[Adopted 3-25-2004 by Ord. No. 04-2]
As used in this Part 4, Subpart A, the following terms shall
have the meanings indicated:
As of any given date, the benefit determined under § 1-405.2,
calculated on the basis of final monthly average salary as of the
date of determination and multiplied by a fraction, the numerator
of which shall be the participant's aggregate service determined as
of such date and the denominator of which shall be the aggregate service
which would be credited to the participant as of his normal retirement
date if he were to continue to be employed as an employee until such
date. In no event shall such fraction exceed 1.0.
The total amount contributed by any participant to this fund
or its predecessor by way of payroll deduction or otherwise, plus
interest credited at 6% per annum. Such interest shall be credited
annually in the form of a compound interest rate up to the date on
which the participant's employment is terminated.
The Municipal Pension Plan Funding Standard and Recovery
Act, enacted as P.L. 1005 (Act 205 of 1984), as amended.[1]
Two forms of payment of equal actuarial present value on
a specified date based on mortality according to the UP-1984 Table
and an interest rate of 6%.
The person, partnership, association or corporation which
at any given time is serving as actuary, provided that such actuary
must be an "approved actuary," as defined in the Act.
The total period or periods of the participant's employment
with the employer, whether or not interrupted. Notwithstanding the
preceding sentence, should any such participant receive a distribution
of his accumulated contributions with respect to a period of employment,
such period of employment shall not be included in his aggregate service
thereafter unless, at the commencement of his next period of employment,
he repays to the fund the amount of such withdrawal with interest.
For purposes of this definition, interest shall accrue as of the date
the employee receives a refund of his accumulated contributions and
shall be computed at the same rate and in the same manner as described
in the definition of "accumulated contributions."
The total compensation of the employee, whether salary or
hourly wages, including overtime pay, holiday pay, longevity pay and
any other form of compensation paid by the employer for police services
rendered. Basic monthly earnings shall also include fixed periodic
amounts paid for periods during which the participant is not actively
employed as a member of the employer's regular full-time police force,
which amounts are paid directly by the employer or through a program
to which the employer has made contributions on behalf of the employee
other than under this plan (including, without limitation, a worker's
compensation program or payments made under the Pennsylvania Heart
and Lung Act).
The person or entity designated by the participant to receive
a refund of the participant's accumulated contributions should the
participant die prior to becoming entitled to a retirement benefit.
In the event that a participant does not designate a beneficiary or
his beneficiary does not survive him, his beneficiary shall be his
surviving spouse, or if there is no surviving spouse, his issue per
stripes, or if there is no surviving issue, his estate.
The Internal Revenue Code of 1986, as amended.
The Council of the Borough of Sharpsburg, which shall direct
and supervise the plan.
The date when a participant is determined by the plan administrator
to be incapacitated due to "total and permanent disability" or the
date when the participant's employment terminates due to such total
and permanent disability, if later.
Any individual employed by the employer on a permanent full-time
basis as a member of the employer's police force.
The Borough of Sharpsburg, Allegheny County.
For purposes of determining aggregate service, means the
following:
The period of time for which an employee is directly or indirectly
compensated or entitled to compensation by the employer for the performance
of duties as a police officer;
Any period of time for which an employee is paid a fixed, periodic
amount in the nature of salary-continuation payments for reasons other
than the performance of duties (such as vacation, holidays, sickness,
entitlement to benefits under worker's compensation or similar laws),
either directly by the employer or through a program to which the
employer has made contributions on behalf of the employee;
Any period during which an employee is entitled to disability
benefits under this plan, provided that the employee returns to employment
within three months of the date on which it is determined that he
is no longer totally and permanently disabled, if such determination
occurs prior to the participant's normal retirement date; or
Any period of voluntary or involuntary military service with
the armed forces of the United States of America, provided that:
The participant has been employed as a regular, full-time member
of the employer's police force for a period of at least six months
prior to the period of military service; and
The participant returns to employment within six months following
his discharge from military service or within such longer period during
which his employment rights are guaranteed by applicable law or under
the terms of a collective bargaining agreement with the employer.
The average monthly salary earned by the participant and
paid by the employer for employment as defined in Subsection 2 of
the definition of "employment" during the final 36 months immediately
preceding retirement which are included in the averaging period. The
term "salary" shall include the total compensation of the employee,
whether salary or hourly wages, including overtime pay, holiday pay,
longevity pay and any other form of compensation paid by the employer
for police services rendered and shall exclude lump-sum payments for
accumulated sick time or back pay damages, awards or settlements.
A legal reserve life insurance company which shall issue
a policy under this plan.
The date on which the participant has completed 25 years
of aggregate service with the employer and attained age 50.
[Amended 3-11-2008 by Ord. No. 08-01]
An employee who has met the eligibility requirements to participate
in the plan as provided in § 1-403.1 and who has not for
any reason ceased to be a participant hereunder.
The police pension fund administered under the terms of this
plan and which shall include all money, property, investments, policies
and contracts standing in the name of the plan.
The committee, which shall consist of nine persons, one of
whom shall be a police officer selected by the employees, as defined
in the definition of "employee;" six of whom shall be members of Council
excluding the President of Council, one of whom shall be the Secretary
of the employee, as defined in this section; and one of whom shall
be the Mayor of the employer.
The Mayor of the employer and duly appointed successors holding
that office.
The plan set forth herein, as amended from time to time,
and designated as the "Borough of Sharpsburg Police Pension Plan."
The Pension Trust Committee or pension trustee, if so authorized
by the Pension Trust Committee, selected to administer the provisions
of the plan. In the event that no such Pension Trust Committee is
chosen, the plan administrator shall be the Council.
