City of Altoona, PA Police Pension Fund

General rule. Except as otherwise provided, this Plan shall at all times comply with the provisions of Code § 415 and the regulations thereunder, the terms of which are specifically incorporated herein by reference. If a benefit payable to a Participant under this Plan would otherwise exceed the limit under Code § 415, the benefit will be reduced to the maximum permissible benefit.

Effective date. If there is more than one permitted effective date for any change, the change shall be effective as of the latest permissible effective date; however, any adjustment in the dollar limit under Code § 415(b)(1)(A), whether required or permissible, shall take effect automatically as of the earliest permissible effective date. Effective as of January 1, 2008 the applicable mortality table and applicable interest rate are found in Rev. Rul. 2007-67. The applicable mortality table in Rev. Rul. 2001-62 was effective from December 31, 2002 through December 31, 2007.

No reduction in accrued benefits. Notwithstanding the above, no change in the limits under this article shall reduce the benefit of any participant.

(5)

Mandatory contributions. Participant contributions are annual additions, and any benefit attributable to participant contributions is not included in the benefit subject to the limits of Code § 415(b). This subsection does not apply to contributions picked-up in accordance with Code § 414(h).

(6)

Permissive service credit. Effective as of January 1, 1998, if a participant makes a purchase of permissive service credit (within the meaning of Code § 415(n)) under the Plan, the benefit derived from the contributions made to purchase the service credit shall be treated as part of the benefit subject to the limitations under this section.

Limit on annual additions.

Annual additions. Except as otherwise provided, annual additions (which include participant contributions) under this Plan shall at all times comply with the provisions of Code, § 415(c) and the regulations thereunder, the terms of which are specifically incorporated herein by reference. If an annual addition would otherwise exceed the limit under Code § 415(c), the excess annual addition will be eliminated in accordance with methods permitted under Rev. Proc. 2008-50 (Rev. Proc. 2006-27 prior to 2009) or its successor.

Multiple plans. If a participant also participates in one or more other plans that are required to be aggregated with this Plan for purposes of determining the limits under Code § 415(c), and if the annual additions would otherwise exceed the limit under Code § 415(c), annual additions will first be reduced under the other plan. If there is more than one other plan, annual additions will first be reduced under the plan with the greatest amount of annual additions.

Effective date. The limits under which Code § 415(c) are adjusted periodically in accordance with changes in the law or cost of living adjustments without the need for a plan amendment. If there is more than one permissible effective date for any required change relating to Code § 415(c), then the change shall be effective as of the earliest permissible effective date.

415(c) Compensation. For the purposes of this section, "compensation" includes only those items specified in Treas. Reg. § 1.415(c)-2(b)1 or (2) and excludes all items listed in Treas. Reg. § 1.415(c)-2(c), the terms of which are specifically incorporated herein by reference. Effective as of January 1, 2009, to the extent required by the Heroes Earnings Assistance Tax Relief Tax Act of 2008 (HEART Act), differential wage payments shall be included in compensation.

Direct rollovers.

If a participant, a spousal beneficiary, or an alternate payee (who is a spouse or former spouse of a participant) is entitled (under other provisions of this Plan) to receive an "eligible rollover distribution" of at least $200 the distributee may elect that the Plan Administrator transfer all or part (provided that the part is at least $500 to any eligible retirement plan capable of accepting such a transfer.

ELIGIBLE ROLLOVER DISTRIBUTION

For purposes of this section, the following definitions shall apply:

Any distribution of all or any portion of the balance to the credit to the distributee, except that an eligible rollover distribution does not include:

Any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of 10 years or more;

Any distribution to the extent such distribution is required under Code § 401(a)(9);

(c)

The portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities); and

(d)

Effective as of January 1, 2002, any hardship distribution. Effective as of January 1, 2002 Subsection (c) does not apply to any after-tax participant contributions that are paid to an individual retirement account or annuity described in Code § 408(a) or (b), or to a qualified defined contribution plan described in Code § 401(a) or 403(a), or effective as of January 1, 2007, any 403(b) annuity contract that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includable in gross income and the portion of such distribution which is not so includable.

DISTRIBUTEE

Includes an employee or former employee. In addition, the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code § 414(p)(11), are distributes with regard to the interest of the spouse or former spouse.

ELIGIBLE RETIREMENT PLAN

An individual retirement account described in Code § 408(a), an individual retirement annuity described in Code § 408(b), an annuity plan described in Code § 403(a), or a qualified trust described in Code § 401(a), that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to a surviving spouse, prior to January 1, 2002, an eligible retirement plan was an individual retirement account or individual retirement annuity. Effective as of January 1, 2002, an eligible retirement plan includes an annuity contract described in Code § 403(b) and an eligible plan under Code § 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this plan. Effective as of January 1, 2008 a Roth IRA is an eligible retirement plan.

