[Adopted 12-16-1986 by Ord. No. 241]
The Police Pension Plan is hereby established pursuant to and in compliance with the Act of May 29, 1956, P.L. 1804, as amended. Such fund shall be under the direction of the Board of Supervisors of Upper Southampton Township and shall be applied under such regulations as the Board of Supervisors may prescribe.
Editor's Note: See 53 P.S. § 767.
[Amended 12-3-1991 by Ord. No. 291]
As used in this article, the following terms shall have the meanings indicated:
- ACCRUED BENEFIT OR ACCUMULATED PLAN BENEFIT
- The amount of an individual's benefit (whether or not vested) as of a specific date determined in accordance with the terms of the pension plan and based on compensation (if applicable) and service to that date.
- ACCUMULATED DEDUCTIONS
- Member contributions accumulated with interest from date deducted from payroll to the end of the plan year prior to distribution, plus any amounts deducted during the year of distribution. The interest rate used on credited accumulations is 6% compounded annually. Any amount credited to the employees' accounts by the PMRS as of January 1, 1986, including amounts of regular interest and excess interest, will be considered as the accumulated deduction of each participant on January 1, 1986.
- ACTUARIAL ASSUMPTIONS
- Factors which actuaries use in estimating future events affecting pension costs; for example, mortality rates, employee turnover, compensation levels, and investment earnings.
- ACTUARIAL COST METHOD OR FUND METHOD
- A procedure for determining the actuarial present value of pension plan benefits and expenses and for allocating such value to time periods, usually in the form of a normal cost and an accrued liability.
- ACTUARIAL EQUIVALENT
- A benefit determined by an actuary to be equivalent in value to the participant's normal retirement benefit, as defined herein; provided that such actuarial equivalent is within the limitations provided herein.
- ACTUARIAL PRESENT VALUE
- The value of all plan benefits and expenses payable at various times, determined as of a given date by a particular set of actuarial assumptions.
- ACTUARIAL VALUATION
- The document presenting the actuary's estimate of the present value of benefits to be paid under a pension plan and the calculation of the amounts of employer contributions or accounting charges for pension costs. This is sometimes called actuarial study or actuarial report.
- A person professionally trained in the technical aspects of pensions, insurance and related fields. The actuary estimates how much money must be contributed to a pension plan in order to provide future benefits.
- A contract that provides an income for specified periods of time, such as a number of years or for life. Annuity payments are usually made monthly. This term is often used synonymously with "pension," but annuity generally refers to an insurance contract and a pension may be insured or uninsured.
- BOARD OF SUPERVISORS
- The governing body of Upper Southampton Township, hereinafter referred to as the "Supervisors."
- The persons appointed to serve as administrators and trustees of the pension fund.
- The payroll deductions made bi-weekly from the compensation of the participants and paid to the pension fund; except that contributions in § 24-9 shall mean the total contribution accumulated during the period of employment and participation in this fund.
- Upper Southampton Township, hereinafter referred to as "Township."
- The Police Pension Fund established pursuant to this article.
- MONTHLY BENEFIT COMPENSATION
- Is calculated by averaging the participants' last 36 months of monthly compensation.
- MONTHLY COMPENSATION
- The total earnings received by a participant in each and every month including, but not limited to, base salary, holiday pay, overtime, longevity pay, shift differential, and educational incentive.
- The Township of Upper Southampton.
- NORMAL COST
- That portion of the actuarial present value of pension plan benefits and expenses which is allocated to the valuation year by the actuarial cost method.
- Every person duly appointed from time to time by the Supervisors as a full-time paid policeman working at least 40 hours a week at a definite salary and eligible for additional fringe benefits as provided by the Township.
- SERVICE IN THE AGGREGATE
- Total service, not necessarily continuous.
- The cessation of services by the participant for any reason including disability, death, resignation and employer termination. Voluntary leaves of absence without pay shall not be a termination for purposes of this article; but no period of such leave shall be computed in the total service in the aggregate for pension benefit purposes. Leaves of absence with pay shall not be considered a termination within the meaning of this article, and such leaves may be computed in the total service in the aggregate for pension benefits purposes; provided that the municipality is able to certify to the Department of the Auditor General that such participant on a leave of absence with pay is within the definition of participant herein.
- A provision that a pension participant will, after meeting certain requirements, retain a right to all of the accrued benefits, even though the employee may leave the job before retirement.
