[Adopted 10-27-2014 by Ord. No. 1230[1]]
[1]
Editor's Note: This ordinance also superseded
former Art. III, Police Pension Plan, adopted 2-21-2006 by Ord. No.
1151.
The following words and phrases as used in this Plan shall have
the meanings set forth in this article, unless a different meaning
is otherwise clearly required by the context:
As of any given date, the benefit determined under § 35-25B, calculated on the basis of final monthly average salary as of the date of determination and multiplied by a fraction, the numerator of which shall be the participant's aggregate service determined as of such date and the denominator of which shall be the projected aggregate service of the participant as if the participant continues in employment until attainment of normal retirement age. Notwithstanding anything contained herein to the contrary, in no event shall the fraction exceed 1.0. In no event, however, shall the accrued benefit exceed the maximum limitation, determined as of the date of computation, provided under § 35-25G. All accrued benefits are subject to all applicable limitations, reductions, offsets, and actuarial adjustments provided pursuant to the terms of the Plan prior to the actual payment thereof. The accrued benefit shall include any service increment determined pursuant to § 35-25F attributable to the participant's aggregate service as of the date of determination.
The total amount contributed by any participant to this Fund or its predecessor by way of payroll deduction or otherwise, plus interest credited at 4% per annum. Interest shall be credited in the form of a simple interest rate from the midpoint of the plan year for which the contributions were made to the first day of the month preceding the date that a distribution of accumulated contributions under §§ 35-27E and 35-28C shall be paid or payment of benefits shall commence.
The Municipal Pension Plan Funding Standard and Recovery
Act which was enacted as Act 205 of 1984, as amended, 53 P.S. § 895.101
et seq.
Two forms of payment of equal actuarial present value on
a specified date. The actuarial present value shall be determined
by use of the UP-1984 Mortality Table and 7% interest unless otherwise
specifically provided herein.
The person, partnership, association or corporation which
at any given time is serving as actuary; provided that such actuary
must be an "approved actuary" as defined in the Act.
The total period or periods of the participant's "employment"
which is defined below with the employer whether or not interrupted.
Notwithstanding the preceding sentence, should any such participant
receive a distribution of accumulated contributions with respect to
a period of employment, such period of employment shall not be included
in aggregate service thereafter unless, at the commencement of the
next period of employment, the participant repays to the Fund the
amount of such distribution with interest. For purposes of this section
1.06, interest shall accrue as of the date the employee receives a
distribution of accumulated contributions and shall be computed at
the same rate and in the same manner as described in the definition
of "accumulated contributions." Aggregate service shall be calculated
in whole years and completed months.
The eligible dependent children are registered at an accredited
institution of higher learning and are carrying a minimum course load
of seven credit hours per semester.
The person or entity designated by the participant to receive
a distribution of the participant's accumulated contributions should
the participant die prior to becoming entitled to a retirement benefit.
In the event that a participant does not designate a beneficiary or
the beneficiary does not survive the participant, the beneficiary
shall be the surviving spouse, or if there is no surviving spouse,
the issue, per stirpes, or if there is no surviving issue, the estate;
but if no personal representative has been appointed, to those persons
who would be entitled to the estate under the intestacy laws of the
Commonwealth of Pennsylvania if the participant had died intestate
and a resident of Pennsylvania.
The person designated by the Borough who has the primary
responsibility for the execution of the administrative affairs for
the Plan.
The Internal Revenue Code of 1986, as amended.
The Police Pension Committee as determined pursuant to § 35-29B.
The Commonwealth of Pennsylvania.
The total remuneration of the employee as reported on Internal
Revenue Service form W-2, whether salary or hourly wages, including
overtime pay, holiday pay, longevity pay and any other form of remuneration
paid by the employer for police services rendered. Compensation shall
be limited on an annual basis for purposes of the Plan to the amount
specified pursuant to Internal Revenue Code Section 401(a)(17).
The Borough Council of the Borough of Brentwood.
The date when a participant is determined by Council or by
a physician appointed by the Plan Administrator to be incapacitated
due to total and permanent disability, or the date when the participant's
employment terminates due to such total and permanent disability,
if later.
Any individual employed by the employer on a regular, full-time
basis as a member of the employer's police force.
The Borough of Brentwood, Allegheny County, Pennsylvania.
For the purpose of determining aggregate service:
The period of time for which an employee is directly or indirectly
compensated or entitled to compensation by the employer for the performance
of duties as a police officer;
Any period of time not to exceed six months for which an employee
is granted an authorized leave of absence, provided that the participant
shall pay participant contributions to the Plan in an amount equal
to the amount which would have been paid if the participant continued
in active employment. Such an authorized leave of absence may be granted
for a period of time for which an employee is paid a fixed, periodic
amount in the nature of salary continuation payments for reasons other
than the performance of duties (such as vacation, holidays, sickness,
entitlement to benefits under workers' compensation or similar laws),
either directly by the employer or through a program to which the
employer has made contributions on behalf of the employee; or a period
during which an employee is entitled to disability benefits under
this Plan, provided that the employee returns to employment within
three months of the date on which it is determined that the employee
is no longer totally and permanently disabled if such determination
occurs prior to the date a participant attains normal retirement age;
or for any other reason acceptable to the Council; employment will
include any period of time that the participant receives Heart and
Lung Act payments to the extent required by law, provided that the
participant makes applicable participant contributions; and
Any period of four years or less of voluntary or involuntary
military service with the Armed Forces of the United States of America,
provided that the participant has been employed as a regular, full-time
member of the employer's police force for a period of at least six
months immediately prior to the period of military service; and the
participant returns to employment within six months following discharge
from military service or within such longer period during which employment
rights are guaranteed by applicable law or under the terms of a collective
bargaining agreement with the employer.
In the case of a participant who is deemed to be totally and
permanently disabled, any period of voluntary or involuntary military
service with the Armed Forces of the United States of America not
to exceed a total of five years which occurred prior to the date on
which a participant first became employed as an employee of the employer,
provided that the participant shall purchase such credit and that
such participant is not entitled to receive, eligible to receive or
is receiving retirement benefits for such military service under a
retirement system administered and wholly or partially paid for by
any other governmental agency except military retirement pay earned
by a combination of active and nonactive duty with a reserve or national
guard component of the armed forces which is payable upon the attainment
of a specified age and period of service under 10 U.S.C. Chapter 67
(relating to retired pay for non-regular service). The purchase price
for such service shall be computed by multiplying the average normal
cost rate for the Plan as certified by the Public employee Retirement
Commission and not to exceed 10% times the participant's average annual
rate of compensation during the first three years of employment and
multiplying the result times the number of years and fractions thereof
being purchased. Interest shall be paid at a rate of 4.75% compounded
annually from the first date of employment to the date of payment.
Any period of qualified military service as determined under
the requirements of Chapter 43 of Title 38, United States Code, provided
that the participant returns to employment following such period of
qualified military service, and the participant makes payment to the
Plan in an amount equal to the participant contributions that would
otherwise have been paid to the Plan during such period of qualified
military service. The amount of participant contributions shall be
based upon an estimate of the compensation that would have been paid
to the participant during such period of qualified military service
as determined by the average compensation paid to the participant
during the 12 months immediately preceding the period of qualified
military service. The amount of participant contributions so calculated
must be paid into the Plan before the end of the period that begins
on the date of reemployment and ends on the earlier of the date that
ends the period that has a duration of three times the period of qualified
military service, or the date that is five years after the date of
reemployment.
Employment shall not mean for the purpose of determining aggregate
service:
Any period of disability for a participant who was disabled
as a result of a nonservice-related disability.
Shall mean the average monthly salary earned by the participant and paid by the employer during the final 36 months immediately preceding termination of active employment and upon which the participant made participant contributions pursuant to Article III if participant contributions were required pursuant to that Article. Salary shall include all compensation for services performed for Brentwood Borough as a Brentwood Borough police officer and reported and included on that police officer's Federal Internal Revenue Service W-2, annual wage and tax statement but shall exclude for this purpose any single sum or extraordinary payments made which are not directly attributable to active employment during the averaging period, including but not limited to payment for accumulated sick leave, payment of a longevity bonus, or payment of a back pay damage award.
Final monthly average salary shall be calculated by taking into account only those periods during which an employee receives salary, as that term is defined in Subsection A of this definition. Therefore, for example, the final monthly average salary for a participant who receives disability benefits from this Plan or who is voluntarily or involuntarily serving in the United States Armed Forces during the final 36 months of aggregate service shall be based on the period during which the employee last received salary (as defined in the preceding paragraph) from the employer.
Salary used to determine final monthly average salary shall
be limited on an annual basis for the purpose of the Plan to the amount
specified in accordance with Internal Revenue Code Section 401(a)(17).
A legal reserve life insurance company authorized to do business
in the Commonwealth of Pennsylvania.
