[Adopted 1-26-1988 by Ord. No. 88-1 (Ch. 1, Part 8, of the
1992 Code)]
This amending restatement may be referred to as the "Middletown
Township Retirement Plan."
The provisions of this restated plan shall apply only to an
individual who meets the definition of "employee" set forth herein
and whose employment terminates on or after the restatement date.
The rights and benefits, if any, of the individual whose employment
terminated prior thereto shall be determined in accordance with the
prior provisions in the plan in effect on the date his employment
terminated (subject to any modification set forth herein which may
affect the holding and/or distribution of previously accrued but unpaid
benefits).
The adoption of this plan by the Township constitutes the continuation
of the existing plan ("prior plan"). Notwithstanding any other plan
provisions to the contrary, the following shall be applicable:
A.
Subject to the conditions and limitations of this plan, each person
who was a participant under the prior plan immediately prior to the
restatement date shall continue as a participant under this plan.
B.
Amounts being paid to a former participant or beneficiary in accordance
with the provisions of the prior plan shall continue to be paid in
accordance with such provisions.
C.
Any beneficiary designation in effect under the prior plan immediately
before its amendment and continuation in the form of this restated
plan shall be deemed to be a valid designation filed with the employer
under this plan, to the extent consistent with the provisions hereof,
unless and until the participant revokes such designation or makes
a new designation under this plan.
[Amended 4-18-1989 by Ord. No. 89-4; 2-19-1991 by Ord. No. 91-8; 1-27-1998 by Ord. No. 98-03; 6-3-2003 by Ord. No. 03-12]
The following words and phrases as used in this plan shall have
the meaning set forth in this article, unless a different meaning
is otherwise clearly required by the context:
The benefit to which a participant is entitled as of any given
date of reference and will be an allocable portion of the benefit
to which he will be entitled at normal retirement date. As of any
given date, a participant's accrued benefit shall be determined on
the basis of (1), (2) or (3) below, whichever applies:
If the participant's benefit is determined under § 70-106A(1) [and § 70-106A(2), if applicable], the accrued benefit shall be the monthly annuity equivalent payable at normal retirement date of the participant's account balance (determined as of such date);
If the participant's benefit is determined under § 70-106A(3), it shall be the monthly amount determined thereunder on the basis of the participant's years of service as of such date; or
If the participant's benefit is determined under § 70-106A(4), it shall be the monthly accrued benefit payable at normal retirement date, determined in accordance with the relevant provisions of the prior plan as in effect on the day preceding the restatement date;
And such accrued benefit shall be payable as a monthly annuity commencing at normal retirement date, or the actuarial equivalent thereof, in accordance with the provisions of § 70-106 hereof; provided, however, a participant's accrued benefit shall be subject to any applicable offsets, adjustments or limitations set forth hereunder prior to the payment thereof. The accrued benefit of any participant in the plan on the day preceding the restatement date shall not be less, as of the restatement date, than it was on the day preceding the restatement date due to the terms of this amendment and restatement of the plan.
The total amount contributed by any participant to this plan
or its predecessor by way of payroll deduction or otherwise, plus
interest credited thereon at the rate of 6%, compounded annually.
The Municipal Pension Plan Funding Standard and Recovery
Act, which was enacted as Act 205 of 1984, 53 P.S. § 895.101
et seq.
Two forms of payment which each involve life contingencies
and which are of equal actuarial present value on a specified date.
The factors to be used in determining actuarial equivalents shall
be 7.5% interest and the 1971 Group Annuity Mortality Table rates
(male rates).
The person, partnership, association or corporation which
at any given time is serving as actuary, provided that such actuary
must be an "approved actuary" as defined in the Act.
Any leave of absence granted in writing by the employer for
reasons, including, but not limited to, accident, sickness, pregnancy
or temporary disability, education, training, jury duty or such other
reasons as may necessitate authorized leave from active employment.
Any person or legal entity designated by a participant to
receive death benefits under the plan.
The person designated by the Township who has the primary
responsibility for the execution of the administrative affairs for
the Township.
The Internal Revenue Code of 1954, as amended.
The basic regular nondeferred rate of taxable wages or salary
(base pay only) received by an employee, excluding therefrom any additional
or extra forms of remuneration such as bonuses, commissions or overtime
payments.
An employee's period of continuous uninterrupted employment
with the employer beginning with such employee's service commencement
date and ending on the date when he terminates employment with the
employer. For purposes of this section, an employee's employment shall
not be deemed to have been interrupted by any periods of authorized
leave of absence expressly granted by the employer; nor shall it be
deemed interrupted by any period of absence during which he served
in the armed forces of the United States of America, provided the
employee returns to his employment with the employer at the time and
under the circumstances required to give him reemployment rights under
any federal or state law. In the event an employee does not return
to employment within the specified period or at the end of an authorized
leave of absence, he shall be deemed to have terminated his employment
when he originally left the service of the employer.
A retirement annuity or retirement income endowment policy
(or a combination of both), or any other form of insurance contract
or policy which shall be deemed appropriate in accordance with the
provisions of the Act.
The date when a participant retires or terminates employment
with the employer if such date is prior to the participant's normal
retirement date but on or after the later of:
The date upon which the provisions of this plan were first
effective, that is, September 1, 1964.
The day which coincides with or immediately follows an employee's completion of the eligibility requirements of § 70-104.
Any person who is regularly employed as a nonuniformed employee
by the employer for at least 1,000 hours of service during each year
of his employment with the employer; such term shall exclude:
Any person who is represented by a collective bargaining agent
with whom the matter of retirement benefits has been the subject of
good faith bargaining with the employer and with respect to whom inclusion
in this plan has not been provided for in such collective bargaining
agreement.
Any person covered by another plan maintained by the employer.
Any person employed on a temporary or seasonal basis.
Any person who works less than 35 hours per week.
The Township of Middletown.
