[Added 4-27-2016 by Ord.
No. 3-2016]
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,[1] 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.
[1]
Editor's Note: See 53 P.S. § 881.101 et seq.
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:
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.
A member who is earning credited service under this contract
as a result of employment with a municipality.
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.
(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.
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.
Any member on or after the effective date of retirement until
the member's annuity is terminated.
Any domestic relations order which has been approved by the
system in accordance with the PMRL.
The member's accrued retirement benefit as calculated pursuant § 2-709.63A.
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.
The Pennsylvania Municipal Retirement Board.
The Commonwealth of Pennsylvania.
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.
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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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The agreement between the Board and the municipality providing
for retirement benefits to the members employed by the municipality.
An increment of service by a member to a municipality as determined under the terms of § 2-709.61A.
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.
A member on or after the effective date of disability retirement
until the disability annuity is terminated.
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).
The Deferred Retirement Option Plan adopted by the Board
and set forth in Appendix A to this contract, if one is so attached.
An annuitant who has elected to participate in the DROP as may be provided under § 2-709.64B.
The member's basic benefit adjusted for commencement upon early retirement as may be provided under § 2-709.62B.
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.
One of the following:
For a member who applies for a disability retirement, the date
certified by the Board as the effective date of disability retirement.
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.
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.
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.
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.
The investment earnings on the fund in excess of that required
for allocation to regular interest and expenses.
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.
The Pennsylvania Municipal Retirement Fund.
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.
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.
The account to which shall be credited any accumulated deductions,
municipal contributions made on behalf of the member and excess interest.
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.
The account maintained for each member, to which shall be
credited such excess interest deemed to be earned on accumulated deductions.
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.
The City of Harrisburg, Dauphin County.
A member who was employed by the municipality as of the date
the municipality joined the system.
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.
See "Pennsylvania Municipal Retirement Law."
A statement of rule adopted by the Board as provided § 2-709.70C and as authorized by PMRL Section 104(10).
All service as an original member completed at the time the
municipality elected to join the system.
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.
The account from which all basic benefits shall be paid for
superannuation, early and disability retirements.
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."
The age and credited service, if any, set forth in § 2-709.62A.
The accrued unreduced basic benefit payable to a member upon
attainment of superannuation retirement age.
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.
The Pennsylvania Municipal Retirement System, a multiple-employer
retirement system created pursuant to the PMRL.
The account to which shall be credited the contributions
made by the municipality toward the disability retirement of members.
The Federal Uniformed Services Employment and Reemployment
Rights Act of 1994 (Pub. L. 101-353, 38 U.S.C. § 4303 et
seq.).
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.
A.
Mandatory membership: membership for full-time firefighters of the
municipality if mandatory.
B.
Optional membership: not available.
C.
Prohibited: membership for elected officials, part-time employees,
seasonal employees, and temporary employees is prohibited, as is membership
for individuals paid only on a fee basis.
A.
Credited service.
(1)
Credited service shall begin to accrue as of the member's
date of enrollment in the system.
(2)
The member's date of enrollment in the system shall be
the date the municipality entered into the system, the member's
date of hire, or upon the expiration of the member's probationary
status, whichever is more recent.
(3)
The municipality shall provide the system with its rules regarding
a probationary period for its employees. The probationary period for
members shall be uniform and shall not exceed one year from the date
the member first entered the service of the municipality. A member
shall not receive credited service for the time served in the probationary
period.
B.
Prior service. An original member shall be granted credited service
for prior service from the date of hire or the expiration of the probationary
period, if one so existed, whichever is more recent.
C.
Purchase service. If a former member of the municipality returns to service with the municipality and becomes a member, the member may restore to the fund the amounts refunded under § 2-709.64A. The member's annuity rights shall be restored as they existed at the time of separation from service, provided the member pays the amount due plus regular interest up to the date of the purchase in a lump sum within 30 days after billing, or through salary deductions amortized with regular interest through a repayment period of not more than five years.
D.
Intervening military service.
(1)
Any member who enters the uniformed services as defined by USERRA
and returns to service as a member within the authorized time period
of the law shall have the authorized time spent in such service credited
to the member's employment record for pension or retirement benefits
if the member makes the required member contributions.
(2)
The amount due from the member shall be certified by the system
and shall be paid by the member in accordance with the applicable
law.
(3)
A member may purchase credit for intervening military service
only if discharge or separation from the service was granted under
other than dishonorable conditions. A member may not purchase military
credit for any service that is covered by another retirement system
administered and wholly or partially paid for by any other government
agency or private employer.
E.
Nonintervening/nonintervening military service.
