[1]
Editor's Note: This ordinance also superseded
former Art. II, Police Pension Plan, adopted 12-3-1974 by Ord. No.
59.
For the purposes of this article, the following
definitions shall apply:
The member's normal retirement benefit multiplied by the
ratio of (a) over (b), where:
|
(a)
|
=
|
The years and months of service completed by
the member as of the date of his termination of employment.
| |
|
(b)
|
=
|
The years and months of service the member would
have completed if he had continued to participate until his normal
retirement date.
|
Age at nearest birthday.
The average of a member's monthly compensation earned over
the last 36 months of employment.
The total compensation paid to an employee for services rendered
as a police officer, excluding "buybacks" and severance pay.
Limerick Township, Montgomery County, Commonwealth of Pennsylvania.
Limerick Township Police Pension Plan Trust Fund.
All police employees who meet the requirements set forth in § 29-8 of this article. The masculine pronoun will include the feminine.
Limerick Township, Montgomery County, Commonwealth of Pennsylvania.
Limerick Township Police Pension Plan. The plan's fiscal
year is the calendar year.
Limerick Township, Montgomery County, Commonwealth of Pennsylvania.
Limerick Township Board of Supervisors or its designee.
This plan is to be funded and maintained by
any of the following methods, or combination of each:
A.
General fund: contributions from the general fund
of the Township which may be required after appropriate approval of
the Township Supervisors.
B.
Member contributions: All members shall make contributions,
which shall be 5% of their total compensation. The Board of Supervisors
may, on an annual basis, by ordinance or resolution, reduce or eliminate
contributions into the plan by members. The Township may, but need
not, have an actuarial study performed prior to reducing or eliminating
member contributions into the plan.
D.
Gifts, grants, devises or bequests: Sums received
by the Township may, to the extent authorized by law, be contributed
to such fund so long as prior approval of the Township Supervisors
is obtained.
A.
Pension Committee.
(1)
The general administration and management of the plan
shall be under the direction of a Pension Committee as appointed by
the Township Board of Supervisors. The Committee shall consist of
two duly appointed Township representatives and one pension plan member.
(2)
The Pension Committee shall have all powers necessary
to enable it properly to carry out its duties, including, but not
limited to, the power to construe the provisions of the fund, to direct
the investment advisor, to determine all questions relating to eligibility
of members and to authorize all disbursements for benefits to members.
The decisions of the Pension Committee on all matters within the scope
of its authority shall be final, subject to approval of the Board
of Supervisors.
B.
Trustee.
(1)
The Fund shall be under the direction of a Trustee
designated by resolution by the Township Board of Supervisors. The
Trustee shall have full responsibility for administration of the program
established hereunder and shall hold, invest, reinvest and distribute
all funds and other property received pursuant hereto in trust for
the purposes of this article. The Trustee may receive, at any time,
gifts, grants, devises, or bequests to the pension fund of any money
or property, real, personal or mixed, to be held by them in trust
for the benefit of this fund and in accordance with the provisions
hereof. The Trustee shall be subject to such rules and regulations
as may from time to time be adopted by the governing body of this
Township by ordinance or by resolution.
(2)
The Trustee shall have full power and authority by
a majority action, either directly or through their designated representatives,
to do all acts, execute, acknowledge and deliver all instruments,
and to exercise, for the sole benefit of the plan members, any and
all powers and discretions necessary to implement and effectuate the
purposes of this article, including, for purposes of illustration,
but not limited to, any of the following:
(a)
To hold, invest and reinvest all funds received
pursuant to this article and such legal investments as may be authorized
as legal investments under the laws of the Commonwealth of Pennsylvania;
(b)
To retain any property which may at any time
become an asset of the fund, as long as said Trustee may deem it advisable;
and
(c)
To make distribution of the monies in the fund,
in accordance with the terms of this article.
C.
The expense of administering this pension fund, including
compensation of any actuary, any custodian of the fund, and any other
charges or expenses related thereto, exclusive of the payment of pensions,
may be paid by the Township or by the pension fund as determined by
the Township Board of Supervisors.