The last month of basis salary or basic rate of pay as applicable
under any then-current collective bargaining agreement before the
disability date.
The minimum obligation of the municipality as determined
by the actuary pursuant to the provisions of the Act.
The date on which the participant has completed 25 years
of aggregate service with the employer and has attained age 55.
A written document prepared in the form specified by the
Plan Administrator and delivered as follows: If such notice or election
is to be provided by the employer or the Plan Administrator, it shall
be mailed in a properly addressed envelope, postage prepaid, to the
last known address of the person entitled thereto, on or before the
last day of the specified notice or election period; or, if such notice
or election is to be provided to the employer or the Plan Administrator,
it must be received by the recipient on or before the last day of
the specified notice or election period.
An employee who has met the eligibility requirements to participate in the Plan as provided in § 35-23A and who has not for any reason ceased to be a participant hereunder.
The Police Pension Fund administered under the terms of this
Plan and which shall include all money, property, investments, policies
and contracts standing in the name of the Plan.
The Plan set forth herein, as amended from time to time and
designated as the Borough of Brentwood Police Pension Plan.
Shall be the Borough Manager or the individual appointed
for the purpose of supervising and administering the provisions of
the Plan. In the event that there is no Borough Manager so serving
and no such appointment is made, the Plan Administrator shall be the
Council.
The twelve-month period beginning on January 1 and ending
on December 31 of each year.
A retirement annuity or retirement income endowment policy
(or a combination of both) or any other form of insurance contract
or policy which shall be deemed appropriate in accordance with the
provisions of applicable law.
January 1, 2014, the date upon which this amendment and restatement
of the Plan becomes effective.
The first day of the month coincident with or next following
the date on which the participant retires from employment or the first
day of any month thereafter on which the payment of retirement benefits
pursuant to this Plan shall commence.
The amount calculated per month pursuant to § 35-25F on behalf of a participant for each completed year of service in excess of 25 years, not to exceed $100 per month.
A condition of physical or mental impairment due to which a participant is unable to perform the usual and customary duties of employment, which condition continues for at least six months and which is reasonably expected to continue to be permanent for the remainder of the participant's lifetime. For purposes of this definition and § 35-26, a condition shall not be treated as a total and permanent disability unless such condition is a direct result of and occurs in the line of duty as an employee. Therefore, an employee whose physical or mental impairment does not occur in the line of duty is not entitled to receive disability benefits under the Plan.
The initial and any successor trustee or trustees of the
trust.
A.
Eligibility requirements. Each employee who was a participant in
the Plan on the day prior to the restatement date shall continue to
be a participant on and after the restatement date subject to the
terms and conditions of the Plan as set forth herein. Each employee
who is employed as a regular, full-time member of the police department
of the employer shall participate herein as of the date on which such
employee's employment first commences or recommences, provided all
prerequisites to participation under this Plan shall have been fulfilled,
including, but not limited to, completion of all forms required by
the Plan Administrator. Full-time members of the police department
serving their probationary period are required to participate.
B.
Notification of Plan Administrator. The Council shall furnish the
Plan Administrator with written notification of the appointment of
any new full-time employee who is eligible for participation hereunder.
C.
Designation of beneficiary. Any new, full-time employee who becomes
a participant hereunder shall provide a written notice in the manner
prescribed by the Plan Administrator which designates a beneficiary
at the time participation commences. The participant's election of
any such beneficiary may be rescinded or changed, without the consent
of the beneficiary, at any time, provided the participant provides
the written notice of the changed designation to the Plan Administrator
in the manner prescribed by the Plan Administrator. Any designation
of a beneficiary made in any manner other than one acceptable to the
Plan Administrator shall be null and void and have no effect under
the terms of this Plan.
A.
Participant contributions. Each participant shall as a requirement of participation pay regular contributions to the Pension Fund in an amount equal to 5% of the participant's compensation that is includable in the calculation of Final Average Monthly Salary. Each participant shall complete the necessary forms to authorize the payment of participant contributions by way of payroll deductions. The participant contributions required under this Subsection A shall be picked up by the employer and shall be treated as employer contributions pursuant to Internal Revenue Code Section 414(h)(2).
B.
Reduction of participant contributions. Notwithstanding the preceding Subsection A, if an actuarial study performed by the actuary shows that the condition of the Pension Fund is such that payments into the Pension Fund by participants may be reduced below the minimum percentages prescribed in Subsection A, or may be eliminated, and that if such payments are reduced or eliminated, contributions by the employer will not be required to keep the Pension Fund actuarially sound, the employer may, subject to such limitations and conditions set forth in the applicable collective bargaining agreement, by ordinance, reduce or eliminate payments into the Pension Fund by participants on an annual basis.
C.
Employer contributions. The actuary, in accordance with the Act,
shall determine the minimum municipal obligation of the employer.
The employer shall pay into the Pension Fund, by annual appropriations
or otherwise, the contributions necessary to satisfy the minimum municipal
obligation.
D.
State aid. General municipal pension system state aid, or any other
amount of state aid received by the employer from the commonwealth
in accordance with the Act and designated by the employer to be applied
to this Plan, may be deposited into the Pension Fund governed by this
Plan and shall be used to reduce the amount of the minimum municipal
obligation of the employer.
E.
Gifts. The Council is authorized to take by gift, grant, devise or
otherwise any money or property, real or personal, for the benefit
of the Plan and cause the same to be held as a part of the Pension
Fund. The care, management, investment and disposal of such amounts
shall be vested in the Council or its delegate, the Plan Administrator,
subject to the direction of the donor and not inconsistent with applicable
laws and the terms of the Plan.
F.
Leased employees. Leased employees [as defined in IRC Section 414(n)]
shall not be eligible to participate. As of the effective date of
this restatement, a leased employee is any person who is not an employee
of the employer and who provides services to the employer if:
(1)
The services are provided pursuant to an agreement between the employer
and any other person (the "leasing organization");
(2)
The person has performed services for the employer on a substantially
full-time basis for a period of at least one year; and
(3)
Such services are performed under the primary direction or control
by the employer.
G.
Independent contractors. Notwithstanding the other sections of this
article, no individual whom the employer regards as not being an employee
shall be eligible to participate even if it is later determined by
a court of law, the Internal Revenue Service, the Social Security
Administration, or any other government agency that he should have
been an employee.
A.
Normal retirement. Each participant shall be entitled to normal retirement
benefits after retirement on or after the participant has attained
normal retirement age.
B.
Normal retirement benefit. Each participant who shall become entitled to a benefit pursuant to Subsection A shall receive a benefit paid monthly in an amount equal to 50% of the participant's final monthly average salary as determined herein.
C.
Late retirement. A participant may continue to work beyond the attainment of normal retirement age subject to the employer's rules and regulations regarding retirement age. If a participant who has met the requirements of Subsection A continues to work beyond normal retirement age, there shall be no retirement benefits paid until employment ceases and retirement begins. The retirement benefit of a participant who retires after attainment of normal retirement age shall be calculated in accordance with Subsection B on the basis of the final monthly average salary as of such participant's actual retirement date.
D.
Payment of benefits. Retirement benefit payments shall be made in
a form, known as the "normal form," which shall be payable as of the
first day of the month coincident with or next following the participant's
retirement date and the first day of each month thereafter during
the participant's lifetime. A participant must complete an application
for benefit in the manner prescribed by the Plan Administrator and
deliver such application to the Plan Administrator at least 30 days
prior to the date on which benefit payments shall commence. Notwithstanding
anything contained herein to the contrary, no retirement benefit payments
nor any other payments shall be due or payable on or before the first
day of the month coincident with or next following the date that is
30 days after the date the Plan Administrator receives the application
for benefits. Payment of benefits hereunder shall cease as of the
date of death of the participant.
E.
Normal form. The normal form for payment of retirement benefits shall
be a monthly annuity payable for the life of the participant.
F.
Service increment. A participant who shall retire after completion of at least 26 years of aggregate service may be eligible to receive a service increment in addition to the Normal Retirement Benefit under Subsection B. Such service increment shall only be available to a participant who shall retire on a retirement date after attainment of normal retirement age and whose aggregate service for purposes of this Subsection F shall only include periods of time when the participant actively renders service in employment and shall not include any period of time during which the participant received a disability benefit under the terms of this Plan or was not otherwise in active employment. The monthly amount of the service increment shall be equal to $25 for each year of aggregate service in excess of 25 years, up to a maximum service increment of $100 per month.
G.
Ad hoc cost of living adjustment. Effective for payment beginning
January 1, 2020, any currently retired police officer who reached
normal retirement age prior to January 1, 2010, shall have his pension
increased by $1,200 a year or $100 a month.
[Added 12-9-2019 by Ord. No. 1284]
H.
(Reserved)
I.
(Reserved)
J.
