[HISTORY: Adopted by the Borough Council
of the Borough of Malvern as indicated in article histories. Amendments
noted where applicable.]
[Adopted 8-5-1969 by Ord. No. 175 (Part
2, Ch. 5, Art. A, of the 1975 Code of Ordinances)]
[Amended 12-7-1971 by Ord. No. 189; 12-5-1972 by Ord. No.
202; 5-10-1983 by Ord. No. 83-6; 10-13-1987 by Ord. No. 87-13; 2-19-1991 by Ord. No. 91-2; 6-19-1995 by Ord. No. 95-2; 10-21-1997 by Ord. No.
97-5; 12-15-1998 by Ord. No. 98-11]
The following terms shall have the meanings
indicated, unless otherwise specifically stated:
The average monthly pay which the member received during
the three consecutive calendar years (36 months) which occurred during
the ten-year period immediately preceding the member’s retirement
and during which (three-year period or 36 months) the employee received
the highest average monthly pay.
[Amended 12-16-2008 by Ord. No. 2008-5[1]]
The Borough of Malvern.
That option to be elected by an eligible employee prior to
retiring, which provides for a reduced pension to the retired employee
and, in event of his death, provides an income for his spouse during
the spouse's lifetime.
The years (and completed twelfths thereof) of employment
as a member (as that term is defined herein) with the Borough, beginning
(as to employees hired after July 1, 1969) after the completion of
one hour of service with the Borough and ending with the date of retirement,
death or other termination of employment, whichever shall first occur.
Temporary absence, not to exceed one year, authorized by the Borough,
such as for sickness or leave of absence, shall not be considered
an interruption of continuous service. Any member who shall enter
upon active duty in the Armed Forces of the United States (whether
or not such entry is voluntary or involuntary) in response to an order
or call to such active duty shall be credited to his or her employment
record, for pension or retirement benefits, all of the time so spent
in such military service, provided that such member shall have received
an official certificate or other document establishing satisfactory
completion of such military service; and provided further that such
member shall have made application for reemployment within 90 days
from his or her discharge or release from such active duty; and provided
further that such continuous service credit in such instance shall
not exceed four years; and provided further that nothing herein shall
be construed to limit or interrupt continuous service where such individual
shall be a member of the active reserve of any branch of the armed
forces, as long as such participation does not require duty days exceeding
90 in number during any calendar year.
That date beyond normal retirement date when an employee
shall actually retire. Deferred retirement beyond the employee's 70th
birthday shall be solely at the Borough's option.
The date which is the first day before the member's normal retirement date when the member may elect to retire with benefits as provided in § 32-3D hereof.
July 1, 1969.
A regular, full-time employee of the Borough of Malvern,
other than policemen, elected officials and employees hired by the
Borough after their 60th birthday. (Exceptions: Anyone hired after
September 1, 1976, and before January 1, 1983, is eligible if hired
before his 62nd birthday.) An employee hired after July 1, 1969, will
be required to complete one hour of service with the Borough to be
eligible to participate in the plan.
In the case of each member, 2% of his or her monthly pay.
For purposes of computing member contributions and average
monthly pay rate, the member's salary or wage which shall include
the following: base pay, overtime pay and longevity pay, if any; any
salary or wage paid after the member's normal retirement date shall
be included in the calculation; any salary or wage paid into a Section
457 Plan for the member shall be included in the calculation. The
following forms of compensation shall be excluded from the definition
of “monthly pay”: bonuses, educational allowances, reimbursed
expenses or payments in lieu of expenses, lump sum severance payments
and fringe benefits such as unused holiday pay, unused sick pay and
unused vacation pay. Any other form of compensation which is not paid
in set, regular predetermined monthly or annual payments shall be
excluded.
For each member the last day of the month in which his 65th
birthday occurs, but not earlier than July 1, 1970.
The pension plan set forth herein, as amended from time to
time, which shall be known as the "Malvern Borough Employees' Pension
Plan."
The twelve-month period beginning January 1 and ending December
31, commencing January 1, 1984. Prior to January 1, 1984, the plan
year began on July 1 and ended on June 30, except that the plan year
starting July 1, 1983, will end on December 31, 1983.
That financial institution designated by resolution by the
majority of Malvern Borough Council.
That provision whereby an eligible employee who is terminated
prior to retirement has a nonforfeitable right to all of his or her
pension accrued to the date of termination which has been provided
by contributions other than his or her own. A member becomes 100%
vested after he or she completes five years of service or after he
or she attains his or her 65th birthday, whichever occurs first.
