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." 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.
[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]
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.
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.
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.
[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.
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.
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.