[HISTORY: Adopted by the Borough Council of the Borough of Boyertown as indicated in article histories. Amendments noted where applicable.]
[Adopted 8-3-1987 by Ord. No. 14-87]
For the purposes of this chapter, the following definitions shall apply:
- ACCRUED BENEFIT
- Eighty-two and one-half percent of 1% of the number of years
in Subsection A below, as computed to the nearest 1/12 of a year,
up to a maximum of 30 years.[Amended 7-1-1996 by Ord. No. 2-96]
- A. The number of years of service between the entry date and the date of determination.
- Annual basic compensation with the employer as of January 1 in each year, excluding overtime payments, commissions, bonuses and any other additional compensation.
- EFFECTIVE DATE
- The original effective date of the plan is January 1, 1971.
- The Borough of Boyertown, Berks County, Commonwealth of Pennsylvania.
- ENTRY DATE
- The anniversary date of one year of service from the date of employment.
- FINAL AVERAGE COMPENSATION
- The average compensation on the last five January 1s before early retirement, termination of employment or retirement.
- The Borough of Boyertown Retirement Income Plan Trust Fund.
- The Borough of Boyertown Retirement Income Plan.
- PLAN YEAR
- January 1 to December 31.
- Continuous employment with the employer. Absence from employment on account of leave of absence authorized by the employer pursuant to the employer's established leave policy will be counted as continuous employment with the employer, provided that such leave of absence is of not more than two years' duration and provided further that the employee returns to active service with the employer at the end of such leave of absence. The employer's leave policy shall be applied in a uniform and nondiscriminatory manner to all participants under similar circumstances. Absence from employment on account of active duty with the Armed Forces of the United States will be counted as continuous employment with the employer, provided that the employee returns to active service with the employer within 90 days after he becomes eligible for release from such active duty.
Editor's Note: See 53 P.S. § 895.101 et seq.
This plan is to be funded and maintained by any of the following methods or combinations of each:
State aid. Funds which are received from the Commonwealth of Pennsylvania pursuant to Act 205 which are directed to this plan, as approved by the Borough Council, may be used.
Borough contributions. Contributions from the Borough of Boyertown, as necessary, with appropriate approval by the Borough Council, may be used.
Gifts, grants, devises or bequests. The sums which may be received by the Borough of Boyertown in the form of gifts, grants, devises or bequests may, to the extent authorized by law, be contributed to said fund with the approval of the Borough Council.
Any other sums received or contributed to the Borough, to the extent authorized by law and with prior approval of the Borough Council, may be used.
Subject to the control and direction of the Borough Council, the Retirement Income Plan Committee, as appointed by the Borough Council, shall have full responsibility for administration of the plan and fund. The Committee shall hold, invest, reinvest and distribute all funds and property received pursuant thereto in trust for the purposes of this chapter. The Committee may receive at any time gifts, grants, devises or bequests to the Retirement Income Plan Trust Fund of any money or property, real or personal or mixed, to be held by the Committee in trust for the benefit of this fund and in accordance with the provisions hereof. The Committee shall be subject to such rules and regulations as may from time to time be adopted by the Borough Council through ordinance or resolution.
The Committee shall have full power and authority, either directly or through its designated representatives, to do all acts, to execute, acknowledge and deliver all instruments and to exercise for the sole benefit of the participants hereunder any and all powers and discretions necessary to implement and effectuate the purposes of this chapter, including, for purposes of illustration, but not limited to, any of the following:
To hold, invest and reinvest all funds received pursuant to this chapter in such investments as may be authorized as legal investments under the laws of the Commonwealth of Pennsylvania.
To retain any property which may at any time become an asset of the fund, as long as the Committee may deem it advisable.
To make distribution of the moneys in the fund, in accordance with the terms of this chapter.
To appoint a trustee or custodian to hold, invest and reinvest plan funds in accordance with this chapter. Such trustee or custodian may be removed or may resign by giving 60 days' written notice to the other party. The Committee shall maintain the authority to oversee and review the performance of the trustee or custodian both on an investment and administrative basis. Plan funds may be invested in pooled funds designated for employee benefit trust funds.
