[Adopted 1-9-1967 by Ord. No. 429 as Ch.
33, Art I, of the 1967 Code]
[Amended 10-21-1991 by Ord. No. 686]
The Police Department of Sayre Borough is established
and may consist of a Chief, Lieutenant, Sergeant and patrolmen.
[Adopted 6-27-1985 by Ord. No. 607]
A Police Pension Fund is hereby established
pursuant to and in compliance with the Act of May 29, 1956, P.L. 1804,
as amended. Such fund shall be applied under such regulations as the
Council may prescribe.
Any member of the police force of the municipality
for at least six months who thereafter shall enter the military service
of the United States shall have credited to his/her employment record
for pension benefits all of the time spent by him/her in such military
service, if such person returns to his/her employment with the municipality
within six months after his/her separation from the military service.
Upon termination of the fund, the assets shall
be distributed as follows:
A. Sufficient funds shall be maintained to provide the pension benefits prescribed in §
27-5B for all participants who have retired prior to termination of the fund or who are eligible for retirement at the time of the termination of this fund.
B. Contributions with interest at a rate established by the Committee as provided in §
27-7 shall be refunded to any and all participants who terminate service at the time of the termination of this fund.
C. Of the remaining funds, those which can be identified
as municipality contributions or contributions other than from participants
or from the commonwealth allocation shall be distributed as the Council
sees fit.
D. All funds in excess of the funds described in Subsections
A,
B and
C above shall be returned to the commonwealth as unused funds pursuant to the Act of May 12, 1943, P.L. 259, as amended, 72 P.S. § 2263.1 et seq.
The Council reserves the right to amend at any
time, in whole or in part, any or all of the provisions of this fund.
However, no such amendment shall authorize or permit any part of the
fund to be used or diverted to purposes other than for the exclusive
benefit of the participants, their beneficiaries or their estates,
nor shall any amendment divest a participant of benefits vested by
§ 27-5K. All such amendments shall comply with the applicable
statutes of the commonwealth, including but not limited to the Act
of May 29, 1956, P.L. (1955) 1804, as amended, 53 P.S. § 767
et seq.
[Added 10-16-2000 by Ord. No. 789]
The early retirement benefit shall be provided
to a member of the police force with 20 or more years of 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 governing body of the municipality
or regional police department. The early retirement benefit shall
become effective as of the date the application is filed with the
governing body or the date designed 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 superannuation retirement
date to the gross pension amount calculated using the monthly average
salary during the appropriate period prior to his termination of employment.
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 18, 1984 (P.L. 1005, No. 205), known as the "Municipal
Pension Plan Funding Standard and Recovery Act."
[Added 8-28-2019 by Ord.
No. 959]
A. Definitions. As used in this section, the following terms shall have
the meanings indicated:
DROP
The Deferred Retirement Option Plan created as an optional
form of benefit under the existing Sayre Borough Police Pension Plan.
DROP PARTICIPANT ACCOUNT
A separate ledger account created to accumulate the DROP
pension benefit for a DROP participant.
MEMBER
A full-time Sayre Borough police officer covered by the Plan.
PARTICIPANT
A member who is eligible for normal retirement and who has
elected to participate in the DROP program.
PLAN
The Sayre Borough Police Pension Plan adopted pursuant to
Act 600.
B. DROP provisions.
(1) Eligibility. Effective January 1, 2020, members of the Sayre Borough
Police Department who have not yet retired prior to the implementation
of the DROP program, may enter into the DROP on the first day of any
month following the attainment of age 50 and the completion of 25
or more years of credited service with Sayre Borough.
(2) Written election. An eligible member of the Plan electing to participate
in the DROP program must complete and execute a "DROP election form"
prepared by Sayre Borough and/or the pension plan administrator, which
shall evidence the member's participation in the DROP program,
and document the participant's rights and obligations under the
DROP. The form must be signed by the member and the Chief Administrative
Officer of the Plan and submitted to Sayre Borough, Bradford County,
Pennsylvania, at least 30 days prior to the member's effective
date of retirement. The DROP election form shall include an irrevocable
notice to the Sayre Borough by the member that the member shall terminate
from employment with the Sayre Borough Police Department effective
on a specific date not less than one year nor more than five years
from the effective date of the DROP election. In addition, all retirement
documents required by the Sayre Borough Police Pension Plan Administrator
must be filed and presented to the Sayre Borough Council for approval
of retirement and commencement of the monthly pension benefit. Once
the retirement application has been approved by the Borough Council,
it shall become irrevocable.
(a)
After a member enters the DROP program, contributions to the
pension plan by the participant and the Borough will cease, and the
amount of monthly benefits will be frozen except for any applicable
cost-of-living adjustment (COLA) increases awarded to all pension
recipients.