A.
Each full-time police employee (regularly working
a minimum of 35 hours per week during the calendar year) employed
by the employer is eligible to participate and shall be a member in
the Limerick Township Police Pension Plan and Fund as of his or her
date of hire.
B.
For the purpose of this section, "service" shall mean
the period of an employee's continuous employment by the employer.
The following types of absence shall not break continuity, and the
time elapsed shall be included in computing the aggregate length of
service:
(1)
Temporary leave of absence or layoff which shall,
if not otherwise stated, expire in six months unless sooner renewed.
(2)
Absence during which regular remuneration is paid.
(3)
A regularly appointed member of the police force who
has been employed as such for at least six months, and who enters
active military service for the United States, must receive retirement
credit for the period of active military service. To be eligible,
the member must return to employment within six months of separation
from such military service and be ineligible to receive military retirement
pay as a result of that service.
The benefits from the fund shall be payable
to members who have served in the Township in a full-time capacity
and who attain their normal retirement date. "Normal retirement date"
shall mean the first of the month coincident with or next following
the attainment of the 50th birthday and the completion of 25 years
of total service. Benefits commence on the first day of the month
coincident with or next following actual retirement.
[Added 2-4-2014 by Ord. No. 343; amended 12-21-2021 by Ord. No.
409]
Any officer employed as a police officer for 26 years or more
shall receive an additional payment per month after retirement, in
addition to their normal monthly pension retirement payments, as follows:
|
Years of Completed Service
|
Additional
|
|---|---|
|
26 years
|
$100
|
|
27 years
|
$200
|
|
28 years
|
$300
|
|
29 years
|
$400
|
|
30 years and longer
|
$500
|
An early retirement benefit shall be provided
to a member of the police force with 20 or more years of service who
terminates employment prior to the completion of superannuation retirement
age and service requirements and who files a written application for
an early retirement benefit with the Township. The early retirement
benefit shall become effective as of the date the application is filed
with the governing body or the date designated on the application,
whichever is later, and shall be the actuarial equivalent of a partial
superannuation retirement benefit calculated as follows:
A.
A partial superannuation retirement benefit shall
be determined by applying the percentage that the member's years of
service bear to the years of service that the member would have rendered
had the member continued to be employed until his superannuation retirement
date to the gross pension amount calculated using the monthly average
salary during the appropriate period prior to his termination of employment.
B.
The actuarial equivalent of the partial superannuation
retirement benefit shall be determined by actuarially reducing the
partial superannuation retirement benefit to reflect that it will
commence on the effective date of the early retirement rather than
on the date on which the member would have completed superannuation
age and service requirements. The actuarial reduction shall be calculated
using the actuarial assumptions reported in the last actuarial valuation
report filed with the Public Employee Retirement Commission under
the act of December 18, 1984 (P.L. 1005, No. 205), known as the "Municipal
Pension Plan Funding Standard and Recovery Act."[1]
[1]
Editor's Note: See 53 P.S. § 895.101
et seq.
[Amended 12-21-2021 by Ord. No. 409]
A.
In the event of any member's service-related total and permanent
disability, the member shall become eligible for a monthly disability
pension as set forth below.
B.
"Total and permanent disability" shall mean a service-related physical
or mental condition of a member incurred in the course and scope of
employment as a Township police officer, which precludes him from
engaging in any police-related employment.
C.
The monthly total and permanent disability pension benefit shall
be in conformity with a uniform scale and shall be equal to 50% of
the member's salary on the date the disability occurred, reduced by
the amount of social security disability benefits received for the
same injury. Disability pension benefits shall commence on the first
of the month coincident with or next following the date of disability,
as determined by a qualified physician selected by the employer. Such
determination shall be final and conclusive.
D.
The employer shall have the right to require the disabled member
to undergo medical examination at monthly intervals. Disability benefit
payments shall cease upon recovery from disability as determined by
the employer's physician. Disability benefit payments shall also cease
upon death.