The current insurer, Principal Mutual Life Insurance Company
of Des Moines, Iowa, or such other insurance company, if any, as may,
from time to time hereafter, be designated by the employer.
The first day of the month coincident with or next following the date when a participant retires pursuant to the provisions of § 70-106E.
A life annuity with a modified cash refund of the participant's
accumulated contributions.
The earlier of the following dates:
The first of the month coincident with or next following
the date when an employee attains normal retirement age.
Any employee who has commenced participation in this plan in accordance with § 70-104 and has not for any reason ceased to participate hereunder.
The assets of the pension plan, which shall be accounted
for separately from the assets of any other plans maintained by the
employer and which shall be administered under the supervision of
the employer in accordance with the terms of the plan.
The Middletown Township Retirement Plan.
The person or committee appointed by the employer to supervise
and administer the plan. In the event no such appointment is made,
the Plan Administrator shall be the employer.
The twelve-month period beginning on January 1 and ending
on the following December 31.
The plan as it existed on the day preceding the restatement
date.
The mandatory time period that the employer requires to evaluate
an employee in that position.
January 1, 1987, the effective date of this amended and restated
plan.
An employee's date of hire.
A participant that is subject to a mental or physical incapacity
of such severity that he is eligible to receive disability benefits
under the Federal Social Security System.
A separate account maintained by a trustee for the purposes
of receiving contributions to the plan and for performing and providing
to the Plan Administrator an accounting of all such contributions
and/or other activities of the account as the Plan Administrator may
direct.
[Added 10-17-2011 by Ord. No. 11-07]
An individual or organization appointed by the Board of Supervisors,
including, but not limited to, a bank or trust company, who shall
take ownership of the assets contained in a trust account for the
purposes of protecting such assets for the sole benefit of the beneficiaries
of the trust account, and who shall receive, invest, disburse and/or
otherwise dispose of contributions to, and/or assets of, the trust
account in accordance with the direction of the Plan Administrator.
[Added 10-17-2011 by Ord. No. 11-07[1]]
Each completed twelve-month period of continuous employment
with the employer. Such twelve-month periods shall be measured beginning
on the employee's service commencement date and anniversaries thereof.
Years of service shall be calculated to fractional years on the basis
of completed months.
[Amended 2-19-1991 by Ord. No. 91-8; 12-17-1991 by Ord. No. 91-34]
A.
An employee shall become a participant in the plan if he is an employee of the employer on his eligibility date, as provided in Subsection A(1) or (2) below:
(1)
Each employee who was a participant in the plan on the day preceding
the restatement date shall continue to be a participant on and after
the restatement date, subject to the terms hereof governing continued
participation in the plan.
(2)
In all other cases, an employee shall become a participant in the
plan after completion of the employee's probationary period.
B.
Each employee who was an employee on the day preceding the restatement date but who had not yet elected to become a participant shall be given a onetime irrevocable election as soon after the restatement date as administratively feasible, providing that either Subsection B(1) or (2) shall apply, as follows:
(1)
Such participant shall be covered as a noncontributory participant hereunder and shall be eligible only for the benefit described in § 70-106A(3) hereof; or
(2)
Such participant shall be covered as a contributory participant hereunder by making contributions in accordance with § 70-106B and shall be eligible to receive the benefit provided under § 70-106A(1) or (4).
C.
Each other employee whose service commencement date occurs on or
after the restatement date shall, as a condition of his employment
with the employer, be required to participate hereunder and shall
automatically become a participant in the plan on his eligibility
date.
E.
Participation requirements. Each participant whose service commencement date occurs on or after the restatement date, § 70-105B hereof, shall execute and complete any enrollment application forms, as required by the Plan Administrator. Each participant whose service commencement date occurred prior to the restatement date and who is a contributory participant as of the restatement date shall also be required to contribute to the plan in accordance with § 70-105B. Only those participants who were employees as of December 31, 1986, but who had not yet elected to participate in the plan shall be given the election to be covered as "noncontributory participants" hereunder.
F.
Change in status. In the event a participant who remains in the service of the employer ceases to be an employee eligible for coverage hereunder, or who ceases or fails to make any contributions which are required as a condition of his participation hereunder, no further benefit accruals shall occur until the participant again qualifies under such participation requirements of § 70-104A through D.
G.
Leave of absence. During any leave of absence that is not an authorized
leave of absence, a participant shall be deemed an inactive participant
and shall not be given credit for years of service for vesting, nor
shall he continue to accrue any years of service for benefits hereunder.
If the employee is not reemployed by the expiration of his leave of
absence, his participation in the plan shall cease on the date on
which his leave of absence commenced. During any authorized leave
of absence, a participant shall continue to receive credit for years
of service for vesting, but years of credited service shall not accrue
unless expressly authorized by the employer as part of the terms and
conditions of such authorized leave of absence.
H.
Recordkeeping. The employer shall furnish the Administrator with
such information as will aid the Administrator in the administration
of the plan and trust. Such information shall include all pertinent
data on employees for purposes of determining their eligibility to
participate in this plan initially and subsequently.
I.
Noneligible participant. The Township Manager shall not be eligible
to participate in the plan.
[Amended 2-19-1991 by Ord. No. 91-8; 12-17-1991 by Ord. No. 91-34; 6-3-2003 by Ord. No. 03-12]
A.
Employer contributions. The employer shall contribute to the plan
the amount determined by the plan's actuary and certified by the chief
administrative officer as the amount which, when combined with state
aid and participants' contributions, is necessary to adequately fund
the benefits hereunder in accordance with the requirements of the
Act.
B.
Mandatory employee contributions. As a condition of participation hereunder, each participant shall be required to file a written designation with the Plan Administrator authorizing that contributions be deducted from his monthly compensation and contributed to the plan at a rate of 5% per month, with the sole exception of those noncontributory participants described in § 70-104E who are eligible to receive only the fixed benefit provided in § 70-106A(3). Such contributions shall be maintained in an employee contribution account which sets forth the amount of a contributory participant's accumulated contributions as of any given date.