The twelve-month period beginning on January 1 and ending
on December 31 of each year.
A retirement annuity or retirement income endowment policy
(or a combination of both) or any other form of insurance contract
or policy which shall be deemed appropriate in accordance with the
provisions of the Act and P.L. 1804, as amended (53 P.S. § 767).
January 1, 2002, the date upon which this amendment and restatement
of the plan becomes effective.
A condition of physical or mental impairment due to which a participant is unable to perform any and every duty of his usual and customary occupation, which condition, to a reasonable degree of medical certainty, is expected to continue to be permanent for the remainder of the participant's lifetime. For purposes of this definition and § 1-406, a condition shall not be treated as a total and permanent disability unless such condition results from the participant's performance in the line of the employee's duty as a member of the employer's police force. Therefore, an employee whose physical or mental impairment does not occur in the line of duty is not entitled to receive disability benefits under the plan.
[1]
Editor's Note: See 53 P.S. § 895.101 et seq.
1.
Plan operated under supervision of the plan administrator. The operation
of the plan shall be supervised by the plan administrator. The plan
administrator shall have the power and authority, by a majority of
its members, to do all acts and to execute, acknowledge and deliver
all instruments necessary to implement and effectuate the purpose
of this plan. The plan administrator shall keep such records as may
be necessary for the determination of the status of each participant
and the presumptive share of each participant in the fund as determined
by the actuary. The plan administrator shall have authority and shall
be charged with the performance of the duties set forth in this plan,
but shall have the authority by general rule or special decision to
determine and make provisions for such items necessary for the proper
carrying out and enforcement thereof that are not specifically provided
by this plan at all times, however, subject to change by proper ordinance
or resolution.
2.
Acceptance of gifts, grants, etc. The plan administrator is hereby
authorized to take by gift, grant, devise or bequest any money or
property, real or personal, in trust for the benefit of the plan and
to cause the same to be held as a part of the pension fund. The care,
management, investment and disposal of said fund is hereby vested
in the plan administrator, subject to the provisions of the laws of
the Commonwealth of Pennsylvania and of this plan and any amendment
thereto and subject to such direction not inconsistent therewith as
the donors of such funds and property may prescribe.
3.
Investment in insurance polices. If it so elects, the employer acting
through the Council may elect to invest all or a portion of the pension
fund's assets in policies issued by an insurer.
1.
Eligibility requirements. Each employee who is employed as a regular,
full-time permanent member of the police department of the employer
shall participate herein as of the date on which such employee's employment
first commences or recommences. Notwithstanding anything contained
herein to the contrary, a newly hired employee shall complete a six-month
probationary period during which participant contributions shall be
deducted in accord with § 1-404.2 and held by the employer
until appointment as a regular employee, at which time such participant
contributions shall be transferred to the pension fund and such participant's
aggregate service shall include such probationary period of employment.
2.
Notification of plan administrator. The Council shall furnish the
plan administrator with written notification of the appointment of
any new full-time permanent employee who is eligible for participation
hereunder within 60 days of the date of such appointment.
3.
Designation of beneficiary. Any new, full-time employee who becomes
a participant hereunder shall provide a written notice which designates
his beneficiary or beneficiaries to the Council at the time his participation
commences. The beneficiary shall receive a refund of accumulated contributions
if such refund is payable pursuant to § 1-407.1. The participant's
election of any such beneficiary or beneficiaries may be rescinded
or changed without the consent of the beneficiary or beneficiaries
at any time, provided the participant provides the Council with written
notice of the changed designation.
1.
Participant contributions. Each participant shall make regular monthly
contributions to the plan at a rate of 5% of such participant's basic
monthly earnings.
2.
Payment of participant contributions. Such participant contributions
shall be deducted from the participant's basic monthly earnings in
each month of his aggregate service during which he receives payments
of basic monthly earnings.
3.
Reduction of participant contributions.
A.
Notwithstanding the preceding Subsections 1 and 2, if an actuarial study performed by the actuary shows that the condition of the pension fund is such that payments into the pension fund by participants may be reduced below the minimum percentages prescribed in Subsection 1, or may be eliminated, and that if such payments are reduced or eliminated contributions by the employer will not be required to keep the pension fund actuarially sound, the employer may, on an annual basis, by ordinance or resolution, reduce or eliminate payments into the pension fund by participants.
B.
For plan years beginning after April 17, 2002, notwithstanding Subsection
1A, the employer may, on an annual basis, by ordinance or resolution,
reduce or eliminate payments into the plan by participants subject
to any applicable terms, conditions or limitations contained in the
bargaining agreement between the Borough of Sharpsburg police officers
and the employer, subject to any state law or bargaining limitations.
4.
Payments of state aid. Payment of general municipal pension system
state aid, or any other amount of state aid received in accordance
with the Act from the Commonwealth of Pennsylvania, which are received
by the employer and deposited into the pension fund governed by this
plan, shall be used as follows:
5.
Employer contributions. The remainder of the annual contributions
required under the provisions of the Act, as determined by the actuary
in accordance with the Act, shall become the obligation of the employer
and shall be paid into the pension fund by annual appropriations.
1.
Normal retirement. Each participant shall be entitled to normal retirement benefits, provided he retires on or after his normal retirement date. Each participant who is receiving disability benefits under this plan shall have his disability benefit determined under this section (in lieu of the benefit payable under § 1-406) as of his normal retirement date.
2.
Normal retirement benefit. Each participant entitled to normal retirement benefits pursuant to Subsection 1 shall receive during his lifetime a monthly retirement income equal to 50% of his final monthly average salary; provided, however, that payment of benefits upon retirement shall be conditioned upon participant being subject to service from time to time as a police reserve in cases of riot, tumult or preservation of the public peace until unfitted for such service, at which time such participant shall be finally discharged by reason of age or disability upon written notice from the Council.
