[HISTORY: Adopted by the Board of Supervisors
of the Township of Lower Makefield as indicated in article histories.
Amendments noted where applicable.]
[Adopted 9-1-2010 by Ord. No. 384[1]]
[1]
Editor's Note: This ordinance also repealed
former Art. I, Police Pension Plan, adopted 8-6-2008 by Ord. No. 377.
Pursuant to Act 180 of 1972, as amended, there
is hereby established the Lower Makefield Township Police Pension
Plan (hereinafter referred to as the "plan") to provide for the benefit
of such police employees of the Township as shall receive an honorable
discharge therefrom by reason of age and service or service disability.
The pension allowed to those who are retired by reason of service-related
disabilities shall be in conformity with a uniform scale.
When used herein, the following terms shall have the following
meanings:
January 1 of each Plan Year.
The monthly average of the compensation received during the
last 36 months of employment.
The Internal Revenue Code of 1986, as now in effect or as
hereafter amended.[1] All citations to sections of the code are to such sections
as they may from time to time be amended or renumbered.
Compensation reportable as wages, tips and other compensation
on Federal Form W-2, as required by Sections 6041, 6051 and 6052 of
the Internal Revenue Code, including all gross reportable base wages,
overtime pay, holiday pay, shift differential, standby pay, education
pay, longevity pay and accrued vacation. Excluded from compensation
at this time shall be: severance pay, accrued sick day pay or other
similar, nonrecurring compensation. Compensation shall include only
that compensation which is actually paid to the participant during
the applicable period (last 36 months). "Compensation" shall also
mean employee contributions made to deferred compensation plans (i.
e., Section 457 plans) as applicable by code sections of the Internal
Revenue Service and regulations related to same. For officers hired
after January 1, 2010, accrued vacation time shall not be included
as compensation for pension calculation purposes. In addition, "compensation"
shall also mean employee contributions made pursuant to a salary reduction
agreement which are not currently includible in the participant's
gross income by reason of the application of code Sections 125, 402(a),
402(h)(1)(B) or 457(a). The annual compensation of each participant
taken into account for determining all benefits provided under the
plan for any plan year shall not exceed $200,000, as adjusted for
increases in the cost-of-living in accordance with Section 401(a)(17)(B)
of the Internal Revenue Code. The cost-of-living adjustment in effect
for a calendar year applies to any determination period beginning
in such calendar year. If a determination period consists of fewer
than 12 months, the annual compensation limit is an amount equal to
the otherwise applicable annual compensation limit multiplied by a
fraction, the numerator of which is the number of months in the short
determination period, and the denominator of which is 12.
[Amended 12-21-2022 by Ord. No. 436]
Deferred Retirement Option Plan.
A separate account created to accept DROP participants' monthly
pension checks while DROP participants.
The date provided in § 34-5C.
June 6, 1960.
Any individual employed by the employer in a uniformed capacity
of a police officer. This term includes both police command officer
and noncommand police officer.
[Amended 12-21-2022 by Ord. No. 436]
Lower Makefield Township.
An employee whose customary employment is for 40 or more
hours per week.
The United States Internal Revenue Service.
The United States Department of Labor.
Any individual employed by employer in the capacity of a
police officer below the rank of Lieutenant and who is a member of
the bargaining unit represented by the Lower Makefield Township Police
Benevolent Association, or its successor organization.
[Added 12-21-2022 by Ord. No. 436]
The date defined in § 34-5A(1).
Any employee who is enrolled in the participation of the plan as provided in § 34-3.
Lower Makefield Township Police Pension Plan.
The twelve-month consecutive period which begins on January
1 and ends on December 31.
Any individual employed by employer in the capacity of a
police officer who is in a command position and has the rank of Lieutenant,
Captain, or Chief of Police.
[Added 12-21-2022 by Ord. No. 436]
The applicable regulations issued under the code or the Act
by the IRS, the Labor Department or any other governmental authority
and any temporary rules promulgated by such authorities pending the
issuance of such regulations.
A participant's normal retirement date, early retirement date or postponed retirement date, whichever has become effective pursuant to § 34-5.
Average monthly compensation.
The trustee or trustees of the trust.
The trust established by the employer as a part of the plan.
The first day of each plan year and any other date as the
Committee, in its discretion, may from time to time determine.
