Township of Falls, PA Chapter 72 Police Pension Fund

[HISTORY: Adopted by the Board of Supervisors of Falls Township 12-22-1969; amended in its entirety 11-29-2001 by Ord. No. 2001-16. Subsequent amendments noted where applicable.]

GENERAL REFERENCES

Signing of checks — See Ch. 15.

Municipal employees deferred compensation — See Ch. 58.

§ 72-1 Purpose.

The Falls Township Police Pension Fund is hereby created to provide benefits for members of the Falls Township Police Department and their families upon death, disability, and/or retirement from the police force.

§ 72-2 Definitions.

The following definitions shall apply for purposes of this ordinance only:

BASE SALARY

An officer's base salary shall be calculated as his average gross monthly salary for the thirty-six-month period prior to his retirement. This average gross monthly salary includes all regular time, overtime, Court time, compensatory time, longevity accruements, educational incentive, and any other amounts of monies that are reportable as gross income according to the IRS Code. If a member has been employed for less than a thirty-six-month period, and becomes eligible for benefits under this ordinance, his base salary shall be computed on the average gross monthly salary for those months he was employed on the police force in an active duty capacity.

COMMITTEE

A. The Police Pension Fund Committee shall consist of five members as follows:

(1) A member of the Police Department appointed by PAFT;

(2) The Township Manager;

(3) A member of the Board of Supervisors, appointed by the Board; and

(4) Two Township residents, appointed at the discretion of the Board.

B. The Falls Township Manager shall act as Chair of the Pension Committee and shall be responsible for notification of meetings, recording of minutes, and all of the other duties normally associated with the chairman of a similar committee. All members shall be appointed on an annual basis and approved by the Falls Township Board of Supervisors. The Police Pension Committee shall adopt rules and regulations necessary to create and administer the Police Pension Fund. The Committee shall serve only in an advisory capacity to the Falls Township Board of Supervisors and all actions in connection with the Police Pension Fund shall be at the discretion of the Supervisors.

DEPENDENT CHILDREN

Those dependent children under 23 years of age.

DISABLED

When a member of the Falls Township Police Department is unable to perform the duties associated with his job description, he shall be considered disabled. Once an officer has been disabled for a twelve-month period, his condition shall be subject to review by the Police Pension Committee. After this twelve-month period, the Committee may select a physician of their choice to determine the extent of the member's disability and his ability to return to work. The Committee may require additional medical examinations at their discretion to monitor the progress of the disability.

LAW ENFORCEMENT AGENCY

The following agencies are considered by the Police Pension Committee to be recognized law enforcement agencies: State Police, Municipal Police, and County Detectives.

MEMBER

Any person employed as a sworn police officer by Falls Township and/or any such person who has previously been employed by the Falls Township Police Department and who, by reason of age and service, or disability, has become eligible for and is receiving benefits hereunder.

NORMAL RETIREMENT DATE

The normal retirement date, as of September 16, 1993, is to be the later of age 50 and attaining 25 years of service.

PERMANENT DISABILITY

Any member of the Falls Township Police Department who has been injured in the line of duty and is totally and permanently unable to perform all of the duties and responsibilities of his job description shall be considered permanently disabled.

POLICE FORCE

The Falls Township Police Department.

SERVICE CONNECTED DISABILITY

A description of the disability and/or death of a member who suffered such disability and/or death directly as a result of an injury sustained while he was on duty and/or acting within the scope of his responsibilities as a police officer for the Township of Falls.

TRUSTEE

That person, agent, and/or organization selected by the Board of Supervisors to hold, invest, and administer the assets of the Police Pension Fund.

§ 72-3 Sources of funds.

The Police Pension Fund shall be supported and maintained as follows:

A. Each active-duty member shall contribute 5% of his compensation to the fund as determined by Act 600.[1]

[1] Editor's Note: See 53 P.S. § 881.101 et seq.

B. Effective January 1, 2002, all members who have achieved pension age/service requirements, but are still active, shall continue contributing to the pension fund. Only those officers who attained age/service retirement status but remained active duty, as of December 31, 2000, are not required to contribute to the Police Pension Fund.

C. Any member who retires for reasons of age and service, or for disability reasons, will no longer be required to contribute to the fund.

D. The Falls Township Treasurer shall establish a system for payroll deductions to administer member contributions.

E. Payments from the State Treasury based upon taxes paid upon premiums by foreign casualty insurance companies shall be applied as follows:

(1) To reduce the unfunded liability; or

(2) After such liability has been funded, to apply against the annual obligation of the Township for future costs; or

(3) To the extent that payment may be in excess of such obligation, to reduce member contributions.

