City of Altoona, PA Paid Firemen's Pension Fund

All officers and members of the Board of Managers shall be covered by a corporate surety bond, secured by the President, the amount of the bond shall be determined by the following:

All moneys represented by cash on hand, in a safety deposit box, in a bank account, whether checking or saving, in a building and loan association or state or federal savings and loan association shall be covered by a fidelity bond equivalent to not less than 25% of same.

Bearer bonds that can be cashed by officers and or trustees shall be covered by not less than 25% of the same.

Securities, be they stocks or bonds, which are registered in the name of the owner, shall be covered by not less than 15% of the value thereof.

(d)

The fidelity bond shall cover not less than 25% of all mortgages.

Provided further, that the expense incurred in securing said bond from an indemnity company shall be paid by the Board of Managers from the pension fund.

§ 94-2 Paid Firemen's Pension Fund created.

There shall be created by the Board of Managers a fund to be known as the "Altoona Paid Firemen's Pension Fund."

The Board of Managers may take and receive gifts, grants, devises or bequests of any monies, real estate, personal property of other valuable things from whatever source for the purpose of the said fund.

Monthly charge; mandatory employee contributions picked up by employer.

[Amended 3-8-2017 by Ord. No. 5702]

There shall also be paid into this Firemen's Pension Fund an equal and proportionate monthly charge against each member of the City of Altoona Fire Department: 5% of the pay of such member. Pay for purposes of those members hired before January 1, 2014, shall be base salary, longevity, holiday pay and overtime. Pay for purposes of those members hired on or after January 1, 2014, shall be base salary.

All mandatory employee contributions designated as such shall be paid or "picked up" by the employer in lieu of contributions by the employees and thereafter treated as employer contributions for federal income taxation purposes within the meaning of Section 414(h)(2) of the Internal Revenue Code of 1986, as amended. The contributions may be paid or picked up by a reduction in the cash salary, by an offset against future salary increases or a combination of both. Affected employees shall not have the option of choosing to receive the picked up contributions directly in lieu of having them paid by the employer to the Plan. Notwithstanding the foregoing, contributions so picked up shall continue to be treated as employee contributions for all purposes of state and local law in the same manner and to the same extent as employee contributions made prior to the date of the pick up; including, by way of illustration and not limitation, being treated as part of the affected employee's compensation for both Pennsylvania and local income tax laws and for purposes of computing any benefits under the affected employee's pension plan.

There shall be paid to the Firemen's Pension Fund by the City annually a sum of money not less than 1/2 of 1% nor more than 3% of all City taxes levied by the City, other than taxes levied to pay interest on or extinguish the debt of the City of any part thereof. Council may exceed the limitations imposed by this subsection if any additional amount is deemed necessary to provide sufficient funds for payments to widows of members retired on pension or killed or who die in the service; provided, however, that the City shall annually pay into said fund not less than 1/2 of 1% of all City taxes levied to pay interest on or extinguish the debt of the City or any part thereof.

All assets now or formerly held by the Fire Department Relief Association of Altoona, Pennsylvania, Incorporated, shall be paid over from said organization and received by the Board of Managers hereby created and shall hereafter be administered by said Board of Managers as part of the Altoona Paid Firemen's Pension Fund.

§ 94-3 Duties of Board of Managers.

The Board of Managers herein provided for shall keep full and accurate accounts of all transactions, it shall have full power to make rules for the transactions of its business, the application and investment of its fund, its time and place of meeting, but shall meet at least four times in each and every year (special meetings upon the call of the President or upon written request of two members of the Board of Managers, first meeting in January to elect officers).

It shall be the duty of the Board of Managers prior to the adoption of the general appropriation ordinance by City Council, to prepare a full and detailed statement of the assets of said fund and the amount which it is required to pay and to present the same to the City Council together with a statement of the amount of money required to enable said Board to pay the said pensions and service increments in full, together with refunds.

No resolution shall be passed or order made for payment of money unless by affirmative vote of a majority of the members of said Board of Managers. Upon all questions of fact relating to the administration of said fund, such resolution or order shall be conclusive.

Said Board of Managers shall issue certificates signed by its President and Secretary to the firemen entitled to retirement and pension and also service increments under this article, for the amount of money ordered paid to such firemen out of the Paid Firemen's Pension Fund, which certificate shall state for what purpose said payment is made.

No firemen shall be entitled to a pension and/or a service increment and/or a refund who does not make the payments herein required. Every firemen must immediately become a contributor to the said fund upon hiring with the department.

§ 94-4 Payment of pension.

Continuous service.