That option which an eligible employee may elect before retiring
to provide a reduced pension and provide for its continuation to his
named beneficiary for the remainder of an elected certain period.
If the retiree lives beyond the period selected, he will continue
to receive payments until his death.
[1]
Editor's Note: This ordinance provided an effective date of
12-31-2008.
[Amended 5-10-1983 by Ord. No. 83-6; 2-19-1991 by Ord. No.
91-2]
A.
The Borough shall pay any cost of the plan in excess
of the amounts received as member contributions.
B.
The Borough shall not be liable to pay any pension
hereunder, but all pension benefits shall be payable from the trust
fund established in connection with the plan. As an alternative, pension
benefits may be payable from any insurance fund established for the
plan or from any annuity purchased from an insurer.
C.
Any forfeitures which may arise under the plan shall
be applied as soon as practicable to reduce the Borough's cost of
the plan.
D.
The effectiveness of the plan shall be subject to
and contingent upon an initial determination of the District Director
of Internal Revenue that the plan is qualified under applicable provisions
of the Internal Revenue Code of 1954.
E.
Each member shall make monthly member contributions,
by payroll deduction, which contributions shall be paid to the plan.
[Amended 12-7-1971 by Ord. No. 189; 12-5-1972 by Ord. No.
202; 5-10-1983 by Ord. No. 83-6; 10-13-1987 by Ord. No. 87-13; 2-19-1991 by Ord. No. 91-2; 6-19-1995 by Ord. No. 95-2; 10-21-1997 by Ord. No.
97-5]
A.
Each eligible member who remains in the Borough's
employment until his normal retirement date or later shall be entitled
to receive a monthly pension, payable during his lifetime on the first
day of each month following his termination of employment.
B.
The monthly pension shall be 2% of the average monthly
pay rate, multiplied by the total years of continuous service, up
to a maximum of 30 years.
C.
A member qualifies for early retirement and may elect
to retire early:
(1)
At any time which is within 10 years of his or her
normal retirement date, provided that he or she has attained the age
of 55 years and completed 25 years of continuous service with the
Borough; or
(2)
As of the first day of any month after attaining the
age of 62 years and after completing 10 or more years of service with
the Borough.
D.
An employee who qualifies for early retirement and
elects to retire early shall elect to have his pension paid under
one of the two options:
E.
An eligible employee shall have the option prior to
retiring of electing to receive a reduced pension and, in the event
of his death, have all or some portion of such pension continued for
the life of his spouse. This option shall be known as "contingent
annuitant option." Election of this option by an eligible employee
shall result in benefits being provided on an actuarially equivalent
basis as determined by a qualified actuary.
F.
An eligible employee, prior to retiring, may elect
to receive a reduced pension for a specified number of years, or life,
whichever occurs later. This option shall be known as "years-certain
option." In the event of a retiree's death before the termination
of years certain, the pension shall be paid to the retiree's named
beneficiary for the remainder of the selected years-certain period.
G.
The member who dies before age 65 or whose service
is terminated before the completion of 10 years of continuous service
and before his 65th birthday shall have refunded to him (or to his
designated beneficiary in the event of death) an amount equal to his
total member contributions to the fund, plus interest at the rate
of 4%, through the end of 1982, plus 7% thereafter, compounded annually
from the end of the plan year in which paid to the date of termination
or death. The member whose service terminated on or after the completion
of 10 years of continuous service and before the 65th birthday shall
have the following options:
(2)
If not yet eligible for early retirement, he may elect to have refunded to him an amount equal to his total member contributions, plus interest at the rate of 4%, through the end of 1982, plus 7% thereafter, compounded annually from the end of the plan year in which paid to the date of termination; if such election for a cash refund is made, the member forfeits those rights to a pension benefit which are attributable to his member contributions with interest (vested benefits are not forfeited); or he may elect to leave his member contributions (plus interest) in the fund and receive his full accrued pension as described in Subsection B, to commence at his normal retirement date.
H.
Notwithstanding the provisions of this section, any
participant who is discharged by the Borough for commission of a felony
or proven dishonesty in the course of employment to the injury of
the Borough or fellow employees shall thereby forfeit his entire interest
under this plan, other than those amounts attributable to his own
contributions, if any, accumulated with interest.
I.