(1)
An active member may purchase credit for other than intervening
military service performed for the United States in times of war,
armed conflict or national emergency, so proclaimed by the President
of the United States, for a period not to exceed five years, provided
the member has completed five years of service to the municipality
subsequent to such military service. An active member may file an
application with the Board for permission to purchase credit for nonintervening
military service upon completion of five years of subsequent service
to the municipality.
(2)
The rate of interest charged a member on purchase of credit
for nonintervening military service shall be the regular interest
in effect on the date of the member's application.
(3)
An active member may purchase credit for nonintervening military
service only if discharge or separation from the service was granted
under other than dishonorable conditions. A member may not purchase
military credit for any service that is covered by another retirement
system administered and wholly or partially paid for by any other
government agency or private employer.
F.
USERRA service/HEART Act.
(1)
Qualified military service. Notwithstanding any provisions herein
to the contrary, contributions, benefits and service credit with respect
to "qualified military service" within the meaning of IRC Section
414(u)(5) will be provided in accordance with IRC Section 414(u).
(2)
HEART Act provisions.
(a)
Death benefits. In the case of a death or disability occurring
on or after January 1, 2007, if a member dies while performing qualified
military service [as defined in IRC Section 414(u)], the survivors
of the member are entitled to any additional benefits (other than
benefit accruals relating to the period of qualified military service)
provided under the system as if the member had resumed and then terminated
employment on account of death.
(b)
Benefit accrual. For benefit accrual purposes, the system will
treat an individual who dies or becomes disabled (as determined by
the system) while performing qualified military service with respect
to the member as if the member had resumed employment in accordance
with the member's reemployment rights under USERRA, on the day
preceding death or disability (as the case may be) and terminated
employment on the actual date of death or disability.
(c)
Determination of benefits. The system will determine the amount of member contributions of an individual treated as reemployed under this § 2-709.61F for purposes of applying IRC Section 414(u)(8)(C) on the basis of the member's average actual employee contributions for the lesser of: (i) the twelve-month period of service with the municipality immediately prior to qualified military service; or (ii) if service with the municipality is less than such twelve-month period, the actual length of continuous service with the municipality.
(d)
Differential wage payments. For years beginning after December
31, 2008:
[1]
A member receiving a differential wage payment,
as defined by IRC Section 3401(h)(2), shall be treated as an employee
of the employer making the payment;
[2]
The differential wage payment shall be treated
as compensation; and
[3]
The system shall not be treated as failing to meet
the requirements of any provision described in IRC Section 414(u)(1)(C)
by reason of any contribution or benefit which is based on the differential
wage payment.
G.
Portability. When a member leaves the employ of the municipality
and enters within one year of separation into the employ of another
municipality that has joined the system, the member's service
credits shall remain unimpaired. Should a member from the employ of
another municipality that has joined the system separate from service
and within one year of separation be employed by the municipality
and qualify for membership under this contract, the member's
service credits will remain unimpaired. In such cases, the municipal
liability for past service shall be prorated by the system between
the municipalities on an equitable basis.
A.
Eligibility for superannuation retirement benefits. A member shall
be eligible for a superannuation retirement benefit upon attainment
of superannuation retirement age, which shall be 50 years of age.
B.
Eligibility for early retirement benefits. Not available.
C.
Eligibility for vested benefits.
(1)
A member shall vest upon the completion of 10 years of credited
service, provided the member files an application to vest with the
Board within 90 days of the member's date of termination of service.
(2)
A vested member shall be entitled to superannuation retirement
benefits upon attainment of 50 years of age.
A.
Basic benefit. The annual basic benefit shall be comprised of the
sum of the following annuities:
(1)
An annuity calculated by multiplying the member's final
salary by all years of credited service not to exceed 20 years and
multiplied by the benefit accrual rate of 2.5%.
(2)
An annuity calculated by multiplying the member's final
salary by all years of credited service in excess of 20 years and
multiplied by the benefit accrual rate of 1.25%.
B.
Excess interest benefit. An annual excess interest benefit shall
be equal to a single life annuity starting on the effective date of
retirement with a present value equal to the member's excess
investment account.
C.
Service increment. Not available.
D.
Cost-of-living adjustment. Members and annuitants who were hired
prior to April 22, 2014, and annuitants who retired on or after January
2, 2005, shall be entitled to a cost-of-living adjustment to the basic
benefit, including any service increment, effective the first January
following at least one year from the effective date of retirement.
