Treas. Reg. § 1.415(c)-2(c), the terms of which are specifically incorporated herein by reference. Effective as of January 1, 2009, to the extent required by the Heroes Earnings Assistance Tax Relief Tax Act of 2008 (HEART Act), differential wage payments shall be included in IRC § 415(c) compensation.

[Added 11-15-2011 by Ord. No. 598; amended 6-19-2018 by Ord. No. 637]

Direct rollovers.

Effective as of January 1, 1993, if a participant, a spousal beneficiary, or an alternate payee (who is a spouse or former spouse of a participant) is entitled (under other provisions of this Plan) to receive an "eligible rollover distribution" of at least $200, the distributee may elect that the Plan Administrator transfer all or part (provided that the part is at least $500 to any "eligible retirement plan" capable of accepting such a transfer.

ELIGIBLE ROLLOVER DISTRIBUTION

For purposes of this section, the following definitions shall apply:

[Amended 11-15-2011 by Ord. No. 598]

DIRECT ROLLOVER

A payment by the Plan to the eligible retirement plan specified by the distributee.

DISTRIBUTEE

Includes an employee or former employee. In addition, the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), are distributees with regard to the interest of the spouse or former spouse.

ELIGIBLE RETIREMENT PLAN

An individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in Code Section 401(a), that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, prior to January 1, 2002, an eligible retirement plan was an individual retirement account or individual retirement annuity. Effective as of January 1, 2002, an "eligible retirement plan" includes an annuity contract described in Code Section 403(b) and an eligible plan under Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this plan. Effective January 1, 2008, a Roth IRA is an "eligible retirement plan."

Any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: (i) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of 10 years or more; (ii) any distribution to the extent such distribution is required under Code Section 401(a)(9); (iii) the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities); and (iv) effective as of January 1, 2002, any hardship distribution. Effective as of January 1, 2002, clause (iii) does not apply to any after-tax participant contributions that are paid to an individual retirement account or annuity described in Code Section 408(a) or (b), or to a qualified defined contribution plan described in Code Section 401(a) or 403(a) or effective as of January 1, 2007, any 403(b) annuity contract that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

Non-spouse beneficiaries. Effective as of January 1, 2007, if a beneficiary who is not a surviving spouse is entitled to receive what would otherwise be an eligible rollover distribution, the beneficiary may, in accordance with Code Section 402(c)(11), make a trustee-to-trustee transfer of that amount to an IRA or individual retirement annuity (other than an endowment contract); provided that:

[Added 11-15-2011 by Ord. No. 598]

The transfer is made not later than the end of the fourth year after the year of the participant's death, and

The account or annuity to which the amount is transferred is treated as an inherited IRA or individual retirement annuity in accordance with Code Section 408(d)(3)(C).

Minimum required distributions.

Notwithstanding any provision in this Plan to the contrary, the distribution of a participant's benefits shall be made in accordance with the requirements and conditions of and shall otherwise comply with Code Section 401(a)(9). For purposes of complying with Code Section 401(a)(9), life expectancies shall be determined in accordance with the 1987 proposed regulations prior to January 1, 2003, and with the final regulations [§ 1.401(a)(9)-1 through § 1.401(a)(9)-9] on or after January 1, 2003.

Beginning of distribution.

Effective as of January 1, 1997, distribution of a participant's benefits shall begin not later than April 1 of the calendar year following the later of:

[1]

The calendar year in which the participant attains age 70 1/2; or

[2]

The calendar year in which the participant retires.

Distributions must be made over a period not exceeding the life of the participant or the joint lives a participant and his beneficiary.

Distributions to a participant and his Beneficiaries shall only be made in accordance with the incidental death benefit requirements of Code Section 401(a)(9)(G) and the regulations thereunder.

This section does not authorize the payment of any benefit in any form not permitted under another provision of the Plan.

Approved domestic relations orders.

All rights and benefits, including elections, provided to a participant in this Plan shall be subject to the rights afforded to any "alternate payee" under what is recognized pursuant to state law support provisions as an approved domestic relations order.

Credit for qualified military service.

Effective as of December 12, 1994, notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance Code Section 414(u).

Vesting upon plan termination.

Upon the termination of this Plan, or complete discontinuance of contributions [within the meaning of pre-ERISA Code Section 401(a)(7)] to this Plan, each employee as of the date of such termination or discontinuance shall become vested to the extent that the Plan is funded.

Consent for lump-sum distributions.

Effective January 1, 2006, notwithstanding any other provision of the Plan, any distribution to a participant made prior to the earlier of age 62 or normal retirement age of an amount in excess of $1,000 that is an eligible rollover distribution as set forth in the Plan and the Code shall be made only upon consent of the participant.

