Borough of Athens, PA Contributions

Application of certain receipts.

The amounts of the payments made by the Treasurer of the Commonwealth from the monies received from taxes paid upon premiums by foreign casualty insurance companies and foreign fire insurance companies, that are determined by the employer to be deposited in the fund, shall be applied as follows:

(a)

To pay expenses incurred for the administration of the fund and the plan.

(b)

To reduce any unfunded liability. "Unfunded liability" means the present value of the liability of the fund on account of retirement benefits payable under this plan that accrued prior to the date as of which mandatory employee contributions were first required, offset by the value of any assets in the fund.

(c)

After the unfunded liability has been funded, to apply against the annual obligation of the employer for future service cost. "Future service cost" means the amount of money required to be contributed annually into the fund on account of benefits payable under the plan with respect to years of service credited after the establishment of the plan.

(d)

To the extent that the payments may be in excess of such obligation, to reduce mandatory employee contributions hereunder.

(2)

Any other monies paid into the fund, including gifts, grants, devises or bequests granted to the trust fund pursuant to 53 P.S. § 768, shall be applied equally against the participant mandatory employee contribution obligation and the employer obligation for future service cost.

Employer contributions. The Chief Administrative Officer of the plan shall determine the financial requirements of the plan on the basis of the most recent actuarial report and shall determine the minimum obligation of the 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 obligation of the employer to the employer (or its governing body) annually and shall certify the accuracy of such calculations and their conformance with Act 205. To the extent that the payments received under § 91-28A(1)(b) do not exceed the employer's annual obligation for future service cost, as determined by the actuary in accordance with Act 205, the employer shall be obligated to make such contribution to the trust by annual appropriations.

Participant's contributions.[1]

[Amended 6-16-2003 by Ord. No. 581]

(1)

Contributions of participants. The governing body of the Borough of Athens may, on an annual basis, by ordinance or resolution, reduce or eliminate payments into the fund by members without the necessity of conducting an actuarial study.

(2)

Reduction or elimination of participant's contributions. The governing body of the Borough of Athens may, on an annual basis, by ordinance or resolution, reduce or eliminate payments into the fund by members without the necessity of conducting an actuarial study.

[1]

Editor's Note: Ordinance No. 727, adopted 12-11-2023, provided as follows: "No contribution shall be required by either the Borough of Athens or the Police Force for the calendar year 2024 based on the Actuarial Valuation Report of the pension of the Police Pension Fund."

Employee contributions. The employer shall remit employee contributions to the trust of the plan as soon as administratively feasible.

Determination of accumulated contributions.

(1)

The participant's accumulated contributions shall be equal to his mandatory employee contributions, with interest credited at the rate of 5.250% per annum.

(2)

Such interest shall be credited annually in the form of a compound interest rate. A participant shall be 100% vested in his accumulated contributions.

Withdrawal of accumulated contributions. Upon termination of employment, a participant who is not vested in his benefit accrued under § 91-7 shall receive an amount that is equal to his total accumulated contributions. The withdrawal shall be payable in one lump sum. Thereafter, the former participant shall have no further right to any benefit under this plan. In no event may any amount be withdrawn or distributed until the participant's retirement, disability, death or termination of employment, regardless of the income tax accounting treatment required by IRC § 72(e)(8)(D).

(1)

Eligible rollover distribution. Effective for distributions made on or after January 1, 1993, a distributee may elect, at the time and in the manner prescribed by the plan administrator, to have any eligible portion of a lump sum distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover payment.

(a)

Effective for distributions made after December 31, 2001, any eligible portion of a lump sum distribution shall include after-tax employee contributions. A portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includable in gross income. However, such portion may be transferred only to an individual retirement account or annuity described in IRC § 408(a) or (b) or to a qualified defined contribution plan described in IRC § 401(a) or 403(a) that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includable in gross income and the portion of such distribution which is not so includable.

(b)

An eligible retirement plan is an individual retirement account described in IRC § 408(a), an individual retirement annuity described in IRC § 408(b), an annuity plan described in IRC § 403(a), or a qualified trust described in IRC § 401(a) that accepts the distributee's lump sum distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. Effective for distributions made after December 31, 2001, an eligible retirement plan shall also mean an annuity contract described in IRC § 403(b) and an eligible plan under IRC § 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. The definition of eligible retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order, as defined in IRC § 414(p).

(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 IRC § 414(p), are distributees with regard to the interest of the spouse or former spouse.

(2)

Special rule relating to time for written explanation. Effective for distributions made on or after January 1, 1993, for any distribution in excess of $200 that may be paid in the form of a lump sum, the plan administrator shall give the participant written notice of his eligible rollover distribution rights as required under IRC § 402(f) no less than 30 days and no more than 90 days before the annuity starting date with respect to the distribution. Effective for distributions made on or alter January 1, 1994, such distribution may commence less than 30 days after the notice is given, provided that:

(a)

The participant is provided with information that clearly states that the participant has a right to a period of at least 30 days after receiving the written explanation and notice to consider the decision of whether or not to elect a distribution;

(b)

The participant, after receiving the written notice, affirmatively elects a distribution.

Forfeiture. The death benefit payable under Article IV shall not be less than the participant's accumulated contributions.