F. Falls Township agrees to make payments to the fund as are necessary, according to law, to maintain the viability of the Police Pension Fund.

G. Voluntary contributions by those persons who wish to contribute to the fund.

H. A list of those officers who have already attain the age/service retirement status, remain active duty as of December 31, 2000, is attached to the Ordinance as Exhibit B.[2]

[2] Editor's Note: Said Exhibit B is on file in the Township offices.

§ 72-4 Retirement benefits.

Those members entitled to retirement benefits and the extent of these benefits shall be as follows:

A. Any member who has served on the Falls Township police force for an aggregate of 25 years of service and has attained his 50th birthday shall be entitled to retire.

B. Upon retirement, a member shall receive a benefit equal to 1/2 of his base salary, averaged over the three years immediately preceding his date of retirement.

C. A member's date of retirement shall be calculated to include all accrued sick, vacation, compensatory time, and holiday, etc.

D. Any member entitled to receive a monthly benefit pursuant to this ordinance, and is also entitled to receive under the social security laws, is entitled to receive 100% of the social security benefits without offset against his pension.

E. Any member who retires after January 1, 1992, shall be eligible for a cost of living adjustment (COLA) pursuant to Act 600.[1] This COLA is based on the Consumer Price Index (CPI) for all urban consumers for the Philadelphia - Wilmington - Atlantic City (PA-DE-NJ-MD), with an annual cap of 8%, up to 130% of the original amount of the member's pension, or the maximum amount allowable under Act 600, which ever is higher. The Consumer Price Index for the PA-DE-NJ-MD is published every other month.

[1] Editor's Note: See 53 P.S. § 881.101 et seq.

F. The COLA as enumerated under Subsection E above shall also apply to the retiree's beneficiary.

§ 72-5 Service-related disability benefits.

Those officers entitled to service-related disability benefits and the extent of these benefits are as follow:

A. Any member who incurs a service-related disability shall receive the equivalent of 1/2 his monthly base salary based upon the average of his monthly pay for the preceding thirty-six-month period.

(1) If the member has been employed for less than 36 months, the member's disability rate will be based upon 1/2 of the member's average monthly salary, for the number of months the member worked prior to the onset of the service-related disability.

B. No member shall qualify for a service-related disability pension hereunder if that disability is the result of an intentional injury, or a violation of the Pennsylvania Crimes Code (other than a summary violation), a DUI violation of the Motor Vehicle Code, or is caused by addiction to narcotics, drugs, and/or alcohol.

C. There shall be no social security offset or workers' compensation offset taken against service-related disability pension benefits for any member receiving a service-related disability pension. This offset language shall only bar credits taken against disability pension benefits under Act 600. It shall not infringe upon or affect in any way any statutory workers' compensation credit permitted by the Pennsylvania Workers' Compensation Act to be taken against workers' compensation benefits or any credit or reduction of social security benefits under federal law.

[Amended 2-15-2005 by Ord. No. 2005-1]

§ 72-6 Non-service-related disability.

Any member who incurs a non-service-related disability, which would require him to be terminated from the police force, shall not be eligible for pension benefits hereunder, unless the member is able to receive under the age and service requirements as described at § 72-4A.

§ 72-7 Termination of service prior to retirement.

If any member terminates their employment with the police force before they become eligible to receive benefits hereunder, the member shall be paid from the assets of the fund an amount equal to their total contributions plus actual investment return up to 5% interest compounded annually while they were a member. This payment shall be in lieu of any other payment or liability of the fund to such member upon their terminating employment with the police force.

§ 72-8 Vesting provision.

A. All members will have complete vesting rights to their accrued benefit once they have completed 12 years of service. Prior to 12 years of service, should they terminate their service before their vesting date, they will be entitled to a return of their contributions as enumerated at § 72-7. If a member terminates their service prior to their retirement date, and after they have vesting rights, their contributions to the fund shall be maintained in their entirety in the fund, and they will be entitled to 100% of their deferred accrued benefit which is equal to the retirement benefit computed in accordance with § 72-4, as of the date of their termination of employment, multiplied by a fraction equal to their years of credited service, divided by their years of total projected service, at their normal retirement date. This deferred, vested monthly benefit shall then become payable in accordance with § 72-4, upon the member attaining their normal retirement date.