3.
Service increment benefits. In addition to the pension benefit provided in Subsection 2, a service increment benefit shall be payable to a participant who has retired under this section if such participant has completed more than 25 years of aggregate service with the employer. The amount of the increment shall be a monthly amount equal to $25 for each completed year of aggregate service exceeding 25 years. In no case shall the total service increment exceed $100 per month.
4.
Late retirement. A participant may continue to work beyond his normal
retirement date, subject to the employer's rules and regulations regarding
retirement age. If a participant who has met the requirements of § 1-405.1
continues to work beyond his normal retirement date, there shall be
no retirement benefits paid until employment ceases and retirement
begins. The retirement benefit of a participant who retires after
his normal retirement date shall be calculated on the basis of his
final monthly average salary as of such participant's actual date
of retirement.
5.
Payment of benefits. Retirement payments shall be payable as of the
first day of the month coincident with or next following the participant's
retirement date and the first day of each month thereafter during
the participant's lifetime.
6.
Assignment. The pension payments herein provided for shall not be
subject to attachment, execution, levy, garnishment or other legal
process and shall be payable only to the participant, his survivors
or his designated beneficiary and shall not be subject to assignment
or transfer.
1.
Disability benefits. A participant who is totally and permanently
disabled shall be entitled to a monthly disability benefit equal to
50% of the participant's final monthly average salary determined as
of his disability date.
2.
Payment of disability benefits. Disability payments shall be made monthly as of the first day of each month, commencing as of the first day of the month immediately following or coincident with the participant's disability date. When the participant reaches his normal retirement date, the amount of disability benefit shall be determined in the same manner and in the same amount as a normal retirement benefit under § 1-405. If a participant fails to return within three months to his position as an employee of the employer upon cessation of total and permanent disability prior to his normal retirement date, his date of termination shall be his disability date.
3.
Verification of disability benefits. Disability benefits awarded
because of total and permanent disability shall be terminated:
A.
If the employer shall determine, on the basis of a medical examination by a physician acceptable to the employer and employee, that the participant prior to his normal retirement date has to a reasonable degree of medical certainty sufficiently recovered to return to employment as defined in the definition of "actuarial equivalent" in § 1-401;
B.
If the participant refuses to undergo a medical examination prior
to his normal retirement date, which may be ordered by the employer
or the plan administrator, provided that the participant may not be
required to undergo a medical examination more often than once very
12 months; or
C.
If the participant is employed in any capacity as a full-time or
part-time police officer prior to his normal retirement date.
4.
Disability retirement benefit after April 17, 2002. Notwithstanding Subsection 1 hereof, for disabilities incurred after April 17, 2002 and to the extent permitted by applicable Pennsylvania law, the disability benefit payable to a participant who meets the requirements of Subsection 1 of the section a monthly benefit calculated at 50% of the member's salary at the time the disability was incurred, provided that any member who receives benefits for the same injuries under the Social Security Act (42 U.S.C. § 301 et seq.) shall have his disability benefits offset or reduced by the amount of such benefits. Notwithstanding anything to the contrary in this plan, anyone receiving benefits under this subsection shall receive no other benefits under this plan.
1.
Preretirement death benefits payable to beneficiary. In the event
a participant who has not attained entitlement to normal retirement
benefits dies during employment or dies after termination of employment
but prior to receiving a refund of accumulated contributions, the
designated beneficiary of the participant shall be entitled to receive
a refund of the participant's accumulated contributions to the plan.
2.
Surviving benefits.
A.
In the event a participant who would be eligible to receive an immediate
payment of normal retirement benefits if he had elected to retire
on the day before his death or a participant who is receiving normal
retirement benefits dies, a survivor benefit shall be payable under
this paragraph. The survivor benefit shall be equal to 50% of the
monthly retirement benefit which the participant was receiving or
would have been receiving had he been retired at the time of his death.
The survivor benefit provided for in this paragraph shall be payable
to the widow or widower of the deceased participant until the earlier
of such widow's or widower's death or remarriage. If there is no widow
or widower of the deceased participant or if the widow or widower
dies or remarries, the survivor benefit provided for in the paragraph
shall be payable in equal shares to the deceased participant's child
or children who have not attained age 18 as of the date on which survivor
benefit payments under this section would commence. Payments to each
surviving child shall cease as of such child's death or attainment
of age 18. Such child's share of the survivor benefit shall be reallocated
in equal shares to any remaining surviving children, then living,
who have not attained age 18.
B.
Effective April 17, 2002, notwithstanding anything in Subsection 2A to the contrary, for a participant who dies after retiring on normal retirement or disability retirement or after becoming eligible for normal retirement benefits or late retirement benefits, the benefit shall be paid to the surviving spouse or, if no spouse survives, or if he or she survives and subsequently dies, then the child or children under the age of 18 years or, if attending college, under or attaining the age of 23 years in the case of a child or children, in the amount of 50% of the pension the participant was receiving or would have been receiving had he been retired at the time of his death. Notwithstanding anything to the contrary in this plan, anyone receiving benefits under this paragraph shall receive no other benefits under this plan. For purposes of this section and § 1-408 of this plan, the phrase "attending college" shall mean the eligible children are registered at an accredited institution of higher learning and are carrying a minimum course load of seven credit hours per semester. This section, insofar as it may be required by Act 30 of 2002,[1] shall apply to surviving spouses whose spouse died on
or before April 17, 2002 and who were not remarried as of April 17,
2002.
