City of New Castle, PA Article 169 Police Pension Plan

§ 169.00 Preamble.

[Ord. 8017, passed 9-13-2012]

The City 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.

§ 169.01 Definitions.

[Ord. 7227, adopted 9-14-1995; Ord. 8082, adopted 3-13-2014; Ord. 7881, adopted 10-23-2008; Ord. 7547, adopted 2-28-2002; Ord. 7342, adopted 12-11-1997; Ord. 7351-A, adopted 1-22-1998]

(a) The following words and phrases as used in this Plan shall have the meaning set forth in this article, unless a different meaning is otherwise clearly required by the context:

(1) ACCRUED BENEFIT — As of any given date, the Participant's monthly benefit determined under Subsection (b) of Section 169.04, which amount shall be based upon the Participant's Average Compensation determined as of such date and multiplied by a fraction, the numerator of which shall be the Participant's completed Years of Credited Service as of such determination date and the denominator of which shall be the number of Years of Credited Service which are required to be completed by the Participant to attain Normal Retirement Age under the Plan. Notwithstanding anything contained herein to the contrary, in no event shall the fraction exceed one (1.0).

The Accrued Benefit shall include any Service Increment to which the Participant is entitled but shall not exceed the maximum limitation, determined as of the date of computation, provided under Subsection (h) of Section 169.04. All Accrued Benefits are subject to all applicable limitations, reductions, offsets and actuarial adjustments provided by the Plan prior to the actual payment thereof and no Accrued Benefits shall be paid unless the Participant satisfies all requirements hereunder for entitlement to receive such benefit.

(2) ACCUMULATED CONTRIBUTIONS — The total amount contributed by any Participant to this Plan or its predecessor by way of payroll deduction or otherwise.

(3) ACT — The Municipal Pension Plan Funding Standard and Recovery Act (enacted as Act 205 of 1984), as amended, 53 P.S. § 895.101 et seq.

(4) ACTUARIAL EQUIVALENT — Two forms of payment of equal actuarial present value on a specified date. The factors to be used in determining Actuarial Equivalents shall be 7% interest, and UP-1984 Mortality Table rates.

(5) ACTUARY — 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.

(6) AUTHORIZED LEAVE OF ABSENCE — Any leave of absence granted in writing by the Employer for reasons including, but not limited to, accident, sickness, pregnancy or temporary disability, education, training, jury duty or such other reasons as may necessitate authorized leave from active employment.

(7) AVERAGE COMPENSATION — The average of the monthly Compensation of the Participant during any five continuous Years of Credited Service prior to termination of Employment which provides the highest average, or the monthly base rate of pay plus the monthly rate of longevity pay at the time of termination from Employment, whichever produces the highest average.

Effective January 1, 2013 and notwithstanding the foregoing in this Section 169.01(a)(7), for a Participant hired on or after January 1, 2013, "Average Compensation" shall mean the average monthly Compensation of the Participant averaged over the highest five Years of Credited Service prior to termination of Employment.

(8) BENEFICIARY — The person or legal entity designated by the Participant to receive any applicable benefits under the Plan payable upon the occurrence of the death of the Participant. 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.

(9) BREAK IN SERVICE — Any period of time after Employment has commenced during which an Employee fails to maintain a continuous period of Employment.

(10) CHIEF ADMINISTRATIVE OFFICER — The person designated by the Employer who has primary responsibility for the execution of the administrative affairs of the Plan.

(11) CODE — The Internal Revenue Code of 1986, as amended.

(12) COMMONWEALTH — The Commonwealth of Pennsylvania.

(13) COMPENSATION — The basic rate of remuneration paid to an Employee by the Employer with respect to personal services rendered as an Employee and shall exclude all other forms of remuneration including but not limited to overtime and expense reimbursements. Amounts paid as lump sums for back-pay damage awards or settlements other than to the extent that such amounts are credited to periods of time when they would otherwise have accrued or been earned shall be excluded such that no amounts are credited in a manner which would result in duplication of remuneration for any particular period of time.

Compensation is subject to the limitation under Code Section 401(a)(17), which is $230,000 for the Plan Year beginning in 2008. The limit is automatically adjusted periodically, without formal amendment, for changes in the law and cost-of-living adjustments under Code Section 401(a)(17).

Effective, January 1, 2013 and notwithstanding the foregoing in this Section 169.01(a)(13), for a Participant hired on or after January 1, 2013. Compensation shall mean the base rate of pay paid to the Participant and shall exclude holiday pay and any other forms of remuneration paid to the Participant by the Employer.

(14) CONTRACT or POLICY — Any insurance or annuity contract issued by an insurance company in accordance with the requirements of the Plan.

(15) COUNCIL — The City Council of the City of New Castle, Pennsylvania.

(16) DISABILITY RETIREMENT DATE — The first day of the month coincident with or next following the date when a Participant terminates Employment due to a Total and Permanent Disability.

(17) EMPLOYEE — Any person who is employed on a regular full-time basis as a police officer by the Employer, and who is not otherwise participating in a pension plan or retirement program sponsored by the Employer which recognizes credit for the same period of service to the Employer.

(18) EMPLOYER — The City of New Castle, Pennsylvania, a political subdivision of the Commonwealth of Pennsylvania.

(19) EMPLOYMENT — 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 an Employee. Employment shall include any period of voluntary or involuntary military service with the armed forces of the United States of America, provided that the Participant has been employed as a regular, full-time member of the Employer's police force for a period of at least six months 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. Employment may include, for the purpose of determining Years of Credited Service, an Authorized Leave of Absence to the extent it is specifically granted in writing by the Council and permitted pursuant to applicable law.

Employment shall also include 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 re-employment 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 re-employment.

(20) INSURER or INSURANCE COMPANY — Any legal reserve life insurance company licensed to do business in one or more states of the United States.

(21) LATE RETIREMENT DATE — The first day of the month coincident with or next following the date when a Participant retires which is subsequent to the Participant's Normal Retirement Date.

(22) MINIMUM MUNICIPAL OBLIGATION — The minimum annual obligation of the municipality as determined by the Actuary and certified by the Chief Administrative Officer pursuant to the provisions of the Act.

(23) NORMAL RETIREMENT AGE — The later of the date at which a Participant attains the age or completes the Years of Credited Service based upon the date that the Participant's Employment commenced as follows:

Date of Hire	Age	Years of Credited Service
Before January 1, 1988	N/A	25
January 1, 1988 to January 1, 1992	55	25
After January 1, 1992	55	25

(24) NORMAL RETIREMENT DATE — The first day of the month coincident with or next following the date when an Employee attains Normal Retirement Age.

(25) NOTICE or ELECTION — 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 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.

(26) PARTICIPANT — Any Employee who has commenced participation in this Plan in accordance with Section 169.02, and has not for any reason ceased to participate hereunder.

(27) PENSION FUND — The assets of the Plan, which shall be accounted for separately from the assets of any other plans maintained by the Employer and which shall be administered under the supervision of the Employer in accordance with the terms of the Plan.