The amount of such adjustment is subject to all of the following limitations:
(1)
The percent increase in the basic benefit, including any service
increment, shall equal 1/2 of the average percentage of the percent
increase or flat monetary increase of the salary increases of all
active members for that year as certified to the Board by the municipality;
and
(2)
The cumulative of the percentage increase for each annuitant
during the entire annuitant's retirement shall not exceed 10%.
E.
Maximum benefits limitations.
(1)
General limitation is the annual retirement benefit payable
to any member, which shall not exceed the maximum permissible amount
for the system year pursuant to IRC Section 415(b) and, to the extent
applicable, Section 415(c).
(2)
Adjustment of limitations.
(a)
To the extent the limitations set forth herein may be from time
to time adjusted by statutes, regulations or other publications issued
by the Internal Revenue Service, such adjusted amounts shall be substituted
for the amounts set forth in this section, provided that no such adjustment
shall reduce a member's accrued benefit unless such adjustment
is required to preserve the qualified status of the system or the
applicable plan.
(b)
If a benefit is to be distributed in a form other than a single
or straight life annuity or joint and survivor annuity (including
any death benefit payable as a survivor's annuity), the actuarial
equivalent [as determined pursuant to IRC Section 415(b)(2)(B)] of
a single life annuity of such benefit must satisfy the limitations
set forth in this section. Further adjustments may be made by the
Board, as permitted by IRC Section 415 and the regulations promulgated
thereunder, under the appropriate circumstances, including, if authorized
by the Board, receipt by the system of rollover contributions or assets
or liabilities transferred from another qualified plan.
(c)
In the event that a member's benefit is to be distributed prior to age 62, the currently effective dollar amount in Subsection E(1) of this section shall be actuarially reduced to the actuarial equivalent [as determined pursuant to IRC Section 415(b)(2)(C)] of an annual benefit equal to the dollar amount commencing at age 62 in the manner as prescribed by IRC Section 415.
(d)
In the event that a member's benefit is to be distributed after age 65, the currently effective dollar amount in Subsection E(1) of this section shall be actuarially increased to the actuarial equivalent [as determined pursuant to IRC Section 415(b)(2)(D)] of an annual benefit equal to such dollar amount commencing at age 65 in the manner as prescribed by IRC Section 415.
(3)
This section shall be interpreted consistent with the limitations
on annual benefits set forth under IRC Section 415(b) and Treasury
Regulations thereunder as applicable to governmental plans under IRC
Section 414(d).
(4)
To the extent applicable, in no event shall a member or a municipality
be permitted to make a contribution in an amount which exceeds the
limitations on contributions and other additions as set forth under
IRC Section 415(c) and Treasury Regulations thereunder, as applicable
January 1, 2012.
(5)
For purposes of this IRC Section 415, the "limitation year,"
is the calendar year.
F.
Social security offset. There shall be no offset for social security
retirement benefits received by a member.
A.
Refund. A member who terminates service may elect to receive the accumulated deductions and the member's excess investment account standing to the credit of the member as of the date of termination of service, in lieu of receipt of a benefit provided under § 2-709.63, Benefits.
B.
Optional form of payment.
(1)
Single life annuity.
(a)
A member shall automatically be deemed to have elected the spouse's death benefit found in § 2-709.65C unless the member files with the Board a waiver of the spouse's death benefit within 90 days of the member's date of enrollment as determined under § 2-709.61. Such waiver shall be irrevocable regardless of the existence of an eligible spouse or dependent(s).
(2)
Reduced annuity options. A member who timely files a waiver
of the spouse's death benefit with the Board may alternatively
elect at the time of retirement to receive the equivalent actuarial
value in a lesser allowance, payable throughout life, with provisions
that:
(a)
Option 1. A life annuity to the member with a guaranteed total
payment equal to the present value of the single life annuity on the
effective date of retirement. If, at death, the member has received
less than such present value as it was as of the effective date of
retirement, the unpaid balance shall be payable to the beneficiary.
If the balance is less than $5,000, it shall be paid in a lump sum
to the beneficiary if living, or if the beneficiary predeceased the
member or if no beneficiary was named, then to the member's estate.
If the balance is $5,000 or more, the beneficiary may elect, by application
duly acknowledged and filed with the Board, to receive payment of
such balance according to any one of the following provisions:
(b)
Option 2. Upon the annuitant's death, the joint and survivor
annuity shall be continued throughout the life of and paid to the
survivor annuitant, if then living.
(c)
Option 3. Upon the annuitant's death, 1/2 of the joint
and survivor annuity shall be continued throughout the life of and
paid to the survivor annuitant, if then living.
(d)
Option 4. Not available.
(e)
Option 5. Not available.
