Township of Cheltenham, PA
Montgomery County
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Table of Contents
Table of Contents
[Adopted 12-29-1977 by Ord. No. 1431 as Ch. 13, Art. II of the Cheltenham Code]
From and after April 21, 1953, the Cheltenham Township Police Pension Fund Inc. is hereby recognized by the Township of Cheltenham as an official and corporate body and eligible to receive any Township or other appropriations to which the Township is entitled to receive and does appropriate for the benefit of said fund.
A. 
The Township hereby creates a municipal police pension fund, to be known as the "Cheltenham Municipal Police Pension Fund," which fund shall be maintained by a charge against each member of the police force; by annual appropriations made by the Township; by payments made by the State Treasurer to the Township Treasurer from the moneys received from taxes upon premiums by foreign casualty insurance companies for purposes of pension retirements for Township police officers; and by gifts, grants, devises or bequests granted to said pension fund.
B. 
The municipal police pension fund shall be administered by a committee of three members appointed by the Board of Township Commissioners, and the term of their appointment shall be for the duration of such period of time as may be fixed by the Township Commissioners. The Committee shall be known as the "Pension Fund Supervisors."
C. 
The Board of Township Commissioners shall appoint one or more Trustees to serve in that capacity at any time of reference. The trust shall be administered and managed under an appropriate deed of trust to be prepared by the Township Solicitor and approved by the Board of Township Commissioners.
D. 
Payment of benefits.
[Amended 12-19-1978 by Ord. No. 1454; 12-15-1981 by Ord. No. 1529; 1-20-1987 by Ord. No. 1645; 3-19-1991 by Ord. No. 1735-91]
(1) 
The benefits from the fund shall be payable to:
(a) 
Police officers who have served in the police force of the Township for an aggregate total of at least 25 years and have attained the age of at least 50 years. Normal retirement shall be at 60 years of age.
[Amended 11-19-2014 by Ord. No. 2290-14]
(b) 
Police officers who are deemed unable to perform the duties of a police officer when such inability is the result of service-incurred injury as determined by the Township.
(c) 
Police officers who are deemed unable to perform the duties of a police officer when such inability is other than a result of service-incurred injury and who have served on the police force of the Township for an aggregate total of at least two years.
(d) 
The families of police officers who have been killed in service.
(2) 
No benefits shall be payable under Subsection D(1) or D(1)(c) of this section if the disability is the result of the use of alcohol or narcotics or if the injury is self-inflicted.
(3) 
Retired officers may be temporarily called back into service in case of riot, tumult or the preservation of the public peace, until unfit for such service, when they may be finally discharged by reason of age or disability.
[Amended 12-15-1981 by Ord. No. 1529]
Any member of the Township police force who has been in service in the force at least six months and who thereafter enters the military service of the United States shall have credited to his record for pension benefits all of his time in the military service if he returns to his employment within six months after his separation from military service.
[Amended 12-15-1981 by Ord. No. 1529]
Payments made under the provisions of this Article shall not be a charge on any other fund in the treasury of the Township, or under its control, save the municipal police pension fund herein provided for.
[Amended 12-15-1981 by Ord. No. 1529; 3-19-1991 by Ord. No. 1735-91]
The basis for determining the benefits shall be as follows:
A. 
Monthly benefits other than length of service increments shall be computed at 1/2 the monthly average salary during not more than the last 60 nor less than the last 36-months of employment.
[Amended 11-19-2014 by Ord. No. 2290-14]
B. 
The benefit must be in conformity with a uniform scale and fixed by the plan’s governing document at 50% of the member’s salary at the time the disability was incurred, reduced by the amount of social security disability benefits received for the same injury. The benefit is payable until recovery from disability, death or normal retirement age.
[Amended 11-19-2014 by Ord. No. 2290-14]
C. 
Benefits payable to family.
(1) 
Monthly benefits to the family of a police officer killed in service shall be the following percentages of the pension which would have been payable to the police officer had he been eligible for the benefits under Subsection A: 50% to the widow and 10% to each child, provided that the maximum total for a widow and children shall be 100%.