The Committee shall administer the Police Pension Fund established by this article by such regulations as shall from time to time be necessary for the effective management of the fund; provided that no regulation shall be contrary to the statutes of the commonwealth pursuant to which this fund is established.
The Committee shall consist of five members, which number shall include one appointed by and chosen from among the Board of Supervisors, two appointed by the Police Benevolent Association of Upper Southampton Township, and one citizen at large, preferably from the business community, appointed by the other four Committee members, and the Township Manager.
The Township Manager shall be a permanent member of the Committee. Every other member shall serve for a period of five years, or until their successors are appointed, provided that the members of the Commission first appointed shall be appointed for varying terms as follows:
Any member may resign upon written notice to the Committee. Any vacancies in the Committee arising from resignation, death or removal shall be filled by the procedure set out herein for the member of the Committee whose resignation, death or removal has created the vacancy.
The Committee shall elect from among its members at the first meeting thereof, and at the first meeting of each succeeding year, a Chairman, Secretary and such other officers as the Committee may deem necessary by a majority vote of the members present at such meeting.
The Committee shall meet no less than twice each year and shall serve without compensation for their services. Written notice of each meeting shall be mailed to each member by the Secretary at least five days prior to said meeting. Regular or special meetings shall be convened at the call of the Chairman or in such other manner as the members may, by a majority vote, designate.
The Committee shall act by such procedure as the Committee shall establish; provided that three members of the Committee shall constitute a quorum. An affirmative vote of a majority of the entire Committee shall be necessary in order to transact any business. The Committee may authorize one of its members to execute any document or documents on behalf of the Committee. The Committee may adopt bylaws and regulations as it deems necessary for the conduct of its affairs and may with approval of the Board of Supervisors appoint such accountants, counsel, specialists or such other persons as it may deem desirable for the proper administration of the pension fund.
The Committee shall keep a record of all its proceedings and acts, and shall keep all such books of accounts, records and other data as shall be necessary for the proper administration of the pension fund.
All such reasonable expenses incurred in the administration of the fund including but not limited to fees for the services of specialists including actuaries, accountants and legal counsel shall be approved by the Board of Supervisors, and paid from Police Pension Fund assets.
No member of the Committee shall incur any liability for any action or failure to act, accepting only liability for its own gross negligence or willful misconduct. The employer shall indemnify each member of the Committee against any and all claims, loss, damages, expenses and liability arising from any action or failure to act, except for such that is the result of gross negligence or willful misconduct of such member.
[Amended 7-11-1989 by Ord. No. 270; 9-17-1991 by Ord. No. 288]
Superannuation retirement age and length of service. Effective January 1, 2001, the superannuation retirement age shall be 52 years of age and 25 years of service.
[Amended 6-21-1994 by Ord. No. 308; 3-18-2003 by Ord. No. 356]
Basic benefits. The monthly pension benefit shall be 1/2 of the monthly average benefit compensation (see § 24-5) of such member during the last 36 months of employment. This benefit is payable for life.
An officer that has more then 25 years of service at the time he or she retires, shall receive $100 per month for each completed year of service in excess of 25 years, up to a maximum of $500 per month after five completed years of service in excess of 25 years. Such length-of-service increments shall be paid in addition to other monthly pension or retirement allowances.
A lifetime survivor's benefit must be provided to the surviving spouse (or if no spouse survives or if he or she subsequently dies, the child or children under 18 years of age or if attending college, under or attaining the age of 23) of no less than 50% of the pension the member was receiving or would have been entitled to receive had he been retired at the time of death.
[Amended 6-21-1994 by Ord. No. 303; 12-7-2015 by Ord. No. 434]
The surviving spouse of a member of the police force who dies before his pension has vested 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 the member of the police force 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.
Service-connected disability retirement. For all contributors hired after July 1, 2003, the following service-connected disability retirement provisions shall apply:
[Amended 3-7-2000 by Ord. No. 342; 10-21-2003 by Ord. No. 359]
A contributor may be retired by the Committee on a service-connected disability allowance if he is under superannuation retirement age, and on a superannuation retirement allowance if he has attained or passes such age, if the physician designated by the Committee after physical examination of the contributor made at the place mutually agreed upon shall certify to the Committee that the contributor is unable to perform the functions and duties of a police officer on account of a service-connected disability and that said contributor ought to be retired. No minimum period of service shall be required for eligibility for a service-connected disability.