(28) PENSION PLAN BOARD — The board appointed pursuant to the provisions of applicable law to administer the Plan as more fully described herein under Section 169.09.

(29) PLAN — The City of New Castle Police Pension Plan.

(30) PLAN ADMINISTRATOR or ADMINISTRATOR — The Pension Plan Board. In the event no such Board is appointed, the Plan Administrator shall be the Council.

(31) PLAN YEAR — The twelve-month period beginning on January 1 and ending on December 31.

(32) RESTATEMENT DATE — January 1, 1994, the effective date of this amended and restated Plan.

(33) SERVICE INCREMENT — The amount determined under Subsection (d) of Section 169.04 on behalf of a Participant who accumulates Years of Credited Service which are required for attainment of Normal Retirement Age.

(34) TOTAL AND PERMANENT DISABILITY — A condition of physical or mental impairment due to which a Participant is unable to perform any duties of Employment with the Employer. The Plan Administrator shall determine whether a Participant has incurred a total and permanent disability based upon the results of an examination by three physicians approved by the Plan Administrator.

(35) YEAR OF CREDITED SERVICE — Shall refer to any consecutive twelve-month period during which a Participant is continuously employed in Employment. Each Year of Credited Service shall be determined from the date on which participation in the Plan shall commence and annual anniversaries thereof and/or in the case of a Break in Service, the date that re-employment of a Participant shall commence and anniversaries thereof, provided that the Employee has authorized the payment of Employee contributions to the Plan.

Year of Credited Service shall also include 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 service credit with the prior approval of Council (such approval shall not be unreasonably withheld). A Participant may purchase such credit provided 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. Ch. 67 (relating to retired pay for non-regular service). The purchase price for such service credit shall be computed by discounting the Participant's wages for the first year of Employment to the period of military service on an annual basis (prorated for actual military service during the applicable year) using a ratio of national average wages and multiplying by the Plan's 1985 normal cost percentage. Interest shall be calculated at the rate of 4.75% from the Participant's first day of Employment to the date of payment. The purchase price hereunder shall be paid into the Plan within the time period prescribed by Council after the date that the purchase price has been determined and provided to the Participant. If a Participant shall not elect to purchase such service credit or fails to pay such purchase price within the time limits prescribed herein, the Participant shall have forever waived any and all right or opportunity to purchase such military service credit.

§ 169.02 Participation in the Plan.

[Ord. 7227, adopted 9-14-1995]

(a) Eligibility for participation. Each Employee shall be eligible to participate in the Plan as of the first day of Employment provided that all administrative prerequisites such as authorizing the payment of Employee contributions via payroll deduction have been fulfilled. 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.

(b) Participation requirements. Each Participant hereunder shall be required to make contributions to the Plan, as provided in Subsection (a) of Section 169.03 hereof, and shall execute and complete any enrollment or application forms as required by the Plan Administrator.

(c) Re-employment. Each Employee who had previously been employed by the Employer and incurred a Break in Service shall, upon re-employment, have prior Years of Credited Service re-credited for all purposes under the Plan upon repayment to the Plan of any amount of Accumulated Contributions which had been distributed pursuant to Subsection (b) of Section 169.08.

(d) Change in status. A Participant who remains in the service of the Employer but ceases to be an Employee eligible for participation hereunder, or ceases or fails to make any contributions which are required as a condition of participation hereunder, shall have no further benefit accruals occur until the individual again qualifies as a Participant hereunder eligible to resume such accrual of benefits.

(e) Leave of absence. During any leave of absence that is not an Authorized Leave of Absence, a Participant shall be deemed an inactive Participant and shall not be given credit for Years of Credited Service nor continue to accrue any benefits hereunder. If the Employee is not re-employed by the expiration of such leave of absence, participation in the Plan shall cease on the date on which such leave of absence commenced. During any Authority Leave of Absence, a Participant shall continue to receive credit for Years of Credited Service to the extent such credit is specifically granted in writing by the Employer and is permitted pursuant to applicable law.

(f) Record keeping. The Employer shall furnish the Administrator with such information as will aid the Administrator in the administration of the Plan. Such information shall include all pertinent data on Employees for purposes of determining their eligibility to participate in this Plan.

§ 169.03 Contributions.

[Ord. 7227, adopted 9-14-1995; Ord. 7260, adopted 4-5-1996; Ord. 7294, adopted 1-23-1997; Ord. 8082, adopted 3-13-2014]

(a) Employee contributions. As a condition of participation hereunder, each Participant shall be required to have contributions deducted from the Participant's Compensation plus longevity pay and contributed to the Plan. The rate of contributions for Participants who were first employed in Employment prior to January 1, 1988, shall be 5% and for Participants who were first employed in Employment after December 1, 1987, the rate shall be 4.5%. Effective January 1, 2013 and notwithstanding the foregoing in this Section 169.03(a), the rate of contribution for Participants who are first employed on or after January 1, 2013 shall be 5% of Compensation. In addition, each Participant shall pay $12 per year for the Service Increment, which amount shall be deducted on a pro rata basis from the Participant's Compensation as paid until the Participant attains age 65 or terminates Employment, whichever shall first occur. Furthermore, each Participant who shall become eligible to receive salary continuation payments under a workers compensation or similar law due to injury or illness shall be required to continue to pay contributions to the Plan during such period of time that such Participant is entitled to accrue additional Years of Credited Service under the Plan while not actively rendering service in Employment.

(1) Effective as of April 1, 1996, the City of New Castle shall "pick-up" the mandatory employee contributions to the Plan, provided that the said "pick-up" of employee contributions is approved as a valid application of the provisions of the Internal Revenue Code Sect. 414(h)(2).

(2) The City of New Castle, its officers, agents, and employees are hereby authorized to take all actions and to do all things that may be necessary or required to effect the implementation of this Ordinance including obtaining the ruling from the Internal Revenue Service that the "pick-up" is valid pursuant to the provisions of Internal Revenue Code Sec. 414(h)(2) if such officers, agents, or employees determine it is necessary or appropriate to obtain such a ruling.

(b) Employer contributions. The Actuary, in accordance with the Act, shall annually 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. Notwithstanding the foregoing, nothing contained herein shall preclude the Employer from contributing an amount in excess of the Minimum Municipal Obligation.

(c) State aid. General municipal pension system State Aid, or any other amount of State Aid received by the Employer in accordance with the Act from the Commonwealth 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.

(d) 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.

(e) 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 or the Plan is terminated, as provided in Section 169.11.

§ 169.04 Retirement benefits.

[Ord. 7227, adopted 9-14-1995; Ord. 7342, adopted 12-11-1997; Ord. 7352, adopted 2-26-1998; Ord. 7441, adopted 7-20-2000; Ord. 7881, adopted 10-23-2008; Ord. 8017, passed 9-13-2012; Ord. 8082, adopted 3-13-2014; Ord. 8221, adopted 4-27-2017; Ord. 8221, adopted 4-27-2017]

(a) Normal retirement. Each Participant shall be entitled to a Normal Retirement Benefit after retirement on or after attainment of Normal Retirement Age. A Participant shall be 100% vested in his Normal Retirement Benefit upon attainment of Normal Retirement Age.

