An active Participant of the Washington Township Police Pension Plan ("Plan") who is an active Employee may enter into the DROP program on the first day of any month following attainment of DROP Retirement Age (the later of attainment 25 years of service and age 50) and after completing a written Election, Waiver and Release and Beneficiary Designation forms and such other administrative requirements as may be required by the Township ("Eligible Employee").
An eligible Plan Participant electing to participate in the DROP program ("DROP Participant") must complete and properly execute the forms supplied by the Township in advance of participation in the DROP program. The election to participate in the DROP is irrevocable seven days after the DROP election is accepted by the Township.
The Entry Date of a DROP Participant's participation in the DROP shall be a date provided on the Participant's application, provided that such date shall only be the first day of the month and must be at least 90 days after the date the Election and Waiver is filed with the Township nor earlier than the date the DROP Participant attains DROP Retirement Age. On the day previous to participation in the DROP the Participant shall have retired from the Plan. After commencement of participation in the DROP, the DROP Participant shall no longer earn or accrue additional benefits or continue service accruals under the Plan nor shall his Compensation for the purpose of calculating any retirement benefits under the Plan increase. Any payments for accumulated sick or annual leave shall be paid out as of the last day of employment prior to entering the DROP. A DROP Participant shall be eligible for all contractual benefits (other than continued pension accruals) and pre-retirement benefits for employees otherwise provided by law, including benefits under the Act of June 2, 1915 (P.L. 736, No. 338), known as the Workers' Compensation Act; the Act of June 28,1935 (P.L. 477, No. 93), referred to as the Enforcement Officers Disability Benefits Law; the Act of December 5, 1936 (2nd Sp. Sess., 1937 P.L. 2897, No. 1), known as the Unemployment Compensation Law; the Act of June 24, 1976 (P.L. 424, No. 101), referred to as the Emergency and Law Enforcement Personnel Death Benefits Act; and the Public Safety Officers' Benefit Act of 1976 (Public Law 94-430), 42 U.S.C. § 90, stat. 1347.
A DROP participant shall be ineligible to re-enroll in the DROP even if the former DROP Participant is reemployed by the Employer and becomes an active member in the Plan.
A DROP Participant shall select an Entry Date, which may be the first day of any month after the date he attains DROP Retirement Age. A DROP Participant shall also select an employment termination date that shall be the last day of a month and which is no more than five years from his Entry Date. A DROP Participant may change his employment termination date to an earlier date than that of his original selection; however, such early termination date shall be the last day of a month.
DROP Participants will continue to make Participant Contributions required by Article V of the Plan or as set forth under the applicable Collective Bargaining Agreement during their DROP participation.
For all Plan purposes other than making Participant Contributions as provided in § 57-76 above, the service and Compensation of the DROP Participant shall remain as it existed on the effective date of commencement of participation in the DROP program.
If a DROP Participant becomes eligible for a Disability pension payable from the Plan and terminates employment, the monthly Normal Retirement Benefit of the DROP Participant shall terminate, and his DROP benefit will be payable as soon as administratively feasible after his termination of employment. Any disability pension payable from the Plan in the event a DROP participant becomes disabled shall be based upon the DROP Participant's monthly average salary or salary (whichever may be applicable) determined as of the day before he began participation in the DROP, and shall be paid in lieu of the Normal Retirement Benefit.
Survivors of a DROP Participant who dies while a DROP Participant shall be ineligible for any death benefits other than the survivor benefits which are ordinarily payable when a Participant is retired on a Normal Retirement Benefit or dies after attaining eligibility for a Normal Retirement Benefit but before commencement of his Normal Retirement Benefit and the Killed-in-Service benefit as provided for in Article IV of the Plan.
A separate interest-bearing subsidiary account shall be established for each DROP Participant. The account balance shall be held in trust for the benefit of the DROP Participant and his beneficiaries as part of the Plan's trust but shall be accounted for separately although it shall not be physically segregated from other Plan trust fund assets. While participating in the DROP a DROP Participant's monthly Normal Retirement Benefit and interest thereon shall be credited to the DROP Participant's DROP Account.