C.
No reversion to the employer. At no time shall it be possible for
the plan assets to be used for, or diverted to, any purpose other
than for the exclusive benefit of the participants and their beneficiaries,
except that contributions made by the employer may be returned to
the employer if:
[Amended 1-27-1998 by Ord. No. 98-03; 6-3-2003 by Ord. No. 03-12]
A.
Normal retirement pension. If a participant retires, on or after
the restatement date, on his normal retirement date, he shall be entitled
to receive a monthly normal retirement benefit, expressed in the normal
form, commencing at normal retirement date, equal to whichever of
the following applies:
(1)
The account balance formula. For any contributory participant who
participates in the plan on or after the restatement date, such participant's
benefit shall be expressed in the form of an account balance but shall
be payable in the form of a monthly annuity which is the actuarial
equivalent of such account balance. The monthly annuity equivalent
shall be based upon the factors used in determining actuarial equivalents.
The participant's hypothetical account balance shall be composed of
two parts, as follows:
(a)
An employee contribution account, which shall provide a benefit
which is the actuarial equivalent of the amount of the participant's
accumulated contributions made to the plan on and after the restatement
date; and
(b)
The employer contribution account, which shall provide a benefit which is equivalent to the amount credited to the participant's employee contribution account in Subsection A(1)(a) plus the additional amount that would hypothetically accumulate in the employee contribution account if the mandatory employee contribution rate of 5% as set forth in § 70-105B were increased to 7% effective January 1, 2003.
(2)
Past service benefit for current participants. For participants who had entered the plan on an eligibility date occurring prior to the restatement date, in addition to the benefit described in Subsection A(1) above, a past service benefit shall be established in the form of a beginning account balance allocated to both the employee contribution account and the employer contribution account. The beginning balance allocated to each of these accounts shall be identical and shall be an amount equal to the participant's accumulated contributions, determined as of the day preceding the restatement date, with interest thereon as provided under the prior plan on the day preceding the restatement date.
(3)
Minimum benefit formula for noncontributory participants. For employees employed by the employer on the day preceding the restatement date, who are not participants as of the day preceding the restatement date and who file an irrevocable election not to be covered as contributory participants under the plan, such participants shall be covered as noncontributory participants hereunder, as provided under § 70-104. The benefit payable to such noncontributory participants, as of any given date of reference, shall be a benefit expressed in the form of a single life annuity, payable at normal retirement date and equal to $10 multiplied by any years of service earned by the participant subsequent to January 1, 1987.
(4)
Minimum benefit for current participants. For participants who were
contributory participants covered by the plan on the day preceding
the restatement date, the minimum benefit payable under this plan
on and after the restatement date shall not be less than the benefit
which would have accrued under the formula contained in Section 1307(A)
of the prior plan, as in effect on the day preceding the restatement
date, as if such formula had continued in effect subsequent to the
restatement date.
B.
Account balance for bookkeeping purposes only. Notwithstanding any other provisions of this plan, the account balance formula described under § 70-106A(1) and (2) shall be upon a hypothetical account balance maintained as a bookkeeping entry only. Such amounts shall not be maintained as actual individual accounts, and neither the Plan Administrator nor the trustee shall be under any obligation to establish such accounts; moreover, there shall be no requirement that the credited interest rate equal the actual earnings of the trust fund for any given period, nor shall there be any requirement that the sum of individual accounts correspond to the value of trust assets as of any given point of reference. The account balance formula shall be solely a mathematical formula used to derive the amount of a participant's accrued benefit under this defined benefit pension plan. Such accrued benefit shall be payable only in the form of an annuity in the normal form, or an annuity which is the actuarial equivalent thereof, unless other forms of payment are authorized under other circumstances which are expressly permitted hereunder.
C.
Normal form. The normal form of retirement benefit hereunder shall
be a life annuity with a modified cash refund of the participant's
accumulated contributions.
D.
Early retirement. If a participant shall retire on an early retirement
date, he shall be entitled to receive, upon making an election therefor,
either:
(1)
A deferred pension commencing at normal retirement date equal to
the participant's accrued benefit determined as of his early retirement
date; or
(2)
An immediate pension commencing on his early retirement (or on any
date intervening between his early retirement date and his normal
retirement date) equal to whichever of the following amounts is applicable:
(a)
If the participant's benefit is determined under § 70-106A(3) or (4), such benefit shall be equal to the benefit described in § 70-106D(1) above, reduced, however, by 6 2/3% for each year by which the date of commencement of benefit payments precedes the participant's normal retirement date. (This reduction shall be straight-line interpolated to completed months.)
(b)
If the participant's benefit is determined under § 70-106A(1) [and § 70-106A(2), if applicable], such benefit shall be the participant's account balance determined under the account balance formula of § 70-106 as of his early retirement date, converted to a monthly annuity benefit payable as of the participant's early retirement date (or any date prior to normal retirement date which is the date selected by the participant as the commencement date for his early retirement benefit), on the basis of the factors used in determining actuarial equivalents.
E.
Late retirement. If a participant remains in the employ of the employer subsequent to his normal retirement date, he shall continue to be eligible to participate hereunder. A participant who retires on a late retirement date shall be entitled to receive a monthly pension determined in accordance with § 70-106, but based on his account balance and/or years of service as of his late retirement date.
F.
Preretirement death and disability benefit.
(1)
If a contributory participant dies or becomes totally and permanently disabled prior to the date when he is eligible to receive retirement benefits hereunder, a benefit equal to the actuarial equivalent of the participant's entire account balance (whether attributable to employer or employee contributions) as set forth under § 70-106A(1) and (2) shall be payable to the participant, in the case of disability, or to the participant's beneficiary, in the case of the participant's death.