[1]
Editor's Note: Act 30 of 2002 amended Act 600 of 1955, the
Municipal Police Pension Law.
3.
Payment of survivor benefits. Survivor payments shall be made monthly
as of the first day of each month. The first installment of any benefit
payable to a survivor shall be payable on the first day of the month
next following the date of death of the participant.[2]
[2]
Editor's Note: Former Subsection 4, Killed-in-Service Benefit,
which immediately followed this subsection, was repealed 3-15-2012
by Ord. No. 12-05.
1.
Rights of terminated employees. If a participant ceased to be an
employee except as otherwise hereinbefore provided, his interest and
rights under this plan shall be limited to those contained in the
following subsections.
2.
Refund of accumulated contribution. If a participant whose employment
with the employer has been terminated for any reason prior to his
normal retirement date and he is neither eligible for a pension under
the plan or he has elected to vest his benefit, such participant or
his beneficiary shall be entitled to receive a refund of his accumulated
contributions to the plan. Upon receipt of such accumulated contributions,
said participant and his beneficiary shall not be entitled to any
further payments from the plan.
3.
Vested benefits upon termination. In lieu of receiving a refund of his accumulated contributions, a participant who has completed 12 years of aggregate service with the employer and who ceases to be an employee of the employer for any reason other than death, retirement or total and permanent disability may elect to vest his retirement benefits under the plan by filing a written notice of his intention to vest with the plan administrator within 90 days of the date he ceases to be an employee. A participant who exercises such an option shall be eligible, upon attainment of what would have been his normal retirement date had he continued to be an employee, for a vested retirement benefit equal to his accrued benefit, determined as of the date on which he terminated employment. If a participant elects to vest his benefit but dies prior to the commencement thereof, his beneficiary shall be entitled to a refund of the participant's accumulated contributions in accordance with the terms of Subsection 2.
4.
Other death benefits. The surviving spouse of a participant who dies on or after April 17, 2002, before his pension has vested, and whose survivors are entitled to no benefits under any other sections of this plan, or if no spouse survives or if he or she survives and subsequently dies, the child or children under the age of 18 years, or if attending college, under or attaining the age of 23 years, of a participant shall be entitled to receive repayment of the accumulated contributions unless the participant has designated another beneficiary. To the extent required by law, the survivor of a participant who dies after April 17, 2002, after receiving a deferred vested benefit or eligible to receive a deferred vested benefit, will be paid a survivor benefit to the survivors determined by law in an amount no greater than the minimum required by law and no earlier than required by law. Anyone receiving benefits under this Subsection 4 shall receive no other benefits under this plan.
1.
Explanation. In recognition of the fact that the plan must comply
in form, content and operation with certain provisions of the Internal
Revenue Code of 1986 (the "code"), and in spite of the limited applicability
of such provisions to the normal operation of the plan, the following
sections detail the limitations and parameters applicable to maintaining
favorable tax treatment of funds contributed to the plan under federal
law.
2.
ACCRUED BENEFIT
ACTUARIAL EQUIVALENT
ANNUAL ADDITIONS
ANNUAL BENEFIT
EMPLOYEE
LEASED EMPLOYEE
A.
(1)
(2)
(3)
B.
LIMITATION YEAR
PARTICIPANT'S ACCOUNT
PLAN YEAR
REGULATION
Definitions. The following words and phrases are hereby introduced
and defined for purposes of this section only:
A participant's retirement benefit exclusive of vesting.
A form of benefit differing in time, period or manner of
payment from a specific benefit provided under the plan, but having
the same value when computed using the "applicable interest rate"
and "applicable mortality table," as defined in IRS Code Section 417(e).
The applicable interest rate shall be determined as of the second
month prior to the first month of the limitation year. The applicable
mortality table and applicable interest rate shall be adjusted automatically
when necessary to maintain the qualified status of this plan. The
applicable mortality table was found in Revenue Ruling 95-6, 1995-1
C.B. 80, and effective as of December 31, 2002, was found in Revenue
Ruling 2001-62.
The sum credited to a participant's account for any limitation
year of: (1) Borough contributions; (2) employee contributions; (3)
forfeitures; (4) amounts allocated after March 31, 1984, to an individual
medical account, as defined in IRS Code Section 415(1)(2), which is
part of a pension or annuity plan maintained by the Borough; and (5)
amounts derived from contributions paid or accrued after December
31, 1985, in taxable years ending after such date, which are attributable
to post-retirement medical benefits allocated to the separate account
of a key employee [as defined in Code Section 419A(d)(3)] under a
welfare benefit plan [as defined under Code Section 419(e)] maintained
by the Borough. Except, however, the percentage limitation referred
to in IRS Code Section 415(C)(1)(B) shall not apply to: (1) any contribution
for medical benefits [within the meaning of IRS Code Section 419A(f)(2)]
after separation from service which is otherwise treated as an annual
addition; or (2) any amount otherwise treated as an annual addition
under Code Section 415(1)(1). Notwithstanding the foregoing, for limitation
years beginning prior to January 1, 1987, only that portion of employee
contributions equal to the lesser of employee contributions in excess
of 6% of "415 Compensation" or 1/2 of employee contributions shall
be considered an annual addition. For years beginning after December
31, 2001, annual additions shall be calculated in conformance with
the Economic Growth and Tax Relief Reconciliation Act of 2001.
The benefit payable under the terms of the plan (exclusive
of any benefit not required to be considered for purposes of applying
the limitations of Code Section 415 to the Plan) payable in the form
of a straight life annuity with no ancillary benefits. If the benefit
under the plan is payable in any other form, the annual benefit shall
be adjusted to the equivalent of a straight life annuity using the
greater of the interest rate assumption specified in the definition
of "actuarial equivalent" or 5%.
