Pursuant to the PMRL Section 104 and Section 401, the Board
has adopted template language which was utilized in the drafting of
the contract. Accordingly, the duly executed contract shall be the
plan document, which shall be interpreted consistent with the requirements
of the PMRL, the Board-adopted regulations, and the Board-adopted policy
statements. In no event shall this contract extend to a member any
rights beyond those specifically set forth in the PMRL. In the event
of a conflict between this chapter and the contract, the provisions
of the contract shall prevail.
The system is a tax-qualified multiple-employer retirement system
in which the PMRL permits each municipality to establish and maintain
a tax-qualified retirement plan pursuant to IRC Section 401(a). This
plan is established by the municipality pursuant to the PMRL and is
intended to provide benefits to employees of the municipality and
operate as a governmental plan pursuant to IRC Section 414(d).
The following terms shall be defined as set forth below, provided
that each term defined in the PMRL shall have the meaning set forth
therein and shall be interpreted consistent with its definition under
the PMRL:
ACCUMULATED DEDUCTIONS
The total amount deducted from the compensation of the member
as set forth in this contract and paid over by the municipality or
paid by the member or from any existing pension or retirement system
directly into the fund and credited to the member's account,
together with regular interest thereon, unless interest is specifically
excluded in this contract.
ACTIVE MEMBER
A member who is earning credited service under this contract
as a result of employment with a municipality.
ACTUARIAL EQUIVALENT
Annuities or lump-sum amounts of equal present value determined
by appropriate actuarial factors based on mortality tables and interest
rates currently adopted and used by the Board. Such mortality tables
and interest rates shall comply with IRC Section 415(b)(2), as applicable.
ACTUARY
(1) A member of the American Academy of Actuaries; or (2)
an individual who has demonstrated to the satisfaction of the Insurance
Commissioner of Pennsylvania that he or she has the educational background
necessary for the practice of actuarial science and has had at least
seven years of actuarial experience; or (3) a firm, partnership or
corporation of which one or more members meets the requirements of
Subclause (1) or (2) above.
ALTERNATE PAYEE
Any spouse, former spouse, child or dependent of a member
who is recognized by an approved domestic relations order as having
a right to receive all or a portion of the monies payable to that
member.
ANNUITANT
Any member on or after the effective date of retirement until
the member's annuity is terminated.
BENEFICIARY
The person or persons last designated in writing to the Board
by a member or an annuitant, or if one is not so designated, the estate
or next of kin under 20 Pa.C.S.A. § 3101 (relating to payments
to family and funeral directors), to the extent applicable, to receive
any death benefit after the death of such member or annuitant.
BOARD
The Pennsylvania Municipal Retirement Board.
COMPENSATION
Remuneration actually received for services rendered as a
member, including basic compensation rate of pay based on 40 hours
per week, longevity, rank differential pay, incentive payments, and
premium pay, which is 1 1/2 times the basic compensation rate
of pay for up to two hours in excess of 40 hours per week, but no
more than 104 hours per year; but excluding reimbursement for expenses
incidental to employment, shift differential, overtime pay for hours
worked in excess of 42 hours, terminal leave pay, payments for off-duty
schooling or drill or court time, clothing and equipment allowances,
meal allowances, educational incentive payments, acting officers'
pay, bonuses, payments in lieu of dependents' health insurance
costs, severance pay, and other special forms of compensation. Payments
received under the Act of June 2, 1915 (P.L. 736, No. 338), known
as "the Pennsylvania Workers' Compensation Act," shall not be
included in compensation. Compensation shall be adjusted as appropriate
to comply with the terms of the PMRL and this contract. For members
who are enrolled in a plan that has adopted the provisions of IRC
Section 414(h), compensation shall also include any such pickup contributions
so designated.
