The Borough of Rockledge, situate in the County of Montgomery, Commonwealth of Pennsylvania, hereby amends and restates the Police Pension Plan and Fund for the purpose of providing retirement and other benefits for eligible police officers of this Borough and their beneficiaries.
[HISTORY: Adopted by the Borough Council of the Borough of Rockledge as indicated in article histories. Amendments noted where applicable.]
[Adopted 10-12-1981 by Ord. No. 415 (Ch. 1, Part 13, of the 2005 Code of Ordinances)]
[Amended 7-9-2001 by Ord. No. 575]
As used in this article, the following terms shall have the meanings indicated:
The age attained by the employee at his/her or her last birthday.
Any January 1 after the effective date.
Means eligible children are registered at an accredited institution of higher learning and are carrying a minimum course load of seven credits for semester.
The Borough of Rockledge, Montgomery County, Commonwealth of Pennsylvania.
The administrative committee appointed as provided in § 87-13 of this article.
With respect to each employee who became or who becomes a member hereof when first eligible to be a member and who thereafter remains a member continuously until such date as he/she becomes eligible to receive benefit payments hereunder, such employee's period of service as an employee, computed in years and months, with each completed calendar month counted as 1/12 of a year. With respect to all other employees becoming members hereof, "credited service" shall mean all of the period of the employee's service as an employee, computed in years and months as aforesaid, during which said employee was a member.
The following shall be deemed not to interrupt the continuity of service, credited service or membership for any of the purposes of this plan, notwithstanding the fact that no "credited service" will be granted for such periods and that no member contributions will be accepted with respect to such period:
Any period of absence during which said employee receives his/her regular compensation.
Absence on leave granted by the Borough for any cause for the period stated in such leave or, if no period is stated, then for six months and any extensions the Borough may grant in writing. For the purposes of this paragraph, the Borough shall give equal treatment to all employees who are in similar circumstances.
Absence in the armed forces or government service in a time of war or emergency, as defined by the Borough, provided he/she returns to service with the Borough within six months after his/her discharge or release to inactive duty (whichever shall occur first) or, if he/she does not return to such service within the said six-month period because of a disability incurred while in the armed forces of the United States, if he/she returns to service with the Borough upon the termination of such disability, provided that within the said six-month period he/she indicates his/her intention of returning to such service and furnishes satisfactory proof to the Committee that his/her disability prevents him/her from returning within said period, and provided he/she continues to furnish such proof at such times as may be requested by the Committee until he/she returns.
Continued employment by the Borough other than as an employee, provided that, for the purposes hereof, service rendered as an independent contractor or as an employee of another employer shall not be deemed to be "continued employment by the Borough."
Any employee whose credited service is interrupted under circumstances other than those specified above shall forfeit all credited service prior to the date of his/her termination and if subsequently rehired shall requalify for membership as though he/she had never been an employee; the member, however, shall not forfeit credited service if either of the following conditions are met:
January 1, 1981.
Any police officer in the employment of the Borough whose customary employment by the Borough is for not fewer than 40 hours per week.
One-sixteenth of the member's aggregate earnings from employment by the Borough during his/her final 60 months as an employee. "Aggregate earnings" shall include all base pay as well as compensation for overtime, holidays, vacation and sick leave.
All assets held by the Trustee under the trust agreement.
The first day of the month coincident with or next following the member's completion of the following requirements:
The Borough of Rockledge Police Pension Plan as herein set forth and as the same may hereafter be amended.
A period of 12 consecutive months commencing on any January 1st and ending on the following December 31st. The first plan year is the period from January 1, 1981 through December 31, 1981.
The spouse of a member or retired member who has been married to the member for two years or more at the date of the member's death.
Any member who is absent from the employ of the Borough for any reason set forth in § 2.5(a), (b) or (c) or who is not an employee by reason of a change in the conditions of his/her employment, as set forth in § 2.5(d).[1]
Any condition which precludes the member from employment as a police officer for so long as such condition persists in a degree of severity to continue to preclude the member from employment as a police officer.