(b) Normal retirement benefit/early retirement benefit. Each Participant who shall become entitled to a benefit pursuant to Subsection (a) of Section 169.04 hereof shall receive a benefit commencing on the Participant's Normal Retirement Date and paid in the Normal Form as provided in Subsection (a) of Section 169.07 hereof. The monthly amount of the Normal Retirement Benefit shall be equal to 50% of the Participant's Average Compensation for those participants who retire before January 1, 1998. The monthly amount of the normal retirement benefit for those who retire on or after January 1, 1998 shall be equal to 75% of the participant's average compensation, or $300, whichever is higher.

Notwithstanding anything to the contrary in this Section 169.04(b), effective May 1, 2017 a Participant hired before January 1, 2008 may with 30 days' written notice to the Plan Administrator opt to elect the Early Retirement Benefit. The Early Retirement Benefit is only available after completing 25 Years of Credited Service and is an unreduced pension benefit (75% of the Participant's Average Compensation, or $300, whichever is higher) that commences when the Participant reaches age 55. In exchange for the optional Early Retirement Benefit, a Participant hired before January 1, 2008 electing this benefit with 25 years of Credited Service prior to reaching age 55 would forfeit all other post-employment benefits for the retiree and his spouse including their entitlement to retiree health care and life insurance benefits that would otherwise be provided by the City to retirees and their spouses who were hired before January 1, 2008 and who retire with an unreduced pension after 25 years of service and age 55. The Survivor Benefit related to the Early Retirement Benefit shall be paid as described in Section 169.06(b) and shall commence as of the first day of the month coincident with or next following the date of death except it shall be payable no earlier than what would have been the Participant's 55th birthday had he survived until such date.

Notwithstanding anything to the contrary in this Section 169.04(b), Effective January 1, 2008 for Participants hired on or after January 1, 2008, the Normal Retirement Benefit shall be 50% of the Participant's Average Compensation.

(c) Late retirement. A Participant may continue in Employment 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) of Section 169.04 continues in Employment beyond the Participant's Normal Retirement Date, there shall be no retirement benefits paid until Employment has ceased and the Participant's retirement actually commences. The retirement benefit of a Participant described in this Subsection (c) of Section 169.04 shall be calculated in accordance with Subsection (b) of Section 169.04 on the basis of Average Compensation as of the Participant's actual retirement and shall commence on the Participant's Late Retirement Date.

(d) Service increment benefit. Notwithstanding anything contained herein to the contrary, a Participant who shall retire after attainment of Normal Retirement Age may be entitled to receive a monthly Service Increment Benefit provided, however, that the Participant shall have accrued sufficient service credit pursuant to this Subsection (d) of Section 169.04. Such Service Increment shall only be available to a Participant who shall retire after attainment of Normal Retirement Age and be eligible to receive a retirement benefit determined under Subsection (b) of Section 169.04, and whose Years of Credited Service for purposes of this Subsection (d) of Section 169.04 shall only include periods of time when the Participant actively renders service in Employment or is on an Authorized Leave of Absence and pays all required contributions to the Plan. No service credit shall be recognized for this purpose after a Participant has attained age 65.

The Service Increment Benefit shall be $100 monthly.

(e) Application for benefit. A Participant must complete and execute an application for benefit on a form and in the manner prescribed by the Plan Administrator and deliver the said application to the Plan Administrator at least 30 days prior to the date on which benefit payments are to commence. Notwithstanding anything contained herein to the contrary, no retirement benefit payments or any other benefit 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 benefit.

(f) 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.

(g) Special provision for restated plans. The benefit amount of any Participant who may have retired prior to the Restatement Date shall not be in any way altered by the provisions of this Plan, except where otherwise expressly indicated herein, and shall continue to be determined on the basis of the terms of the Plan in effect on the day preceding the Restatement Date.

(h) Maximum benefit limitations.

(1) Maximum annual benefit.

A. General rule. Except as otherwise provided, this Plan shall at all times comply with the provisions of Code Section 415 of the regulations thereunder, the terms of which are specifically incorporated herein by reference. If a benefit payable to a Participant under this Plan would otherwise exceed the limit under Code Section 415, the benefit will be reduced to the maximum permissible benefit.

B. Effective date. If there is more than one permissible effective date for any required change in the Code Section 415(b) provisions, then the change shall be effective as of the latest permissible effective date; however, any adjustment in the dollar limit under Code Section 415(b)(1)(A), whether required or permissible, shall take effect automatically as of the earliest permissible effective date. The "applicable mortality table" in Rev. Rule 2001-62 became effective as of December 31, 2002.

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

D. Multiple plans. If a Participant also participates in one or more other plans that are required to be aggregated with this Plan for purposes of determining the limits under Code Section 415(b) or (e), and if the aggregated benefits would otherwise exceed the limit under Code Section 415(b) or (e), then benefits shall be reduced first under this Plan. [Historical Note: Code Section 415(e) applied for Limitation Years beginning prior to 2000.]

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

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

G. To the extent applicable, the above provisions and limitations shall be subject to Code Section 415(b)(2)(G).

(2) Limit on annual additions.

A. Annual additions. Except as otherwise provided, annual additions (which include Participant Contributions) under this Plan shall at all times comply with the provisions of Code Section 415(c) and the regulations thereunder, the terms of which are specifically incorporated herein by reference. If an annual addition would otherwise exceed the limit under Code Section 415(c), the excess annual addition will be allocated in accordance with reg. § 1.415-6(b)(6)(ii).

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

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

(i) Cost of living adjustment. Each retired Participant and surviving spouse who shall be receiving payment of a retirement or survivor benefit under the Plan and who shall have been receiving payment of the said retirement or survivor benefit for a period of at least five years as of January 1, 2000, shall be eligible for a single cost of living adjustment to the benefit amount that was being paid monthly. Each individual that has been receiving payments for at least five years but less than 10 years shall receive an adjustment that shall be an amount paid monthly equal to 5% of the monthly benefit payment. Each individual that has been receiving payments for at least 10 years but less than 15 years shall receive an adjustment that shall be an amount paid monthly equal to 10% of the monthly benefit payment. Each individual that has been receiving payments for at least 15 years but less than 20 years shall receive an adjustment that shall be an amount paid monthly equal to 15% of the monthly benefit payment. Each individual that has been receiving payments for at least 20 years shall receive an adjustment that shall be an amount paid monthly equal to 20% of the monthly benefit payment.

Each Participant and surviving spouse eligible to receive a cost of living adjustment hereunder shall receive the adjustment commencing as of July 1, 2000, and continuing for so long as payment of a retirement benefit shall continue unless otherwise waived by the Participant or surviving spouse in a writing acceptable to the Plan Administrator. If any Participant or surviving spouse shall waive the receipt of the cost of living adjustment, they can commence receipt of the adjustment as of the first day of the month following the date that the Plan Administrator receives the request to receive the adjustment in a writing acceptable to the Plan Administrator.

§ 169.05 Disability retirement.