Heroes Earnings Assistance and Relief Tax Act (HEART Act). Effective for deaths occurring on or after January 1, 2007, if a participant dies while performing qualified military service [as defined in IRC § 414(u)], the survivors of the participant are entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service) provided under the Plan had the participant resumed and then terminated employment on account of death.

[Added 11-15-2011 by Ord. No. 598; amended 9-18-2012 by Ord. No. 604]

Vesting at normal retirement age. Effective July 15, 1980, upon attainment of normal retirement age a participant shall be 100% vested in his normal retirement benefit.

[Added 11-15-2011 by Ord. No. 598]

Mandatory distributions. Effective January 1, 2006, in the event of a mandatory distribution under the terms of this Plan, if the participant does not elect to have the distribution paid directly to an eligible retirement plan specified by the participant in a direct rollover, or to receive the distribution directly, then the distribution will be paid in a direct rollover to an IRA designated by the Plan.

[Added 11-15-2011 by Ord. No. 598]

Intent to comply with Internal Revenue Code.

[Added 6-19-2018 by Ord. No. 637]

The employer intends that this Plan shall meet all the pertinent requirements established for a governmental plan [as defined in Internal Revenue Code § 414(d)] under Internal Revenue Code § 401(a), as amended, and the Plan shall be interpreted, wherever possible, to comply with the terms of said Code and all formal regulations and rulings pertinent to the Plan and trust agreement.

§ 21-10 Pension Fund.

Operation of the Pension Fund.

Council is hereby authorized to hold and supervise the investment of the assets of the Pension Fund in trust, subject to the provisions of the laws of the commonwealth and of this Plan and any amendment thereto. To the extent that a trust is required by law and no third-party trustee has been appointed, a trust is hereby created with Council as trustee.

The Pension Fund shall be used to pay benefits as provided in the Plan and, to the extent not paid directly by the employer, to pay the expenses of administering the Plan pursuant to authorization by the employer.

The employer intends the Plan to be permanent and for the exclusive benefit of its employees. It expects to make the contributions to the Pension Fund required under the Plan. The employer shall not be liable in any manner for any insufficiency in the Pension Fund; benefits are payable only from the Pension Fund, and only to the extent that there are monies available therein. The Pension Fund will consist of all funds held by the employer under the Plan, including contributions made pursuant to the provisions hereof and the investments, reinvestments and proceeds thereof. The Pension Fund shall be held, managed, and administered pursuant to the terms of the Plan. Except as otherwise expressly provided in the Plan, the employer has exclusive authority and discretion to manage and control the Pension Fund assets. The employer may, however, appoint a trustee, custodian and/or investment manager, at its sole discretion

The employer may also enter into a freestanding trust agreement in conjunction with appointing a trustee, in which case the provisions of the freestanding trust agreement shall supersede this Article.

Powers and duties of employer. With respect to the Pension Fund, the employer shall have the following powers, rights and duties, in addition to those vested in it elsewhere in the Plan or by law, unless such duties are delegated.

To retain in cash so much of the Pension Fund as it deems advisable and to deposit any cash so retained in any bank or similar financial institution (including any such institution which may be appointed to serve as trustee hereunder), without liability for interest thereon.

To invest and reinvest the principal and income of the fund and keep said fund invested, without distinction between principal and income, in securities which are at the time legal investments for fiduciaries under Chapter 73 of the Pennsylvania Probate, Estates and Fiduciaries Code, or as the same may be subsequently modified or amended.

To sell property held in the fund at either public or private sale for cash or on credit at such times as it may deem appropriate; to exchange such property; to grant options for the purchase or exchange thereof.

To consent to and participate in any plan of reorganization, consolidation, merger, extension or other similar plan affecting property held in the fund; to consent to any contract, lease, mortgage, purchase, sale or other action by any corporation pursuant to any such plan.

(5)

To exercise all conversion and subscription rights pertaining to property held in the fund.

(6)

To exercise all voting rights with respect to property held in the fund and in connection therewith to grant proxies, discretionary or otherwise.

(7)

To place money at any time in a deposit bank deemed to be appropriate for the purposes of this Plan no matter where situated, including in those cases where a bank has been appointed to serve as trustee hereunder, the savings department of its own commercial bank.

(8)

In addition to the foregoing powers, the employer shall also have all of the powers, rights, and privileges conferred upon trustees by Chapter 73 of the Probate, Estates and Fiduciaries Code, or as the same may be subsequently modified or amended, and the power to do all acts, take all proceedings and execute all rights and privileges, although not specifically mentioned herein, as the employer may deem necessary to administer the Pension Fund.

(9)

To maintain and invest the assets of this Plan on a collective and commingled basis with the assets of other pension plans maintained by the employer, provided that the assets of each respective plan shall be accounted for and administered separately.