The contract between the Borough and the Trustee establishing the terms by which and under which the fund is invested, distributed, accounted for and terminated, as the same now exists and as it may hereafter be amended.
Any fiduciary appointed by the Borough Council to serve in that capacity under the trust agreement.
[1]
Editor's Note: See definition of "credited service" in this section.
A.
All employees will be members of the Plan and will make the contributions required by § 87-4A hereof in such manner as is prescribed by the Committee.
B.
Any employee currently a member of the pension plan as it existed prior to January 1, 1981, continues to be covered as a member under this amended and restated Police Pension Plan.
A.
Member contributions. Each member shall contribute an amount, not to exceed 5%, as determined by the Plan actuary as necessary to maintain the soundness of the Plan and provide the benefits contemplated by it.
[Amended 10-27-2008 by Ord. No. 607]
B.
State contributions. The Trustee shall accept any payments made by the State Treasurer from proceeds of the tax paid on premiums by foreign casualty insurance companies.
D.
Other contributions. The Trustee shall accept any gifts, bequests, or other contributions in addition to those funds contributed by the members, the state and the Borough.
A.
Accrued benefit. Each member's accrued benefit shall be equal to 50% of his/her final average earnings.
B.
Normal retirement. Each member retiring on his/her normal retirement date shall be entitled to receive a monthly pension commencing upon said normal retirement date and ending on the first day of the month in which his/her death occurs equal to his/her accrued benefit as of said normal retirement date.
C.
Postponed retirement. Each member retiring after his/her normal retirement date shall be entitled to receive a monthly pension commencing upon the first day of the month after he/she ceases to be an employee and ending on the first day of the month in which his/her death occurs equal to his/her accrued benefit as of his/her actual retirement date.
D.
Disability retirement.
(1)
Should any member suffer total disability which is service-connected, he/she shall be entitled to receive a monthly pension commencing upon the first day of the month after the onset of such total disability and continuing thereafter during the remainder of such period of total disability. The amount of the disability pension shall be the member's accrued benefit less any workers' compensation benefits that the member is receiving because of such total disability.
(2)
The Committee reserves the right to require disabled members to present evidence of total disability and of the continuance of such condition, from time to time, and further reserves the right to require members to submit to medical examinations from time to time by one or more licensed medical practitioners selected by the Committee as a precondition to the continued payment of benefits.
A.
Death after eligibility for retirement benefits.
(2)
The death benefit shall be a monthly annuity equal to 50% of the benefit the member was receiving or would have been receiving if such member had retired on the first day of the month of his/her death.
(3)
The surviving spouse of a member of the police force who was eligible for retirement benefits at the time of death shall be paid a 50% survivor's benefit until the death of said spouse, or if there was no spouse or if the spouse subsequently dies, then such benefit is paid to the children of said member of the police force until they reach the age of 18 years, unless they are in college at an accredited institution and carrying at least seven credit hours per semester; in which case the benefit continues until the 23rd birthday.
[Amended 10-27-2008 by Ord. No. 607]
An additional benefit will be paid to the member's designated beneficiary, or to the member's estate if the member has no designated beneficiary, as promptly as practicable after the last benefits are paid pursuant to the provisions of §§ 87-5 and 87-6 equal to the excess, if any, of the sum of the member's contributions and accumulated interest at 5%, compounded annually, thereon standing to the member's credit at the time of the commencement of his/her pension benefits over the sum of the benefits paid to the member, the member's spouse, and the member's children.
B.
The Committee shall annually determine the size of the cost-of-living increase, and the decision will be made as soon as practicable after the increase in the Consumer Price Index for the Philadelphia region has been released by the Bureau of Labor Statistics. Each annual cost-of-living increase will not exceed the lesser of 7% or 1/2 of the relevant year's increase in the Philadelphia region's Consumer Price Index and will uniformly apply to all retired members and beneficiaries receiving benefits, subject to the limits in Subsection C.
C.
The following limits apply to each member's cost-of-living increases:
(1)
Each retired member's total monthly pension benefit may never exceed 75% of his/her final average earnings. In the case of a member's spouse and children receiving benefits pursuant to § 87-6, the total monthly benefit may never exceed 37 1/2% of the member's final average earnings.