The benefit must be in conformity with a uniform scale and fixed by the plan's governing document at no less than 50% of the member's salary at the time the disability was incurred, reduced by the amount of Social Security disability benefits received for the same injury.
[Amended 12-7-2015 by Ord. No. 434]
Should a disability annuitant die before the total disability retirement allowance received shall be at least equal to the amount of his accumulated deductions at the time of disability retirement, then the Committee shall pay to the named beneficiary, if living, or if the named beneficiary predeceased the annuitant or no beneficiary was named, then to the annuitant's estate, an amount equal to the difference between such total retirement allowance received and the annuitant's accumulated deductions.
Disability retirement. For all contributors hired prior to July 1, 2003, the following disability retirement provisions will apply:
[Added 10-21-2003 by Ord. No. 359]
After a contributor has had 10 or in more years of total service, he may, upon application or on application of one acting in his behalf, be retired by the Committee on a disability allowance if he is under superannuation retirement age, and on a superannuation retirement allowance if he has attained or passes such age, if the physician designated by the Committee after physical examination of the contributor made at the place mutually agreed upon, shall certify to the Committee that the contributor is unable to perform the functions and duties of a police officer and that said contributor ought to be retired. When the disability of a contributor is determined to be service connected, no minimum period of service shall be required for eligibility.
A disability annuity shall be sufficient to produce a retirement allowance of 30% of the contributors final salary. Where the disability of the member is determined to be service-connected, the retirement allowance shall equal 50% of his final salary. The disability annuity shall be reduced by the amount of any payments for which the member shall be eligible under the Act of June 21, 1915 (P.L. 736, No. 338), known as the "Pennsylvania Workmens Compensation Act," as amended, or the Act of June 21, 1939 (P.L. 566M No. 284), known as the "Pennsylvania Occupational Disease Act," as amended.
Any contributor entitled to retire for disability may, in lieu of such retirement, if he has eight or more years of total service, elect to retire nonvoluntarily under the provisions of this section.
Should a disability annuitant die before the total disability retirement allowance received shall be at least equal to the amount of his accumulated deductions at the time of disability retirement, then the Committee shall pay to the named beneficiary, if living, or if the named beneficiary predeceased the annuitant, or no beneficiary was named, then to the annuitant's estate, an amount equal to the difference between such total retirement allowance received and the annuitant's accumulated deductions.
Vesting. If a participant, before reaching superannuation retirement age and having completed 12 years of total service, for any reason ceases to be a full-time police officer, he shall be entitled to vest his retirement benefits until he attains superannuation retirement age by filing with the Committee a written notice of his intention to vest within 90 days of the date of his termination. Upon reaching the date which would have been his superannuation retirement date if he had continued to be employed as a full-time police officer, he shall be paid a partial superannuation retirement allowance determined by applying the percentage his years of service bears to the years of service which he would have rendered had he continued to work until his superannuation retirement date to the gross pension, using, however, the monthly average salary during the appropriate period prior to his termination of employment.
[Amended 12-7-2015 by Ord. No. 434]
Early retirement. A police officer shall be eligible for early retirement benefit in accordance with this subsection. The 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 Board of Supervisors of Upper Southampton Township. The early retirement benefit shall become effective as of the date the application is filed with the Board of Supervisors of Upper Southampton Township 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:
[Added 7-5-2000 by Ord. No. 346]
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.
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 that 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."
Editor's Note: See 53 P.S. § 895-402 et seq.
Cost of living increases. Benefits shall be increased annually in proportion to changes in the Consumer Price Index. The amount of such increases in the pensions of retired police are subject to all the following limitations:
The percent increase in pension shall not exceed the percent increase in the Consumer Price Index since the last year in which the retired policeman last worked.
The pension after such increase shall not exceed 75% of the final average base salary which was used as the basis for computing the retired policeman's pension.
The total cost-of-living increase shall not exceed 30% of the retired policeman's pension at the time he retired.
Social security offset. Benefits payable to participants under the provisions of this article shall not be subject to a social security offset.
Designation of beneficiaries.
