[HISTORY: Adopted by the Borough Council of the Borough of Mount Joy as indicated in article histories. Amendments noted where applicable.]
[Adopted 2-10-1992 by Ord. No. 491 (Ch. 1, Part 7, of the 1992 Code of Ordinances); amended 5-6-2013 by Ord. No. 3-13]
[Amended 6-1-2015 by Ord. No. 5-15; 9-12-2022 by Ord. No. 5-22]
There is hereby established the Mount Joy Borough Nonuniformed Employee Pension Plan as set forth in the document entitled "Mount Joy Borough Nonuniformed Employee Pension Plan Originally Effective February 1, 1965, As Amended And Restated Effective January 1, 1997" containing Articles I, Definitions; II, Participation; III, Retirement Benefits; IV, Death Benefits; V, Termination of Employment Benefits; VI, Contributions; VII, Additional Qualification Rules; VIII, Administration of the Plan; IX, Amendment and Termination of Plan; and X, Miscellaneous Provisions, and amended and supplemented by the Good Faith Compliance Amendment for the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) dated January 14, 2003; Amendment No. 1 dated July 14, 2003; Amendment No. 2 dated July 2, 2004; the Good Faith Amendment to Comply with Code Section 401(a)(31)(B) as amended by the Economic Growth and Tax Relief Reconciliation Act of 2001 ( EGTRRA) dated March 31, 2005; Amendment No. 3 dated May 4, 2015; and Amendment No. 4 dated September 13, 2021; copies of which documents are presently on file in the Office of the Secretary of the Borough.
Borough Council hereby appoints the Borough Secretary as the Chief Administrative Officer of the Mount Joy Borough Nonuniformed Employee Pension Plan pursuant to Pennsylvania Act 205, the Municipal Pension Plan Funding Standard and Recovery Act.
[Adopted 2-10-1992 by Ord. No. 492 (Ch. 1, Part 6, of the 1992 Code of Ordinances)]
There is hereby established a police pension fund to provide pension benefits to full-time police officers of the Police Department of the Borough of Mount Joy. This police pension fund is established under and shall be administered in accordance with the provisions of Act 600, Act of May 29, 1956, P.L. (1955) 1804, No. 600, as amended, 53 P.S. § 767 et seq.
A. 
In the interpretation of this article, words in the singular shall include the plural, and words in the plural shall include the singular. The masculine gender shall include the feminine gender and the neuter.
B. 
The following terms shall have the following meanings when used in this article:
ACT 600
The Act of May 29, 1956, P.L. (1955) 1804, No. 600, as amended, 53 P.S. § 767 et seq.
BOROUGH
The Borough of Mount Joy, Lancaster County, Pennsylvania.
COMPENSATION
The total earnings, except as modified in this definition, from the Borough during any specific period. Earnings as used in this definition includes base pay, longevity pay, night differential pay, overtime pay, sick pay, vacation pay and other remuneration. For purposes of an officer's pension calculation, only the amount of sick pay, vacation pay, or personal time accrued in the last 36 months is permitted.
[Added 9-12-2022 by Ord. No. 4-22]
PARTICIPANT
A full-time police officer of the Borough who is eligible to participate in the police pension fund.
POLICE PENSION FUND or FUND
The police pension fund established to provide pension benefits for the full-time police officers of the Borough in accordance with the requirements of Act 600.
The police pension fund established under the provisions of this article shall be maintained by:
A. 
A charge against each full-time member of the police force.
B. 
Annual appropriations made by the Borough.
C. 
Payments made by the State Treasurer to the Borough Treasurer from moneys received from taxes paid upon premiums by foreign casualty insurance companies for purposes of pension retirement for police officers.
D. 
Gifts, grants, devises or bequests granted to the police pension fund.
[Amended 2-4-2002 by Ord. No. 1-02]
A. 
Each full-time police officer who has been in the employ of the Borough as a full-time police officer for 25 years in the aggregate, except as otherwise provided herein, and who has attained the age of 50 years may retire and shall, upon his actual retirement from employment with the Borough, be entitled to receive pension or retirement benefits as are hereinafter provided.