(2)
The sum of the cost-of-living increases received by a member and his/her beneficiaries may not exceed 30%.
B.
Notwithstanding any other provision of this Plan, any member who ceases to be an employee by reason of discharge for "cause," which includes:
(1)
Willfully damaging the Borough's property.
(2)
Proven or admitted dishonesty or stealing.
(3)
Conviction of a felony, or who, after having terminated his/her service as an employee prior to normal retirement date, is proven or admits to having committed an act that was grounds for discharge for "cause" hereunder, shall be divested of all rights under this Plan, except those rights provided by Subsection A.
B.
The normal form of all benefits payable hereunder shall be a pension for the life of the member commencing on the date specified and ending with a payment made on the first day of the month in which the member dies; subject, however, to the payment of death benefits calculated pursuant to §§ 87-6 and 87-7.
C.
Pension benefits may be paid directly by the Trustees or by purchase of annuity contracts, which may be held by the Trustee or which may be assigned by the Trustee to the member, provided that such contracts are, in the hands of the member, nonassignable and noncommutable.
A.
It is the duty of the Trustee to pay the benefits to members and their beneficiaries, as provided in §§ 87-5, 87-6, 87-7, 87-8 and 87-9 in accordance with instructions received from the Committee; provided, however, that the duty of the Trustee to make such payments is wholly contingent upon the sufficiency of the Fund for such purpose. Neither the Trustee nor the Borough in any way guarantees the sufficiency of the Fund to make such payments nor assumes any liability for the insufficiency thereof.
B.
The Borough or the Committee may employ an actuary, investment advisors, counsel or other professional consultants, from time to time, in connection with the operation of the Fund or this Plan. If hired by the Borough, such persons or entities shall be compensated by the Borough at such rates as may be agreed upon by the Borough Council. If hired by the Committee, such persons or entities shall be compensated by the Borough, if agreed upon by the Borough Council, but shall otherwise be compensated by the Committee directly from the Fund.
C.
The Trustee shall make an annual determination of the fair market value of the Fund as of the anniversary date and as of such additional dates as the Committee may direct. The fair market value of the Fund shall be reported to the actuary, who shall calculate the amount to be contributed to the Fund by the Borough with respect to each plan year in accordance with the assumptions most recently adopted by the Committee for the purpose of such computations; provided, however, that the liability of the Borough to make such contributions is subject to all of the conditions and limitations set forth elsewhere in this Plan.
[Amended 3-14-2005 by Ord. No. 590]
A.
The Plan shall be administered by a Police Pension Committee, which shall consist of three or more citizens who shall be Borough of Rockledge citizens appointed by the Borough Council; one member shall be a Borough Councilmember, one member shall be a member of the police force, and one member shall be a member of the general public. Each member shall be appointed to serve without compensation for an indeterminate term at the will of the Council. In addition to the Committee members, the Committee shall have a secretary, who shall be the Secretary or Manager of the Borough. The Committee shall make and adopt rules and regulations for the efficient administration of the Plan, subject to the approval of the Borough Council. The Borough shall notify the Trustee of the Committee's appointment, and the Trustee shall be entitled to assume that the Committee's authority to act continues until written notice to the contrary is given. Any member of the Committee may resign by notice, in writing, filed with the Borough. Any vacancy, however arising, shall be filled by the Borough Council; provided, however, that the Council shall not be compelled to fill any vacancy if at least three members of the Committee remain in office.
B.
The Committee shall keep all data, records and documents pertaining to the administration of the Plan and shall execute all documents pertaining to the administration of the Plan and shall execute all documents necessary to carry out the provisions of the Plan, and shall provide all such data, records and documents to the Trustee, the actuary and any other professional whose services are employed pursuant to § 87-11B of this Plan.
C.
The Committee shall construe the Plan, shall determine any questions of fact arising under the Plan, and shall make all decisions required of it under the Plan or the trust agreement, and its construction thereof and decisions and actions taken thereon in good faith shall be final and conclusive. It may correct any defect or supply any omission or reconcile any inconsistency in such manner and to such extent as it shall deem expedient to carry the Plan into effect, and it shall be the sole judge of such expediency. The Committee shall act uniformly with respect to matters coming before it concerning employees in similar circumstances.
