Township of North Lebanon, PA POLICE PENSION PLAN

Editor's Note: The amended and restated Police Pension Plan is on file in the office of the Township Secretary.

[Ord. 1-2010, 1/18/2010; as amended by Ord. 6-2011, 11/21/2011, § 1; and by Ord. 3-2014, 8/18/2014, § 1]

2009 Compliance Amendment. As authorized by Section 9.2 of the North Lebanon Township Police Pension Plan ("Plan") as amended and restated effective January 1, 2008, the employer, North Lebanon Township, hereby amends the Plan to comply with Act 600 of 1956, as amended by Act 51 of 2009, the Emergency and Law Enforcement Personnel Death Benefits Act. This amendment shall be effective as provided herein. The amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions of this amendment. The employer hereby amends the Plan in the following manner:

"FIRST: Repeal of Killed-of-Service Benefit.
	"Section 4.2(a) and (b) are amended to remove the killed-in-service benefit. As amended, Section 4.2(a) and (b) shall read as follows:
		"(a)	Killed-in-Service Benefit - Effective with respect to deaths occurring on or after October 9, 2009, the killed-in-service death benefit shall no longer be payable under this plan or by the employer. A deceased participant's surviving spouse or eligible child who is eligible to receive such benefit due to the qualifying death of the participant on or after April 17, 2002 and prior to October 9, 2009 shall continue to receive the benefit as formerly awarded.
		"(b)	Survivor Benefit - If a retired or disabled participant who is receiving a pension benefit dies or if a participant dies after satisfying the requirements for retirement whether or not he had previously terminated employment, the participant's surviving spouse or eligible child (if any and as further described in Section 4.1(c)) shall receive a benefit equal to 50% of the retirement benefit that the participant was receiving or would have been receiving if the participant had been retired on the date of death.
"SECOND: Effective Date.
	"This amendment is made effective as of October 9, 2009.
"THIRD: Remaining Plan Provisions.
	"All other provisions of the Plan remain in full force and effect."

2011 HEART Compliance Amendment. As authorized by Section 9.2 of the North Lebanon Township Police Pension Plan ("Plan") as amended and restated effective January 1, 2008, the employer, North Lebanon Township, hereby amends the Plan to comply with the law and regulatory changes effective as of or prior to the 2011 plan year and now required to be incorporated into the Plan. This amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions of this amendment. The employer hereby amends the Plan in the following manner:

"FIRST: USERRA Break in Service.
	"Section 1:10 is amended to comply with the Heroes Earning Assistance and Relief Tax Act of 2008 (HEART) with respect to deaths occurring on or after January 1, 2007. As amended, Section 1.10(e) shall contain a final paragraph that shall read as follows:
	"Effective with respect to deaths occurring on or after January 1, 2007, in the case of a participant who dies while performing qualified military service, the beneficiary(ies) of the participant shall be entitled to any benefits payable under Sections 4.1 and 4.2 (b) and (c) that would have been payable had the participant resumed and then terminated employment on account of death. Years of vesting service shall be credited under this provision for purposes of determining the amount of any death benefit payable.
"SECOND: IRC Section 402(f) Notice Period.
	"Effective for notices issued on or after January 1, 2007, Section 6.2(d)(2) is amended to comply with the Pension Protection Act of 2006 by reflecting that a participant's written notice of his eligible rollover distribution rights as required under IRC Section 402(f) may be given as much as 180 days before the annuity starting date. As amended, the first paragraph of Section 6.2(d)(2) shall read as follows:
		"Effective for distributions made on or after January 1, 1993, for any distribution in excess of $200 that may be paid in the form of a lump sum, the plan administrator shall give the participant written notice of his eligible rollover distribution rights as required under IRC Section 402(f) no less than 30 days and no more than 180 days (90 days for notices issued before January 1, 2007) before the annuity starting date with respect to the distribution. Effective for distributions made on or after January 1, 1994, such distribution may commence less than 30 days after the notice is given, provided that:
***
"THIRD: Definitions (IRC Section 415 Limitations)-Compensation.
	"Effective for limitation years beginning on or after July 1, 2007, Section 7.1(e)(3) is amended to comply with the final regulations issued under IRC Section 415 with respect to the treatment of severance compensation following a termination of employment. Effective for limitation years beginning on or after January 1, 2009, Section 7.1(e)(3) is amended to comply with IRC Section 414(u)(12) as added by the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART) regarding differential wage payments. As amended, Section 7.1(e)(3) shall contain the following additional paragraphs that shall read as follows:
		"In order to be taken into account for a limitation year, compensation must be paid or treated as paid prior to severance from employment with the employer. Effective for limitation years beginning on or after July 1, 2007, an includable payment shall be treated as paid prior to severance from employment if it is paid by the later of 2 1/2 months after severance or the last day of the calendar year that includes the severance date. For this purpose, includable payments are those that absent the severance would have been paid and are regular compensation for services during regular working hours or outside working hours (such as overtime or shift differentials), commissions, bonuses, or other similar compensation. Includable payments shall also include accrued sick, vacation, or other leave if such payments would have been included in compensation as defined in Section 1.3 if they were paid prior to the employee's severance from employment.
		"For limitation years beginning after December 31, 2008, compensation for a limitation year shall include amounts paid as differential wages to a participant on qualified military service leave of more than 30 days and otherwise meeting the requirements of IRC Section 3401(h)(2).
"FOURTH: Effective Date of Amendment.
	"These amendments are effective as provided herein.
"FIFTH: All other provisions of the Plan remain in full force and effect."

Amendment #3 to the North Lebanon Township Police Pension Plan. As authorized by Section 9.2 of the North Lebanon Township Police Pension Plan ("Plan") as amended and restated effective January 1, 2008, the employer, North Lebanon Township, hereby amends the Plan in the following manner:

"FIRST: Deferred Retirement Option Program.
	"Section 3.4 is amended to provide participants with a deferred retirement option program. As amended, Section 3.4 shall contain a new Subsection (c) that shall read as follows:
		"(c)	Deferred Retirement Option Program - Effective January 1, 2015, any participant who reaches his normal retirement date (defined as attainment of age 50 and completion of 25 years of service) shall be eligible to elect to participate under the Deferred Retirement Option Program (DROP), subject to the following requirements.
			"(1)	Definitions - For purposes of this Section 3.4(c), the following definitions shall apply.
				"(A)	Beneficiary - Beneficiary means the individual(s) designated by the police officer in accordance with Section 4.1 (b) to receive the DROP account balance in the event of the police officer's death during a period in which the police officer is participating in the DROP, but before the police officer separates from employment.
				"(B)	DROP - DROP means the Deferred Retirement Option Program.
				"(C)	DROP Account - DROP account means the separate, interest bearing, account created to accept the DROP participant's monthly pension payments while a DROP participant.
				"(D)	DROP Period - DROP period means the period beginning as of the participating police officer's written election notice as approved by the employer and continuing for a period of at least 12 months and until that police officer's separation from employment as a police officer of the employer (his resignation date), but in no event to exceed 60 months.
				"(E)	Police Officer - Police officer means a police officer of the employer.
				"(F)	Resignation Date - The date specified in the participant's irrevocable DROP election notice as approved by the employer as of which the participant shall resign from employment as a police officer with the employer. In no event shall the resignation date be less than 12 months or longer than 60 months from the execution of the DROP election notice form.
			"(2)	DROP Eligibility - As of the effective date of this Section 3.4(c), a police officer who has not retired prior to the implementation of the DROP may enter into the DROP on the first day of any month following his satisfaction of the normal retirement date requirements (attainment of age 50 and completion of 25 years of service).
				"(A)	Written Election - A police officer electing to participate in the DROP must complete and execute a DROP election notice form prepared by the employer, which shall evidence the participant's participation in the DROP. The form must be signed by the participant and notarized and submitted to the employer prior to the date on which the participant wishes the DROP election notice to be effective. The DROP election notice shall include an irrevocable notice to the employer, by the participant, that the participant shall resign from employment with the employer effective on the resignation date and includes an agreement that the participant will forego: (i) active membership in the plan; (ii) any growth in the salary base used for calculating the retirement benefit; and (iii) any additional benefit accrual for retirement purposes, including length-of-service increments. A police officer shall cease to work as a police officer on his resignation date, unless the employer terminates or honorably discharges him prior to the resignation date.
				"(B)	Pension Benefit Distribution - The participant must complete and file with the plan administrator any forms required for the commencement of the pension distribution, other than tax-related forms necessary for a distribution payment outside of the trust. Approval of the DROP election notice shall be subject to the employer's approval of the retirement and payment of the pension.
				"(C)	Finality of Election - Once the employer approves the retirement application and the DROP election notice, both elections are irrevocable.
			"(3)	Pension Contributions - After a police officer elects to participate in the DROP by the execution of the DROP forms, he shall not be required to make any contributions to the plan under the provisions of Section 6.2 during his DROP period.
			"(4)	Limitation on Pension Accrual - After the effective date of the DROP option, the participant shall no longer earn or accrue additional years of benefit service for pension calculation purposes. No benefit increases that may occur after a DROP participant's commencement of participation in the DROP program, including bargained pension enhancements, mandated pension enhancements through arbitration or pension enhancements mandated by law will increase the frozen DROP pension as calculated and determined in accordance with this Section 3.4(c)(4) and Section 3.4(c)(5).
			"(5)	Benefit Calculation - For all plan purposes, the years of benefit service of a police officer participating in the DROP shall remain as they existed on the effective date of commencement of participation in the DROP. Service thereafter shall not be recognized or used for the calculation or determination of any benefits payable by the plan. The average monthly compensation of the police officer for pension calculation purposes shall remain as it existed on the effective date of commencement of participation in the DROP. Earnings or increases in earnings thereafter shall not be recognized or used for the calculation or determination of any benefits payable by the plan. The pension benefit payable to the participant shall increase only as a result of cost-of-living adjustments in effect on the effective date of the participant's participation in the DROP or by applicable cost-of-living adjustments specifically granted with respect to the DROP thereafter.
			"(6)	Payments to the DROP Account - The monthly retirement benefits that would have been payable had the police officer elected to cease employment and receive a retirement benefit shall, upon commencement of participation in the DROP, be held under the plan trust. A separate accounting shall be made for each participant's DROP account. The DROP account shall earn the same annual rate of return as the trust, but not less than 0.0% nor more than 4.5%. Such annual return shall be prorated for the first partial calendar year of the DROP participation. For the last partial calendar year of DROP participation, the return on the trust shall be determined based upon the return from January 1 through the date of termination of employment.
			"(7)	Accrual of Non-Pension Benefits - After a police officer elects to participate in the DROP, all other contractual benefits shall continue to accrue in accordance with any collective bargaining agreement applicable to the participant with the exception of those provisions relating to this plan.