B. 
Any full-time member of the police force who has been a regularly appointed employee of this Borough for a period of at least six months and who thereafter shall enter into the military service of the United States shall have credited to his employment record for pension or retirement benefits all of the time spent by him in such military service, if such persons returns or has heretofore returned to his employment within six months after his separation from the service.
C. 
Any participant retiring under this article shall be subject to serve, from time to time, as a police reserve in case of riot, tumult or preservation of the public peace, until unfitted for such service, whereupon he may be finally discharged from reserve service by reason of age or disability.
D. 
On or after January 1, 1993, a participant may obtain full service credit for each year of military service or fraction thereof, not to exceed five years, for military service completed prior to employment of the participant by the Borough as a full-time police officer. The amount due for the purchase of credit for military service other than intervening military service shall be computed by applying the average normal cost rate for Borough and township police pension plans, as certified by the Public Employee Retirement Study Commission, but not to exceed 10%, to the participant's average annual rate of compensation over the first three years of municipal service and multiplying the result by the number of years and fraction part of a year of creditable nonintervening military service being purchased, together with interest at the rate of 4.75%, compound annual, from the date the participant became a full-time police officer of the Borough to the date of payment for the purchase of such credit for military service. Notwithstanding the foregoing, a participant shall not be able to purchase credit for nonintervening military service if the participant is entitled to receive, eligible to receive now 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 government agency, with the exception of a participant eligible to receive or receiving military retirement pay earned by a combination of active duty and nonactive 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. Chapter 67.
[Amended 2-4-2002 by Ord. No. 1-02]
A. 
The amount of pension or retirement benefits payable under this article shall be as follows: Monthly pension or retirement benefits shall be 1/2 of the monthly average compensation of the participant during the last 36 months of employment. Such retirement benefits shall be paid monthly during the balance of the participant's life following actual retirement. Pension payments made under the provisions of this article shall not be a charge on any other fund of the Borough or under its control save the police pension fund.
[Amended 9-12-2022 by Ord. No. 4-22]
B. 
A length of service increment shall be provided to all participants who retire under the terms of this article for each completed year of service beyond 25 years at the rate of $100 per month. Such length of service increments shall be paid in addition to other monthly pension benefits.
C. 
A cost-of-living increment shall be provided to all participants receiving retirement benefits at the rate of 3%, provided that such increments shall not exceed the percentage increase in the consumer price index from the year in which the participant last worked; provided further that in no case shall the total police pension benefits exceed 75% of the salary for computing retirement benefits; and, provided further, that the total cost-of-living increase shall not exceed 30%. No cost-of-living increase shall be granted which would impair the actuarial soundness of the pension fund.
D. 
There is hereby established an early retirement benefit which shall be available to a full-time police officer with 20 or more years of continuous service who terminates employment prior to the completion of superannuation retirement age and service requirements and who files a written application for an early retirement benefit with Borough Council. The early retirement benefit shall become effective as of the date the application is filed with Borough Council or the date designated on the application, whichever is later, and shall be the actuarial equivalent of a partial superannuation retirement benefit calculated as follows:
(1) 
A partial superannuation retirement benefit shall be determined by applying the percentage that the participant's years of service bear to the years of service that the participant would have rendered had the participant continued to be employed until his or her superannuation retirement date to the gross pension amount calculated using the monthly average salary during the appropriate period prior to his or her termination of employment.
(2) 
The actuarial equivalent of the partial superannuation retirement benefit shall be determined by actuarially reducing the partial superannuation retirement benefit to reflect that it will commence on the effective date of the early retirement rather than on the date on which the participant would have completed superannuation age and service requirements. The actuarial reduction shall be calculated using the actuarial assumptions reported in the last actuarial valuation report filed with the Public Employee Retirement Commission under the Act of December 18, 1984 (P.L. 1005, No. 205), known as the "Municipal Pension Plan Funding Standard and Recovery Act" or "Act 205," 53 P.S. § 895.101 et seq.
