Township of Upper Chichester, PA Chapter 71 Pensions and Retirement

[HISTORY: Adopted by the Board of Commissioners of the Township of Upper Chichester as indicated in article histories. Amendments noted where applicable.]

GENERAL REFERENCES

Civil Service Commission — See Ch. 18.

Firemen's Relief Association — See Ch. 39.

Officers and employees — See Ch. 60.

Police Department — See Ch. 82.

Salaries and compensation — See Ch. 105.

Article I Police Pension Plan

[Adopted 6-8-2006 by Ord. No. 625]

§ 71-1 Definitions.

A. As used in this article, the following terms shall have the meanings indicated:

AGE

The age attained by the employee at his or her last birthday.

ANNIVERSARY DATE

Any January 1 after the effective date.

AVERAGE APPLICABLE COMPENSATION

The average monthly earnings of the member at any time of reference computed over the last 36 months (or such shorter period as represents the member's total period of continuous employment by the Township prior to such date of reference). For purposes of computing average applicable compensation, actual monthly earnings shall be based on W-2 earnings in which all forms of earnings are derived from the terms and conditions of the employee's employment; however, any member hired after January 1, 1998, shall exclude any lump sum buyback at retirement of accrued but unused leave time and any member hired after March 1, 2012, in addition to earnings currently excluded, overtime shall not be included for pension purposes.

[Amended 5-10-2012 by Ord. No. 677]

BOARD

The Board of Commissioners of the Township of Upper Chichester.

CHIEF ADMINISTRATIVE OFFICER

The person who has primary responsibility for the execution of the administrative affairs of this pension plan, or the designee of that person.

COMPENSATION

Based on W-2 earnings in which all forms of earnings are derived from the terms and conditions of the employee's employment; however, any member hired after January 1, 1998, shall exclude as "compensation" any lump sum buyback at retirement of accrued but unused leave time and any member hired after March 1, 2012, in addition to earnings currently excluded, overtime shall not be included for pension purposes.

[Amended 5-10-2012 by Ord. No. 677;12-8-2016 by Ord. No. 706]

EARLY RETIREMENT DATE

The first day following the date on which the member completes 20 years of service.

EFFECTIVE DATE

Of this article shall be January 1, 2005.

EMPLOYEE

Any sworn police officer in the full-time employ of the Township Police Department whose customary employment is for not less than 40 hours a week.

FUND

All assets held by the trust under the trust agreement relating to this Police Pension Plan.

MEMBER

Any sworn police officer in the full-time employ of the Township Police Department who has satisfied the eligibility requirements established in § 71-2 hereof and who is, at the time of reference, or has prior to their elimination, been making such contributions as may be required pursuant to § 71-3A hereof.

NORMAL RETIREMENT DATE

The first day following the date on which the member completes 25 years of service, and the date on which the member attains age 50.

PLAN

The Police Pension Plan for the Township of Upper Chichester, as herein set forth and as the same may hereafter be amended.

PLAN YEAR

A period of 12 consecutive months commencing on any January 1 and ending on the following December 31.

SALARY

The member's base wage.

SERVICE

The aggregate of the member's total periods of employment as a full-time employee of the Township. If a member enters military service, either voluntarily or by conscription, after he has been employed for at least six months, such time spent in the Armed Forces of the United States during a period of wartime of general military conflict shall be counted as service for purposes of the plan, provided that such member returns to police service with the Township within six months after his discharge or release from such active duty in the Armed Forces of the United States. The time spent in military service due to voluntary extension of such military service during a period of peacetime shall not be included as service for the purposes of this plan.

TOTAL AND PERMANENT DISABILITY

Any condition arising from service-connected illness or injury which precludes an employee from performing the duties associated with the normal occupational requirements of a police officer as certified by a physician designated by the Township.

TOWNSHIP

The Township of Upper Chichester, Delaware County, Commonwealth of Pennsylvania.

TRUSTEE

The Board of Commissioners of the Township of Upper Chichester or any other agency or person appointed by such to serve in that capacity as set forth in the trust agreement.

B. Wherever applicable as used herein, unless the context specifically provides otherwise, the singular and plural shall be interchangeable, and the masculine and feminine pronoun shall include either sex.

§ 71-2 Eligibility.

A. All persons who are employees (as defined in this plan) as of the effective date hereof shall be a member as of the effective date.

B. Any person who becomes an employee after the effective date hereof shall become a member on the first day of service as an employee.

§ 71-3 Contributions.

A. Contributions by members.

(1) Member shall pay into the fund at a rate of 5% of compensation. Compensation for this purpose shall be as defined in § 71-1 of this article. The Board may, on an annual basis, by ordinance or resolution, reduce or eliminate payments into the fund by members. Individual records of contributions by members shall be maintained, including all interest credited to his individual account. Interest to be credited shall be 5% compounded annually.

(2) Interest shall be credited from the end of the plan year in which paid to the last day of the month after which a refund becomes payable.

B. Refund of member's contributions. Any member who for any reason shall be ineligible to receive a pension after having made contributions shall be entitled to a refund of his individual account balance; such refund is payable immediately upon discontinuance of his employment with the police force or within a reasonable time (not more than 45 days after discontinuance). If such discontinuance is due to death, then such refund shall be paid to his designated beneficiary or, in the absence thereof, to his estate. If a retired member who is receiving a benefit by reason of disability or retirement, dies, and is not survived by a spouse, then the refund payable to the beneficiary shall be equal to the individual account balance at the date of disability or retirement, less any pension payments made to the member.

