[HISTORY: Adopted by the Borough Council of the Borough of
Souderton as indicated in article histories. Amendments noted where
applicable.]
GENERAL REFERENCES
Police Department — See Ch. 120.
[Adopted 11-6-1995 by Ord. No. 590 (Ch. 16, Art. II, of the 1972 Code;
amended in its entirety 1-4-2010 by Ord. No. 691]
A pension plan is hereby established for the Borough's
full-time, nonuniformed employees pursuant to and in compliance with
the Act of February 1, 1966, P.L. 1656, No. 581, as amended.[1] Such plan shall be under the direction of the Borough
Council of the Borough of Souderton and shall be applied under such
regulations as the Borough Council may prescribe. The effective date
of this article shall be January 1, 2010; however, the plan established
hereunder shall be deemed a continuation of the previous nonuniformed
pension plan, as maintained and administered by PMRS, for state aid
purposes.
[1]
Editor's Note: See the Borough Code, 8 Pa.C.S.A. § 101
et seq.
As used in this article, the following terms shall have the
meanings indicated:
The governing body of the Borough of Souderton acting in
the capacity of administrator of the Nonuniformed Pension Plan established
pursuant to this article.
The persons which may be appointed to serve in an advisory
capacity to the Borough Council in the administration of the plan.
The monies paid by the employer to the plan and/or the payroll deductions made monthly from the salaries of the participants and paid to the plan; except that "contributions" in § 106-4E shall mean total contributions paid by the participant and accumulated during the period of employment and participation in this plan.
The deferred retirement option plan created as an optional
form of benefit under the existing Souderton Borough Nonuniformed
Pension Plan.
[Added 12-5-2016 by Ord.
No. 730]
A member who is eligible for normal retirement and who has
elected to participate in the DROP program.
[Added 12-5-2016 by Ord.
No. 730]
A separate ledger account created to accumulate the DROP
pension benefit for a DROP participant.
[Added 12-5-2016 by Ord.
No. 730]
The Borough of Souderton.
The value of any participant's benefits which shall
accrue by virtue of that participant's service rendered subsequent
to the enactment of this article.
A full-time nonuniformed employee of Souderton Borough covered
by the plan.
[Added 12-5-2016 by Ord.
No. 730]
Every person duly appointed from time to time by the employer
as a full-time nonuniformed employee working not less than 35 hours
per week at a definite salary, subject to reasonable vacation and
sick leave, to be included in the plan upon date of hire.
The Souderton Borough Nonuniformed Pension Plan adopted pursuant
to Act of February 1, 1966, P.L. 1656, No. 581, as amended.
[Amended 12-5-2016 by Ord. No. 730]
The amount of compensation received by a participant in each
and every month, including base pay, overtime pay, longevity pay,
shift differential, and any other such increments. The term salary
shall include regular payments made for vacation time, sick time,
compensatory time, personal days and bereavement leave. The term "salary"
shall also include lump sum payments for any unused days for any of
the foregoing listed benefits which were earned during the highest
36 months of employment, as well as any severance payments, made at
the time of termination or retirement, provided that participant contributions
are deducted from any such payments at the rate in effect at that
time.
Total aggregate service, not necessarily continuous, with
the employer.
The cessation of service by the participant for any reason,
including disability, resignation, and employee termination. Death
shall not be considered a termination within the meaning of this article.
Voluntary leaves of absence without pay shall not be considered a
termination for the purposes of this article; but no period of such
leave shall be computed in the total service for pension benefit purposes.
Leaves of absence with pay shall not be considered a termination within
the meaning of this article (provided that the municipality is able
to certify to the Department of the Auditor General that such participant
on a leave of absence with pay is within the definition of a participant
as set forth herein); but such leaves may be computed in the total
service for pension benefit purposes.
The present value of any participant's benefits accrued
prior to the enactment of this article by virtue of that participant's
prior service.
A.
The Borough Council shall administer the plan by such regulations
as shall from time to time be necessary for the effective maintenance
of the plan, provided that no regulation shall be contrary to the
statutes of the Commonwealth of Pennsylvania and/or applicable federal
regulations.
B.
The Borough Council shall appoint a Committee which shall act as
an advisory body to the Borough Council in the administration of the
plan according to the regulations established pursuant to this article.
C.
The Committee shall consist of the Borough Manager, one or more participants
in the plan, and at least one Borough Council member.
(1)
All such persons so designated shall serve at the pleasure of the
Borough Council. Any member may resign upon written notice to the
Borough Council and the Committee. Any vacancies in the Committee
arising from resignation, death, or removal shall be filled by the
Borough Council by the procedure set out herein for the member of
the Committee whose resignation, death or removal has created the
vacancy.
(2)
The Committee shall meet no less than annually, and shall serve without
compensation for their services.
D.
The Committee shall act by such procedure as the Committee shall
establish, provided that all decisions shall be by majority vote.
The Committee may authorize one of its members to execute any document
or documents on behalf of the Committee, may adopt bylaws and regulations
as it deems necessary for the conduct of its affairs, and may appoint
such accountants, counsel, specialists or such other personnel as
it may deem desirable for the proper administration of the plan, provided
that all such executions of documents, adoptions of bylaws and regulations,
and appointments shall be approved by the Borough Council.
E.
The Committee shall keep a record of all its proceedings and acts
which shall relate to the plan, and shall keep all such books of accounts,
records and other data as shall be necessary for the proper administration
of the plan. All actions of the Committee shall be communicated to
the Borough Council.
F.
All such reasonable expenses incurred in the administration of the
plan, including, but not limited to, fees for the services of specialists
including actuaries, accountants, consultants, and legal counsel shall
be approved by the Borough Council and all may be paid from the plan,
provided that no such payment shall be contrary to the statutes of
the Commonwealth of Pennsylvania.