Every fireman accepting the provisions of this article who shall have served for a continuous period of not less than 20 years and shall have reached the age of 50 years shall be entitled to be retired and eligible to pension, and may make application to the said Board of Managers for retirement.

All firemen hired on or after January 1, 1980, shall serve for a continuous period of 25 years and shall have reached the age of 55 years to become eligible to retire from active duty on pension and make application to the Board of Managers for said retirement.

[Amended 2-26-1980 by Ord. No. 4622]

All firefighters hired on or after January 1, 2014, shall serve for a continuous period of 20 years and shall have reached the age of 50 years to become eligible to retire from active duty on pension and make application to the Board of Managers for said retirement.

[Added 11-21-1972 by Ord. No. 4211; 3-26-2014 by Ord. No. 5651]

(4)

All firefighters hired before January 1, 2014, who shall serve for a continuous period of 20 years shall be entitled to retire from active duty on pension and may make application to the Board of Managers for said retirement regardless of their age upon reaching 20 years of service. This provision shall not apply to firefighters hired on or after January 1, 2014.

[Added 3-8-2017 by Ord. No. 5702]

(5)

Effective January 1, 1997, firefighters hired prior to January 1, 2014, will vest after 12 years of service as provided under the Third Class City Code[1] pension provisions for firefighters. This provision will also apply to firefighters hired on or after January 1, 2014.

[Added 3-8-2017 by Ord. No. 5702]

Editor's Note: See 11 Pa.C.S.A. § 10101 et seq.

(6)

Effective January 1, 2000, firefighters who have been laid off/furloughed and are recalled to work for the City may, for pension purposes, restore the break in service by purchasing not more than 24 months of the time lost in the same manner that they would for restoring a break in service caused by an absence for military duty. This purchase must be made within 180 days after a recall from layoff or furlough. This option may only be taken if any previous pension fund monies which were refunded to the member have been reinstated by repayment to the Altoona Paid Fireman's Pension Fund prior to this purchase of furlough time.

[Added 3-8-2017 by Ord. No. 5702]

Payments of pensions shall not be a charge on any fund in the treasury of the City or under its control save the Firemen's Pension Fund herein provided for. The basis of the pension of a member, with the exception of those members who were hired on or after January 1, 2014, shall be determined by the monthly salary of the member at the date of retirement or the highest average annual salary which he/she received during any five years of service preceding retirement, whichever is the higher, whether for disability or by reason of age or service and except as to service increments provided for herein in Subsection B(2) of this section shall be 1/2 the annual salary rate, whichever is the higher. The basis of the pension of a member hired on or after January 1, 2014, shall be determined by 50% of the monthly base wage of such member at the date of retirement. In the case of payment of pensions to members for permanent injury incurred in commencement of payment of pension shall be fixed by regulations of the Board. Such regulations shall not take into consideration the amount and duration of workmen's compensation allowed by law. Payment to spouses of members retired on pension or killed in the service on or after January 1, 1960, or who die in the service on or after January 1, 1968, shall be the amount payable to the member or which would have been payable had he/she been retired at the time of his/her death, except that payments to spouses shall be made so long as they do not remarry.

[Amended 11-21-1972 by Ord. No. 4211; 3-26-2014 by Ord. No. 5651]

A monthly retirement payment shall be made on the 15th day of each and every month as of the effective retirement date.

In addition to the pension which is authorized to be paid from the Firemen's Pension Fund by this Act and notwithstanding the limitation therein placed upon such pensions and upon contributions, every contributor, with the exception of those contributors hired on or after January 1, 2014, who shall become entitled to the pension shall also be entitled to the payment of a service increment in accordance with the subject to the conditions hereinafter set forth:

No service increment shall be paid to firefighters hired on or after January 1, 2014. For firefighters hired prior to January 1, 2014, a service increment shall be paid. The service increment shall be the sum obtained by computing the number of whole years after having served 20 years during which a contributor has been employed by the City and paid out of the City treasury and multiplying the said number of years so computed by an amount equal to 1/8 of the retirement allowance which has become payable to such contributor in accordance with the provisions of this Act. In computing the service increment, no employment after the contributor has reached the age of 65 years shall be included and no service increment shall be paid in excess of $500 per month. Said increments are included in the COLA calculations to bring the retiree's benefit to the 75% cap.

[Amended 3-8-2017 by Ord. No. 5702]

Each contributor hired before January 1, 2014, shall pay into the pension fund a monthly sum in addition to his/her pension contribution, which shall not exceed the sum of $5 per month; and, provided that such service increment contribution shall not be paid after the contributor has reached the age of 65 years.