A.
Any member who has completed 12 years of service in
this plan shall become one-hundred-percent vested in his accrued benefit.
Upon termination of employment with the employer, a vested member
shall be eligible to receive his accrued benefit starting as a monthly
annuity at his normal retirement date under this article.
B.
However, any member who separates from service prior
to his normal retirement date for any reason other than death or total
and permanent disability shall receive a complete refund of the total
amount of his member contributions with interest, if such refund is
greater in value than the actuarial equivalent of the accrued benefit.
[Amended 12-10-2009 by Ord. No. 310]
A.
Survivor benefits. In the event of the death of a
member or the death of a member who has retired or is honorably discharged
on pension, the surviving spouse or, if no spouse survives or if he
or she survives and subsequently dies, then the child(ren) under the
age of 18 or, if then attending college, under or reaching the age
of 23, shall, during his or her lifetime in the case of a surviving
spouse or, in the case of a child(ren), until reaching the age of
18 or, if then attending college, under or reaching the age of 23,
be entitled to receive a pension calculated at 50% of the pension
the member was receiving or would have been receiving had he or she
been retired or honorably discharged on pension at the time of his
or her death. For the purposes of this section, the phrase "attending
college" shall mean the eligible child(ren) is registered at an accredited
institution of higher learning and is carrying the minimum course
load of seven credit hours per semester.
B.
Pre-vesting benefits. The surviving spouse of any
member who dies before his or her pension has vested or, if no spouse
survives or if he or she survives and subsequently dies, the child(ren)
under the age of 18 or, if attending college, under or reaching the
age of 23 of the member shall be entitled to receive repayment of
all money which the member invested in the pension fund plus interest
or other increases in value of the member's investment in the pension
fund unless the member has designated another beneficiary for this
purpose. For the purposes of this section, the phrase "attending college"
shall mean the eligible child(ren) is registered at an accredited
institution of higher learning and is carrying a minimum course load
of seven credit hours per semester.
[1]
Editor's Note: Former § 29-11.4, Killed in service
death benefit, was repealed 12-10-2009 by Ord. No. 310, effective
as of 10-9-2009. This ordinance also provided that if a police officer
who is a member of the plan is killed in service while performing
police services for the employer on or after 10-9-2009, no killed-in-service
benefit shall be payable to the participant’s surviving spouse
or eligible dependents, if any, under this plan or by the employer
or Township.
The Plan is intended to be tax-qualified under
the applicable provisions of Section 401(a) of the Internal Revenue
Code, as amended, and shall be construed and applied in a manner consistent
with such intent. The plan and its trust fund are for the exclusive
benefit of plan members and their beneficiaries. Refer to Attachment
"A" for requirements of the Internal Revenue Code.[1]
[1]
Editor's Note: Said attachment is on file
in the Township offices.
The pension payments herein provided for shall
not be subject to attachment, execution, levy, garnishment or other
legal process and shall be payable only to the member or his designated
beneficiary. No member or his beneficiary shall have any right to
alienate, encumber or assign any assets of the fund held by the Trustees
on his behalf or any of the benefits of payments or proceeds of any
contract or agreement purchased or acquired by the Township hereunder.
[Added 12-10-2009 by Ord. No. 311]
A.
ACT 44
ACT 51
BARGAINING UNIT
BENEFICIARY
COMMENCEMENT DATE
DROP NOTICE or DROP ELECTION
DROP PARTICIPANT or PARTICIPANT
DROP PARTICIPATION PERIOD
DROP PROGRAM
EMPLOYER
FORMER DROP PARTICIPANT
MEMBER or OFFICER
PLAN
PLAN ADMINISTRATOR
RESIGNATION DATE
RETIREMENT DATE
SUBSIDIARY DROP ACCOUNT or DROP ACCOUNT
TOWNSHIP
Definitions. As used in this section, the following terms shall have
the meanings indicated:
Chapter 11 (only) of the bill signed by Governor Edward G.