B. The member or his beneficiaries will receive a minimum benefit equal to the return of their contributions, plus interest in accordance with § 72-7. In lieu of receiving the deferred vested accrued benefit, the member may elect to receive a return of his contributions, plus interest, in accordance with § 72-7.

C. This annuity shall continue until the spouse's death or remarriage, whichever occurs first.

D. In the event of the death of a member who passes away without a spouse, but leaves dependent children, those dependent children receive their pro rata portion of 50% of the member's pension until their 23rd birthday. As each child reaches the age of 23, their share reverts to any younger children, in equal shares, until the youngest of the member's children reaches the age of 23.

§ 72-9 Survivors annuity.

In the event of the death of a member, the survivor annuity shall apply as follows:

A. If he is survived by his spouse, the spouse shall be entitled to receive a monthly annuity in the amount of 50% of the benefit the member would have been eligible to receive at the time of his death.

B. If a member dies and is eligible to retire according to the age and service requirements in effect at the time of his death, his spouse and/or children shall be entitled to 50% of his pension as referenced in Subsections A and D herein.

C. This annuity shall continue until the spouse's death or remarriage after April 17, 2002, only, in accordance with Act 30 (amending Act 600) of 2002, 53 Pa. C.S. 767.

[Amended 3-4-2003 by Ord. No. 2003-6]

D. In the event of the death of a member who passes away without a spouse, but leaves minor children, those minor children receive their pro rata portion of 50% of the member's pension until their 18th birthday. As each child reaches the age of 18, their share reverts to any younger children, in equal shares, until the youngest of the member's children reaches the age of 18.

E. Pensions for the families of members killed in service shall be calculated at 100 per centum of the member's salary at the time of death.

[Added 6-14-2005 by Ord. No. 2005-05]

§ 72-10 Military service credit.

An employee that was on active duty in the United States military service prior to being employed by Falls Township will be afforded the opportunity to receive full service credit for each year of military service or fraction thereof, not to exceed five years. This can be purchased by the employee to count towards years of municipal service and/or age; the full cost of all said benefits are to be borne by the employee. This cost per year will be computed as follows:

A. The employee's first three years of salary with Falls Township will be averaged;

B. Ten percent of this three-year period will be averaged;

C. An interest rate of 4.75% will be compounded annually from the date of these three years of service to the date of payment of this military service credit.

§ 72-11 Law enforcement service credit.

A. Any police officer who was employed as a full, active-duty officer in a law enforcement agency recognized by the Pension Board shall be given the opportunity to receive full credit for each year of law enforcement service, or fraction thereof, not to exceed five years. This law enforcement service credit may be purchased by the employee to count towards years of municipal service in the formula for determining eligibility for retirement. The full cost of these benefits are to be borne by the employee. This per-year cost will be computed as follows:

(1) The officer's first three years of gross salary will be averaged;

(2) Ten percent of this three-year period will be averaged;

(3) An interest rate of 4.75% will be compounded annually from the date of these three years of service to the date of payment of this law enforcement service credit.

B. This will not apply to any officers hired after the 10th of April, 1998.

C. Any officer hired before the 10th of April, 1998, who qualifies for this benefit and desires to possibly one day utilize this benefit shall be required to submit a letter of intent to the Township Manager. This letter shall be submitted on or before the 31st of July, 1998. If the officer fails to do so, he will have had forfeited all rights to some day utilize this benefit.

D. Submission of said letter to the Township Manager will in no way force the officer to utilize this benefit but will instead just afford him the option to do so if desired. The letter shall be signed for by the Township Manager, and a second copy will be placed on file with this agreement.

§ 72-12 Return from disability.

In the event a member is placed on a service-related disability, he shall be unable to return to active duty status without the agreement of the member himself, the Board of Supervisors and the Police Pension Board. The member is only permitted to return if he has recovered from his disability and is able to return to full, active-duty status. If the member, the Board of Supervisors, and Police Pension Board cannot agree, then the member shall not return to active duty and will remain on disability.

§ 72-13 Death benefits.

The life insurance coverage on employees eligible under this fund shall be as follows:

A. All retired employees shall be provided $15,000 of life insurance. This life insurance is to be paid from the Township's general fund at no cost to the employee.

B. The fifteen-thousand-dollars-life-insurance policy will be maintained until the member's death.

§ 72-14 Employment of actuary; compensation.