The portion of a participant's account which has become nonforfeitable pursuant to § 34-5F(2).
[1]
Editor's Note: See 26 U.S.C. § 1 et seq.
Each police officer employee who is holding a full-time position
in the Police Department and who works not less than an average of
40 hours per week for a stated salary or compensation shall become
a participant of the plan on the first day of the calendar month coinciding
with or next following the completion of six months of total service.
A.
In general. Except as provided in § 34-4D, a person is credited with all periods of service in which he/she is employed by the employer (or any related employer) as an employee, including working days, vacation, sick days, holidays, bereavement days, jury duty time, nonscheduled days (such as weekends or the equivalent) and any period of short-term disability up to 12 months during which an employee is receiving disability benefits.
B.
Intervening military service.
(1)
With six months or more of prior service. Any member of the police
force of Lower Makefield Township who has been a regularly appointed
employee of the Department for a period of six months and who thereafter
shall enter into the military service of the United States shall have
credited to his or her employment record for pension or disability
benefits all of the time spent by him or her in such service of the
United States military if such person returns or has heretofore returned
to his employment within six months after his or her separation from
the service.
(2)
With less than six months of prior service. Any member of the police
force who was employed by the Department for less than six months
before leaving to enter the military service of the United States
shall have such military service credited for the pension or disability
benefits, provided:
(a)
The person returns to employment with the employer (or any related
employer) at a time when the employer (or any related employer) is
legally obligated to reemploy the person under the Uniformed Services
Employment and Reemployment Rights Act of 1994, 38 U.S.C. § 4301
et seq., and any amendments, supplements or successor legislation;
and
(b)
Such person pays to the plan the amount of employee contributions
that such person would have had to make had he been employed by the
employer during the time he was in military service. Any payment to
the plan shall be made during the period beginning with the date of
reemployment and whose duration is three times the period of the person's
service in the military, not to exceed five years.
C.
Back pay. A person is also credited with service during any period
for which back pay, irrespective of mitigation of damages, is either
awarded or agreed to by the employer.
A.
Normal retirement.
(1)
Normal retirement date.
[Amended 2-17-2021 by Ord. No. 424]
(a)
Normal retirement shall be established by the completion of
at least 25 years of credited service and the officer attaining the
age of 53 years.
(b)
The normal retirement date for a participant hired on or after
July 10, 1957, shall be the first day of the month coinciding or following
the later of his or her 53rd birthday or the completion of 25 years
of credited service.
(2)
Amount of normal retirement benefit. The retirement benefit of a
participant who obtains normal retirement shall be 50% of the average
last 36 months of compensation. "Compensation" shall be defined as
follows: all gross reportable base wages, holiday pay, shift differential,
standby pay, education pay, longevity pay and accrued vacation. Excluded
from compensation at this time shall be: overtime pay, severance pay,
accrued sick day pay or other similar, nonrecurring compensation.
Compensation shall include only that compensation which is actually
paid to the participant during the applicable period (last 36 months).
"Compensation" shall also mean employee contributions made to deferred
compensation plans (i.e., Section 457 plans), as applicable by code
sections of the Internal Revenue Service and regulations related to
same. For officers hired after Janurary 1, 2010, accrued vacation
time shall not be included as compensation for pension calculation
purposes.
(3)
Service increment benefit. A length-of-service increment will be
provided according to Act 30, as follows: Beginning at the completion
of 26 years of service, $100 a month will be added to the officer's
calculated pension benefit and continue for each completed year of
service up to 30 years or more, with the total maximum amount of $500
per month. This benefit will be provided to those officers who retire
or enter DROP prior to midnight, December 31, 2013.