[Ord. 7227, adopted 9-14-1995]

(a) Disability retirement. A Participant with at least 10 Years of Credited Service who incurs a Total and Permanent Disability before attaining Normal Retirement Age or a Participant who incurs a Total and Permanent Disability as a direct result of and in the line of duty of Employment regardless of the number of the Participant's years of Credited Service before attaining Normal Retirement Age shall be entitled to a Disability Retirement Benefit as of the Disability Retirement Date.

(b) Disability retirement benefit. A Participant who shall be entitled to a Disability Retirement Benefit under Subsection (a) of Section 169.05 shall receive a benefit commencing on the Participant's Disability Retirement Date and paid in the Normal Form as provided in Subsection (a) of Section 169.07 hereof. The monthly amount of benefit hereunder shall be 50% of the Participant's Average Compensation.

(c) Payment of disability benefit. Payment of a Disability Retirement Benefit shall be made in the Normal Form under Subsection (a) of Section 169.07 commencing on the Participant's Disability Retirement Date and ending on the earlier of the date of death of the Participant, the date that the Participant's Total and Permanent Disability shall cease, or the date that the Participant would attain Normal Retirement Age if the Participant had continued to accrue Years of Credited Service to such date (such a Participant shall thereafter receive a retirement benefit equal to the amount of the Disability Retirement Benefit). If the Participant's Total and Permanent Disability shall cease prior to the attainment of the Participant's Normal Retirement Age, the Participant shall be deemed to have terminated Employment as of the Disability Retirement Date for purposes of this Plan unless the Participant shall resume active Employment within three months following the date on which such Total and Permanent Disability ceased. A Participant who fails to resume active Employment after Total and Permanent Disability ceases shall not be entitled to a distribution of Accumulated Contributions pursuant to Subsection (b) of Section 169.08 to the extent that the total amount of Disability Retirement Benefits paid exceeds the value of the Participant's Accumulated Contributions as of the Disability Retirement Date, and shall not be entitled to any other benefits under the Plan as a result of the accumulation of any Years of Credited Service as of the Disability Retirement Date.

(d) Verification of disability. The Plan Administrator shall determine whether a Participant shall have incurred a Total and Permanent Disability. Proof of Total and Permanent Disability shall consist of the sworn statement of three practicing physicians, designated by the Plan Administrator, that the Participant has incurred a Total and Permanent Disability. If the Plan Administrator shall determine that a Participant who is Totally and Permanently Disabled has recovered sufficiently to resume active Employment 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 in condition which may cause the Participant's entitlement to receipt of such benefits to cease. If a Participant fails to provide immediate Notice to the Plan Administrator of any such change in status and thereby continues to receive payment of benefits hereunder to which the Participant is not entitled, the Plan Administrator may take whatever action is necessary and permitted under applicable law to recover any amount of improper payments, including offsetting such amounts against any future payment of retirement or other benefits under the Plan or legal action. The Plan Administrator may also recover the costs of any such action.

(f) Subrogation. In the case of any Participant who shall incur a Total and Permanent Disability hereunder and who shall as a result thereof receive payment of a Disability Retirement Benefit under Subsection (b) of Section 169.05 hereof, the Plan shall be subrogated to the right of such Participant to receive any payment under the Commonwealth's Worker's Compensation Act, Enforcement Officers Disability Benefits Law, or similar laws on account of such Total and Permanent Disability.

§ 169.06 Death benefits.

[Ord. 7632, adopted 8-21-2003; Ord. 8082, adopted 3-13-2014; Ord. 7632, adopted 8-21-2003, effective 1-1-2008]

(a) Death of participant. Upon the occurrence of the death of a Participant, there shall be benefits payable in accord with the following sections of this Section 169.06.

(b) Survivor benefit. If a Participant here under who is receiving a benefit under Subsections (b) or (c) of Section 169.04 or Subsection (b) of Section 169.05 or Subsection (c) of Section 169.08, or is eligible to receive a benefit under Subsections (b) or (c) of Section 169.04 or Subsection (c) of Section 169.08 shall die, or if a Participant shall be killed in the line of duty of Employment, and be survived by a spouse or any children under the age of 18, there shall be a Survivor Benefit payable hereunder. The Survivor Benefit shall be paid to the surviving spouse until the date of death of the surviving spouse. Upon the death of the surviving spouse or upon the death of the Participant with no surviving spouse but with any surviving children under age 18, the Survivor Benefit shall be paid in equal shares to the surviving dependent children of the deceased Participant. Dependent children shall include the children of the deceased Participant who have not attained 18 years of age. The shares payable to the surviving dependent children shall be adjusted as each child ceases to be eligible to receive a share of the benefit hereunder.

For Participants who are Employees prior to January 1, 2008, the Survivor Benefit shall be as follows: For Participants hired or promoted before January 1, 2008, the monthly Survivor Benefit shall be equal to 50% of the Participant's Average Compensation or $300, whichever is greater. For Participants hired on or after January 1, 2008, the Survivor Benefit shall be 50% of the Participant's Accrued Benefit. The Survivor Benefit payable with respect to the Deferred Vested Benefit shall be 50% of the Accrued Benefit of the Participant. The Survivor Benefit shall commence as of the first day of the month coincident with or next following the date of death except in the case of the Deferred Vested Benefit, which shall be payable no earlier than what would have been the Participant's Normal Retirement Age had he survived until such date.

(c) Death before retirement. If a Participant shall die prior to the commencement of the payment of any retirement or other benefits under this Plan, and without eligibility for payment of a Survivor Benefit under Subsection (b) of Section 169.06, the Beneficiary shall be entitled to receive a distribution of the Participant's Accumulated Contributions determined as of the date of death of the Participant. 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.

(d) Death after retirement. If a Participant shall die after becoming eligible for payment of a retirement benefit under Subsection (b) of Section 169.04 or after commencement of a benefit under Subsection (b) of Section 169.04 or Subsection (b) of Section 169.05 and without eligibility for payment of a Survivor Benefit under Subsection (b) of Section 169.06, and the total amount of benefits paid to the Participant does not at least equal or exceed the Participant's Accumulated Contributions as of the date of death, there shall be paid to the Beneficiary an amount equal to the difference between the amount of benefits paid and the amount of the Participant's Accumulated Contributions. If the benefits paid exceeds the amount of the Participant's Accumulated Contributions, there shall be no additional amounts due or payable hereunder.

(e) Death after retirement. If a Participant hereunder who is receiving a benefit under Subsection (b) of Section 169.04 shall die and be survived by a spouse, there shall be a benefit payable hereunder to such surviving spouse until the date of death of the surviving spouse. Such benefit shall be in an amount as specified in Section 169.06(b). Prior to January 1, 2008, such a benefit may be granted at the discretion of Council provided that it shall not increase the costs of the Plan for valuation purposes. If a Participant shall die after becoming eligible for payment of a retirement benefit under Subsection (b) of Section 169.04 or after commencement of a benefit under Subsection (b) of Section 169.04 or Subsection (b) of Section 169.05 and without eligibility for payment of a survivor benefit under Subsection (b) of Section 169.06 or a surviving spouse benefit under this Subsection, and the total amount of benefits paid to the Participant does not at lest equal or exceed the Participant's Accumulated Contributions as of the date of death, there shall be paid to the Beneficiary an amount equal to the difference between the amount of benefits paid and the amount of the Participant's Accumulated Contributions. If the benefits paid exceed the amount of the Participant's Accumulated Contributions, there shall be no additional amount due or payable hereunder.