Any person who is employed by the Borough, but excludes any
person who is an independent contractor. "Employee" shall not include
leased employees within the meaning of Code Sections 414(n)(2) and
414(o)(2), unless such leased employees are covered by a plan described
in Code Section 414(n)(5) and such leased employees do not constitute
more than 20% of the recipient's nonhighly compensated work force.
Any person (other than an employee of the recipient) who,
pursuant to an agreement between the recipient and any other person
("leasing organization"), has performed services for the recipient
[or for the recipient and related persons determined in accordance
with Code Section 414(n)(6)] on a substantially full-time basis for
a period of at least one year, and such services are under primary
direction and control of recipient. Contributions or benefits provided
a leased employee by the leasing organization which are attributable
to services performed for the recipient employer shall be treated
as provided by the recipient employer. A leased employee shall not
be considered an employee of the recipient:
If such employee is covered by a money purchase pension plan
providing:
A nonintegrated employer contribution rate of at least 10% of
compensation, as defined in Code Section 4159(c)(3), but including
amounts contributed pursuant to a salary reduction agreement which
are excludable from the employee's gross income under IRS Code Section
125, 402(a)(8), 402(h) or 403(b);
Immediate participation; and
Full and immediate vesting.
If leased employees do not constitute more than 20% of the recipient's
nonhighly compensated work force.
The plan year, for purposes of applying the limitations under
the current article.
The account established and maintained by the administrator
for each participant with respect to his total interest in the defined
contribution plan maintained by the Borough resulting from annual
additions.
The twelve-month period beginning on January 1 and ending
on December 31 of each year.
The income tax regulations, as amended from time to time,
as promulgated by the Secretary of the Treasury or his delegate.
3.
Maximum annual benefit.
A.
Subject to the exceptions below, the maximum annual benefit payable
to a participant under this plan in any limitation year shall equal
$90,000.
B.
Notwithstanding anything in this section to the contrary, to the
extent the plan was in existence on May 6, 1986, and had complied
at all times with the requirements of Code Section 415, (including
any pertinent elections) the maximum annual benefit for any individual
who was a participant as of the first day of the limitation year beginning
after December 31, 1986 shall not be less than the current accrued
benefit. "Current accrued benefit" shall mean a participant's accrued
benefit under the plan, determined as if the participant had separated
from service as of the close of the last limitation year beginning
before January 1, 1987, when expressed as an annual benefit within
the meaning of Code Section 415(b)(2). In determining the amount of
a participant's current accrued benefit, the following shall be disregarded:
(1) any change in the terms and conditions of the plan after May 5,
1986; and (2) any adjustment for cost of living occurring after May
5, 1986.
C.
The dollar limitation under Code Section 415(b)(1)(A) stated in Subsection 3A above shall be adjusted periodically in accordance with changes in the law under Code Section 415(b) or cost-of-living adjustments under Code Section 415(d). The limitation for the first limitation year ending after December 31, 2001 is $160,000.
D.
For the purpose of this section, all qualified defined benefit plans
(whether terminated or not) ever maintained by the Borough shall be
treated as one defined benefit plan, and all qualified defined contribution
plans (whether terminated or not) ever maintained by the Borough shall
be treated as one defined contribution plan.
E.
For the purpose of this section, if this plan is a Code Section 413(c)
plan, all employers of a participant who maintain this plan will be
considered to be a single employer, namely the Borough.
4.
Adjustments to annual benefit and limitations.
A.
If the annual benefit begins before age 62, then the dollar limitation shall be reduced so that it is the actuarial equivalent of the $160,000 limitation beginning at age 62. For purposes of adjusting the dollar limitation applicable prior to age 62, the interest rate assumption shall be the greater of 5% or the rate specified in the plan. In no event, however, shall the aforesaid dollar limitation be reduced to an amount less than that required by the code, and the above limitations shall not apply to survivor or disability pension paid pursuant to the plan. This subsection does not apply to the benefit of any participant who has 15 or more years of service with the Borough's Police Department or who qualifies for a disability benefit under § 1-403.
B.
If the annual benefit begins after age 65, the dollar limitation
shall be increased so that it is the actuarial equivalent of a $160,000
single life annuity at age 65.
C.
For purposes of adjusting the $160,000 limitation applicable after
age 65, the interest rate assumption shall be the lesser of 5% or
the rate specified in the plan.
E.
For purposes of the annual benefit, no adjustment is required for
qualified joint and survivor annuity benefits, preretirement death
benefits, or post-retirement medical benefits.
F.
To the extent applicable, the above provisions and limitations shall
be governed by Code Section 415(b)(2)(G).
5.
Annual benefit not in excess of $10,000. Subject to the provisions
of any applicable state law, this plan may pay an annual benefit to
any participant in excess of his or her maximum annual benefit if
the annual benefit derived from Borough contributions under this plan
and all other defined benefit plans maintained by the Borough does
not in the aggregate exceed $10,000 for the limitation year or for
any prior limitation year and the Borough has not at any time maintained
a defined contribution plan in which the participant participated.
For purposes of this paragraph, if this plan provides for voluntary
or mandatory employee contributions, such contributions will not be
considered a separate defined contribution plan maintained by the
Borough.
6.
Participation or service reductions. In the case of a member who is not receiving a disability benefit under the plan, if a participant has less than 10 years of participation in the plan at the time he begins to receive benefits thereunder, the limitations in Subsections 3 and 4 shall be reduced by multiplying such limitations by a fraction, the numerator of which is the number of years of participation (or part thereof) in the plan and the denominator of which is 10; provided, however, that said fraction shall in no event be less than 1/10.
7.