A. The Police Pension Committee shall make recommendations to the Board of Supervisors for the employment of an actuary to develop those calculations necessary to properly administer this fund. The compensation of the actuary shall be determined from time to time by the Board of Supervisors, and the expense of this actuary shall be borne by the fund, as long as the State of Pennsylvania pays administrative expenses associated with the management of the Police Pension Fund. If the state ceases to pay these expenses, then that expense shall be borne by the Township.

B. Nothing in this section shall be construed to authorize anything in excess of that which is authorized by Act 600/Act 205.[1]

[1] Editor's Note: See 53 P.S. § 881.101 et seq. and 53 P.S. § 895.101 et seq. respectively.

§ 72-15 Employment of trustee; compensation.

A. The Police Pension Committee shall make recommendations to the Board of Supervisors for the employment of trustee to hold, invest, and administer the assets of the Police Pension Fund. The trustee shall report to the Pension Committee, who in response will report directly to the Board of Supervisors. The compensation of the trustee shall be determined from time to time by the Board of Supervisors, and the expense of this trustee shall be borne by the fund exclusively. If the state ceases to pay these expenses, then that expense shall be borne by the Township.

B. Nothing in this section shall be construed to authorize anything in excess of that which is authorized by Act 600/Act 205.[1]

[1] Editor's Note: See 53 P.S. § 881.101 et seq. and 53 P.S. § 895.101 et seq., respectively.

§ 72-16 Employment of legal services; compensation.

The Police Pension Committee shall make recommendations to the Board of Supervisors for the employment of legal counsel to be employed by the Committee in the administration of this fund. Legal counsel shall be responsible for review of case and statutory law, the application of Act 600[1] and any other statute regulating the fund, review of trust and actuary reports, and any other legal issues associated with the administration and/or management of this fund. The compensation of the legal counsel shall be determined from time to time by the Board of Supervisors and the expense of legal counsel shall be borne by the fund as long as the State of Pennsylvania pays administrative expenses associated with the management of the Police Pension Fund. If the state ceases to pay these expenses, then that expense shall be borne by the Township.

[1] Editor's Note: See 53 P.S. § 881.101 et seq.

§ 72-17 Expenses of administration.

The Police Pension Committee shall be authorized to expend those sums of money necessary for the proper administration and management of this fund. The Committee shall ensure that the costs of administration and management are directly associated with the plan, and will monitor these costs to ensure that they are prudent and necessary, and a reasonable benefit to the plan. In addition, the Committee will require an itemized accounting of all expenses associated with the plan to allow for the payment of authorized administrative expenses from pension plan monies. If the state ceases to pay these expenses, then that expense shall be borne by the Township.

§ 72-18 Fund not subject to assignment or attachment.

No portion of the assets of the Police Pension Fund shall be subject to attachment, execution, levy, garnishment, or any other legal process, but shall be payable only to the member or his designated beneficiary and shall not be subject to voluntary or involuntary assignment or transfer by any member.

§ 72-19 DROP (Deferred Retirement Option Program).

The Township agrees, with the cooperation of the Police Association of Falls Township (PAFT), to create, maintain and operate a separate DROP Program, consistent with and not in violation of, applicable IRS statutory and regulatory provisions, and all provisions of Pennsylvania Act 600 and Pennsylvania Act 205.[1] In accordance with same, the following terms and conditions are hereby recognized and implemented:

A. Any eligible participants must have completed the minimum requirements for full retirement eligibility pursuant to the conditions and terms set forth in the applicable collective bargaining agreement then and there in effect.

B. That each eligible officer's decision to enter into the DROP Program is irrevocable, i.e., no return to participation in the Township Police Pension Plan is permitted once the DROP election has been implemented.

C. That the maximum DROP Program participation is five years or such other time which is specified in the collective bargaining agreement then and there in effect at the time an eligible officer elects the DROP Program option.

D. That exercising the DROP Program option not be mandatory but is optional.

E. That an eligible officer may decide to elect the DROP option once eligible (50/25), but is not required to elect DROP participation immediately upon eligibility.

F. That DROP Program payments will reflect cost of living (COLA) adjustments.

G. That for purposes of collective bargaining and other employment issues relative to the Township, an officer's "retirement date" is the date that the officer actually ceases employment with the Township and not the date the officer elects the DROP Program option.

H. That the DROP Program will be administered by ICMA or an equivalent sophisticated fund manager.

[1] Editor's Note: See 53 P.S. § 881.101 et seq. and 53 P.S. § 895.101 et seq., respectively.