C. Deposits. Contributions by members shall be remitted to the trustee monthly.

D. State aid. The portion of the payments made by the State Treasurer to the Township and designated by the Board to be allocated to the Police Pension Fund from money received from taxes paid upon premiums by foreign casualty insurance companies for purposes of pension retirement or disability benefits for policemen shall be used as follows:

(1) To reduce the unfunded liability, or, after such liability has been fully funded;

(2) To apply against the annual obligation of the Township for future service costs, or to the extent that the payment may be in excess of such obligations;

(3) To reduce member contributions pursuant to Subsection A hereof.

E. Township contributions. Subject to the provisions and limitations set forth in other sections of this plan, the Township shall contribute the amounts certified to be necessary by the fund's actuary to provide the benefits provided by this plan.

F. Nonintervening military buy back.

(1) The plan provides full service credit for each year of military service or fraction thereof, not to exceed five years, to a member who was not employed by the Township prior to such military service, payable by the member.

(2) The member shall pay the amount for the purchase of credit for military service other than intervening military service which shall be computed by applying the average normal cost rate for the plan as certified by the Public Employee Retirement Study Commission, but not to exceed 10%, to the member'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 into service to the date of payment.

(3) A member of the plan shall be eligible to receive service credit for intervening or nonintervening military service provided that he is not entitled to receive, eligible to receive then 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 member eligible to receive or is receiving military retirement pay earned by a combination of active duty and nonactive 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 service).[1]

[1] Editor's Note: Prior Ch. 67 was renumbered; see now 10 U.S.C. § 12731 et seq.

G. Other contributions. The fund shall be authorized to receive by gift, grant, devise or bequest, any money or property, real, personal or mixed, in trust for the benefit of the fund. The trustee of the fund shall be subject to such directions not inconsistent with this plan as the donors of such funds and property may prescribe.

§ 71-4 Retirement benefits.

A. Normal retirement.

(1) Each member may retire on or at any time after his normal retirement date. Any member so retiring shall be entitled to receive a monthly pension commencing as of the first day following his date of actual retirement and ending with the payment made as of the first day of the month in which his death occurs. The monthly pension to which such retired member shall be entitled to under this plan shall be equal to 50% of such member's average applicable compensation.

(2) In addition to the monthly retirement benefit described above, each member who has completed 26 years of service shall receive an additional monthly pension benefit equal to a maximum of $100 per month.

B. Early retirement benefit. Each member may retire on or at any time after his early retirement date. Upon termination, the member must file with the Secretary of the Township, a written notice of his intention to elect an early retirement benefit. This benefit shall become effective as of the date of the notice or the date designated in the notice, whichever is later. The amount of the early retirement benefit shall be the actuarial equivalent of a vested retirement benefit as computed in § 71-6B(1). The actuarial equivalent of the vested retirement benefit shall be determined by actuarially reducing the vested retirement benefit to reflect that it will commence on the effective date of the early retirement rather than on the member's normal retirement date. The actuarial reduction shall be calculated using the actuarial assumptions reported in the last actuarial valuation report filed with the Public Employee Retirement Commission.

C. Postponed retirement. An employee shall be allowed to continue as an employee beyond his normal retirement date. In such case, the employee shall remain a member of the plan until he actually retires or ceases to be an employee. Any contributions required pursuant to § 71-3A hereof shall continue.

D. Disability benefit. If a member retires because of a total and permanent disability, he shall be entitled to receive a pension benefit equal to 70% of his salary at the time the disability was incurred, offset by any social security disability benefits received by the member for the same injury. The benefit will commence on the first day of the month following the month in which he retires. In no event, however, shall the member's total benefit, including workers' compensation, social security, and any other program of disability benefits financed in whole or in part by the Township, exceed 100% of his predisability salary.

E. Cost of living adjustment. There shall be a cost of living adjustment provided to all members who retire; provided however, that such cost of living increase shall not exceed the percentage increase in the All Urban Consumers CPI for the Philadelphia area from the year in which the police officer last worked; provided further that in no case shall the total police pension benefits exceed 75% of the salary for computing retirement benefits; provided further that the total cost of living increase shall not exceed 30%. No cost of living increase(s) shall be granted which would impair the actuarial soundness of the plan. All adjustments shall be made in January and calculated on the twelve-month-percentage change in the consumer price index as of the previous October.

§ 71-5 Death benefits.

A. Death benefit if no surviving spouse nor dependent children. If a member dies prior to the commencement of pension benefits, then his designated beneficiary shall be entitled to a refund of his accumulated member's contributions with credited interest. If no beneficiary survives, then the refund is payable to the member's estate.

B. Pension benefit to surviving spouse and dependent children.

(1) If a member dies survived by a spouse or dependent children, after having become eligible to receive a pension benefit [i.e., he was eligible because a) he was already receiving a pension; b) he met the age and service requirements, but he had not yet retired], then a monthly pension benefit shall be provided.

(2) The amount of the monthly pension benefit shall be 50% of the pension the member was receiving or would have been entitled to receive if he had been retired at the time of his death.

(3) In the event a member dies after completing 12 or more years of service but was not yet eligible for normal retirement or preretirement survivor benefits, the surviving spouse shall act on behalf of the member in selecting the alternative addressed in § 71-6B(1). If a vested benefit is selected, the surviving spouse shall receive 50% of the member's vested monthly benefit commencing on the first day of the month following the member's normal retirement date.

(4) In the event a member dies after completing 20 or more years of service but was not yet eligible for normal retirement or preretirement survivor benefits, the surviving spouse shall act on behalf of the member in selecting the alternative addressed in § 71-4B. If an early retirement benefit is selected, the surviving spouse shall receive 50% of the member's monthly early retirement benefit commencing on the first day of the month following the election of this benefit.