D.
The Committee shall serve without bond except as may be otherwise required by law and without compensation for its services as such. All expenses of the Committee shall be paid by the Borough.
E.
The members of the Committee, and each of them, shall be free of all liability for any act or omission except by willful misconduct or gross negligence, and each of them shall be fully indemnified by the Borough against all judgments not involving findings of their respective personal or collective willful misconduct or gross negligence and against all costs, including counsel fees, incurred in defense of actions brought against them.
F.
The Committee shall make available to members, retired members and terminated members and to their beneficiaries, for examination during business hours, such records as pertain to the person examining.
G.
To enable the Committee to perform its functions, the Borough shall supply full and timely information to it on all matters relating to the pay of all members, their retirement, death, termination of employment and such other pertinent facts as the Committee may require; and the Committee shall advise the Trustee of such of the foregoing facts as may be pertinent to the Trustee's administration of the Trust and shall give proper instructions to the Trustee for the carrying out of the purposes of this Plan.
H.
The Committee shall enact such rules and regulations for the conduct of its business and for the administration of the Plan as it may consider desirable, provided the same shall not be in conflict with any of the provisions of the Plan. All actions of the Committee shall be taken at meetings at which at least two members shall be present, or by written resolution, without the holding of a meeting, and any resolutions concurred in by not less than two of its members shall be the action of the entire Committee. Written minutes shall be kept of the meetings and actions of the Committee. No member of the Committee who is a member of the Plan shall vote on any matter affecting his/her benefits separately from the benefits of all other employees.
I.
The Secretary, acting on behalf of the Committee, or any three members of the Committee shall have the power to execute all documents necessary to carry out the actions of the Committee, and any person, partnership, corporation or government agency shall accept such documents over such signature or signatures as if executed by the Committee.
A.
It is the expectation of the Borough that it will continue this Pension Plan indefinitely and will, from time to time, contribute to the Fund such amounts as may be needed to provide the benefits set forth in the Plan, but continuance of the Plan is not assumed as an obligation of the Borough. and the right is reserved by the Borough at any time to reduce, suspend or discontinue its contributions hereunder.
B.
The Borough assumes no obligation or responsibility with respect to the operation of the Plan and does not guarantee the payment of the benefits therein provided for members of the Plan. The Borough shall have no liability with respect to the administration of the Fund held by the Trustee, and payments made under the provisions of any ordinance establishing, amending or maintaining the Plan shall not be a charge on any other fund in the treasury of the Borough or under its control save the Police Pension Fund herein provided for.
C.
Nothing contained in the Plan shall be held or construed as a contract or guarantee of employment nor shall create any liability upon the Borough to retain any person in its service. The Borough reserves its full right to discontinue the services of any person without any liability, except for salary or wages that may be due and unpaid, whenever in its judgment its best interest so required, and such discontinuance shall be without regard to this Plan.
A.
The Borough may amend, curtail or terminate this Plan at any time; provided, however, that no amendment affecting the Trustee shall be made without its consent (other than an amendment having the effect of terminating the Plan), nor shall any amendment be made which will in any manner divert any part of the Fund to any purpose other than the exclusive benefit of members or their beneficiaries (except that upon termination such diversion may be made after all of the fixed and contingent liabilities to members and their beneficiaries have been met), nor shall any amendment be made at any time which will in any manner divest any benefit then vested in a member.
B.
In the event of termination of this Plan, the Trustee, upon written instructions from the Committee, shall allocate the assets then remaining in the Fund, to the extent that such assets are sufficient, to members and retired members in the following order of precedence:
(1)
To members and retired members in an amount equal to their respective contributions, reduced in the cases of retired members by any prior distributions made to them.
(2)
To provide benefits due retired members in the proportion that the pension earned of each such member bears to the total pensions earned for all such members.
(3)
The remaining assets, if any, to each of the remaining members in the proportion that his/her pension credits earned to the date of termination bears to the total pension credits so earned for all such remaining members.