§ 169.07 Payment of benefits.

[Ord. 7227, adopted 9-14-1995; Ord. 7547, adopted 2-28-2002; Ord. 7743, adopted 10-27-2005; Ord. 7881, adopted 10-23-2008; Ord. 7976, adopted 11-16-2011]

(a) Normal form. The Normal Form for payment of retirement benefits shall be a monthly annuity for the life of the Participant.

(b) Commencement of benefits. A Participant may make an Election to commence receiving distribution of retirement benefits as of the Participant's Normal Retirement Date or Late Retirement Date, whichever is applicable, or may defer such payments to a date not later than the required date for commencement of benefits determined under Subsection (c) of Section 169.07.

(c) Minimum required distributions.

(1) Notwithstanding any provision in this Plan to the contrary, the distribution of a Participant's benefits shall be made in accordance with the requirements and conditions of and shall otherwise comply with Code Section 401(a)(9). For purposes of complying with Code Section 401(a)(9), life expectancies shall be determined in accordance with the 1987 proposed regulations prior to January 1, 2003 and with the final regulations (§ 1.401(a)(9)-1 through § 1.401(a)(9)-9) on or after January 1, 2003.

(2) Effective as of January 1, 1997 distribution of a Participant's benefits shall begin not later than April 1st of the calendar year following the later of:

A. The calendar year in which the Participant attains age 70 1/2, or

B. The calendar year in which the Participant retires. Distributions must be made over a period not exceeding the life of the Participant or the joint lives of a Participant and his Beneficiary.

(3) Distributions to a Participant and his Beneficiaries shall only be made in accordance with the incidental death benefit requirements of Code Section 401(a)(9)(G) and the regulations thereunder.

(4) This section does not authorize the payment of any benefit in any form not permitted under another provision of the Plan.

(d) Small amounts. If the Plan Administrator determines that the value of a Participant's Accrued Benefit is so small as to make pension payments in the Normal Form administratively impractical, the Plan Administrator may cause such payments to be made at such other periodic intervals as are administratively practical, but no less frequently than annually, or may make a single lump sum payment equal to the commuted value of such Accrued Benefit to the extent permitted under applicable law.

(e) Nonduplication of benefit. To avoid any duplication of benefits, a Participant who is receiving a retirement benefit under this 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 Average Compensation and Years of Credited Service as of the date that such period of resumed Employment shall cease.

(f) 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. A Participant's Election, failure to make an Election or revocation of an Election hereunder shall be final and binding on all persons.

(g) Direct rollovers.

(1) Effective as of January 1, 1993, if a Participant, a spousal beneficiary, or an alternate payee (who is a spouse or former spouse of a Participant) is entitled (under other provisions of this Plan) to receive an "eligible rollover distribution" of at least $200, the distributee may elect that the Plan Administrator transfer all or part (provided that the part is at least $500) to any "eligible retirement plan" capable of accepting such a transfer.

(2) For purposes of this section, the following definitions shall apply:

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

B. An "eligible retirement plan" is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in Code Section 401(a), that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to a surviving spouse, prior to January 1, 2002, an eligible retirement plan was an individual retirement account or individual retirement annuity. Effective as of January 1, 2002, an "eligible retirement plan" includes an annuity contract described in Code Section 403(b) and an eligible plan under Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this plan. Effective January 1, 2008, an eligible retirement plan shall include a Roth IRA as that term is defined in Code Section 408A(b) that agrees to separately account for amounts transferred from this Plan.

C. A distributee includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p)(11), are distributees with regard to the interest of the spouse or former spouse.

D. Effective as of January 1, 2002, an Employee may, in accordance with Code Section 457(e)(17), make a trustee-to-trustee transfer from an eligible deferred compensation plan (as defined in Code Section 457(b)) to this Plan for the purpose of purchasing service credit (to the extent that such purchases are permitted under the terms of the Plan) or repaying a cash-out of contributions refunded under the Plan.

(3) Non-spouse 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 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 Code Section 408(d)(3)(C).

(h) Qualified domestic relations order distribution. All rights and benefits, including elections, provided to a Participant in this Plan shall be subject to the rights afforded to any "alternate payee" pursuant to a domestic relations order as provided by applicable state law. In evaluating any such domestic relations order, the Plan may use as a guide Code Section 414(p).

(i) Credit for qualified military service.

(1) Effective as of December 12, 1994, notwithstanding any provisions of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Code Section 414(u).

(j) Consent for lump-sum distribution. Effective January 1, 2006, notwithstanding any other provision of the Plan, any distribution to a Participant made prior to the earlier of age 62 or Normal Retirement Age of an amount in excess of $1,000 that is an eligible rollover distribution as set forth in the Plan and the Code, shall be made only upon consent of the Participant.

(k) Miscellaneous Pension Protection Act of 2006 (PPA) and Heroes Earnings Assistance Relief Tax Act (HEART Act) provisions. The following provisions are added to the Plan. Any prior provisions that are inconsistent with the provisions in this Subsection are hereby superseded.

(1) The purpose of these plan amendments are to comply with the Pension Protection Act of 2006 (PPA) and the Heroes Earnings Assistance Relief Tax Act (HEART Act). Notwithstanding anything in this Plan to the contrary, this Plan shall be interpreted so as to comply with the applicable required provisions of the PPA and the HEART Act.

(2) For the purposes of 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.

(3) 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), differential wage payments shall be included in Compensation.

(4) Effective as of January 1, 2007, an "eligible rollover distribution" shall include an eligible rollover distribution containing after tax contributions that is transferred to a direct trustee-to-trustee transfer to a 403(b) annuity contract or a qualified trust under Code Section 401(a) that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

(5) Effective as of January 2, 1008, a Roth IRA is an "eligible retirement plan."

(6) HEART Act - Effective for participant deaths occurring while performing qualified military service (as defined in Code Section 414(u)) on or after January 1, 2007, the Plan will provide retirement benefits and service credit to the extent required by the HEART Act.

§ 169.08 Termination of employment.

[Ord. 7227, adopted 9-14-1995; Ord. 7773, passed 3-23-2006; Ord. 7781, passed 5-11-2006]

(a) Rights of terminated employees. A Participant who shall cease to be an Employee except as otherwise hereinbefore provided shall have all interest and rights under this Plan limited to those contained in the following Subsections of this section.

(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 retirement benefit. A Participant who shall have completed at least 12 Years of Credited Service and whose Employment shall terminate for any reason other than due to death or Total and Permanent Disability prior to attainment of Normal Retirement Age shall be entitled to elect to receive a deferred retirement benefit in lieu of a distribution of Accumulated Contributions under Subsection (b) of Section 169.08. Such deferred retirement benefit shall be equal to the Participant's Accrued Benefit as of the date Employment terminates and shall commence after application pursuant to Subsection (e) of Section 169.04 and not earlier than the date which would be the Participant's Normal Retirement Date under the Plan if the Participant remained in Employment until such date.