(5) The monthly pension benefit is payable to the surviving spouse until death or then to surviving dependent children under the age of 18 years or if attending college, under or attaining the age of 23 years. "Attending college" shall mean the eligible children are registered at an accredited institution of higher learning and are carrying a minimum course load of seven credit hours per semester. Dependent children shall include adopted children, and any child conceived before the time of the member's death and thereafter born to the member's spouse.

C. Preretirement survivor benefit. In the event a member is killed in service, the member's family shall receive the benefits provided for and subject to the terms of Act 51 of 2009,[1] which benefits are paid exclusively by the Commonwealth of Pennsylvania with the exception of any pension benefit to which the member was entitled prior to the member's death, solely by virtue of the member's service as a Township police officer (i.e., either a normal, early, or vested pension benefit). It is understood that "family" shall refer to the surviving spouse and dependent children. The benefit is payable to the surviving spouse until death, then to the surviving dependent children under the age of 18 years, or, if attending college, under or attaining the age of 23 years.

[Amended 5-10-2012 by Ord. No. 677]

[1] Editor's Note: See 53 P.S. § 767 et seq.

§ 71-6 Severance of employment.

A. If a member leaves the employ of the Township or ceases to be a member whether by reason of his transfer, resignation or discharge, or by reason of disability or retirement other than after becoming eligible for benefits pursuant to § 71-4 or 71-5 of this plan, he shall be entitled to a refund of all contributions made by him and then on deposit in the fund, plus interest thereon, computed at the rate described in § 71-3A.

B. However, a member who has completed 12 or more years of service may elect either Subsection B(1) or (2) as described below:

(1) He may elect to leave his contributions, plus interest in the fund so as to receive a vested pension benefit to start at his normal retirement date. He must file with the Secretary of the Township, within 90 days of the date he ceases to be a full-time police officer, a written notice of his intention to vest. The amount of the vested pension benefit shall be (x) divided by (y) where (x) is the number of years of service at the date of termination and (y) is the number of years of service which the member would have had if he worked until normal retirement date, multiplied by the benefits described in § 71-4A. Years of service shall be measured in years and completed months.

(2) He may elect to receive a refund of all contributions made by him and then on deposit in the trust fund, plus interest thereon, computed at the rate described in § 71-3A. If he elects to receive the refund of his contributions plus interest, he would forfeit the pension benefit outlined in Subsection B(1).

§ 71-7 Method of distribution of benefits.

A. Refund benefits becoming distributable pursuant to § 71-6 and death benefits becoming distributable pursuant to the provision of § 71-5A shall be paid in the form of a lump-sum distribution.

B. The normal form of all benefits payable hereunder shall be a pension for the life of the member commencing on the date specified and ending with a payment made on the first day of the month in which the member dies, subject, however, to the payment of a death benefit calculated pursuant to § 71-5B.

§ 71-8 Management of fund.

A. It is the duty of the trustee to pay the benefits to members and their beneficiaries, as provided in §§ 71-4, 71-5 and 71-6, in accordance with the instructions received from the Board; provided, however, that the duty of the trustee to make such payments is wholly contingent upon the sufficiency of the fund for such purposes.

B. The Board may employ an actuary, investment advisors, counsel, or other professional consultants from time to time in connection with the operation of the fund or of this plan. Such persons or entities shall be compensated by the Township at such rates as may be agreed upon by the Board. Such compensation may be paid from the fund.

C. The Board may, by an instrument in writing, appoint one or more persons as an investment manager and may delegate to an investment manager, from time to time, the power to manage and control the investment of any plan asset.

(1) Each person appointed shall be:

(a) An investment advisor registered under the Investment Advisors Act of 1940;[1]

[1] Editor's Note: See 15 U.S.C. § 80b-1 et seq.

(b) A bank as defined in that Act; or

(c) An insurance company qualified to manage, acquire or dispose of any asset of the plan under the laws of more than one state.

(2) Each investment manager shall acknowledge in writing that it is a fiduciary with respect to the plan. The Board shall enter into an agreement with each investment manager specifying the duties and compensation of such investment manager and other terms and conditions under which such investment manager shall be retained. The Board shall not be liable for any act or omission of any investment manager, and shall not be liable for following the advice of any investment manager, with respect to any duties delegated to the investment manager.

(3) The Board shall have the power to determine the amount of fund assets to be invested pursuant to the direction of a designated investment manager and to set investment objectives and guidelines for the investment manager.

D. The trustee shall make an annual determination of the fair market value of the fund as of the anniversary date and as of such additional dates as the Board may direct. The fair market value of the fund shall be reported to the actuary who shall calculate the amount to be contributed to the fund by the Township with respect to each plan year in accordance with the assumptions most recently adopted by the Board for the purpose of such computations; provided, however, that the liability of the Township to make such contributions is subject to all of the conditions and limitations set forth elsewhere in this plan.

§ 71-9 The Board.

A. The plan shall be administered by the Board. The Board shall make and adopt rules and regulations for the efficient administration of the plan.

B. The Board shall keep all data, records and documents pertaining to the administration of the plan and shall execute all documents necessary to carry out the provision of the plan, and shall provide all such data, records and documents to the professionals whose services are employed pursuant to § 71-8B of this plan.

C. The Board shall construe the plan, shall determine any questions or fact arising under the plan and shall make all decisions required of it under the plan. Decisions and actions taken thereon in good faith shall be final and conclusive. It may correct any defect or supply any omission or reconcile any inconsistency in such manner and to such extent as it shall be the sole judge of such expediency. The Board shall act uniformly with respect to matters coming before it concerning employees in similar circumstances.