C.
After allocation of the funds, the Committee shall determine whether to operate the Fund as the source of whatever payments the money so allocated will provide or to purchase immediate or deferred annuities from an insurance company in whatever amounts the money so allocated will provide.
D.
Notwithstanding any provision of the Plan to the contrary, if the Plan is terminated or its full current costs have not been paid for the first 10 years after the establishment thereof or after an amendment increasing benefits provided by the Plan, the benefits provided by the Employer's contributions for each of its 25 highest paid employees as of the date of establishment of the Plan or as of the date of an amendment increasing benefits, but excluding those employees whose yearly pension as estimated at such time will not exceed $1,500, shall be limited to those benefits which may be derived from contributions equal to the largest of:
(1)
Twenty thousand dollars.
(2)
The sum of the employer's contributions which would have been applied to provide an amount equal to 20% of the first $50,000 of the participant's average regular annual compensation, multiplied by the number of years and fractions thereof since the establishment of the Plan or the amendment substantially increasing benefits, plus, if there has been an amendment substantially increasing benefits, the employer's contributions which would have been applied to provide benefits for the participant if the Plan had been terminated on the day it was amended.
(3)
The employer's contributions which would have been applied to provide benefits for the participant if no amendment increasing benefits had been adopted. These limitations shall also apply if a participant described above begins receiving a pension within the ten-year period.
E.
If the Plan is terminated within 10 years after the establishment thereof or after an amendment increasing benefits, all benefits in excess of those permitted hereunder shall be distributed to the remaining eligible participants in the order provided hereinafter.
F.
Plan effects.
(1)
If the Plan is in full force and effect and the full current costs have been met, the foregoing conditions contained in § 87-9A shall not restrict the current payment of the full retirement benefits called for by the Plan to any participant. The limitations of this section shall be inapplicable to the extent the Commissioner of Internal Revenue or his/her duly authorized representative may later rule that the limitations are no longer necessary for the Plan to meet the requirements for qualifications under the Internal Revenue Code.
(2)
If this Plan is not terminated within the period specified in Subsection D, the benefits, if any, which have been withheld from a participant in accordance with this section shall be turned over to the participant or his/her representative at the end of said period or as soon thereafter as the full current costs of the Plan attributable to the said period have been met for the first time.
(3)
If the Plan is terminated within 10 years of the effective date or if the full current costs of the Plan have not been met within 10 years of the effective date and if, as a result thereof, Subsection D of this section of the Plan provides for any former or current member of the police force benefits less than that provided by the Plan (exclusive of the effect of Subsection D), then the Borough shall provide benefits to such former or current members of the police force so that the benefits provided under the Plan and the benefits provided by the Borough shall equal the benefits that would have been provided by the Plan if it had continued in full force and effect.
[Added 7-9-2001 by Ord. No. 575]
A.
No benefit under this Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge or encumbrance, nor to seizure, attachment or other legal process for the debts of any member or member's beneficiary.
B.
Anything heretofore contained in this Plan to the contrary notwithstanding, it is the intention of the Borough that any action hereinprovided to be taken by the Trustee shall be taken only in accordance with written instructions of the Committee given in such detail as to preclude the exercise by the Trustee of discretion in the performance thereof.
C.
In no circumstance, whether upon amendment or termination of this Plan or otherwise, shall any part of the Fund be used for or diverted to any purpose other than the exclusive benefit of members or their beneficiaries until all of the actuarial obligations to such members or members' beneficiaries have been met.
D.
If the Committee deems any person incapable of receiving benefits to which he/she is entitled by reason of minority, illness, infirmity, or other incapacity, it may direct the Trustee to make payment directly for the benefit of such person or to any person selected by the Committee to disburse it, whose receipt shall be a complete acquittance therefor. Such payment shall, to the extent therefor, discharge all liability of the Borough, the Committee, the Trustee and the Fund.
E.
In the case of all provisions utilized herein, the singular shall include the plural and the masculine shall include the feminine.
F.
Should any provision of this Plan be determined to be void by any court, the Plan will continue and, to the extent necessary, will be deemed not to include the provision determined to be void.
