City of Lock Haven, PA
Clinton County
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Table of Contents
Table of Contents
[Adopted 3-26-1963 by Ord. No. 506A (Ch. 1, Part 8A, of the 2003 Code of Ordinances)]
A police pension and retirement fund is hereby established by the City of Lock Haven, which shall be known and designated as the "Police Pension Fund" and shall hereafter be referred to in this article as the "fund."
The fund shall be maintained, directed, applied and distributed pursuant to the provisions herein contained and the regulations adopted pursuant hereto for the benefit of the members of the association herein created.
[Amended 5-1-1972 by Ord. No. 826A; 2-16-1976 by Ord. No. 950A; 4-21-1980 by Ord. No. 106B; 12-30-1985 by Ord. No. 233B; 8-3-1998 by Ord. No. 561B; 2-24-2003 by Ord. No. 670[1]]
A Board of seven members is hereby constituted and created, which shall be known and designated as the "Police Pension Fund Board," and hereinafter referred to in this article as the "Board," and which shall consist of the following:
A. 
The City Treasurer of the City of Lock Haven, whose membership shall be concurrent with his term of office as said Treasurer. The City Treasurer shall be the Treasurer of the Police Pension Fund Board.
B. 
Three Councilmen of the City of Lock Haven, who shall be appointed by the vote of City Council and who shall serve for terms of two years or until a successor is appointed. A vacancy occurring during a term shall be filled for the unexpired term by the election of a successor in the same manner as his predecessor.
C. 
Two members of that group consisting of active members of the police force, whose membership to said Board shall be by election by the active members of the police force and whose term of office shall be three years. Terms of office shall be staggered to provide continuity of Board membership. A vacancy occurring during a term of office shall be filled for the unexpired term by election of a successor in the same manner as his predecessor.
D. 
One member of that group consisting of retired members of the police force, whose membership to said Board shall be by election by retired members of the police force. The term of office shall be for three years and shall not be concurrent with the term of either of the members of the Board elected pursuant to Subsection C above. A vacancy occurring during a term of office shall be filled for the unexpired term by election of a successor in the same manner as his predecessor. The terms of Board members elected by ballots dated April 1996 are hereby extended through February 28, 1999, at which time a new term of office shall be filled by a new election. Said term shall not be concurrent with the terms of either member of the Board elected pursuant to Subsection C above.
[1]
Editor's Note: Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. I).
The members of the Board shall serve without compensation, but shall be reimbursed from the fund for any necessary expenditures, and no member shall suffer loss of salary or wages through serving on the Board.
[Amended 3-3-1970 by Ord. No. 762A]
A. 
The Board may, from time to time, with approval of Council of the City and subject to the limitations of this article and of law:
(1) 
Establish rules and regulations for the administration of the fund and the transaction of its business. All such rules and regulations shall, however, be subject to the approval of Council; and Council may, from time to time, by ordinance, alter, modify, change or repeal such rules and regulations and establish new rules and regulations for the administration of the fund by the Board and the transaction of its business.
(2) 
Appoint a Secretary and such medical, clerical and other employees as may be necessary.
(3) 
Determine and fix the compensation of all persons employed by the Board.
B. 
A corporate depository chosen by the Board shall care for, manage, invest and dispose of (as part of the fund) all money or property, real, personal or mixed, taken by the City of Lock Haven by gift, grant, devise or bequest, in trust, for the benefit of such pension fund, subject to the provisions of this article and future regulations by Council, and subject to such directions not inconsistent therewith as the donors of such funds and property may prescribe.
[Amended 3-3-1970 by Ord. No. 762A; 4-21-1980 by Ord. No. 106B; 2-24-2003 by Ord. No. 670]
The Board shall, with approval of Council of the City and subject to the limitations of this article and of law:
A. 
Hold an annual meeting during the second calendar quarter of each year and thereat present the annual report of the depository showing the condition of the investments of the fund and evidencing receipts, charges and disbursements during the previous year, which depository report will be made part of the record of the proceedings and a copy of which shall be filed with the Council of the City of Lock Haven, and copies of which shall be furnished to each member of the association requesting the same.
B. 
Hold such special meetings as the efficient discharge of their duties require; and the Chairman may, and upon request in writing of three members of the Board shall, call special meetings of the Board upon 24 hours' notice to each member, which notice shall state whether such meeting is to be convened for special or general business; but such notice may be waived by unanimous consent of the members.
C. 