Each participant shall have the right to name the beneficiary or beneficiaries for preretirement death benefits on policies of insurance purchased by the fund; provided that the ownership of such policies shall remain in the municipality's governing body and shall be endorsed to prevent the assignment of ownership to the insured. If the participant shall fail to name a beneficiary, such benefits that would have accrued to his beneficiaries shall be paid to the participant's estate.
Each participant may, from time to time, change the beneficiaries in such form and manner as shall be prescribed by the Committee.
Death prior to retirement or retirement eligibility. The beneficiaries designated by the participant pursuant to Subsection B herein may be entitled to the death benefit of a policy of insurance purchased by the Police Pension Fund; provided that the participant, at the time of his/her death, is not retired according to the terms in Subsection B.
Contributions by participants. Participant contributions shall be paid into the fund by the Municipality through payroll deductions in such manner and such time as the Committee may by rule and regulation determine. Participant's contributions shall be reduced to 2% effective the pay period starting on May 13, 2007, and shall remain in effect through the last pay period in December 2009. Thereafter the contribution shall be increased to 5%.
[Amended 4-28-1998 by Ord. No. 332; 5-19-1999 by Ord. No. 340; 3-19-2002 by Ord. No. 352; 3-18-2003 by Ord. No. 356; 7-23-2007 by Ord. No. 384]
Editor's Note: Ordinance Nos. 332, 340 and 352 provided for the elimination of said contributions for the calendar years 1998 through 2002.
Reduction or elimination of participant's contributions. The monthly contributions of the participants may be reduced below the minimum percentage prescribed, or eliminated, on an annual basis if an actuarial study indicates that such reduction or elimination for that year will not adversely affect the actuarial soundness of the fund. If the actuarial study so indicates, the reduction or elimination shall be effected by ordinance, and it shall be effective for one year. No reduction or elimination shall result in increasing the liability of the municipality to the fund.
Contributions of the municipality.
Prior service liability. It shall be the obligation of the municipality to fund the prior service liability of participants determined by the actuary based upon credit for all years of prior service toward the municipal annuity of each original member; provided that such liability may be funded over a period not to exceed 25 years. The 25 years commences with passage of this article.
Future service liability. The actuary shall determine, from time to time, the amount which shall be contributed annually by the municipality for service credits of original and new participants. The municipality shall have no liability for the future service cost of the pension fund unless such cost is not met by the allocation of commonwealth funds and participants' contributions. The maintenance of the actuarial soundness of the fund shall be the responsibility of the municipality.
Administrative expenses. It shall be the responsibility of the municipality to pay the administrative expenses incurred in the management of the fund; however, certain expenses may be paid from the assets of the fund.
Allocation of commonwealth funds. The payments made by the State Treasurer to the municipality from the moneys received from the taxes paid on the premiums of foreign casualty insurance companies for purposes of pension retirement or disability benefits for police officers shall be used as follows:
Gifts, bequests, and grants. All other moneys and property received by the Committee, including gifts, bequests, devises and grants, shall, unless otherwise specifically provided, be applied equally against the participants and the municipality portions of the future service cost.
Allocation of assets of existing pension fund(s). Any assets of any existing pension fund for the members of the municipality's Police Department are hereby transferred to the fund established by this article and shall be applied against the unfunded liability.
If for any reason a member of the police force of the municipality shall terminate service prior to superannuation retirement age, that member shall be entitled to a refund of accumulated deductions as defined in § 24-5.
If the member shall subsequently return to service and return the accumulated deductions as defined in § 24-5 to the fund which were refunded to him/her upon termination, he/she shall be entitled to credit for the prior years of service to the extent of the return of contributions. Nothing in this section shall be construed to allow credit for service not actually given to the municipality, except as specifically provided in § 24-10.
Any member of the police force employed by Upper Southampton Township who has been regularly appointed officer of the Police Department and shall enter into the military service of the United States, shall have credited to his employment record for pension or retirement benefits all of the time spent by him in such military service, if such person returns or has heretofore returned to his employment within six months after his separation from the service.
An active member may also purchase credit for other than intervening military service performed for the United States in times of war, armed conflict or national emergency, so proclaimed by the President of the United States, for a period not to exceed five years; provided that the member has completed five years of service to the Township subsequent to such military service, and files an application with the Committee to purchase credit for nonintervening military service upon completion of five years of subsequent service to the Township.
The amount due from the member shall be certified in accordance with methods approved by the actuary, and may be paid in a lump sum within 30 days or it may be amortized with additional interest through salary deductions in amounts agreed upon by the member and the Committee.