			"(8)	Disability During DROP Period - If a police officer becomes temporarily incapacitated due to injury or sickness during his participation in the DROP, he shall continue to participate in the DROP as if he were fully employed. The police officer shall receive disability pay in the same amount as disabled police officers that are not participating in the DROP. In no event shall a police officer on temporary disability have the ability to draw from his DROP account. However, notwithstanding any other provision in this paragraph, if a police officer is disabled and has not returned to work as of his required resignation date; then, such DROP notice resignation shall take precedence over all other provisions herein and said police officer shall be required to resign. On such date, he shall receive the DROP account balance and, thereafter, commence receiving his DROP pension benefit. Such participant shall not receive any other disability payment under the plan.
				"If a police officer suffers a service-connected total and permanent disability, his participation in the DROP shall immediately cease. On such date, he shall receive the DROP account balance and, thereafter, commence receiving his DROP pension benefit. Such participant shall not receive any other disability payment under the plan.
			"(9)	Death Benefits Under DROP -
				"(A)	DROP Benefits for Designated Beneficiary - If a DROP participant dies, the participant's designated beneficiary shall be entitled to apply for and receive the benefits accrued in the participant's DROP account as provided in Section 3.4(c)(11).
				"(B)	Final Credit Monthly Retirement Benefit - The monthly retirement benefit accrued in the participant's DROP account during the month of a DROP participant's death shall be the final monthly retirement benefits credited for DROP participation.
				"(C)	DROP Eligibility Terminates upon Participant's Death - A DROP participant's eligibility to participate in the DROP terminates upon the death of the DROP participant. If a DROP participant dies on or after the effective date of participation in the DROP but before the initial monthly retirement benefit of the participant accruable for the month has accrued in the participant's DROP account, the plan administrator shall pay the monthly retirement benefit payable from the plan, if any, to the designated beneficiary as though the participant had not elected DROP participation and had died after the police officer's effective date of retirement, but before receipt of the retired participant's first normal retirement benefit.
				"(D)	Survivors Ineligible for Active Employee's Death Benefit - The survivor of a DROP participant who dies shall not be eligible to receive retirement death benefits payable in the event of the death of an active employee.
				"(E)	Survivors Eligible for Retired Member's Death Benefit - The survivor of a DROP participant who dies shall be eligible to receive retirement death benefits normally payable in the event of the death of retired employee.
			"(10)	Termination of Employment - A DROP participant may voluntarily terminate from his employment prior to his resignation date; where upon, his DROP election shall be revoked. A DROP participant may change the DROP termination date to an earlier date within the limitation of Section 3.4(c)(2), but may not change it to a later date than elected at the time of initial DROP participation. No penalty shall be imposed for early termination of DROP participation. Upon either early or regular termination of DROP participation, the DROP participant shall be separated from employment with the employer and the plan shall pay the balance in the participant's DROP account to the terminating participant as provided in Section 3.4(c)(11). The DROP participant shall be ineligible to re-enroll in the DROP thereafter even if the former DROP participant is re-employed by the employer with renewed active membership in the plan.
				"As set forth in Section 10.3, neither the DROP nor the acceptance of a DROP election shall be construed as creating or changing any contract of employment between the employer and its employees, and the employer retains the right to deal with its employees in the same manner as though a DROP account had not been created. Upon termination of employment, the participant shall be ineligible to reparticipate in the DROP.
			"(11)	Distribution of DROP Account - Upon the resignation date set forth in the police officer's DROP election notice or as of the first day of the month following an earlier voluntary termination date, the retirement benefits payable to the police officer shall no longer be paid to his DROP account. If not previously terminated, the participant's employment shall terminate automatically as of such resignation date. Within 45 days or as soon as administratively possible following the termination of the police officer's employment pursuant to his participation in the DROP, the balance in his DROP account shall be paid to him in a single lump sum payment. For any distribution in excess of $200, the plan administrator shall give the participant written notice of his eligible rollover distribution rights. The participant shall receive such notice at least 30 days before the scheduled distribution date. If the police officer or beneficiary fails to elect a method of payment within 60 days after police officer's termination date, the plan shall pay the balance directly to the custodian of an eligible retirement plan.
				"The form of payment selected by a police officer or surviving beneficiary shall comply with the minimum distribution requirements of the Internal Revenue Code of 1986.
				"The DROP shall at all times comply with the annual benefit limitations of Code Section 415 and the regulations thereto.
			"(12)	Pre-retirement Benefits - Except for those benefits specified in Section 3.4(c)(2)(A) as forgone by the member, a DROP participant shall be eligible for any employee benefits provided to active employees before retirement by North Lebanon Township and those otherwise provided by law, including but not limited to, benefits under the act of June 2, 1915 (P.L. 736, No. 338), known as the Workers' Compensation Act; the act of June 28, 1935 (P.L. 477, No. 193), referred to as the Enforcement Officer Disability Benefit Law; the act of December 5, 1936 (2nd Sp. Sess, 1937 P.L. 2897, No. 1), known as the Unemployment Compensation Law; the act of June 24, 1976 (P.L., 424, No. 101), referred to as the Emergency and Law Enforcement Personnel Death Benefits Act; and the Public Safety Officers' Benefit Act of 1976 (Public Law 94-430, 42 U.S.C. § 90 stat. 1347).
			"(13)	Forfeiture of Benefits - Notwithstanding a police officer's participation in the DROP, a police officer who is subject to forfeiture of his pension benefits under the provisions of Section 5.2(d) shall forfeit any amounts currently deposited in the DROP account.
			"(14)	Subsequent Employment and Renewal of Active Membership - After both the termination of the participant's employment as a DROP participant with the employer and the expiration of the DROP participation period, a former DROP participant shall be ineligible to re-enroll in the DROP pursuant to Section 3.4(c)(10).
"SECOND: Effective Date.
	"This amendment is made effective as of January 1, 2015.
"THIRD: Remaining Plan Provisions.
	"All other provisions of the Plan remain in full force and effect."