Notwithstanding any provision to the contrary, a member's
compensation shall not exceed the limitations under IRC Section 401(a)(17),
as adjusted in accordance with IRC Section 401(a)(17)(B). The adjustment
in effect for a calendar year applies to any period, not exceeding
12 months, over which compensation is determined (the "determination
period") beginning in such calendar year. If a determination period
consists of fewer than 12 months, the compensation limit will be multiplied
by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12. The OBRA '93
annual compensation limit is $150,000, as adjusted by the Commissioner
of Internal Revenue for increases in the cost of living in accordance
with IRC Section 401(a)(17)(B). Effective for calendar years beginning
on and after January 1, 2002, the compensation limit shall be $170,000
as adjusted. Effective for calendar years beginning on and after January
1, 2003, the compensation limit shall be $200,000 as adjusted. The
cost-of-living adjustment in effect for a calendar year applies to
any period, not exceeding 12 months, over which compensation is determined
(the "determination period") beginning in such calendar year. If a
determination period consists of fewer than 12 months, the compensation
limit will be multiplied by a fraction, the numerator of which is
the number of months in the determination period, and the denominator
of which is 12.
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For purposes of applying the limitations of IRC Section 415(c),
compensation shall be calculated as provided above and shall also
include any elective deferral [as defined in IRC Section 402(g)(3)],
severance payments and any amount which is contributed or deferred
by the municipality at the election of the member and which is not
includible in the gross income of the member by reason of IRC Section
125, IRC Section 132(f) or IRC Section 457. Compensation shall exclude:
(A) any distributions from a plan of deferred compensation; and (B)
other amounts which received special tax benefits, or contributions
made by the municipality (whether or not under a salary reduction
agreement) towards the purchase of an annuity described in IRC Section
403(b) (whether or not the amounts are actually excludible from the
gross income of the municipality).
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CONTRACT or PLAN
The agreement between the Board and the municipality providing
for retirement benefits to the members employed by the municipality.
DATE OF TERMINATION OF SERVICE
For an active member, the last day of employment in a status
covered by the eligibility requirements of the contract. For an inactive
member, the date on which formal action is taken by the municipality
to separate the member from employment.
DISABILITY ANNUITANT
A member on or after the effective date of disability retirement
until the disability annuity is terminated.
DOMESTIC RELATIONS ORDER
Any judgment, decree or order, including approval of a property
settlement agreement, by a court of competent jurisdiction pursuant
to a domestic relations law which relates to the marital property
rights of the spouse or former spouse of a member, including the right
to receive all or a portion of the monies payable to that member under
the system in furtherance of the equitable distribution of marital
assets. The term includes orders of support, as that term is defined
by 23 Pa.C.S.A. § 4302 (relating to definitions), and orders
for the enforcement of arrearages, as provided by 23 Pa.C.S.A. § 3703
(relating to enforcement of arrearages).
DROP
The Deferred Retirement Option Plan adopted by the Board
and set forth in Appendix A to this contract, if one is so attached.
EFFECTIVE DATE OF DISABILITY RETIREMENT
The date following the last day for which compensation was
paid or the date on which the member filed an effective application
for disability benefits, whichever is later.
EFFECTIVE DATE OF RETIREMENT
One of the following:
A.
For a member who files an application for an annuity within
90 days after the date of termination of service, the later of:
(1)
The first day following the date of termination of service;
or
(2)
The date specified on the application.
B.
For a member who does not file an application for an annuity
within 90 days after the date of termination of service, the later
of:
(1)
The date the application is filed; or
(2)
The date specified on the application.
C.
For a member who applies for a disability retirement, the date
certified by the Board as the effective date of disability retirement.
D.
For a DROP participant, the day before the effective date of
DROP participation as determined in accordance with Appendix A to
this contract, if one is so attached.
ELIGIBLE RETIREMENT PLAN
Any of the following: (a) an individual retirement account
described in IRC Section 408(a); (b) an individual retirement annuity
described in IRC Section 408(b); (c) an annuity plan described in
IRC Section 403(a); (d) a qualified trust described in IRC Section
401(a); (e) an annuity contract described in IRC Section 403(b); and
(f) an eligible plan under IRC Section 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 accepts
the member's eligible rollover distribution. However, in the
case of an eligible rollover distribution to the nonspousal beneficiary
of a member, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
ELIGIBLE ROLLOVER DISTRIBUTION
Any distribution of all or any portion of the balance of
a qualified plan described in IRC Section 401(a) or 403(a), an annuity
described in IRC Section 403(b), or an eligible deferred compensation
plan described in IRC Section 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. The above notwithstanding,
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 member or the joint lives (or joint life expectancies) of the
member and the member's beneficiary, or for a specified period
of 10 years or more; (b) any distribution to the extent such distribution
is required under IRC Section 401(a)(9); and (c) the portion of any
distribution which consists of after-tax employee contributions.