Minimum required distributions. Notwithstanding any provision in this Plan to the contrary, the distribution of a Participant's benefits shall be made in accordance with the requirements of Code § 401(a)(9). For purposes of complying with Code § 401(a)(9), life expectancies were determined in accordance with the 1987 proposed regulations prior to January 1, 2003 and with the final regulations § 1.401(a)(9)-1 through § 1.401(a)(9)-9) on or after January 1, 2003.

Distribution of a participant's benefits shall begin no later than April 1 of the calendar year following the later of:

The calendar year in which the participant attains age 70 1/2, or

The calendar year in which the participant retires.

Distributions must be made over a period not exceeding the life of the participant or the joint lives a participant and his beneficiary.

Distributions to a participant and his beneficiaries shall only be made in accordance with the incidental death benefit requirements of Code § 401(a)(9)(G) and the regulations thereunder. If a participant receives a joint and survivor annuity and the beneficiary is not the participant's spouse, life expectancy shall be determined using the Uniform Lifetime Table of Treasury regulation § 1.401(a)(9)-9.

This section does not authorize the payment of any benefit in any form not permitted under another provision of the Plan.

Approved domestic relations orders. All rights and benefits, including elections, provided to a participant in this Plan shall be subject to the rights afforded to any alternate payee under what is recognized pursuant to state law support provisions or as a approved domestic relations order.

Credit for qualified military service. Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance Code §§ 401(a)(37) and 414(u).

Vesting upon plan termination. Upon the termination of this Plan, or complete discontinuance of contributions (within the meaning of pre-ERISA Code § 401(a)(7)) to this Plan, each employee (who is not already 100% vested) as of the date of such termination or discontinuance shall become vested to the extent that the Plan is funded.

Mandatory lump-sum distributions. Effective as of January 1, 2006, no lump-sum distribution in excess of $1,000 may be made to a participant prior to the participant's attainment of normal retirement age unless the participant consents to the distribution.

Nonspousal rollover. Effective January 1, 2007, if a beneficiary who is not a surviving spouse is entitled to receive what would otherwise be an eligible rollover distribution the beneficiary may, in accordance with Code § 402(c)(11), make a trustee-to-trustee transfer of that amount to an IRA or individual retirement annuity (other than an endowment contract); provided that:

The transfer is made not later than the end of the fourth year after the year of the participant's death; and

The account or annuity to which the amount is transferred is treated as an inherited IRA or individual retirement annuity in accordance with Code § 408(d)(3)(C).

Full vesting at normal retirement age. A participant's normal retirement benefit shall be 100% vested upon attainment of his normal retirement age.

Forfeitures. Forfeitures shall not be used to increase the benefits of any participant in this Plan, but may be used to reduce employer contributions to the Plan.

Exclusive benefit. The Plan is maintained for the exclusive benefit of its participants and beneficiaries.

§ 94-21 Provisions relative to funding under Act 205.

Actuarial valuations.

The actuary to the Plan shall perform an actuarial valuation at least biennially.

Each 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.

Such actuarial valuation shall be prepared and certified by an approved actuary, as such term is defined in Act 205.

The expenses attributable to the preparation of any actuarial valuation report or investigation required by Act 205 or any other expenses which are permissible under the terms of Act 205 and which are directly associated with administering the Plan shall be allowable administrative expenses payable from the assets of the Fund. Such allowable expenses shall include, but shall not be limited to, the following:

Investment costs associated with obtaining authorized investments and investment management fees;

Accounting expenses;

(c)

Premiums for insurance coverage on Fund assets;

(d)

Reasonable and necessary counsel fees incurred for advice or to defend the Fund; and

(e)

Legitimate travel and education expenses for officials of the Plan.

(5)

Council, in its fiduciary role, shall monitor the services provided to the Plan to ensure that the expenses are necessary, reasonable and benefit the Plan; and further provided, that the Administrator shall document all such expenses item by item, and where necessary, hour by hour.

Duties of the Chief Administrative Officer.

The actuarial reports described above shall be prepared and filed under the supervision of the Chief Administrative Officer.

ADMINISTRATOR or PLAN ADMINISTRATOR

The Chief Administrative Officer of the Plan shall determine the financial requirements of the Plan on the basis of the most recent actuarial report and shall determine the minimum obligation of the City with respect to funding the Plan for a given plan year. The Chief Administrative Officer shall submit the financial requirements of the Plan and the minimum obligation of the City to Council annually and shall certify the accuracy of such calculations and their conformance with Act 205.