Incorporation of Code Section 415 by reference. Notwithstanding anything
contained in this section to the contrary, the limitations, adjustments
and other requirements prescribed in this section shall at all times
comply with the provisions of Code Section 415 and the regulations
thereunder, the terms of which are specifically incorporated herein
by reference. The provisions of Code Section 415(e) applied for limitation
years beginning prior to January 1, 2000.
8.
Required distributions. Notwithstanding any provision in this plan
to the contrary, the distribution of a participant's benefits shall
be made in accordance with the requirements and conditions and shall
otherwise comply with Code Section 401(a)(9). For purposes of complying
the with Code Section 401(a)(9), life expectancies shall be determined
in accordance with the 1987 proposed regulations prior to January
1, 2003 and with the final regulations [§ 1.401(a)(9)-1
through § 1.401(a)(9)-9] on or after January 1, 2003.
A.
Effective as of January 1, 1997, distribution of a participant's
benefits shall begin not later than April 1 of the calendar year following
the later of:
B.
Distributions to a participant and his beneficiaries shall only be
made in accordance with the incidental death benefit requirements
of Code Section 401(a)(9)(G) and the regulations thereunder.
C.
This section does not authorize the payment of any benefit in any
form not permitted under another provision of the plan.
9.
Qualified domestic relations order distribution. All rights and benefits,
including elections, provided to a participant in this plan shall
be subject to the rights afforded to any alternate payee under what
is recognized pursuant to state law support provisions or as a qualified
domestic relations order. For purposes of this section, "alternate
payee" and "qualified domestic relations order" shall be determined
by the plan administrator, who may use as guidance Code Section 414(p).
10.
Direct rollover.
A.
This section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the plan to the contrary that
would otherwise limit a distributee's election under this section,
a distributee may elect, at the time and in the manner prescribed
by the plan administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified
by the distributee in a direct rollover.
B.
For purposes of this section, the following definitions shall apply:
(1)
An "eligible rollover distribution" is any distribution of all
or any portion of the balance to the credit of the distributee, except
that an eligible rollover distribution does not include: any distribution
that is one of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life expectancy)
of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or
for a specified period of 10 years or more; any distribution to the
extent such distribution is required under Code Section 401(a)(9);
and prior to January 1, 2002, the portion of any distribution that
is not included in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities).
(2)
An "eligible retirement plan" is an individual retirement account
described in Code Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in Code Section 401(a),
that accepts the distributee's eligible rollover distribution. However,
in the case of an eligible rollover distribution to the surviving
spouse prior to January 1, 2002, an eligible retirement plan is an
individual retirement account or individual retirement annuity.
(3)
A "distributee" includes an employee or former employee. In
addition, the employee's or former employee's surviving spouse and
the employee's or former employee's spouse or former spouse who is
the alternate payee under a qualified domestic relations order, as
defined in Code Section 414(p)(11), are distributees with regard to
the interest of the spouse or former spouse.
(4)
A "direct rollover" is a payment by the plan to the eligible
retirement plan specified by the distributee.
(5)
Effective as of January 1, 2002, an employee may, in accordance
with Code Section 457(e)(17), make a trustee-to trustee transfer from
an eligible deferred compensation plan [as defined in Code Section
457(b)] to this plan for the purpose of purchasing service credit
(to the extent that such purchases are permitted under the terms of
the plan) or repaying a cash-out of contributions refunded under the
plan.
11.
This section shall apply to distributions made after December 31,
2001.
A.
Modification of definition of eligible retirement plan. For purposes
of the direct rollover provisions in this section of the plan, an
eligible retirement plan shall also mean an annuity contract described
in Section 403(b) of the IRS Code and an eligible plan under Section
457(b) of the IRS Code which is maintained by a state, political subdivision
of a state, or any agency or instrumentality of a state or political
subdivision of a state, and which agrees to separately account for
amounts transferred into such plan from this plan. The definition
of eligible retirement plan shall also apply in the case of a distribution
to a surviving spouse or to a spouse or former spouse who is the alternate
payee under a qualified domestic relation order, as defined in Section
414(p)(11) of the IRS Code.
B.
Modification of definition of eligible rollover distribution to include
after-tax employee contributions. For purposes of the direct rollover
provisions in this section of the plan, a portion of a distribution
shall not fail to be an eligible rollover distribution merely because
the portion consists of after-tax employee contributions that are
not included in gross income. However, such portion may be paid only
to an individual retirement account or annuity described in Section
408(a) or (b) of the IRS Code, or to a qualified defined contribution
plan described in Section 401(a) or 403(a) of the IRS Code that agrees
to separately account for amounts so transferred, including separately
accounting for the portion of such distribution which is includible
in gross income and the portion of such distribution which is not
so includible.
12.
Credit for qualified military service. Notwithstanding any provision
of this plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be provided
in accordance with Section 414(u) of the IRS Code.
13.
Limit on compensation. Except for purposes of the limitations under
Section 415 of the IRS Code, with respect only to an employee who
becomes a participant in the plan on or after January 1, 1996, compensation
is subject to the limitation under Code Section 401(a)(17), which
is $2000,000 for the plan year beginning in 2002. The $200,000 limit
is adjusted periodically for changes in the law and cost-of-living
adjustments under IRS Code Section 401(a)(17).
14.
Limit on annual additions.
A.
Effective as of January 1, 2002, the annual additions allocated to
the account of a participant, including any contributions "picked-up"
by the Borough in accordance with Code Section 414(h) and any annual
additions under any other defined contribution plan of the Borough
shall not exceed the lesser of:
C.