As part of a one-time only retirement incentive, those selecting employees (hereinafter referred to as "Window Participants") electing to retire on or before June 30, 2006 and who have at least 19 1/2 Years of Credited Service under the Plan, may retire pursuant to the window terms and receive their Accrued Benefit payable immediately. In the interest of the Plan, only two Participants may elect to become Window Participants.

ADDENDUM ONE
This Addendum One to the New Castle Police Pension Plan ("Plan") summarizes the terms and provisions of a one-time only window benefit to be offered through the Plan. The defined terms used with respect to the window benefit are as contained in the Plan, except to the extent defined below:
1.	Window Participant. Plan Participants who are employed as of the date of adoption of this Addendum One who fulfill the Window conditions of completing at least 19 1/2 Years of Credited Service (on or before June 30, 2006) and who have not reached Normal Retirement Age and who execute an unconditional and irrevocable election prior to June 30, 2006 ("Window Election") and who execute a Release and Waiver drafted by the Plan Administrator, shall be eligible for the Window Benefit.
2.	Window Benefit. A Window Participant shall be eligible for the Window Benefit, which shall be a Deferred Retirement Benefit under Plan Section 169.08(c), which is the Accrued Benefit, however, a Window Participant shall be entitled to receive the Window Benefit upon reaching the Window Retirement Date, without regard to the Window Participant's Normal Retirement Date under Section 169.08(c). The Window Benefit shall be in lieu of any other benefit under the Plan. For the purposes of calculating the Accrued Benefit for the purposes of this Window Benefit only, credit for partial Years of Credited Service shall be allowed.
3.	Window Retirement Date. A Window Participant shall select a Window Retirement Date, which shall not be more than one month nor less than 15 days from the date of the Window Election. This date shall represent the Window Retirement Date and Window Benefit payments shall begin the first of the month following the Window Retirement Date.
4.	Limitations. No Plan Participants shall be eligible if more than two Participants elect to become Window Participants.
This window program shall be subject to and reformed to the extent necessary to comply with all laws including the Internal Revenue Code and related regulations (as they apply to governmental plans) as well as any other applicable federal or state law requirements. Once the Window Participant has satisfied all the window conditions, he shall no longer be eligible for any other benefit under the Plan, but rather he shall receive the Window Benefit. The Survivor Benefit applicable to the Deferred Retirement Benefit (Plan Section 169.08(c)) shall commence as of the first day of the month coincident with or next following the date of death of the Window Participant. Neither his/her family, his/her children nor surviving spouse shall receive any other benefit under the Plan or the window.

§ 169.09 Administration.

[Ord. 7227, adopted 9-14-1995]

(a) Plan administrator. The Pension Plan board shall be the Plan Administrator and 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 Council shall be the Plan Administrator.

(b) Pension Plan Board. The Pension Plan Board shall consist of the Mayor, members of Council, City Treasurer, Chief of Police and three Participants who will be elected annually by the Participants who are contributing to the Pension Fund.

Each member of the Pension Plan Board shall serve in that capacity until the earliest of death, resignation or removal. Each member, but not including the Mayor, members of Council, City Treasurer, or Chief of Police, of the Pension Plan Board may resign by giving written notice to the Council and other members of the Pension Plan Board 30 days prior to the date of resignation. Any vacancy on the Pension Plan Board shall be filled in accord with the provisions governing initial appointment as a member of the Pension Plan Board.

The Pension Plan Board may organize itself in any manner deemed appropriate to effectuate its purposes hereunder provided that:

(1) It shall act by a majority of its members at the time in office either by vote at a meeting or in writing without a meeting,

(2) It shall appoint a Chairman who shall be the Mayor, a Secretary who may, but need not be a Pension Plan Board member and such other agents as it may deem advisable,

(3) It may authorize any one or more of its members to execute any document or documents including any application, request, certificate, notice, consent, waiver or direction and shall notify the Council, in writing, of each such member so authorized; however, if no such member is so authorized, the Chairman shall be deemed to be so authorized,

(4) It shall meet at least one time in each Plan Year, and

(5) It shall maintain and keep such records as are necessary for the efficient operation of the Plan and preservation of the Pension Fund or as may be required by any applicable law, regulation or ruling, and shall provide for the preparation and filing of such forms, reports or documents as may be required to be filed with any governmental agency or department and with the Participants and/or other persons entitled to benefits under the Plan.

(c) Authority and duties of the plan administrator. 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 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:

(1) To construe this Plan;

(2) To determine all questions affecting the eligibility of any Employee to participate herein;

(3) To compute the amount and source of any benefit payable hereunder to any Participant or Beneficiary;

(4) To authorize any and all disbursements;

(5) To prescribe any procedure to be followed by any Participant and/or other person in filing any application or election;

(6) To prepare and distribute, in such manner as may be required by law or as the Plan Administrator deems appropriate, information explaining the Plan;

(7) To require from the Employer or any Participant such information as shall be necessary for the proper administration of the Plan; and

(8) To appoint and retain any individual to assist in the administration of the Plan, including such legal, clerical, accounting, actuarial and investment services as may be required by any applicable law or laws. The Plan Administrator in its capacity as 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, or to determine or require any contributions to the Plan, said powers being exclusively reserved to the Council in its capacity as the governing body of the Employer.

(d) Plan administration expense. 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 Plan Administrator to the extent permitted under applicable law and not otherwise paid by the Employer.

(e) Hold harmless. No member of the Council nor the Plan Administrator nor the Actuary nor any other person involved in the administration of the Plan 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 and each successor and each of any such individual's heirs, executors and administrators, and the Plan Administrator's 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 the Plan Administrator or a 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 (i) the specific Plan provisions on which the denial is based, (ii) an explanation of additional material or information, if any, necessary to perfect such claim and a statement of why such material or information is necessary, and (iii) an explanation of the review procedure.

(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.

§ 169.10 The Pension Fund.

[Ord. 7227, adopted 9-14-1995]

(a) Operation of the Pension Fund. The Council of the City of New Castle 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 of Pennsylvania and of this Plan and any amendment thereto.

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.

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.

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, re-investments 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. The Employer may, however, appoint a trustee, custodian and/or investment manager, at its sole discretion.

(b) Powers and duties of 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.

(c) 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.

(d) 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 his 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 trustees shall be entitled to pay the same, or to reimburse themselves for the payment thereof, from the Pension Fund.

(e) 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.

(f) 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.

§ 169.11 Amendment and termination of Pension Plan or Pension Fund.

[Ord. 7227, adopted 9-14-1995]

(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:

(1) That no amendment shall deprive any Participant or any Beneficiary of a deceased Participant of any of the benefits to which each is entitled under this Plan with respect to contributions previously made;

(2) That no amendment shall provide for the use of funds or assets held under this Plan other than for the benefit of Employees and no funds contributed to this Plan or assets of this Plan shall, except as provided in Subsection (e) of Section 169.11, ever revert to or be used or enjoyed by the Employer; and

(3) That no amendment to the Plan which provides for a benefit modification shall be made unless the cost estimate described in Subsection (c) of Section 169.12 has been prepared and presented to the Council in accordance with the Act.