Any administrative expense which is an allowable administrative expense under Act 205 of the Commonwealth of Pennsylvania will be payable from the assets of the fund. If administrative expenses are not or cannot be paid from the fund, the expense will be paid by the Borough of Boyertown.
Each regular full-time employee of the Borough whose customary employment is for more than 30 hours per week will be eligible to participate on the day when he completes one year of service. No one will be eligible for this plan if he is hired after his 60th birthday or if he is a police officer, part-time employee, dispatcher, or member of a bargaining unit.
The normal retirement date to receive benefits from the fund shall be the first day of the month coinciding with or next following the 65th birthday or the completion of 10 years of service, if later. If a participant is continuing in the employ of the employer after the normal retirement date, benefit payments will be postponed to the first day of the month next following the actual date of retirement and will be in an amount equal to the actuarial equivalent of the normal retirement benefit.
The basis for determining the amount of annual pension to a participant retiring under § 42-5 shall be 0.825% of the participant's final average compensation multiplied by the number of years in Subsection A(1) below, as computed to the nearest 1/12 of a year, up to a maximum of 30 years.
[Amended 7-1-1996 by Ord. No. 2-96]
The number of years of service between the entry date and the normal retirement date.
Such pension or retirement benefit shall be payable from the assets of the fund established pursuant to this chapter.
The normal form of annuity under the plan is a life annuity. However, upon retirement, a participant may elect to receive benefits in a form different than the normally prescribed annuity form. Any such alternative form must be the actuarial equivalent of the normal form of annuity. Alternative options include, but are not limited to, the following:
A life annuity coupled with a guaranty that payments will be made for a certain period of years, such as five, 10 or 15 years.
A joint and contingent survivor annuity, whereby the annuity is to continue to the participant's spouse after the death of the retired participant as a specified percentage of the annuity being paid while the participant survived.
Any other alternative form requested by the participant which is approved by the employer.
The early retirement date is the first of the month coincident with or next following a participant's retirement from the employ of the employer which occurs within five years before the normal retirement date. Such retirement is subject to the written consent of the Committee and to the requirement that the participant have 10 years of service.
The early retirement benefit is the actuarial equivalent of the accrued benefit earned to the early retirement date.
A participant is disabled when he is wholly disabled by bodily injury or disease so as to be unable to engage in any occupation or employment for wage or profit and such disability is expected to be permanent and continuous during the remainder of his life, but excluding a disability resulting from military service, for which a government pension is payable, and excluding a disability resulting from habitual drunkenness or addiction to narcotics, engaging in a criminal enterprise or intentionally self-inflicted injury.
The determination of whether or not a participant is or continues to be disabled will be made by the Committee on the basis of such medical evidence and other relevant data as the Committee deems necessary or desirable. Failure of a participant to furnish such evidence or data when requested shall be sufficient reason for the Committee to determine that the participant is not disabled or no longer disabled.
A participant will not cease to be disabled solely because he engages in gainful employment for purposes of rehabilitation, as approved by the Committee.
If a participant becomes disabled after meeting the eligibility requirements and remains disabled for six consecutive months, he will become eligible to receive disability benefits as of the first day of each month thereafter as long as he is living and remains disabled.
The amount of disability benefits to be received by a participant will be equal to 100% of the accrued benefit determined as if termination of employment had occurred on the date that the participant became disabled. The amount of disability benefits will be reduced by the amount of any periodic cash payments provided for the participant under or on account of any workmen's compensation law or similar law which became payable on or after the date he first became eligible for disability benefits hereunder.
If a participant has become eligible for disability benefits under the provisions of Subsection E above but thereafter improves to the point that he is able to perform some type or types of employment for compensation but still remains unfit, either physically, mentally, emotionally or by lack of training or experience, to perform any type of work for the Borough of Boyertown, the Committee shall have the discretion to award unto the participant such part-time disability benefits as it deems proper, taking into consideration the amounts the participant is able to earn in other employment.
There are no death benefits under this plan except for any death benefits that may be payable based upon the annuity option elected for someone in benefit receipt status.