[Amended 3-8-2017 by Ord. No. 5702]

Service increment contributions shall be paid at the same time and in the same manner as pensions and may be withdrawn in full, without interest, by persons who leave the employment of the City, subject to the same conditions by which retirement contributions may be withdrawn, or by persons who retire before becoming entitled to any service increment.

(d)

The said Board of Managers shall have the right, on application received, to retire on pension any paid fireman accepting the provisions of this article, if, in its opinion and in the opinion of two reputable physicians of the City and selected by it, and who shall make a physical examination and file their opinion in writing with the Board of Managers (whose fees shall be paid by the fireman asking to be retired), that such fireman is physically or mentally incapacitated, through injury received or disease contracted in the actual performance of duty and by reason of the performance of such duty and without fault or misconduct on his/her part, from performing his/her duty in the City of Altoona Fire Department; provided, however, that the Board of Managers shall have the authority to order another examination at the expiration of six months from the date of retirement and, if the disability of the pensioner shall be found to have been removed, the said Board of Managers shall terminate the pension and he/she shall be reinstated as an active member of the City of Altoona Fire Department.

Each contributor, hired on or after January 1, 2014, shall not be entitled to any service increment and shall not be entitled to any cost of living adjustment.

Long-term disability pension.

[Added 3-8-2017 by Ord. No. 5702]

Any firefighter who has less than 10 years of service and who is totally disabled due to illness, injuries, or mental incapacity not received in the line of duty, and is unable to perform the duties of a firefighter, shall be entitled to a pension of 25% of his annual compensation. For illness, injuries, or mental capacity not received in the line of duty after 10 years of service, the compensation shall be 50% of his annual compensation.

The disability pension shall be payable to the firefighter during his lifetime and if he/she shall die, the pension payment that he/she was receiving shall be continued to be paid to his/her spouse if she/he survives or if she/he subsequently dies, then the child or children under the age of 19 years or until such children shall have terminated their status as full-time students, whichever is later.

The pension fund will pay an additional $100 per month to any collective bargaining unit member who retires. Any and all portions of the service increment earned plus the $100 shall be paid by the pension fund. This benefit shall not be available to any employee hired on or after January 1, 2014.

[Added 3-8-2017 by Ord. No. 5702]

For firefighters hired prior to January 1, 2014, salary computation used to determine pension benefits shall be base salary, longevity, holiday pay, and overtime worked by the firefighter. This provision shall not apply to firefighters hired on or after January 1, 2014.

[Added 3-8-2017 by Ord. No. 5702]

§ 94-5 Increase of allowances.

[Amended 3-8-2017 by Ord. No. 5702]

Effective January 1, 1996, firefighters retiring subsequent to that date shall receive a cost of living adjustment in and for the first year and every subsequent January 1 until the initial rate of retirement benefits reaches 75% of the salary computations used to determine the rate of monthly benefits. Said cost of living adjustments shall be based on the existing formula used or the CPI-W National Index measured from October 1 to October 1 of the previous year, whichever is greater. This benefit shall not apply to employees hired on or after January 1, 2014.

§ 94-6 Participation.

Whenever any person shall become entitled to receive a pension from the Firemen's Pension Fund and shall have been admitted to participate therein, he/she shall not thereafter be deprived of his/her right to participation therein upon the basis upon which he/she first became entitled thereto, except for one or more of the following causes, that is to say:

Conviction of a felony or misdemeanor.

Becoming habitual drunkard.

NORMAL RETIREMENT BENEFIT

Failing to comply with some general regulation relating to the management of said fund which may be made by the managers, and which may provide that a failure to comply therewith shall terminate the right to participate in the pension fund.

A termination of a pension shall be only after such due notice and hearing as shall be prescribed by regulation of the managers.

§ 94-7 Transfers, gifts, refunds and monthly charges.

[Amended 3-8-2017 by Ord. No. 5702]

In any City wherein the members of the Fire Department are members of a pension fund not established solely for the purpose of pensioning members of the Fire Department, there shall be transferred from such other pension fund into the Firemen's Pension Fund required to be established by this Act, the moneys contributed thereto by members of the Fire Department who have not been retired, and a just and equitable proportion of the moneys contributed by the City department. Such transfers may be made by the transfer of securities. The amounts to be transferred shall be amicably adjusted by the managers of the Firemen's Pension Fund and the pension board having the charge of such other pension fund. In case of disagreement as to the amount so to be transferred, the disagreement shall be resolved by the City Council, whose action thereon shall be final.

Nothing contained in this section shall be construed to relieve any existing pension fund of its liability to continue the payment of pensions to retired members of the Fire Department in accordance with the laws and regulations under which such members were retired.