Modification of benefits. Prior to the adoption of any provision that modifies a benefit provided hereunder, the Chief Administrative Officer shall provide to Council a cost estimate of the proposed modification. Such estimate shall be prepared by an approved actuary, which estimate shall disclose to Council the impact of the proposed modification on the future financial requirements of the Plan and the future minimum obligation of the City with respect to the Plan.

Definitions.

ACTUARY

An approved actuary under Act 205 and thus shall have at least five years actuarial experience with public pension plans and who is either enrolled as a member of the American Academy of Actuaries or enrolled as an actuary pursuant to ERISA.

The person or persons appointed by the City to administer the Plan. In the event no one is appointed, the Plan Administrator shall be the City Manager.

CHIEF ADMINISTRATIVE OFFICER

The person designated by the City who has primary responsibility for execution of the administrative affairs of the City, in the case of the City, or the pension plan in the case of the Plan or the designee of that person. If the City does not name a Chief Administrative Officer, it shall be the City Manager.

§ 94-22 Eligibility; payment of pension; pension benefits.

Eligible members.

Every officer who is a member in good standing of the Police Pension Fund Association, who shall have been a dues paying member for a continuous period of 20 years, excepting those officers whose service is interrupted by their service in the Armed Forces of the United States, and were employed by the City as an officer prior to January 1, 2014, meets the age requirement, if any, as set forth in the collective bargaining agreement between the City and its police officers, may be entitled to retire and eligible for pension upon recommendation of the Police Pension Fund Association. Every officer hired on or after January 1, 2014, who retires and is a member in good standing of the Police Pension Fund Association, who shall have been a dues paying member for a continuous period of 20 years, excepting those officers whose service is interrupted by their service in the Armed Forces of the United States, and who shall have attained the age of 50 years, may be entitled to retire and eligible for pension upon recommendation of the Police Pension Fund Association. With the exception of those members hired on or after January 1, 2014, upon such recommendation, the Police Pension Fund Board shall then direct that the said retiring member shall be paid out of the Police Pension Fund, payable in monthly installments, a pension determined by the rate of the monthly pay of the member at the date of injury, death, honorable discharge or retirement or the highest average salary which the member received during any five years of service preceding injury, death, honorable discharge or retirement, whichever is the higher, and except as the service increments shall not in any case exceed in any year one-half the annual pay of such member computed at such monthly or average annual rate, whichever is the higher, and if so entitled to, in addition, a service increment, which sum shall be obtained by computing the number of whole years after having served the minimum required by this article and multiplying the said number of years so computed by an amount equal to 1/40 of his or her retirement or pension allowance which has become payable to such member in accordance with the provisions of this article. For those members hired on or after January 1, 2014, upon the recommendation of the Police Pension Fund Association, the Police Pension Fund Board shall then direct that the said retiring member shall be paid out of the Police Pension Fund, payable in monthly installments, a pension determined by the rate of the monthly base wage of the member at the date of injury, death, honorable discharge or retirement which shall not in any case exceed in any year one-half the annual base wage of such member computed in accordance with the provisions of this article.

[Amended 3-26-2014 by Ord. No. 5650; 2-24-2016 by Ord. No. 5672[1]]

[1]

Editor’s Note: This ordinance provided for applicability to retirements on or after January 1, 2014.

In computing the service increment, which shall not be available to those members hired on or after January 1, 2014, no employment after the member has reached the age of 65 years shall be included, and no service increment shall be paid to any member in excess of $500 per month.

[Amended 3-26-2014 by Ord. No. 5650; 2-24-2016 by Ord. No. 5672[2]]

[2]

Editor’s Note: This ordinance provided for applicability to retirements on or after January 1, 2014.

For any member of the Police Pension Fund Association who retires on or after January 1, 2014, with the exception of those members hired on or after January 1, 2014, the salary computation utilized to determine pension benefits shall include overtime worked by the member up to a maximum of $7,500 per year.

[Amended 3-26-2014 by Ord. No. 5650]

With the exception of any member hired on or after January 1, 2014, any member of the Altoona Police Pension Fund who is a contributor and who served in the Armed Forces of the United States subsequent to September 1, 1940, and who was not a member of the Altoona Police Pension Fund prior to such military service, shall be entitled to have full credit for each year or fraction thereof, not to exceed five years of such service, upon his/her payment to the Altoona Police Pension Fund of an amount equal to that which he/she would have paid had he/she been a member during the period for which he/she desires credit, and his/her payment to such fund of an additional amount as the equivalent of the contributions of the City on account of such military service. All such military service qualifying by such payment by the member shall also be included in the credit for such member in the computation of said member's service increment, as provided for in this article and in the bylaws of the Altoona Police Pension Fund.