Designate a depository or depositories for the fund, which designation shall be valid until rescinded and another is designated by similar action; and the Treasurer of the Board shall immediately deposit all monies in the fund therewith in the name of the fund.
D. 
Keep all records and accounts as shall be necessary for the efficient execution of this article.
E. 
Furnish to Council such financial and other reports as it may, from time to time, request.
[Amended 3-7-1977 by Ord. No. 6B; 4-20-1981 by Ord. No. 130B]
An association is hereby constituted and created which shall be known and designated as the "Police Pension Fund Association," herein referred to as the "Association."
A. 
The membership of the Association shall consist of each active member of the police force now or hereafter employed by the City of Lock Haven. Admission to membership shall be automatic by virtue of such employment and each person so employed shall and must become a member of the Association.
B. 
Each active member of the police force shall contribute to the fund in accordance with this article from the date of his employment as a member of the police force.
The members of the Association shall, subject to the limitations of this article and of law:
A. 
Establish rules and regulations for the administration and transaction of its business.
B. 
Elect officers in accordance with established rules and regulations to represent the Association.
C. 
Certify to the Board and Council annually a list of the members of the Association in good standing and the amount of salaries and wages paid to each member as a member of the police force of the City, together with a list of members of the Association who were during said year dismissed, or who resigned or terminated their service, and the date thereof.
D. 
Furnish to the Board and Council, upon request, such information relative to the subject of this article as the Board or Council shall require.
The fund shall be under, and is hereby committed to, the direction and control of the Board.
[Amended 3-3-1986 by Ord. No. 233B]
The City of Lock Haven shall annually appropriate and pay into the fund not less than the minimum obligation as required by the Municipal Pension Plan Funding Standard and Recovery Act (Act 205 of 1984) as certified to the Council of the City by the chief administrative officer in accordance with Section 304 of the aforesaid Act.[1]
[1]
Editor's Note: See 53 P.S. § 895.304.
[Amended 3-3-1970 by Ord. No. 762A]
The depository shall invest the principal of the fund and any accumulated interest thereon not necessary for the immediate payment of pensions hereunder in:
A. 
The bonds or obligations of the United States or the United States Treasury, or those for the payment of principal and interest on which the faith and credit of the United States is pledged.
B. 
Bonds or other interest bearing obligations of the Commonwealth of Pennsylvania, or those for the payment of principal and interest on which the faith and credit of the Commonwealth is pledged.
C. 
Bonds or other interest-bearing obligations of any county, City, borough, township or school district of the Commonwealth of Pennsylvania, or those for the payment of which the faith and credit of such political subdivision is pledged; provided, that at the date of the investment in such bonds or other interest-bearing obligations, such political subdivision is not in default in payment of principal or interest owed by it on any part of its bonded indebtedness.
D. 
Any other investment which is legal for fiduciaries.
The pension herein provided for shall not be subject to attachment or execution and shall be payable only to the beneficiary designated and shall not be subject to assignment or transfer.
[Amended 2-2-1965 by Ord. No. 533A; 11-30-1965 by Ord. No. 542A; 2-1-1966 by Ord. No. 561A; 7-2-1968 by Ord. No. 664A; 2-18-1969 by Ord. No. 709A; 3-3-1970 by Ord. No. 762A; 12-20-1971 by Ord. No. 809A; 3-7-1977 by Ord. No. 6B; 6-20-1977 by Ord. No. 40B; 6-20-1977 by Ord. No. 41B; 12-30-1985 by Ord. No. 233B; 3-3-1986 by Ord. No. 236B; 12-19-1994 by Ord. No. 482B]
A. 
Any member of the Association who has attained 20 years of service as an active member of the police force shall be entitled to a pension in accordance with the terms of Subsections B and C hereof.
B. 
Payments in the amount provided in Subsection C hereof shall be payable to members of the Association who are entitled to a pension pursuant to Subsection A hereof upon attaining age 50 or retiring from active service as a police officer, whichever event occurs later.
C. 
Upon becoming eligible for the commencement of payments pursuant to Subsections A and B herein, the member shall apply to the Board and, after the aforesaid date, the Board shall pay said member from the fund during the remainder of his or her natural life, in monthly installments, a pension in an amount annually equal to 50% of the highest one year's W-2 earnings during the last three years of service immediately preceding retirement from active service as a police officer.
D. 
Surviving spouse benefits.