G.
No member of the Borough Council or the Committee established pursuant
to this article shall incur any liability for any action or failure
to act, excepting only liability for its own gross negligence or willful
misconduct. The employer shall indemnify each member of the Borough
Council and the Committee against any and all claims, loss, damages,
expense, and liability arising from any action or failure to act,
except for such that is the result of gross negligence or willful
misconduct of such member.
A.
Eligibility for normal retirement.
[Amended 12-5-2016 by Ord. No. 730]
(1)
A participant who joined the plan prior to January 1, 1980, may retire
from active employment on the first day of the month following the
attainment of age 60, provided that the participant has completed
10 or more years of service with the employer.
(2)
A participant who joined the plan on or after January 1, 1980, but
before December 31, 2016, may retire from active employment on the
first day of the month following the attainment of age 62, provided
that the participant has completed 10 or more years of service with
the employer.
(3)
A participant who joined the plan on or after December 31, 2016,
may retire from active employment on the first day of the month following
the attainment of age 62, provided that the participant has completed
25 or more years of service with the employer.
B.
Normal retirement benefit.
(1)
A participant who shall complete the age and service requirements
as set forth in this article shall receive a pension for life in the
amount equal to 2% for each full year of service, times the participant's
average monthly salary over the participant's highest 36 months
of employment. The maximum benefit shall be 70% of such participant's
average monthly salary, so calculated.
(2)
Subject further to those limitations imposed by the statutes of the
Commonwealth of Pennsylvania, no offset or reduction from the benefit
here provided for shall be made for any social security retirement
benefits, workmen's compensation, or other benefits to which
the participant is also entitled.
(3)
The benefit herein provided shall be payable solely from the assets
of the plan.
C.
Early retirement benefit.
[Amended 12-5-2016 by Ord. No. 730]
(1)
A participant who joined the plan prior to December 31, 2016, and
who has been involuntarily terminated after eight years of credited
service or who has separated voluntarily after 20 years of credited
service may retire early. Benefits will be actuarially reduced for
each year or partial year thereof that early retirement takes place
prior to age 60 for those participants who joined the plan prior to
January 1, 1980, or age 62 for those participants who joined the plan
on or after January 1, 1980, but prior to December 31, 2016.
(2)
A participant who joined the plan on or after December 31, 2016,
and has been involuntarily terminated after eight years of credited
service or who has separated voluntarily after 25 years of credited
service may retire early. Benefits will be actuarially reduced for
each year or partial year thereof that early retirement takes place
prior to age 62.
D.
Disability benefit.
(1)
A participant who has 10 or more years of credited service may, upon
application or on application of one acting in the participant's
behalf, or upon application of a responsible official of the municipality,
be retired by the Borough on a disability allowance if the physician
designated by the Borough, after medical examination of the participant
shall certify to the Borough that the individual is unable to engage
in any gainful employment and that said member ought to be retired.
When the disability of a member is determined to be service-connected,
no minimum period of service shall be required for eligibility.
(2)
A disability annuity payable from the total disability reserve account
which, together with the municipal annuity and the participant's
annuity, if any, shall be sufficient to produce a retirement allowance
of 80% of the participant's final salary. Where the disability
of the participant is determined to be service-connected, the disability
allowance shall equal 80% of the participant's final salary.
The disability annuity shall be reduced by the amount of any payments
for which the participant shall be eligible under the Act of June
2, 1915 (P.L. 736, No. 338), known as "The Pennsylvania Workmen's
Compensation Act" or the Act of June 21, 1939 (P.L. 566, No. 284),
known as "The Pennsylvania Occupational Disease Act."[1]
[1]
Editor's Note: See 77 P.S.§ 1 et seq. and 77 P.S.
§ 1201 et seq.
(3)
Any participant with eight or more years of credited service entitled to retire for disability may, in lieu of such retirement, elect to retire not voluntarily under the provisions of Subsection C.
(4)
Should a disability annuitant die before the total disability retirement
allowance received equals the amount of the participant's accumulated
deductions at the time of disability retirement, the Borough shall
pay to the named beneficiary (if living, or if the named beneficiary
predeceased the annuitant, or no beneficiary was named, then to the
annuitant's estate) an amount equal to the difference between
such total retirement allowance received and the annuitant's
accumulated deductions. 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.
E.
Death benefit.
(1)
A participant who is entitled to a superannuation retirement allowance because of meeting the superannuation retirement requirements found in Subsection A of this section or a participant who is entitled to a voluntary early retirement allowance because of completing 20 years of credited service may file a written application for retirement requesting that such retirement become effective at the time of death.
(2)
When applying for retirement, the participant may elect one of the options provided in Subsection H and nominate a beneficiary. The application shall be held by the Borough until:
(3)
If a participant entitled to a retirement allowance dies while in
municipal service, benefits become effective as if the participant
had retired on the day immediately preceding death. The beneficiary
receives the annuity option elected before the participant's
death. If an option was not filed with the Borough, it shall be considered
that the participant elected Option 1 as was provided by PMRS. In
such event, payment under Option 1 shall be made to the beneficiary
designated in the nomination of beneficiary form on file with the
Borough.
F.
Vested benefit.
(1)
A vested deferred monthly benefit shall be provided for any participant
whose termination date occurs prior to the participant's normal
retirement date, provided that the participant shall have completed
a minimum of 10 years of service with the employer and shall have
notified the employer of such intention to vest within 90 days of
the participant's date of termination. This benefit shall be
computed in the same manner as set forth in this article.
(2)
Such vested deferred monthly benefit shall be paid to the participant
upon attainment of that participant's normal retirement age as
set forth in this article.