(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 a bankrupt or upon the making of a general assignment for the benefit of its creditors.

(d) Distribution upon termination. In the event of the termination of the Plan, all amounts of vested benefits accrued by the affected Participants as of the date of such termination, to the extent funded on such date, shall be nonforfeitable hereunder. In the event of termination of the Plan, the Employer shall direct either (1) 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 (2) that the Plan Administrator immediately distribute to each Participant an amount equal to the vested Accrued Benefit to the date.

If there are insufficient assets in the Pension Fund to provide for all vested Accrued Benefits as of the date of Plan termination, priority shall first be given to the distribution of any amounts attributable to mandatory or voluntary Employee contributions before assets are applied to the distribution of any vested benefits attributable to other sources hereunder.

All other assets attributable to the terminated Plan shall be distributed and disposed of in accordance with the provisions of applicable law and the terms of any instrument adopted by the Employer which effects such termination.

(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 the 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.

§ 169.12 Provisions to comply with the Municipal Pension Plan Funding Standard and Recovery Act of 1984.

[Ord. 7227, adopted 9-14-1995]

(a) Actuarial valuations. The Plan's Actuary shall perform an actuarial valuation at least biennially unless the Employer is applying or has applied for supplemental state assistance pursuant to Section 603 of the Act, whereupon actuarial valuation reports shall be made annually.

Such biennial actuarial valuation report shall be made as of the beginning of each Plan Year occurring in an odd-numbered calendar year, beginning with the year 1985.

Such actuarial valuation shall be prepared and certified by an Approved Actuary, as such term is defined in the Act.

The expenses attributable to the preparation of any actuarial valuation report or experience 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:

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

(2) Accounting expenses;

(3) Premiums for insurance coverage on fund assets;

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

(5) Legitimate travel and education expense for pension 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 pension 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. Such actuarial reports shall be prepared and filed under the supervision of the Chief Administrative Officer.

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 annually and shall certify the accuracy of such calculations and their conformance with the Act.

(c) Benefit 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.

§ 169.13 Miscellaneous.

[Ord. 7227, adopted 9-14-1995]

(a) Employment rights. Participation in this Plan shall not give any right to any Employee to be retained in the employ of the Employer nor shall it interfere with the right of the Employer to discharge any Employee and to deal with such Employee without regard to the effect that such treatment might have upon participation in this Plan.

(b) Meaning of certain words. As used herein the masculine gender shall include the feminine gender and the singular shall include the plural in all cases where such meaning would be appropriate. Headings of Sections are inserted only for convenience of reference and are not to be considered in the construction of the Plan.

(c) 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.

(d) Severability of provisions. Should any provisions of this Plan be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if said illegal and invalid provisions had never been inserted herein.

(e) Incapacity of participant. If any Participant shall be physical 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 the Participant, and any such payments so made shall be deemed for every purpose to have been made to such Participant.

(f) 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 of this Plan, 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.

(g) 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 be no such surviving spouse, to such 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.

(h) Assets in Pension 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) Personal liability. Subject to the provisions of the Act and unless otherwise specifically required by other applicable laws, no past, present or future officer or agent of the Employer or Plan Administrator shall be personally liable to any Participant, Beneficiary or other person under any provision of the Plan.

§ 169.14 Effective date.

[Ord. 7227, adopted 9-14-1995]

The effective date of this Article 169 is January 1, 1994.

§ 169.15 Deferred retirement option plan (DROP).

[11-22-2022 by Ord. No. 8424]

(a) Definitions. Unless otherwise specifically set forth in this § 169.15, the defined terms used herein shall have the meaning assigned to them in the remainder of Article 169.

DROP

The DROP is created as an optional form of benefit under the existing City of New Castle Police Pension Fund (Fund). The DROP shall be for a maximum three-year term.

DROP ACCOUNT

A separate account created to accumulate the DROP pension benefit for a DROP participant.

DROP PARTICIPANT

Qualifying officer who has elected to participate in the DROP program.

QUALIFYING OFFICER

Any full-time active participant who has attained an age of 57 with 25 years of credited service and thus is eligible for normal retirement.

(b) Eligibility. Qualifying officers may elect to enter the DROP on the first day of any month after reaching age 57 and 25 years of credited service.

(c) Written election. A qualifying officer in the fund electing to participate in the DROP program must complete and execute a DROP Election Form which shall evidence the DROP participant's participation in the DROP program, the DROP participant's election to forego active membership in the fund and document the DROP participant's rights and obligations under the DROP. The form must be signed by the DROP participant and the Chief Administrative Officer of the fund and submitted to the plan administrator prior to the date on which the DROP participant elects to enter the DROP (election date). Election date must be after the later of age 57 and 25 years of credited service. The DROP election form shall include an irrevocable notice to the employer by the DROP participant that the DROP participant shall terminate from employment with the employer effective on a specific date not more than three years from the effective date of the DROP participant's entry into the DROP. In addition, all retirement documents required by the City must be filed and presented to the Board for approval of retirement and commencement of the monthly pension benefit. Once the retirement application has been approved by the Board, it shall become irrevocable. A DROP participant's participation shall become effective the day following his election date.

(1) After a DROP participant enters the DROP program, contributions to the fund by the participant will cease, and the amount of the monthly benefits will be frozen except for any applicable cost-of-living adjustment (COLA) increases, if any, awarded to all pension recipients.

(2) Participants should 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.

(d) Limitation on pension accrual. After the effective date of the DROP election, the DROP participant shall no longer earn or accrue additional years of service for pension purposes including the calculation of any service increment. The DROP participant shall also forego any growth in salary after the election date for the purpose of calculating retirement benefits under the fund.

(e) Ineligibility for re-enrollment in DROP. Once a DROP participant's DROP participation terminates, he shall be ineligible to re-enroll in the DROP even if the former DROP participant is reemployed by the local government with renewed active membership in the fund.

(f) Benefit calculation. For all fund purposes, service of a DROP participant 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 fund including any service increments that may be available. The average compensation of the DROP participant 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 fund. The pension benefit payable to the participant shall increase only as a result of cost-of-living adjustments (COLAs), if any, effective on or after the date of the DROP participant's participation in the DROP.

(g) Payments to DROP account. The monthly retirement benefits that would have been payable had the DROP participant elected to cease employment and receive a retirement benefit shall, upon the DROP participant commencing participation in the DROP program, be credited on the first day of each month into a separate account established by the fund administrator to track and accumulate the participant's monthly pension benefits. This account shall be designated the DROP account. The DROP account shall not contain a guaranteed interest rate but shall be credited with interest at the actual rate earned by the DROP account but shall not be less than 0% nor greater than 4.5% and shall be compounded monthly. The DROP account shall be a segregated account into which each DROP participant's monthly retirement benefit shall be deposited. All earnings or losses credited to the DROP account will be included in the final cash settlement. The DROP account shall be invested in an insured savings account, money market account or a mutual fund invested in ultra short-term treasuries as may be selected by the Comprehensive Board of Trustees. All earnings or losses credited to the DROP account will be included in the final cash settlement.