The Board of Managers of the Altoona Paid Firemen's Pension Fund shall continue to pay any and all pensions and death benefits to those firemen retired prior to January 1, 1970.

Any such City may take, by gift, grant, devise or bequest, any money or property, real, personal or mixed, in trust for the benefit of such pension fund and the care, management, investment and disposal of such trust funds or property shall be vested in such officer or officers of such City, for the time being, as the said City may designate and such care, management and disposal shall likewise be directed by ordinance and the said trust funds shall be governed thereby, subject to such directions, not inconsistent therewith, as the donors of such funds and property may prescribe.

If for any cause any member of the Fire Department contributing to the pension fund shall cease to be a member of the Fire Department before he/she becomes entitled to a pension, the total amount of the contributions paid into the pension fund by such member shall be refunded to him in full without interest. If any such members shall have returned to him the amount contributed, and shall afterward again become a member of the Fire Department, he/she shall not be entitled to the pension designated until 20 years after his/her reemployment, unless he/she shall return to the pension fund the amount withdrawn, in which event the period of 20 years shall be computed from the time the member first became a member of the Fire Department, excluding therefrom any period of time during which the member was not employed by the Fire Department. In the event of the death of a member of the Fire Department not in the line of service before the member becomes entitled to the pension aforesaid and such member is not survived by a widow or family entitled to payments as hereinbefore provided, the total amount of contributions paid into the pension fund by the member shall be paid over to his/her estate.

Monthly charges to the Firemen's Pension Fund against firemen shall be payroll deduction, and his/her consent to said deduction shall be obtained by the Secretary of the Board immediately upon his/her hiring with the department.

§ 94-8 Applicable provisions of Internal Revenue Code.

[Added 3-8-2017 by Ord. No. 5702[1]]

Intent to comply with Internal Revenue Code. The employer intends that this Plan shall meet all the pertinent requirements established for a governmental plan [as defined in Internal Revenue Code § 414(d)] under Internal Revenue Code § 401(a), as amended, and the Plan shall be interpreted, wherever possible, to comply with the terms of said Code and all formal regulations and rulings pertinent to the Plan and trust agreement.

Definitions. The following definitions apply for purposes of this § 94-8 only:

EMPLOYEE

A full-time firefighter of the City of Altoona.

EMPLOYER

The City of Altoona.

LEASED EMPLOYEE

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 performed under primary direction or control by the recipient.

LIMITATION YEAR

The plan year.

NORMAL RETIREMENT AGE

The age and service requirements established by the Plan to receive a full benefit from the Plan as set forth in Plan § 94-22A(1).

The benefit provided to a participant who has attained normal retirement age as set forth in Plan § 94-22A(1).

PARTICIPANT

A current or former employee who is participating in the City of Altoona Firemen's Pension Plan.

Limit on compensation. Compensation is subject to the limitation under Code Section 401(a)(17), which is $260,000 for the plan year and limitation year beginning in 2014. The limit is automatically adjusted periodically, without formal amendment, for changes in the law and cost-of-living adjustments under Code Section 401(a)(17).

Leased employees and independent contractors. Leased employees and independent contractors are not eligible to participate in this Plan. Any person whom the employer does not regard as being an employee shall not be eligible to participate.

Limit on accrued benefit.

General rule. Except as otherwise provided, this Plan 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. If a benefit payable to a participant under this Plan would otherwise exceed the limit under Code Section 415, the benefit will be reduced to the maximum permissible benefit.

Effective date. If there is more than one permitted effective date for any change, the change shall be effective as of the latest permissible effective date; however, any adjustment in the dollar limit under Code Section 415(b)(1)(A), whether required or permissible, shall take effect automatically as of the earliest permissible effective date. Effective as of January 1, 2008, the "applicable mortality table" and "applicable interest rate" are found in Rev. Rul. 2007-67. The "applicable mortality table" in Rev. Rul. 2001-62 was effective from December 31, 2002, through December 31, 2007.

No reduction in accrued benefits. Notwithstanding the above, no change in the limits under this article shall reduce the benefit of any participant.

(4)

Multiple plans. If a participant also participates in one or more other plans that are required to be aggregated with this Plan for purposes of determining the limits under Code Section 415(b), and if the aggregated benefits would otherwise exceed the limit under Code Section 415(b), then benefits shall be reduced first under this Plan.

(5)

Mandatory contributions. Participant contributions are annual additions, and any benefit attributable to participant contributions is not included in the benefit subject to the limits of Code Section 415(b). This subsection does not apply to contributions "picked-up" in accordance with Code Section 414(h).