[Amended 7-1-1996 by Ord. No. 2-96]
A participant's vesting percentage is 100% upon attainment of normal retirement date or upon being disabled. Upon early retirement or termination of employment, the vesting percentage is as follows:
The benefit payments herein provided for shall not be subject to attachment, execution, levy, garnishment or other legal process and shall be payable only to the participant or the designated beneficiary.
No participant or his beneficiary shall have any right to alienate, encumber or assign any assets of the fund on his behalf or any of the benefits or proceeds of any contract or agreement purchased or acquired hereunder.
Any contract or agreement purchased or acquired pursuant to this chapter upon the life of such participant shall contain a provision, in substance, that to the extent permitted by law, none of the benefits or payments or proceeds of such contract or agreement shall be subject to any legal process by any creditor of such participant or beneficiary of such participant.
[Adopted 3-4-2002 by Ord. No. 1-02]
As used in this article, the following terms shall have the meanings indicated:
- The Internal Revenue Code, as amended periodically.
- Plan member's wages, as defined in Code Section 3401(a), for a plan year for which the municipality is required to provide the plan member a written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Such 415 compensation shall include any elective deferrals defined in Code Section 402(g)(3) and all amounts contributed or deferred at the election of the plan members which are not includible in the gross income of the plan member by reason of either Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b), 414(h)(2) or 457.
- PLAN YEAR
- The calendar year.
- The income tax regulations, as amended periodically.
Unless the plan member otherwise elects, the payment of benefits under the plan to the plan member will begin not later than the 60th day after the latest of the close of the plan year in which:
In the case of a plan which provides for the payment of an early retirement benefit, a plan member who satisfied the service requirements for such early retirement benefit, but separated from the service (with any nonforfeitable right to an accrued benefit) before satisfying the age requirement for such early retirement benefit, is entitled upon satisfaction of such age requirement to receive a benefit not less than the benefit to which he would be entitled at the normal retirement age, actuarially reduced under regulations prescribed by the Secretary.
A plan member's benefits must commence to be paid not later than April 1st of the calendar year following the later of the calendar year in which the member attains age 70 1/2 or the calendar year in which the member retires. Such distributions must equal or exceed the required minimum distribution, and otherwise be made in a manner consistent with the requirements of Code Section 401(a)(9) and the regulations thereunder.
Required distributions must be made over the lifetime or the life expectancy of the plan member or the joint life times or joint life expectancy of the plan member and the plan member's designated beneficiary. The life expectancy of the plan member and the plan member's spouse may be redetermined at the election of the plan member or the plan member's spouse. Such an election is irrevocable, once made. If no such election is made by the date benefit distributions must commence, then the life expectancy of the plan member and the plan member's spouse shall not be recalculated. Tables V and VI of Regulation 1.72-9 shall be used for computing life expectancy or joint and survivor life expectancy.
All benefit distributions to a plan member or the plan member's beneficiary shall be in accordance with the incidental death benefit requirements of Code Section 401(a)(9)(G) and the related regulations.
The limitations and other requirements outlined below are intended to comply with Code Section 415 and the regulations thereunder, the terms of which are specifically incorporated herein by reference. The maximum compensation limit and benefits limitations under the Code are as follows:
The compensation used in calculating a plan member's benefit cannot exceed the limits of Code Section 401(a)(17), as adjusted for cost-of-living increases, per Code Section 415(d).
General rule. In no event shall the annual retirement benefit payable to a plan member under this plan, together with retirement benefits provided under all qualified benefit plans maintained or previously maintained by the municipality, for any limitation year, which shall be the calendar year, exceed the maximum benefit permitted, as adjusted annually per Code Section 415(d), under Code Section 415(b) (including any applicable grandfathering rules). This plan section shall be applied in accordance with Code Section 415 and the regulations thereunder.
Adjustments of limits.
Where a retirement benefit commences before age 62, the Code Section 415(b)(1)(A) dollar limit shall be reduced in accordance with Code Section 415(b)(2)(F). This reduction shall not result in a limit that is less than $75,000 if the benefit begins at or after age 55, or the actuarial equivalent of $75,000 at age 55 (determined in accordance with Code Section 415) if the benefit begins before age 55.