D. The members of the Board, and each of them shall be free of all liability for any act or omission except by willful misconduct or gross negligence, and each of them shall be fully indemnified by the Township against all judgments not involving findings of their respective personal or collective willful misconduct or gross negligence and against all cost, including counsel fees, incurred in defense of actions brought against them.

E. The Board shall make available to members, retired members and terminated members and to their beneficiaries, for examination during business hours, such records as to pertain to the person examining.

F. To enable the Board to perform its function, the Township Administration shall supply full and timely information to it on all matters relating to the pay of all members, their retirement, death, termination of employment and such other pertinent facts as the Board may require.

G. The Board shall enact such rules and regulations for the conduct of its business and for the administration of the plan as it may consider desirable, provided the same shall not be in conflict with any of the provisions of the plan. All actions of the Board shall be taken at meetings at which at least three members shall be present, or by written resolutions concurred by not less than three of its members. Written minutes shall be kept of the meetings and action of the Board.

H. The Secretary, acting on behalf of the Board, shall have the power to execute all documents necessary to carry out the actions of the Board, and any person, partnership, corporation or government agency shall accept such documents over such signature or signatures as if executed by the Board.

§ 71-10 Provisions relating to the Township.

A. It is the expectation of the Township that it will continue this pension plan indefinitely, and will, from time to time, contribute to the fund such amounts as may be needed to provide the benefits set forth in the plan.

B. The provisions of any ordinance establishing, amending, or maintaining the plan shall not be a charge on any other fund in the treasury of the Township or under its control, save the Uniformed Employees' Pension Fund herein provided for.

C. Nothing contained in the plan shall be held or construed as a contract or guarantee of employment nor to create any liability upon the Township to retain any person in its service. The Township reserves the full right to discontinue the service of any person without any liability except for salary or wages that may be due and paid, whenever in its judgment its best interests so require, and such discontinuance shall be without regard to this plan.

§ 71-11 Termination or amendment of plan.

A. The Township may amend this plan from time to time as is necessary to maintain its actuarial soundness and to incorporate changes in plan benefits or entitlements. However, no amendment shall be made which will, in any manner, divert any part of the fund to any purpose other than the exclusive benefit of members or their beneficiaries (except that upon termination such diversion may be made after all of the fixed and contingent liabilities to members and their beneficiaries have been met); nor shall any amendment be made at any time which will in any manner divest any benefit then vested in a member or reduce or eliminate a benefit to which a member has been given an expectation by virtue of pension ordinance or pension calculations for retiring officers who retired during the member's participation in this plan.

B. In the event of termination of this plan, the Board shall allocate the assets then remaining in the fund as follows:

(1) Sufficient funds shall be maintained to provide the pension benefits prescribed in § 71-3 for all members who have retired prior to termination or who are eligible for retirement at the time of the termination of this fund.

(2) Contributions with interest at a rate established by the Board as provided in § 71-5 shall be refunded to any and all members who terminate service at the time of the termination of the fund.

(3) Of the remaining funds, those which can be identified as municipality contributions or contributions other than from members or from the commonwealth allocation, shall be distributed as the Board sees fit, provided that such distribution is in compliance with § 71-8.

(4) All funds in excess of the funds described in Subsection B(1), (2) and (3) above shall be returned to the commonwealth as unused funds pursuant to the Act of May 12, 1943, P.L. 259, as amended, 72 P.S. § 2263.1 et seq.

§ 71-12 Miscellaneous provisions.

A. No benefit under this plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, or encumbrance, nor to seizure, attachment, or other legal process for the debts of any member or member's beneficiary. This provision shall not apply to a "Qualified Domestic Relations Order" defined in Code Section 414(p), and those other domestic relations orders permitted to be so treated by the Board under the provisions of the Retirement Equity Act of 1984. The Township shall establish a written procedure to determine the qualified status of domestic relations orders to administer distributions under such qualified orders. Further, to the extent provided under a "Qualified Domestic Relations Order," a former spouse of a member shall be treated as the spouse or surviving spouse for all purposes under this plan.

B. Any person dealing with the Township may rely upon a copy of this plan and any amendments thereto certified to be true and correct by the trustee.

C. In no circumstances, whether upon amendment or termination of this plan or otherwise, shall any part of the fund be used or diverted to any purpose other than the exclusive benefit of members or their beneficiaries until all of the actuarial obligations to such member or member's beneficiaries have been met.

D. If the Board deems any person incapable of receiving benefits to which he is entitled by reason of minority, illness, infirmity, or other incapacity, it may make payment directly for the benefit of such person, to the guardian or trustee for said person, whose receipt shall be complete acquittance therefore. Such payment shall, to the extent therefor, discharge all liability of the Township, or the fund.

E. Should any provision of this plan be determined to be void by any court, the plan will continue to operate and, to the extent necessary, will be deemed not to include the provision determined to be void.

F. Headings and captions provided herein are for convenience only and shall not be deemed part of the plan.

G. This plan shall be construed and applied under the laws of the Commonwealth of Pennsylvania where not in conflict with federal laws which shall prevail.

§ 71-13 Act 44 Retirement Program.

[Added 7-13-2017 by Ord. No. 710]

A. Title. This section shall be known as the "Upper Chichester Police Act 44 Retirement Program."

B. Definitions. When used in this section, the below words shall have the meaning indicated.

ACT 44 PLAN

The Pension Payments Plan approved by the Pennsylvania Legislature September 18, 2009, amending Title 53 as it relates to municipal police pension plans.

ACT 44 PLAN ACCOUNT

Separate account created to accept Act 44 Plan participants' monthly pension check while an Act 44 Plan participant, as well as any interest thereon.