G.
Headings and captions provided herein are for convenience only and shall not be deemed part of the Plan.
H.
This Plan shall be construed and applied under the laws of the Commonwealth of Pennsylvania where not in conflict with federal laws which shall otherwise prevail.
[Amended 10-12-1981 by Ord. No. 415; added 7-9-2001 by Ord. No. 575; 4-26-2004 by Ord. No. 586; 3-14-2005 by Ord. No. 590]
A.
Age/service requirement. Any police officer who shall attain the minimum age of 50 years and shall have completed a minimum of 25 years of consecutive service with the Rockledge Borough Police Department shall be entitled to retire from service as a police officer under the provisions of the Rockledge Borough Police Pension Plan and the statutory obligations of Act 600 which are then in effect.
B.
Computation. The existing language is deleted in its entirety and replaced with the following language: "Pension benefits shall be computed by using the average actual monthly compensation of the employee at the time of reference computed over the last 36 months (or shorter period as represents the member's total period of continuous employment by the Borough) of his/her continuous employment by the Borough prior to such date of reference."
C.
Vesting. The Borough agrees that the police pension of any officer who shall have completed 12 years of continuous service with the Rockledge Borough Police Department shall be entitled to vest his or her pension benefits, said pension benefits to be calculated and paid in compliance with Act 600 and any amendments thereto.
D.
Survivor's benefits.
(1)
The surviving spouse of a member of the police force or a member who retires on pension who dies or, if no spouse survives or if he or she survives and subsequently dies, then the child or children under the age of 18 years or, if attending college, under or attaining the age of 23 years, of a member of the police force or a member who retires on pension who dies, shall during his/her lifetime in the case of a surviving spouse or until reaching the age of 18 years or, if attending college, under or attaining the age of 23 years in the case of a child or children, be entitled to receive a pension calculated at no less than 50% of the pension the member was receiving or would have been receiving had he/she been retired at the time of his/her death. For the purposes of this subsection, the phrase "attending college" shall mean the eligible children are registered at an accredited institution of higher learning and are carrying a minimum course load of seven credit hours per semester.
(2)
The surviving spouse of a member of the police force who dies before his/her pension has vested or if no spouse survives or if he/she or she survives and subsequently dies, the child or children under the age of 18 years or, if attending college, under or attaining the age of 23 years, of the member of the police force shall be entitled to receive repayment of all money which the member invested in the pension fund plus interest or other increases in value of the member's investment in the pension fund unless the member has designated another beneficiary for this purpose.
(3)
Pensions for the families of members killed in service shall be calculated at 100% of the member's salary at the time of death. For the purposes of this subsection, the phrase "attending college" shall mean the eligible children are registered at an accredited institution of higher learning and are carrying a minimum course load of seven credit hours per semester.
E.
Police Pension Board. The Police Pension Board shall always include at least one full-time police officer of Rockledge Borough Police Department.
F.
Early retirement. After 20 years of continuous service, regardless of age, as authorized by Act 24 of 1998, codified as 53 P.S. § 771(i), specifically providing as follows:
(1)
There is hereby established an early retirement benefit, which shall be available to a member of the police force with 20 or more years of continuous service who terminates employment prior to the completion of superannuation retirement age and service requirements and who files a written application for an early retirement benefit with the Borough Manager. The early retirement benefit shall become effective on the date the application is filed with the Borough Manager or the date designated on the application, whichever is later, and shall be the actuarial equivalent of a partial superannuation retirement benefit calculated as follows:
(a)
A partial superannuation retirement benefit shall be determined by applying the percentage that the member's years of service bear to the years of service that the member would have rendered had the member continued to be employed until his/her superannuation retirement date to the gross pension amount calculated using the monthly average salary during the appropriate period prior to his/her termination of employment; and
(b)
The actuarial equivalent of the partial superannuation retirement benefit shall be determined by actuarially reducing the partial superannuation retirement benefit to reflect that it will commence on the effective date of the early retirement rather than on the date on which the member would have completed superannuation age and service requirements. The actuarial reduction shall be calculated using the actuarial assumptions reported in the last actuarial valuation report filed with the Public Employee Retirement Commission under the Act of December 28, 1984 (P.L. 1005, No. 205), known as the "Municipal Pension Plan Funding Standard and Recovery Act" or "Act 205," 53 P.S. § 895.101 et seq.