(2) 
If the wife of the deceased officer is or becomes deceased or remarries, the death benefit under this section shall be payable to the child or children of the deceased officer as follows: 50% to one child and 60% to two children, increased by 10% for each additional child up to a maximum of 100%.
(3) 
The pension to the widow shall cease if she remarries.
(4) 
"Child" shall mean an officer's natural or legally adopted son or daughter who has not attained the age of 18 years.
D. 
The benefits for any month shall be offset by monthly social security benefits as follows:
(1) 
For police officers retired prior to January 1, 1981, monthly benefits shall be offset by 75% of the monthly social security benefit accrued while in the employ of the Township which would become payable to the officer at age 65.
(2) 
For police officers retired between January 1, 1981, and December 31, 1983, monthly benefits shall be offset by 50% of the monthly social security benefit accrued while in the employ of the Township which would become payable to the officer at age 65.
(3) 
For police officers retired on or after January 1, 1984, monthly benefits shall not be offset by any social security benefits.
The Township may employ an actuary at a compensation to be determined from time to time by the Board of Township Commissioners. The actuary shall determine the present value of the liability for the pensions payable under § 48-7 to police officers for service prior to the effective date of this Article. To the extent that the past service cost has not been funded by the Cheltenham Police Pension Fund, Inc., the Township shall make contributions to the municipal police pension fund to fully fund such liability over a period not to exceed 25 years. The actuary shall also determine the amount which shall be contributed to the establishment of this municipal police pension fund.
[Amended 3-19-1991 by Ord. No. 1735-91]
Members of the Cheltenham Township police force shall pay into the Municipal Police Pension Fund an amount equal to not more than 5% of monthly compensation. The Township Manager is hereby authorized to establish a system of payroll deductions necessary for the administration of the fund and to make payments of the amounts so withheld pursuant to the provisions of this section unto said Municipal Police Pension Fund. The remainder of the needed annual contributions, as determined by the actuary, shall be paid to the fund by the Township.
Payments by the State Treasurer to the Township Treasurer from the taxes paid upon premiums by foreign casualty insurance companies shall be applied as follows:
A. 
To reduce the unfunded past service liability and after such liability has been funded.
B. 
To reduce the annual obligation of the Township for future service cost or to the extent that the payment may be in excess of such obligation.
C. 
To reduce police officers' contributions.
The existing Cheltenham Municipal Police Pension Fund, Inc., a corporation incorporated November 7, 1934, by the Court of Common Pleas of Montgomery County, Pennsylvania, shall be continued; provided, however, that no Township funds or funds received from the State Treasurer as aforesaid shall be paid to the Cheltenham Municipal Police Pension Fund, Inc., and no police officer shall be required to make contributions thereto.
[Amended 3-19-1991 by Ord. No. 1735-91]
A. 
A lifetime survivor’s benefit must be provided to the surviving spouse (or if no spouse survives or if he or she subsequently dies, the child or children under 18 years of age or if attending college, under or attaining the age of 23) of 50% of the pension the member was receiving or would have been receiving or would have been entitled to receive had he been retired at the time of death. ("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.)
[Amended 11-19-2014 by Ord. No. 2290-14]
B. 
All officers shall have the right of vesting after completing 12 years of service in lieu of a refund of their own contributions. Under the provisions of this benefit, should a police officer, before completing superannuation retirement age and service requirements but after having completed 12 years of total service, for any reason, cease to be employed as a full-time police officer by the Township, such officer shall be entitled to vest retirement benefits by filing with the Township, within 90 days of the date such person ceases to be a full-time police officer, a written notice of intention to vest. Upon reaching the date which would have been the officer's superannuation retirement date if employment as a full-time officer had continued, the officer shall be paid a partial superannuation retirement allowance determined by applying the percentage such officer's years of service bear to the years of service which the officer would have rendered had employment continued until the officer's superannuation retirement date to the gross pension, using, however, the monthly average pay during the appropriate period prior to termination of employment.
C. 
Any member of the police force who for any reason shall be ineligible to receive a pension hereunder after having contributed to the police pension fund created hereby shall be entitled to a refund of all such moneys paid by him into said fund immediately upon discontinuance of his employment with the police force. If such discontinuance is due to death, the refund shall be paid to his designated beneficiary or to his estate to the extent that it has not been paid to his family under § 48-7 above.