Assignment. The pension benefit payments prescribed herein shall
not be subject to attachment, execution, levy, garnishment or other
legal process and shall be payable only to the participant or designated
beneficiary and shall not be subject to assignment or transfer. However,
all rights and benefits, including elections, provided to a participant
in this Plan shall be subject to the rights afforded to any alternate
payee under what is recognized pursuant to state law support provisions
or as a qualified domestic relations order. For purposes of this section,
"alternate payee" and "qualified domestic relations order shall be
determined by the Plan Administrator in accordance with applicable
law.
K.
Retired participants. Any participant who shall have terminated employment
prior to the restatement date shall not have the benefit altered in
any way by the provisions of this amended and restated Plan, except
where otherwise expressly provided herein. Such retired participants
shall continue to have their benefits governed by the terms of the
Plan in effect on the day of the participant's termination of employment.
L.
Personal right of participant. The right to receive any benefits
under this Plan is a personal right of the participant and shall expire
upon the death of the participant. No heir, legatee, devisee, beneficiary,
assignee or other person claiming by or through a participant shall
have any interest in any benefits hereunder unless clearly and expressly
so provided by the terms of this Plan or the provisions of applicable
law. A participant's election, failure to make an election or revocation
of an election hereunder shall be final and binding on all persons.
M.
Nonduplication of benefit. To avoid any duplication of benefits,
a participant who is receiving a retirement benefit under the Plan
and who shall resume employment shall have benefit payments suspended
until the first day of the month coincident with or next following
the date such employment shall cease. Upon resumption of benefit payments,
such participant shall receive the greater of the amount of the suspended
benefit or the amount of benefit based upon final monthly average
salary and aggregate service as of the date that such period of resumed
employment shall cease.
N.
Limitation of liability. Nothing contained herein shall obligate
the employer, the Plan Administrator, any fiduciary or any agent or
representative of any of the foregoing, to provide any retirement
or other benefit to any participant or beneficiary which cannot be
provided from the assets available in the Pension Fund, whether such
benefits are in pay status or otherwise payable under the terms of
the Plan. The Council retains the right to amend or terminate this
Plan consistent with applicable law at any time with or without cause
and whether or not such action directly or indirectly results in the
suspension, reduction or termination of any benefit payable under
the Plan or in pay status, and without liability to any person for
any such action.
A.
Disability retirement. A participant who shall incur a total and
permanent disability shall be entitled to a disability retirement
benefit as of the disability date.
B.
Disability retirement benefit. A participant who shall be entitled to a disability retirement benefit under Section 5.01, whose total and permanent disability is the direct result of injuries incurred in the line of duty as an employee shall be entitled to an employment-related disability benefit which shall be a monthly benefit in an amount equal to 50% of the member's salary at the time the disability was incurred, determined pursuant to the definition of "member's salary at the time disability was incurred" in § 35-22, provided that any member who receives benefits for the same injuries under social security disability shall have the participant's disability benefits offset or reduced by the amount of such benefits.
C.
Payment of disability benefits.
(1)
Disability payments shall be made monthly as of the first day of each month, commencing as of the first day of the month coincident with or immediately following the participant's disability date and continuing until the earliest of the death of the participant, the attainment of normal retirement age, or cessation of total and permanent disability. If a totally and permanently disabled participant attains normal retirement age, any disability retirement benefits shall cease, and such participant shall be entitled to his Normal Retirement Benefit determined under § 35-25B. The Normal Retirement Benefit of a totally and permanently disabled participant shall be determined using "final monthly average salary," as defined in § 35-22, and such benefit shall be multiplied by a fraction, the numerator of which shall be the participant's aggregate service as of the disability date and the denominator of which shall be the projected aggregate service as if the participant would have continued in employment until the attainment of his normal retirement age.
(2)
A participant who shall fail to return within three months to employment as an employee of the employer upon cessation of total and permanent disability prior to attainment of normal retirement age shall be deemed to have terminated employment as of the disability date, and shall not be entitled to any distribution of accumulated contributions pursuant to § 35-28B to the extent that the total amount of disability payments exceeds the value of the participant's accumulated contributions as of the disability date.
D.
Verification of disability. The Plan Administrator shall in its sole
discretion determine whether a participant shall have incurred a total
and permanent disability. The Plan Administrator shall rely on the
report of a physician acceptable to the Plan Administrator. If the
Plan Administrator shall determine that a participant who is totally
and permanently disabled has recovered sufficiently to resume active
employment as a police officer or if a participant refuses to undergo
a medical examination as directed by the Plan Administrator (such
a medical examination may not be required more frequently than once
in any given twelve-month period), the payment of disability retirement
benefits shall cease.
E.
Cessation of disability. A participant who is receiving payment of
disability retirement benefits under this Plan must notify the Plan
Administrator of any change which may cause a cessation of entitlement
to receipt of such benefits hereunder. If a participant fails to provide
immediate notice to the Plan Administrator of any such change in status
and continues to receive payment of benefits hereunder to which the
participant is not entitled, then the Plan may take whatever action
is necessary to recover any amount of improperly paid amounts, including
legal action or offsetting such amounts against any future payments
of retirement or other benefits under the Plan, including the costs
of such actions.
F.
Reduction in benefits. All disability retirement benefit payments
made to an eligible participant shall be reduced by the amount of
any payments for which the participant is eligible under any workers'
compensation or similar laws, whether or not the participant collects
such compensation payments; and shall be reduced further by any other
disability compensation payment for which the participant is eligible,
provided by the Borough or by any other federal, state or local government
entity, whether or not the participant collects such compensation
payment.
A.
Death benefit. Except as hereinafter set forth, no benefit shall
be payable hereunder upon or by reason of the death of any participant.
B.
Survivor benefit.
(1)
If a participant shall die after commencement of retirement or disability
benefit payments or after the participant is eligible to retire under
section 4.01 and before retirement benefit payments commence, a survivor
benefit shall be paid to the surviving spouse of the participant or,
if no spouse survives or the spouse survives and subsequently dies,
then the child or children of the participant under the age of 18,
or if attending college, under or attaining the age of 23 in an amount
equal to 50% of the participant's retirement benefit which the participant
was receiving or would have been receiving had the participant been
retired at the time of death.
(2)
Such survivor benefit shall be paid in lieu of any distribution of
accumulated contributions to which the deceased participant may have
been entitled; provided, however, that in the event the amount of
participant's accumulated contributions exceeds the amount of survivor
benefit payable in accordance with the preceding, then such participant's
death benefit shall be equal to the amount of the participant's accumulated
contributions.
C.
(Reserved)
D.
Payment of survivor benefit. The survivor benefit commences as of
the first day of the month coincident with or immediately following
the date of death of the participant. The survivor benefit shall be
paid monthly to the surviving spouse of the participant, if any, until
the date of death of the surviving spouse. Upon the death of the surviving
spouse or if there is no surviving spouse, the survivor benefit shall
be paid monthly in equal shares to the surviving dependent children
of the deceased participant until the death or attainment of age 18
of each child, or if attending college, under or attaining the age
of 23. The shares payable to the surviving children shall be adjusted
as each child ceases to be eligible to receive a share of the benefit
hereunder.
E.
Death of participant prior to retirement. The surviving spouse of
a participant who dies on or after April 17, 2002, before his pension
has vested, and whose survivors are entitled to no benefits under
any other provisions of this Plan, or if no spouse survives or if
he or she survives and subsequently dies, the child or children under
the age of 18 years, or if attending college, under or attaining the
age of 23 years, of a participant shall be entitled to receive a refund
of accumulated contributions (which includes interest at 4% per annum)
unless the participant has designated another beneficiary. If the
participant has received disability retirement benefits hereunder,
the amount of distribution of accumulated contributions shall be reduced
by the amount of disability retirement benefits, which have been paid
hereunder.
A.
Rights of terminated employees. A participant who shall cease to
be an employee except as otherwise herein before provided shall have
all interest and rights under this Plan limited to those contained
in the following sections of this article.
B.
Distribution of accumulated contributions. A participant whose employment
with the employer shall terminate for any reason other than death
or total and permanent disability prior to attainment of normal retirement
age shall be entitled to receive a distribution of accumulated contributions.
Upon receipt of such accumulated contributions, said participant and
beneficiary shall not be entitled to any further payments from the
Plan.
C.
Deferred vested benefit. A participant who has completed at least 12 years of aggregate service and whose employment with the employer shall terminate for any reason other than death or total and permanent disability prior to attainment of normal retirement age shall be entitled to elect to receive a deferred vested benefit in lieu of a distribution of accumulated contributions under Subsection B. The election hereunder shall be made within 90 days of the date on which the participant's employment shall cease or shall be forever waived, and a distribution pursuant to Subsection B shall occur. Such a deferred vested benefit shall be in an amount equal to the participant's accrued benefit as of the date employment terminates and shall commence after application pursuant to § 35-25D as of the first day of the month coincident with or next following the date on which the participant's normal retirement age would be attained if the participant continued in employment until such date.