Rendell on September 18, 2009, and designated as Act 44 of 2009 (formerly
House Bill 1828 of 2009).
The bill signed by Governor Edward G. Rendell on October
9, 2009, and designated as Act 51 of 2009 (formerly Senate Bill 369
of 2009).[1]
The duly recognized collective bargaining unit representing
all eligible full-time police officers of the Limerick Township Police
Department.
[Added 12-21-2021 by Ord.
No. 409]
The individual identified by a DROP participant to receive
the balance of such participant's DROP account in the event of the
death of the DROP participant during the DROP participation period.
The date of an officer's entry into the DROP Program.
The form prescribed by the employer and association upon
which a member or officer informs the employer of his or her irrevocable
intent to participate in the DROP Program. Once submitted to the employer
and approved by the employer, the DROP notice is irrevocable, except
as otherwise provided herein.
A member or officer who is eligible to receive a normal retirement
benefit based on reaching the requisite age and service for retirement
as defined under the Limerick Township Police Pension Plan ("Plan")
and who has properly submitted a DROP notice to participate in the
DROP, which has been approved by the employer's Board of Supervisors,
and who has commenced his or her DROP participation period.
The period from the time of the commencement of the officer's
(i.e., participant's) participation in the DROP as stated in the officer's
DROP notice which has been approved by the employer (i.e., the commencement
date) until the officer's separation from employment as a police officer
of the employer (i.e., the resignation date), which shall not exceed
36 months. Participation in the DROP does not guarantee the DROP participant's
employment by the local government during the DROP participation period.
[Amended 3-6-2018 by Ord.
No. 385]
The program implemented by the employer and association pursuant
this document through which members of the employer may establish
DROP accounts while continuing to provide police service for the employer
as described herein. The DROP Program is an integral component of
the plan.
The Limerick Township and the Limerick Township Police Department,
Montgomery County, Commonwealth of Pennsylvania.
An individual who elected to participate in the DROP Program
pursuant to the terms of this DROP agreement and who completed his
or her DROP participation period and who is currently receiving his
or her pension directly from the plan following his or her resignation
date.
A duly sworn police officer employed by the employer.
The Limerick Township Police Pension Plan.
The individual(s) charged with supervising the administration
of the plan.
The date specified in the participant's irrevocable DROP
notice which was approved by the employer on which the member or participant
shall resign from employment with the employer at the end of the DROP
participation period, which shall be no more than 36 months from the
commencement of the participant's DROP participation period.
[Amended 3-6-2018 by Ord.
No. 385]
The date specified in the participant's irrevocable letter
of resignation as the date on which the officer shall retire and begin
his/her DROP participation period.
A separate account created for the exclusive purpose of accepting
monthly pension benefits of a DROP participant while they are participating
in the DROP Program. The account balance shall be accounted for separately
but need not be physically segregate from other pension trust fund
assets. The DROP account will not have any interest compounded or
credited, except to the extent that the officer's account earns such
interest up to a maximum of 4.5%. If no interest is earned, no interest
shall be credited.
Limerick Township.
[1]
Editor's Note: The former definition of "Association," which
immediately followed this definition, was repealed 12-21-2021 by Ord.
No. 409.
B.
Eligibility. Any officer who has reached his/her normal retirement
date based on age and service (the superannuation date as defined
by the pension plan) may elect to become a DROP participant on the
first day of the month coincident with or next following the attainment
of the requirements for receipt of normal retirement age and service
(i.e., superannuation) pension benefits under the plan, which is a
minimum of 25 years of service and attaining at least the age of 50.
In addition, in order to be eligible to participate in the DROP, an
officer must comply with the following requirements:
(1)
Letter of resignation. An officer electing to participate in
the DROP must provide to the employer a binding and irrevocable letter
of resignation from regular employment with the local government that
discloses the member's intent to retire and specifies the member's
retirement date. This letter of resignation must be submitted to the
employer at least 30 days prior to the date on which the officer's
DROP participation period is to commence.