(3)
The surviving spouse of a participant who dies before his or her
pension has vested shall be entitled to receive repayment of all money
which the participant invested in the pension fund, including the
participant's contributions and any excess interest previously
awarded to the participant, plus interest or other increases in value
of the participant's investment in the pension fund, unless the
participant has designated another beneficiary for this purpose.
G.
Termination.
(1)
If for any reason a participant shall terminate service with the
employer prior to becoming vested, that participant shall be entitled
to a refund of that participant's contributions plus interest
at a rate of 6% per annum. Such interest shall be uniform for all
participants.
(2)
If a participant shall subsequently return to service and return
to the plan the contributions plus interest which were refunded to
the participant upon termination, the participant shall be entitled
to credit for the prior years of service to the extent of the return
of contributions.
H.
Actuarial equivalent benefits.
(1)
Options on superannuation, early retirement or vesting. At the time
a participant elects to receive a retirement benefit allowance, the
benefit may be payable throughout the participant's life, in
which case the benefit is known as a "single life annuity." The participant
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. If the participant dies before receiving in payments
the present value of the retirement allowance as it was at the time
of retirement, the balance, if less than $5,000, shall be paid in
a lump sum to the designated beneficiary if living, or if the named
beneficiary predeceased the participant or if no beneficiary was named,
then to the participant's estate. If the balance is $5,000 or
more, the beneficiary may elect, by application duly acknowledged
and filed with the Borough to receive payment of such balance according
to any one of the following provisions:
(b)
Option 2. Upon the annuitant's death, the retirement allowance
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 retirement
allowance shall be continued throughout the life of and paid to the
survivor annuitant, if then living.
(d)
Option 4. A participant may elect to receive, in one payment
at the time of retirement, the full amount of the participant's
accumulated deductions (not to include excess investment monies) standing
to his credit in the participant's account. In so electing this
option, the participant forfeits the portion of the annuity paid for
from the accumulated contributions, but shall continue to be entitled
to an annuity comprised of the municipal contribution and any excess
investment monies so credited to the account. Any participant electing
this option shall be entitled to receive his remaining annuity calculated
in accordance with any of the other options provided for in this section.
(2)
Should a participant who has elected a single life annuity die before
receiving in annuity payments the full amount of the total accumulated
deductions standing to their credit in the participant account on
the effective date of retirement, the balance shall be paid to the
designated beneficiary.
I.
Nonalienation of benefits and vesting.
(1)
No benefit under the plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge.
Nor shall any such benefits be in any manner liable for or subject
to garnishment, attachment, execution, levy or other legal process.
(2)
Further, all benefits granted herein shall vest in the participant
upon completion of the requirements for eligibility, and that participant's
benefits shall continue in the amount and in the form in which that
participant first became entitled to them.
J.
Cost-of-living adjustment.
(1)
Effective January 1, 2010, a cost-of-living adjustment shall be provided
to all retirees and/or survivors who are receiving benefits as of
December 31, 2009. The amount of the adjustment shall be equal to
3%.
(2)
Effective January 1, 2011, a cost-of-living adjustment shall be provided
to all retirees and/or survivors who are receiving benefits as of
December 31, 2010. The amount of the adjustment shall be equal to
3%.
(3)
Effective January 1, 2012, and thereafter, annual cost-of-living
adjustment as determined by Borough Council shall be provided to all
retirees and/or survivors who are receiving benefits as of the end
of the preceding calendar year.
K.
DROP provisions.
[Added 12-5-2016 by Ord.
No. 730]
(1)
Eligibility. Effective December 31, 2016, members of the Souderton Borough Nonuniformed Pension Plan who have not yet retired prior to the implementation of the DROP program, may enter into the DROP on the first day of any month following the attainment of eligibility for normal retirement, pursuant to § 106-4, Retirement requirements and benefits, as revised.
(2)
Written election.
(a)
An eligible member of the plan electing to participate in the
DROP program must complete and execute a "DROP Election Form" prepared
by Souderton Borough and/or the pension plan administrator, which
shall evidence the member's participation in the DROP program,
and document the participant's rights and obligations under the
DROP. The form must be signed by the member and the chief administrative
officer of the plan and submitted to Souderton Borough, Montgomery
County, Pennsylvania, at least 30 days prior to the member's
effective date of retirement. The DROP Election Form shall include
an irrevocable notice to Souderton Borough by the member that the
member shall terminate from employment with Souderton Borough effective
on a specific date not less than one year or more than three years
from the effective date of the DROP election. In addition, all retirement
documents required by the Souderton Borough Nonuniformed Pension Plan
Administrator must be filed and presented to the Souderton Borough
Council for approval of retirement and commencement of the monthly
pension benefit. Once the retirement application has been approved
by Souderton Borough, it shall become irrevocable.
(b)
After a member enters the DROP program, contributions to the
pension plan by the participant and the Borough will cease, and the
amount of monthly benefits will be frozen except for any applicable
cost-of-living adjustment (COLA) increases awarded to all pension
recipients.
(c)
Members shall be advised to consult a tax advisor, of their
choice, prior to considering the DROP program, as there may be serious
tax implications and/or consequences to participating in the DROP
program.
(3)
Limitation on pension accrual. After the effective date of the DROP
election, the participant shall no longer earn or accrue additional
years of continuous service for pension purposes.
(4)
Benefit calculation. For all plan purposes, continuous service of
a member participating in the DROP program shall remain as it existed
on the effective date of commencement of participation in the DROP
program. Service thereafter shall not be recognized or used for the
calculation or determination of any benefits payable by the Souderton
Borough Nonuniformed Pension Plan. The average monthly pay of the
member for pension calculation purposes shall remain as it existed
on the effective date of commencement of participation in the DROP
program. Earnings or increases in earnings thereafter shall not be
recognized or used for the calculation or determination of any benefits
payable by the plan. The pension benefit payable to the participants
shall increase only as a result of cost-of-living adjustments (COLAs),
which are effective on or after the date of the member's participation
in the DROP program.