Expenses such as actuarial and legal expenses to establish, operate and administer the DROP Program shall, to the extent permitted under State law, be paid from the Police Pension Plan.
After both the termination of the DROP Participant's employment as a DROP Participant and the expiration of the DROP participation period, a former DROP Participant shall be subject to such reemployment limitations as other retired Former Participants.
A. 
Upon termination from employment (for any reason, whether by retirement, resignation, discharge, or death), the DROP Account (including interest), less any withholding taxes, if any, shall be paid within 45 days by the program to the DROP Participant or surviving beneficiary; or the balance in the DROP Participant's Account shall be paid within 45 days to an eligible retirement plan under the Internal Revenue Code including to the custodian of an eligible retirement plan as defined in Section 402(c)(8)(b) of the Internal Revenue Code or, in the case of an eligible rollover distribution to the surviving spouse of a deceased Participant, an eligible retirement plan that is an individual retirement account or an individual retirement annuity as described in Section 402(c)(9) of the Internal Revenue Code except that if the DROP Participant or beneficiary fails to elect a method of payment within 60 days after a DROP Participant's termination date, the Plan shall pay the balance as a lump sum to the DROP Participant and surviving beneficiary as set forth above.
B. 
A distributee may elect to have an eligible rollover distribution paid directly to an eligible retirement plan by way of a direct rollover. For purposes of this paragraph, a "distributee" includes a DROP Participant, a Participant's designated beneficiary, and a Participant's former spouse who is an alternate payee under a qualified domestic relations order. For purposes of this paragraph, "eligible rollover distribution" has the meaning given the term by Section 402(f)(2)(A) of the Internal Revenue Code except that a qualified trust shall be considered an eligible retirement plan only if it accepts the distributee's eligible rollover distribution, and, in the case of an eligible rollover distribution to a surviving spouse, an eligible retirement plan is an "individual retirement account" or an "individual retirement annuity" as those terms are defined in Sections 408(a) and (b) of the Internal Revenue Code.
C. 
Regardless of the option selected by the Participant, the Township has a right to accelerate payments in order to comply with Section 401(a)(9) of the Internal Revenue Code and the right to defer payments in compliance with Section 415 of the Internal Revenue Code. There shall be no loans, hardship withdrawals, or other such distributions while the DROP Participant is employed by the Township.
D. 
NOTE: If a rollover is not utilized or if the DROP distribution is for some reason not eligible for rollover treatment, income taxes and possibly additional taxes will be due upon distribution.
To participate in the DROP, an eligible DROP Participant must complete the Election form, and Waiver and Release form as well as the Beneficiary Designation form.
A. 
None of the benefits, payments, proceeds, claims or rights of any DROP Participant hereunder shall be subject to any claim of any creditor of the Participant nor shall any Participant have any right to transfer, assign, encumber or otherwise alienate, any of the benefits or proceeds which he may expect to receive, contingently or otherwise, under the DROP program.
B. 
Notwithstanding any restrictions on the time of distribution which would otherwise apply under the DROP program, distributions may be made with respect to a domestic relations order recognized under state law.
The Township can amend, revise or terminate the DROP at any time to conform the program with State or Federal law including the requirements of the Internal Revenue Code or to otherwise effectuate the operation or administration of the program, including the establishment of a trust to hold DROP Account funds if deemed helpful by the Township or as required by law. All such amendments shall be binding upon future DROP Participants and upon all DROP Participants who have balances in their accounts. Any provisions of state law passed after the adoption of the DROP program that are required to be part of a pre-existing DROP program will be instituted in this DROP program. The Township shall, by regulation, provide for the operation and interpretation of the DROP program. The Township shall administer the DROP program including the determination of all claims brought thereunder.
The DROP program shall be construed pursuant to the laws of the Commonwealth of Pennsylvania.
A DROP Participant's DROP Account is subject to forfeiture as provided in the Act of July 8, 1978 (P.L. 752, No. 140), known as the Public Employee Pension Forfeiture Act. Forfeitures under this section or under any other provision of law may not be applied to increase the benefits that any DROP Participant would otherwise receive under the DROP.
Any defined terms used in this article that are not defined herein are as otherwise defined in the Washington Township Police Pension Plan.