(2)
If a noncontributory participant dies prior to becoming eligible
to receive retirement benefits hereunder, no benefit shall be payable
hereunder.
(3)
If a noncontributory participant becomes totally and permanently
disabled prior to the date when he is eligible to retire and receive
benefits hereunder, such participant shall be eligible to receive
a deferred benefit payable at normal retirement date equal to the
participant's accrued benefit, determined as of the date when his
employment terminates due to his becoming totally and permanently
disabled.
G.
Postretirement death benefits. If a participant dies subsequent to
the date when his retirement benefits commence, no death benefits
shall be payable under this article, and the death benefit payable,
if any, from this plan shall be limited to that which is payable pursuant
to the form of benefit payment in force for such participant at the
time his death occurs.
H.
Maximum benefit limitations.
(1)
Notwithstanding any other provisions of this plan, no benefit provided
under this plan attributable to contributions of the employer shall
exceed, as an annual amount, the lesser of:
(a)
Ninety thousand dollars, assuming a single life annuity or qualified
joint and survivor annuity (as defined for purposes of Code Section
415), subject to cost-of-living adjustments made from time to time
by plan amendments or automatically in accordance with and in such
amounts as are prescribed in or pursuant to regulations promulgated
under Section 415(d) of the Code (which adjustments shall not become
effective prior to January 1 of the year for which such adjustment
is made); or
(b)
One hundred percent of the participant's average compensation for the three consecutive years of employment (or such lesser number as may apply if the employee does not have three consecutive years) in which he received the highest aggregate compensation while a participant, and the rate of benefit accrual shall be frozen or reduced accordingly, subject to the provisions of Subsection H(2) below.
(2)
The limitation provided in Subsection H(1) above shall be subject to the following conditions:
(a)
For purposes of the above limitations, "compensation" shall
mean the participant's wages, salaries, fees for professional services
and other amounts received for personal services actually rendered
in the course of employment with an employer maintaining the plan.
The term "compensation" as used in this section shall not include
items such as the following:
[1]
Contributions made by the employer to a plan of deferred compensation
to the extent that, before the application of Code Section 415 limitations
to that plan, the contributions are not includable in the gross income
of the employee for the taxable year in which contributed. In addition,
employer contributions made on behalf of an employee to a simplified
employee pension described in Code Section 408(k) are not considered
as compensation for the taxable year in which contributed to the extent
such contributions are deductible by the employee under Code Section
219(b)(7). Additionally, any distributions from a plan of deferred
compensation are not considered as compensation for Code Section 415
purposes, regardless of whether such amounts are includable in the
gross income of the employee when distributed. However, any amounts
received by an employee pursuant to an unfunded nonqualified plan
may be considered as compensation for Code Section 415 purposes in
the year such amounts are includable in the gross income of the employee.
[2]
Other amounts which receive special tax benefits, such as premiums
for group term life insurance (but only to the extent that the premiums
are not includable in the gross income of the employee), or contributions
made by an employer (whether or not under a salary reduction agreement)
towards the purchase of an annuity contract described in Internal
Revenue Code Section 403(b) (whether or not the contributions are
excludable from the gross income of the employee).
(b)
For purposes of the above limitations, if the benefit under the plan is payable in any form other than in the forms described therein (without regard to ancillary benefits) or if the employees contribute to the plan or make rollover contributions, the determination as to whether the limitations have been satisfied shall be made by adjusting the benefit so that it is the actuarial equivalent of the benefit described in § 70-106H(1). For the purpose of making the adjustment in the form of the benefit to an actuarial equivalent, the interest rate shall not be less than the greater of 5% or the rate specified under the plan's definition of actuarial equivalent.
(c)
If retirement income benefits commence prior to a participant's attainment of age 62, the limitation contained in § 70-106H(1)(a) shall be adjusted to the actuarial equivalent of $90,000 annual benefit commencing at age 62. The reduction under this paragraph shall not reduce the limitation of § 70-106H(1)(a) below $75,000 if the benefit begins at or after age 55 or, if the benefit begins before age 55, the amount which is the equivalent of the $75,000 limitation for age 55. For the purpose of making this adjustment, the interest rate used shall not be less than the greater of 5% or the rate specified in the plan's definition of actuarial equivalent.
(d)
If retirement income benefits commence after the participant's attainment of age 65, the limitation described in § 70-106H(1)(a) shall be adjusted so that such limitation (as so increased) equals an annual benefit (beginning when such retirement income benefit begins) which is the actuarial equivalent of a ninety-thousand-dollar annual benefit commencing at age 65; provided, however, that in no case shall such benefit exceed the limitation contained in § 70-106H(1)(b). For the purpose of making this adjustment, the interest rate assumption shall not be greater than the lesser of 5% or the rate specified in the plan's definition of actuarial equivalent.
(e)
Benefits payable to a participant under this plan shall be deemed not to exceed the limitations imposed by § 70-106H(1) if the annual benefit payable to such participant does not exceed $10,000 (for this year or any prior year), provided such participant has never participated in a defined contribution plan maintained by the employer.
(f)
In the event a participant has less than 10 years of service, the limitations described in § 70-106H(1) and (2)(e) of this section shall be multiplied by a fraction, the numerator of which is the number of years of service credited to the participant and the denominator of which is 10.
(g)
For purposes of applying the limitations of this section, all
defined benefit plans of the employer shall be treated as one defined
benefit plan, and all defined contribution plans shall be treated
as one defined contribution plan.
(h)
For purposes of the above limitations, the limitation year shall
be the plan year, unless such period is otherwise defined in a written
resolution adopted by the employer.
A.
Forms of benefit payment.
(1)
The normal form for payment of retirement benefits shall be a life
annuity with a modified cash refund of the participant's accumulated
contributions.