From time to time, the Borough Council shall review
the amount of monthly retirement benefit payable to a retired member
to determine if and when a cost of living adjustment (COLA) is appropriate.
Prior to such review, the plan actuary shall calculate the effect
of such increases on the actuarial soundness of the plan. No COLA
shall be granted which would impair the actuarial soundness of the
plan. No COLA shall become effective before January 1, 1998. COLA's
shall be authorized by a resolution passed by Council; an ordinance
shall not be required.
A.
The plan shall be administered by the Malvern Borough
Council or its authorized agent designated by resolution.
B.
The Malvern Borough Council shall adopt, amend or
repeal any policy pertaining to the plan after due notice to all eligible
employees enrolled in the plan.
C.
The Borough of Malvern shall pay all expenses authorized
and incurred for the administration of the plan except those which
are paid from the plan.
D.
The Borough shall employ an actuary when deemed necessary
to review the plan and report his findings to Borough Council.
A.
The Borough of Malvern reserves the right to revise
or terminate the plan at any time, provided that such revision or
termination is done to protect the interests of both the eligible
employees and the Borough.
B.
Termination of plan or discontinuance of contributions.
(1)
If the plan is terminated or if contributions are
completely discontinued, the Borough shall have no further obligation.
The funds held in the plan shall be used to provide pensions to the
extent sufficient as may be determined by Borough Council with approval
of the appropriate agency of the Internal Revenue Service. In the
absence of such determination within six months after such termination,
disposition of the plan shall be accomplished in order of priority,
by classes, as follows:
(a)
To refund the total member contributions to
each eligible member and retired member, less, in the case of each
retired member, the aggregate pension payments received by him prior
to the date of termination of the plan.
(b)
To continue the payment of pensions to all retired
members (and their beneficiaries) who are receiving pension payments.
(c)
To provide for the payment of pensions to or
on account of each eligible member who has attained his normal retirement
date.
(d)
To provide for the payment of pensions to or
on account of all members in such manner as may be determined by Borough
Council with the approval of the appropriate Internal Revenue Service
Agency.
(2)
If the funds remaining for any class are not sufficient
to provide full benefits within such class, the funds available for
such class shall be allocated among such class in the same proportion
that the actuarial value of the benefit for each member bears to the
total actuarial value of all benefits for all eligible members within
such class. Any funds remaining after the satisfaction of all liabilities
under the plan to eligible members or their beneficiaries shall be
returned to the Borough.
C.
The Borough reserves the right to change the method
of funding the plan at any time and without the consent of any other
party. The plan shall not be considered as having terminated, nor
shall any benefits be considered as having vested because of such
change.
A.
Eligible members' contributions and benefits, to the
extent permitted by law, shall not be subject to the claims of any
creditor or beneficiary or to attachment, garnishment or other legal
or equitable process by any creditor or beneficiary, nor shall any
eligible member have any right to alienate, anticipate, commute, pledge,
encumber or assign any such benefits.
B.
The Malvern Borough Council shall be authorized to
direct that payments under the plan be made to a person or institution
caring for an eligible member or his beneficiary entitled to receive
benefits who has become incompetent, either physically or mentally,
and to continue such payments to such person or institution as long
as the incapacity lasts.
C.
If the beneficiary of an eligible member shall be
a minor without a guardian, the Borough Council may direct disposition
of benefits from the plan until the beneficiary shall have attained
his majority.
D.
The plan shall not confer upon any employee any right
of employment.
E.
All provisions of the plan, including definitions,
shall be interpreted according to the laws of the Commonwealth of
Pennsylvania.
F.
Words used in the masculine include the feminine gender.
Words used in the singular or plural shall be construed as plural
or singular, respectively, where they would so apply.
[Adopted 11-5-1974 by Ord. No. 231 (Part
2, Ch. 5, Art. B, of the 1975 Code of Ordinances)]
The purpose of this article is to revoke and
rewrite Ordinance No. 179, which was effective September 1, 1969,
so that it shall conform to the Pennsylvania Police Pension Act (Act
600 of 1956).
This article shall be deemed to be effective
as of September 1, 1974, and shall apply to persons retiring after
that date.
[Amended 5-10-1983 by Ord. No. 83-7; 2-19-1991 by Ord. No.
91-2; 6-19-1995 by Ord. No. 95-4]
A.