(2)
Written DROP election.
(a)
An officer electing to participate in the DROP must complete
and execute a DROP election form provided by the employer. The DROP
election must be signed by the officer, notarized, and submitted to
the employer at least 30 days prior to the date on which the officer's
DROP participation period is to commence, which shall be specified
on the DROP election. The DROP election shall include a notice to
the employer by the officer that the officer shall resign from employment
with the employer effective on his or her resignation date, which
shall be no more than 36 months from the commencement of the participant's
DROP participation period. Once approved by the employer, an officer's
resignation date shall be irrevocable. An officer shall cease to work
as a police officer on the officer's resignation date, unless the
employer terminates or honorably discharges the officer prior to the
resignation date. The DROP election shall also:
[Amended 3-6-2018 by Ord.
No. 385]
[1]
Detail or reference the DROP participant's rights and obligations
under the DROP (as stated in this document);
[2]
Include an agreement and acknowledgement that the DROP participant
agrees to forgo:
[a]
Active membership in the retirement system and plan;
[b]
Any growth in the salary base used for calculating the DROP
participant's regular retirement benefit and any additional growth
in the DROP participant's monthly retirement benefit;
[c]
Any growth in the DROP participant's DROP supplemental account,
except any credited interest (in accordance with the terms of the
plan) between zero and 4.5%;
[d]
Any additional benefit accrual for retirement purposes, including
but not limited to length of service increments; and
(b)
The written DROP election form shall also include an acknowledgement
by the DROP participant that he/she has reviewed the DROP Plan and
Program as well as this agreement and that he/she is retiring and
entering into the DROP knowingly and voluntarily and that he/she agrees
to enter into a release of claims (provided separately and attached
hereto)[2] that will be attached to the Written DROP election. The
form shall also include an acknowledgement by the DROP that he/she
shall be solely responsible for all tax liability and any other fees
or penalties that may be incurred as a result of his/her participation
in the DROP.
[2]
Editor's Note: Said form is available in the Township offices.
(3)
Waiver and release. Each officer who seeks to become a DROP
participant must execute a waiver of claims and release (attached
hereto)[3] before he or she may become a DROP participant. The failure
to execute this document will preclude the officer from participating
in the DROP Program.
[3]
Editor's Note: Said form is available in the Township offices.
C.
Pension contributions. After an officer elects to participate in
the DROP Program by the execution of the DROP notice and his or her
DROP participation period commences, the officer shall not make any
required contributions to the plan during the DROP participation period.
D.
Accrual of non-pension benefits. After an officer elects to participate
in the DROP Program, all other terms and conditions of employment,
as set forth in the collective bargaining agreement between the employer
and the association, shall continue to apply during the DROP participation
period with the exception of those provisions relating to the plan.
The parties agree that a DROP participant shall be entitled to the
continued accrual during the DROP participation period of leave time
but shall not be entitled to the payout of any payments for unused
leave time during or at the end of the DROP participation period.
At the end of the DROP participation period, a DROP participant shall
not be entitled to any severance pay or other lump sum payment (except
his or her accrued DROP account).
E.
Disability during DROP participation period.
(1)
The employer, association, and all DROP participants recognize
the unique nature of the DROP Program and the benefits that it offers
to the DROP participant and the employer. Such benefits for the employer,
however, are based on the DROP participant being able to work to provide
the employer with the benefit of his or her experience, as stated
above. It is recognized that if the DROP participant cannot work by
providing police services for the employer, the employer will suffer
a significant burden and the purpose and intent behind the DROP Program
will not be fulfilled to the detriment of the taxpayers of the employer
and the employer.