[Amended 10-3-2011 by Ord. No. 889[1]]
(1) 
The surviving spouse of a member of the Association who retires on pension or who has attained 20 or more years of active service with the City of Lock Haven police force and has attained the age of 50 years shall be entitled to benefits. The surviving spouse shall be eligible for benefits for the remainder of the surviving spouse's lifetime or until the surviving spouse remarries. If no spouse survives, or if the surviving spouse subsequently dies or remarries, then the child or children, under 18 years of age, of the member of the Association who retires on pension or who has attained 20 or more years of active service with the City of Lock Haven police force and has attained the age of 50 years who dies from causes which would not entitle his survivors to a survivor annuity under the terms of Pennsylvania Act 51 of 2009[2] shall be entitled to benefits until reaching the age of 18 years. Such benefits shall be paid in monthly installments to those entitled to receive benefits in the amount of 50% of the benefit that the member was receiving at the time of his death or was entitled to receive at the time of his death had he retired at the time of his death. No survivor benefit shall be payable in the event of the death of a member who terminates employment with entitlement to a vested benefit under § 99-14 but has not commenced that benefit at the time of his death.
[2]
Editor's Note: See 53 P.S. § 891.
(2) 
Applications for such benefit shall be made to the Board after the death of the member of the Association. Each member of the Association shall contribute monthly to the fund an amount equal to 1/2 of 1% of the member's monthly salary for survivor benefits.
[1]
Editor's Note: Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. I).
E. 
"Salary," as used in this section, shall be construed to mean the base minimum compensation, plus the longevity increment received by the member and shall not be construed to include any overtime pay received by the member.
F. 
In addition to the retirement allowance which is authorized to be paid from the Police Pension Fund and notwithstanding the limitations therein placed upon such retirement allowances and upon contributions, every contributor who shall become entitled to the retirement allowance shall also be entitled to the payment of a "service increment" in accordance with and subject to the conditions hereafter set forth:
(1) 
"Service increment" shall be the sum obtained by computing the number of whole years after having served the minimum required by this article for the vesting of a pension during which a contributor has been employed by such City and paid out of the City treasury and multiplying the said number of years so computed by an amount equal to 1/40 of the retirement allowance which has become payable to such contributor in accordance with the provisions of this article. No service increment shall be paid in excess of $100 per month.
(2) 
Each contributor, beginning on January 1, 2012, will pay into the retirement fund a monthly sum equal to 1% of total W-2 earnings. This contribution is in addition to any contribution for any other benefits paid under the pension fund, including widow and spouse benefits and longevity.[3]
[3]
Editor's Note: Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. I).
(3) 
Service increment contribution shall be paid at the same time and in the same manner as retirement contributions and may be withdrawn in full, without interest, by persons who leave the employment of such City, subject to the same conditions by which retirement contributions may be withdrawn, or by persons who retired before becoming entitled to any service increment.
[Amended 2-2-1965 by Ord. No. 533A; 11-30-1965 by Ord. No. 542A; 2-1-1966 by Ord. No. 561A; 7-2-1968 by Ord. No. 664A; 2-18-1969 by Ord. No. 709A; 3-3-1970 by Ord. No. 762A; 12-20-1971 by Ord. No. 809A; 3-7-1977 by Ord. No. 6B; 6-20-1977 by Ord. No. 40B; 6-20-1977 by Ord. No. 41B; 12-30-1985 by Ord. No. 233B; 3-3-1986 by Ord. No. 236B; 12-19-1994 by Ord. No. 482B; 10-1-2001 by Ord. No. 620B]
A. 
Effective for police officers who terminate employment on or after January 1, 1999, a limited vested benefit shall be available pursuant to the provisions below. As such, should a member of the Police Pension Fund ("fund"), before completing the minimum age and minimum period of continuous service requirements, but after having completed 12 years of full-time service with the City of Lock Haven Police Department ("service") so elected, the member shall be entitled to vest his pension benefit subject to the following conditions:
(1) 
The member must file with the Police Pension Board ("Board") of the fund a written notice of his or her intention to vest.
(2) 
The member must include in the notice, the date the member intends to terminate his or her service, and must acknowledge that there is no entitlement to post-retirement medical benefits pursuant to this limited vested benefit unless the member shall have accrued at least 20 years of service, then any possible entitlement to post-retirement medical benefits shall be as described in the Act 111 Arbitration Award (14 L 360 01572 94J) dated February 5, 1996.
(3) 
The member must be in good standing with the Police Department on the date of notice to vest.