ACTUARY
ATTENDING COLLEGE
AVERAGE MONTHLY SALARY
BENEFICIARY
BOROUGH
COMMONWEALTH
CONTINUOUS SERVICE
DROP
DROP ACCOUNT
MEMBER
MEMBERSHIP FORM
MONTHLY SALARY
PLAN
PLAN YEAR
TRUST AGREEMENT
TRUSTEE
TRUST FUND
Wherever used in this article, the following terms
shall have the meanings set forth below, unless the context clearly
indicates a different meaning:
The actuary appointed by the Borough to make computations
and determine liabilities from time to time at the direction of the
Borough Council.
For the purposes of this article, a child is considered to
be “attending college” if he or she is registered at an
accredited institution of higher learning and is carrying a minimum
course load of seven credit hours per semester.
[Added 11-15-2005 by Ord. No. 2005-7]
In the case of each member whose employment terminates on
or after his or her normal retirement date, the average amount of
monthly salary paid to him or her during the last 36 months of continuous
service with the Borough.
[Amended 12-16-2008 by Ord. No. 2008-5[1]]
The person designated by a member to receive such benefits as may be payable under the plan on account of his death pursuant to provisions of § 32-16 of this article.
The Borough of Malvern.
The Commonwealth of Pennsylvania.
The years (and completed twelfths thereof) of employment
as a police officer with the Borough on a permanent, full-time basis,
beginning with the date on which such police officer was hired by
the Borough and ending with the date of retirement, death or other
termination of employment, whichever shall first occur. Temporary
absence not to exceed one year, authorized by the Borough, such as
for sickness or leave of absence, shall not be considered an interruption
of continuous service. Any member who shall enter upon active duty
in the armed forces of the United States (whether or not such entry
is voluntary or involuntary) in response to an order or call to such
active duty shall have credited to his or her employment record, for
pension or retirement benefits, all of the time so spent in such military
service, provided that such member shall have received an official
certificate or other document establishing satisfactory completion
of such military service; and provided further that such member shall
have made application for reemployment within 90 days from his or
her discharge or release from such active duty; and provided further
that such continuous service credit in such instance shall not exceed
four years; and provided, further, that nothing herein shall be construed
to limit or interrupt continuous service where such individual shall
be a member of the active reserve of any branch of the armed forces
as long as such participation does not require duty days exceeding
90 in number during any calendar year.
Deferred Retirement Option Plan.
[Added 5-16-2017 by Ord.
No. 2017-2]
A separate account created to accept DROP participants'
monthly pension check while a DROP participant.
[Added 5-16-2017 by Ord.
No. 2017-2]
All regular, full-time employees of the Borough of Malvern's Police Department who have met the requirements described in § 32-11.
The form filed by the participant with Borough Council to
provide for the designation by the member of a beneficiary (including
a secondary beneficiary(ies) if the member so desires) to whom, in
the event of death, all payments provided herein shall be paid. Any
beneficiary so designated may be changed by the member, at any time
during his or her life, by signing and filing with the Borough Council
a written notification of change of beneficiary in such form as shall
be required by the Borough Council.
For a member, the regular amount of salary, which amount
shall be all money the member receives monthly, before taxes, in set,
predetermined, regular amounts (e.g., base and longevity pay), plus
money paid for overtime and/or bonus, but not including any other
compensation which is not paid in money and in set, regular, predetermined,
monthly payments (e.g., educational allowances, reimbursed expenses
or payments in lieu of expenses, lump sum severance payments and fringe
benefits such as unused holiday pay, unused sick pay and unused vacation
pay); however, if a member is compensated on an annual salary basis,
his monthly salary shall be 1/12 of his regular annual salary, which
shall be all money that the member receives annually, in set, predetermined,
regular amounts (e.g., base and longevity pay), plus money paid for
overtime and/or bonus, but not including any other compensation which
is not paid in money and in set, regular, predetermined annual payments.
The Borough of Malvern Police Pension, Death and Disability
Plan, as stated herein, and as amended from time to time.
The twelve-month period beginning January 1 and ending December
31, commencing January 1, 1984. Prior to January 1, 1984, the plan
year began on September 1 and ended on August 31, except that the
plan year starting September 1, 1983, will end on December 31, 1983.
Any trust agreement, declaration of trust or deed of trust,
as from time to time amended, under which the trust fund shall be
received, held and disbursed in accordance with this article. This
term shall include any group pension contract which is established
for the purpose of funding the benefits of this plan.
The trustee or trustees of the trust fund.