EQUIVALENT ACTUARIAL VALUE
Benefits which have equal present value when computed on
the basis of interest and the mortality tables adopted by the Board
and in use at the date the benefit becomes effective.
EXCESS INTEREST
The investment earnings on the fund in excess of that required
for allocation to regular interest and expenses.
FINAL SALARY
The average annual compensation earned and paid during the
member's highest consecutive five years of credited service in
the 10 years prior to the effective date of retirement, or the annual
compensation of the member determined by the rate of the monthly compensation
of the member at the date of termination of service, whichever is
greater.
FUND
The Pennsylvania Municipal Retirement Fund.
INACTIVE MEMBER
A member who is enrolled in the system but is no longer earning
credited service under this contract as a result of separation from
or leave from employment with a municipality.
IRC
The Internal Revenue Code of 1986, as designated and referred
to in the Federal Tax Reform Act of 1986 (Public Law 99-514), as amended.
A reference to "IRC Section _____" shall be deemed to refer to the
identically numbered section and subsection or other subdivision of
such section in 26 U.S.C. (relating to Internal Revenue Code), as
such identically numbered section may be amended.
MEMBER
A municipal firefighter who meets the eligibility requirements in §
2-709.60A or
B and who holds a full-time position in the Fire Department of the municipality and who works for a stated salary.
MEMBER'S ACCOUNT
The account to which shall be credited any accumulated deductions,
municipal contributions made on behalf of the member and excess interest.
MEMBER'S ANNUITY
That portion or component of the basic benefit which is of
equivalent actuarial value, at date of retirement, to the accumulated
deductions of the member.
MUNICIPAL ACCOUNT
The account maintained for the municipality, to which shall
be credited the contributions made by it toward the benefits of the
members under the system.
ORIGINAL MEMBER
A member who was employed by the municipality as of the date
the municipality joined the system.
PENNSYLVANIA MUNICIPAL RETIREMENT LAW
53 P.S. § 881.101 et seq. A reference to "PMRL
Section _____" shall be deemed to refer to the identically numbered
subsection of 53 P.S. § 881, as may be amended.
PMRL
See "Pennsylvania Municipal Retirement Law."
PRIOR SERVICE
All service as an original member completed at the time the
municipality elected to join the system.
REGULAR INTEREST
The rate fixed by the Board, from time to time, on the basis
of earnings on investments to be applied to the members' accounts,
municipal accounts and the retired members' reserve account.
SERVICE-CONNECTED DISABILITY
Total and permanent disability of a member resulting from
a condition arising out of and incurred in the course of employment,
and which is compensable under the applicable provisions of the Act
of June 2, 1915 (P.L. 736, No. 338), known as "the Pennsylvania Workers'
Compensation Act," or the Act of June 21, 1939 (P.L. 566, No. 284),
known as "the Pennsylvania Occupational Disease Act."
SURVIVOR ANNUITANT
Any person who has been named by a member under a joint and
survivor annuity option to receive an annuity upon the death of such
member.
SYSTEM
The Pennsylvania Municipal Retirement System, a multiple-employer
retirement system created pursuant to the PMRL.
USERRA
The Federal Uniformed Services Employment and Reemployment
Rights Act of 1994 (Pub. L. 101-353, 38 U.S.C. § 4303 et
seq.).
VESTED MEMBER
A member after a stipulated age or with sufficient years of service, or both, as set forth in §
2-709.62C, who has terminated service with the municipality and has elected to leave total accumulated deductions in the fund and to defer receipt of a basic benefit, provided the election is made within 90 days after the date of termination of service.