(2)
If a participant elects not to receive his benefits in the normal
form, he shall file a written election with the Plan Administrator
indicating that he wishes to receive payment of his benefit in such
other annuity forms as may be approved and authorized by the Plan
Administrator at the time such payments commence. Any optional form
authorized for payment of benefits hereunder shall be the actuarial
equivalent of the normal form. Payment of benefits in the form of
a single lump-sum cash payment shall also be permitted under this
plan.
B.
Commencement of benefits.
(1)
A participant may elect to commence receiving distribution of his
retirement benefits as of his normal retirement date. If a participant
elects immediate commencement of his retirement benefit, payments
shall commence as of the first of the month following his retirement
date.
(2)
Unless the participant otherwise elects, payment of his benefits
under the plan shall commence not later than 60 days following the
close of the plan year in which occurs the latest of the following
dates:
C.
Required distributions.
(1)
Notwithstanding any other provision of this plan, the entire benefit
of any participant who becomes entitled to benefits prior to his death
shall be distributed either:
(a)
Not later than the required beginning date; or
(b)
Over a one-hundred-twenty-month period beginning not later than
the required beginning date and extending over the life of such participant
or over the lives of such participant and designated beneficiary (or
over a period not extending beyond the life expectancy of such participant
or the joint life expectancies of such participant and a designated
beneficiary).
(2)
If a participant who is entitled to benefits under this plan dies prior to the date when his entire interest has been distributed to him after distribution of his benefits has begun in accordance with § 70-107B above, the remaining portion of such benefit shall be distributed at least as rapidly as under the method of distribution being used under § 70-107B as of the date of his death.
(3)
If a participant who is entitled to benefits under this plan dies
before distribution of his benefits has begun, the entire interest
of such employee shall be distributed within five years of the death
of such employee, unless the following sentence is applicable. If
any portion of the employee's interest is payable to (or for the benefit
of) a designated beneficiary, such portion shall be distributed over
the life of such designated beneficiary (or over a period not extending
beyond the life expectancy of such beneficiary), and such distributions
begin not later than one year after the date of the employee's death
or such later date as provided by regulations issued by the Secretary
of the Treasury, then for purposes of the five-year rule set forth
in the preceding sentence, the benefit payable to the beneficiary
shall be treated as distributed on the date on which such distributions
begin; provided, however, that notwithstanding the preceding sentence
if the designated beneficiary is the surviving spouse of the participant,
then the date on which distributions are required to begin shall not
be earlier than the date upon which the employee would have attained
age 70 1/2 and, further provided, if the surviving spouse dies
before the distributions to such spouse begin, this subparagraph shall
be applied as if the surviving spouse were the employee.
(4)
For purposes of this section, the following definitions and procedures
shall apply:
(b)
"Designated beneficiary" shall mean any individual designated
by the employee under this plan according to its rules.
(c)
Any amount paid to a child shall be treated as if it had been
paid to the surviving spouse if such amount will become payable to
the surviving spouse upon such child's reaching majority (or other
designated event permitted under regulations issued by the Secretary
of the Treasury).
(d)
For purposes of this section, the life expectancy of an employee
and/or the employee's spouse (other than in the case of a life annuity)
may be redetermined but not more frequently than annually.
D.
Small amounts. In its sole discretion, the employer may direct the
Administrator to distribute the vested benefit of a participant who
is terminating his participation in the plan in the form of a lump-sum
payment if the actuarial present value of such benefit is $3,500 or
less and such participant is 100% vested in his accrued benefit hereunder.
Any distribution made pursuant to this section shall be made within
one year after a participant terminates service with the employer.
E.
Designation of beneficiary. A participant may designate a beneficiary
or beneficiaries with respect to any benefits which may become payable
upon his death, and he may from time to time change such beneficiary
or beneficiaries. All such designations shall be made on forms provided
by the Plan Administrator. In the absence of such a designation, if
applicable, the beneficiary of the participant shall be his personal
representative, if any, and if none, those persons entitled to his
estate under the intestate laws of the state in which the participant
was domiciled at the time of his death.
F.
Nonduplication of benefits. To avoid any duplication of benefits,
if any participant ceases to be employed for any reason and is reemployed,
any benefit payments then being paid pursuant to the terms of this
plan shall be suspended and future retirement benefits shall be coordinated
in such a manner as to preclude any duplication hereunder.
[Amended 6-3-2003 by Ord. No. 03-12]
A.
Rights of terminated employees. If a participant shall cease to be
an employee except as otherwise hereinbefore provided, his interest
and rights under the plan shall be limited to those contained in the
following sections of this article.
B.
Refund of accumulated contributions. If a participant whose employment
with the employer has been terminated for any reason other than death
or disability prior to his normal retirement date, and he is neither
eligible for a pension under the plan, nor has he completed at least
five years of service, such participant shall be entitled to receive
an amount equal to his accumulated contributions, if any. Upon receipt
of such amount, said participant and his or her beneficiary shall
not be entitled to any further payments from the plan. (Noncontributory
participants shall not be entitled to any benefit under this section.)
C.
Vested benefits. If a participant's employment terminates for a reason
other than death or retirement after he has completed at least five
years of service, such participant shall be entitled to a deferred
vested benefit equal to his accrued benefit determined as of the date
when his employment terminates.
D.
Payment of vested benefits.
(1)
Payment of vested benefits under § 70-108C shall be in lieu of a refund of a participant's employee contribution account under § 70-108B. Payments of a participant's vested benefit shall be made by the trustee, at the direction of the Administrator and subject to the provisions of § 70-108C, at the date which would have been such participant's normal retirement date had he continued his employment (or such earlier date as may be authorized by the employer on a uniform and nondiscriminatory basis with respect to all plan participants). Notwithstanding the preceding, a participant with an entitlement to a vested benefit may elect to commence receiving such benefit as of the date when he would have been eligible for an early retirement benefit as provided in § 70-106D had he continued employment with the employer; provided, however, that any payment of a vested accrued benefit as of a participant's early retirement date shall be subject to the reduction factor for early payment set forth in § 70-106D(2). A participant eligible to receive his vested benefit may be permitted to receive such benefit in any form authorized for payment of retirement benefits under the provisions of § 70-107A. The Plan Administrator shall, after consulting with the participant, and subject to the provisions of § 70-108C, determine the time and form of any distribution of vested benefits hereunder in a nondiscriminatory manner and not contrary to any laws or regulations which may govern such distributions.