The property (corpus) and income generated therefrom which
from time to time shall be received and held by the trustee pursuant
to the terms of a trust agreement established to receive funds for
the purpose of providing benefits under this article.
[1]
Editor's Note: This ordinance provided an
effective date of 12-31-2008.
B.
Wherever applicable as used herein, unless the context
specifically provides otherwise, the singular and plural shall be
interchangeable, and the masculine or feminine pronoun shall include
either sex.
[Amended 12-13-1988 by Res. No. 272; 2-19-1991 by Ord. No.
91-2]
A.
The plan shall be administered by the Malvern Borough
Council. When signatures are required as to the administration of
the plan, the Borough Secretary shall be authorized to sign; in his
absence, the Borough Treasurer or President of Council is authorized
to sign. The Borough Secretary shall be the chief administrative officer
for purposes of the plan.
B.
The Borough Secretary shall be responsible for keeping
all records necessary for the smooth, efficient administration of
the plan. The Borough Treasurer shall serve as Treasurer of the plan.
C.
The Borough Council shall administer the plan in accordance
with the provisions hereof. It shall have all powers necessary for
such purpose, including, but not by way of limitation, the power to:
(1)
Construe and interpret the provisions of this article,
such construction and interpretation thereof to be final and conclusive;
and the trustee shall be bound to adopt any such construction or interpretation
of Council communicated to the trustee in writing.
(2)
Determine all questions affecting the eligibility
of any person to participate in the plan.
(3)
Compute the amount of benefits payable hereunder to
members and their beneficiaries.
(4)
Authorize disbursements by the trustee for the payment
of benefits or for the purchase of such benefits under any annuity
or insurance contract or contracts.
D.
The Council shall, from time to time, adopt such actuarial
assumptions and methods and mortality, service and other tables as
it may deem appropriate for the operation of the plan.
E.
The members of Council, and each of them, shall be
free from all liability for their acts and conduct as such members,
except for their own gross negligence, willful misconduct or lack
of good faith, and the Borough shall indemnify them, and each of them,
from the consequences of their acts and conduct in their official
capacity, except to the extent that such consequences result from
their own gross negligence, willful misconduct or lack of good faith.
F.
The Council may obtain legal, accounting, actuarial,
medical and clerical services to the extent necessary to administer
the plan, the expense of which shall be paid directly from the trust
fund by the trustee of that fund, by appropriations consistent with
such needs. The Council shall be responsible for the preparation of
an annual report prepared as delegated by the Council at the end of
each calendar year. The Borough Council may rely on opinions of physicians
and counsel so selected and also upon certifications, valuations and
reports of actuaries and accountants so selected.
[Added 12-13-1988 by Res. No. 272; amended 2-19-1991 by Ord. No.
91-2]
Each full-time police officer shall be deemed
a member of the plan, for eligibility and vesting purposes, on the
first day that he completes one hour of service.
A member's normal retirement date shall be the
first day of the first month next following his 55th birthday and
the completion of 25 years of continuous service. In no event shall
any member work beyond his normal retirement date unless the Borough
Council specifically requests that he do so and the member consents.
Retirement is mandatory at the member's 65th birthday.
A member who retires on or after his normal
retirement date shall be entitled to receive a monthly benefit for
life. The amount of his monthly benefit shall be equal to 50% of his
average monthly salary. The member's total monthly benefit shall be
made up of the sum of:
A.
Any pension benefits from pension plans heretofore
established by a private organization or association, but only to
the extent that the commonwealth or any of its municipalities shall
have contributed to such pension plan moneys raised by taxation; plus
C.
Benefits from this plan to the extent necessary to
bring the total benefits in any month up to one-half of the member's
average monthly salary.
[Added 5-16-2017 by Ord.
No. 2017-2[1]]
A.
Eligibility. Effective January 1, 2017, members of the Borough's
Police Department who have not retired prior to the implementation
of the DROP program may enter into DROP on the first day of any month
following reaching the officer's normal retirement date. The
length of DROP participation shall be a maximum of 24 months.
B.
Written election.
(1)
In order to participate in the DROP, an Officer must submit a written
election. This election must be received no later than one year after
the officer's normal retirement date. After the passage of one
year from the officer's normal retirement date, if the officer
has not made an election to participate in DROP, the officer may not
do so for the remainder of his/her employment with the Borough.
(2)
Election to participate in DROP is irrevocable, and, therefore, once
an Officer elects to participate in DROP, the officer cannot thereafter
leave the DROP and resume participation in the pension plan. However,
the officer may cease employment at any time during DROP participation,
but in no event shall the officer's employment continue after
the identified termination date contained in the officer's written
election.