(5)
Payments to DROP participant account. The monthly retirement benefits
that would have been payable had the member elected to cease employment
and receive a normal retirement benefit shall, upon the member commencing
participation in the DROP program, be credited on the first day of
each month into a separate ledger account established by the plan
administrator to track and accumulate the participant's monthly
pension benefits. This account shall be designated the DROP participant
account. Interest shall be compounded and credited monthly at an annual
rate of 2%. All interest credited to the DROP participant account
shall be included in the final cash settlement.
(6)
Early termination. A participant may withdraw from the DROP program
at any time and no penalty shall be imposed for early termination
of DROP participation. However, the participant shall not be permitted
to make any withdrawals from the DROP participant account until DROP
participation has ended.
(7)
Payout. Upon the termination date set forth in the DROP Election
Form or on such date as the participant withdraws or is terminated
from the DROP program, if earlier, the normal retirement benefits
payable to the participant or the participant's beneficiary,
if applicable, shall be paid directly to the participant or beneficiary
and shall no longer be credited to the DROP participant account. Within
45 days following the actual termination of a participant's employment
with Souderton Borough, the accumulated balance in the DROP participant
account shall be paid to the participant in a single lump-sum payment.
Such payment shall be made either in cash, subject to any federal
withholding as may be required, or as a direct rollover to an Individual
retirement account (IRA). If the participant or beneficiary fails
to elect a method of payment within 60 days after the participant's
termination date, the retirement system shall pay the balance as a
lump sum.
(8)
Disability during DROP. A participant on temporary disability can
continue to participate in the DROP program and retain the ability
to draw from the DROP participant account. However, notwithstanding
any other provision in this subsection, if a participant is disabled
and has not returned to work as of the date of the required resignation,
then such resignation shall take precedence over all other provisions
herein, and said participant shall be required to resign. If a DROP
participant becomes eligible for a disability pension benefit due
to a permanent, service-related disability and terminates employment,
the monthly normal retirement benefit shall cease.
(9)
Death. If a participant dies before the DROP participant account
balance is paid, the participant's beneficiary shall have the same
rights as the participant to withdraw the DROP participant account
balance. The monthly benefit credited to the participant's DROP
participant account during the month of the participant's death
shall be the final monthly benefit for DROP participation.
(10)
Amendment. Any amendments to this subsection shall be consistent
with the provisions covering deferred retirement option plans set
forth in any applicable collective bargaining agreement or state or
federal law, and shall be binding upon all future participants and
upon all participants who have balances in their DROP participant
accounts.
A.
Contributions of the employer. Contributions to the plan by the employer
shall be in an amount determined by the annual minimum municipal obligation
(MMO) calculation, prepared in accordance with Act 205 of 1984, which
is certified to the governing body of the Borough by September 30
and included in the Borough budget for the following year.
B.
Contributions of participants. Participants are currently required
to contribute 5% of their total compensation to the plan. Any future
changes in the contribution requirement for participants may be enacted
by an ordinance or resolution.
C.
Allocation of commonwealth funds. Any payments made by the State
Treasurer to the employer from the monies received from the taxes
paid on the premiums of foreign casualty insurance companies for purposes
of retirement or disability benefit pensions for municipal employees
shall be used as follows:
(1)
To reduce the unfunded liability, or after such liability is funded;
(2)
To apply against the annual obligation of the employer for future
service cost, or to the extent that the payments may be in excess
of such obligations;
(3)
To reduce or eliminate the contributions paid by the participants.
D.
Allocation of assets of existing pension plans. Any assets of any
existing pension plans for the full-time, nonuniformed employees of
the Borough are hereby transferred to the plan established pursuant
to this article, and shall be applied against the unfunded liability.
E.
Gifts, bequests, and grants. All other monies and property received
by the plan, including gifts, bequests, devices, and grants shall
be applied equally against the participant and the employer portions
of the future service cost unless otherwise specifically provided.
A.
Credit for military service. Any participant in the plan with at
least six months of service with the employer who thereafter shall
enter the military service of the United States of America shall have
credited to the participant's employment record for pension benefit
purposes all of the time spent by the participant in such military
service, provided that the participant returns to service with the
employer within six months after said participant's separation
from such military service.
B.
Purchase of nonintervening military service.
[Amended 12-5-2016 by Ord. No. 730]
(1)
A service credit shall be provided for each year of military service
or fraction thereof, not to exceed five years, to any nonuniformed
pension plan participant who was not employed by the Borough of Souderton
prior to such military service. The amount due for the purchase of
credit for military service, other than intervening military service,
shall be computed by applying the average normal cost rate for the
Souderton Borough Nonuniformed Pension Plan, as certified by the Act
205 actuarial valuation reports filed with the Commonwealth of Pennsylvania,
but not to exceed 10%, to the participant's average annual rate
of compensation over the first three years of municipal service and
multiplying the result by the number of years and fractional part
of a year of creditable nonintervening military service being purchased
together with interest at the rate of 4 3/4% compounded annually
from the date of initial entry of municipal service to the date of
payment.
(2)
Any Nonuniformed Pension Plan participant shall be eligible to receive
service credit for intervening or nonintervening military service
as provided herein, provided that the participant is not entitled
to receive, eligible to receive now or in the future, or is receiving
retirement benefits for such service under a retirement system administered
and wholly or partially paid for by any other governmental agency,
with the exception of a participant eligible to receive or receiving
military retirement pay earned by a combination of active duty and
non-active duty with a reserve or national guard component of the
armed forces which retirement pay is payable only upon the attainment
of a specified age and period of service under 10 U.S.C. Ch. 67 (relating
to retired pay for nonregular services).