(2)
In the event a deferred vested participant elects to receive a refund
of his accumulated contributions in a single lump-sum payment at any
time on or after the date he ceases to be an employee and before the
date when payment of his vested benefit commences, such payment shall
be deemed a voluntary cash-out hereunder and shall be payable in lieu
of the portion of the deferred benefits otherwise payable hereunder
which is attributable to his employee contributions account. Thereafter,
such employee's deferred vested benefit shall be limited to the employer
contribution account portion or his accrued benefit hereunder.
E.
Vesting at normal retirement date. Notwithstanding the preceding,
a participant shall become 100% vested as of his normal retirement
age.
F.
Forfeiture upon death. A participant who terminates his employment with the employer at a time when he is not vested in any portion of his accrued benefit derived from employer contributions shall cease to be a participant hereunder and shall not be entitled to any benefits under the plan derived from employer contributions. Notwithstanding the preceding, in any case where a participant has made employee contributions to the plan, the current value of the participant's employee contribution account shall be refunded to the beneficiary of the participant, as provided under § 70-106F, if the participant dies prior to receipt of his vested benefit.
G.
Application of forfeitures. Amounts forfeited by any participant
may not be used to increase the benefits which other participants
would otherwise receive under the plan; they shall be used only to
reduce the employer's contributions to the plan.
A.
Plan Administrator.
(1)
The administration of the plan and the operation of the pension fund
shall be directed and supervised by the Board of Supervisors of the
employer. The Board of Supervisors shall have the power and authority,
by a majority of its members, either directly or through a designated
representative, to do all acts and to execute, acknowledge and deliver
all instruments necessary to implement and effectuate the purpose
of this plan. The Board of Supervisors may appoint a Plan Administrator,
which shall have the power and duty to operate and administer the
provisions of the plan and to make and enforce such rules and regulations
as may be necessary and proper for the efficient administration of
the plan.
(2)
If the Board of Supervisors does not appoint a Plan Administrator,
the Board of Supervisors shall be the Plan Administrator.
(3)
The Plan Administrator may appoint such subcommittees with such powers
as it shall determine; may authorize one or more of its members to
execute or deliver any instrument or do any act on its behalf; and
may employ counsel and agents and such clerical, accounting and actuarial
services as it may require in carrying out the provisions of the plan.
B.
Authority and duties of the Plan Administrator.
(1)
The Plan Administrator shall have the power to determine the eligibility
of any employee to participate in or receive benefits under this plan,
to settle any disputes which may arise in the operation of the plan,
and to determine the interest of any participant in the plan.
(2)
All discretionary acts which may be taken pursuant to this plan by
the Plan Administrator with respect to participants or their beneficiaries
shall be uniform and nondiscriminatory in their nature and shall be
applicable to all participants and their beneficiaries in substantially
identical situations.
A.
Operation of the pension fund.
(1)
The Township's Board of Supervisors is hereby authorized to hold
and supervise the investment of the assets of the pension fund, subject
to the provisions of the laws of the Commonwealth of Pennsylvania
and of this plan and any amendment thereto.
(2)
The pension fund shall be used to pay benefits as provided in the
plan and, to the extent not paid directly by the employer, to pay
the expenses of administering the plan pursuant to authorization by
the employer.
(3)
The employer intends the plan to be permanent and for the exclusive
benefit of its employees. It expects to make the contributions to
the trust required under the plan. The employer shall not be liable
in any manner for any insufficiency in the pension fund; benefits
are payable only from the pension fund, and only to the extent that
there are monies available therein.
(4)
The pension fund will consist of all funds held by the employer under
the plan, including contributions made pursuant to the provisions
hereof and the investment, reinvestments and proceeds thereof. The
pension fund shall be held, managed, and administered by the insurer
in accordance with the terms of the plan and the group annuity contract.
B.
Investment of contributions.
[Amended 10-17-2011 by Ord. No. 11-07]
(1)
All contributions made under the plan will be deposited with the
trustee or insurer and invested in accordance with the investment
policy adopted by the Board of Supervisors. The investment of contributions
may include insurance contracts, policies or group annuity contracts,
as well as fixed income securities, equity securities, mutual funds,
bank collective funds, cash equivalents and/or other investments as
deemed appropriate by the Plan Administrator.
(2)
To the extent not prohibited by state law, the employer may specify
whether all or any portion of an employer contribution deposited under
a group annuity contract is to be invested in any of the separate
accounts of the insurer in which the group contract participates.
C.
Actions of insurer. No insurer which may issue a contract or policy
for the purpose of this plan shall be required to take or permit any
action contrary to the provisions of said contract or policy nor shall
the insurer be required to look into the terms of this plan or question
any action as authorized by the plan sponsor.
D.
Insurer not a party to plan. The insurer shall not be deemed to be
a party to this plan for any purpose nor shall it be responsible for
the validity of this plan.
E.
Common investments. The insurer shall not be required to make separate
investments for individual participants or to maintain separate investments
for each participant's account but may invest contributions and any
profits or gains therefrom in common investments.
A.
Right to amend. The employer shall have the right to amend the plan
at any time, by adoption of the appropriate resolution or ordinance,
and with respect to any provisions thereof, and all parties thereto
or claiming any interest thereunder shall be bound thereby; provided,
however, that no amendment shall revise the accrued benefit of a participant
determined as of the later of the date such amendment is adopted or
the date such amendment becomes effective, if such revised vested
accrued benefit is less than that computed under the plan without
regard to such amendment.