(4)
Optional form of benefit. For a participant hired prior to March 10, 2003, in lieu of having his pension paid under § 34-5A(2) and subject to § 34-5E(1), a participant may elect to have his pension paid under the optional form of pension which shall be a life with ten-year certain annuity form which shall be the actuarial equivalent of a joint and 50% survivor annuity form considered as the normal form of benefit; provided, however, that if the participant's election occurs within the two-year period immediately preceding his retirement date and subsequent to the 31st day following the issue date of the contract, he will be required to furnish the employer with evidence satisfactory to the employer and the insurance company of his good health at the time of election before such election will become effective. A participant's election of the option pursuant to this section shall be made, in writing, prior to his retirement date in a form satisfactory to the employer. Once the option has been elected, it cannot be changed or rescinded without the consent of the employer. The life with ten-year certain annuity optional form of pension provides reduced monthly payments to the participant, the first payment payable on his retirement date, provided that he is then living. Subsequent monthly payments are payable to the participant on the first day of each month thereafter throughout his remaining lifetime, terminating with the payment payable on the first day of the month in which the participant's death occurs. If the participant's death occurs before he has received 120 monthly payments, such monthly payments will be continued to the participant's beneficiary until a total of 120 monthly payments have been made to the participant and his beneficiary. In determining the actuarial reduction used to reflect the life with ten-year certain annuity form, the equivalent actuarial value 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.
B.
Postponed retirement. A participant may elect to postpone his retirement
beyond his normal retirement date. His postponed retirement benefit
will be computed in the same manner as the normal retirement benefit,
using compensation to the postponed retirement date.
C.
Early retirement. If an participant leaves the employment of the Township, not as a result of disciplinary proceedings, death or disability, and that officer shall have completed at least 20 years of service to the Township, then that participant shall receive a proportionate share of the normal retirement benefit calculated pursuant to § 34-5A(2) above, equal to the percentage of the number of years of credited service the participant has completed bears to 25 years.
D.
Permanent, service-related disability retirement.
(1)
Eligibility. If a participant shall qualify for a permanent and total
service-related disability benefit under the provisions of the plan,
such officer shall be eligible to receive a disability benefit from
the plan.
(2)
Disability retirement date. The disability retirement date for participants
shall be the first day of the month following the date of service-related
disability. The disability retirement date may immediately follow
any period of time during which the participant was receiving credited
services during short-term disability benefits.
(3)
Amount of disability benefit.
(a)
A participant whose employment with the employer is severed
due to a total and permanent disability will become entitled to disability
payments commencing on the first day of the calendar month following
the date his employment was severed and continuing on the first day
of each month thereafter until the police officer's death. The monthly
amount of the disability payments payable to the participant for a
work-related disability shall be 50% of the officer's salary at the
time the disability was incurred, provided that any police officer
who receives benefits for the same injuries under the Social Security
Act (49 Stat. 620, 42 U.S.C. § 301 et seq.) shall have the
disability benefit offset or reduced by the amount of such social
security benefits. All service time and compensation accrued during
any period of short-term disability immediately preceding the severance
of employment shall be excluded from the calculation of benefits payable
pursuant to a disability pension under this subsection.
(b)
"Total and permanent disability" means an officer's inability
to perform the full duties of a police officer by reason of a medically
determinable physical or mental impairment that can be expected to
result in death or to be of long, continued and an indefinite duration
as determined by the employer on the basis of medical advice rendered
by a physician selected by the employer, where such disability stems
from a work-related injury or illness.
E.
Death benefits.
(1)
Qualification for death benefit.
(a)
The beneficiaries [as defined in Subsection E(4)] of a police officer shall be entitled to receive a death benefit if the police officer dies:
[1]
After he/she has begun receiving benefits under a normal retirement
benefit; or
[2]
After he/she has begun receiving disability retirement benefits,
provided that such benefits did not terminate prior to his/her death
because he/she ceased to be disabled; or
[3]
While still employed by the Township and after having met the
age and service requirements for normal retirement; or
[4]
Prior to commencement of any retirement benefit under this section
and was vested in his/her accrued benefit.
(2)
Death benefit form and amount of payments. The death benefit shall
be paid in a series of monthly payments:
(a)
Beginning on the first day of the month following the month of the police officer's death under the conditions described in Subsection E(1)(a)[1], [2] or [3];
(b)
Beginning on the first day of the month following the expected normal retirement date of the deceased police officer and described in Subsection E(1)(a)[4]; and
(c)
Continuing on the first day of each succeeding month until there
is no person who qualifies as a beneficiary;
(d)
In a monthly amount equal to:
[1]
Seventy-five percent of the monthly amount being received by the police officer at the time of his/her death, or would have been receiving had the police officer been retired at the date of death, described in Subsection E(1)(a)[1], [2] or [3]; or
[2]
Seventy-five percent of the monthly vested accrued amount the police officer would have been entitled to receive, described in Subsection E(1)(a)[4].