(10)

To invest the assets of the Pension Fund in any collective commingled trust fund maintained by a bank or trust company, including any bank or trust company which may act as a trustee hereunder. In this connection, the commingling of the assets of this Plan with assets of other eligible, participating plans through such a medium is hereby specifically authorized. Any assets of the Plan which may be so added to such collective trusts shall be subject to all of the provisions of the applicable declaration of trust, as amended from time to time, which declaration, if required by its terms or by applicable law, is hereby adopted as part of the Plan, to the extent of the participation in such collective or commingled trust fund by the Plan.

(11)

To make any payment or distribution required or advisable to carry out the provisions of the Plan, provided that if a trustee is appointed by the employer, such trustee shall make such distribution only at the direction of the employer.

(12)

To compromise, contest, arbitrate, enforce or abandon claims and demands with respect to the Plan.

(13)

To retain any funds or property subject to any dispute without liability for the payment of interest thereon, and to decline to make payment or delivery thereof until final adjudication is made by a court of competent jurisdiction.

(14)

To pay, and to deduct from and charge against the Pension Fund, any taxes which may be imposed thereon, whether with respect to the income, property or transfer thereof, or upon or with respect to the interest of any person therein, which the Fund is required to pay; to contest, in its discretion, the validity or amount of any tax, assessment, claim or demand which may be levied or made against or in respect of the Pension Fund, the income, property or transfer thereof, or in any matter or thing connected therewith.

(15)

To appoint any persons or firms (including, but not limited to, accountants, investment advisors, counsel, actuaries, physicians, appraisers, consultants, professional plan administrators and other specialists), or otherwise act to secure specialized advice or assistance, as it deems necessary or desirable in connection with the management of the Fund; to the extent not prohibited by applicable law, the employer shall be entitled to rely conclusively upon and shall be fully protected in any action or omission taken by it in good faith reliance upon, the advice or opinion of such persons or firms, provided such persons or firms were prudently chosen by the employer, taking into account the interests of the participants and Beneficiaries and with due regard to the ability of the persons or firms to perform their assigned functions.

(16)

To retain the services of one or more persons or firms for the management of (including the power to acquire and dispose of) all or any part of the Fund assets, provided that each of such persons or firms is registered as an investment advisor under the Investment Advisors Act of 1940, is a bank (as defined in that act), or is an insurance company qualified to manage, acquire or dispose of pension trust assets under the laws of more than one state; in such event, the employer shall follow the directions of such Investment Manager or Managers with respect to the acquisition and disposition of fund assets, but shall not be liable for the acts or omissions of such Investment Manager or Managers, not shall it be under any obligation to review or otherwise manage any Fund assets which are subject to the management of such investment manager or managers. If the employer appoints a trustee, the trustee shall not be permitted to retain such an investment manager except with the express written consent of the employer.

Common investments. The employer shall not be required to make separate investments for individual participants or to maintain separate investments for each participant's account, but may invest contributions and any profits or gains therefrom in common investments.

Compensation and expenses of appointed trustee. If a third-party trustee is appointed, the trustee shall be entitled to such reasonable compensation as shall from time to time be agreed upon by the employer and the trustee, unless such compensation is prohibited by law. Such compensation, and all expenses reasonably incurred by the trustee in carrying out its functions, shall constitute a charge upon the employer or the Pension Fund, which may be executed at any time after 30 days' written notice to the employer. The employer shall be under no obligation to pay such costs and expenses, and, in the event of its failure to do so, the trustee shall be entitled to pay the same, or to be reimbursed for the payment thereof, from the Pension Fund.

Periodic accounting. If a trustee is appointed, the Pension Fund shall be evaluated annually, or at more frequent intervals, by the trustee and a written accounting rendered as of each fiscal year end of the Fund, and as of the effective date of any removal or resignation of the trustee, and such additional dates as requested by the employer, showing the condition of the Fund and all receipts, disbursements and other transactions effected by the trustee during the period covered by the accounting, based on fair market values prevailing as of such date.

Value of the Pension Fund. All determinations as to the value of the assets of the Pension Fund, and as to the amount of the liabilities thereof, shall be made by the employer or its appointed trustee, whose decisions shall be final and conclusive and binding on all parties hereto, the participants and Beneficiaries and their estates. In making any such determination, the employer or trustee shall be entitled to seek and rely upon the opinion of or any information furnished by brokers, appraisers and other experts, and shall also be entitled to rely upon reports as to sales and quotations, both on security exchanges and otherwise as contained in newspapers and in financial publications.

§ 21-11 Amendment and termination of Pension Plan or Pension Fund and conformance with Act 600.