[Amended 2-2-1998 by Ord. No. 536]
A. 
A full-time police officer becomes a participant in the fund and liable for contributions immediately upon employment.
B. 
Each participant shall contribute monthly into the police pension fund established hereunder an amount equal to 5% of the participant's total monthly compensation. All such contributions by the participant shall be deducted by the Borough from the participant's salary. Any balance of needed annual contributions shall become the obligation of the Borough and shall be paid to the pension fund by annual appropriations.
C. 
If an actuarial study shows that the condition of the police pension fund of the Borough is such that payments into the fund by members may be reduced below the minimum percentages hereinbefore prescribed, or eliminated, and that if such payments are reduced or eliminated, contributions by the Borough will not be required to keep the fund actuarially sound, the Borough Council may, on an annual basis by resolution, reduce or eliminate payments into the fund by police officers.
D. 
Any payments made by the Commonwealth of Pennsylvania to the Borough from moneys received from taxes paid upon premiums by foreign casualty insurance companies for pension purposes shall be used as follows:
(1) 
To reduce the unfunded liability of the Borough on account of pensions payable hereunder and after such liability has been funded.
(2) 
To apply against the annual obligation of the Borough for future service cost or to the extent that the payment may be in excess of such obligation and after such liability has been funded.
(3) 
To reduce the participant's contributions as provided for by Subsection B herein and after such liability has been funded.
(4) 
To apply against the annual obligation of the Borough to contribute to the Borough's nonuniformed employee pension fund.
Any full-time police officer who is totally and permanently disabled from injuries incurred in service as a police officer of the Borough shall be entitled to monthly disability benefits which shall be equal to 1/2 of the monthly average salary of the participant during the last 36 months of employment.
Upon the death of a participant who is receiving a retirement benefit, or upon the death of a participant who is eligible to receive retirement benefits, or upon the death of a participant who is killed in the performance of police duties, the surviving spouse shall be entitled, during his or her lifetime or so long as he or she does not remarry, to receive a pension equal to 50% of the pension the participant was receiving or would have been receiving had the participant been retired at the time of the participant's death. If there is no surviving spouse, or if the surviving spouse subsequently dies or remarries, then the child or children of the participant under the age of 18 shall be entitled to receive a pension equal to 50% of the pension the participant was receiving or would have been receiving had the participant been retired at the time of death. Such pension to the child or children shall continue until the child or children reach the age of 18 years.
A. 
The Borough shall be the owner of all moneys or property paid into the fund or annuities or policies purchased from insurance companies hereunder and the owner and designated beneficiary of any insurance and retirement income contracts acquired hereunder, and no participant prior to retirement shall have any right or interest in any portion of said moneys or property; provided, however, that each participant who is for any reason whatsoever ineligible to receive a pension after having contributed any charges to the police pension fund established pursuant to this article shall be entitled to a refund of all such moneys paid by him or her into the pension fund, with interest at a floating rate compounded annually and based on the annual average of interest rates earned by the total fund through investments, compounded monthly, immediately upon discontinuance of his or her employment. If such termination or discontinuance of employment is due to death, such refund of money shall be paid to the participant's designated beneficiary or, in the absence thereof, to his or her estate.
B. 
Notwithstanding any language in this article to the contrary, a vested benefit as described in this section is hereby authorized, provided such vested benefit does not impair the actuarial soundness of the fund as determined by an actuary. For the purposes of this article, "actuary" shall mean:
(1) 
A member of the American Academy of Actuaries; or
(2) 
An individual who has demonstrated to the satisfaction of the Insurance Commissioner of Pennsylvania that he or she has the educational background necessary for the practice of actuarial science and has had at least seven years of actuarial experience; or
(3) 
A firm, partnership or corporation of which one or more members meets the requirements of Subsection B(1) or (2) above.
C. 