The pensions herein provided shall not be subject to attachment, or other legal process, and shall be payable only to the member or his designated beneficiary or to his estate and shall not be subject to assignment or transfer.
The expenses of administration and management of the fund, including the compensation of the actuary and of the trustees of the fund, shall be paid by the Township.
[Added 11-20-2007 by Ord. No. 2145-07[1]]
A. 
Definitions. As used in this section, the following terms shall have the meanings indicated:
ASSOCIATION
The Cheltenham Township Police Association, the duly recognized collective bargaining unit representing all eligible full-time police officers of the Cheltenham Township Police Department.
BENEFICIARY or BENEFICIARIES
The individual or individuals identified by a DROP participant to receive the balance of such DROP participant's DROP account in the event of the death of the DROP participant during the DROP participation period.
DROP
Deferred Retirement Option Plan.
DROP PARTICIPATION PERIOD
The period of time from the commencement of the officer's (i.e., participant's) participation in the DROP as stated in the officer's DROP notice, which has been approved by the Township, until the officer's separation from employment as a police officer in Cheltenham Township (e.g., resignation date, as defined below), which in no event shall be less than 12 months and shall not exceed 36 months.
DROP PERIOD
The period of time during which an officer can participate in a DROP, which in no event shall be less than 12 months or exceed more than 36 months.
DROP PROGRAM
The program implemented by the Township and Association pursuant to which members of the Township's Police Department may establish DROP accounts while continuing to provide police service for the Township as described herein. The DROP Program is an integral component of the Plan.
DROP ACCOUNTS
Separate accounts created for the exclusive purpose of accepting monthly pension checks of DROP participants while they are participating in the DROP Program.
DROP NOTICE
The form prescribed by the Township and Association upon which a member or officer informs the Township of his or her irrevocable intent to participate in the DROP Program. Once submitted to the Township and approved by the Township, the DROP notice is irrevocable, except as otherwise provided herein.
DROP PARTICIPANT or PARTICIPANT
A member or officer who has properly submitted a DROP notice to participate in the DROP, which has been approved by the Township's Board of Commissioners, and who has commenced his or her DROP participation period.
MEMBER or OFFICER
A duly sworn police officer employed by the Township.
PLAN
The Cheltenham Township Police Pension Plan.
RESIGNATION DATE
The date specified in the participant's irrevocable DROP notice approved by the Township on which the member or participant shall resign from employment with the Cheltenham Township Police, which shall be no less than 12 months and no more than 36 months from the commencement of the Officer's DROP participation period.
TOWNSHIP
The Township of Cheltenham, County of Montgomery, Commonwealth of Pennsylvania, including its elected and appointed officials.
B. 
Eligibility. Any member who has reached his/her normal retirement date (as defined by the pension plan) may elect to become a DROP participant on the first day of any month following satisfaction of the requirements for receipt of normal pension benefits under the Plan, which is a minimum of 25 years of service and attaining at least the age of 50. In addition, in order to be eligible to participate in the DROP, an officer must:
(1) 
Written DROP notice. An officer electing to participate in the DROP must complete and execute a DROP notice. The DROP notice must be signed by the officer and notarized and submitted to the Township at least 45 days prior to the date on which the officer wishes his/her DROP participation period to commence, which shall be specified on the DROP notice. The DROP notice shall include a notice to the Township by the member that the member shall resign from employment with the Cheltenham Township Police Department effective on a specific date (the "resignation date") which shall be no less than 12 months and no more than 36 months from the commencement of the Officer's DROP participation period. Once approved by the Township, an Officer's resignation date shall be irrevocable. An officer shall cease to work as a police officer on the officer's resignation date, unless the Township terminates or honorably discharges the officer prior to the resignation date.
(2) 
Finality of election and approval by Township. All retirement documents required by the Police Pension Plan Administrator must be filed and presented to the Township for approval of retirement, participation in the DROP and payment of pension benefits.
(3) 
Once the Township approves a DROP notice, it is irrevocable.
C. 