A.
Plan Administrator. The Plan Administrator shall be the individual
appointed by the Council who shall have the power and authority to
do all acts and to execute, acknowledge and deliver all instruments
necessary to implement and effectuate the purpose of this Plan. The
Plan Administrator may delegate authority to act on its behalf to
any persons it deems appropriate. If a Plan Administrator is not appointed,
the Borough Manager shall be the Plan Administrator, and if there
is no Borough Manager serving it shall be Council.
B.
Police Pension Board. If the Council shall appoint a Police Pension
Board, it shall be for the purpose of advising the Council regarding
the operation, administration, and the investment of assets of the
Plan. The Board shall consist of not more than five members, including
the Mayor, Plan Administrator, Finance Director, one member of Council,
appointed by Council President, and one member (as well as an alternate
to serve should the regular police member not be available) who shall
be active police officers of the Borough selected by the police officers.
Each member of the Board shall serve in that capacity until the earlier
of resignation, death, removal, or otherwise. Each member may resign
by delivering written notice to the Council and other members of the
Board. The Board shall act by a majority of its members at the time
in office and such action may be taken either by vote at a meeting
or in writing without a meeting.
C.
Authority and duties of the Plan Administrator.
(1)
The Plan Administrator shall have full power and authority to do
whatever shall, in its judgment, be reasonably necessary for the proper
administration and operation of the Plan. The interpretation or construction
placed upon any term or provision of the Plan by the Plan Administrator
or any action of the Plan Administrator taken in good faith shall,
upon the Council's review and approval thereof, be final and conclusive
upon all parties hereto, whether employees, participants or other
persons concerned. By way of specification and not limitation and
except as specifically limited hereafter, the Plan Administrator is
authorized to:
(a)
Construe this Plan;
(b)
Determine all questions affecting the eligibility of any employee
to participate herein;
(c)
Compute the amount and source of any benefit payable hereunder
to any participant or beneficiary;
(d)
Authorize any and all disbursements;
(e)
Prescribe any procedure to be followed by any participant and/or
other person in filing any application or election;
(f)
Prepare and distribute, in such manner as may be required by
law or as the Plan Administrator deems appropriate, information explaining
the Plan;
(g)
Require from the employer or any participant such information
as shall be necessary for the proper administration of the Plan;
(h)
Appoint and retain any individual to assist in the administration
of the Plan, including such legal, clerical, accounting and actuarial
services as may be required by any applicable law or laws; and
(i)
Select an individual retirement plan provider (either the state
or a federally regulated financial institution) and invest funds in
connection with the rollover of mandatory distributions as described
in § 35-25I(2).
(2)
The Plan Administrator shall have no power to add to, subtract from
or modify the terms of the Plan or change or add to any benefits provided
by the Plan, or to waive or fail to apply any requirements of eligibility
for benefits under the Plan. Further, the Plan Administrator shall
have no power to adopt, amend, or terminate the Plan, to select or
appoint any trustee or to determine or require any contributions to
the Plan, said powers being exclusively reserved to the Council.
D.
Plan Administrator costs. The Plan Administrator shall serve without
compensation for services unless otherwise agreed by the Council in
writing. All reasonable expenses incident to the functioning of the
Plan Administrator, including, but not limited to, fees of accountants,
counsel, actuaries and other specialists and other costs of administering
the Plan, may be paid from the Pension Fund upon approval by the Council
to the extent permitted under applicable law and not otherwise paid
by the employer.
E.
Hold harmless. No member of the Council, the Plan Administrator if
the Plan Administrator is an employee or official of the Borough,
nor any other person involved in the administration of the Plan that
is an employee of the employer shall be liable to any person on account
of any act or failure to act which is taken or omitted to be taken
in good faith in performing their respective duties under the terms
of this Plan. To the extent permitted by law, the employer shall,
and hereby does agree to, indemnify and hold harmless the Plan Administrator
if the Plan Administrator is an employee or official of the Borough
and each of any such individual's heirs, executors and administrators,
and the delegates and appointees (other than any person, bank, firm
or corporation which is independent of the employer and which renders
services to the Plan for a fee) from any and all liability and expenses,
including counsel fees, reasonably incurred in any action, suit or
proceeding to which he is or may be made a party by reason of being
or having been a member, delegate or appointee of the Plan Administrator,
except in matters involving criminal liability, intentional or willful
misconduct. If the employer purchases insurance to cover claims of
a nature described above, then there shall be no right of indemnification
except to the extent of any deductible amount under the insurance
coverage or to the extent of the amount the claims exceed the insured
amount.
F.
Approval of benefits. The Plan Administrator shall review and approve
or deny any application for retirement benefits within 30 days following
receipt thereof or within such longer time as may be necessary under
the circumstances. Any denial of an application for retirement benefits
shall be in writing and shall specify the reason for such denial.
G.
Appeal procedure. Any person whose application for retirement benefits
is denied, who questions the amount of benefit paid, who believes
a benefit should have commenced which did not so commence or who has
some other claim arising under the Plan ("claimant"), shall first
seek a resolution of such claim under the procedure hereinafter set
forth.
(1)
Any claimant shall file a notice of the claim with the Plan Administrator
which shall fully describe the nature of the claim. The Plan Administrator
shall review the claim and make an initial determination approving
or denying the claim.
(2)
If the claim is denied in whole or in part, the Plan Administrator
shall, within 90 days (or such other period as may be established
by applicable law) from the time the application is received, mail
notice of such denial to the claimant. Such ninety-day period may
be extended by the Plan Administrator if special circumstances so
require for up to 90 additional days by the Plan Administrator's delivering
notice of such extension to the claimant within the first ninety-day
period. Any notice hereunder shall be written in a manner calculated
to be understood by the claimant and, if a notice of denial, shall
set forth:
(3)
Upon receipt of notice denying the claim, the claimant shall have
the right to request a full and fair review by the Council of the
initial determination. Such request for review must be made by notice
to the Council within 60 days of receipt of such notice of denial.
During such review, the claimant or a duly authorized representative
shall have the right to review any pertinent documents and to submit
any issues or comments in writing. The Council shall, within 60 days
after receipt of the notice requesting such review (or in special
circumstances, such as where the Council in its sole discretion holds
a hearing, within 120 days of receipt of such notice), submit its
decision in writing to the person or persons whose claim has been
denied. The decision shall be final, conclusive and binding on all
parties, shall be written in a manner calculated to be understood
by the claimant and shall contain specific references to the pertinent
Plan provisions on which the decision is based.
(4)
Any notice of a claim questioning the amount of a benefit in pay
status shall be filed within 90 days following the date of the first
payment which would be adjusted if the claim is granted unless the
Plan Administrator allows a later filing for good cause shown.
(5)
A claimant who does not submit a notice of a claim or a notice requesting
a review of a denial of a claim within the time limitations specified
above shall be deemed to have waived such claim or right to review.
(6)
Nothing contained herein is intended to abridge any right of a claimant to appeal any final decision hereunder to a court of competent jurisdiction under 2 Pa.C.S.A. § 752. No decision hereunder is a final decision from which such an appeal may be taken until the entire appeal procedure of this Subsection G of the Plan has been exhausted.
A.
Operation of the pension fund.
(1)
The Council is hereby authorized to hold and supervise the investment
of the assets of the Pension Fund, subject to the provisions of the
laws of the commonwealth and of this Plan and any amendment thereto.
(2)
The Pension Fund shall be used to pay benefits as provided in the
Plan and, to the extent not paid directly by the employer, to pay
the expenses of administering the Plan pursuant to authorization by
the employer.
(3)
The employer intends the Plan to be permanent and for the exclusive
benefit of its employees. It expects to make the contributions to
the Pension Fund required under the Plan. The employer shall not be
liable in any manner for any insufficiency in the Pension Fund; benefits
are payable only from the Pension Fund, and only to the extent that
there are monies available therein.
(4)
The Pension Fund will consist of all funds held by the employer under
the Plan, including contributions made pursuant to the provisions
hereof and the investments, reinvestments and proceeds thereof. The
Pension Fund shall be held, managed, and administered pursuant to
the terms of the Plan. Except as otherwise expressly provided in the
Plan, the employer has exclusive authority and discretion to manage
and control the Pension Fund assets. However, the employer may, at
its sole discretion, appoint a custodian investment manager. The Council
shall be the trustee, to the extent a trustee is required and none
has been appointed.
(5)
If all Plan assets are held in one or more custodial accounts or annuity contracts issued by an insurance company licensed to do business in Pennsylvania, then the Council does not need to appoint a trustee, and plan assets shall be administered in accordance with the other provisions of this Plan and the terms of the agreement with the insurance company. If there is a separate trust document, then the terms of that document shall supersede the provisions of this § 35-30. If the Council fails to name a trustee, the Borough shall be the trustee.
B.