(6)

Permissive service credit. Effective as of January 1, 1998, if a participant makes a purchase of permissive service credit [within the meaning of Code Section 415(n)] under the Plan, the benefit derived from the contributions made to purchase the service credit shall be treated as part of the benefit subject to the limitations under this section.

Limit on annual additions.

Annual additions. Except as otherwise provided, annual additions (which include participant contributions) under this Plan shall at all times comply with the provisions of Code Section 415(c) and the regulations thereunder, the terms of which are specifically incorporated herein by reference. If an annual addition would otherwise exceed the limit under Code Section 415(c), the excess annual addition will be eliminated in accordance with methods permitted under Rev. Proc. 2008-50 (Rev. Proc. 2006-27 prior to 2009) or its successor.

Multiple plans. If a participant also participates in one or more other plans that arc required to be aggregated with this Plan for purposes of determining the limits under Code Section 415(c), and if the annual additions would otherwise exceed the limit under Code Section 415(c), annual additions will first be reduced under the other plan. If there is more than one other plan, annual additions will first be reduced under the plan with the greatest amount of annual additions.

Effective date. The limits under which Code Section 415(c) are adjusted periodically in accordance with changes in the law or cost-of-living adjustments without the need for a plan amendment. If there is more than one permissible effective date for any required change relating to Code Section 415(c), then the change shall be effective as of the earliest permissible effective date.

(4)

415(c) compensation. For the purposes of this section, "compensation" includes only those items specified in Treas. Reg. § 1.415(c)-2(b)1 or (2) and excludes all items listed in Treas. Reg. § 1.415(c)-2(c), the terms of which are specifically incorporated herein by reference. Effective as of January 1, 2009, to the extent required by the Heroes Earnings Assistance Tax Relief Tax Act of 2008 (HEART Act),[2] differential wage payments shall be included in compensation.

Editor's Note: See 26 U.S.C. § 1 et seq.

Direct rollovers.

If a participant, a spousal beneficiary, or an alternate payee (who is a spouse or former spouse of a participant) is entitled (under other provisions of this Plan) to receive an "eligible rollover distribution" of at least $200, the distributee may elect that the Plan Administrator transfer all or part (provided that the part is at least $500) to any "eligible retirement plan" capable of accepting such a transfer.

For purposes of this subsection, the following definitions shall apply:

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: i) 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; ii) any distribution to the extent such distribution is required under Code Section 401(a)(9); iii) the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities); and iv) effective as of January 1, 2002, any hardship distribution. Effective as of January 1, 2002, clause (iii) does not apply to any after-tax participant contributions that are paid to an individual retirement account or annuity described in Code Section 408(a) or (b), or to a qualified defined contribution plan described in Code Section 401(a) or 403(a), or effective as of January 1, 2007, any 403(b) annuity contract that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includable in gross income and the portion of such distribution which is not so includable.

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 a surviving spouse, prior to January 1, 2002, an eligible retirement plan was an individual retirement account or individual retirement annuity. Effective as of January 1, 2002, an "eligible retirement plan" includes an annuity contract described in Code Section 403(b) and an eligible plan under Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this plan. Effective as of January 1, 2008, a Roth IRA is an "eligible retirement plan."

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.

Minimum 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 of Code Section 401(a)(9). For purposes of complying with Code Section 401(a)(9), life expectancies were 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.

Period of distribution.

Distribution of a participant's benefits shall begin no later than April 1 of the calendar year following the later of:

The calendar year in which the participant attains age 70 1/2; or

The calendar year in which the participant retires.

Distributions must be made over a period not exceeding the life of the participant or the joint lives of a participant and his beneficiary.

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. If a participant receives a joint and survivor annuity and the beneficiary is not the participant's spouse, life expectancy shall be determined using the Uniform Lifetime Table of Treasury Regulation § 1.401(a)(9)-9.

This subsection does not authorize the payment of any benefit in any form not permitted under another provision of the Plan.

Approved domestic relations orders. 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 an approved domestic relations order.

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 Code Sections 401(a)(37) and 414(u).

Vesting upon Plan termination. Upon the termination of this Plan, or complete discontinuance of contributions [within the meaning of pre-ERISA Code Section 401(a)(7)] to this Plan, each employee (who is not already 100% vested) as of the date of such termination or discontinuance shall become vested to the extent that the Plan is funded.

Mandatory lump-sum distributions. Effective as of January 1, 2006, no lump-sum distribution in excess of $1,000 may be made to a participant prior to the participant's attainment of normal retirement age unless the participant consents to the distribution.