The rate of interest to be charged to members on their purchase of credit for intervening or nonintervening military service shall be the rate being credited to member's contributions in effect on the date of the member's application, compounded annually.
A member may purchase credit for intervening or nonintervening military service only if his discharge or separation from the service was granted under other than dishonorable conditions.
A member may not purchase credit for any military service for which he is entitled to receive a retirement allowance from the United States government.
Upon termination of the fund, the assets shall be distributed as follows:
Sufficient funds shall be maintained to provide the pension benefits prescribed in § 24-7 for all participants who have retired prior to termination, who are eligible for retirement at the time of the termination or who shall be entitled to vested retirement benefits.
Of the remaining funds, those which can be identified as municipality contributions or contributions other than from the commonwealth allocation shall be distributed by resolution of the Board of Supervisors.
All funds in excess of the funds described in this section shall be returned to the commonwealth as unused funds pursuant to the Act of May 23, 1943, P.L. 259, as amended, 72 P.S. § 2263.1 et seq.
Neither the establishment of the plan hereby created, nor any modification thereof, nor the creation of any fund or account, nor the payment of any benefits, shall be construed as giving to any participant or other person any legal or equitable right against the municipality, the Committee, the Board of Supervisors or any officer or employee thereof, except as herein provided. Under no circumstances shall the fund created hereby constitute a contract for continuing employment for any participant or in any manner obligate the municipality to continue or discontinue the services of an employee.
This plan has been established and shall be maintained by the municipality in accordance with the laws of the Commonwealth of Pennsylvania. The plan shall continue for such period as may be required by such laws and should such laws provide that the municipality may, by its own action, discontinue this plan, the municipality reserves the right to take such action. Upon termination the municipality shall have no liability hereunder other than that imposed by law.
All investment by the Committee of the assets of this fund shall comply with guidelines established by the Commonwealth of Pennsylvania and such regulations as the Pension Committee shall establish for the purpose of investing such funds.
The Committee may also purchase annuities or other contracts or insurance which provide a cash value with which to fund pensions; provided that the Committee shall determine the value of any policies purchased, the company with which the contracts shall be made, and the time to purchase such policies. The Committee shall also have the obligation to insure that the policies purchased provide benefits on a uniform scale and that such policies are endorsed to the ownership of the municipality.
The Supervisors reserve the right to amend at any time, in whole or in part, any or all of the provisions of this article. However, no such amendment shall authorize or permit any part of the fund to be used or diverted to purposes other than for the exclusive benefit of the participants, their beneficiaries or their estates. Nor shall any amendment divest a participant of benefits vested by § 24-7F. All such amendments shall comply with the applicable statutes of the commonwealth including but not limited to the Act of May 29, 1956, P.L. (1955) 1804, as amended, 53 P.S. § 767 et seq.
This plan shall be constructed according to the laws of the Commonwealth of Pennsylvania, and all provisions hereof shall be administered according to the laws of such commonwealth.
Whenever any words are used herein in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and wherever any words are used in singular form they shall be construed as though they were also used in the plural form in all cases where they would so apply.
Headings of sections and subsections of this article are inserted for convenience of reference. They constitute no part of this plan and are not to be considered in the construction hereof.
[Added 7-23-2007 by Ord. No. 384]
A Deferred Retirement Option Plan (DROP) is hereby established as follows:
Beginning January 1, 2007, an optional DROP program shall be made available to any Upper Southampton Township police officer who has fulfilled the age and service requirements as set forth above and in Ordinance No. 241. The DROP program shall be an optional retirement program in which an eligible member of the pension plan may elect to participate, deferring receipt of normal retirement benefits while continuing employment with the Township, without loss of any other employee benefits.
The DROP program is designed to allow an officer to accumulate a lump sum cash amount for retirement without affecting his or her normal monthly retirement benefit as of the date that he or she becomes a DROP participant. Under DROP, the officer effectively makes a decision to "retire" with respect to the pension plan only, yet continues to work as an active police officer.
Eligibility: Any Upper Southampton Township police officer who has fulfilled the age and service requirement as set forth above and in Ordinance No. 241 shall be eligible to participate in the DROP program. The officer may enter the program at his or her option in conformance with this agreement and after providing at least 30 days' written notice to the Township.