G.
Intervening military service. Any member of the police force employed by the Borough who has been a regularly appointed employee for a period of at least six months and who thereafter shall enter into the military service of the United States shall have credited to his/her employment record for pension or retirement benefits all of the time spent by him/her in such military service, if such person returns or has heretofore returned to his/her employment within six months after his/her separation from the service. Further, where an officer served in the military but did not work for the Borough prior thereto, he/she or she may nonetheless purchase credit for such nonintervening military service, provided that it is in accordance with the requirements of 53 P.S. § 770, being the military service provision of the Pennsylvania Municipal Police Pension Law.
[Amended 8-30-2021 by Ord. No. 674]
[Added 10-27-2008 by Ord. No. 607]
A. DROP DROP ACCOUNT DROP BENEFIT DROP ENTRY DATE DROP PARTICIPANT DROP PERIOD MEMBER
Eligibility and definitions. Any member who has reached his/her normal retirement date may elect to become a participant in the DROP. Eligible employees who elect to participate in the DROP make an irrevocable commitment to separate from Borough service and retire upon ceasing participation in the DROP, which they must do no later than five years after entering the DROP. Such employees remain employees of the Borough for all other purposes (except that deductions for employee pension contributions cease and the employee no longer accrues additional service credit for the Borough pension) and are not treated as separated from the Borough during their participation in the DROP. However, the determination of the retirement benefit amount is made and payment begun upon entry into the DROP, except that payments of that benefit are credited to a special DROP account subject to certain conditions rather than to the employee directly. Relevant terms are further defined as follows:
A deferred retirement option plan; the DROP is not a "plan" as that term is used with respect to pension plans.
The total amount credited to an individual DROP participant due to participation in the DROP.
A member's total DROP account balance at the time the member separates from active service.
The effective date of the member's participation in the DROP.
A member who is participating in the DROP.
The duration of a member's participation in the DROP, from the DROP entry date to the date the member separates from active service with the Borough.
A full-time police officer of the Rockledge Borough Police Department who is also required by Act 600 to be a member of the police pension plan and fund.
B.
Election to participate. Election to participate in DROP is irrevocable. The member shall make the election by using forms and procedures as prescribed by the Pension Board trustees. Such election may be made anytime after reaching the normal retirement date. The Borough will receive at least 30 days' notice of the requested DROP election date.
C.
DROP pension payments. Upon entry into the DROP, a member's service and average applicable compensation shall be frozen and his/her DROP pension payment shall be calculated as if he/she actually retired on the date he/she entered the DROP. The monthly DROP pension payment, plus any applicable COLA, shall be paid to an individual DROP investment account. A third-party administrator shall maintain the account, independent of the Borough of Rockledge. There shall be no additional costs to the Borough of Rockledge under the DROP plan.
D.
Individual DROP investment account. Each member shall have unfettered discretion in the selection of mutual funds that are consistent with their risk tolerance and time frame. The member shall work in consultation with the financial institution where the funds are deposited to make these selections.
[Amended 5-4-2020 by Ord. No. 668]
E.
Employee contributions. Upon entry into the DROP, all Borough and employee contributions shall cease, with no additional costs to the Borough. The entry date shall be the date of receipt by the Borough of the member's application.
F.
Maximum participation. The maximum period of participation in the DROP is 60 months. Once the maximum participation has been achieved, the member must terminate employment and separate from service. There is no return to regular employment from a DROP. During the DROP participation period, the member may choose to end participation and fully retire.
G.
Distribution options. Commensurate with DROP participation, a member shall make an election, on forms designated by the Pension Board trustees, of the payout option(s) he/she wishes at the termination of the DROP period. This election may be changed at any time prior to termination. The distribution options are as follows:
(1)
A full and lump-sum distribution.