Nonspousal rollover. Effective January 1, 2007, if a beneficiary who is not a surviving spouse is entitled to receive what would otherwise be an "eligible rollover distribution," the beneficiary may, in accordance with Code Section 402(c)(11), make a trustee-to-trustee transfer of that amount to an IRA or individual retirement annuity (other than an endowment contract); provided that:

The transfer is made not later than the end of the fourth year after the year of the participant's death; and

The account or annuity to which the amount is transferred is treated as an inherited IRA or individual retirement annuity in accordance with Code Section 408(d)(3)(C).

Full vesting at normal retirement age. A participant's normal retirement benefit shall be 100% vested upon attainment of his normal retirement age.

Forfeitures. Forfeitures shall not be used to increase the benefits of any participant in this Plan, but may be used to reduce employer contributions to the Plan.

Exclusive benefit. The Plan is maintained for the exclusive benefit of its participants and beneficiaries.

Editor's Note: This ordinance also repealed former § 94-8, Gifts. See now § 94-7D.

§ 94-9 Provisions relative to funding under Act 205. [1]

[Added 3-8-2017 by Ord. No. 5702[2]]

Actuarial valuations. The actuary to the Plan shall perform an actuarial valuation at least biennially.

Each 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 an approved actuary, as such term is defined in Act 205.

Allowable expenses.

The expenses attributable to the preparation of any actuarial valuation report or investigation required by Act 205 or any other expenses which are permissible under the terms of Act 205 and which are directly associated with administering the Plan shall be allowable administrative expenses payable from the assets of the fund. Such allowable expenses shall include, but shall not be limited to, the following:

Investment costs associated with obtaining authorized investments and investment management fees;

Accounting expenses;

[3]

Premiums for insurance coverage on fund assets;

[4]

Reasonable and necessary counsel fees incurred for advice or to defend the fund; and

[5]

Legitimate travel and education expenses for officials of the Plan.

Council, in its 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 Administrator shall document all such expenses item by item, and where necessary, hour by hour.

Duties of the Chief Administrative Officer.

The actuarial reports described above shall be prepared and filed under the supervision of the Chief Administrative Officer.

ADMINISTRATOR or PLAN ADMINISTRATOR

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 City with respect to funding the Plan for a given plan year. The Chief Administrative Officer shall submit the financial requirements of the Plan and the minimum obligation of the City to Council annually and shall certify the accuracy of such calculations and their conformance with Act 205.

Modification of benefits. Prior to the adoption of any provision that modifies a benefit provided hereunder, the Chief Administrative Officer shall provide to Council a cost estimate of the proposed modification. Such estimate shall be prepared by an approved actuary, which estimate shall disclose to Council the impact of the proposed modification on the future financial requirements of the Plan and the future minimum obligation of the City with respect to the Plan.

Definitions. As used in this section, the following terms shall have the meanings indicated:

ACTUARY

An approved actuary under Act 205 and thus shall have at least five years' actuarial experience with public pension plans and who is either enrolled as a member of the American Academy of Actuaries or enrolled as an actuary pursuant to ERISA.

The person or persons appointed by the City to administer the Plan. In the event no one is appointed, the Plan Administrator shall be the City Manager.

CHIEF ADMINISTRATIVE OFFICER

The person designated by the City who has primary responsibility for execution of the administrative affairs of the City, in the case of the City, or the pension plan in the case of the Plan or the designee of that person. If the City does not name a Chief Administrative Officer, it shall be the City Manager.

Editor's Note: See 53 P.S. § 895.101 et seq.

Editor's Note: This ordinance also repealed former § 94-9, Refunds. See now § 94-7E.

§ 94-10 Deferred Retirement Option Plan (DROP).

[Added 3-8-2017 by Ord. No. 5702[1]]

Summary of deferred retirement option (DROP). Effective April 1, 2009, a retirement benefit distribution option is available to members who qualify and voluntarily elect as provided in the Third Class City Code,[2] and the collective bargaining agreement between the City of Altoona and the Altoona Firefighters Local 299 of the International Association of Firefighters. This option will be available for eligible bargaining unit members and shall not affect a member's eligibility for a City pension. Additionally, participants in the DROP program are considered to be active firefighters and will continue to be members of the collective bargaining unit, however, if while in the DROP program, contractual benefits change which affect retirement, the member already entered into the DROP will abide by the contract language which was in effect at the time he/she entered the DROP. Otherwise, participants in the DROP program are subject to all rights and responsibilities provided by the collective bargaining agreement until no longer performing the duties of firefighter and terminate employment with the City of Altoona.