Pension contributions. After an officer's DROP participation period commences, the officer shall not be required to make any contributions to the plan during his/her DROP participation period.
D. 
Accrual of nonpension benefits. After an officer elects to participate in the DROP Program, all other contractual benefits shall continue to accrue in accordance with the collective bargaining agreement with the exception of those provisions relating to the Plan.
E. 
Disability during DROP period. The Township, Association and all DROP participants all recognize the unique nature of the DROP Program and the benefits that it offers to the DROP participant and the Township. Such benefits for the Township, however, are based on the DROP participant being able to work to provide the Township with the benefit of his or her experience, as stated above. It is recognized that if the DROP participant cannot work by providing police services for the Township, the Township will suffer a significant burden and the purpose and intent behind the DROP Program will not be fulfilled, to the detriment of the taxpayers of Cheltenham Township. Accordingly, if a DROP participant becomes temporarily incapacitated during his DROP participation period, as defined in the Township's disability benefit plan, the following shall apply:
(1) 
The DROP Participant shall continue to participate in the DROP Program as if fully employed. Such participant shall receive disability benefits (including heart and lung benefits, if eligible and such benefits are applicable) in the same amount and under the same terms as disabled police officers that are not participating in DROP, except:
(a) 
If a DROP participant is disabled and has not returned to work as of his required resignation date (as defined above), such participant shall be required to resign on his or her resignation date. Such member shall not be entitled to any other disability payment or monthly disability pension benefit from the Township or the Plan.
(b) 
If a participant becomes and remains incapacitated for a period of six months during his or her DROP participation period, the participant shall be honorably discharged from employment at the end of the sixth month. At that time, such member shall receive the balance of his or her DROP account and, thereafter, commence receiving his or her frozen monthly pension benefit in the amount calculated when the officer became a participant in the DROP Program. Such member shall not be entitled to any other disability payment or monthly disability pension benefit from the Township or the Plan.
F. 
Death during DROP period. If a DROP participant dies during the DROP participation period, his or her survivor as defined by the Plan shall be entitled to receive benefits and his or her DROP account shall be handled according to the following:
(1) 
If a DROP Participant dies during his or her DROP participation period and the Act 600 killed-in-service death benefit is legally payable (pursuant to the limitations and requirements of Act 600) to the participant's survivors as defined by the Plan, the participant's DROP notice shall be revoked and the DROP account shall not be payable to any designated beneficiary of the deceased DROP participant, but such funds will revert back to the Plan.
(2) 
If death occurs during the DROP period but the Act 600 killed-in-service death benefit is not legally payable (pursuant to the limitations and requirement of Act 600) to the participant's survivors as defined by the Plan, the DROP participant's DROP notice shall be revoked, the beneficiary shall receive a lump-sum payment of the DROP account balance, and the participant's survivors as defined by the Plan shall receive the survivor's benefit as defined by the Plan.
G. 
The monthly pension benefit calculation and limitation on pension accrual. After the effective date of the DROP notice, the officer shall no longer earn or accrue additional years of service for pension calculation purposes under the Plan. No benefit increases that may occur after a DROP participant's commencement of participation in the DROP Program, including bargained pension enhancements, mandated pension enhancements through arbitration or pension enhancements mandated by law, will apply to the DROP participant and shall not increase the DROP participant's frozen pension under the Plan, as calculated on the effective date of the DROP participation period. The average monthly compensation of the officer for pension calculation purposes shall remain as it existed on the effective date of the DROP participation period. Earnings or increases in earnings thereafter shall not be recognized or used for the calculation or determination of any benefits payable by the Plan. The pension benefit payable to the members shall increase only as a result of cost-of-living adjustments in effect under the Plan on the effective date of the member's participation in the DROP Program or by applicable cost-of-living adjustments specifically granted to DROP participants or retirees thereafter.
H. 
Termination of employment. On the participant's resignation date, his or her employment shall terminate automatically.
I. 
DROP pension payments. Upon entry into the DROP Program, a member's service and average applicable compensation (as each are defined under the Plan) will be frozen and his or her pension payment will be calculated as if he or she retired and ceased employment with the Township on the effective date of such officer's DROP participation period. The monthly pension payment shall be transferred into the participant's DROP account.