(3)
If a member has elected a joint and survivor annuity option
and the member and survivor annuitant die before receiving in annuity
payments the full amount of the total accumulated deductions and excess
interest standing to the credit of the member on the effective date
of retirement, the balance shall be paid to the beneficiary.
C.
Required minimum distribution. In no event may a member or beneficiary
be entitled to a form of payment which commences or is payable over
a period which fails to satisfy the required distribution provisions
of IRS Section 401(a)(9), including the incidental benefit distribution
requirements. The Board shall adopt procedures as necessary to comply
with the IRC Section 401(a)(9) and the Treasury Regulations thereunder
as applicable to governmental plans.
D.
Direct rollover.
(1)
Eligible rollover distributions. If a member is eligible for
a distribution that qualifies as an "eligible rollover distribution,"
as defined herein, and under the IRC Section 402(f)(2)(A), such amount
shall be distributed as follows:
(a)
If the distributable amount is $1,000 or less, it shall be distributed
as a direct payment to such member as soon as administratively practicable
after separation from service.
(b)
If the distributable amount is $5,000 or less, but more than
$1,000, then it shall be distributable as soon as administratively
practicable after separation from service, as follows:
[1]
Upon the written consent of the member, by rollover to an eligible retirement plan as directed by the member [as provided in Subsection D(2) below] or by direct payment to the member; or
[2]
In absence of the member's written consent,
by direct transfer to an individual retirement account maintained
on behalf of the member by a trustee designated by the Board.
(c)
If the distributable amount exceeds $5,000, it shall be distributed by direct payment to such member [or by rollover to an eligible retirement plan, as directed by the member pursuant to Subsection D(2) below], as follows:
[1]
If the member has attained superannuation retirement
age, it shall be distributed as soon as administratively practicable
after separation from service.
[2]
If the member has not attained superannuation retirement
age, it shall be distributed as soon as administratively practicable
after the member attains superannuation retirement age; or, if the
member consents to such distribution in writing, as soon as administratively
practicable after receipt of such consent.
(2)
Direct rollover. Except as provided in Subsection D(1)(a) above, a member, a member's surviving spouse, a member's beneficiary or a member's former spouse who is an alternate payee under an approved domestic relations order pursuant to § 2-709.68B, may elect, at the time and in the manner prescribed by the Board, to have any portion of his or her distribution paid directly, as an eligible rollover distribution, to an eligible retirement plan.
E.
Disability retirement.
(1)
General rule. A member may, upon application or on application
of one acting on the member's behalf, or upon application of
a responsible official of the municipality, be retired by the Board
on a disability retirement if the medical examiner designated by the
Board, following a review of the application and any supporting medical
records and other documentation submitted with the application, certifies
to the Board that the member is unable to engage in any gainful employment
and that said member ought to be retired.
(2)
Once every year, the Board may require a medical review of subsequent
medical documentation of the disability annuitant, while still under
superannuation retirement age, by the medical examiner designated
by the Board. Should the medical examiner recommend to the Board that
such disability annuitant is no longer physically or mentally incapacitated
and is able to engage in a gainful occupation, then the portion of
the annuity funded from the total disability reserve account shall
be discontinued.
(3)
Should a disability annuitant, while under superannuation retirement
age, refuse to submit to at least one medical review in any year,
the disability retirement shall be discontinued until the withdrawal
of such refusal; and should such refusal continue for one year, then
all rights in and to any disability retirement or for early involuntary
retirement as may be provided under the contract shall be forfeited.
(4)
A member shall be eligible to apply for a disability retirement
if the member has completed four years of credited service.
(5)
A disability annuitant shall receive an annual benefit equal to 50% of the disability annuitant's final salary or, if the disability annuitant has at least 20 years of credited service, an annual benefit equal to an unreduced superannuation retirement benefit calculated in accordance with § 2-709.63.
(6)
The disability annuitant's annuity shall not be affected
by the amount of any payments for which the disability annuitant shall
be eligible under 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."
(7)
Should a disability annuitant die, a monthly pension shall be
payable to such disability annuitant's surviving spouse, until
the surviving spouse's death, equal to the disability annuity
the disability annuitant was receiving, provided that such spouse
had been married to the disability annuitant prior to the commencement
of the disability annuity and at the time of the disability annuitant's
death. If a spouse who is receiving a benefit under this subsection
dies, payments will continue to be made to any surviving children
under the age of 18, or if attending college under or attaining the
age of 23.