(3)
Killed-in-service death benefit.
(a)
The beneficiaries of a police officer who dies due to injuries
incurred while performing the duties of his/her employment shall be
entitled to receive a killed-in-service death benefit, which shall
consist of a series of monthly payments:
(b)
In the event that an officer is killed in the line of duty,
his/her surviving spouse or beneficiary, as the case may be, shall
first be paid the benefits provided by Act 51, with the commonwealth
serving as a primary source. To the extent that any difference exists
between those Act 51 benefits and the killed-in-service benefits that
were provided under the agreement prior to the effective date of Act
51, the Township shall be secondarily liable only for such difference
in benefits. The foregoing provision shall be without prejudice to
the right of the association and/or affected survivors to assert the
unconstitutionality of Act 51 to the extent that it reduces the pension
benefits of officers who are on the payroll as of its effective date.
If, after applicable case law, arbitration or other applicable ruling,
it is determined that Act 51 benefits are the exclusive source for
killed-in-service recovery, that any Township attempt to pay any benefits
will be deemed a waiver of its reliance on Act 51 benefits for survivors'
receipt of such payment, the parties shall negotiate an alternative,
if any, to such Township payment of the excess. If they are unable
to reach an agreement, the issue shall be submitted to final and binding
interest arbitration in accordance with the procedures contained in
Act 111. If the state law allows for coordination of benefits between
Act 51 and the Township-sponsored pension plan, the appropriate documents
will be amended accordingly.
(4)
Beneficiaries.
(a)
For purposes of the death benefit and killed-in-service benefit,
the beneficiary of a police officer shall be his/her spouse. If there
is no spouse or if the spouse survives and subsequently dies, then
the death benefit shall be payable to the police officer's child or
children who have not yet attained age 18 (or are attending college
and have not yet attained age 23). For purposes of this subsection,
a person is attending college if he/she is registered at an accredited
institution of higher learning and is carrying a minimum course load
of seven credit hours per semester. The death benefit or killed-in-service
benefit shall be payable to eligible children in equal shares.
(b)
For purposes of the death benefit return of contributions in Subsection E(5), the beneficiary(ies) shall be the spouse or eligible children as above. In the case where there is no spouse or eligible children, the participant may designate the beneficiary to whom the death benefit return of contributions shall be paid.
(5)
Death benefit return of accumulated employee contributions.
(a)
In general. If a police officer dies at a time when his/her
beneficiaries are not eligible to receive a death benefit or killed-in-service
death benefit or has no beneficiaries, and has not received any payments
under a normal retirement benefit, disability retirement benefit or
vested benefit, then the plan shall distribute an amount equal to
the amount of the police officer's accumulated contributions, plus
interest at the rate of 5% per annum, to the police officer's named
beneficiary(ies). If the police officer failed to designate a beneficiary
or if no designated beneficiary shall have survived the police officer,
the distribution shall be made to the estate of the police officer.
(6)
No other death benefits. Except as provided in this section, no police
officer or former police officer and no estate, heir or beneficiary
of any police officer or former police officer shall receive any payment
or benefit under this plan or from the trust due to the death of a
police officer or former police officer.
F.
Accrued benefit and vested benefit.
(1)
Accrued benefit. A member's accrued benefit as of any applicable date will be equal to the product obtained by multiplying the normal retirement benefit determined in accordance with § 34-5A using average monthly compensation as of the date employment terminated, by a fraction, the numerator of which is the years of service to the date employment terminated and the denominator of which is the total years of service the member would have earned if the member continued to work to the normal retirement date.
(2)
Vested benefit.
(a)
A participant who terminates employment with the Township prior
to his or her normal retirement date shall have a vested benefit calculated
by multiplying the member's accrued benefit by the following applicable
percentage:
|
Years of Service
|
Vesting Percentage
| |
|---|---|---|
|
Less than 12
|
0%
| |
|
12 or more
|
100%
|
(b)
The participant's vested benefit shall be payable commencing
on his or her normal retirement date. If the participant has met the
service requirement for early retirement, he or she may elect to commence
to receive the vested benefit as of the first of any month on or after
his or her early retirement date.
G.
Cost-of-living adjustment.