Powers and duties of the employer. With respect to the Pension Fund,
the employer shall have the following powers, rights and duties, in
addition to those vested in it elsewhere in the Plan or by law, unless
such duties are delegated:
(1)
To retain in cash so much of the Pension Fund as it deems advisable
and to deposit any cash so retained in any bank or similar financial
institution (including any such institution which may be appointed
to serve as trustee hereunder), without liability for interest thereon.
(2)
To invest and reinvest the principal and income of the fund and keep
said fund invested, without distinction between principal and income,
in securities which are at the time legal investments for fiduciaries
under the Pennsylvania Fiduciaries Investment Act, or as the same
may be subsequently modified or amended.
(3)
To sell property held in the fund at either public or private sale
for cash or on credit at such times as it may deem appropriate; to
exchange such property; to grant options for the purchase or exchange
thereof.
(4)
To consent to and participate in any plan of reorganization, consolidation,
merger, extension or other similar plan affecting property held in
the fund; to consent to any contract, lease, mortgage, purchase, sale
or other action by any corporation pursuant to any such plan.
(5)
To exercise all conversion and subscription rights pertaining to
property held in the fund.
(6)
To exercise all voting rights with respect to property held in the
fund and in connection therewith to grant proxies, discretionary or
otherwise.
(7)
To place money at any time in a deposit bank deemed to be appropriate
for the purposes of this Plan no matter where situated, including,
in those cases where a bank has been appointed to serve as trustee
hereunder, the savings department of its own commercial bank.
(8)
In addition to the foregoing powers, the employer shall also have
all of the powers, rights, and privileges conferred upon trustees
by the Pennsylvania Fiduciaries Investment Act, or as the same may
be subsequently modified or amended, and the power to do all acts,
take all proceedings and execute all rights and privileges, although
not specifically mentioned herein, as the employer may deem necessary
to administer the Pension Fund.
(9)
To maintain and invest the assets of this Plan on a collective and
commingled basis with the assets of other pension plans maintained
by the employer, provided that the assets of each respective plan
shall be accounted for and administered separately.
(10)
To invest the assets of the Pension Fund in any collective commingled
trust fund maintained by a bank or trust company, including any bank
or trust company which may act as a trustee hereunder. In this connection,
the commingling of the assets of this Plan with assets of other eligible,
participating plans through such a medium is hereby specifically authorized.
Any assets of the Plan which may be so added to such collective trusts
shall be subject to all of the provisions of the applicable declaration
of trust, as amended from time to time, which declaration, if required
by its terms or by applicable law, is hereby adopted as part of the
Plan, to the extent of the participation in such collective or commingled
trust fund by the Plan.
(11)
To make any payment or distribution required or advisable to
carry out the provisions of the Plan, provided that if a trustee is
appointed by the employer, such trustee shall make such distribution
only at the direction of the employer.
(12)
To compromise, contest, arbitrate, enforce or abandon claims
and demands with respect to the Plan.
(13)
To retain any funds or property subject to any dispute without
liability for the payment of interest thereon, and to decline to make
payment or delivery thereof until final adjudication is made by a
court of competent jurisdiction.
(14)
To pay, and to deduct from and charge against the Pension Fund,
any taxes which may be imposed thereon, whether with respect to the
income, property or transfer thereof, or upon or with respect to the
interest of any person therein, which the Fund is required to pay;
to contest, in its discretion, the validity or amount of any tax,
assessment, claim or demand which may be levied or made against or
in respect of the Pension Fund, the income, property or transfer thereof,
or in any matter or thing connected therewith.
(15)
To appoint any persons or firms (including, but not limited
to, accountants, investment advisors, counsel, actuaries, physicians,
appraisers, consultants, professional plan administrators and other
specialists), or otherwise act to secure specialized advice or assistance,
as it deems necessary or desirable in connection with the management
of the Fund; to the extent not prohibited by applicable law, the employer
shall be entitled to rely conclusively upon and shall be fully protected
in any action or omission taken by it in good faith reliance upon,
the advice or opinion of such persons or firms, provided such persons
or firms were prudently chosen by the employer, taking into account
the interests of the participants and beneficiaries and with due regard
to the ability of the persons or firms to perform their assigned functions.
(16)
To retain the services of one or more persons or firms for the
management of (including the power to acquire and dispose of) all
or any part of the Fund assets, provided that each of such persons
or firms is registered as an investment advisor under the Investment
Advisors Act of 1940, is a bank (as defined in that act), or is an
insurance company qualified to manage, acquire or dispose of pension
trust assets under the laws of more than one state; in such event,
the employer shall follow the directions of such investment manager
or managers with respect to the acquisition and disposition of fund
assets, but shall not be liable for the acts or omissions of such
investment manager or managers, nor shall it be under any obligation
to review or otherwise manage any Fund assets which are subject to
the management of such investment manager or managers. If the employer
appoints a trustee, the trustee shall not be permitted to retain such
an investment manager except with the express written consent of the
employer.
(17)
Common investments. The employer shall not be required to make
separate investments for individual participants or to maintain separate
investments for each participant's account, but may invest contributions
and any profits or gains therefrom in common investments.
(18)
Compensation and expenses of appointed trustee. If a trustee
is appointed, the trustee shall be entitled to such reasonable compensation
as shall from time to time be agreed upon by the employer and the
trustee, unless such compensation is prohibited by law. Such compensation,
and all expenses reasonably incurred by the trustee in carrying out
its functions, shall constitute a charge upon the employer or the
Pension Fund, which may be executed at any time after 30 days' written
notice to the employer. The employer shall be under no obligation
to pay such costs and expenses, and, in the event of its failure to
do so, the trustee shall be entitled to pay the same, or to be reimbursed
for the payment thereof, from the Pension Fund.
(19)
Periodic accounting. If a trustee is appointed, the Pension
Fund shall be evaluated annually, or at more frequent intervals, by
the trustee and a written accounting rendered as of each fiscal year
end of the Fund, and as of the effective date of any removal or resignation
of the trustee, and such additional dates as requested by the employer,
showing the condition of the Fund and all receipts, disbursements
and other transactions effected by the trustee during the period covered
by the accounting, based on fair market values prevailing as of such
date.
(20)
Value of the Pension Fund. All determinations as to the value
of the assets of the Pension Fund, and as to the amount of the liabilities
thereof, shall be made by the employer or its appointed trustee, whose
decisions shall be final and conclusive and binding on all parties
hereto, the participants and beneficiaries and their estates. In making
any such determination, the employer or trustee shall be entitled
to seek and rely upon the opinion of or any information furnished
by brokers, appraisers and other experts, and shall also be entitled
to rely upon reports as to sales and quotations, both on security
exchanges and otherwise as contained in newspapers and in financial
publications.
A.
Amendment of the plan. The employer may amend this Plan at any time
or from time to time by an instrument in writing executed in the name
of the employer under its municipal seal by officers duly authorized
to execute such instrument and delivered to the Council; provided,
however, that:
(1)
No amendment shall deprive any participant or any beneficiary of
a deceased participant of any of the benefits to which he is entitled
under this Plan with respect to contributions previously made;
B.
Termination of the plan. The employer shall have the power to terminate
this Plan in its entirety at any time by an instrument in writing
executed in the name of the employer.
C.
Automatic termination of contributions. Subject to the provisions
of the Act governing financially distressed municipalities, the liability
of the employer to make contributions to the Pension Fund shall automatically
terminate upon liquidation or dissolution of the employer, upon its
adjudication as bankrupt or upon the making of a general assignment
for the benefit of its creditors.
D.
Distribution upon termination.
(1)
In the event of the termination of the Plan, all amounts of vested
benefits accrued by the affected participants as of the date of such
termination, to the extent funded on such date, shall be nonforfeitable
hereunder. In the event of termination of the Plan, the employer shall
direct either:
(a)
That the Plan Administrator continue to hold the vested accrued
benefits of participants in the Pension Fund in accordance with the
provisions of the Plan (other than those provisions related to forfeitures)
without regard to such termination until all funds have been distributed
in accordance with the provisions; or
(b)
That the Plan Administrator immediately distribute to each participant
an amount equal to the vested accrued benefit to the date.
(2)
If there are insufficient assets in the Pension Fund to provide for
all vested accrued benefits as of the date of Plan termination, priority
shall first be given to the distribution of any amounts attributable
to mandatory or voluntary employee contributions before assets are
applied to the distribution of any vested benefits attributable to
other sources hereunder.
(3)
All other assets attributable to the terminated Plan shall be distributed
and disposed of in accordance with the provisions of applicable law
and the terms of any instrument adopted by the employer which effects
such termination.
E.
Residual assets. If all liabilities to vested participants and any
others entitled to receive a benefit under the terms of the Plan have
been satisfied and there remain any residual assets in the Pension
Fund, such residual assets remaining shall be returned to the employer
insofar as such return does not contravene any provision of law, and
any remaining balance, in excess of employer contributions, shall
be returned to the commonwealth.