(4) 
The Board shall indicate on the notice to vest the highest one year's W-2 earnings during the last three years of service preceding said date.
(5) 
The member shall forgo any other benefits under the plan.
B. 
Upon reaching the date which would have been the member's retirement date had the member continued his full-time employment with the Police Department, the member shall notify the Board, in writing, that the member desires to collect his or her pension. The amount of retirement benefits the member is entitled to receive pursuant to this provision shall be computed as follows:
(1) 
The initial determination of the member's base retirement benefits shall be computed on the highest one year's W-2 earnings during the last three years of service indicated on the notice to vest.
(2) 
The portion of the base retirement benefits due the member shall be determined by applying to the base amount the ratio determined by the number of years of service at termination divided by 20, which represents the minimum number of years of service required to receive base retirement benefits. These benefits will not be payable until the member reaches the age of 50.
Examples
Years at Vesting
Normal1 Retirement Years
Actual Benefit2 Multiplier for Vesting
% of Salary at Retirement
12
20
12/20
30%
13
20
13/20
32.5%
14
20
14/20
35%
15
20
15/20
37.5%
16
20
16/20
40%
17
20
17/20
42.5%
18
20
18/20
45%
19
20
19/20
47.5%
20
20
20/20
50%
NOTES:
1
Normal retirement = 20 years of service.
2
To be multiplied by the base amount of retirement at normal retirement.
[Amended 3-2-1971 by Ord. No. 789A; 12-30-1985 by Ord. No. 233B; 3-3-1986 by Ord. No. 236B]
A. 
Definitions.
(1) 
As used in this chapter, the following terms shall have the meanings indicated:
INJURY
Only violence to the physical structure of the body and such disease or infection as naturally results therefrom.
INJURY SUSTAINED WHILE IN THE COURSE OF ACTIVE DUTY AS A MEMBER OF THE POLICE FORCE
Shall not include an injury caused by an act of a third person intended to injure the member because of reasons personal to him, but shall include all other injuries sustained while the employee is actually engaged in the furtherance of his duties as a member of the police force.
PERMANENT DISABILITY
A physical condition that permanently prevents the member from discharging the duties of an active member of the police force.
(2) 
The terms "salary," "wage," "monthly salary," "monthly wage or salary," "salaries and wages" or any other similar term as used throughout this article shall be construed to mean the base minimum compensation, plus longevity increment received by the member and shall not be construed to include any overtime pay received by the member.
B. 
Disability benefits. The Board shall pay to each member of the Association who, after one year of service on the police force, shall be permanently disabled as a result of an injury sustained in the course of active duty as a member of the police force, a monthly disability benefit equal to 2 1/2% of the member's final monthly salary times the member's complete years of service; provided, however, that the maximum disability benefit shall be 50% of the member's final monthly salary.
C. 
The pension provided for in this section shall be paid in monthly installments and during such periods as there shall be sufficient principal in the fund to make the payments.
D. 
A pension provided for in this section shall be paid in addition to any workmen's compensation or benefits which the member shall receive by reason of disability.
E. 
The surviving spouse of an Association member receiving disability pension hereunder at the time of death shall be eligible for benefits the remainder of the surviving spouse's lifetime or until the surviving spouse remarries. If there is no surviving spouse, or if the surviving spouse subsequently dies or remarries, then the child or children under 18 years of age of such deceased member of the Association shall be entitled to benefits until reaching the age of 18. Such benefits shall be paid in monthly installments to those entitled to receive benefits and shall be calculated at the rate of 50% of the disability pension the member was receiving at the time of death. Application for such benefit shall be made to the Board after the death of the member of the Association.
[Amended 1-19-1998 by Ord. No. 539B-A; 2-24-2003 by Ord. No. 670]
A. 
If a member of the Association contributing to the fund shall be dismissed by the City, or for any cause cease to be a member of the Association before he becomes entitled to a pension hereunder, the total amount of the contribution paid into the fund by the member, except life insurance premiums, shall upon request be refunded in full, without interest.
B. 
If a member of the Association enters into the active military or naval service of the United States government and shall, at the time of his entry into such service or immediately thereafter, file with the City Treasurer a statement under oath setting forth that he intends to retain his position with the City of Lock Haven and resume his duties at the expiration of his military or naval service, and such member shall pay to the fund monthly during the time he is in such military or naval service a sum equal to that which he would have paid had he been a member during the period for which he desires credit, then in such case the period of his military or naval service shall be included in computing his years of service in the employ of the City.
