Borough of Pennsburg, PA Police Pension Program

Member shall pay into the fund at a rate of 1.5% for 2021, 1.5% for 2022, 3.0% for 2023, 3.5% for 2024, 4.0% for 2025 4.5% for 2026 and 5.0% for 2027-2030 of compensation up to the social security maximum wage plus 5% on compensation which is not subject to social security taxes by the member. Compensation for this purpose shall be as defined in § 16-1 of the Plan. The Borough may, on an annual basis, by ordinance or resolution, reduce or eliminate payments into the fund by members. Individual records of contributions by members shall be maintained, including all interest credited to his individual account. Interest to be credited shall be 4.0% compounded annually.

Interest shall be credited from the end of the plan year in which paid to the end of the month after which a refund becomes payable.

Refund of member's contributions. Any member who for any reason shall be ineligible to receive a pension after having made contributions shall be entitled to a refund of his individual account balance; such refund is payable immediately upon discontinuance of his employment with the police force or within a reasonable time (not more than 45 days after discontinuance). If such discontinuance is due to death, then such refund shall be paid to his designated beneficiary or, in the absence thereof, to his estate. If the disabled or retired member is receiving a benefit by reason of disability or retirement, then the refund payable to the beneficiary is equal to the individual account balance at the date of disability or retirement, less any pension payments made to the member.

Deposits. Contributions by members shall be remitted to the trustee monthly.

State aid. The portion of the payments made by the State Treasurer to the Borough and designated by the Borough to be allocated to the Police Pension fund from money received from taxes paid upon premiums by foreign casualty insurance companies for purposes of pension retirement or disability benefits for policemen shall be used as follows: (1) to reduce the unfunded liability, or, after such liability has been fully funded, (2) to apply against the annual obligation of the Borough for future service costs, or to the extent that the payment may be in excess of such obligations, (3) to reduce member contributions pursuant to § 16-3A hereof.

Borough contributions. Subject to the provisions and limitations set forth in other sections of this Plan, the Borough shall contribute the amounts certified to be necessary by the fund's actuary to provide the benefits provided by this Plan.

Non-intervening military buy back.

The Plan provides full service credit for each year of military service or fraction thereof, not to exceed five years, to a member who was not employed by the Department prior to such military service, payable by the member.

The member shall pay the amount for the purchase of credit for military service other than intervening, a military service shall be computed by applying the average normal cost rate for the Plan as certified by the Public Employee Retirement Study Borough, but not to exceed 10%, to the member's average annual rate of compensation over the first three years of service and multiplying the result by the number of years and fractional part of a year of creditable non-intervening military service being purchased, together with interest at the rate of four and three quarters per centum compounded annually from the date of initial entry into service to the date of payment.

A member of the Plan shall be eligible to receive service credit for intervening or non-intervening military service provided that he is not entitled to receive, eligible to receive then or in the future, or is receiving retirement benefits for such service under a retirement system administered and wholly or partially paid for by any other governmental agency with the exception of a member eligible to receive or is receiving military retirement pay earned by a combination of active duty and non-active duty with a reserve or national guard component of the armed forces which retirement pay is payable only upon the attainment of a specified age and period of service under 10 U.S.C. Ch. 67 (relating to retired pay for non-regular service).

Other contributions. The fund shall be authorized to receive by gift, grant, devise or bequest, any money or property, real, personal or mixed, in trust for the benefit of the fund. The trustee of the fund shall be subject to such directions not inconsistent with this Plan as the donors of such funds and property may prescribe.

§ 16-4 Retirement benefits.

Normal retirement. Each member may retire on or at any time after his normal retirement date. Any member so retiring shall be entitled to receive a monthly pension commencing as of the first day following his date of actual retirement and ending with the payment made as of the first day of the month in which his death occurs. The monthly pension to which such retired member shall be entitled to under this Plan shall be equal to 50% of such member's average applicable compensation offset by 25% of the Primary Social Security Benefit payment at age 65 or later.

Early retirement benefit. Each member may retire on or at any time after his early retirement date. Upon termination, the member must file with the Secretary of the Borough, a written notice of his intention to elect an early retirement benefit. This benefit shall become effective as of the date of the notice or the date designated in the notice, whichever is later. The amount of the early retirement benefit shall be the actuarial equivalent of a vested retirement benefit as computed in § 16-6A(1). The actuarial equivalent of the vested retirement benefit shall be determined by actuarially reducing the vested retirement benefit to reflect that it will commence on the effective date of the early retirement rather than on the member's normal retirement date. The actuarial reduction shall be calculated using the actuarial assumptions reported in the last actuarial valuation report filed with the Public Employee Retirement Borough.