(2)
Accordingly, in light of those acknowledgements and concerns,
if a DROP participant becomes temporarily incapacitated during his
or her DROP participation period, the following shall apply:
(a)
The DROP participant shall continue to participate in the DROP
Program as if fully employed. Such participant shall receive disability
benefits (including heart and lung benefits, if eligible and such
benefits are applicable) in the same amount and under the same terms
as disabled police officers that are not participating in DROP except:
[1]
If a DROP participant is still temporarily disabled and has
not returned to work as of his or her required resignation date, such
participant shall be required to resign on his or her resignation
date and after such date shall be a former DROP participant who shall
begin to receive directly the same monthly pension benefit payment
as calculated at the beginning of the DROP participation period. Such
officer shall not be entitled to any other benefit, disability payment
or monthly disability pension benefit from the plan or the Township,
except that the normal retirement benefit that was previously deposited
into the DROP account shall be paid directly to the former DROP participant.
[2]
If a participant becomes permanently disabled from performing
his or her full police duties during his or her DROP participation
period (whether due to a work-related or non-work-related injury),
the participant shall be honorably discharged from employment after
the injury that prevents the DROP participant from performing full
police duties is deemed to be permanent.
[a]
If the injury has been deemed to be work-related,
the DROP participant shall terminate employment and resign from employment
and begin to receive the service-connected disability benefit under
the plan to the extent permitted by law. At such time, if a disability
benefit under the plan is legally payable, the DROP participant's
normal retirement benefit shall cease in lieu of the disability benefit
under the plan.
[b]
Alternatively, if the injury is deemed to be non-work-related,
the DROP participant shall terminate his or her DROP Participation
and resign from employment and begin to receive directly his or her
normal monthly pension benefit, as calculated at the beginning of
the DROP participation period, and payment of his or her DROP account
in accordance with this agreement.
F.
Death during DROP period. If a DROP participant dies during the DROP
participation period, his or her survivor(s) as defined by the plan
or, in lieu thereof, the participant's named beneficiary, shall be
entitled to receive benefits and the participant's DROP account, and
shall be handled according to the following provisions:
(1)
If a DROP participant dies during his or her DROP participation
period and a killed-in-service death benefit is determined to be payable
in accordance with Act 51 of 2009 (which amended Emergency and Law
Enforcement Personnel Death Benefits Act by creating a killed-in-service
benefit applicable to municipal law enforcement officers and repealed
the killed-in-service benefit in Act 600, as amended by Act 30 of
2002) to the DROP participant's survivors, the participant's DROP
election shall be revoked and the DROP account shall be payable to
survivor(s) as defined by the plan or, in lieu thereof, the named
beneficiary, of the deceased DROP participant. At that time, the DROP
participant's monthly retirement benefit shall cease and there shall
be no survivor's benefit payable under the plan to the DROP participant's
survivors.
(2)
If death occurs during the DROP participation period but the
killed-in-service death benefit under Act 51 of 2009 (as defined above)
is deemed to be not payable, the DROP participant's DROP election
shall be revoked, and the survivor(s) as defined by the plan or, in
lieu thereof, the participant's named beneficiary, shall be entitled
to a lump-sum payment of the DROP account balance and the participant's
survivor(s) as defined by the plan shall receive the survivor's benefit,
if any, in accordance with and as defined by the plan.
G.
Forfeiture of benefits. Notwithstanding an officer's participation
in the DROP Program, an officer or DROP participant who is convicted
of 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
to 1314, shall forfeit his or her right to be a DROP participant and
also shall forfeit his or her right to receive a pension, including
any amounts currently deposited in the DROP account. In such a case,
the member shall only be entitled to receive the contributions, if
any, made by the member to the plan, without interest.
H.
The monthly pension benefit calculation and limitation on pension
accrual. After the effective date of the DROP notice, the officer
shall no longer earn or accrue additional years of service for pension
calculation purposes under the plan. No benefit increases that may
occur after a DROP participant's commencement date, including bargained
pension enhancements, mandated pension enhancements through arbitration,
or pension enhancements mandated by law, will apply to the DROP participant
and shall not increase the DROP participant's frozen pension under
the plan, as calculated on the effective date of the DROP participation
period as stated in the DROP notice. Upon the commencement date, the
participant's monthly pension payment shall be transferred into the
participant's DROP account. The average monthly compensation of the
participant for pension calculation purposes shall remain as it existed
on the effective date of the DROP participation period as stated in
the DROP notice. Earnings or increases in earnings thereafter shall
not be recognized or used for the calculation or determination of
any benefits payable by the plan. The pension benefit payable to the
members shall increase only as a result of cost-of-living adjustments,
if applicable, that may be applicable and in effect under the plan
on the effective date of the member's participation in the DROP Program
or by applicable cost-of-living adjustments specifically granted to
DROP participants or retirees thereafter.