F.
Exclusive benefit rule. In the event of the discontinuance and termination
of the Plan as provided herein, the employer shall dispose of the
Pension Fund in accordance with the terms of the Plan and applicable
law; at no time prior to the satisfaction of all liabilities under
the Plan shall any part of the corpus or income of the Pension Fund,
after deducting any administrative or other expenses properly chargeable
to the Pension Fund, be used for or diverted to purposes other than
for the exclusive benefit of the participants in the Plan, their beneficiaries
or their estates.
A.
Actuarial valuations.
(1)
The Plan's actuary shall perform an actuarial valuation at least
biennially.
(2)
Such biennial actuarial valuation report shall be made as of the
beginning of each plan year occurring in an odd-numbered calendar
year, beginning with the year 1985.
(3)
Such actuarial valuation shall be prepared and certified by an approved
actuary, as such term is defined in the Act.
(4)
The expenses attributable to the preparation of any actuarial valuation
report or investigation required by the Act or any other expense which
is permissible under the terms of the Act and which are directly associated
with administering the Plan shall be an allowable administrative expense
payable from the assets of the Pension Fund. Such allowable expenses
shall include but not be limited to the following:
(a)
Investment costs associated with obtaining authorized investments
and investment management fees;
(b)
Accounting expenses;
(c)
Premiums for insurance coverage on Fund assets;
(d)
Reasonable and necessary counsel fees incurred for advice or
to defend the Fund; and
(e)
Legitimate travel and education expenses for Plan officials;
provided, however, that the municipal officials of the employer, in
their fiduciary role, shall monitor the services provided to the Plan
to ensure that the expenses are necessary, reasonable and benefit
the Plan; and further provided, that the Plan Administrator shall
document all such expenses item by item and, where necessary, hour
by hour.
B.
Duties of Chief Administrative Officer.
(1)
Such actuarial reports shall be prepared and filed under the supervision
of the Chief Administrative Officer.
(2)
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 municipal obligation
of the employer with respect to funding the Plan for any given plan
year. The Chief Administrative Officer shall submit the financial
requirements of the Plan and the minimum municipal obligation of the
employer to the Council annually and shall certify the accuracy of
such calculations and their conformance with the Act.
C.
Benefit plan modifications. Prior to the adoption of any benefit
plan modification by the employer, the Chief Administrative Officer
of the Plan shall provide to the Council a cost estimate of the proposed
benefit plan modification. Such estimate shall be prepared by an approved
actuary, which estimate shall disclose to the Council the impact of
the proposed benefit plan modification on the future financial requirements
of the Plan and the future minimum municipal obligation of the employer
with respect to the Plan.
A.
Plan not a contract of employment. No police officer of the employer
nor anyone else shall have any rights whatsoever against the employer
or the Plan Administrator as a result of this Plan except those expressly
granted to them hereunder. Participation in this Plan shall not give
any right to any employee to be retained in the employ of the employer,
nor shall interfere with the right of the employer to discharge any
employee and to deal with such employee without regard to the effect
such treatment might have upon participation in the Plan.
B.
Meaning of certain words. For purposes of this Plan, the masculine
gender shall include the feminine gender, and the singular shall include
the plural, and vice versa, in all cases wherever the person or context
shall plainly so require. Headings of articles and sections are included
solely for convenience of reference and are not to be considered in
the construction of the Plan.
C.
Construction of Document. This Plan may be executed and/or conformed
in any number of counterparts, each of which shall be deemed an original
and shall be construed and enforced according to the laws of the commonwealth,
excepting such commonwealth's choice of law rules.
D.
Information to be furnished by the employer. The employer shall furnish
to the Plan Administrator (and where applicable, the trustee) information
in the employer's possession as the Plan Administrator and the trustee
shall require from time to time to perform their duties under the
Plan.
E.
Severability of provisions. In case any provisions of this Plan shall
be held illegal or invalid for any reason, said illegality or invalidity
shall not affect the remaining parts of this Plan, and the Plan shall
be construed and enforced as if said illegal and invalid provisions
had never been inserted therein.
F.
Incapacity of participant. If any participant shall be physically
or mentally incapable of receiving or acknowledging receipt of any
payment of pension benefits hereunder, the Plan Administrator, upon
the receipt of satisfactory evidence that such participant is so incapacitated
and that another person or institution is maintaining the participant,
and that no guardian or committee has been appointed for the participant,
may provide for such payment of pension benefits hereunder to such
person or institution so maintaining him, and any such payments so
made shall be deemed for every purpose to have been made to such participant.
G.
Liability of officers of the Plan Administrator and/or employer.
Subject to the provisions of the Act and unless otherwise specifically
required by other applicable laws, no past, present or future officer
of the employer shall be personally liable to any participant, beneficiary
or other person under any provision of the Plan.
H.
Assets of the Fund. Nothing contained herein shall be deemed to give
any participant or beneficiary any interest in any specific property
of the Pension Fund or any right except to receive such distributions
as are expressly provided for under the Plan.
I.
Pension Fund for sole benefit of participants. The income and principal
of the Pension Fund are for the sole use and benefit of the participants
covered hereunder, and to the extent permitted by law, shall be free,
clear and discharged from and are not to be in any way liable for,
debts, contracts or agreements, now contracted or which may hereafter
be contracted, and from all claims and liabilities now or hereafter
incurred by any participant or beneficiary.
J.
Benefits for a deceased participant. If any benefit shall be payable
under the Plan to or on behalf of a participant who has died, if the
Plan provides that the payment of such benefits shall be made to the
participant's estate, and if no administration of such participant's
estate is pending in the court of proper jurisdiction, then the Plan
Administrator, at its sole option, may pay such benefits to the surviving
spouse of such deceased participant or, if there is no surviving spouse,
to such of participant's then living issue, per stirpes; provided,
however, that nothing contained herein shall prevent the Plan Administrator
from insisting upon the commencement of estate administration proceedings
and the delivery of any such benefits to a duly appointed executor
or administrator.
A.
DROP
DROP ACCOUNT
MEMBER
PARTICIPANT
PLAN
Definitions. As used in this article, the following terms shall have
the meanings indicated:
The Deferred Retirement Option Plan created as an optional
form of benefit under the existing Borough of Brentwood Police Pension
Plan.
A separate ledger account created to accumulate the DROP
pension benefit for a DROP participant.
A full-time Borough of Brentwood police officer covered by
the Plan.
A member who satisfies the eligibility requirements set forth in Subsection B below and who has elected to participate in the DROP program.
The Borough of Brentwood Police Pension Plan adopted pursuant
to Act 600.
B.
Eligibility. Effective June 1, 2009, members of the Borough of Brentwood
Police Association bargaining unit that have not retired prior to
the implementation of the DROP program may enter into the DROP on
the first day of any month following the attainment of age 55 and
the completion of 25 or more years of credited service with the Borough
of Brentwood.
C.
Written election.
(1)
An eligible member of the Plan electing to participate in the DROP
program must complete and execute a DROP election form prepared by
the Borough of Brentwood Manager and/or the Plan Administrator, which
shall evidence the member's participation in the DROP program, and
document the participant's rights and obligations under the DROP.
The form must be signed by the member and the Chief Administrative
Officer of the Plan and submitted to the Borough of Brentwood, within
30 days of the date on which the member wishes the DROP election be
effective. The DROP election form shall include an irrevocable notice
to the Borough of Brentwood by the member, that the member shall terminate
from employment with the Borough of Brentwood Police Department effective
on a specific date no more than five years from the effective date
of the DROP election. In addition, all retirement documents required
by the Borough of Brentwood Police Pension Plan Administrator must
be filed and presented to the Borough of Brentwood Council for approval
of retirement and commencement of the monthly pension benefit. Once
the retirement application has been approved by the Council, it shall
become irrevocable.
(2)
The member shall also complete a beneficiary designation form, naming
the beneficiary that shall receive his DROP account in the event that
he dies before his DROP account has been paid out. If you do not name
a beneficiary, your beneficiary will be deemed to be your survivor(s)
as determined under Act 600's return of contributions provisions.
(3)
After a member enters the DROP program, contributions to the pension
plan by the participant and the Borough will cease, and the amount
of the monthly benefits will be frozen except for any applicable cost-of-living
adjustment (COLA) increases awarded to all pension recipients.
(4)
Members shall be advised to consult a tax advisor of their choice,
prior to considering the DROP program, as there may be serious tax
implications and/or consequences to participating in the DROP program.
D.
Limitation on pension accrual. After the effective date of the DROP
election, the participant shall no longer earn or accrue additional
years of continuous service for pension purposes.
E.