Postponed retirement. An employee shall be allowed to continue as an employee beyond his normal retirement date. In such case, the employee shall remain a member of the Plan until he actually retires or ceases to be an employee. Any contributions required pursuant to § 16-3A hereof shall continue.

Disability benefit.

If a member retires because of a total and permanent disability, he shall receive a monthly pension equal to 50% of his salary at the time the disability was incurred, offset by any social security disability benefits received by the member for the same injury. This benefit shall continue until his death.

The benefit will commence immediately after the onset of the disability as certified by a licensed physician chosen by the Borough. The Borough reserves the right to require disabled members to present evidence of a total and permanent disability and of the continuance of such condition from time to time and further reserves the right to require members to submit medical examinations by practitioner(s) selected by the Borough as a pre-condition to the continued payment of benefits.

Cost of living adjustment. There shall be a cost of living adjustment provided to all members who were hired before January 1, 2006, and who retire after January 1, 2023. The annual cost of living adjustment will be based on the annual percentage October increase for the All Urban Consumers CPI for the Philadelphia Metropolitan area. However, in no case shall the pension benefits exceed the lesser of 10% of the original monthly pension benefit or 75% of the final average salary used for computing the pension benefit. The initial Cola will be payable the first January at least one year from retirement.

§ 16-5 Death benefits.

Death benefit if no surviving spouse nor dependent children. If a member dies prior to the commencement of pension benefits, then his designated beneficiary shall be entitled to a refund of his accumulated member's contributions with credited interest. If no beneficiary survives, then the refund is payable to the member's estate.

Pension benefit to surviving spouse and dependent children. If a member dies survived by a spouse or dependent children, after having become eligible to receive a pension benefit (i.e., he was eligible because (a) he was already receiving a pension (b) he met the age and service requirements, but he had not yet retired), then a monthly pension benefit shall be provided.

The amount of the monthly pension benefit shall be 50% of the pension the member was receiving or would have been entitled to receive if he had been retired at the time of his death.

In the event a member dies after completing 12 or more years of service but was not yet eligible for normal retirement or pre-retirement survivor benefits, the surviving spouse shall act on behalf of the member in selecting the alternative addressed in § 16-6A. If a vested benefit is selected, the surviving spouse shall receive 50% of the member's vested monthly benefit commencing on the first day of the month following the member's normal retirement date.

In the event a member dies after completing 20 or more years of service but was not yet eligible for normal retirement or pre-retirement survivor benefits, the surviving spouse shall act on behalf of the member in selecting the alternative addressed in § 16-4B. If an early retirement benefit is selected, the surviving spouse shall receive 50% of the member's monthly early retirement benefit commencing on the first day of the month following the election of this benefit.

(4)

The monthly pension benefit is payable to the surviving spouse until death, then to surviving dependent children under the age of 18 years or if attending college, under or attaining the age of 23 years. Attending college shall mean the eligible children are registered at an accredited institution of higher learning and are carrying a minimum course load of seven credit hours per semester. Dependent children shall include step-children, adopted children, and any child conceived before the time of the member's date and thereafter born to the member's spouse.

Pre-retirement survivor benefit. In the event a member is killed in service, the member's family shall receive the benefits provided for and subject to the terms of Act 51 of 2009, which benefits are paid exclusively by the Commonwealth of Pennsylvania with the exception of any pension benefit to which the member was entitled to prior to the member's death, solely by virtue of the member's service as a Upper Perk Police officer (i.e., either a normal, early, or vested pension benefit). It is understood that family shall refer to the surviving spouse and dependent children. The benefit is payable to the surviving spouse until death, then to the surviving dependent children under the age of 18 years, or if attending college, under or attaining the age of 23 years. The term dependent children and attending college shall be consistent with that of Article V, Section 5.02 of Resolution No. 03-01.

§ 16-6 Severance of employment.