(1) The DROP shall at all times comply with the annual benefit limitations of IRC § 415 and the regulations thereto.

(h) Early termination. A DROP participant may withdraw from the DROP program at any time and effectuate a complete separation from service. No penalty shall be imposed for early termination of DROP participation. However, the DROP participant shall not be permitted to make any withdrawals from the DROP account until DROP participation has ended.

(i) Payout. Upon the termination date set forth in the DROP election form or on such date as the DROP participant withdraws or is terminated from the DROP program, if earlier, the retirement benefits payable to the participant shall be paid directly to the participant and shall no longer be credited to the DROP account. Within a period not to exceed 45 days following the actual termination of a participant's employment with the City, the DROP participant or the DROP participant's designated beneficiary, where applicable, shall elect one of the following options: 1) the accumulated balance in the DROP account, less any withholding taxes required to be remitted to the Internal Revenue Service, shall be paid to the DROP participant or his designated surviving beneficiary in a single lump-sum payment; or 2) the balance of the DROP participant's DROP account shall be paid within 45 days directly to the custodian of an eligible retirement fund as defined in Section 402 (c)(8)(b) of the Internal Revenue Code of 1986 (IRC) or in the case of an eligible rollover distribution to the surviving spouse of a deceased DROP participant, an eligible retirement fund that is an individual retirement account or an individual retirement annuity as described in IRC § 402(c)(9). If the DROP participant or designated beneficiary fails to elect a method of payment within 60 days after the DROP participant's termination date, the DROP participant's DROP account shall be paid in a lump sum as provided in (2) above. All distributions of the DROP account shall comply with IRC § 401(a)(9).

(1) Under this Subsection (i), a distributee may elect to have an eligible rollover distribution paid directly to an eligible rollover distribution paid directly to an eligible retirement fund by way of a direct rollover. For purposes of this section a "distributee" includes a DROP participant, a DROP participant's designated beneficiary, or in lieu thereof, a DROP participant's survivor as provided by Article 169, and a DROP participant's former spouse who is an alternate payee under a qualified domestic relations order. For purposes of this section, "eligible rollover distribution" has the meaning given the term by IRC § 402(f)(2)(A) except that a qualified trust shall be considered an eligible fund 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 fund is an "individual retirement account" or an "individual retirement annuity" as those terms are defined in IRC § 408(a) and (b).

(j) Death. A DROP participant's eligibility to participate in the DROP terminates upon the death of the DROP participant. If a DROP participant dies on or after the effective date of participation in the DROP but before the first monthly retirement benefit due the DROP participant for that month has been credited to his DROP account, the fund shall pay the monthly retirement benefit as though the DROP participant had not elected DROP participation and had died after the DROP participant's effective date of retirement but before receipt of the DROP participant's first regular retirement benefit. If a DROP participant dies while participating in the DROP and after his monthly retirement benefits have begun to have been credited to his DROP account, the monthly retirement benefit credited to the DROP participant's DROP account during the month of the DROP participant's death shall be the final monthly retirement benefit from the fund credited to his DROP account.

(1) Except for those benefits specifically payable as a result of death incurred in the course of performing a hazardous public duty, the survivors of the DROP participant who dies shall not be eligible to receive retirement system death benefits payable in the event of the death of an active member. The DROP participant's survivor(s) shall be eligible to receive survivor benefits normally payable in the event of the death of a retired participant.

(k) Disability. If a DROP participant becomes eligible for a disability benefit from the fund and terminates employment, the monthly nondisability retirement benefit of the DROP participant shall terminate.

(l) Eligibility for other benefits. DROP participants shall be eligible for all non-pension employee benefits provided to active employees under the collective bargaining agreement in effect at the time of their enrollment as a DROP participant, except that such eligibility shall not cause, result in, or be construed to require, any growth in the salary base used for calculating the retirement benefit for such DROP participants.

(m) Eligibility for statutory benefits. A DROP participant shall be eligible for all preretirement benefits for employees otherwise provided by law including, but not limited to the following:

(1) The Workers' Compensation Act [the Act of June 2, 1915 (P.L. 736, No. 338)].[1]

[1] Editor's Note: See 77 P.S. § 1 et seq.

(2) The Enforcement Officer Disability Benefits Law [the Act of June 28, 1935 (P.L. 477, No. 193)].[2]

[2] Editor's Note: See 53 P.S. § 637 et seq.

(3) The Unemployment Compensation Law [the Act of December 5, 1936 (2nd Sp. Sess., 1937 P.L. 2897, No. 11)].[3]

[3] Editor's Note: See 43 P.S. § 751 et seq.

(4) The Emergency and Law Enforcement Personnel Death Benefits Act [the Act of June 24, 1976 (P.L. 424, No. 101)].[4]

[4] Editor's Note: See 53 P.S. § 891 et seq.

(5) The Public Safety Officers' Benefit Act of 1976 (Public Law 94-430, 42 U.S.C. § 90 Stat. 1347).

(n) Designation of beneficiary. A DROP participant may designate a DROP beneficiary who shall be entitled to apply for and receive the DROP participant's DROP account in the event of the DROP participant's death while participating in the DROP. In the event that a DROP participant does not designate a beneficiary and dies while participating in the DROP, his DROP account will be paid to his survivor(s) as determined under Article 169 and if no such survivors exist, then to his estate.

(o) 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 DROP participants who have balances in their DROP accounts.

(p) Taxation, attachment and assignment. Except as provided in this subsection, the right of a DROP participant to any benefit or right accrued or accruing under the provisions of this § 169.15 and moneys in the DROP participant's DROP account are exempt from a state or municipal tax, levy and sale, garnishment, attachment, spouse's election, or any other process whatsoever. Rights and benefits under § 169.15 shall be subject to forfeiture as provided by the Public Employees Forfeiture Act [the Act of July 8, 1978 (P.L. 752, No. 140)]. Forfeitures under this subsection or under any other provision of law may not be applied to increase the benefits that any DROP participant otherwise would receive under this § 169.15. Rights under this § 169.15 shall be subject to attachment in favor of an alternate payee as set forth in a qualified domestic relations order and state law.

(q) Trust requirement. A DROP participant's DROP account shall be held in trust for the exclusive benefit of fund participants who are or were DROP participants and for their beneficiaries.

(r) Severability. The provisions of this § 169.15 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 Article 169 shall not be affected thereby. It is hereby expressly declared as the intent of the City that this § 169.15 has been adopted as if such unconstitutional or illegal provision or provisions have not been included herein.

(s) Auditor General findings. If the Auditor General issues a finding of noncompliance with the provisions of Act 44 of 2009 that govern this DROP, the City shall be authorized to reform this DROP ordinance to bring it into compliance with the DROP within 90 days of the date the Auditor General's finding becomes final.