A.
Matters or procedure not covered in this agreement shall be as set
forth in Act 205 of 1984, as may, from time to time, be amended.
B.
Should any change or mistake in records result in any participant,
beneficiary or survivor annuitant receiving from the plan more or
less than the individual would have been entitled to receive had the
records been correct, regardless of the intentional or unintentional
nature of the error and upon the discovery of such error, the plan
will 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 the individual was correctly
entitled shall be paid.
Upon termination of the plan, the assets shall be distributed
as follows:
A.
Sufficient funds shall be maintained to provide the pension benefits prescribed in § 106-4 for all participants who have retired prior to the termination of the plan, or who are eligible to retire at the time of the termination of the plan.
B.
Sufficient funds shall be maintained to provide vested pension benefits prescribed in § 106-4 for all participants who are eligible for such benefits.
C.
Any funds representing contributions from the remaining participants
shall be returned to such participants with interest at a rate of
6% per annum.
D.
Of the remaining funds, those which can be identified as contributions
of the employer, or contributions other than those identified as unused
commonwealth allocations, shall be distributed as the Borough Council
sees fit, provided that such distribution is made on a uniform basis.
A.
Neither the establishment of the plan hereby created, nor any modification
thereof, nor the creation of any fund or account, nor the payment
of any benefits, shall be construed as giving to any participant or
other person any legal or equitable right against the employer, or
any officer or employee thereof, or the Borough Council except as
herein provided.
B.
Under no circumstance shall the plan hereby created constitute a
contract for continuing employment for any participant or in any manner
obligate the employer to continue or to discontinue the services of
an employee.
C.
This plan has been established and shall be maintained by the employer
in accordance with the laws of the Commonwealth of Pennsylvania. The
plan shall continue for such period as may be required by such laws,
provided that the employer may, by its own action, discontinue this
plan should such laws provide, and the employer reserves the right
to take such action in its sole and absolute discretion. Upon termination,
the employer shall have no liability hereunder other than that imposed
by law.
All investments by the Borough Council of the assets of this
plan shall comply with any applicable state statutes, rules and regulations
with respect to municipal investments for nonuniformed pension funds
and with such regulations as the Borough Council shall establish for
the purpose of investing such funds.
The Borough Council reserves the right to amend, at any time in whole or in part, any or all of the provisions of the plan, provided that no such amendment shall authorize or permit any part of the plan to be used or diverted to purposes other than for the exclusive benefit of the participants, their beneficiaries, or their estates. Nor shall any amendment divest a participant of benefits vested by the provisions of § 106-4. All such amendments shall comply with the applicable statutes of the Commonwealth of Pennsylvania.
A.
This plan shall be constructed according to the laws of the Commonwealth
of Pennsylvania, and all provisions hereof shall be administered according
to the laws of such Commonwealth.
B.
Wherever any words are used herein in the masculine gender, they
shall be construed as though they were also used in the feminine gender
in all cases where they would so apply; and wherever any words used
herein are in the singular form, they shall be construed as though
they were also used in the plural form in all cases where they would
so apply.
C.
Headings of sections and paragraphs of this instrument are inserted
for convenience of reference. They constitute no part of this plan
and are not to be considered in the construction thereof.
The provisions of this article shall be severable, and if any
article, paragraph, clause, sentence, or words of this article hereby
adopted are declared for any reason invalid, unlawful, or unconstitutional,
it is the intent of the Borough that it would have passed all other
articles, paragraphs, clauses, sentences, or words of this article
independent of the elimination herefrom of any such portion as may
be declared invalid, unlawful, or unconstitutional.
This article repeals all other ordinances and/or resolutions
prior to the date of its enactment which documents established, maintained,
governed, or regulated a pension plan for the full-time, nonuniformed
employees of the Borough of Souderton, it being further provided that
the provisions of this article are intended to be a continuation of
those existing in Ordinance No. 590, as amended, to the extent they
are consistent herewith.
[Adopted 5-2-2005 by Ord.
No. 655; amended in its entirety 1-4-2010 by Ord. No. 690]
A pension plan is hereby established for the full-time police
officers pursuant to and in compliance with the Act of May 29, 1956,
P.L. (1955) 1804, No. 600, as amended.[1] Such plan shall be under the direction of the Borough
Council of the Borough of Souderton and shall be applied under such
regulations as the Borough Council may prescribe. The effective date
of this article shall be January 1, 2010; however, the plan established
hereunder shall be deemed a continuation of the previous Police Pension
Plan, as maintained and administered by PMRS, for state aid purposes.
[1]
Editor's Note: See 53 P.S. § 761 et seq.
As used in this article, the following terms shall have the
meanings indicated:
The governing body of the Borough of Souderton acting in
the capacity of administrator of the Police Pension Plan established
pursuant to this article.
The persons which may be appointed to serve in an advisory
capacity to the Borough Council in the administration of the plan.
The monies paid by the employer to the plan and/or the payroll deductions made monthly from the salaries of the participants and paid to the plan; except that "contributions" in § 106-18G shall mean total contributions paid by the participant and accumulated during the period of employment and participation in this plan.
The Borough of Souderton.
The value of any participant's benefits which shall
accrue by virtue of that participant's service rendered subsequent
to the enactment of this article.
Every person duly appointed from time to time by the employer
as a full-time police officer working not less than 40 hours per week
at a definite salary, subject to reasonable vacation and sick leave,
to be included in the plan upon date of hire.