J. 
Individual DROP investment account. Each member shall select and direct the investments in his or her DROP account from an array of options selected by the Township. The Township may select a third party to provide mutual fund or other investment options, recordkeeping and reporting to the members and the Plan. All investment and administrative costs shall be charged against the participant's DROP account. Accordingly, the officer shall bear the full responsibility for obtaining appropriate investment advice, as well as for the consequences of any investment of all or part of the contents of the DROP account. The DROP account established for each participant will be considered a tax-deferred account maintained as part of the plan, and, as a result, will be subject to the restrictions established under Section 401(a) of the Internal Revenue Code. As a condition of participation in the DROP Program, both the Association and the individual officers and participants collectively and individually acknowledge that the Township shall have no responsibility for the financial impact and/or consequences of an Officer's participation in the DROP Program, including, but not limited to, the investment of the balance of an officer's DROP account, the performance of any such investments, or any tax consequences flowing from participation in the DROP Program.
K. 
Distribution options. Commensurate with DROP Program participation, a member must make an election on forms designated by the Township of the payout option(s) desired upon termination of the DROP period. This election may be changed at any time before the resignation date. The distribution options are as follows:
(1) 
A lump sum distribution.
(2) 
Rollover to another eligible retirement plan or to an IRA (as permitted by law).
L. 
Beneficiary designation. Commensurate with DROP Program participation, a member must make an election, on forms designated by the Township, of his or her beneficiary or beneficiaries.
M. 
Revocation of DROP participation. A DROP participant who voluntarily terminates his or her employment for any reason prior to the resignation date stated in his or her DROP notice (which has been accepted by the Township) shall automatically revoke his or her DROP participation election and cease employment with the Township.
N. 
Amendment. Any amendments to the DROP Plan shall be consistent with the provisions covering deferred retirement option plans set forth in any applicable collective bargaining agreement and shall be binding upon all future DROP participants and upon all DROP participants who have balances in their DROP accounts. The DROP Plan may only be amended by a written instrument, signed by an authorized representative of the Township and the Association, not by any oral agreement or past practice.
O. 
Interpretation of provisions.
(1) 
This section shall be interpreted under the laws of the Commonwealth of Pennsylvania. An officer's election to participate in the DROP Program shall in no way be construed as a limitation on the Township's right to suspend or terminate an officer for just cause or to grant the officer an honorable discharge based upon a physical or mental inability to perform his or her duties. Nothing provided hereunder shall be construed as a change to the parties' practice of calculating pensionable compensation, and except for the ability to establish a DROP account and participate in the DROP Program, nothing herein is intended to create new pension benefits of any kind which did not exist as of December 31, 2007.
(2) 
Nothing provided hereunder shall guarantee any officer or DROP participant a specific term of employment. All DROP participants shall be subject to the same terms and conditions of employment (except those relating to benefits under the Plan and retiree benefits), rules and regulations and disciplinary procedures as other officers and members who are not DROP participants.
(3) 
Except as provided in this DROP section, all DROP participants shall be considered to be employees of the Township and subject to the same terms and conditions of employment contained in all Township policies, directives, and orders as well as in the collective bargaining agreement between the Township and the police, including but not limited to the obligation to continue to make health care contributions, just as all other police officers employed by the Cheltenham Township Police Department who are not DROP participants.
P. 
Cost to participants. Participants will pay any costs of the Township and the Plan relating to the operation and administration of the DROP Program.
Q. 
Compliance with a future law. The Township and the Association and all current and future DROP participants (as a condition of participating in the DROP) recognize that laws may be enacted that impact the provisions of this DROP Program. The Township, the Association and any current and future DROP participants (as a condition of participating in the DROP) agree and acknowledge that if any such law requires that this DROP Program be altered, changed, modified or amended in any way, such changes shall be made as required by such law within the required time period. The Association and the Township shall meet to discuss how to most efficiently implement those changes, and any agreement reached in those discussions shall be binding on the Township, the Association and any current and future DROP participants. Such discussions, however, shall not in any way delay the implementation of any such required change as required by law.
[1]
Editor's Note: This ordinance provided that it shall take effect 1-1-2008.