Under the provisions of such benefit, should a police officer, before completing superannuation retirement age and service requirements but after having completed 12 years of total service, for any reason cease to be employed as a full-time police officer by the Borough, he or she shall be entitled to vest his or her retirement benefits by filing with the Borough Council, within 90 days of the date he or she ceases to be a full-time police officer, a written notice of his or her intention to vest. Upon reaching the date which would have been his or her superannuation retirement date if he or she had continued to be employed as a full-time police officer, he or she shall be paid a partial superannuation retirement allowance determined by applying the percentage his or her years of service bears to the years of service which he or she would have rendered had he or she continued to work until his or her superannuation retirement date to the gross pension established by § 46-23 of this article using, however, the monthly average salary during the appropriate period prior to his or her termination of employment. Such pension or retirement benefits for any month shall be up to 1/2 the average monthly salary as set forth in § 46-23 to the extent necessary to bring the total benefits in any month up to his or her partial superannuation retirement allowance as outlined herein. It is the intention of this section to provide a vested benefit as and to the extent authorized by Act No. 1979-99, 53 P.S. § 771.[1]
[1]
Editor's Note: Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. I).
[Amended 7-6-2020 by Ord. No. 6-20]
The police pension fund shall be maintained under the direction of the trustees of the police pension fund. The President of Borough Council, the Borough Manager and the Chairperson of the Administration and Finance Committee of Borough Council shall serve as the trustees of the police pension fund. The trustees shall have full responsibility for the administration of the program established hereunder and shall hold, invest. reinvest and distribute all funds or other property received pursuant hereto in trust for the purpose of this article. The trustees may receive at any time and from time to time gifts, grants, devises or bequests to the police pension fund or any money or property. real or personal, or mixed, to be held by them in trust for the benefit of the fund and in accordance with the provisions hereof. The trustees shall have full power and authority by a majority action of the trustees to do all acts. execute, acknowledge and deliver all instruments, and to exercise for the sole benefit of’ the participants hereunder any and all powers and discretion necessary to implement and effectuate the purpose of this article, including, for purposes of illustration but not limited to, any and all of the following:
A. 
To hold, invest and reinvest all funds received pursuant to this article, in such legal investments as may be authorized as legal investments under the laws of the Commonwealth of Pennsylvania.
B. 
To enter into contracts or deposit agreements on behalf of this Borough with one or more banks, trust companies, savings-and-loan associations or insurance companies, in order to provide the pension and other benefits herein set forth, and to pay the premiums and deposits required by the purchase of said contracts.
C. 
To retain or purchase as an investment any form of annuity or contracts of similar nature and to exercise, with respect thereto, any right or incident of ownership.
D. 
To retain any property which may at any time become an asset of the fund, as long as said trustees may consider it advisable.
E. 
To make distribution of moneys in the fund in accordance with the terms of this article.
The pension 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 his or her designated beneficiary. No participant or his or her beneficiary shall have any right to alienate, encumber or assign any assets of the fund held by the Borough on his or her behalf or any of the benefits or payments or proceeds of any contract or agreement purchased or acquired by the Borough hereunder. Any contract or agreement purchased or acquired pursuant to this article 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.
All costs and expenses incurred in administering the police pension fund, including, but not limited to, the compensation paid to an actuary and to any custodian or trustee of the fund, shall be paid from the police pension fund.
The Borough Council shall employ or retain the services of an actuary to conduct and file the actuarial study required to be filed with the Department of Community and Economic Development of Pennsylvania pursuant to Act 293 of 1972, as amended.[1]
[1]
Editor's Note: See 53 P.S. § 730.1 et seq.
[Added 9-12-2022 by Ord. No. 4-22]
The Borough hereby establishes a deferred retirement option plan ("DROP") as part of its police pension plan in accordance with the following requirements:
A. 
Eligibility.
(1) 
Eligibility for the DROP shall be determined by and limited to full-time police officers employed by the Borough who have completed 25 or more years of service and have attained the age of 50, who meet the following requirements:
(a) 
The officer did not retire or began receiving a normal retirement benefit or a disability benefit from the fund prior to the implementation of this DROP or the officer's entry into the DROP, whichever is later.