C. 
In the event of the death of a member of the Association before he becomes entitled to the pension herein provided for, the total of the contributions paid into the fund by said member shall be paid to the estate of said deceased employee, without interest.
D. 
In the event of the death of a member of the Association while receiving pension hereunder, but before the amount of the pension received shall equal the total amount of contributions paid into the fund, the difference between the amount received as pension and the amount contributed to the fund by the deceased member shall be paid to the estate of said deceased employee, without interest.
E. 
A member of the police pension fund who is a contributor or who served in the armed forces of the United States subsequent to September 1, 1940, and who was not a member of the police pension plan fund prior to such military service, shall be entitled to have full credit for each year or fraction thereof, not to exceed three years of such service, upon his payment to the police pension fund an amount equal to that which he would have paid had he been a member during the period for which he desires credit, and his payment to such fund of an additional amount as the equivalent of contributions of the City on account of such military service. The amount to be paid by the member for purchase of military service shall be determined by the fund's actuary. This provision shall apply irrespective of date of employment.
[Amended 11-4-2013 by Ord. No. 925]
A person receiving a pension hereunder, who serves in any City office to which he was elected by popular vote, during the term of said office, said person shall not be entitled to said pension.
[Amended 3-3-1970 by Ord. No. 762A]
All disbursements from the fund shall be by check or order drawn by the authorized depository.
Payments of pensions or allowances under this article shall be made solely out of the moneys and property in the Police Pension Fund and shall not be a charge on any other fund in the treasury of the City or under its control.
The Treasurer shall give surety bond approved by the Board in such sum as the Board may determine for the faithful performance of his duties. The premium for such bond shall be paid by the Board out of the funds entrusted to them.
It shall be the duty of the Treasurer to keep account of all moneys coming into his hands belonging to the Board and of all disbursements of the same. All moneys received by the Treasurer shall forthwith be deposited in the depository chosen by the said Board in the name of the Police Pension Fund.
[Amended 3-3-1970 by Ord. No. 762A]
The depository or someone employed by it shall at least once a year submit to the Board and to the Council of the City of Lock Haven a statement of the financial condition of the fund and of the accounts received and paid out during the year, and of all investments made by the depository and the condition of such investments.
[Added 4-21-1980 by Ord. No. 106B]
There is hereby created a Retirement Committee composed of the Treasurer of the Board and the Secretary of the Board. The Committee shall receive applications for benefits, shall approve or disapprove applications and shall transmit approved applications to the depository for benefit payments in accordance therewith. The Board may designate the Committee to execute any document(s) on behalf of the Board, in which event the Board shall notify the depository in writing of such action.
[Added 12-17-2001 by Ord. No. 625B; amended 2-2-2009 by Ord. No. 833]
A. 
Definitions. The following words and phrases are hereby introduced and defined for purposes of this section only:
LEASED EMPLOYEE
Effective as of January 1, 1997, any person (other than an employee of the recipient) who, pursuant to an agreement between the recipient and any other person ("leasing organization"), has performed services for the recipient [or for the recipient and related persons determined in accordance with Code Section 414(n)(6)[1]] on a substantially full-time basis for a period of at least one year, and such services are under primary direction and control of the recipient.
LIMITATION YEAR
The plan year, for purposes of applying the limitations under the current article.
[1]
Editor's Note: See 26 U.S.C. § 414(n)(6).
B. 
Maximum annual benefit.
(1) 
General rule. Except as otherwise provided, this plan shall at all times comply with the provisions of Code Section 415[2] 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 Section 415, the benefit will be reduced to the maximum permissible benefit.
[2]
Editor's Note: See 26 U.S.C. § 415.
(2) 
Effective date. If there is more than one permissible effective date for any required change in the Code Section 415(b)[3] provisions, then the change shall be effective as of the latest permissible effective date; however, any adjustment in the dollar limit under Code Section 415(b)(1)(A),[4] whether required or permissible, shall take effect automatically as of the earliest permissible effective date. The "applicable mortality table" in Revenue Ruling 2001-62 became effective as of December 31, 2002, and shall remain effective through December 31, 2007. The "applicable mortality table" and "applicable interest rate" after December 31, 2007, is found in Revenue Ruling 2007-67.
[3]
Editor's Note: See 26 U.S.C. § 415(b).
[4]
Editor's Note: See 26 U.S.C. § 415(b)(1)(A).