Benefit calculation. For all Plan purposes, continuous service of
a member participating in the DROP program shall remain as it existed
on the effective date of commencement of participation in the DROP
program. Service thereafter shall not be recognized or used for the
calculation or determination of any benefits payable by the Borough
of Brentwood Police Pension Plan. The average monthly pay of the member
for pension calculation purposes shall remain as it existed on the
effective date of commencement of participation in the DROP program.
Earnings or increases in earnings thereafter shall not be recognized
or used for the calculation or determination of any benefits payable
by the Plan. The pension benefit payable to the participants shall
increase only as a result of cost-of-living adjustments (COLAs), if
any, as provided in the Plan effective on or after the date of the
member's participation in the DROP program.
F.
Payments to DROP account. The monthly retirement benefits that would
have been payable had the member elected to cease employment and receive
a normal retirement benefit shall, upon the member commencing participation
in the DROP program, be credited on the first day of each month into
a separate ledger account established by the Plan Administrator to
track and accumulate the participant's monthly pension benefits. This
account shall be designated the DROP account. The DROP account shall
be credited with annual interest at a rate of 4.5% compounded and
credited monthly. All interest credited to the DROP account will be
included in the final cash settlement.
G.
Early termination. A participant may withdraw from the DROP program
at any time and effectuate a complete retirement from service. No
penalty shall be imposed for early termination of DROP participation.
However, the participant shall not be permitted to make any withdrawals
from the DROP account until DROP participation has ended.
H.
Payout.
(1)
Upon the termination of employment (for any reason, whether by resignation,
discharge or death) the retirement benefits payable to the participant
or the participant's beneficiary, if applicable, shall be paid directly
to the participant or beneficiary and shall no longer be credited
to the DROP account. Within 30 days following the actual termination
of a participant's employment with Borough of Brentwood, the accumulated
balance in the DROP account shall be paid to the participant or his
surviving beneficiary in a single lump-sum payment. Alternatively,
the participant's DROP account shall be paid within 30 days to an
eligible retirement plan under the Internal Revenue Code, including
to the custodian of an eligible retirement plan as defined in Section
402(c)(8)(b) of the Internal Revenue Code or, in the case of an eligible
rollover distribution to the deceased participant's surviving spouse,
an eligible retirement plan that is an individual retirement account
or an individual retirement annuity as described in Section 402(c)(9)
of the Internal Revenue Code except that if the participant or beneficiary
fails to elect a method of payment within 60 days of the participant's
employment termination date, the Plan shall pay the balance as a lump
sum to the participant or surviving beneficiary as set forth above.
The form of payout selected by the DROP participant or his beneficiary
shall comply with the minimum distribution requirements of the Internal
Revenue Code.
(2)
A distributee may elect to have an eligible rollover distribution
paid directly to an eligible retirement plan by way of a direct rollover.
For purposes of this subsection, a "distributee" includes a participant,
a participant's beneficiary, and a participant's former spouse who
is an alternate payee under a qualified domestic relations order.
For purposes of this subsection, "eligible rollover distribution"
has the meaning given the term by Section 402(f)(2)(A) of the Internal
Revenue Code except that a qualified trust shall be considered an
eligible retirement plan only if it accepts the distributee's eligible
rollover distribution, and, in the case of an eligible rollover distribution
to a surviving spouse, an eligible retirement plan is an "individual
retirement account" or an "individual retirement annuity" as those
terms are defined in Sections 408(a) and (b) of the Internal Revenue
Code.
(3)
Regardless of the option selected by the participant, the Borough
has the right to accelerate payment in order to comply with Section
401(a)(9) of the Internal Revenue Code. There shall be no loans, hardship
withdrawals or other such distributions while the participant is employed
by the Borough.
I.
Death. If a participant dies before the DROP account balance is paid,
the participant's named beneficiary shall have the same rights as
the participant to withdraw the DROP account balance. The monthly
benefit credited to the participant's DROP account during the month
of the participant's death shall be the final monthly benefit for
DROP participation.
J.
Killed in service. Benefits are payable to survivors of a DROP participant
killed in service as set forth in Act 51 of 2009.
K.
Disability. If a participant becomes eligible for a disability benefit
from the Plan and terminates employment, the monthly normal retirement
benefit of the DROP participant shall terminate, and his DROP Benefit
will be payable as soon as administratively feasible after his termination
of employment. Any disability pension payable from the Plan in the
event the participant becomes disabled shall be based upon the participant's
compensation on the day before he commenced participation in the DROP.
L.
Non-pension Benefits of active employees. A DROP participant shall
be eligible for preretirement benefits for employees, including those
benefits otherwise provided by law, including benefits under the Act
of June 2, 1915 (P.L. 736, No. 338), known as the "Workers' Compensation
Act";[1] the Act of June 28, 1935 (P.L. 477, No. 93), referred
to as the "Enforcement Officer Disability Benefits Law";[2] the Act of December 5, 1936 (2nd Sp. Sess., 1937 P.L.
2897, No. 1) known as the "Unemployment Compensation Law";[3], the Act of June 24, 1976 (P.L. 424, No. 101) referred
to as the "Emergency and Law Enforcement Personnel Death Benefits
Act";[4] and the Public Safety Officers' Benefit Act of 1976 (Public
Law 94-430, 42 U.S.C. § 90 stat. 1347).
M.
Reenrollment prohibited. A participant shall be ineligible to reenroll
in the DROP even if a former DROP participant is reemployed by the
Borough and becomes an active member in the Plan.
N.
Expenses. Expenses such as actuarial and legal expenses to establish,
operate and administer the DROP shall, to the extent permitted under
Pennsylvania law, be paid from the Plan and not the participant's
DROP account.
O.
Participant contributions. Participants will not be required to make
member contributions during their DROP participation period at the
same rate as is required of members pursuant to the terms of the Plans
except as may be agreed to pursuant to paragraph Q below.
P.
Nonassignment. None of the benefits, payments, proceeds, claims or
rights of any participant hereunder shall be subject to any claim
of any creditor of the participant nor shall any participant have
any right to transfer, assign, encumber or otherwise alienate, any
of the benefits or proceeds which he may expect to receive, contingently
or otherwise, under the DROP. Notwithstanding any restrictions on
the time of distribution which would otherwise apply under the DROP,
distributions may be made with respect to a domestic relations order
recognized under state law.
Q.
No guaranty of employment. None of the rights, benefits or features
of the DROP shall entitle a participant to employment with the Borough.
R.
Automatic closure to new participants.
(1)
In no case shall the Borough be obligated to allow new entrants into
the DROP in the event that the existence of the DROP requires the
Borough to make any additional payments into the Plan at any time.
Should it be determined that the existence of the DROP causes the
Borough to make additional payments to the Plan, the DROP will automatically
be closed to new entrants, and no member shall be permitted to enter
the DROP after the date of the determination. Any participant at the
time of the determination shall be allowed to complete his participation
in the DROP until the DROP termination date he elected upon entering
the DROP.
(2)
For the purposes of determining whether the existence of the DROP
causes the Borough to make any additional payments into the Plan,
the Borough at its sole discretion may at any time have an actuarial
study performed that will compare actuarial studies of the Plan without
a DROP to actuarial studies of the Plan with the DROP and compare
the Borough's contribution to the Plan with the DROP to the Borough's
contribution to the Plan without the DROP. For the actuarial studies
of the Plan including the DROP, any actuarial experience gains or
losses associated with the existence and participation in the DROP
will be considered. Included in the cost of the DROP is any state
aid lost by virtue of the existence of the DROP that is not replaced
with participant contributions to the Plan. In the event that actuarial
studies show that the DROP is causing the Borough to contribute additional
monies to the Plan, the Borough and the bargaining unit may agree
to increase member and participant contributions to the Plan to the
extent that the DROP no longer requires the Borough to make increased
contributions to the Plan, in which case the DROP will not be automatically
closed to new entrants.
S.
DROP account subject to Public Employees Forfeiture Act. A participant's
DROP account is subject to forfeiture as provided in the Act of July
8, 1978 (P.L. 752, No. 140), as amended, known as the "Public Employees
Forfeiture Act." Forfeitures shall be applied to reduce future employer
contributions.
T.
Amendment. Any amendments to the DROP ordinance shall be consistent
with the provisions covering deferred retirement option plans set
forth in any applicable collective bargaining agreement or state or
federal law, and shall be binding upon all future participants and
upon all participants who have balances in their DROP accounts.
U.
Laws. The DROP shall be construed pursuant to the laws of the Commonwealth
of Pennsylvania.
V.
Severability. The provisions of this § 35-34 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 this § 35-34 shall not be affected thereby. It is hereby expressly declared as the intent of the Borough of Brentwood that this § 35-34 would have been adopted as if such unconstitutional or illegal provision or provisions had not been included herein.
W.
Pending legislation and law changes. In the event of the passage of legislation or decisions of the courts of Pennsylvania which is binding on the Borough governing DROPs in the Commonwealth of Pennsylvania, this § 35-34 shall be amended to comply with any new legal requirements set forth therein, including immediate termination of the DROP. In the event that the DROP is terminated under this section, any participant in the DROP shall be treated as if he never elected to participate in the DROP and instead continued as an active employee and a member of the Plan.