(b) 
The officer reached the necessary age and service requirements (the "superannuation date") necessary for receiving a full retirement under the terms of the applicable collective bargaining agreement and this article.
(c) 
The officer is not receiving and will not receive a disability benefit from the plan or fund or the Borough.
(2) 
Officers may enter the DROP on the first day of any month upon attaining both the applicable age 50 and 25 years of service.
(3) 
Participation in the DROP does not guarantee the DROP participant's employment by the Borough during the specified period of the DROP.
B. 
Written election. An eligible police officer who wishes to be a participant in the DROP must signify that intention in writing as follows:
(1) 
A police officer electing to participate in the DROP must complete, sign, and return the Borough a "DROP participation election form" prepared by the Borough. The form must be signed by the police officer and be notarized prior its submission to the Borough Manager. The DROP participation election form shall include:
(a) 
A binding/irrevocable notice of resignation from regular employment with the Borough, by the police officer confirming the officer's intent to retire and specifying the officer's specific retirement date and the date that the officer's DROP participation will commence, which shall be the date after the specified retirement date.
(b) 
The specification of the DROP termination date ("resignation date") which shall be no later than 48 months from the effective date of the DROP election form.
(c) 
The police officer shall cease to work as and have the legal authority of a police officer and may no longer be employed by the Borough as a police officer on the officer's resignation date unless the Borough terminates or honorably discharges the officer prior to such resignation date. A DROP participant may resign from employment while in DROP status, which shall terminate his/her participation in DROP and employment with the Borough. Participation in a DROP does not guarantee the DROP participant's employment by the Borough during the specified period of the DROP.
(2) 
The DROP participation election form shall advise the officer of the following:
(a) 
An explanation of the participant's rights and obligations while in the DROP.
(b) 
That, as a condition of DROP participation, the participant foregoes active participation in the plan and foregoes any recalculation of pension benefits after the officer's retirement date or when the officer begins participation in the DROP, even to include any salary increases, occurring after DROP participation commences.
(c) 
That a DROP participant's service while in DROP will not count as pension service time nor will it entitle a participant to any service increment benefits to which the participant was not entitled to prior to commencing DROP participation.
(3) 
A DROP participant must also complete any and all retirement documents required by the Borough and the plan administrator, and such documents must be filed and presented to the Borough for approval of retirement and payment of pension at least 30 days before the retirement date specified § 46-32B(1).
(4) 
Once a DROP participation election form has been approved by the Borough, it is irrevocable.
(5) 
Once a DROP participant enters the DROP, the participant may not subsequently leave the DROP and then reenter the DROP at any time, even if the retired officer separates from employment and subsequently begins employment with the Borough in another position or under another Borough pension plan.
(6) 
A retired officer who leaves the DROP may not be rehired as a Borough police officer after leaving the DROP.
C. 
Benefit calculation. For all pension benefit calculation and plan purposes, continuous service of a police officer participating in the DROP shall remain as it existed on the effective date of commencement of the participant's participation in the DROP. Service thereafter shall not be recognized for or used for the calculation or recalculation of the participant's pension or the determination of any benefits payable by the plan or the Borough. The average monthly compensation of the DROP participant for pension calculation purposes shall remain, as it existed on the effective date of commencement of participation in the DROP. To the extent there are any increases in salary or compensation after an officer's DROP participation period commences, such increases shall not be recognized or used for the calculation, recalculation, or determination of any benefits payable by the plan.
D. 
Accumulation of the DROP account. The monthly pension normal retirement benefit that would have been payable directly to the retiree/DROP participant had the retiree/DROP participant not elected to participate in the DROP and to directly receive a normal retirement benefit, shall, upon the retiree/participant commencing participation in DROP accumulate to the benefit of that retiree/participant and be accounted for on that DROP participant's DROP account. Participants shall not have the option of self-directed investment of their individual DROP account while in the DROP. Instead, the DROP account monies shall be invested in a fund to be identified and selected solely by the Borough in accordance with applicable law, including but not limited to all applicable provisions of the IRS Code and Pennsylvania pension laws, to generate a rate of return of no less than 0% and no more than 4.5%.