(2)
Rollover to another qualified retirement plan (as permitted by law) or to an IRA.
(3)
Purchase of an annuity.
(4)
Keep the monies in the individual DROP investment account. Monies kept in the individual DROP investment account may be withdrawn in any manner desired by the member.
(5)
Any other distribution provided by the Pension Board trustees/third-party administrator.
H.
Beneficiary designation. Commensurate with DROP participation, a member shall make an election, on forms designated by the Pension Board trustees, of the beneficiary or beneficiaries he/she wishes to receive the monies in his/her individual DROP investment account in the event of his/her death before all monies have been distributed.
I.
Disability. A member who becomes permanently disabled during the DROP period and retires from service shall revert to his/her normal retirement pension and directly receive those pension payments that were being deposited into his/her DROP investment account. The participant will then have access to the distributions from his/her individual DROP investment account.
J.
If the Commonwealth of Pennsylvania passes and implements legislation governing DROP plans in this state, any plan in effect in the Borough of Rockledge will be brought into compliance with such legislation when required.
K.
Death during DROP participation. If a participating member who during the DROP period dies and the killed-in-service benefit is not payable, the member shall be honorably discharged as of the date of death, and the beneficiaries shall only receive a lump sum payment of the DROP investment account. All other pension benefits would be paid as in the ordinary course.
L.
Subsequent legislation. If the Commonwealth of Pennsylvania enacts legislation governing the creation or operation of DROP plans, such legislation shall be controlling to the extent of any conflict with the provisions herein, and should any provision herein become illegal or unenforceable, it shall be excised from the remainder if doing so does not render the entire ordinance invalid or incapable of implementation.
[Adopted 1-8-2007 by Ord. No. 599]
A.
The Borough hereby authorizes the execution of a custodial account agreement, adoption agreement, and such other documentation as is necessary to establish a deferred compensation plan, also known as a "457 Plan."
B.
The Borough reserves the right to make amendments to the Plan documents from time to time as necessary to effectuate the intent of the Plan or to comply with the Internal Revenue Code, without modification of this article in order to do so.
C.
Initially, Lincoln Investment Planning, Inc., shall serve as custodian of the account(s). Council reserves the right, in the future, to change the Plan custodian by resolution and in accordance with the notification requirements set forth in the Plan documents.
D.
The Borough will abide by the terms of the Plan and all administrative and other service agreements related to it. The Plan shall at all times be maintained in accordance with state and federal laws and regulations, including the Internal Revenue Code.
E.
Fees paid for administration of the Plan may be deducted from the participants' account. This includes maintenance fees, sales charges, brokerage fees, and investment fees.
F.
In the event that the Borough wishes to terminate the Plan, such termination may only be accomplished by duly adopted ordinance, and such ordinance must specify the date of termination.
G.
All contributions and assets held in connection with the Plan are held in trust for the exclusive benefit of participants and their beneficiaries and for defraying reasonable plan expenses. All contributions to the Plan shall be transferred to Lincoln or as directed by Lincoln (or its successor) to designated trustees.
H.
All employees are eligible to participate, both uniform and nonuniform. An employee must be employed full time with the Borough for six consecutive months in order to be eligible to participate. An employee may change the percentage of their contribution once a month, to be effective the first pay period of the following month. Loans from the Plan are not permitted. Withdrawal of funds for emergencies shall be only in accordance with IRS regulations as interpreted by the Plan documents. A participating nonuniformed employee's contribution to the Plan shall be matched by a contribution by the Borough to the employee's account up to a maximum of 5% of the employee's pay. For purposes of calculating such percentage, reference shall be made to the Internal Revenue Code and standard accounting practices as interpreted by the Plan custodian. Borough contributions shall be made at the same time that payroll checks are issued each pay period.
[Amended 4-26-2010 by Ord. No. 616]
I.
Any portion of this article or the Plan implementation documents which is determined to be contrary to law shall be severable from the remainder and shall not cause a termination of the Plan.
J.
The effective date of the Plan is February 1, 2007.
K.
The Plan shall be interpreted, to the extent that state law is determinative, under the laws of the Commonwealth of Pennsylvania.