If a member leaves the employ of the Department or ceases to be a member whether by reason of his transfer, resignation or discharge, or by reason of disability or retirement other than after becoming eligible for benefits pursuant to § 16-4 or 16-5 or 16-6 of this Plan, he shall be entitled to a refund of all contributions made by him and then on deposit in the fund, plus interest thereon, computed at the rate described in § 16-3A. However, a member who has completed 12 or more years of service may elect either Subsection A(1) or (2) as described below:

He may elect to leave his contributions, plus interest in the fund so as to receive a vested pension benefit to start at his normal retirement date. He must file with the Secretary of the Borough within 90 days of the date he ceases to be a full-time police officer, a written notice of his intention to vest. The amount of the vested pension benefit shall be (x) divided by (y) where (x) is the number of years of service at the date of termination and (y) is the number of years of service which the member would have had if he worked until normal retirement date, multiplied by the benefits described in § 16-4A. Years of service shall be measured in years and completed months.

He may elect to receive a refund of all contributions made by him and then on deposit in the Trust fund, plus interest thereon, computed at the rate described in § 16-3A. If he elects to receive the refund of his contributions plus interest, he would forfeit the pension benefit outlined in Subsection A(1).

§ 16-7 Method of distribution of benefits.

Refund benefits becoming distributable pursuant to § 16-6A and death benefits becoming distributable pursuant to the provision of § 16-5A shall be paid in the form of a lump-sum distribution.

The normal form of all benefits payable hereunder shall be a pension for the life of the member commencing on the date specified and ending with a payment made on the first day of the month in which the member dies, subject, however, to the payment of a death benefit calculated pursuant to § 16-5B.

§ 16-8 Management of Fund.

It is the duty of the trustee to pay the benefits to members and their beneficiaries, as provided in §§ 16-4, 16-5 and 16-6, in accordance with the instructions received from the Borough, provided, however, that the duty of the trustee to make such payments is wholly contingent upon the sufficiency of the fund for such purposes.

The Borough may employ an actuary, investment advisors, counsel, or other professional consultants from time to time in connection with the operation of the fund or of this Plan. Such persons or entities shall be compensated by the Borough at such rates as may be agreed upon by the Borough. Such expenditure may be paid from the fund.

The trustee shall make an annual determination of the fair market value of the fund as of the anniversary date and as of such additional dates as the Borough may direct.

The fair market value of the fund shall be reported to the actuary who shall calculate the amount to be contributed to the fund by the Borough with respect to each plan year in accordance with the assumptions most recently adopted by the Borough for the purpose of such computations, provided, however, that the liability of the Borough to make such contributions is subject to all of the conditions and limitations set forth elsewhere in this Plan.

§ 16-9 The Borough.

The Plan shall be administered by the Borough. The Borough shall make and adopt rules and regulations for the efficient administration of the Plan.

The Borough shall keep all data, records and documents pertaining to the administration of the Plan and shall execute all documents necessary to carry out the provision of the Plan, and shall provide all such data, records and documents to the professionals whose services are employed pursuant to § 16-8B of this Plan.

The Borough shall construe the Plan, shall determine any questions or fact arising under the Plan and shall make all decisions required of it under the Plan. Decisions and actions taken thereon in good faith shall be final and conclusive. It may correct any defect or supply any omission or reconcile any inconsistency in such manner and to such extent as it shall be the sole judge of such expediency. The Borough shall act uniformly with respect to matters coming before it concerning employees in similar circumstances.

The members of the Borough, and each of them shall be free of all liability for any act or omission except by willful misconduct or gross negligence, and each of them shall be fully indemnified by the Borough against all judgments not involving findings of their respective personal or collective willful misconduct or gross negligence and against all cost, including counsel fees, incurred in defense of actions brought against them.

The Borough shall make available to members, retired members and terminated members and to their beneficiaries, for examination during business hours, such records as to pertain to the person examining.

To enable the Borough to perform its function, the Borough Administration shall supply full and timely information to it on all matters relating to the pay of all members, their retirement, death, termination of employment and such other pertinent facts as the Borough may require.

The Borough shall enact such rules and regulations for the conduct of its business and for the administration of the Plan as it may consider desirable, provided the same shall not be in conflict with any of the provisions of the Plan. All actions of the Borough shall be taken at meetings at which at least four members shall be present, or by written resolutions concurred in by not less than four of its members shall be the action of the entire Borough. Written minutes shall be kept of the meetings and action of the Borough.

The Chief Administrative Officer, acting on behalf of the Borough, shall have the power to execute all documents necessary to carry out the actions of the Borough, and any person, partnership, corporation or government agency shall accept such documents over such signature or signatures as if executed by the Borough.

§ 16-10 Provisions relating to the Borough.

It is the expectation of the Borough that it will continue this Pension Plan indefinitely, and will, from time to time, contribute to the fund such amounts as may be needed to provide the benefits set forth in the Plan.