Where a retirement benefit commences after age 65, the Code Section 415(b)(1)(A) dollar limit shall be increased as described in Code Section 415(b)(2)(F).
The maximum benefit limit of Code Section 415(b)(1) shall be applied to benefits in the form of a straight life annuity (with no ancillary benefits) without regard to benefits attributed to plan member contributions and rollover contributions. If the form payable to a plan member is other than a single life annuity or a Code Section 417(b) qualified joint and survivor annuity, the plan member's benefit shall not exceed the actuarial equivalent of the Code Section 415(b)(1) maximum payable in the form of a single life annuity unless no such adjustment is required under Code Section 415 and related regulations.
Notwithstanding the other rules of the plan and Code Section 415, if the plan member has not participated in a defined contribution plan of the municipality, the plan member's annual retirement benefit shall not be deemed to exceed the maximum benefit limit if it does not exceed the Code Section 415(b)(4) limit of $10,000, as adjusted for plan participation or service of less than 10 years in accordance with Code Section 415(b)(5).
Order of defined benefit plan reductions. If the plan member participates or participated in any other defined benefit plan of the municipality, and the plan member's aggregate annual retirement benefit under this plan and such other plan exceeds the limits permitted under Code Section 415, such plan member's benefit shall be first reduced under this plan.
Notwithstanding the plan's vesting schedule, upon any amendment or restatement of the plan, a plan member's vested accrued benefit shall not be less than the vested accrued benefit immediately preceding such amendment or restatement.
Notwithstanding the plan's vesting schedule, a plan member shall be 100% vested when the plan member completes the age and service requirements for normal retirement at his normal retirement date under the plan.
Notwithstanding the plan's vesting schedule, a plan member shall be 100% vested in his accrued benefit (to the extent funded) as of the date of partial or complete plan termination.
Notwithstanding § 42-16, the plan shall recognize any qualified domestic relations order (QDRO) set forth under Code Section 414(p). Any plan member's benefits, rights or elections shall be subject to any rights afforded to the alternate payee by a QDRO. Further, a distribution to an alternate payee is permitted if authorized by a QDRO, even if the plan member involved has not separated from service and has not reached the earliest retirement age under the plan.
No plan member or beneficiary shall have any benefit subject to any type of alienation, anticipation, assignment, charge, encumbrance, pledge, sale or transfer. Further, no benefits shall be subject to or liable for any debts, contracts, engagements, liabilities or torts. The only exceptions to this section are those in § 42-17, above and those referenced in Code Sections 401(a)(13)(C) and (D).
If any portion of a plan benefit is payable to a plan member or beneficiary at the later of the plan member's 62nd birthday or his normal retirement age and such benefit remains unpaid solely by reason that the municipality, after sending a registered letter, to the last known address, return receipt requested, and after diligent effort fails to locate the plan member or beneficiary, the actuarial value of the benefit shall be forfeited and applied towards reducing plan costs. If, subsequent to the forfeiture, a plan member or beneficiary is located, the actuarial value of the forfeiture at the time it was forfeited (no adjustments for gains or losses) shall be restored.
Forfeitures must not be applied to increase the benefits any municipal employee would otherwise receive under the plan.
In the case of any merger or consolidation with, or transfer of plan assets or liabilities to any other plan, each plan member would (if the plan then terminated) receive a benefit immediately after the merger, consolidation, or transfer which is equal to or greater than the benefit he would have been entitled to receive immediately before the merger, consolidation, or transfer (if the plan had then terminated).
As required by Code Section 401(a)(25), the actuarial assumptions used to calculate plan benefits shall not be subject to the municipality's discretion.
Distribution shall be made in the form of a direct trustee-to-trustee transfer to the eligible retirement plan so specified if any distributee of any eligible rollover distribution:
Eligible rollover distribution. For purposes of this subsection, the term "eligible rollover distribution" has the meaning given such term by Code Section 402(f)(2)(A).
Eligible retirement plan. For purposes of this subsection, the term "eligible retirement plan" has the meaning given such term by Code Section 402(c)(8)(B), except that a qualified trust shall be considered an eligible retirement plan only if it is a defined contribution plan, the terms of which permit the acceptance of rollover distributions.