Township of Upper Southampton, PA
Bucks County
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Table of Contents
Table of Contents
[Adopted 12-16-1986 by Ord. No. 242]
A Municipal Pension Plan is hereby established pursuant to and in compliance with the Act of May 1, 1933, P.L. 103 (No. 69), reenacted and amended July 10, 1947 (P.L. 1481, No. 567) as amended, known as the "Second Class Township Code."[1] 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.
[1]
Editor's Note: See 53 P.S. § 65101 et seq.
[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 cost. This is sometimes called actuarial study or actuarial report.
ACTUARY
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.
ANNUITY
A contract that provides an income for specified period 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."
COMMITTEE
The persons appointed to serve as administrators and trustees of the pension fund.
CONTRIBUTIONS
The payroll deductions made biweekly from the compensation of the participants and paid to the pension fund; except that contributions in § 24-21 shall mean the total contribution accumulated during the period of employment and participation in this fund.
EMPLOYER
Upper Southampton Township, hereinafter referred to as "Township."
FUND
The municipal pension established pursuant to this article.
MONTHLY BENEFIT COMPENSATION
For those who retire on or after January 1, 2008, "monthly benefit compensation" shall be calculated by averaging the last 36 months of the participant's monthly compensation.
[Amended 12-18-2001 by Ord. No. 351; 1-15-2008 by Ord. No. 390[1]]
MONTHLY COMPENSATION
The total earnings received by a participant in each and every month including, but not limited to, base salary, paid holidays and overtime.
MUNICIPALITY
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.
PARTICIPANT
Every person duly appointed from time to time by the Supervisors as a full-time, paid nonuniformed employee 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.
TERMINATION
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.
VESTING
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.
[1]
Editor's Note: This ordinance also provided that it shall be effective as of 1-1-2008.
A. 
The Committee shall administer the Municipal 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.
B. 
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 and from among nonuniformed employees 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.
(1) 
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:
(a) 
Board of Supervisors appointee: two years.
(b) 
Nonuniformed employee appointee: three years.
(c) 
Citizen appointee: four years.
(d) 
Nonuniformed employee appointee: five years.
(2) 
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.
C. 
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.
D. 
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 designate.
E. 
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.
F. 
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.
G. 
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 Municipal Pension Fund assets.
H. 
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, losses, damages, expenses and liability arising from any action or failure to act, except for such that is the result of gross negligence of willful misconduct of such member.
[Amended 2-2-1988 by Ord. No. 252; 12-3-1991 by Ord. 291]
A. 
Superannuation retirement age and length of service. The superannuation retirement age shall be 61 years of age and 20 years of service.
[Amended 1-18-2005 by Ord. No. 366]
B. 
Basic benefits.
[Amended 1-18-2005 by Ord. No. 366]
(1) 
The monthly pension benefit is determined by multiplying the years of credited service times the monthly benefit compensation times 2.6%. However, in no event shall the normal retirement benefit equal more than 70% of the final salary.
(2) 
Cost of living increases. Benefits shall be increased annually in proportion to changes in the Consumer Price Index; provided, however, the total amount of such cost of living increases in the pensions of retired members shall be limited to a lifetime cap of 5%.
C. 
Death benefits.
(1) 
If a member is eligible to elect a superannuation benefit and dies before electing said benefit, it will be presumed that he elected the benefit the day before he died.
(2) 
A member who meets the qualifications for superannuation or voluntary early retirement may file an application with the Committee for said benefit, providing that the application become effective only upon his death. In the event no application is filed, it will be presumed the member had elected to retire under Option A as defined in the "Options at Retirement" outlined in Subsection G of this section, naming the beneficiary in the most recent Nomination of Beneficiary Form on file with the Committee.
D. 
Disability retirement.
(1) 
With a service-connected disability, an annual benefit equal to 50% of the final salary is payable. For a non-service-connected disability, an annual benefit of 30% of the final salary is payable, provided the member has 10 or more years of credited service.
(2) 
The disability must be a permanent and total disability and occur prior to superannuation age. The benefit is offset by appropriate worker's compensation benefits.
E. 
Vesting. A member's retirement benefit becomes fully vested upon the completion of five years of credited service. Application to vest must be made within 90 days of separation from employment.
[Amended 1-18-2005 by Ord. No. 366]
F. 
Early retirement. A member may receive an annuity under the early retirement provisions, provided one of the following conditions is met:
(1) 
The member is involuntarily terminated with eight or more years of credited service; or
(2) 
The member has earned at least 20 years of credited service; or
(3) 
The member has attained the age for superannuation but has not met the superannuation service requirements.