(8)
Should a disability annuitant die without a surviving spouse
or surviving children under the age of 18, or if attending college
under or attaining the age of 23, and before the amount payable under
this section equals the amount of accumulated deductions plus the
balance in the member's excess investment account as of the effective
date of disability retirement, the Board shall pay to the beneficiary
(if living, or if the beneficiary predeceased the disability annuitant,
or no beneficiary was named, then to the disability annuitant's
estate) an amount equal to the difference between such amounts paid
under this section and the accumulated deductions and the balance
in the member's excess investment account. If such difference
is less than $100 and no letters have been taken out on the estate
within six months after the disability annuitant's death, such
difference may be paid to the undertaker or to any person or municipality
who or which shall have paid the claim of the undertaker.
A.
Eligibility. An active member will be deemed to have elected the spouse's death benefit found in Subsection C(1) or (2) below, as applicable, unless such member filed with the Board a waiver of the spouse's death benefit within 90 days of the member's date of enrollment as determined under § 2-709.61A.
B.
Elections. When filing a waiver of the spouse's death benefit, one of the options provided in § 2-709.64B may be elected. The application shall be held by the Board until:
C.
Death benefits.
(1)
If an active member did not file a waiver of the spouse's death benefit within 90 days of the member's date of enrollment and dies before becoming eligible for any benefits under this contract, the surviving spouse (or in the absence of a spouse, any surviving children under the age of 18, or if attending college under or attaining the age of 23) will receive a pension equal to the greater of: (1) the unreduced accrued pension of such active member as provided in § 2-709.63A; or (2) 50% of the active member's final salary.
(2)
If an active member did not file a waiver of the spouse's
death benefit within 90 days of the member's date of enrollment
and dies after becoming eligible for any benefits under this contract,
the surviving spouse (or in the absence of a spouse, any surviving
children under the age of 18, or if attending college under or attaining
the age of 23) will receive a pension equal to the pension which such
active member would have been eligible to receive had the active member
retired on the day immediately preceding death.
(3)
If there is no surviving spouse or children eligible for the
benefit, the balance of the member's account on the date of death
shall be paid to the beneficiary.
(4)
A vested member who dies but who met the eligibility requirements for a superannuation retirement benefit found in § 2-709.62A will be deemed to have elected Option 1 as provided in § 2-709.64B(2)(a). In such event, payment under Option 1 shall be made to the beneficiary.
(5)
If a vested member dies before becoming eligible for any benefits
under this contract, the balance of the vested member's account
shall be paid to the beneficiary.
A.
Municipality contributions.
(1)
The Board will actuarially determine the normal cost of the
benefits provided in this contract and any liability associated with
the actuarial experience of such benefits which shall be contributed
annually by the municipality. The Board shall determine and the municipality
shall be charged an additional amount to be contributed annually toward
a reserve account for any disability benefit which may be payable
under this contract.
(2)
The amounts so determined shall be computed in accordance with
the Municipal Pension Plan Funding Standard and Recovery Act, 53 P.S.
§ 895.101 et seq., and the PMRL.
B.
Member contributions.
(1)
Members shall contribute 5% of their compensation, plus $1 per
month.
(2)
If sufficient funds exist, the municipality may annually elect
to lower or waive the required member contribution rate by adopting
a resolution and filing it with the Board.
(3)
Contributions shall be deducted from payroll and transmitted
to the system by the municipality in accordance with the Board's
policy regarding the treatment of member contributions.
(4)
Member contributions will be treated as taxed at the time they
are made to the system, will be tracked separately, and will not be
treated as taxable when paid out to the member.
A.
Annuitant.
(1)
If an annuitant, other than a disability annuitant, returns
to service with the same municipality, the annuity shall cease; and
in the case of an annuity other than a disability annuity, the present
value of such annuity shall be frozen as of the date such annuity
ceases.
(2)
Upon subsequent discontinuance of service, such annuitant, other
than a former disability annuitant, shall be entitled to an annuity
which is actuarially equivalent to the sum of the present value of
the annuity previously being paid and the present value of the annuity
earned by further service and further deductions added upon reemployment.
(3)
The above notwithstanding, if the annuitant is otherwise eligible
to receive an in-service distribution of the annuity due to (i) attainment
of normal retirement age as defined in the IRC; (ii) operation of
IRC Section 401(a)(36); or (iii) operation of any other provision
as may be adopted by the Board and consistent with the tax-qualification
provisions of the IRC, the annuity shall continue to be paid through
the period of such reemployment; but the annuitant shall not be enrolled
as a member or receive credited service during any period of an in-service
distribution.
(4)
The municipality is required to notify the Board immediately
of the reemployment status of any annuitant.
B.
Former member other than annuitants.