(b)
Members shall be advised to consult a tax advisor, of their
choice, prior to considering the DROP program, as there may be serious
tax implications and/or consequences to participating in the DROP
program.
(3) Limitation on pension accrual. After the effective date of the DROP
election, the participant shall no longer earn or accrue additional
years of continuous service for pension purposes.
(4) Benefit calculation. For all Plan purposes, continuous service of
a member participating in the DROP program shall remain as it existed
on the effective date of commencement of participation in the DROP
program. Service thereafter shall not be recognized or used for the
calculation or determination of any benefits payable by the Sayre
Borough Police Pension Plan. The average monthly pay of the member
for pension calculation purposes shall remain as it existed on the
effective date of commencement of participation in the DROP program.
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 participants shall
increase only as a result of cost-of-living adjustments (COLAs), which
are effective on or after the date of the member's participation
in the DROP program.
(5) Payments to DROP participant account. The monthly retirement benefits
that would have been payable had the member elected to cease employment
and receive a normal retirement benefit shall, upon the member commencing
participation in the DROP program, be credited on the first day of
each month into a separate ledger account established by the Plan
Administrator to track and accumulate the participant's monthly
pension benefits. This account shall be designated the DROP participant
account. Interest shall be compounded and credited monthly at an annual
rate of 2%. All interest credited to the DROP participant account
shall be included in the final cash settlement.
(6) Early termination. A participant may withdraw from the DROP program
at any time and no penalty shall be imposed for early termination
of DROP participation. However, the participant shall not be permitted
to make any withdrawals from the DROP participant Account until DROP
participation has ended.
(7) Payout. Upon the termination date set forth in the DROP election
form or on such date as the participant withdraws or is terminated
from the DROP program, if earlier, the normal retirement benefits
payable to the participant or the participant's beneficiary,
if applicable, shall be paid directly to the participant or beneficiary
and shall no longer be credited to the DROP participant account. Within
45 days following the actual termination of a participant's employment
with Sayre Borough, the accumulated balance in the DROP participant
account shall be paid to the participant in a single lump-sum payment.
Such payment shall be made either in cash, subject to any federal
withholding as may be required, or as a direct rollover to an Individual
Retirement Account (IRA). If the participant or beneficiary fails
to elect a method of payment within 60 days after the participant's
termination date, the retirement system shall pay the balance as a
lump sum.
(8) Disability during DROP. If a participant becomes temporarily disabled
during the DROP period, the participation freezes and the time period
while on temporary disability does not count towards the selected
DROP participation period. Upon return to duty, the DROP period shall
resume, continuing with the remaining time left in the DROP period.
The participant shall receive disability pay in the same manner as
disabled police officers that are NOT participating in DROP. In no
event shall a participant on temporary disability have the ability
to draw from the DROP participant account. However, notwithstanding
any other provision in this subsection, if an officer is disabled
and has not returned to work as of the date of the required resignation,
then such resignation shall take precedence over all other provisions
herein, and said officer shall be required to resign. If a DROP participant
becomes eligible for a disability pension benefit due to a permanent,
service-related disability under Act 600 and terminates employment,
the monthly normal retirement benefit shall cease.
(9) Death. If a participant dies before the DROP participant account
balance is paid, the participants' beneficiary under Act 600
shall have the same rights as the participant to withdraw the DROP
participant account balance. The monthly benefit credited to the participant's
DROP participant Account during the month of the participant's
death shall be the final monthly benefit for DROP participation.
(10)
Killed-in-service survivor benefit. If a participant is killed
in service, the participant's beneficiaries under Act 600 shall
be entitled to apply to the Commonwealth of Pennsylvania and receive
a recalculation for payment of survivor benefits at 100% of the participant's
salary at the time of death.
(11)
Amendment. Any amendments to this DROP Ordinance shall be consistent
with the provisions covering deferred retirement option plans set
forth in any applicable collective bargaining agreement or state or
federal law, and shall be binding upon all future participants and
upon all participants who have balances in their DROP participant
accounts.
C. Effective date. The effective date of the changes described in this
section is January 1, 2020; however, the implementation of the DROP
program will be as provided in this section.
D. Severability: The provisions of this section shall be severable,
and if any of its provisions shall be held to be unconstitutional
or illegal, the validity of any of the remaining provisions of this
section shall not be affected thereby. It is hereby expressly declared
as the intent of Sayre Borough, Bradford County, Pennsylvania that
this section has been adopted as if such unconstitutional or illegal
provision or provisions had not been included herein.
E. Pending legislation: In the event that the DROP provision is declared invalid or illegal by a court of competent jurisdiction or through an administrative determination of the Office of the Auditor General, the police officers shall have the right to bargain in accordance with Act 111 over deletion of this benefit. It is expressly understood that this shall not involve bargaining over a replacement provision. The provisions of this section are written to comply with Chapter
11 of Act 44 of 2009.