(4) 
The early retirement annuity granted under Subsections F(1) or (2) results in an actuarially reduced benefit. The reduction is calculated based on the time early retirement is taken before superannuation age. Early retirement elected under Subsection F(3) produces a proportional reduction with the normal retirement benefit reduced by the ratio of the credited years of service divided by the required years of credited service for superannuation retirement.
G. 
Options at retirement.
(1) 
At the time of a member's superannuation or early retirement, he may elect to receive his normal benefit payable throughout his life. This option is known as a single life annuity. Upon the member's death, any member contributions or credited interest not paid in the form of a benefit will be paid to the designated beneficiary.
(2) 
A member may, instead of the single life annuity, elect one of the following optional forms of benefit payment. In all cases, the benefits will be calculated to have the equivalent actuarial value as the single life annuity.
(a) 
Option 1. Under this option, if the member dies before receiving in benefit payments the present value of his retirement benefit as it was determined at retirement, the remainder shall be paid to the named beneficiary or estate. If the amount is more than $5,000, the beneficiary may elect to receive it in a lump sum, an annuity; or a lump sum with the remainder as an annuity.
(b) 
Option 2. With this option, the member would choose a survivor annuitant and so long as either one is living, the benefit would continue to be paid.
(c) 
Option 3. With this option, the member would choose a survivor annuitant. Upon the death of the member, the survivor annuitant would receive a benefit that was 1/2 of the member's benefit so long as the survivor annuitant was living.
(3) 
Under Options 2 and 3, the survivor annuitant is selected at retirement and cannot be changed thereafter.
H. 
Effective January 1, 1999, benefits payable to participants under the provisions of this article shall not be subject to a social security offset.
[Amended 12-15-1998 by Ord. No. 333]
I. 
Designation of beneficiaries. Each participant shall have the right to name the beneficiary or beneficiaries for benefits provided under this pension plan on forms provided by the Committee.
A. 
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 a percentage of actual compensation (see § 24-17) which is sufficient to keep the fund actuarially sound and, effective January 1, 1999, said contribution shall not be less than 4% of a participant's total compensation.
[Amended 12-15-1998 by Ord. No. 333]
B. 
Reduction or elimination of participant's contributions. The monthly contributions of the participants may be reduced below the minimum percentage hereinbefore 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 affected 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.
C. 
Contributions of the municipality.
(1) 
Prior service liability. It shall be the obligation of the municipality to fund the prior service liability of participants determined by 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.
(2) 
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.
(3) 
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.
D. 
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 nonuniformed employees may be used as follows:
(1) 
To reduce the unfunded liability, or after such liability is funded;
(2) 
To apply against the annual obligation of the municipality for future service cost, or, to the extent that the payment may be in excess of such obligation; or
(3) 
To reduce participants' contribution.
E. 
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.
F. 
Allocation of assets of existing pension fund(s). Any assets of any existing pension fund established for the nonuniformed employees of Upper Southampton Township are hereby transferred to the fund established by this article and shall be applied against the unfunded liability.
A. 
If, for any reason, a member of this plan shall terminate service prior to superannuation retirement age, that member shall be entitled to a refund of accumulated deductions as defined in § 24-17.
B. 
If a member shall subsequently return to service and return the accumulated deductions as defined in § 24-17 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 § 24-22.
A. 
Any member who has been employed by Upper Southampton Township and who thereafter is inducted into military service in times of war, armed conflict, or national emergency shall have credited to his employment record for pension or retirement benefits all of the time spent by him in such military service, during the continuance of war, armed conflict or national emergency if such person returns or has heretofore returned to his employment within six months after his separation from the service.
B. 
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.
(1) 
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.
(2) 
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 the member's contributions in effect on the date of the member's application, compounded annually.
(3) 
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.
(4) 
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:
A. 
Sufficient funds shall be maintained to provide the pension benefits prescribed in § 24-19 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.
B. 
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.
C. 
All funds in excess of the funds described in Subsections A and B of this section shall be returned to the commonwealth as unused funds pursuant to the Act of May 12, 1943, P.L. 259, as amended, 72 P.S. § 2263.1 et seq.
A. 
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.
B. 
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.
A. 
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.
B. 
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 purchases, 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 § 24-19F. All such amendments shall comply with the applicable statutes of the commonwealth.
A. 
This plan shall be construed according to the laws of the Commonwealth of Pennsylvania and all provisions herein shall be administered according to the laws of such commonwealth.
B. 
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 in the plural form in all cases where they would so apply.
C. 
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.