The provisions of any resolution establishing, amending, or maintaining the Plan shall not be a charge on any other fund in the Treasury of the Borough or under its control, save the Uniformed Employee's Pension Fund herein provided for.

Nothing contained in the Plan shall be held or construed as a contract or guarantee of employment nor to create any liability upon the Borough to retain any person in its service. The Borough reserves the full right to discontinue the service of any person without any liability except for salary or wages that may be due and paid, whenever in its judgement its best interests so require, and such discontinuance shall be without regard to this Plan.

§ 16-11 Termination or amendment of Plan.

The Borough may amend this Plan from time to time as is necessary to maintain its actuarial soundness and to incorporate changes in Plan benefits or entitlements. However, no amendment shall be made which will, in any manner, divert any part of the fund to any purpose other than the exclusive benefit of members or their beneficiaries (except that upon termination such diversion may be made after all of the fixed and contingent liabilities to members and their beneficiaries have been met); nor shall any amendment be made at any time which will in any manner divest any benefit then vested in a member or reduce or eliminate a benefit to which a member has been given an expectation by virtue of pension ordinance or pension calculations for retiring officers who retired during the members participation in this Plan.

In the event of termination of this Plan, the Borough shall allocate the assets then remaining in the fund as follows:

Sufficient funds shall be maintained to provide the pension benefits prescribed in § 16-3 for all members who have retired prior to termination or who are eligible for retirement at the time of the termination of this fund.

Contributions with interest at a rate established by the Borough as provided in § 16-5 shall be refunded to any and all members who terminate service at the time of the termination of the fund.

Of the remaining funds, those which can be identified as municipality contributions or contributions other than from members or from the commonwealth allocation, shall be distributed as the Borough sees fit, provided that such distribution is in compliance with § 16-8.

(4)

All funds in excess of the funds described in Subsection A(1), (2) and (3) above 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.

§ 16-12 Miscellaneous provisions.

Pursuant to Section 776 of Act 600, 43 P.S. 767 et seq., no benefit under this Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, or encumbrance, nor to seizure, attachment, or other legal process for the debts of any member or member's beneficiary.

Any person dealing with the Borough may rely upon a copy of this Plan and any amendments thereto certified to be true and correct by the trustee.

In no circumstances, whether upon amendment or termination of this Plan or otherwise, shall any part of the fund be used or diverted to any purpose other than the exclusive benefit of members or their beneficiaries until all of the actuarial obligations to such member or member's beneficiaries have been met.

If the Borough deems any person incapable of receiving benefits to which he is entitled by reason of minority, illness, infirmity, or other incapacity, it may make payment directly for the benefit of such person, to the guardian or trustee for said person, whose receipt shall be complete acquittance therefor. Such payment shall, to the extent therefor, discharge all liability of the Borough, or the fund.

Should any provision of this Plan be determined to be void by any court, the Plan will continue to operate and, to the extent necessary, will be deemed not to include the provision determined to be void.

Headings and captions provided herein are for convenience only and shall not be deemed part of the Plan.

This Plan shall be construed and applied under the laws of the Commonwealth of Pennsylvania where not in conflict with federal laws which shall prevail.

This resolution repeals all other resolutions prior to the date of its enactment.

§ 16-13 Upper Perk Police Department Police Act 44 Retirement Program.

[Added 2-8-2022 by Ord. No. 3-2022]

Title. This section shall be known as the "Upper Perk Police Department Police Act 44 Retirement Program."

Definitions. When used in this section, the below words shall have the meanings indicated:

ACT 44 PROGRAM

The Act 44 Deferred Retirement Option Program referred to in the Collective Bargaining Agreement between the Upper Perk Police Officers and the Borough of Pennsburg.

ACT 44 PROGRAM ACCOUNT

Separate ledger account created to accept Act 44 Program participants' monthly pension benefit while an Act 44 Program participant, as well as any interest thereon.

BOROUGH

Borough of Pennsburg, Montgomery County, Pennsylvania.

FUND or PLAN

The Police Pension Plan.

PARTICIPANT

A police officer who meets the eligibility for and has executed the proper documents for participation in Act 44 Program and has had such application approved by the Borough.

POLICE OFFICERS

Police officers of the Upper Perk Police Department.

Eligibility. Police officers who have not retired prior to the implementation of the Act 44 Program may enter the Act 44 Program on the first day of any month following completion of one of the following conditions:

If hired on or after January 1, 2006, the police officer must complete 25 years of credited service and attain the age of 55 years old.