Amendment #5 to the North Lebanon Township Police Pension Plan. As authorized by Section 9.2 of the North Lebanon Township Police Pension Plan ("Plan") as amended and restated effective January 1, 2008, the employer, North Lebanon Township, hereby amends the Plan in the following manner:

[Added by Ord. No. 1-2020, 3/16/2020]

"FIRST: Deferred Retirement Option Program.
Section 3.4(c)(2)(A) is amended to require that a police officer hired on or after January 1, 2020, who wishes to participate in the Deferred Retirement Option Program must elect to enter the DROP within one year of satisfaction of the normal retirement date requirements. As amended, Section 3.4(c)(2)(A) shall read as follows:
"(A) Written Election - A police officer electing to participate in the DROP must complete and execute a DROP election notice form prepared by the employer, which shall evidence the participant's participation in the DROP. The form must be signed by the participant and notarized and submitted to the employer prior to the date on which the participant wishes the DROP election notice to be effective. A police officer hired on or after January 1, 2020, must elect to enter the DROP within one year of satisfaction of the normal retirement date requirements. The DROP election notice shall include an irrevocable notice to the employer, by the participant, that the participant shall resign from employment with the employer effective on the resignation date. A police officer shall cease to work as a police officer on his resignation date, unless the employer terminates or honorably discharges him prior to the resignation date.
"SECOND: Early Retirement.
"Section 3.5 is amended to add an early retirement benefit to the Plan. As amended, Section 3.5 shall read as follows:
"3.5 - An early retirement benefit shall be provided to a member of the police force with 20 or more years of vesting service who terminates employment prior to the completion of normal retirement age and service requirements and who files a written application for an early retirement benefit with the governing body of the employer. The early retirement benefit shall become effective as of the first day of the month coincident with or next following the date the application is filed with the governing body or the date designated on the application, whichever is later, and shall be the actuarial equivalent of the accrued benefit calculated as follows:
"(a)	The accrued benefit shall be determined under Section 3.3.
"(b)	The actuarial equivalent of the accrued benefit shall be determined by actuarially reducing the accrued benefit to reflect that it will commence on the effective date of the early retirement rather than on the date on which the member would have completed normal retirement age and service requirements. The actuarial reduction shall be calculated using the actuarial assumptions reported in the last actuarial valuation report filed with the Pennsylvania Department of the Auditor General's Municipal Pension Reporting Program under Act 205.
"THIRD: Effective Date.
"This amendment is made effective as of January 1, 2020.
"FOURTH: Remaining Plan Provisions.
"All other provisions of the Plan remain in full force and effect."