A.
Limit on annual additions.
(1)
Annual additions. Except as otherwise provided, annual additions
(which include participant contributions) under this Plan shall at
all times comply with the provisions of Internal Revenue 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 Internal Revenue 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.
(2)
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 Internal Revenue Code Section
415(c), and if the annual additions would otherwise exceed the limit
under Internal Revenue 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.
(3)
Effective date: the limits under which Internal Revenue 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 Internal Revenue 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 Relief Tax Act of 2008 (HEART Act),[1] differential wage payments shall be included in compensation.
[1]
Editor's Note: See 26 U.S.C. § 1 et seq.
B.
Maximum benefit limitations.
(1)
General rule. Except as otherwise provided, this Plan shall at all
times comply with the provisions of Internal Revenue 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 Internal Revenue
Code Section 415, the benefit will be reduced to the maximum permissible
benefit.
(2)
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
Internal Revenue Code Section 415(b)(1)(A), whether required or permissible,
shall take effect automatically as of the earliest permissible effective
date. For the purposes of Internal Revenue Code Section 415(b)(1)(A),
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. From January 1, 2009, through December
31, 2013, the applicable mortality table is found in IRS notice 2008-85.
(3)
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 Internal Revenue Code Section
415(b), and if the aggregated benefits would otherwise exceed the
limit under Internal Revenue Code Section 415(b), then benefits shall
be reduced first under this Plan. [Historical Note: Code Section 415(e)
applied for limitation years beginning prior to 2000.]
(5)
Mandatory contributions. Participant contributions are annual additions
subject to the limit of Internal Revenue Code Section 415(c), and
any benefit attributable to participant contributions is not included
in the benefit subject to the limits of Internal Revenue Code Section
415(b). This subsection does not apply to contributions picked-up
in accordance with Internal Revenue 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 Internal Revenue 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.
C.
Required distributions.
(1)
Notwithstanding any other provision of this Plan, the entire benefit
of any participant who becomes entitled to benefits prior to his death
shall be distributed either:
(a)
Not later than the required beginning date; or
(b)
Over a period beginning not later than the required beginning
date and extending over the life of such participant or over the lives
of such participant and a designated beneficiary (or over a period
not extending beyond the life expectancy of such participant, or the
joint life expectancies of such participant and a designated beneficiary).
(2)
If a participant who is entitled to benefits under this Plan dies prior to the date when his entire interest has been distributed to him after distribution of his benefits has begun in accordance with Subsection C(1)(b) above, the remaining portion of such benefit shall be distributed at least as rapidly as under the method of distribution being used under Subsection C(1)(b) as of the date of his death.
(3)
If a participant who is entitled to benefits under this Plan dies
before distribution of his benefit has begun, the entire interest
of such employee shall be distributed within five years of the death
of such employee, unless the following sentence is applicable. If
any portion of the employee's interest is payable to (or for the benefit
of) a designated beneficiary, such portion shall be distributed over
the life of such designated beneficiary (or over a period not extending
beyond the life expectancy of such beneficiary), and such distributions
begin not later than one year after the date of the employee's death
or such later date as provided by regulations issued by the Secretary
of the Treasury, then for purposes of the five-year rule set forth
in the preceding sentence, the benefit payable to the beneficiary
shall be treated as distributed on the date on which such distributions
begin. Provided, however, that notwithstanding the preceding sentence,
if the designated beneficiary is the surviving spouse of the participant,
then the date on which distributions are required to begin shall not
be earlier than the date upon which the employee would have attained
age 70 1/2 and, further provided, if the surviving spouse dies
before the distributions to such spouse begin, this subsection shall
be applied as if the surviving spouse were the employee.
(4)
For purposes of this subsection, the following definitions and procedures
shall apply:
(a)
"Required beginning date" shall mean April 1 of the calendar
year following the later of the calendar year in which the employee
attains age 70 1/2, or the calendar year in which the employee
retires.
(b)
The phrase "designated beneficiary" shall mean any individual
designated by the employee under this Plan according to its rules.
(c)
Any amount paid to a child shall be treated as if it had been
paid to the surviving spouse if such amount will become payable to
the surviving spouse upon such child's reaching majority (or other
designated event permitted under regulations issued by the Secretary
of the Treasury).
(d)
For purposes of this subsection, the life expectancy of an employee
and/or the employee's spouse shall be determined in accordance with
the 1987 proposed regulations prior to January 1, 2003, and with the
final regulations [§ 1.401(a)(9)-1 through § 1.401(a)(9)-9]
on or after January 1, 2003.
(5)
This subsection does not authorize the payment of any benefit in
any form not permitted under another provision of the plan.
D.
Multiple plan reduction. Internal Revenue Code Section 415(e) applied
for limitation years beginning prior to 2000.
E.
Limit on compensation. Effective January 1, 1996, compensation is
subject to the limitation under Internal Revenue Code Section 401(a)(17),
which is $245,000 for the plan year beginning in 2010. The limit is
automatically adjusted periodically, without formal amendment, for
changes in the law and cost-of-living adjustments under Internal Revenue
Code Section 401(a)(17).
F.
Direct rollover.
(1)
This subsection applies to distributions made on or after January
1, 1993. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this subsection,
a distributee may elect, at the time and in the manner prescribed
by the Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified
by the distributee in a direct rollover.
(2)
DIRECT ROLLOVER
DISTRIBUTEE
ELIGIBLE RETIREMENT PLAN
ELIGIBLE ROLLOVER DISTRIBUTION
(a)
[1]
[2]
[3]
[4]
(b)
For purposes of this subsection, the following definitions shall
apply:
Is a payment by the Plan to the eligible retirement plan
specified by the 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 Internal
Revenue Code Section 414(p), are distributees with regard to the interest
of the spouse or former spouse.
Is an individual retirement account described in Internal
Revenue Code Section 408(a), an individual retirement annuity described
in Internal Revenue Code Section 408(b), an annuity plan described
in Internal Revenue Code Section 403(a), or a qualified trust described
in Internal Revenue Code Section 401(a), that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, prior to January 1,
2002, an eligible retirement plan 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 Internal Revenue Code Section 403(b) and an eligible plan under
Internal Revenue 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 January 1, 2008, a Roth IRA is an eligible retirement
plan.
Any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution
does not include:
Any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the
life (or life expectancy) of the distributee or the joint lives (or
joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of 10 years or more;
Any distribution to the extent such distribution is required
under Internal Revenue Code Section 401(a)(9);
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
Effective as of January 1, 2002, any hardship distribution.
Effective as of January 1, 2002, Subsection F(2)(a)[3] does
not apply to any after-tax participant contributions that are paid
to an individual retirement account or annuity described in Internal
Revenue Code Section 408(a) or (b), or to a qualified defined contribution
plan described in Internal Revenue 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.
(3)
Nonspouse beneficiaries. Effective as of 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 Internal Revenue 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:
(a)
The transfer is made not later than the end of the fourth year
after the year of the participant's death; and
(b)
The account or annuity to which the amount is transferred is
treated as an inherited IRA or individual retirement annuity in accordance
with Internal Revenue Code Section 408(d)(3)(C).
G.
Credit for qualified military service. Effective December 12, 1994,
notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service
will be provided in accordance with Section 414(u) of the Internal
Revenue Code.
H.
Heroes Earnings Assistance Relief Tax Act (HEART Act). Effective
for deaths occurring after January 1, 2007, if a participant dies
while performing qualified military service [as defined in IRC § 414(u)],
the survivors of the participant are entitled to any additional benefits
(other than benefit accruals relating to the period of qualified military
service) provided under the Plan had the participant resumed and then
terminated employment on account of death.
I.
Vesting at normal retirement age. Effective September 1, 1974, upon
attainment of normal retirement age a participant shall be 100% vested
in his normal retirement benefit.
J.
Domestic relations order. Effective January 1, 1985, all rights and
benefits, including elections, provided to a participant in this Plan
may be subject to the rights afforded to any alternate payee pursuant
to a domestic relations order as provided by applicable state law.
K.
Vesting upon plan termination. Upon the termination of this Plan,
or complete discontinuance of contributions (within the meaning of
pre-ERISA Internal Revenue 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.
L.
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.
M.
Governmental plan. 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.
N.
No reversion to the employer. At no time shall it be possible for
the Plan assets to be used for, or diverted to, any purpose other
than for the exclusive benefit of the participants and their beneficiaries,
except that contributions made by the employer may be returned to
the employer if the contribution was made due to a mistake of fact
and the contribution is returned within one year of the mistaken payment
of the contribution, the Plan is terminated, or as otherwise permitted
by the laws of the Commonwealth of Pennsylvania.