I.
Maximum participation. The maximum period of participation in the
DROP Program is 36 months. Once the maximum participation has been
achieved, the participant must terminate employment and separate from
service.
[Amended 3-6-2018 by Ord.
No. 385]
J.
DROP participation termination.
(1)
DROP participant's participation in a DROP shall end when the
DROP participant is separated from employment from or by the employer
during his or her DROP participation period for any reason or when
the DROP participant reaches his or her resignation dates as stated
in his or her DROP election form. A DROP participant may change the
DROP termination date to an earlier date within the limitations of
this agreement, which in no event shall exceed 36 months.
[Amended 3-6-2018 by Ord.
No. 385]
(2)
Upon termination of the DROP participation period, the balance
of the DROP account shall be paid to the terminating DROP participant
as stated in § 1114(d) of Act 44 and shall be subject to
any applicable taxes under applicable law and to any attachment and
assignment as stated in § 1114(e) of Act 44.
(3)
A DROP participant shall be ineligible to re-enroll in the DROP
Program after his or her participation in the DROP is terminated for
any reason, even if the former DROP participant is re-employed by
the local government with renewed active membership in the retirement
system.
K.
DROP pension payments. Upon entry into the DROP Program, a DROP participant's
service and average monthly compensation (as each is defined under
the plan) will be frozen and his or her pension payment will be calculated
as if he or she retired and ceased employment with the employer on
the effective date of such officer's DROP participation period as
stated in the DROP notice. The monthly pension payment shall be credited
towards the participant's DROP account as stated below.
L.
Individual DROP account. The employer shall create a DROP account
which shall be a ledger account for each DROP participant. Such account
shall be accounted for separately but will not be physically segregated
from the other Plan assets. While employed and a DROP participant,
the DROP participant's monthly retirement benefit shall be credited
to the DROP account as stated above and the benefit accumulation under
the DROP shall be calculated and credited in accordance with the policy
set by the plan administrator. No interest shall be credited to any
DROP participant's account, except to the extent that the officer's
account earns such interest up to a maximum of 4.5%.
M.
Distribution options.
(1)
Commensurate with DROP Program participation, a participant
must make an election on forms designated by the employer of the payout
option(s) desired upon termination of the DROP period. This election
may be changed at any time before termination. The distribution options
are as follows:
(2)
The DROP participant shall be responsible and liable for all
taxes and other governmental fees, penalties and charges that may
be due as a result of the DROP participant's termination of the DROP
and receipt of the monies in his/her DROP account.
N.
Beneficiary designation. Commensurate with DROP Program participation,
a participant must make an election, on forms designated by the employer,
of the beneficiary or beneficiaries he or she intends to receive the
balance of the participant's DROP account in the event of the participant's
death and there are no survivors as defined by the plan before such
balance has been distributed.
O.
Amendment. Any amendments to the DROP Program shall be consistent
with the provisions covering deferred retirement option plans set
forth in any applicable collective bargaining agreement and shall
be binding upon all future DROP participants and upon all DROP participants
who have balances in their DROP accounts. The DROP Program may only
be amended by a written instrument, signed by an authorized representative
of the employer and the association, not by any oral agreement or
past practice.
P.
Interpretation of provisions.