(1)
If a former member of the municipality returns to service with the municipality and becomes a member, the member may restore to the fund the amounts refunded under § 2-709.64A that represent that member's previous service and continue accruing credited service for service rendered subsequent to the return to service.
(2)
The member's annuity rights shall be restored as they existed
at the time of separation from service, provided the member pays the
amount due plus regular interest up to the date of purchase in a lump
sum within 30 days after billing, or through salary deductions amortized
with regular interest through a repayment period of not more than
five years.
A.
General. The basic benefit, accumulated deductions and the moneys
in the fund shall be exempt from any state or municipal tax and shall
be unassignable except to a beneficiary.
B.
Domestic relations orders. Rights under this contract shall be subject
to attachment in favor of an alternate payee as set forth in an approved
domestic relations order.
C.
Forfeiture.
(1)
Rights under this contract shall be subject to forfeiture as
required under the Act of July 8, 1978 (P.L. 752, No. 140), known
as the "Public Employee Pension Forfeiture Act."[1] Forfeitures under this clause or under any other provision
of law may not be applied to increase the benefits that any member
would otherwise receive under this Act.
[1]
Editor's Note: See 43 P.S. § 1311 et seq.
(2)
The Public Employee Pension Forfeiture Act states that all benefits
payable to a public employee must be forfeited if the employee is
convicted of, or pleads guilty or no defense to, a crime related to
public office or public employment enumerated in the Public Employee
Pension Forfeiture Act.
(3)
In the event a member is convicted of or pleads guilty or no
defense to a forfeitable crime, the member will be entitled to receive
the retirement contributions the member made, without regular interest
or excess interest, unless a court of competent jurisdiction orders
the member's contributions to be paid as restitution to the municipality.
(4)
All service and benefits forfeited by operation of the Public
Employee Pension Forfeiture Act shall be ineligible for retirement
coverage should the member later gain public employment and qualify
for membership in the system, regardless of the employing municipality.
A.
General. The Pennsylvania Municipal Retirement Fund shall consist
of contributions by municipalities from payroll deductions, from other
contributions made by members through the employing municipality to
the system, transfers made from municipal retirement or pension systems
and investment earnings.
B.
Separate accounts. The Board shall keep separate accounts for each
municipality, except the total disability reserve account and the
retired member's reserve account, which shall be maintained as
pooled accounts. The municipality and the members shall be liable
to the Board for the amount of contributions required to cover the
cost of the basic benefit and other benefits payable to such members.
C.
Disability. Upon the granting of a disability retirement, there shall
be transferred to the retired member's reserve account the amount
of the disability annuitant member's account, together with an
amount from the municipal account to equal the amount of the equivalent
actuarial value of the basic benefit, and such additional amount from
the total disability reserve account as may be needed to provide the
actuarial equivalent of the disability retirement to which the disability
annuitant is entitled.
D.
Basic benefit. Upon the granting of a basic benefit, there shall be transferred to the retired member's reserve account the amount of the member's account, plus an amount from the municipal account such that the sum will equal the equivalent actuarial value to the annuity provided in § 2-709.64B(1).
E.
Municipal liability. The regular interest charges payable and the
creation and maintenance of the necessary reserves for the payment
of the benefits, as to the municipality and its members, are hereby
made the obligation of the municipality in accordance with PMRL Section
111 and shall not otherwise attach to those assets of the fund attributable
to any other municipality and its members.
F.
Exclusive benefit. The fund is a trust, and the assets of the system
are held in trust. No part of the assets of the system shall be used
for or diverted to purposes other than for the exclusive benefit of
the members, their survivor annuitant or beneficiaries prior to the
satisfaction of all liabilities of the system with respect to them.
The assets of the fund shall be used only to pay:
G.
Custody of the fund. All moneys and securities in the fund shall
be placed in the custody of the State Treasurer as is required by
PMRL Section 109.
H.
Management and investment of the fund. The members of the Board shall
be trustees of the fund and shall have the exclusive management of
said fund, with full power to invest the moneys therein, subject to
the terms, conditions, limitations and restrictions imposed by law
upon fiduciaries. The Board shall have power to hold, purchase, sell,
assign, transfer and dispose of any securities and investments in
said fund, as well as the proceeds of such investments, and of the
money belonging to such fund.
I.
Allocation of regular interest. The Board shall annually allocate
regular interest to the credit of each member's account, municipal
account, and the retired member's reserve account.
J.
Allocation of excess interest.
(1)
The Board may, after deducting money to pay for regular interest
and any appropriate expenses of the system, award excess interest
to the municipality in accordance with Board-adopted policy.