(3) 
No reduction in accrued benefits. Notwithstanding the above, no change in the limits under this section shall reduce the benefit of any participant.
(4) 
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 Section 415(b),[5] and if the aggregated benefits would otherwise exceed the limit under Code Section 415(b), then benefits shall be reduced first under this plan.
[5]
Editor's Note: See 26 U.S.C. § 415(b).
(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 Section 415(b).[6] This subsection does not apply to contributions "picked up" in accordance with Code Section 414(h).[7]
[6]
Editor's Note: See 26 U.S.C. § 415(b).
[7]
Editor's Note: See 26 U.S.C. § 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 Section 415(n)[8]] 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.
[8]
Editor's Note: See 26 U.S.C. § 415(n).
(7) 
Benefit less than $10,000. Benefits paid to a participant which total less than $10,000 from all defined benefit plans maintained by the employer expressed as an annual benefit shall be deemed not to exceed the limitations of this section, provided that the employer has not at any time maintained a defined contribution plan in which the participant has participated; however, in the case of a participant who is not receiving a disability retirement benefit or a death benefit, with fewer than 10 years of service, the limitation expressed in this Subsection B(7) shall be reduced by 1/10 for each year of service less than 10, but in no event shall this limitation be less than $1,000. In the event that a participant has less than 10 years of service with the employer, the limitation of this section shall be reduced by multiplying the otherwise applicable limitation by a fraction, the numerator of which is the number of years of service with the employer.
[Added 10-1-2012 by Ord. No. 910]
C. 
Limit on annual additions.
(1) 
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 Section 415(c)[9] 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 Section 415(c), the excess annual addition will be eliminated in accordance with methods permitted under Revenue Procedure 2008-50 (Revenue Procedure 2006-27 prior to 2009) or its successor.
[9]
Editor's Note: See 26 U.S.C. § 415(c).
(2) 
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 Section 415(c),[10] and if the annual additions would otherwise exceed the limit under Code Section 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.
[10]
Editor's Note: See 26 U.S.C. § 415(c).
(3) 
Effective date. The limits under which Code Section 415(c)[11] 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 Section 415(c), then the change shall be effective as of the earliest permissible effective date.
[11]
Editor's Note: See 26 U.S.C. § 415(c).
(4) 
Code Section 415 compensation. For the purposes of the annual additions limitations of Code Section 415(c)[12] and this section, "compensation" includes wages within the meaning of Section 3401(a)[13] (for the purpose of income tax withholding at the source), plus amounts that would be included in wages but for an election under Code Sections 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 401(k) or 457(b).[14] However, any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed [such as the exception for agricultural labor in Section 3401(a)(2)[15]] are disregarded for this purpose. For limitation years beginning prior to January 1, 1998, elective deferrals under Code Section 402(g)[16] and amounts elected under Sections 125(a), 132(f)(4), 401(k) or 457(b)[17] are excluded from "compensation." 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.
[Added 10-1-2012 by Ord. No. 910]
[12]
Editor's Note: See 26 U.S.C. § 415(c).
[13]
Editor's Note: See 26 U.S.C. § 3401(a).
[14]
Editor's Note: See 26 U.S.C. §§ 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 401(k) and 457(b).
[15]
Editor's Note: See 26 U.S.C. § 3401(a)(2).
[16]
Editor's Note: See 26 U.S.C. § 402(g).
[17]
Editor's Note: See 26 U.S.C. §§ 125(a), 132(f)(4), 401(k) and 457(b).
D. 
Leased employees and independent contractors. Leased employees and independent contractors are not eligible to participate in this plan. Any person whom the Board of Supervisors does not regard as being an employee shall not be eligible to participate.
E. 
Limit on compensation. Compensation (for purposes of calculating monthly earnings) is subject to the limitation under Code Section 401(a)(17),[18] which is $230,000 for the plan year beginning in 2008. The limit is automatically adjusted periodically, without formal amendment, for changes in the law and cost-of-living adjustments under Code Section 401(a)(17). As of January 1, 1994, this amount was $150,000, and at all times the plan requires compliance with Section 401(a)(17).
[18]
Editor's Note: See 26 U.S.C. § 401(a)(17).
F. 
Multiple plan reduction. Code Section 415(e)[19] applied for limitation years beginning prior to 2000.
[19]
Editor's Note: 26 U.S.C. § 415(e) was repealed 8-20-1996 by P.L. 104-188, § 1452(a).
G. 