FUND or PLAN

The municipal Police Pension Plan.

PARTICIPANT

A police officer who meets the eligibility for and has executed the proper documents for participation in Act 44 Plan and has had such application approved by the Township.

POLICE OFFICERS

Police officers of the Police Department of Upper Chichester Township.

TOWNSHIP

Upper Chichester Township, Delaware County, Pennsylvania.

C. Eligibility. Eligibility for the Act 44 Plan shall be determined as follows:

(1) Police officers who have not retired prior to the implementation of the Act 44 Plan program may enter into the Act 44 Plan program on the first day of any month following completion of 25 years of credited service and attained the age of 50 prior to the enactment of this section.

D. Written election. Eligible officers who wish to be participants in the Act 44 Plan program must signify that intention in writing as follows:

(1) A police officer electing to participate in the Act 44 Plan program must complete and execute an Act 44 Plan participation election form prepared by the Township, which shall evidence the member's election to participate in the Act 44 Plan. The form must be signed by the police officer and be notarized and submitted prior to the date on which the member wishes Act 44 Plan participation to commence. The Act 44 Plan participation election form shall include an irrevocable notice to the Township, by the police officer member, that the police officer shall resign from employment with the Police Department effective on a specific date (the resignation date). In no event shall the resignation date be longer than 48 months. A police officer shall cease to work as a police officer on the officer's resignation date, unless the Township properly terminates or honorably discharges the officer prior to the resignation date. In addition, upon providing the 90 days' notice to the Township, which may be waived by the Township in its sole discretion, a participant may resign from employment while in Act 44 Plan status.

(2) In addition to the above information, the Act 44 Plan participation election form shall also advise the employee of the following: 1) an explanation of the participant's rights and obligations while in Act 44 Plan; 2) that, as a condition of Act 44 Plan participation, the participant foregoes active participation in the Police Pension Plan and foregoes any recalculation of pension benefits to include salary increases occurring after Act 44 Plan participation commences; and 3) that the Act 44 Plan participant's service while in Act 44 Plan will not count as pension service nor will it entitle a participant to any service increment benefits to which the participant was not entitled prior to commencing Act 44 Plan participation. An Act 44 Plan participant must also complete all necessary and appropriate retirement documents required by the Police Pension Plan Administrator, and such documents must be filed and presented to the Township for approval of retirement and payment of pension, which approval shall not be unreasonably withheld. Once an Act 44 Plan participation election form has been approved by the Township, it is irrevocable. Likewise, once an Act 44 Plan participant enters the Act 44 Plan program, the participant may not subsequently leave and re-enter the Act 44 Plan, even if the employee separates from employment and subsequently begins employment with the Township again.

E. Benefit calculation. For all retirement fund purposes, continuous service of a police officer participating in the Act 44 Plan shall remain as it existed on the effective date of commencement of participation in the Act 44 Plan. Service thereafter shall not be recognized or used for the calculation or determination of any benefits payable by the Township Police Pension Plan. The average monthly compensation of the police officer for pension calculation purposes shall remain as it existed on the effective date of commencement of participation in the Act 44 Plan. Earnings or increases in earnings thereafter shall not be recognized or used for the calculation or determination of any benefits payable by the Pension Plan. The pension benefit payable to the members shall increase only as a result of cost of living adjustments in effect on the effective date of the member's participation in the Act 44 Plan or by applicable cost of living adjustments granted thereafter.

F. Accumulation of the Act 44 Plan account. The monthly retirement benefits that would have been payable had the police officer elected to cease employment and receive a normal retirement benefit, shall, upon the police officer commencing participation in Act 44 Plan, accumulate to the benefit of that officer and be paid into that police officer's Act 44 Plan account. Participants shall not have the option of self-directed investment of their individual Act 44 Plan account while in the Act 44 Plan. Instead, the monies shall be invested in a fund to be identified and selected solely by the Township so as to generate a rate of no less than 0% and no more than 4.5%.

G. Accrual of non-pension benefits. After a police officer elects to participate in the Act 44 Plan program, all other contractual benefits shall continue to accrue with the exception of those provisions relating to the Police Pension Plan.

H. Payout. Upon separation from employment, the Act 44 Plan payout options available to the Act 44 Plan participant shall be as follows:

(1) The balance of the Act 44 Plan participant's account, less withholding taxes, if any, remitted to the Internal Revenue Service, shall be paid to the participant or the participant's surviving beneficiary.

(2) The balance of the Act 44 Plan participant's account shall be paid directly to the custodian of an eligible retirement plan as defined by Internal Revenue Code Section 402(c)(8)(b) or, in the case of an eligible rollover distribution to the surviving spouse of a deceased Act 44 Plan participant, an eligible retirement plan that is an individual retirement account or an individual retirement annuity as defined by Internal Revenue Code § 402(c)(9).

(3) If the Act 44 Plan Participant or beneficiary fails to make an election within 60 days of termination of Act 44 Plan participation, then the Township shall implement Subsection H(1) above.