For purposes of this section, compensation means a participant's
wages as defined in Code Section 3401(a) and all other payments of
compensation by the Borough (in the course of the Borough's business)
for a limitation year for which the Borough is required to furnish
the participant with a written statement under IRS Code Sections 6041(d),
6051(a)(3) and 6052. Such compensation must be determined without
regard to any rules under Code Section 3401(a) that limit the remuneration
included in wages based on the nature or location of the employment
or the services performed [such as the exception for agricultural
labor in Code Section 3401(a)(2)]. Effective as of January 1, 1998,
compensation for purposes of this section includes amounts not included
in income by reason of IRS Code Section 125, 132(f)(4), 401(k), 402(g)(3),
403(b) or 457(a).
1.
Actuarial valuations. The plan's actuary shall perform an actuarial
valuation at least biennially unless the employer is applying or has
applied for supplemental state assistance pursuant to Section 603
of the Act, whereupon actuarial valuation reports shall be made annually.
Such biennial actuarial valuation report shall be made as of the beginning
of each plan year occurring in an odd-numbered calendar year, beginning
with the year 1985. Such actuarial valuation shall be prepared and
certified by any approved actuary, as such term is defined in the
Act. The expenses attributable to the preparation of any actuarial
valuation report or investigation required by the Act or any other
expense which is permissible under the terms of the Act and which
are directly associated with administering the plan shall be an allowable
administrative expense payable from the assets of the pension fund.
Such allowable expenses shall include but not be limited to the following:
A.
Investment costs associated with obtaining authorized investments
and investment management fees;
B.
Accounting expenses;
C.
Premiums for insurance coverage on fund assets;
D.
Reasonable and necessary counsel fees incurred for advise or to defend
the fund; and
E.
Legitimate travel and education expenses for plan officials; provided,
however, that the municipal officials of the employer, in their fiduciary
role, shall monitor the services provided to the plan to ensure that
the expenses are necessary, reasonable and benefit the plan; and further
provided, that the plan administrator shall document all such expenses
item by item and, where necessary, hour by hour.
2.
Duties of chief administrative officer. Such actuarial reports shall
be prepared and filed under the supervision of the chief administrative
officer. The Chief Administrative Officer shall mean the person who
has primary responsibility for the execution of the administrative
affairs of the Borough of Sharpsburg or the designee of such person.
The chief administrative officer of the plan shall determine the financial
requirements of the plan on the basis of the most recent actuarial
report and shall determine the minimum obligation of the employer
with respect to funding the plan for any given plan year. The chief
administrative officer shall submit the financial requirements of
the plan and the minimum obligation of the employer to the Council
annually and shall certify the accuracy of such calculations and their
conformance with the Act.
3.
Benefit plan modifications. Prior to the adoption of any benefit
plan modification by the employer, the chief administrative officer
of the plan shall provide to the Council a cost estimate of the proposed
benefit plan modification. Such estimate shall be prepared by an approved
actuary, which estimate shall disclose to the Council the impact of
the proposed benefit plan modification on the future financial requirements
of the plan and the future minimum obligation of the employer with
respect to the plan.
[1]
Editor's Note: See 53 P.S. § 895.101 et seq.
1.
Amendment of the plan. The Council may amend this plan at any time
or from time to time by resolution executed in the name of the Council
under its municipal seal by officers duly authorized to execute such
instrument and delivered to the Council; provided, however:
[Amended 3-11-2008 by Ord. No. 08-01]
A.
That no amendment shall deprive any participant or any beneficiary
of a deceased participant of any of the benefits to which he is entitled
under this plan with respect to contributions previously made;
B.
That no amendment shall provide for the use of funds or assets held
under this plan other than for the benefit of employees, and no funds
contributed to this plan or assets of this plan shall, except as provided
in § 1-411.5, ever revert to or be used or enjoined by the
employer; and
C.
That no amendment to the Plan which provides for a benefit modification
shall be made unless the cost estimate described in § 1-410.3
has been prepared and presented to the Council in accordance with
the Act.
2.
Termination of the plan. The employer shall have the power to terminate
this plan in its entirety at any time by an instrument in writing
executed in the name of the employer if permitted under applicable
law.
3.
Automatic termination of contributions. Subject to the provisions
of the Act governing financially distressed municipalities, the liability
of the employer to make contributions to the pension fund shall automatically
terminate upon liquidation or dissolution of the employer, upon its
adjudication as a bankrupt or upon the making of a general assignment
for the benefit of its creditors.
4.
Distribution upon termination. In the event of the termination of
the plan, all amounts of vested benefits accrued by the affected participants
as of the date of such termination to the extent funded on such date
shall be nonforfeitable hereunder. In the event of termination of
the plan, the employer shall direct either: (a) that the plan administrator
continue to hold the vested accrued benefits of participants in the
pension fund in accordance with the provisions of the plan (other
than those provisions related to forfeitures) without regard to such
termination until all funds have been distributed in accordance with
the provisions; or (b) that the plan administrator immediately distribute
to each participant an amount equal to his vested accrued benefit
to the date. If there are insufficient assets in the pension fund
to provide for all vested accrued benefits as of the date of plan
termination, priority shall first be given to the distribution of
any amounts attributable to mandatory or voluntary employee contributions
before such assets are applied to the distribution of any vested benefits
attributable to other sources hereunder. All other assets attributable
to the terminated plan shall be distributed and disposed of in accordance
with the provisions of applicable law and the terms of any instrument
adopted by the employer which effects such termination.
5.
Residual assets. If all liabilities to vested participants and any
others entitled to receive a benefit under the terms of the plan have
been satisfied and there remain any residual assets in the pension
fund, such residual assets remaining shall be returned to the employer
insofar as such return does not contravene any provision of law, and
any remaining balance in excess of employer contributions shall be
returned to the commonwealth.