Vesting upon plan termination. Upon the termination of this plan, or complete discontinuance of contributions [within the meaning of pre-ERISA Code Section 401(a)(7)] to this plan, each employee, as of the date of such termination or discontinuance, shall become vested to the extent that the plan is funded.
H. 
Required distributions.
(1) 
Notwithstanding anything to the contrary herein contained, all distributions under the plan shall be made in accordance with Section 401(a)(9) of the Code.[20] Any distribution option under the plan which is inconsistent with Section 401(a)(9) of the Code shall be inoperative to the extent of such inconsistency. Effective as of January 1, 2003, all distributions under the plan shall be made in accordance with Regulation § 1.401(a)(9)-1 through § 1.401(a)(9)-9. For calendar years prior to 2003, distributions were made in accordance with the 1987 proposed regulations [under Section 401(a)(9) of the Code], except to the extent that those proposed regulations were overridden by amendments to the Code. Nothing in this section gives any participant, retired participant, beneficiary, or alternate payee the right to elect any time or method of a distribution not provided for in another section of the plan.
[20]
Editor's Note: See 26 U.S.C. § 401(a)(9).
(2) 
Required beginning date.
(a) 
Participant's required beginning date. Effective as of January 1, 1997, distribution to a participant must be made or commenced no later than the first day of April following the calendar year in which such participant attains age 70 1/2 or retires, whichever is later.
(b) 
Death of participant before distribution begins. If the participant dies before distributions begin, the participant's entire interest will be distributed, or begin to be distributed, no later than as follows:
[1] 
If the participant's surviving spouse is the participant's sole designated beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the participant died, or by December 31 of the calendar year in which the participant would have attained age 70 1/2, if later.
[2] 
If the participant's surviving spouse is not the participant's sole designated beneficiary, then distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the participant died.
[3] 
If there is no designated beneficiary as of September 30 of the year following the year of the participant's death, the participant's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the participant's death.
[4] 
If the participant's surviving spouse is the participant's sole designated beneficiary and the surviving spouse dies after the participant but before distributions to the surviving spouse begin, this Subsection H(2)(b), other than Subsection H(2)(b)[1], will apply as if the surviving spouse were the participant.
(3) 
Distributions, if not made in a lump sum, shall be made over a period not exceeding the lifetime of the participant or the joint lifetimes of the participant and his designated beneficiary, or over a period certain not extending beyond the life expectancy of the participant or the joint life expectancies of the participant and his beneficiary.
(4) 
If the participant's interest is to be paid in the form of annuity distributions under the plan, payments under the annuity shall satisfy the following:
(a) 
The annuity distributions must be paid in periodic payments made at intervals not longer than one year;
(b) 
The distribution period must be over a life (or lives) or over a period certain not longer than a life expectancy (or joint life and last survivor expectancy) described in Section 401(a)(9)(A)(ii) or Section 401(a)(9)(B)(iii) of the Code,[21] whichever is applicable;
[21]
Editor's Note: See 26 U.S.C. § 401(a)(9)(A)(ii) and (a)(9)(B)(iii).
(c) 
For plan years beginning prior to 2003, the life expectancy (or joint life and last survivor expectancy) for purposes of determining the period certain shall be determined without recalculation of life expectancy;
(d) 
Once payments have begun over a period certain, the period certain may not be lengthened even if the period certain is shorter than the maximum permitted;
(e) 
Payments must either be nonincreasing or increase only as in accordance with Treasury regulations.
I. 
Domestic relations order. All rights and benefits, including elections, provided to a participant in this plan may be subject to the rights afforded to any alternate payee pursuant to a domestic relations order as provided by applicable state law.
J. 
Direct rollover.
(1) 
This section applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the plan to the contrary that would otherwise limit a distributee's election under this section, a distributee may elect, at the time and in the manner prescribed by the plan administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.
(2) 
For purposes of this section, the following definitions shall apply:
(a) 
Eligible rollover distribution.
[1] 
An "eligible rollover distribution" is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include:
[a] 
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 ten years or more;
[b] 
Any distribution to the extent such distribution is required under Code Section 401(a)(9)[22];
[22]
Editor's Note: See 26 U.S.C. § 401(a)(9).
[c] 
The portion of any distribution that is not includible 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.
[2] 
Effective as of January 1, 2002, Subsection J(2)(a)[1][c] does not apply to any after-tax participant contributions that are paid to an individual retirement account or annuity described in Code Section 408(a) or (b),[23] or to a qualified defined contribution plan described in Code Section 401(a) or 403(a) or, effective as of January 1, 2007, any 403(b)[24] annuity contract that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.