I. Service-related disability during Act 44 Plan. If an Act 44 Plan participant becomes temporarily incapacitated during his participation in Act 44 Plan, that police officer shall continue to participate in the Act 44 Plan program as if fully employed. The police officer shall receive disability pay in the same amount as disabled police officers that are not participating in Act 44 Plan. In no event shall a police officer on temporary disability have the ability to draw from his Act 44 Plan account. However, notwithstanding any other provision in this paragraph, if a police officer is disabled and has not returned to work as of the date of his required resignation, then such resignation shall take precedence over all other provisions herein and said officer shall be required to resign. Nothing contained in this Plan shall be construed as conferring any legal rights upon any police officer or other person to a continuation of employment, nor shall participation in the Act 44 Plan program supersede or limit in any way the right of the Township to honorably discharge a police officer based upon an inability to perform his or her full duties as a police officer. If an Act 44 Plan participant becomes eligible for a service-related disability pension and his employment is terminated due to an inability to continue in service on grounds that render him eligible for a service-related disability pension, the monthly normal retirement benefit of the Act 44 Plan participant shall end. Instead, the police officer shall receive a service-related disability pension, the monthly payment being equal to the amount which was payable in accordance with the Act 44 Plan benefit calculation (i.e., the benefit will not be recalculated and shall remain 50%, as calculated at the time of entry into the PLAN, subject to cost-of-living adjustments).

J. Death. If an Act 44 Plan participant dies, the participant's eligibility for Act 44 Plan shall terminate upon the date of death. In such case, if the Act 44 Plan account balances have not yet been paid out, the participant's legal beneficiary shall have the same rights and options as the participant to withdraw/roll over the account balance.

K. Forfeiture of benefits. Notwithstanding a police officer's status as an Act 44 Plan participant, a current or former participant who is convicted or pleads guilty to engaging in criminal misconduct which constitutes a "crime related to public office or public employment," as that phrase is defined in Pennsylvania's Pension Forfeiture Act, 43 P.S. §§ 1311 to 1314, shall forfeit his right to receive a pension, including any amounts currently deposited in the Act 44 Plan account. In such a case, the participant shall only be entitled to receive the contributions, if any, made by the participant to the Police Pension Fund, without interest.

L. Cost of management for Act 44 Plan program. The police officers and the Township agree that any costs or fees associated with the management of the Act 44 Plan accounts shall be paid directly and solely by the participant, and not by the Township, in such amounts as have been agreed upon in the collective bargaining agreement.

M. Amendment. Any amendments to the Act 44 Plan section shall be consistent with the provisions covering individual retirement option plans set forth in any applicable collective bargaining agreement and shall be binding upon all future Act 44 Plan participants and upon all Act 44 Plan participants who have balances in their individual retirement option accounts. The Act 44 Plan may only be amended by a written instrument, not by any oral agreement or past practice.

N. Construal of provisions. A police officer's election to participate in the Act 44 Plan program shall in no way be construed as a limitation on the Township's right to suspend or to terminate a police officer for just cause or to grant the police officer an honorable discharge based upon a physical or mental inability to perform his or her duties.

O. Severability. The provisions of the Act 44 Plan program shall be severable, and if any of its provisions shall be held to be unconstitutional or illegal, the validity of any of the remaining provisions of the Act 44 Plan program shall not be affected thereby. It is hereby expressly declared as the intent of the Township that the Act 44 Plan program would have been adopted had such unconstitutional or illegal provision or provisions not been included herein.

P. Effective date. The effective date of the Act 44 Plan program shall be the date the Township approves the collective bargaining agreement, which references the creation of this Act 44 Plan.

Article II Retiree Medical Trust

[Adopted 12-16-2020 by Ord. No. 740]

§ 71-14 Definitions.

As used in this article, the following terms shall have the meanings indicated:

ADMINISTRATOR

The employer or the corporations, individuals, or other entities, if any, appointed by the employer to provide specified administrative services for the plan.

CODE

The Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.

CUSTODIAN

The bank or financial institution designated by the trustees to hold custody of the fund or assets of the trust.

FUND or TRUST FUND

All money and property, of every kind and character, including principal and income, held by the trust.

PLAN

The Upper Chichester Township Retiree Medical Program as it is now in effect or as subsequently amended.

TRUST

The trust established by this article and as amended from time to time.

TRUSTEES

Collectively, the individuals designated by the employer as trustees hereunder and who consent to serve as trustees.

§ 71-15 Contributions; duties of trustees.

The employer shall deliver to the trust periodically the amounts of money and, if applicable, property other than money that it determines necessary to be contributed by the employer under the plan to the fund. The trustees shall be accountable for all delivered contributions. The trustees shall have no duty to determine that the amounts received by the trust comply with the provisions of the plan or that the fund is adequate to provide the benefits stipulated in the plan. The trustees shall have no duty, expressed or implied, to compel any contribution to be made by the employer but shall be responsible only for property received by the trust under this article.

§ 71-16 Payments; use of assets.

A. Administrator to direct payments. Payments shall be made from the trust by the custodian only pursuant to the direction of the administrator, which shall include one or more of the persons authorized, in writing, by the administrator to give the instructions on its behalf, or the trustees. If the direction is made by telephone, the direction shall be confirmed by subsequent letter from the person providing such instructions. The custodian shall be fully protected from any liability for making payments from the trust in accordance with the direction of the administrator or the trustees. The custodian shall have no responsibility to see to the application of the payments or to ascertain whether any direction it receives complies with the terms of the plan. The custodian shall have no liability for any failure to act in the absence of instructions from the administrator or trustees.

B. No diversion of trust fund assets. No portion of the principal or income of the trust fund may be used for or diverted to purposes other than providing benefits to the participants under the plan, provided that payment of any taxes as may be imposed on the trust and payment of the trust's administrative expenses may be made from the trust and fund as provided herein. The employer shall have no beneficial interest in the trust and fund or any part thereof.

C. Irrevocable trust. Notwithstanding any provision of this article to the contrary, this trust shall be an irrevocable trust exempt from federal income taxation under Section 115 of the code.[1] All assets held by the trust and all earnings hereon are to be used exclusively for the exercise of the essential governmental function of the employer in providing benefits to its employees as participants in the plan.

[1] Editor's Note: See 26 U.S.C.A. § 115, I.R.C.