The Police Pension Plan established pursuant to this article
as a continuation of the Police Pension Plan previously maintained
and administered by PMRS.
The amount of compensation received by a participant in each
and every month, including base pay, overtime pay, longevity pay,
shift differential, and any other such increments. The term "salary"
shall include regular payments made for vacation time, sick time,
compensatory time, personal days and bereavement leave. The term "salary"
shall also include lump sum payments for any unused days for any of
the foregoing listed benefits which were earned during the final 36
months of employment, as well as any severance payments, made at the
time of termination or retirement, provided that participant contributions
are deducted from any such payments at the rate in effect at that
time.
Total aggregate service, not necessarily continuous, with
the employer.
The cessation of service by the participant for any reason,
including disability, resignation, and employee termination. Death
shall not be considered a termination within the meaning of this article.
Voluntary leaves of absence without pay shall not be considered a
termination for the purposes of this article; but no period of such
leave shall be computed in the total service for pension benefit purposes.
Leaves of absence with pay shall not be considered a termination within
the meaning of this article (provided that the municipality is able
to certify to the Department of the Auditor General that such participant
on a leave of absence with pay is within the definition of a participant
as set forth herein); but such leaves may be computed in the total
service for pension benefit purposes.
The present value of any participant's benefits accrued
prior to the enactment of this article by virtue of that participant's
prior service.
A.
The Borough Council shall administer the plan by such regulations
as shall from time to time be necessary for the effective maintenance
of the plan, provided that no regulation shall be contrary to the
statutes of the Commonwealth of Pennsylvania and/or applicable federal
regulations.
B.
The Borough Council shall appoint a Committee which shall act as
an advisory body to the Borough Council in the administration of the
plan according to the regulations established pursuant to this article.
C.
The Committee shall consist of the Borough Manager, one or more participants
in the plan, and at least one Borough Council member.
(1)
All persons so designated shall serve at the pleasure of the Borough
Council. Any member may resign upon written notice to the Borough
Council and the Committee. Any vacancies in the Committee arising
from resignation, death, or removal shall be filled by the Borough
Council.
(2)
The Committee shall meet no less than annually, and shall serve without
compensation for their services.
D.
The Committee shall act by such procedure as the Committee shall
establish, provided that all decisions shall be by majority vote.
The Committee may authorize one of its members to execute any document
or documents on behalf of the Committee, may adopt bylaws and regulations
as it deems necessary for the conduct of its affairs, and may appoint
such accountants, counsel, specialists or such other personnel as
it may deem desirable for the proper administration of the plan, provided
that all such executions of documents, adoptions of bylaws and regulations,
and appointments shall be approved by the Borough Council.
E.
The Committee shall keep a record of all its proceedings and acts
which shall relate to the plan, and shall keep all such books of accounts,
records and other data as shall be necessary for the proper administration
of the plan. All actions of the Committee shall be communicated to
the Borough Council.
F.
All such reasonable expenses incurred in the administration of the
plan, including, but not limited to, fees for the services of specialists
including actuaries, accountants, consultants, and legal counsel shall
be approved by the Borough Council and all may be paid from the plan,
provided that no such payment shall be contrary to the statutes of
the Commonwealth of Pennsylvania.
G.
No member of the Borough Council or the Committee established pursuant
to this article shall incur any liability for any action or failure
to act, excepting only liability for its own gross negligence or willful
misconduct. The employer shall indemnify each member of the Borough
Council and the Committee against any and all claims, loss, damages,
expense, and liability arising from any action or failure to act,
except for such that is the result of gross negligence or willful
misconduct of such member.
A.
Eligibility for normal retirement.
(1)
For participants hired prior to January 1, 2010, a participant in
the plan may retire from active employment on the first day of the
month following the attainment of age 50, provided that the participant
has completed at least 25 or more years of service with the employer.
(2)
For participants hired on or after January 1, 2010, a participant
in the plan may retire from active employment on the first day of
the month following the attainment of age 50, provided that the participant
has completed at least 25 or more years of service with the employer.
B.
Normal retirement benefit.
(1)
For participants hired prior to January 1, 2010, a participant who
shall complete the age and service requirements as set forth in this
article shall receive a pension for life in the amount equal to 2%
of the participant's average monthly salary over the last 36
months of employment multiplied by all years of credited service,
not to exceed 50% of the participant's final average salary.
In addition to this basic benefit, a participant shall also be entitled
to partially or completely withdraw the accumulated value of the participant's
excess interest account carried over from PMRS and updated with applicable
interest and/or have the then current value of that account converted
into an additional monthly annuity amount to be added to the basic
benefit in accordance with the procedure that PMRS would have applied
to such excess interest.
(2)
For participants hired on or after January 1, 2010, a participant
who shall complete the age and service requirements as set forth in
this article shall receive a pension for life in the amount equal
to 50% of the participant's final monthly average salary over
the participant's last 36 months of employment. This benefit
shall be strictly governed by Act 600, and no excess interest account
shall exist or be created for this group of participants.
(3)
Subject further to those limitations imposed by the statutes of the
Commonwealth of Pennsylvania, no offset or reduction from the benefit
here provided for shall be made for any social security retirement
benefits, workmen's compensation, or other benefits to which
the participant is also entitled.
(4)
The benefit herein provided shall be payable solely from the assets
of the plan.
C.
Early retirement benefit.
(1)
For participants hired prior to January 1, 2010, a participant who
has been involuntarily terminated after eight years of credited service
or who has separated voluntarily after 24 years of credited service
may retire early. Benefits will be actuarially reduced for each year
or partial year thereof that early retirement takes place prior to
age 50.
(2)
Any participant who has at least 20 years of credited service but
less than 25 years of credited service may also retire early. The
benefits for a participant meeting this condition will be actuarially
reduced for each year or partial year thereof that early retirement
takes place prior to the date on which the participant would have
earned 25 years of credited service and would have attained age 50.