[23]
Editor's Note: See 26 U.S.C. § 408(a) and (b).
[24]
Editor's Note: See 26 U.S.C. §§ 401(a), 403(a) and 403(b), respectively.
(b) 
An "eligible retirement plan" is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a) or a qualified trust described in Code Section 401(a) that accepts the distributee's eligible rollover distribution.[25] However, in the case of an eligible rollover distribution to the 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 Section 403(b)[26] and an eligible plan under Code Section 457(b)[27] 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 January 1, 2008, a Roth IRA is an eligible retirement plan.
[25]
Editor's Note: See 26 U.S.C. §§ 408(a), 408(b), 403(a) and 401(a), respectively.
[26]
Editor's Note: See 26 U.S.C. § 403(b).
[27]
Editor's Note: See 26 U.S.C. § 457(b).
(c) 
A "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 Section 414(p),[28] are distributees with regard to the interest of the spouse or former spouse.
[28]
Editor's Note: See 26 U.S.C. § 414(p).
(d) 
A "direct rollover" is a payment by the plan to the eligible retirement plan specified by the distributee.
K. 
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 with Section 414(a) of the Code.[29]
[29]
Editor's Note: See 26 U.S.C. § 414(a).
L. 
Mandatory lump-sum distributions. Effective as of January 1, 2006, if, prior to attaining age 62, a participant is entitled to a lump-sum distribution in excess of $1,000, his or her vested interest shall be transferred to an individual retirement account (IRA), unless the participant elects to receive a cash distribution.
M. 
Heroes Earnings Assistance Relief Tax Act (HEART Act). Effective for deaths occurring on or after January 1, 2007, if a participant dies while performing qualified military service [as defined in IRC § 414(u)[30]], the survivors of the participant are entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service) provided under the plan had the participant resumed and then terminated employment on account of death.
[Amended 10-1-2012 by Ord. No. 910]
[30]
Editor's Note: See 26 U.S.C. § 414(u).
N. 
Nonspouse beneficiaries. Effective as of 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 Section 402(c)(11),[31] make a trustee-to-trustee transfer of that amount to an IRA or individual retirement annuity (other than an endowment contract), provided that:
(1) 
The transfer is made not later than the end of the fourth year after the year of the participant's death; and
(2) 
The account or annuity to which the amount is transferred is treated as an inherited IRA or individual retirement annuity in accordance with Code Section 408(d)(3)(C).[32]
[32]
Editor's Note: See 26 U.S.C. § 408(d)(3)(C).
[31]
Editor's Note: See 26 U.S.C. § 402(c)(11).
O. 
Plan for sole benefit of participants. The income and principal of the plan are for the sole use and benefit of the participants and their beneficiaries and, to the extent permitted by law, shall be free, clear and discharged of and from and are not to be in any way liable for debts, contracts or agreements, now contracted or which may hereafter be contracted, and from all claims and liabilities now or hereafter incurred by any participant or beneficiary.
[Added 10-1-2012 by Ord. No. 910]
P. 
No reversion to the employer. At no time shall it be possible for the plan assets to be used for, or diverted to, any purpose other than for the exclusive benefit of the participants and their beneficiaries, except that contributions made by the employer may be returned to the employer if the contribution was made due to a mistake of fact and the contribution is returned within one year of the mistaken payment of the contribution, the plan is terminated, or as otherwise permitted by the laws of the Commonwealth of Pennsylvania.
[Added 10-1-2012 by Ord. No. 910]
Q. 
Vesting upon attainment of normal retirement age. The participant shall be one-hundred-percent vested in his normal retirement benefit upon the attainment of normal retirement age.
[Added 10-1-2012 by Ord. No. 910]
R. 
Vesting upon plan termination. Upon the termination of this plan, or complete discontinuance of contributions [within the meaning of pre-ERISA Code Section 401(a)(7)] to this plan, each employee (who is not already one-hundred-percent vested), as of the date of such termination or discontinuance, shall become vested to the extent that the plan is funded.
[Added 10-1-2012 by Ord. No. 910]
S. 
Retroactive effective date for certain Internal Revenue Code provisions. Notwithstanding the effective date of this section, any provision required by EGTRRA is effective as of January 1, 2002, and any provision that is required by GUST is effective as of the effective dates set forth herein.
[Added 10-1-2012 by Ord. No. 910]