§ 71-17 Diversion; investment; holdings.

A. Prohibition against diversion. The assets of the fund shall be held for the exclusive purposes of providing plan benefits to eligible employees and their dependents, paying taxes and defraying reasonable expenses of the plan administration as provided for in this trust.

B. Investment authority. Subject to the requirements of applicable Pennsylvania law and other applicable law, the fund may be invested and reinvested without distinction between principal income. Subject to § 71-18A herein and consistent with any funding method for the plan communicated by the employer to the trustees:

(1) Property investment. Pursuant to the specific direction of the trustees, the custodian is authorized to retain or sell property contributed to the fund and to invest and maintain investment of part or all of the fund in any common or preferred stocks, bonds (including United States retirement plan bonds), common or pooled stock funds or mutual funds, whether managed by the custodians or others, insurance contracts, notes, debentures, mortgages or any other property, whether real, personal or mixed and regardless of where located, in the same manner that a prudent person would do under similar circumstances with due regard for the purposes of the plan;

(2) Cash holdings. The trustees may hold a reasonable portion of the fund in cash pending investment or payment of expenses or benefits; and

(3) Cash investments. The trustee shall keep cash, other than cash held under Subsection B(2) above, earning a reasonable interest rate in accounts in any banking similar financial institution that is supervised by the United States or a state or in demand notes and interests in demand notes, treasury bills or short-term negotiable commercial paper.

§ 71-18 Powers of trustees; compensation; terms.

A. Powers. The trustees, in addition to all powers and authorities granted to trustees under common law, statutory authority and other provisions of this article, and subject to the provisions of the applicable Pennsylvania state law, shall have the following powers and authorities, to be exercised in the trustees' sole discretion:

(1) Acquire and hold property: to purchase, or subscribe for, any securities or other property and to retain the same in trust;

(2) Dispose of property: to sell, exchange, convey, transfer, grant options to purchase, or otherwise dispose of any securities or other property held by the trustees, by private contract or at public auction. Any sale or other disposition may be made for cash or upon credit, or partly for cash and partly upon credit. No person dealing with the trustees shall be bound to see to the application of the purchase money or to inquire into the validity, expediency, or propriety of any sale or other disposition by the trustees;

(3) Exercise rights under securities: to vote upon any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights, or other options and to make any incidental payments; to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, and to delegate discretionary powers, and to pay any related assessments or charges; and generally to exercise any of the powers of an owner of the stock, bonds, securities, or other property held as part of the trust fund;

(4) Hold cash: to keep any portion of the trust fund in cash or cash balances that the trustees may, at various times, deem to be in the best interests of this trust, without liability for interest on the cash;

(5) Hold certain property temporarily: to accept and retain, for a period of time that the trustees deem advisable, any securities or other property received or acquired by it as trustees, whether or not the securities of other property would normally be purchases as investments under this trust;

(6) Execute instruments: to make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers granted in this trust;

(7) Settle claims: to settle, compromise, or submit to arbitration any claims, debts, or damages to or owing to or from the trust fund, to commence or defend suits or legal or administrative proceedings, and to represent the trust fund in all suits and legal and administrative proceedings;

(8) Employ agents: to employ suitable agents, attorneys, accountants, trustees and financial counsel, and other persons that are reasonably necessary for the proper administration of the fund, and to pay their reasonable expenses and compensation, including, but not limited to, payment of reasonable costs of custodial services provided to the trust by the custodian;

(9) Acquire foreclosed real estate: to acquire real estate by purchase, exchange, or as the result of any foreclosure, liquidation, or other salvage of any investment previously made under this trust (foreclosed real estate); to hold the foreclosed real estate in the manner and upon the terms that the trustees deem advisable; and to manage, operate, repair, develop, improve, partition, mortgage, or lease for any term or terms of years the foreclosed real estate or any other real estate constituting a part of the trust fund, upon the terms and conditions that the trustees deem proper, using the other trust assets for any of the purposes if deemed advisable;

(10) Invest in savings accounts: to invest funds of the trust fund in night deposits or savings accounts, including such accounts at the custodian, bearing a reasonable rate of interest;

(11) Invest in government obligations: to invest in treasury bills and other forms of United States government obligations;

(12) Exercise conversion and subscription rights. If any bonds, notes, stocks, or other securities held by the trustees shall entitle the holder to an option or privilege is given to the holder to subscribe for additional or other bonds, notes, stocks, or other securities, the trustees are authorized to exercise the options, rights and privileges from time to time and to make the conversions and subscriptions, to make the required payment, and to hold the acquired securities as investments of the funds;

(13) Invest in certificates of deposit: to deposit monies in federally insured savings accounts or certificates of deposit in banks or savings and loan associations, including such accounts at the custodian;

(14) Necessary and implied powers: to do all acts, take all actions, and exercise all rights and privileges, although not specifically mentioned in this section, that the trustees deem necessary to administer the trust fund, and to carry out the purposes of this trust.

B. Compensation expenses of the trustees. The trustees shall be entitled to reimbursement of all reasonable and necessary expenses (including reasonable fees for agents, attorneys, accountants and other persons rendering services to the trustee) incurred in connection with the discharge of their responsibilities under this trust. No trustee shall be entitled to any further compensation (as distinguished from reimbursement of expenses) for his or her services as a trustee. Any reimbursement of expenses incurred by a trustee shall be agreed upon, in writing, at the appropriate time by the trustee and the employer and, unless paid by the employer, shall be paid from the fund by the custodian as directed by the trustees.