Editor's Note: See 11 Pa.C.S.A. § 10101 et seq.

Eligibility. A member must be eligible for normal retirement to be eligible for the DROP. Members eligible to participate in the DROP plan shall include all members hired subsequent to January 1, 2005, who do not have the option to buy the postretirement health care coverage provided by the City with accrued sick leave. Furthermore, any member hired prior to January 1, 2005, may use his/her accrued sick leave to purchase either postretirement health care or buy into the DROP, but not both. In any case, buying into the DROP or postretirement health care shall mean trading in 87 sick days for the option chosen.

Sick leave. Any employee hired before January 1, 2005, must waive the requirement to be paid for accumulated sick leave, as referenced in Article X, Section 1(A), in order to participate in the DROP. Firefighters must have accumulated 87 sick days to participate in the DROP and be eligible for normal retirement as outlined in Article X, Section 2(A), and will be paid the value of 20% of all accumulated sick days in excess of 87 up to the maximum number as outlined in Article X, Section 2(G). For purposes of the DROP, "retirement" as referenced in Article X, Section 2(G), shall mean termination of service. "Termination of service" shall mean when the employee is no longer employed as a firefighter for the City. The above article references in this subsection are to Article X of the Collective Bargaining Agreement between the City and City firefighters which is effective January 1, 2014.

Election to participate.

The member shall make the election by using forms and procedures as prescribed by the Pension Board. Member participating in DROP must establish a date certain upon which the member shall resign from service as a City firefighter. This date certain must be prior to completion of the maximum participation period as set forth below. As a condition of participation in the DROP program, the individual member acknowledges that the Union and the City shall have no responsibility for the financial impact and/or consequences of a member's participation in DROP, including but not limited to the investment of the contents of a member's DROP account, the performance of any such investments, the member decision to participate in DROP, or any tax consequences flowing from the DROP participation.

Upon deciding to participate in the DROP, a member must submit, on forms provided by the City, all of the following: a) a binding letter of resignation from regular employment with the City which discloses the member's intent to retire; and b) a written election to participate in the DROP that details the member's rights and obligations under the DROP and includes an agreement to forgo:

Active membership in the pension plan.

Any growth in the salary base used for calculating the regular retirement benefit.

Any additional benefit accrual for retirement purposes.

DROP pension payments. Upon entry into the DROP, a member's pensionable service, as that term is defined and utilized in the collective bargaining agreement, and the average applicable compensation shall be frozen and his/her pension and retirement payments shall be calculated as if he/she actually retired on the date he/she entered the DROP. The monthly DROP pension payment, plus any applicable COLA, shall be paid to an individual DROP investment account managed by Wachovia Securities in its FundSource Program (or comparable mutually agreed upon program). Wachovia Securities shall maintain the account, independent of the City of Altoona.

Individual DROP investment account.

Each member shall upon electing to enter the DROP meet with a member of Wachovia Securities to establish a FundSource Account (or comparable account) and select the investment in his/her individual investment account from an array of options as offered by the FundSource Program (or comparable program). The third party will be the party responsible for all investment options and recordkeeping of all assets transferred to the member's FundSource Account (or comparable account) from the pension fund. All investment and administrative costs incurred with the third party shall be charged against the individual DROP investment accounts of the participants.

If at any time Wachovia Securities is no longer able to provide the individual DROP account satisfactorily as described in this agreement, the City and Union agree to select a mutually agreed upon third party to administer the individual DROP accounts.

Employee contributions. Upon entry into the DROP, all City and employee contributions to the Firemen's Pension Fund shall cease, with no additional cost to the City.

Participation period. An eligible member may participate in the DROP plan for no more 60 months. At any time up to 60 months the member may terminate his or her employment and enact the payment options with his or her individual DROP account. Once the maximum participation has been achieved, the member must terminate employment and separate from services.

Distribution options.

Commensurate with DROP participation, a member shall make an election, on forms designated by Wachovia Securities and its FundSource Program, selecting the payout option(s) he/she wishes at the termination of the DROP period. This election may be changed at any time prior to termination. The distribution options are as follows:

A full and lump-sum distribution.

Rollover to another qualified retirement plan (as permitted by law) or to an IRA.

Purchase of an annuity.

(d)

Keep the monies in the individual DROP investment account. Monies kept in the individual DROP Investment Account may be withdrawn in any manner desired by the member.

(e)

Any other distribution provided by the third party administrator or any manner permitted by law.

As with the decision to participate in the DROP program, the City and the Union assume no responsibility for the consequences of the rollover election made by a participating member, including tax consequences and issues of the legality of a rollover, of the manner of distribution which a member selects for the distribution and the individual DROP participants agree to hold the City and the Union harmless for any consequences flowing from the member's receipt of a full or partial distribution of the contents of the member's DROP account.