Entry into DROP: Election to participate in the program by an eligible officer shall be made on any date following the date on which the officer fulfills the minimum age and service requirements for retirement under the pension plan. Once an officer commences participation in the DROP program, he or she may not choose to end participation in the DROP program and resume contributions to the pension plan.
Enrollment forms: Election to participate in the program shall be made by completing the required request and enrollment forms, which shall show the entry date into the DROP program and the deferred retirement date tot the term chosen by the officer.
Term of the program: The DROP term shall be for a period of up to a maximum of 36 months from the date of entry into the program. Termination of participation in the DROP program shall take place:
At the end of the thirty-six-month period, or at any time prior if the officer chooses to end his or her participation earlier than 36 months; or
If the thirty-six-month time limit is extended in future Collective Bargaining Agreements, any member participating in the DROP program at that time may, at his or her option, extend the DROP participation period to that allowed under the current agreement; or
If the officer is terminated from employment for reasons set forth under applicable Pennsylvania Law.
Status and contributions: Once enrolled in the DROP program, the participant shall be retired under the pension plan for the purpose of calculating pension benefits, unless otherwise prescribed herein, but not for the purpose of employment with the Upper Southampton Township Police Department. The DROP participant shall continue to receive all employee benefits and programs as set forth in this agreement. Once an officer enters the DROP program, he or she shall no longer be required to make any contributions to the pension fund.
Retirement rate: Payments to DROP accounts will be made at the participant's normal retirement monthly benefit amount, which is determined by Act 600 approved May 29, 1956, P.L. 1804, Ordinance No. 241 and this agreement.
Administration: DROP accounts shall be administered by an investment manager who shall be selected, and agreed upon, by both the Township and the Association. All DROP accounts shall receive the rate of return experienced by the DROP Fund during the participant's DROP period. The Township and Association agree that any costs or fees associated with the management of the DROP program accounts shall be paid directly from the DROP accounts within the Police Pension Fund and not by the Township. Furthermore, the Township and the Association agree that the investment risk is borne entirely by the participant in the DROP program and not by the Township or the Police Pension Fund.
Disability issues: If, while an officer is enrolled in the DROP program and he or she is injured while on duty, to the extent that he or she is permanently disabled from performing police work for Upper Southampton Township as a result of that service-connected disability, the police officer shall be retired on the basis of a service-connected disability, at the then-current normal monthly retirement benefit. The officer has no claim for a disability pension once the officer enrolls in the Drop program.
Survivorship options: If a DROP participant dies during his or her participation period, all funds in the participant's account shall be disbursed to the participant's beneficiary or beneficiaries listed in the DROP contract. If the participant dies after receiving the DROP account funds, further disbursements or disposition of those funds shall be determined by the deceased participant's Last Will and Testament and/or applicable state and federal estate laws.
Conflict with laws: If, after the DROP program is instituted, an agency of the Commonwealth of Pennsylvania issues an official opinion holding that this DROP plan is in conflict with Pennsylvania law, the Township and the Association agree to meet within 30 days to discuss such opinion and bring the DROP program into compliance with applicable law, if possible. If no agreement can be reached, or if there is a dispute as to the validity of the official opinion, either or both parties may submit the dispute to the Court of Common Pleas of Bucks County for a declaratory judgment. If the DROP program cannot be brought into compliance with Pennsylvania Law, it shall be terminated subject to any constitutionally vested rights of the participants. It is the intention of the parties that the DROP program will only be terminated if a final determination is made that the program cannot be brought into compliance with applicable Pennsylvania Law.
Killed in the line of duty: If a DROP participant dies during the DROP period and the Act 600 Killed in Service Death Benefit is payable to the survivor of the DROP participant, then the DROP election shall be deemed withdrawn and the DROP account shall not be payable to any designated beneficiary, but rather shall revert to the corpus of the plan. In such a case, the Act 600 Killed in Service Benefit shall be payable.
Death while on DROP: If a DROP participant dies during the DROP period, and the Act 600 Killed in Service Benefit is not payable, the officer shall be honorably discharged as of the date of death, and the designated beneficiary shall be entitled to a lump sum payment of the DROP account, together with any applicable survivor benefit authorized by the plan.
The actual date of availability of the DROP program will commence with the start of the Collective Bargaining Agreement and the appointment of a mutually agreed upon investment manager, whichever is later.