6.
Exclusive benefit rule. In the event of the discontinuance and termination
of the plan as provided herein, the employer shall dispose of the
pension fund in accordance with the terms of the plan and applicable
law; at no time prior to the satisfaction of all liabilities under
the plan shall any part of the corpus or income of the pension fund,
after deducting any administrative or other expenses properly chargeable
to the pension fund, be used for or diverted to purposes other than
for the exclusive benefit of the participants in the plan, their beneficiaries
or their estates.
1.
Plan not a contract of employment. No police officer of the employer
nor anyone else shall have any rights whatsoever against the employer
or the plan administrator as a result of this plan except those expressly
granted to the hereunder. Nothing herein shall be construed to give
any police officer the right to remain on the police force of the
employer.
2.
Masculine/feminine; singular/plural. For purposes of this plan, the
masculine shall be read for the feminine and the singular shall be
read for the plural, wherever the person or context shall plainly
so require.
3.
Construction of document. This plan may be executed and/or conformed
in any number of counterparts, each of which shall be deemed an original
and shall be construed and enforced according to the laws of the Commonwealth
of Pennsylvania, excepting such commonwealth's choice of law rules.
4.
Headings. The headings of sections are included solely for convenience
of reference, and if there be any conflict between such headings and
the text of the plan, the text shall control.
5.
Severability of provisions. In case any provisions of this plan shall
be held illegal or invalid for any reason, said illegality or invalidity
shall not affect the remaining parts of this plan, and the plan shall
be construed and enforced as if said illegal and invalid provisions
had never been inserted therein.
6.
Incapacity of participant. If any participant shall be physically
or mentally incapable of receiving or acknowledging receipt of any
payment of pension benefits hereunder, the plan administrator, upon
proof of a fully executed and notarized power of attorney or a court
order appointing a legal guardian that such participant is so incapacitated
and that another person or institution is maintaining him, may provide
for such payment of pension benefits hereunder to such person or institution
so maintaining him, and any such payments so made shall be deemed
for every purpose to have been made to such participant.
7.
Liability of officers of the plan administrator and/or employer.
Subject to the provisions of the Act and unless otherwise specifically
required by other applicable laws, no past, present or future police
officer of the employer shall be personally liable to any participant,
beneficiary or other person under any provision of the plan.
8.
Assets of the fund. Nothing contained herein shall be deemed to give
any participant or his beneficiary any interest in any specific property
of the pension fund or any right except to receive such distributions
as are expressly provided for under the plan.
9.
Pension fund for sole benefit of participants. The income and principal
of the pension fund are for the sole use and benefit of the participants
covered hereunder and, to the extent permitted by law, shall be free,
clear and discharged from and are not to be in any way liable for
debts, contracts or agreements now contracted or which may hereafter
be contracted, and from all claims and liabilities now or hereafter
incurred, by any participant or beneficiary.
[Adopted 4-8-2002 by Ord.
No. 02-3]
Sharpsburg Borough (hereinafter "Borough"), being a member municipality
of the Pennsylvania Municipal Retirement System (hereinafter "System"),
hereby elects to change its member benefits in that system as authorized
by the Pennsylvania Municipal Retirement Law,[1] as amended (hereinafter "the Law"), and does hereby agree
to be bound by all the requirements and provisions of said article
and the law, as the case may be, and to assume all obligations, financial
and otherwise, placed upon member municipalities by said amendment,
as the case may be. All references hereafter shall be based on benefits
negotiated between the Pennsylvania Municipal Retirement Board (hereinafter
"Board") and the Borough under the provisions of Article IV of the
Law.
[1]
Editor's Note: See 53 P.S. § 881.101 et seq.
Membership in the System shall be mandatory for all permanent,
municipal employees of the Borough. Membership for elected officials
and employees hired on a temporary or seasonal basis is prohibited,
as is membership for individuals paid only on a fee basis.
Credit for prior service for original members is granted for
each year or partial year thereof that the member was employed by
the Borough from original date of hire. Benefits provided to members
in the Sharpsburg Borough Municipal Employee Plan Agreement (hereinafter
"Agreement") dated April 8, 2002, shall accrue based on all credited
service granted and earned in accordance with this section.
Payment for any obligation established by the adoption of this
part and the agreement between the System and Borough shall be made
by the Borough in accordance with the Law and Act 205 of 1984, the
Municipal Pension Plan Funding Standard and Recovery Act.[1]
[1]
Editor's Note: See 53 P.S. § 895.101 et seq.
As part of this part, the Borough agrees that the System shall
provide the benefits set forth in the agreement between the Board
and Borough dated April 8, 2002. The passage and adoption of this
part by the Borough is an official acceptance of said agreement and
the financial obligations resulting from the administration of said
benefit package. The Borough hereby assumes all liability for any
unfundedness created or which may be created due to the acceptance
of the benefit structure outlined in the above-referenced agreement.
The Borough intends this part to be the complete authorization
of the Borough's amended plan and, therefore, specifically repeals
the previous agreement and Ordinance No. 491 of 1991, and substitutes
the amended agreement dated April 8, 2002, with an effective date
of January 1, 2002, in its place. A complete and true copy of said
agreement is attached hereto, and all the terms of which are incorporated
herein.[1]
[1]
Editor's Note: A copy of the agreement is on file in the Borough's
offices.
Duly certified copies of all ordinances, including this part
and the referenced agreement, shall be filed with the System of the
Commonwealth of Pennsylvania. Membership for the municipal employees
of the Borough in the System shall be effective the first day of October
1965, with the revised plan structure reflected in the agreement dated
April 8, 2002, effective the first day of January, 2002.