(1)
The Township Supervisors of Lower Makefield shall have the authority,
upon the recommendation of the Police Pension Committee, to provide
by resolution for a cost-of-living increase for those participants
in the plan receiving retirement benefits and who qualify under applicable
law. These cost-of-living increases may be granted; provided, however,
that such cost-of-living increase shall not exceed the following:
(2)
No cost-of-living increase shall be granted which would impair the
actuarial soundness of the Lower Makefield Township Police Pension
Plan. Prior to the recommendation of the cost-of living increase,
the Police Pension Committee shall direct the fund actuary to submit
a written cost estimate of the funding cost of such an adjustment.
H.
Misstatements and adjustments. If it is found that the benefits provided
under the plan with respect to a participant are incorrect because
of a misstatement as to his age, length of credited service, earnings
or any other relevant fact, the benefits shall be equitably adjusted
on the basis of the correct facts with respect to such participant.
The amount of the benefits will be adjusted to the amount which could
have been provided on the basis of the correct facts. If it is ascertained
that an overpayment has been made, the amount of such overpayment
will be charged against any further payments to the participant. If
it is ascertained that an underpayment has been made by the plan,
the amount of such underpayment shall be paid by the plan to the participant
or person entitled thereto, subject to the sufficiency of the trust
fund of the plan.
A.
Contributions by police officers.
(1)
Contributions by police command officers. Police command officers
shall make contributions to the Lower Makefield Township Police Pension
Plan in accordance with the following schedule:
[Amended 12-16-2020 by Res. No. 2432; 12-16-2020 by Res. No. 2433; 2-17-2021 by Ord. No. 424; 12-15-2021 by Res. No. 2465; 12-21-2022 by Ord. No.
436]
(2)
Contributions
by noncommand police officers. Noncommand police officers shall make
contributions to the Lower Makefield Township Police Pension Plan
in accordance with the following schedule:
[Added 12-21-2022 by Ord. No. 436][1]
(3)
The Township Supervisors may, on an annual basis by resolution, reduce
or eliminate payments into the fund by police officers.
(4)
Any employee who discontinues his employment in the Township and
who, for any reason whatsoever, shall be unable to receive a pension
after having contributed any charge to the plan shall be entitled
to a refund of all such moneys paid by him into such plan, with interest
at the rate of 5% per annum. Such interest is to be credited for the
period commencing on the January first following the year in which
the contribution is made and ending on the first of the month in which
distribution is made.
[Amended 12-21-2022 by Ord. No. 436]
B.
Other sources of funding. In addition to contributions made by a police command officer or a noncommand police officer under Subsection A, funding of the plan shall consist of payments made to the Township by the Commonwealth of Pennsylvania for the purpose of retirement or disability pensions for police employees under any present or future law providing therefor; by such appropriations thereto as may be lawfully made by the Township; by gifts, grants and bequests received by the plan; and by receipts from investment of the plan.
[Amended 12-21-2022 by Ord. No. 436]
A.
Police Pension Committee. The Lower Makefield Township Police Pension
Plan Committee duties and responsibilities shall be defined by resolution
of the Board of Supervisors.
B.
Chief Administrative Officer. The Township Manager or his designee
shall be the Chief Administrative Officer (CAO) of the plan and shall
have primary responsibility for the administration of the pension
plan. The duties of the CAO shall be as follows:
(1)
Supervise and direct the preparation of actuarial reports;
(2)
Certify and file actuarial valuation reports with the Public Employee
Retirement Commission;
(3)
Make actuarial report information available to the plan members;
(4)
Annually, determine and submit to the Township Supervisors the financial
requirements of the pension plan and minimum municipal obligation;
and
(5)
Provide the Township Supervisors with a cost estimate of the effect
of any proposed benefit plan modification.
A.
Trustees of the plan. The Township Supervisors shall act as trustees
of the plan.
B.
Receipt of funds. The Township Treasurer shall forthwith remit to
the trustees all funds received for the purposes of the plan or appropriated
thereto by the Township, with memorandum as to the source thereof,
and shall secure its receipt thereof. The trustees shall receive the
same and invest any funds not currently required for disbursements
in the same manner and in the same kinds of securities as are authorized
by law for banks chartered by the Commonwealth of Pennsylvania.
C.