A.
Right to terminate. It is the present intention of the employer to
maintain the plan indefinitely. Nevertheless the employer reserves
the right, at any time, to permanently discontinue further contributions
to the plan or to terminate the entire plan.
B.
Distribution upon termination.
(1)
In the event of the termination or partial termination of the plan,
all amounts of benefits accrued by the affected participant to the
date of such termination, to the extent funded on such date, shall
immediately become fully vested and nonforfeitable. In the event of
termination of the plan, the employer shall direct either:
(a)
That the accrued benefits of participants in the plan continue
to be held in the pension fund in accordance with the provisions of
the plan (other than those provisions related to forfeitures) without
regard to such termination until all funds have been distributed in
accordance with such provisions; or
(b)
That distribution be made to each participant in an amount equal
to his accrued benefit as of such date in the form of a lump sum or
such other form as may be approved by the employer.
(2)
If there are insufficient assets in the pension fund to provide for
all vested accrued benefits as of the date of plan termination, priority
shall first be given to the distribution of any amounts attributable
to participant contributions before assets are applied to the distribution
of vested benefits attributable to other sources hereunder.
C.
Residual assets. If all liabilities under the plan to participants
and others entitled to receive a benefit have been satisfied and there
remain any residual assets in the pension fund, the residual assets
shall be returned to the employer insofar as such return does not
contravene any provision of law, and any remaining balance in excess
of employer contributions shall be returned to the commonwealth.
A.
Actuarial valuations. The plan's actuary shall perform an actuarial
valuation at least biennially unless the employer is applying or has
applied for supplemental state assistance pursuant to Section 603
of the Act,[1] whereupon actuarial valuation reports shall be made annually.
(1)
Such biennial actuarial valuation report shall be made as of the
beginning of each plan year occurring in an odd-numbered calendar
year, beginning with the year 1985.
(2)
Such actuarial valuation shall be prepared and certified by an approved
actuary, as such term is defined in the Act.
(3)
The expenses attributable to the preparation of any actuarial valuation
report or experience investigation required by the Act or any other
expense which is permissible under the terms of the Act and which
are directly associated with administering the plan shall be allowable
administrative expenses payable from the assets of the pension fund.
Such allowable expenses shall include but not be limited to the following:
(a)
Investment cost associated with obtaining information, investments
and investment management fees.
(b)
Accounting expenses.
(c)
Premiums for insurance coverage on fund assets.
(d)
Reasonable and necessary counsel fees incurred for advice or
to defend the fund.
(e)
Legitimate travel and education expense for pension plan officials;
provided, however, that the municipal officials of the employer, in
their fiduciary role, shall monitor the services provided to the plan
to ensure that the expenses are necessary, reasonable and benefit
the pension plan; and, further, provided that the Plan Administrator
shall document all such expenses item by item and, where necessary,
hour by hour.
[1]
Editor's Note: See 53 P.S. § 895.603.
B.
Reporting requirements.
(1)
Such actuarial reports shall be prepared and filed under the supervision
of the chief administrative officer of the Township.
(2)
The chief administrative officer of the pension plan shall determine
the financial requirements of the pension plan on the basis of the
most recent actuarial report and shall determine the minimum obligation
of the employer with respect to funding the plan for any given plan
year. The chief administrative officer shall submit the financial
requirements of the plan and the minimum obligation of the employer
to the Board of Supervisors of the employer annually and shall certify
the accuracy of such calculations and their conformance with the Act.
C.
Benefit modifications. Prior to the adoption of any benefit plan
modification by the employer, the chief administrative officer of
the plan shall provide to the employer a cost estimate of the proposed
benefit plan modification. Such estimate shall be prepared by an approved
actuary, which estimate shall disclose to the employer the impact
of the proposed benefit plan modification on the future financial
requirements of the plan and the future minimum obligation of the
employer with respect to the plan.
[Amended 10-4-1994 by Ord. No. 94-16]
A.
Incapacity of pensioner. If any pensioner shall be physically or
mentally incapable of receiving or acknowledging receipt of any payment
of pension benefits hereunder, the employer, upon the receipt of satisfactory
evidence that such pensioner is so incapacitated and that another
person or institution is maintaining him and that no guardian or committee
has been appointed for him, may provide for such payment of pension
benefits hereunder to such person or institution so maintaining him,
and any such payments so made shall be deemed for every purpose to
have been made to such pensioner.
B.
Benefits for a deceased participant. If any benefit shall be payable
under the plan to or on behalf of a participant who has died, if the
plan provides that the payment of such benefits shall be made to the
participant's estate, and if no administration of such participant's
estate is pending in the court of proper jurisdiction, then the employer,
at its sole option, may pay such benefits to the surviving spouse
of such deceased participant or, if there be no such surviving spouse,
to such participant's then living issue, per stirpes; provided, however,
that nothing contained herein shall prevent the employer from insisting
upon the commencement of estate administration proceedings and delivery
of any such benefits to a duly appointed executor or administrator.
C.
Liability of officers of the employer. Subject to the provisions
of the Act, no past, present or future officer of the employer shall
be personally liable to any participant, beneficiary or other person
under any provision of the plan or any policy issued pursuant thereto.
D.
Assets in pension fund not property of individual participants. Nothing
contained herein shall be deemed to give any participant or his beneficiary
any interest in any specific property of the pension fund or any right
except to receive such distributions as are expressly provided for
in this plan.
E.
Employment rights not affected by the plan. Participation in this
plan shall not give any right to any employee to be retained in the
employ of the employer nor shall it interfere with the right of the
employer to discharge any employee and to deal with him without regard
to the effect that such treatment might have upon him as a participant
in this plan.
F.