Amendment of the Plan. The employer may amend this Plan at any time or from time to time by an instrument in writing executed in the name of the employer under its municipal seal by officers duly authorized to execute such instrument and delivered to Council; provided, however:

That no amendment shall deprive any participant or any beneficiary of a deceased participant of any of the benefits to which he is entitled under this Plan with respect to contributions previously made;

That no amendment shall provide for the use of funds or assets held under this Plan other than for the benefit of employees and no funds contributed to this Plan or assets of this Plan shall, except as provided in § 21-11E, ever revert to or be used or enjoyed by the employer; and

That no amendment to the Plan which provides for a benefit modification shall be made unless the cost estimate described in § 21-12C has been prepared and presented to Council in accordance with the Act.

Termination of the Plan. Subject to state law and collective bargaining limitations, the employer shall have the power to terminate this Plan in its entirety at any time.

Automatic termination of contributions. Subject to the provisions of the Act governing financially distressed municipalities, the liability of the employer to make contributions to the Pension Fund shall automatically terminate upon liquidation or dissolution of the employer, upon its adjudication as a bankrupt or upon the making of a general assignment for the benefit of its creditors.

Distribution upon termination.

In the event of the termination of the Plan, all amounts of vested benefits accrued by the affected participants as of the date of such termination, to the extent funded on such date, shall be nonforfeitable hereunder. In the event of termination of the Plan, the employer shall direct either (a) that the Plan Administrator continue to hold the vested accrued benefits of participants in the Pension Fund in accordance with the provisions of the Plan (other than those provisions related to forfeitures) without regard to such termination until all funds have been distributed in accordance with the provisions; or (b) that the Plan Administrator immediately distribute to each participant an amount equal to the vested accrued benefit to the date.

If there are insufficient assets in the Pension Fund to provide for all vested accrued benefits as of the date of Plan termination, priority shall first be given to the distribution of any amounts attributable to mandatory or voluntary employee contributions before assets are applied to the distribution of any vested benefits attributable to other sources hereunder.

All other assets attributable to the terminated Plan shall be distributed and disposed of in accordance with the provisions of applicable law and the terms of any instrument adopted by the employer which effects such termination.

Residual assets. If all liabilities to vested participants and any others entitled to receive a benefit under the terms of the Plan have been satisfied and there remain any residual assets in the Pension Fund, such residual assets remaining shall be returned to the employer insofar as such return does not contravene any provision of law, and any remaining balance, in excess of employer contributions, shall be returned to the commonwealth.

Exclusive benefit rule. In the event of the discontinuance and termination of the Plan as provided herein, the employer shall dispose of the Pension Fund in accordance with the terms of the Plan and applicable law; at no time prior to the satisfaction of all liabilities under the Plan shall any part of the corpus or income of the Pension Fund, after deducting any administrative or other expenses properly chargeable to the Pension Fund, be used for or diverted to purposes other than for the exclusive benefit of the participants in the Plan, their Beneficiaries or their estates.

Verification of Pension Plan as Act 600 Plan.

The Plan has been, is, and shall be operated and provide benefits only in compliance with Act 600 of the Commonwealth of Pennsylvania.

Any resolution, policy, provisions, interpretation stating otherwise is of no force and effect and the Borough, by enacting this section, again has clearly established that the Borough Police Pension Plan is, and has been, an Act 600 Plan.

Any footnote in the Code of the Borough of Heidelberg, notation, memorandum, and opinion inconsistent with Act 600 is specifically declared unenforceable, invalid, and not authorized by the Borough.

The only Police Pension Plan adopted and enforced by the Borough of Heidelberg is an Act 600 Pension Plan, which applies to all full-time officers of the Borough of Heidelberg.

§ 21-12 Compliance with Municipal Pension Plan Funding Standard and Recovery Act of 1984.

Actuarial valuations.

The Plan's actuary shall perform an actuarial valuation at least biennially.

Such biennial actuarial valuation report shall be made as of the beginning of each plan year occurring in an odd-numbered calendar year, beginning with the year 1985.

Such actuarial valuation shall be prepared and certified by an approved actuary, as such term is defined in the Act.

The expenses attributable to the preparation of any actuarial valuation report or investigation required by the Act or any other expense which is permissible under the terms of the Act and which are directly associated with administering the Plan shall be an allowable administrative expense payable from the assets of the Pension Fund. Such allowable expenses shall include but not be limited to the following:

Investment costs associated with obtaining authorized investments and investment management fees;

Accounting expenses;

(c)

Premiums for insurance coverage on Fund assets;

(d)

Reasonable and necessary counsel fees incurred for advice or to defend the Fund; and

(e)

Legitimate travel and education expenses for Plan officials; provided, however, that the municipal officials of the employer, in their fiduciary role, shall monitor the services provided to the Plan to ensure that the expenses are necessary and reasonable and benefit the Plan; and further provided that the Plan Administrator shall document all such expenses item by item, and where necessary, hour by hour.

Duties of Chief Administrative Officer.

Such actuarial reports shall be prepared and filed under the supervision of the Chief Administrative Officer.