E. 
Accrual of nonpension benefits. After a police officer elects to participate in the DROP, all other contractual benefits shall continue to accrue.
F. 
Payout. Upon separation from employment, the DROP payout options available to the DROP participant shall be as follows:
(1) 
The balance of the DROP 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.
(2) 
The balance of the DROP 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 DROP 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).
(3) 
If the DROP participant or beneficiary fails to make an election within 60 days following the date of termination of DROP participation, the Chief Administrative Officer of the plan shall implement § 46-32.H.
G. 
Service-connected disability. If a DROP participant becomes temporarily incapacitated and unable to perform police duties due to an injury or condition suffered while in service and entitling the officer to benefits under the Workers' Compensation or Heart and Lung Acts, or both, during the DROP participation period, the DROP participant shall continue to participate in the DROP as if fully employed. The officer shall receive disability pay in the same amount as disabled police officers that are not participating in the DROP; however, due to the unique nature of the DROP and the goals of the DROP, there shall be a rebuttable presumption after a period of 12 months that the DROP participant is permanently disabled and unable to perform his or her police duties and his or her continued employment with the Borough and participation in the DROP shall end. In no event shall a police officer on temporary disability draw from his DROP account.
(1) 
If a DROP participant becomes eligible for a service-connected disability benefit from the plan and his employment is terminated due to an inability to continue in service on grounds that render him eligible for a service-connected disability benefit, the monthly normal retirement benefit of the DROP participant shall be reclassified as being on account of a service-connected disability to the extent permitted by law. In no event shall a DROP participant's monthly retirement benefit be recalculated. The DROP participant's monthly retirement benefit shall remain as calculated at the time of entry into the DROP in accordance with the provisions of the plan.
(2) 
Notwithstanding any other provision in this § 46-32G, if an officer is disabled and has not returned to work as of the date of his required resignation as stated in the DROP participation election form, such resignation shall take precedence over all other provisions herein and said officer shall be required to resign. Such officer shall receive his or her then existing DROP account monies and continue to receive the applicable pension benefit thereafter in accordance with the provisions of this § 46-32 and in the same manner as any other DROP participant.
(3) 
Nothing contained in this plan shall be construed as conferring any legal rights upon any police officer or other person to a continuation of employment nor shall participation in the DROP supersede or limit in any way the right of the Borough to discharge a police officer based upon an inability to perform his or her full duties as a police officer.
H. 
Death. If a DROP participant dies, the participant's eligibility for DROP shall terminate upon the date of death. In such case, if the DROP account balances have not yet been paid out, the participant's legal beneficiary under this DROP shall have the same rights and options as the participant to withdraw/roll over the account balance and the survivor provisions of the plan shall apply if applicable.
I. 
Forfeiture of benefits. Notwithstanding a police officer's status as a DROP participant, a current or former participant who is convicted or pleads guilty to engaging in criminal misconduct which constitutes a "crime related to public office or public employment," as that phrase is defined in Pennsylvania's Pension Forfeiture Act, 43 P.S. §§ 1311-1314, shall forfeit his right to receive a pension, including any amounts currently deposited in the DROP account. In such a case, the participant shall only be entitled to receive the contributions, if any, made by the participant to the fund, without interest.
J. 
Amendment. Any amendments to this § 46-32 shall be consistent with the provisions covering any applicable collective bargaining agreement and shall be binding upon all future DROP participants and upon all DROP participants who have balances in their DROP accounts.
K. 
Continued employment. A police officer's election to participate in the DROP shall in no way be construed as a limitation on the Borough's right to suspend, discharge or terminate a police officer or to grant any officer an honorable discharge based upon a physical or mental inability to perform his or her duties.