[Amended 3-26-2014 by Ord. No. 5650]

(5)

Every officer in good standing of the Police Pension Fund Association who retires on or after January 1, 1996, with the exception of those members hired on or after January 1, 2014, shall receive an annual cost of living adjustment. The cost of living adjustment shall not exceed 50% of the original pension benefit in total. The annual adjustment will be based on the Consumer Price Index — All Urban, and shall be the annual percent increase in the Consumer Price Index on a yearly basis from October to October of the year prior to the increase, i.e.:

[Amended 3-26-2014 by Ord. No. 5650]

	CPI — All Urban October 1995	=	153.7
	CPI — All Urban October 1996	=	158.3
	Difference	=	4.6

(6)

The adjustment is attained by dividing 4.6 by 153.7 which equals the percentage of CPI increase (2.9%).

(Reserved)[3]

[3]

Editor's Note: Former Subsection B, regarding an early retirement option, was repealed 3-26-2014 by Ord. No. 5650.

Vested rights.

Should a member of the Altoona Police Pension Fund desire to retire from active police service before completing the minimum age and minimum period of service requirements, but, after having completed 12 years of full-time service, the member shall be entitled to vest their retirement benefits subject to the following condition:

The member must file with the Pension Board a written notice of intention to vest;

The member must include in the notice the date the member intends to terminate their service as a full-time police officer;

(c)

The termination date shall be at least 30 days later than the date of the notice to vest;

(d)

The member must be in good standing with the Police Department on the date of notice to vest; and

(e)

The Board shall indicate on the notice to vest the rate of the monthly pay of the member as of the date of said notice to vest or the highest average annual salary which the member received during any five years of service preceding said date, whichever is the higher.

Upon reaching the date which would have been the member's retirement date had the member continued full-time employment with the Police Department, the member shall notify the Board, in writing, that the member desires to collect their pension. The amount of retirement benefits the member is entitled to receive under this section shall be computed as follows:

The initial determination of the member's base retirement benefits shall be computed on the salary; however, the same shall be computed on base wage for members hired on or after January 1, 2014, indicated on the notice to vest; and

[Amended 3-26-2014 by Ord. No. 5650]

The portion of the base retirement benefits due the member shall be determined by applying to the base amount the percentage that the member's years of service actually rendered bears to the years of service which would have been rendered had the member continued to be employed by the Department until their minimum retirement date.

If a member should die before reaching the age of 50 years, the member's surviving spouse or, if the spouse subsequently dies, then the child or children under 18 years of the member, may make application and receive the same pension consideration as would have been paid to the retired member. This benefit would continue until the death of the surviving spouse, and in the case of the child, or children, until the 18th birthday.

The surviving spouse of a member of the police force or a member who retires on pension who dies, or if no spouse survives or if they survive and subsequently die, then the child or children under the age of 18 years of a member of the police force, or a member who retires on pension who dies, shall, during the surviving spouse's lifetime or until reaching the age of 18 years in the case of a child or children, be entitled to receive the pension the member was receiving or would have been receiving had he/she been retired at the time of death. The minimum base pension for the Altoona Police Pension Fund shall be $300 per month. This shall include pensions for retired officers and surviving spouses.

Any police officer, with the exception of those police officers hired on or after January 1, 2014, who has less than 10 years of service and who dies or is totally disabled due to illness, injuries, or mental incapacities not in the line of duty, and is unable to perform the duties of a police officer, shall be entitled to a pension of 25% of his/her annual compensation. For death, illness, injuries, or mental incapacities received after 10 years of service the compensation shall be 50% of his/her annual compensation. The disability pension shall be payable to the police officer during his/her lifetime and if he/she shall die, the pension payment that he/she was receiving shall be continued to be paid to said police officer's spouse if the spouse survives or if the spouse subsequently dies then the child or children under the age of 18 years of the police officer.

[Amended 3-26-2014 by Ord. No. 5650]

Any police officer who becomes totally disabled due to the injuries sustained in the line of duty, shall be deemed to be fully vested in the Altoona Police Pension Fund, regardless of the actual number of years of credited service, and shall be eligible for immediate retirement benefits.

Claims under this subsection shall be decided by the governing body of the City. Proof of disability shall be by competent medical evidence provided by the claimant. The governing body of the City and/or the Pension Board may, at any time, have the claimant examined by its own physician.

Claims under this subsection may be brought as the regulations of City Council prescribe. Hearings and appeals shall be as provided in Title 2 of the Pennsylvania Consolidated Statutes (relating to administrative law and procedure).