Benefit payments. The trustees shall pay benefits out of the plan
only at such times, to such persons and in such amounts as may be
certified to them by the Secretary of the Police Pension Committee
at the direction of the Police Pension Committee. The trustees shall
annually submit to the Township Supervisors a detailed report of their
administration of the plan, which reports when so submitted shall
be open to inspection by any interested party.
D.
Investment powers. The plan is hereby authorized to receive by gift,
grant, devise or bequest any money or other property, real, personal
or mixed, in trust for the benefit of the plan, and the care, management,
investment and disposal of such trust funds or property shall be vested
in the trustees having the management of the plan, and said trust
funds or property shall be administered in accordance with the regulations
governing the plan, subject to such directions not inconsistent therewith
as the donors of such funds or property may prescribe.
E.
Trustee bonding. The trustees shall be bonded in such amounts as
shall be determined by the Township Supervisors.
Benefits may not be assigned or attached except insofar as may
otherwise be required by law, no benefit under the plan shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, and any attempt to do so shall be voided,
except as specifically provided in the plan, nor shall any such benefits
be in any manner liable for or subject to garnishment, attachment,
execution, levy or other legal process for the collection of debts
or liable for or subject to the debts, contract, liabilities, engagements
or torts of the person entitled to such benefit.
A.
Administrative expenses.
(1)
The expenses of administration of the plan established by this article,
including the compensation of the actuary and the bond for the trustees
of the plan, exclusive of the payment of retirement or disability
benefits, may be paid from the plan assets.
(2)
The municipality may provide pensions through annuity contracts with
insurance companies, provided that such pensions shall not be less
than as set forth in this article and conform to the entitlement and
eligibility provisions hereof.
B.
Amendment of resolution. Insofar as the provisions of this article
are the same as statutory provisions, they shall be subject to change
or repeal to comply with any future statutory provisions, and the
provisions of this document may be amended or repealed if statutory
authority be granted therefor or if statutory restrictions or mandates
are eliminated and discretion vested in the Township Supervisors.
C.
Severability. In the event that any provision, section, sentence,
clause or part of this article shall be held to be invalid, such invalidity
shall not affect or impair any remaining provision, section, sentence,
clause or part of this article, it being the intent of the Township
Supervisors that such remainder shall be and shall remain in full
force and effect.
D.
Plan does not confer employment rights. The establishment of the
plan shall not be construed as conferring any legal rights upon any
police officer or other person to a continuation of employment nor
shall it interfere with the rights of the Township Supervisors to
discharge any police officer or to treat him or her without regard
to the effect such treatment might have upon him or her as a member
of the plan.
E.
Gender and number. Any masculine pronoun includes the feminine, and
any singular reference means the plural, wherever appropriate.
F.
Decisions to be uniformly applied. In connection with the administration
of the plan, the practice of the Police Pension Committee, whenever
there is a choice or decision to be made with respect to participants
of the plan, shall be uniformly applied to all similar circumstances,
with the result that there shall be no discrimination in the operation
of the plan.
G.
Plan governed by laws of commonwealth. The plan shall be construed,
regulated and administered under the laws of the Commonwealth of Pennsylvania.
H.
Examination of documents by participants. Notwithstanding any information
that is made available by the Township Supervisors, the Police Pension
Committee or the trustees to participants of the plan through the
distribution of descriptive booklets, bulletin board notices, payroll
notices or oral announcement, any participant of the plan may examine
the plan and all amendments thereto at the main office of the Lower
Makefield Township at such mutually convenient time as is arranged
by the members and a representative of the Township Supervisors and/or
the Board of the Trustees.
A.
Eligibility. Members of the Lower Makefield Township Police Department who have not retired prior to the implementation of the DROP program may enter into DROP on the first day of any month following completion of 25 years of credited service and attaining the age of 53. Eligibility shall be subject to the conditions set forth in Subsection O, Severability, below.
[Amended 2-17-2021 by Ord. No. 424]
B.