(2)
Notwithstanding any other provision, excess interest shall not
be allocated to the member's accounts and/or retired members'
reserve account if the municipality's funding status in relation
to the benefit structure set forth under this contract is less than
95% funded as of the most-recent actuarial report filed pursuant to
the Municipal Pension Plan Funding Standard and Recovery Act, 53 P.S.
§ 895.101 et seq.
(3)
In the event that the municipality's funding status in
relation to the benefit structure set forth under this contract is
less than 95% funded as of the most-recent actuarial report filed
pursuant to the Municipal Pension Plan Funding Standard and Recovery
Act, 53 P.S § 895.101 et seq., all excess interest awarded
by the Board shall be allocated to the municipal account.
(4)
In the event that the municipality's funding status in
relation to the benefit structure set forth under this contract is
95% funded or more as of the most-recent actuarial report filed pursuant
to the Municipal Pension Plan Funding Standard and Recovery Act, 53
P.S. § 895.101 et seq., excess interest awarded to the municipality
shall be allocated between the retired member's reserve account,
municipal account and member's account proportionately based
on the individual assets credited to each account.
(5)
The amount allocated to the member's account shall be credited
in accordance with Board-adopted policy in an equal percentage to
each member based on the assets in each member's account.
(6)
The amount allocated to the retired member's reserve account
shall be credited so as to provide an equal percentage benefit increase
to each annuitant and survivor annuitant in accordance with Board-adopted
policy.
A.
General powers of the Board. In the administration of the system,
the Board has the exclusive authority under the PMRL to:
(1)
Contract for professional services, including but not limited
to actuarial, investment and medical, as it deems advisable;
(2)
Keep in convenient form such data as shall be deemed necessary
for actuarial valuation purposes;
(3)
From time to time, through its actuary, make an actuarial investigation
into the mortality and service experience of the members and annuitants
and of the various accounts created by the PMRL;
(4)
Adopt for the system one or more mortality tables and such other
tables as shall be deemed necessary;
(5)
Certify annually the amount of appropriation which the municipality
shall pay into the fund, which amounts shall be based on estimates
furnished by the actuary;
(6)
Prepare and distribute annual statements of accounts to each
of the active members, showing the contributions made during the year,
the interest earned and the total balance standing in the member's
account at the end of the year;
(7)
Perform such other functions as are required for the execution
of the PMRL and of any other federal and state law and to administer
and interpret this contract to ensure that the system is maintained
as tax-qualified under the IRC.
B.
Limits on benefit structure. This contract shall not provide benefits
in excess of or provide for member contribution rates less than those
available to the municipality's class of employees covered by
this contract under existing law, including laws applicable to the
establishment of pension plans.
C.
Policy statements.
(1)
Pursuant to PMRL Section 104(10), the Board has authority to
adopt policy statements as necessary to administer the system and
establish rules regarding the operation of the system. Policy statements
shall remain in full force and effect until superseded or otherwise
revoked by the Board.
(2)
Any policy statement shall be deemed incorporated herein by
reference regardless of its adoption date and shall be binding on
the municipality to the extent applicable.
(3)
Any policy statement may be retitled, amended, or supplemented
from time to time by written notice to the municipality.
(4)
The Board shall provide written notice to the municipality within
90 days of enactment of any new policy statement.
D.
Amendment of contract.
(1)
The Board and the municipality shall have authority at any time to amend this contract. No amendment or modification of this contract, except as permitted under § 2-709.70C, shall have any force or effect unless it is in writing and signed by the parties hereto.
(2)
Notwithstanding any other provision, in no event shall an amendment
to this contract:
(3)
Benefit improvements shall be determined on a total plan basis
and not on a benefit-by benefit comparison nor on an individual-by-individual
comparison.
E.
Benefits claims procedures.
(1)
The Board is statutorily vested with the exclusive jurisdiction
to administer and interpret this contract in accordance with the PMRL.
The parties hereby waive any claim or defense that such forum is not
convenient or proper.
(2)
If a member and/or municipality believe that a right or benefit
under this contract has been improperly denied, a written request
for a final determination must be filed with the system.
(3)
If the member and/or municipality disagrees with the final determination
reached by the system, the member and/or the municipality has the
right to file an appeal and request an administrative hearing before
the Board. See 1 Pa. Code §§ 31.11, 31.15, 33.31, 33.34,
and 35.20. The appeal and request for an administrative hearing must
include a statement of the facts that forms the basis of the requested
relief and all points of law that support the claim.
(4)
An administrative hearing is a process in which evidence is
presented before an independent hearing examiner who makes a recommendation
to the Board, following which the Board renders a final adjudication.