If hired before January 1, 2006, and electing participation in the Act 44 Program prior to January 1, 2025, the police officer must complete 25 years of credited service and attain the age of 52 years old.

If hired before January 1, 2006, and electing participation in the Act 44 Program on or after January 1, 2025, the police officer must complete 25 years of credited service and attain the age of 50 years old.

Written election. Eligible officers who wish to be participants in the Act 44 Program must signify that intention in writing as follows:

A police officer electing to participate in the Act 44 Program must complete and execute an "Act 44 Program Participation Election Form" prepared by the Borough, which shall evidence the member's election to participate in the Act 44 Program. The form must be signed by the police officer and be notarized and submitted prior to the date on which the member wishes Act 44 Program participation to commence. The Act 44 Program Participation Election Form shall include an irrevocable notice to the Borough, by the police officer member, that the police officer shall resign from employment with the Police Department effective on a specific date (the "resignation date") that is no later than four years from the effective date of Act 44 Program Election Form. A police officer shall cease to work as and may no longer be employed as a police officer on the officer's resignation date, unless the Borough properly terminates or honorably discharges the officer prior to the resignation date. A participant may resign from employment while in Act 44 Program status, which shall terminate his/her participation in the Act 44 Program.

In addition to the above information, the Act 44 Program Participation Election Form shall also advise the employee of the following: 1) an explanation of the participant's rights and obligations while in Act 44 Program; 2) that, as a condition of Act 44 Program participation, the participant foregoes active participation in the Police Pension Plan and foregoes any recalculation of pension benefits to include salary increases occurring after Act 44 Program participation commences; and 3) that the Act 44 Program participant's service while in Act 44 Program will not count as pension service nor will it entitle a participant to any service increment benefits to which the participant was not entitled prior to commencing Act 44 Program participation. An Act 44 Program participant must also complete any and all retirement documents required by the Police Pension Plan Administrator, and such documents must be filed and presented to the Borough for approval of retirement and payment of pension. Once an Act 44 Program Participation Election Form has been approved by the Borough, it is irrevocable. Likewise, once an Act 44 Program participant enters the Act 44 Program program, the participant may not subsequently leave and then re-enter the Act 44 Program, even if the employee separates from employment and subsequently begins employment with the Borough again.

Benefit calculation. For all pension plan purposes, continuous service of a police officer participating in the Act 44 Program shall remain as it existed on the effective date of commencement of participation in the Act 44 Program. Service thereafter shall not be recognized or used for the calculation or determination of any benefits payable by the Upper Perk Police Department Pension Plan. The average monthly compensation of the police officer for pension calculation purposes shall remain, as it existed on the effective date of commencement of participation in the Act 44 Program. Earnings or increases in earnings thereafter shall not be recognized or used for the calculation or determination of any benefits payable by the pension plan. The pension benefit payable to the members shall increase only as a result of cost of living adjustments in effect on the effective date of the member's participation in the Act 44 Program or by applicable cost of living adjustments granted thereafter.

Accumulation of the Act 44 Program account. The monthly retirement benefits that would have been payable had the police officer elected to cease employment and receive a normal retirement benefit shall, upon the police officer commencing participation in Act 44 Program, accumulate to the benefit of that officer and be accounted for on that police officer's Act 44 Program account. Participants shall not have the option of self-directed investment of their individual Act 44 Program account while in the Act 44 Program. Instead, the monies shall be invested in a fund to be identified and selected solely by the Borough in accordance with applicable law so as to generate a rate of return of no less than 0% and no more than 4.5%.

Accrual of non-pension benefits. After a police officer elects to participate in the Act 44 Program, all other contractual benefits shall continue to accrue with the exception of those provisions relating to the Police Pension Plan.

Payout. Upon separation from employment, the Act 44 Program payout options available to the Act 44 Program participant shall be as follows:

The balance of the Act 44 Program participant's account, less withholding taxes, if any, remitted to the Internal Revenue Service, shall be paid to the participant or the participant's surviving beneficiary.

The balance of the Act 44 Program participant's account shall be paid directly to the custodian of an eligible retirement plan as defined by Internal Revenue Code Section 402(c)(8)(b), or in the case of an eligible rollover distribution to the surviving spouse of a deceased Act 44 Program participant, an eligible retirement plan that is an individual retirement account or an individual retirement annuity as defined by Internal Revenue Code Section 402(c)(9).