D.
Length of service increment benefit. In addition to the normal retirement benefit provided for in § 106-18B of this article and the disability benefit provided for in § 106-18E of this article, and subject to those limitations imposed by the statutes of the Commonwealth of Pennsylvania, participants shall receive an additional $100 per month for each completed year of service in excess of 25 years up to a maximum of $500 per month after 30 years of service.
E.
Disability benefit.
(1)
In the event of the participant's total and permanent disability
resulting from service-related injuries, such participant may become
eligible for a monthly disability pension. Such disability pension
shall commence when the participant has been declared totally and
permanently disabled and unable to perform police work. A participant
shall not be entitled to any disability benefit from this plan for
a disability resulting from an injury deemed to be non-service-related.
(2)
Total and permanent disability shall mean a physical or mental condition
of a participant which renders the participant unable to perform police
work. The Borough Council shall designate a physician to represent
and certify to the Borough Council such disability as total, permanent,
and service-related.
(3)
Any participant who suffers a permanent injury incurred in service
shall receive a pension calculated at a rate of 50% of the participant's
salary at the time the disability was incurred, provided that any
participant who receives benefits for the same injuries under the
Social Security Act (49 Stat. 620, 42 U.S.C. § 301 et seq.)
shall have his or her disability benefit offset or reduced by the
amount of such benefit.
F.
Vested benefit.
(1)
A vested deferred monthly benefit shall be provided for any participant whose termination date occurs prior to the participant's normal retirement date, provided that the participant shall have completed a minimum of 12 years of service with the employer and shall have notified the employer in writing of such intention to vest within 90 days of the participant's date of termination. The amount of the vested deferred monthly benefit shall be determined in accordance with the provisions of § 106-18B.
(2)
Such vested deferred monthly benefit shall be paid to the participant
upon attainment of that participant's normal retirement age as
set forth in this article.
(3)
The surviving spouse of a member of the police force who dies before
his or her pension has vested, 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 the member of the police force shall be entitled
to receive repayment of all money which the member invested in the
pension fund, including the participant's contributions and any
excess interest previously awarded to the participant, plus interest
or other increases in value of the member's investment in the
pension fund, unless the member has designated another beneficiary
for this purpose.
G.
Termination.
(1)
If for any reason a participant shall terminate service with the
employer prior to becoming vested, that participant shall be entitled
to a refund of that participant's contributions plus interest
at a rate of 6% per annum. Such interest shall be uniform for all
participants.
(2)
If a participant shall subsequently return to service and return
to the plan the contributions plus interest which were refunded to
the participant upon termination, the participant shall be entitled
to credit for the prior years of service to the extent of the return
of contributions.
(3)
Nothing in this article shall be construed to allow credit for service not actually given to the employer, except as specifically provided for in § 106-20.[1]
[1]
Editor's Note: Original § 4.8, Killed-in-service
benefit, which immediately followed this subsection, was repealed
7-11-2016 by Ord. No. 725.
H.
Widows' and children's benefit. The surviving spouse of
a participant of the police force or a participant of the police force
who retires on pension who dies, 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, of a participant of the police force or a participant
of the police force who retires on pension who dies, shall be entitled
to receive a pension equal to the pension which such participant was
receiving, or would have been eligible to receive, or would have been
receiving had he or she been retired at the time of death.
I.
Nonalienation of benefits and vesting.
(1)
No benefit under the plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge.
Nor shall any such benefits be in any manner liable for or subject
to garnishment, attachment, execution, levy or other legal process.
(2)
Further, all benefits granted herein shall vest in the participant
upon completion of the requirements for eligibility, and that participant's
benefits shall continue in the amount and in the form in which that
participant first became entitled to them.
J.
Cost-of-living adjustment. An annual cost-of-living adjustment shall
be provided to a retired participant effective the first January following
at least one year from the initial date of retirement. The amount
of such increase is subject to the limitations as noted hereinafter:
(1)
Such increment shall equal the percentage increase in the appropriate
consumer price index as promulgated by the Bureau of Labor Statistics,
U.S. Department of Labor, from the month in which the participant
last worked.
(2)
In no case may the participant's total pension benefits exceed
75% of the retired participant's salary for computing retirement
benefits.
(3)
The retired participant's total cost-of-living adjustments shall
not exceed 30% of the retiree's original pension benefit.
A.
Contributions of the employer. Contributions to the plan by the employer
shall be in an amount determined by the annual minimum municipal obligation
(MMO) calculation, prepared in accordance with Act 205 of 1984, which
is certified to the governing body of the Borough by September 30
and included in the Borough budget for the following year.
B.
Contributions of participants.
(1)
Contributions to the plan by the participants shall be at the rate
of 5% of gross wages.
(2)
The Borough Council of the Borough of Souderton may, on an annual
basis, by ordinance or resolution, reduce or eliminate payments into
the fund by participants without the necessity of conducting an actuarial
study. However, no such reduction or elimination of contributions
by the participant shall result in increasing the liability of the
employer to the plan.
C.
Allocation of commonwealth funds. Any payments made by the State
Treasurer to the employer from the monies received from the taxes
paid on the premiums of foreign casualty insurance companies for purposes
of retirement or disability benefit pensions for municipal employees
shall be used as follows:
(1)
To reduce the unfunded liability, or after such liability is funded;
(2)
To apply against the annual obligation of the employer for future
service cost, or to the extent that the payments may be in excess
of such obligations;
(3)
To reduce or eliminate the contributions paid by the participants.
D.