Beneficiary designation. Commensurate with DROP participation, a member shall make an election, on forms designated by Wachovia Securities, designating the beneficiary or beneficiaries he/she wishes to receive the monies in his/her individual DROP investment account in the event of his/her death before all monies have been distributed.

Disability.

A member who becomes permanently disabled during the DROP period shall be retired from service and, thereafter, shall revert to his/her normal pension retirement pension. He will directly receive those pension payments which were being deposited into his/her DROP investment account. The participant will then have access to the distribution from his/her DROP investment account.

If a member becomes temporarily disabled during his/her participation in DROP, the time period while on disability counts toward the sixty-month participation limit. During such period of temporary disability, a member shall receive disability pay in the same amounts as disabled firefighters that are not participating in DROP. In no event shall a member on temporary disability have the ability to draw from the DROP account.

However, notwithstanding any other provision in this subsection, if a member is disabled and has not returned to work as of the date of his required retirement, then such retirement shall take precedence over all other provisions herein and said member shall immediately resign.

Cost of management for DROP program. The firefighter, the Union and the City agree that any cost or fees associated with the management and/or administration of the DROP accounts shall be paid directly from the individual DROP account and not by the City.

Municipal pension costs. In expressing the normal cost and administrative expense requirements as a dollar amount under Section 202(b)(2) of Act 205,[3] the City shall exclude the compensation of all DROP participants from the payroll of the active membership of the pension plan. For purposes of computing and reporting the applicable number of units under Section 402(e) of Act 205, a DROP participant shall not be reported to the Auditor General as an active employee.

[3]

Editor's Note: See 53 P.S. § 895.101 et seq.

Amendment. Any amendment to the DROP plan shall be consistent with the provisions covering deferred retirement option plans set forth in any applicable collective bargaining agreement and shall be binding upon all future DROP participants and upon all DROP participants who have balances in their deferred retirement option accounts. The DROP Plan may only be amended upon a written instrument, not by any oral agreement or past practice. The firefighters, the Union and the City recognize the possibility that the General Assembly (Commonwealth of Pennsylvania) may enact statutes containing definitions and/or requirements impacting the method and manner by which municipal DROP plans are maintained. The firefighters, the Union and the City agree to act promptly and in good faith to amend this DROP plan to ensure compliance with Act 205 and any other applicable law.

Interpretation and rights.

The terms of the DROP shall be interpreted under the laws of the Commonwealth of Pennsylvania. Participation in the DROP program does not create any separate entitlement to employment. In addition, nothing provided hereunder shall be construed as a change to the parties practice of calculating pensionable compensation, and except for the ability to establish a DROP account and participate in the DROP program, nothing herein is intended to create new pension benefits of any kind which did not exist as of December 31, 2007.

The establishment of the DROP through collective bargaining and/or any individual's election to participate in the DROP is not intended to change any existing procedure or practice between the Union and the City or individual firefighters and the City and the current rights and obligations of all parties shall remain unchanged, except as modified by this agreement for those individual firefighters who elect to participate in the DROP program.

Editor's Note: This ordinance also repealed former § 94-10, Monthly charges. See now § 94-7F.

§ 94-11 Investments.

The Altoona Paid Firemen's Pension Fund Association is directed to create a Paid Firemen's Pension Investment Account.

The Board of Managers is hereby authorized to invest all assets or money of the pension fund.

The interest received from such investments shall be paid into the pension fund upon receipt of same, and if at any time sufficient funds are not available (inclusive of the monies appropriated by the City up to the amount it may be permitted to pay under the law), for the payment of all pensions and service increments in full, then said Board may dispose of and sell such securities as it may hold and use the proceeds thereof to supply such deficiency.

All monies invested for the credit of said account shall be invested in such investments as are permissible under the Fiduciaries Investment Act of 1949, being the Act of May 26, 1949, P.L. 1828, as amended.

All securities are to be deposited with and held by the Treasurer of said Board of Managers.

§ 94-12 Exemptions.

All pensions and service increments granted under this article and every portion thereof shall be exempted from attachment or garnishment processes and shall not be seized, taken or subject to detainer or levied upon by virtue of an execution of any processes or proceedings whatsoever, issued out of or by any court in this commonwealth for the payment and satisfaction in whole or in part of any claim, damage, demand or judgment against any pensioner, and no pensioner shall have the right to transfer or assign his or her pension or any part thereof, either by way of mortgage or otherwise.[1]