(1)
This document shall be interpreted under the laws of the Commonwealth
of Pennsylvania. An officer's election to participate in the DROP
Program shall in no way be construed as a limitation on the employer's
right to suspend or terminate an officer for just cause under applicable
law or to grant the officer an honorable discharge based upon a physical
or mental inability to perform his or her duties. Nothing provided
hereunder shall be construed as a change to the parties' practice
of calculating pensionable compensation, and except for the ability
to establish a DROP account and participate in the DROP Program, nothing
herein is intended to create new pension benefits of any kind which
did not exist as of the date the DROP Program is adopted.
(2)
Nothing provided hereunder shall guarantee any officer or DROP
participant a specific term of employment. All DROP participants shall
be subject to the same terms and conditions of employment (except
those relating to benefits under the plan and retiree benefits), rules
and regulations, and disciplinary procedures as other officers and
members who are not DROP participants.
Q.
Cost to participants.
(1)
The original costs for starting the DROP, as well as the costs
of administering the DROP Program as a whole will be paid by the Township
and/or the plan, as decided by the Township.
(2)
Any costs incurred by an individual officer's DROP account will
be paid by the officer.
(3)
Participants and all parties to this agreement agree that this
DROP Program must at all times be cost neutral. If it is determined
at any time that this DROP Program is not cost neutral, or that the
DROP Program increases the costs to the plan in any amount, the association
and the Township shall meet to discuss how the cost will be funded.
The two options to be discussed are limited to the following:
(a)
To the extent permitted under applicable law, the association
will make up the cost, through increased contributions; or
(b)
If the association will not agree to the remedy stated above in Subsection Q(3)(a), the DROP Program will be terminated and removed from the plan and any future participation in the DROP will cease. All then-current DROP participants shall continue until their DROP participation period ends (i.e., the resignation date).
R.
Compliance with law.
(1)
The employer and the association acknowledge and agree that
the provisions stated in this agreement are essential to their agreement
and to the continuation of this DROP Program. The employer and the
association further acknowledge and agree that they believe that all
of the provisions in this agreement are in compliance with applicable
law, including Act 44 and Act 51. If any provision contained in this
agreement and DROP Program is found by a court of law or the Pennsylvania
Department of the Auditor General or any court of law to not be in
compliance with applicable law, including Act 44 or Act 51, the association
and the employer may meet to discuss ways to most efficiently implement
any changes necessary to bring this agreement and DROP Program into
compliance with applicable law and any agreement reached in those
discussions shall be binding on the employer, the association, and
any current and future DROP participants. However, if this agreement
or DROP Program, or any provision contained in this agreement, is
found by any court of law or the Pennsylvania Department of the Auditor
General or any other federal or commonwealth governmental agency or
department to not be in compliance with applicable law, including
Act 44 or Act 51, neither the association nor the employer is under
any obligation to bargain over bringing the agreement and DROP Program
into compliance with such law and instead may terminate this agreement
and the DROP Program immediately.
(2)
The parties acknowledge and agree that any DROP participant will be bound by any changes to the DROP Program as a result of the legislation referenced above, regardless of whether at the time these changes are made such individual is a DROP participant or a former DROP participant who is then currently receiving his/her pension directly and has access to his/her DROP account. As a result, the association, the employer, and all individuals who become a DROP participant or former DROP participant recognize that such who become a DROP participant or former DROP participant do not have a vested or constitutional right in the benefits provided under this DROP Program to the extent it is subsequently changed by legislation or found to be unlawful as stated above as referenced herein. No issue in this Subsection R shall be subject to the grievance and arbitration procedure contained in the collective bargaining agreement between the Township and the association or as outlined below in Subsection S.
S.
Arbitration applicable.
(1)
The parties agree that, except as stated in Subsections Q and R with respect to an issue relating to cost neutrality or legality of any provision of this DROP or the DROP as a whole, an issue arising under a provision of the DROP Program and/or this agreement shall be subject to collective bargaining or Act 111 interest arbitration if, after negotiation, the parties cannot come to an agreement on the dispute.
(2)
The course of action to resolve any association or association
member dispute arising from a provision of the DROP Program and/or
this agreement shall be the same as that contained within the grievance
procedures in the applicable collective bargaining agreement.