All administrative hearings are conducted at the Board's headquarters
in Harrisburg. The Board's final adjudication is subject to an
appeal before the Commonwealth Court of Pennsylvania.
(5)
All appeals and requests for administrative hearings must be
made in writing within 30 days of the date of the final determination
and sent to:
|
Appeal Docket Administrator
Pennsylvania Municipal Retirement Board
5 North Fifth Street
Harrisburg, PA 17101-1905
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(6)
If the appeal and request for an administrative hearing are
not received by the Board within the thirty-day period, the member
and/or municipality will no longer have the right to administratively
appeal the denial of its request to the Board.
F.
Plan withdrawal.
(1)
Withdrawal. The municipality may, for good cause, file an application
with the Board for permission to withdraw from the system if it meets
all of the following requirements:
(a)
The municipality has been enrolled in the system for a period
of at least five years.
(b)
The municipality has met all of its financial obligations to
the system.
(c)
The municipality has passed an ordinance signifying its intention
to withdraw from the system.
(d)
The municipality has certified to the Board that an affirmative
vote approving withdrawal from the system had been obtained from at
least 75% of all active members, inactive members, vested members,
annuitants, and survivor annuitants.
(e)
The municipality has acknowledged its responsibility to assume
and provide for all future benefit payments to the existing active
members, inactive members, vested members, annuitants, survivor annuitants,
and their beneficiaries effective upon the withdrawal.
(f)
The application has specified a date for the withdrawal to become
effective, provided if there are annuitants and/or survivor annuitants
in active pay status, the effective date is the first day of a month
no earlier than the month after which the Board is scheduled to take
action on the withdrawal application.
(2)
In the event that the municipality elects to terminate its participation
in the system, a member's basic benefit under this contract shall
be immediately vested to the extent funded as of the effective date
of the withdrawal.
(3)
In the event the municipality withdraws from the system, the
municipality shall only be entitled to the assets credited to the
municipal account and the members' accounts in accordance with
the provisions of the PMRL and policy statements. Assets that are
actuarially determined by the Board's actuary to be matched to
the municipality's annuitants and survivor annuitants will also
be returned to the municipality in accordance with the PMRL and policy
statements.
G.
Notice. Any notice, demand, direction, instruction, or other communication
required or permitted hereunder shall be confirmed in writing and
shall be sufficiently given for all purposes when sent (i) by registered
United States mail, postage prepaid; (ii) by facsimile, with a copy
sent by first-class United States mail (provided that if the date
of dispatch is not a working day, the facsimile shall be deemed to
have been received at the opening of business of the addressee on
the next working day); (iii) by e-mail to any party at the following
e-mail address; or (iv) by delivering the same in person to any party
at the following addresses or such other addresses as may be designated
in writing from time to time by the parties:
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BOARD:
|
PENNSYLVANIA MUNICIPAL
RETIREMENT BOARD
Attn: Secretary
Suite 301 Eastgate Center
1010 North 7th Street
Harrisburg, Pennsylvania 17102
Fax: 717/783-8363
Email: RA-Staff@pa.gov
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H.
Filings with the Board.
(1)
Receipt. Any filing, election or notice required to be made
under this contract or the PMRL by a member must be made by written
statement, duly attested, and filed in the office of the Board or
deposited in the United States mail, addressed to the Board.
(2)
Timeliness. Subject to any exceptions provided for in the PMRL,
the timeliness of any filing, election or notice required to be made
under this contract or the PMRL to the Board by a member shall be
governed by the actual receipt of the filing, election or notice rather
than the date of mailing.
(3)
Municipal certifications.
(a)
In the event the system receives an application for a benefit
from a member in which certification by the municipality with regard
to the data used to calculate such benefit is needed but such certification
has not been made by the municipality, the system shall issue a formal
demand to the municipality for such certification of the necessary
data.
(b)
Any certification required to be made by the municipality with
regard to any application for benefits by a member under this contract
shall be made by the municipality within 45 days following the date
of the system's formal demand.
(c)
Failure of the municipality to provide such requested certification
within the forty-five-day period shall result in the system utilizing
the most-current reliable data maintained by the system for the member.
I.
Mistake in the record. Should any change or mistake in records result
in any member, beneficiary or survivor annuitant receiving from the
system more or less than the individual would have been entitled to
receive had the records been correct, then, regardless of the intentional
or unintentional nature of the error and upon the discovery of such
error, the Board shall correct the error and, so far as practicable,
adjust the payments which may be made for and to such person in such
a manner that the actuarial equivalent of the benefit to which he
was correctly entitled shall be paid.