Written election. A member of the Police Department electing to participate
in the DROP must complete and execute a drop option form prepared
by Lower Makefield Township, which shall evidence the member's participation
in the DROP. The form must be signed by the member and notarized and
submitted to Lower Makefield Township prior to the date on which the
member wishes the DROP option to be effective. The DROP option notice
shall include a notice to Lower Makefield Township, by the member,
that the member shall resign from employment with the Lower Makefield
Township Police Department effective on a specific date (the "resignation
date"). In no event shall the resignation date be shorter than 12
months nor longer than 48 months from the execution of the DROP option
form. An officer shall cease to work as a Lower Makefield Township
Police Officer on the officer's resignation date, unless Lower Makefield
Township terminates or honorably discharges the officer prior to the
resignation date. A member may elect, in writing, to terminate participation
in the DROP program any time up to six months before the previously
selected resignation date. Once a member terminates participation
in the program, then the member is barred from any future participation
in the program. In addition, all retirement documents required by
the Police Pension Board Administrator must be filed and presented
to the Pension Board for approval of retirement and payment of pension.
C.
Limitation on pension accrual. After the effective date of the DROP
option, the member shall no longer earn or accrue additional years
of continuous service for pension purposes.
D.
Benefit calculation. For all retirement fund purposes, continuous
service of a member 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 Lower Makefield Township
Police Pension Fund. The average applicable compensation of the member
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 fund. The pension benefit payable to the member shall remain
unchanged even if the pension plan improvements occur after the election
of the DROP option but prior to the officer's separation from service.
E.
Payments to the DROP account. The monthly retirement benefits that
would have been payable had the member elected to cease employment
and receive a normal retirement benefit, shall, upon the member commencing
participation in the DROP, be paid into the separate account established
to receive the participant's monthly pension payments. This account
shall be designated the DROP account.
F.
Accrual of nonpension benefits. After an 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.
G.
Payout. Upon the termination date set forth in the member's DROP
option notice or such date as Lower Makefield Township separates the
member from employment, the retirement benefits payable to the member
or member's beneficiary, if applicable, shall be paid to the member
or beneficiary and shall no longer be paid to the member's deferred
retirement option account. Within 30 days following termination of
a member's employment pursuant to their participating in the DROP
program, the balance in the member's DROP account shall be paid to
the member in a single lump sum payment or at the member's option,
in any fashion permitted by law.
H.
Disability during DROP. If a bargaining unit member becomes incapacitated
during this participation in DROP, that member shall continue to participate
in the DROP program as if fully employed. However, notwithstanding
any other provision in this subsection, if an officer is disabled
and has not returned to work as of the date of his required resignation,
then such resignation shall take precedence over all other provisions
herein, and said officer shall be required to resign. Nothing contained
in this plan shall be construed as conferring any legal rights upon
any police employee or other person to a continuation of employment
nor shall participation in the DROP program supersede or limit in
any way the right of Lower Makefield Township to honorably discharge
a police employee based upon an inability to perform his or her full
duties as a police officer. If such an officer is terminated while
participating in the DROP program, he shall, upon termination, receive
the DROP payments that had accrued to the date of his honorable discharge.
I.
Death. If the DROP member dies before the DROP account balances are
paid, the participant member's legal beneficiary shall have the same
rights as the member to withdraw the account balance as of the date
of death.
J.
Forfeiture of benefits. Notwithstanding an officer's participation
in the DROP program, an 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, shall forfeit his right to receive a pension, including
any amounts currently deposited in the DROP account.
K.
Account manager. Lower Makefield Township will select an investment
manager to administer the DROP account.
L.
Cost of management for DROP program. The Association and Lower Makefield
Township agree that any costs or fees associated with the management
of the DROP accounts shall be paid directly from the Police Pension
Fund and not by Lower Makefield Township.
M.
Amendment. Any amendments to § 34-11 shall be consistent with the provisions covering deferred retirement option plans set forth in the collective bargaining agreement and shall be binding upon all future DROP participants and upon all DROP participants who have balances in their deferred retirement option accounts. The DROP program may only be amended by a written instrument.
N.
Construal of provisions. An officer's election to participate in
the DROP program shall in no way be construed as a limitation on Lower
Makefield Township's right to suspend or terminate an officer for
just cause or to grant the officer an honorable discharge based upon
physical or mental inability to perform his or her duties.
O.
Severability. The provisions of this § 34-11 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 § 34-11 shall not be affected thereby. It is hereby expressly declared as the intent of Lower Makefield Township that this § 34-11 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, it shall be removed from the Police Pension Plan. If it is ever determined to be legal and allowable by law it shall be placed back in the Police Pension Plan.