Pension fund for sole benefit of participants. The income and principal
of the pension fund are for the sole use and benefit of the participants
of this plan and, to the extent permitted by law, shall be free, clear
and discharged of and from and are not to be in any way liable for
debts, contracts or agreements, now contracted or which may hereafter
be contracted, and from all claims and liabilities now or hereafter
incurred by any participant or beneficiary.
G.
Meaning of certain words. As used herein, the masculine gender shall
include the feminine gender and the singular shall include the plural
in all cases where such meaning would be appropriate. Headings of
sections are inserted only for convenience of reference and are not
to be considered in the construction of the plan.
H.
Information to be furnished by the employer. The employer shall furnish
to the Plan Administrator (and, where applicable, the trustee) information
in the employer's possession as the Plan Administrator and the trustee
shall require from time to time to perform their duties under the
plan.
I.
Spendthrift. To the extent permitted by law, no payments to any person
under any contract, nor the right to receive such payments, nor any
interest in this plan and pension fund, shall be subject to assignment,
alienation, transfer of anticipation, either by voluntary or involuntary
act of any participant or beneficiary or by operation of law, nor
shall such payment right or interest be subject to the demand or claims
of any such person's debt, obligations or liabilities.
J.
Tax-exempt status of pension fund. The employer intends that the
plan and accompanying pension fund herein created shall qualify under
the provisions of Section 401(a) of the Internal Revenue Code, as
such provisions apply to qualified government plans and as an "exempt
organization" within the meaning of Section 501(a) of the Internal
Revenue Code of 1954, or under any comparable section of any future
legislation which amends, supplements or supersedes said section.
Nevertheless, all taxes of any and all kinds whatsoever that may be
levied or assessed under the existing or future laws upon the pension
fund or the income thereof and investment charges shall be paid from
the pension fund.
K.
Rollover of eligible distributions.
(1)
A distributee may elect: at the time and in a manner consistent with
the requirements of Section 402(c) of the Internal Revenue Code (the
"Code"), governing rollover of distributions from qualified trusts,
and associated sections and subsections thereof as they shall be amended
from time to time, and at the time and in the manner prescribed by
the Plan Administrator, to have any portion of distribution paid directly
to an eligible retirement plan specified by the distributee in a direct
rollover.
(2)
Definitions.
(a)
Eligible rollover distribution. Any distribution to a distributee
of all or any portion of the balance to the credit of the employee
in a qualified trust; except that such term shall not include:
[1]
Any distribution which is one of a series of substantially equal
periodic payments (not less frequently than annually) made:
[2]
Any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code.
[3]
Any distribution or portion thereof which is not includable
in gross income of the distributee as determined in accordance with
Section 402(c) of the Code.
[4]
Any other distribution not qualifying for rollover treatment
under the Internal Revenue Code of 1986, as amended.
(b)
Eligible retirement plan.
[1]
Any individual retirement account described in Section 408(a)
of the Code.
[2]
An individual retirement annuity described in Section 408(b)
of the Code (other than an endowment contract).
[3]
A qualified trust described in Section 401(a) of the Code.
[4]
An annuity plan described in Section 403(a) of the Code. Except
that if a lump-sum distribution is made to a spouse of an employee
after the employee's death under Code Section 402(c)(9), only individual
retirement accounts and individual retirement annuities as described
in this section shall be considered eligible retirement plans.
(c)
Distributee. Includes the following:
(3)
Other provisions. All other provisions of this article known as the
"Middletown Township Retirement Plan" notwithstanding, neither the
Township nor the Plan Administrator shall be obligated to allow:
(a)
A distributee to divide an eligible rollover distribution into
two or more separate distributions to be paid in direct rollovers
to two or more eligible retirement plans.
Whenever the requirements of this article are in conflict with
other requirements of the ordinances of the Township of Middletown,
the most restrictive or those imposing the higher standards shall
govern.
[Added 3-9-2004 by Ord. No. 04-02; amended 11-17-2014 by Ord. No. 14-06; 6-15-2020 by Ord. No. 20-03]
Notwithstanding any other provision of this section of the Code
of Ordinances of Middletown Township, a participant who has attained
the age of 60 years on or before June 15, 2020 and who has completed
10 years of service shall be eligible to retire from his or her employment
with the Township and for purposes of this retirement plan on and
subject to the following terms and conditions:
A.
A participant who will attain the age of 60 on or before June 15,2020,
shall be eligible to participate in the Early Retirement Incentive
Program ("ERIP") as outlined in in this section.
B.
A participant who is eligible for the ERIP shall file a written notification
of his or her election to participate in the ERIP to the Plan Administrator
and the Township Manager no later than July 13, 2020.
C.
The written notification shall also state whether the participant
wishes to receive either:
(1)
A payment of his or her benefits under the ERIP in the form of a
single lump sum cash payment in the amount of $20,000 upon his or
her retirement; or
(2)
A continuation of health benefits held by the participant as of the
date of his or her retirement for a period of one year from the date
of their retirement.
D.
The ERIP participant shall be required to retire effective no later
than August 14, 2020.
E.
Except as otherwise provided in this subsection, a participant who
elects to participate in the ERIP shall upon his or her retirement
be entitled to receive benefits in accordance with the regular provisions
of the Plan.
F.
Notwithstanding any other provision of the Non-Uniform Pension Plan,
an ERIP participant shall be entitled to receive only such benefits
as are set forth in this section.
G.
In the event of any conflict between the specific provisions of this
section and any other provision of this, article, the specific provisions
of this section shall control, and shall be construed so as to afford
the ERIP participant with all of the specific benefits set forth in
this section, and no more. All other terms and provisions of the Non-Uniformed
Employee Pension Plan as set forth in this article shall remain in
full force and effect and be applicable to a participant in the ERIP
to the extent they are not expressly or by implication modified by
or contrary to the terms of this section.