Allocation of assets of existing pension plans. Any assets of any
existing pension plans for the police officers of the Borough are
hereby transferred to the plan established pursuant to this article,
and shall be applied against the unfunded liability.
E.
Gifts, bequests, and grants. All other monies and property received
by the plan, including gifts, bequests, devices, and grants shall
be applied equally against the participant and the employer portions
of the future service cost unless otherwise specifically provided.
A.
Credit for military service. Any participant in the plan with at
least six months of service with the employer who thereafter shall
enter the military service of the United States of America shall have
credited to the participant's employment record for pension benefit
purposes all of the time spent by the participant in such military
service, provided that the participant returns to service with the
employer within six months after said participant's separation
from such military service.
B.
Purchase of nonintervening military service.
(1)
A service credit shall be provided for each year of military service
or fraction thereof, not to exceed five years, to any participant
who was not employed by the Borough of Souderton prior to such military
service. The amount due for the purchase of credit for military service,
other than intervening military service, shall be computed by applying
the average normal cost rate for Borough and township police pension
plans, as certified by the Public Employee Retirement Commission,
but not to exceed 10% to the participant's average annual rate
of compensation over the first three years of service and multiplying
the result by the number of years and fractional part of a year of
creditable nonintervening military service being purchased together
with interest at the rate of 4 3/4% compounded annually from
the date of initial entry of police service to the date of payment.
(2)
Any participant shall be eligible to receive service credit for intervening
or nonintervening military service as provided herein, provided that
the participant is not entitled to receive, eligible to receive now
or in the future, or is receiving retirement benefits for such service
under a retirement system administered and wholly or partially paid
for by any other governmental agency with the exception of a participant
eligible to receive or receiving military retirement pay earned by
a combination of active duty and non-active duty with a reserve or
national guard component of the armed forces which retirement pay
is payable only upon the attainment of a specified age and period
of service under 10 U.S.C. Ch. 67 (relating to retired pay for nonregular
services).
A.
Matters or procedure not covered in this article shall be as set
forth in Act 205 of 1984, as may, from time to time, be amended.
B.
Should any change or mistake in records result in any participant,
beneficiary or survivor annuitant receiving from the plan more or
less than the individual would have been entitled to receive had the
records been correct, regardless of the intentional or unintentional
nature of the error and upon the discovery of such error, the plan
will 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 the individual was correctly
entitled shall be paid.
Upon termination of the plan, the assets shall be distributed
as follows:
A.
Sufficient funds shall be maintained to provide the pension benefits prescribed in § 106-18 for all participants who have retired prior to the termination of the plan, or who are eligible to retire at the time of the termination of the plan.
B.
Sufficient funds shall be maintained to provide vested pension benefits prescribed in § 106-18 for all participants who are eligible for such benefits.
C.
Any funds representing contributions from the remaining participants
shall be returned to such participants with interest at a rate of
6% per annum.
D.
Of the remaining funds, those which can be identified as contributions
of the employer, or contributions other than those identified as unused
commonwealth allocations, shall be distributed as the Borough Council
sees fit, provided that such distribution is made on a uniform basis.
A.
Neither the establishment of the plan hereby created, nor any modification
thereof, nor the creation of any fund or account, nor the payment
of any benefits, shall be construed as giving to any participant or
other person any legal or equitable right against the employer, or
any officer or employee thereof, or the Borough Council except as
herein provided.
B.
Under no circumstance shall the plan hereby created constitute a
contract for continuing employment for any participant or in any manner
obligate the employer to continue or to discontinue the services of
an employee.
C.
This plan has been established and shall be maintained by the employer
in accordance with the laws of the Commonwealth of Pennsylvania. The
plan shall continue for such period as may be required by such laws,
provided that the employer may, by its own action, discontinue this
plan should such laws provide, and the employer reserves the right
to take such action in its sole and absolute discretion. Upon termination,
the employer shall have no liability hereunder other than that imposed
by law.
All investments by the Borough Council of the assets of this
plan shall comply with any applicable state statutes, rules and regulations
with respect to municipal investments for police pension funds and
with such regulations as the Borough Council shall establish for the
purpose of investing such funds.
The Borough Council reserves the right to amend, at any time in whole or in part, any or all of the provisions of the plan; provided that no such amendment shall authorize or permit any part of the plan to be used or diverted to purposes other than for the exclusive benefit of the participants, their beneficiaries, or their estates. Nor shall any amendment divest a participant of benefits vested by the provisions of § 106-18. All such amendments shall comply with the applicable statutes of the Commonwealth of Pennsylvania.
A.
This plan shall be constructed according to the laws of the Commonwealth
of Pennsylvania, and all provisions hereof shall be administered according
to the laws of such Commonwealth.
B.
Wherever any words are used herein in the masculine gender, they
shall be construed as though they were also used in the feminine gender
in all cases where they would so apply; and wherever any words used
herein are in the singular form, they shall be construed as though
they were also used in the plural form in all cases where they would
so apply.
C.
Headings of sections and paragraphs of this instrument are inserted
for convenience of reference. They constitute no part of this plan
and are not to be considered in the construction thereof.
The provisions of this article shall be severable, and if any
article, paragraph, clause, sentence, or words of this article hereby
adopted are declared for any reason invalid, unlawful, or unconstitutional,
it is the intent of the Borough that it would have passed all other
articles, paragraphs, clauses, sentences, or words of this article
independent of the elimination herefrom of any such portion as may
be declared invalid, unlawful, or unconstitutional.
This article repeals all other ordinances and/or resolutions
prior to the date of its enactment which documents established, maintained,
governed, or regulated a pension plan for the police officers of the
Borough of Souderton, it being further provided that the provisions
of this article are intended to be a continuation of those existing
in Ordinance No. 655, as amended, to the extent they are consistent
herewith.