C. Taxes paid from trust fund. All taxes of any and all kinds may be levied or assessed under any applicable state or federal laws upon the fund or its income (excluding taxes, if any, upon benefits paid to employees or their heirs, executors, administrators or assigns) and shall be paid from the fund by the custodian upon the specific direction of the trustees.

D. More than one trustee. Trustees shall act by a majority of their number, but may authorize any one or more of them to sign papers and instruments on their behalf.

E. Term of service. Trustees shall serve two-year terms.

F. Voting. All decisions by the trustees must be made during a meeting of a quorum of the trustees by majority vote. A quorum shall constitute a majority of the trustees.

§ 71-19 Duties of trustees; liability.

A. Accounts and records.

(1) Maintenance of accounts and records. The trustees shall maintain accurate and detailed records and accounts of all properties of the fund and all investments, receipts, disbursements, and other transactions under this trust.

(2) Inspection and audit. All the accounts, books and records of the trust shall be open to inspection and audit by any persons designated by the employer. The trustee shall, at the written and verbal direction of the employer, submit the accounts, books and records of the trust to auditors of the employer or any other party denominated as such by the employer.

(3) Standard of care. The trustees shall discharge their duties under this trust and under the plan solely in the interest of those individuals entitled to benefits under the plan and for the exclusive purpose of providing benefits to eligible employees and other persons entitled to benefits under the plan, and defraying reasonable expenses of administering the plan and the trust, and shall act with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

B. Limitation on liability. In no event shall any such successor trustee be liable on account of any act or failure to act of any predecessor trustee or have any duty to make any inquiry or investigation as to any act or omission occurring prior to the appointment of the successor trustee. Each successor trustee shall demonstrate acceptance of this trust by executing this trust or an addendum to this trust.

§ 71-20 Appointment, removal and resignation of trustees.

A. Appointment. Trustees shall be appointed by the employer at its discretion. The trustees shall exercise their powers and obligations under the terms of this article independent of the employer and in the best interest of the beneficiaries of the trust.

B. Removal. The employer may remove a trustee by giving 14 days' written notice of the intended action to the trustee(s).

C. Resignation. A trustee may resign by giving 14 days' written notice of the intended action to the employer.

§ 71-21 Amendment; termination.

A. Amendment. This trust may be amended from time to time, in whole or in part, without notice to any party. No amendment of this trust shall be permissible if such amendment or termination would cause the trust to become subject to federal, state or local taxation. In addition, no such amendment may affect the irrevocability of the trust with respect to the trust's assets immediately prior to the adoption of the amendment, with respect to which the trust must remain irrevocable, and which are to be used exclusively for the intended purposes of the trust.

B. Termination. The employer may terminate this trust at any time by giving written notice of the termination to the trustees. The termination shall be effective on the date the notice is mailed, or as of such other later date as may be specified in such notice. Notwithstanding any provision to the contrary herein, the trust shall be terminated upon the termination of the plan.

C. Payment of funds on liquidation. Upon the termination of the trust, the affairs of the trust shall be wound up as soon as may be reasonably practicable, and the fund, or the liquidation proceeds of the fund, shall be paid out and distributed by the trustees in the following order unless judgment or decree of a court of competent jurisdiction or any applicable law shall mandate a contrary application;

(1) Administration expenses. First, to the payment of all reasonable and necessary expenses of managing and administering the fund to the extent that the expenses are not paid by the employer; and

(2) Benefit payments. Second, to the payment of benefits to eligible participants and their eligible dependents that are payable from the trust as the administrator shall direct the trustees in writing.

D. Undistributed assets. Any assets remaining in the trust following the completion of all steps set forth in Subsection C may be used for any lawful purpose; provided, however, that such assets may not be distributed to any private entity or person.

E. Liquidation powers. From and after the date of the termination of the trust and until the final distribution of the fund has been completed, the trustees shall continue to have all of the powers provided under this trust that may be necessary or expedient for the orderly liquidation and distribution of the fund.

§ 71-22 Other provisions; severability.

A. Nonalienation. Except as otherwise permitted or required by the terms of the plan or applicable law, the benefits payable from this trust under the plan are intended for the payment of benefits for the persons entitled to them under the plan. Except for obligations of persons entitled to benefits to the fund, the benefits shall not be subject in any manner to attachment, lien or other process to secure payment of the debts and obligations of the persons to whom they are or may become payable, including, but not limited to, any debts or obligations having their origin in matters relating to marital relationships, alimony or child support.

B. Governing law. The validity and effect of the trust and the rights and obligations of the employer, eligible employees and all other persons affected by this trust shall be construed and determined in accordance with the laws and statutes of the Commonwealth of Pennsylvania.

C. Severability. If any provision of this trust is held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this trust, but this instrument shall be construed and enforced as if the illegal and invalid provisions had never been inserted in this trust.

D. Gender and number. Whenever in this trust the masculine gender is used, it shall be deemed to include the feminine and neuter genders as well, and singular usage shall include plural usage, and vice versa, as the context shall require.

E. Headings. Headings and numbers in this trust are included for convenience of reference only, and if there shall be any conflict between any of the numbers headings and the text of this trust, the text shall control.

F. Binding effect. This trust shall be binding upon all employees or former employees having or claiming to have any interest under the plan or this trust, their heirs, executors, administrators, conservators and assigns, and upon the employer, the trustees and their respective successors assigns.

G. Administration. The administrator shall have the authority to control and manage the operation and administration of the plan and shall apply all rules of the procedure and regulations adopted by the employer in a uniform and nondiscriminatory manner so that all persons entitled to benefits under the plan are treated similarly. The employer and the administrator shall have the authority that is necessary to discharge its responsibility under the plan and may delegate any and all of its responsibilities of control and management of the operation and administration of the plan.