[Adopted 1-15-2014 by Ord. No. 394]
Lower Makefield Township hereby establishes the Lower Makefield
Township Nonuniformed Defined Contribution Pension Plan in the form
of the ICMA Retirement Corporation Governmental Money Purchase Plan
& Trust (MPP01/01/06).
The effective date of the Plan shall be January 1, 2012.
The normal retirement date shall be the first day of the month
coincident with or next following the date in which the eligible employee
attains 60 years of age.
[Amended 8-15-2018 by Ord. No. 411]
The only group of employees eligible to participate in this plan are all nonuniformed full-time employees hired on or after January 1, 2012. An employee shall be eligible upon commencement of full-time employment. At such time, the employee shall begin to make contributions to the plan and the Township's contribution shall be made in accordance with § 34-16. Persons hired full-time on or after January 1, 2012, shall not be permitted to participate in the existing Township's Defined Benefit Pension Plan for nonuniformed employees.
A.
The Township shall contribute, on behalf of each employee, a match
equaling the contribution made by the employee up to a maximum of
6% of earnings. Employees shall have no minimum obligation with respect
to contributions.
B.
Employer contributions for a plan year shall be contributed on behalf of participants remaining employed by the Township on the December 31 of each plan year but the contribution by the Township will be made on or before January 31 of the following year based upon earnings, as defined in § 34-17, for the prior year. Participant contributions for a plan year shall be contributed on a monthly basis.
Earnings, as defined in the plan, shall include overtime and
any bonuses paid to a participant.
[Amended 8-15-2018 by Ord. No. 411]
Rollover contributions in accordance with Section 4.11 of the
Plan shall be permitted.
[Amended 8-15-2018 by Ord. No. 411]
A.
A participant's vested interest in his/her employer contribution
account shall be determined from the following table as of any date
of reference:
|
Participant's Years of Service
|
Participant's Vested Percentage
|
|
Less than one year of service
|
None
|
|
More than two years of service
|
40%
|
|
More than three years of service
|
60%
|
|
More than four years of service
|
80%
|
|
More than five years of service
|
100%
|
B.
If a participant's employment by the Township terminates prior to
becoming fully vested, the participant's own contribution shall be
refunded to the participant, plus interest on said contributions.
The Township's contributions and interest accrued on same shall be
returned to the Township. If an employee leaves the employ of the
Township after being fully vested but prior to attaining the age of
60 years, the employee shall have an option to withdraw his/her funds
and be taxed accordingly or the employee may roll over his/her account
balance into an individual retirement account or other appropriate
account.
Loans are not permitted under the plan.
In-service distributions are not permitted under the plan even
after a participant attains normal retirement age.
Upon attaining the age of 60 and being eligible to retire, the
employee may select payment options then available from ICMA Retirement
Corporation or available through a successor Plan Administrator.
The normal form of payment of benefits under the plan is a lump
sum. Upon death, the surviving spouse is the beneficiary, unless he
or she consents to the participant's naming another beneficiary.
The plan will provide for final pay contributions for accrued
unpaid vacation and sick leave, if applicable, and the employer will
contribute on behalf of the participant up to 6% of final pay to the
plan, subject to the limitations as set forth in Article 5 of the
Plan. It is understood and agreed that the Township's obligation shall
be limited to matching the percentage contributed by the employee
up to a maximum of 6%. Each participant eligible to participate in
the plan shall be given the opportunity to enroll at enrollment to
irrevocably elect to contribute 6% of final pay to the plan. Once
elected, a participant's election shall remain in force and may not
be revised or revoked.
No contributions shall be made by a participant or be required
to be made by the Township during periods when a participant is on
an unpaid leave status such that the Township does not pay wages to
the participant.
The Township herein appoints ICMA Retirement Corporation as
the Plan Administrator pursuant to the terms and conditions of the
ICMA Retirement Corporation Governmental Money Purchase Plan and Trust.
By adoption of this article, the Township agrees to the provisions
of the Plan and Trust. The Plan Administrator agrees to inform the
Township of any amendments to the plan made pursuant to Section 14.05
of the plan or to the discontinuance or abandonment of the plan.
The Township Manager is authorized to complete the adoption
agreement and execute any and all other documents as may be necessary
to effectuate the intent of this article.