(3)
The officer shall make the election to participate in DROP by using
forms and procedures as prescribed by the plan trustee. The documentation
that must be executed before an officer may participate in the DROP
program shall include a provision releasing the Borough from any liability
with regard to investment and other losses (subject to the guaranteed
rate of return set forth herein) and shall contain an acknowledgement
that any fees, commissions and administrative costs attributable to
DROP participation shall be the sole and exclusive responsibility
of the DROP participant. As a condition precedent to participation
in DROP, the officer must also acknowledge and agree to hold the Borough
harmless for any consequences flowing from the officer's decision
to participate in DROP, including, but not limited to, any tax consequences
or implications of DROP participation.
(4)
In addition, all retirement documents required by the plan must be
filed and presented to the Borough Council for acceptance and approval
of retirement and payment of pension. Once a DROP election has been
approved by the Borough Council, it is irrevocable.
C.
Limitation on pension accrual. After the effective date of the DROP
election, the officer shall no longer earn or accrue additional years
of continuous service for pension purposes. Likewise, during the period
of DROP participation, the officer shall not be required to make pension
contributions to the plan.
D.
Benefit calculation. For all plan purposes, continuous service of
a member participating in the DROP shall remain as it existed on the
effective date of commencement of participation in the DROP. Service
thereafter shall not be recognized or used for the calculation or
determination of any benefits payable by the plan. The officer's
pension benefit shall remain as it existed on the effective date of
commencement of participation in the DROP. 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
any applicable cost of living adjustments in effect on the effective
date of the member's participation in the DROP or by applicable
cost of living adjustments granted thereafter.
E.
Payments to DROP account. The monthly retirement benefits that would
have been payable had the officer elected to cease employment and
receive a normal retirement benefit, shall, upon the officer commencing
participation in DROP, be paid into the separate account titled as
"Malvern Borough, DROP FBO John Smith." The Borough shall guarantee
that, at a minimum, the return on investment for the contents of the
DROP account shall not be less than 0%.
F.
Accrual of nonpension benefits. After an officer elects to participate
in the DROP program, all other contractual benefits shall continue
to accrue. An officer may utilize leave time during the DROP period.
G.
Payout. Upon the termination date set forth in the officer's
DROP election notice or such date as the Borough separates the officer
from employment, the retirement benefits payable to the officer or
the officer's beneficiary, if applicable, shall be paid to the
officer or beneficiary and shall no longer be paid to the officer's
DROP account. Within 30 days following termination of an officer's
employment pursuant to his/her participating in the DROP program,
the balance in the officer's DROP account shall be paid to the
member in a single lump-sum payment or at the officer's option,
in any fashion permitted by law. As a condition of participation in
DROP, the officer acknowledges that the Borough plays no role nor
has any responsibility in advising the officer regarding the appropriate
payout vehicle. Accordingly, any officer participating in DROP assumes
all financial consequences for his/her participation in DROP, including,
but not limited to, the manner in which a permitted payout from the
DROP account is made. The participating officer agrees to hold the
Borough harmless for any tax consequences which flow directly or indirectly
from the officer's participation in DROP.
H.
Disability during DROP. If an officer becomes temporarily disabled
during his/her participation in DROP, any such time lost due to disability
shall be counted towards the maximum participation time limit. Upon
return to duty, membership in DROP shall continue with the remaining
time left until the officer's resignation date. If eligible,
the officer shall receive disability pay in the same amount as disabled
police officers that are not participating in DROP. In no event shall
an officer on temporary disability have the ability to draw from his
DROP 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 his/her required resignation, then such resignation
shall take precedence over all other provisions herein and said officer
shall be required to resign. Nothing contained in this plan shall
be construed as conferring any legal rights upon any police employee
or other person to the continuation of employment, nor shall participation
in the DROP program supersede or limit in any way the right of the
Borough to honorably discharge a police employee based upon an inability
to perform his or her full duties as a police officer.
I.
Death. If an officer participating in DROP dies before the DROP account
balances are paid, the officer's legal beneficiary shall have
the same rights as the officer to withdraw the account balance.
J.
Forfeiture of benefits. Notwithstanding an officer's participation
in the DROP Plan, an officer who is convicted or pleads guilty to
engaging in criminal misconduct which constitutes a "crime related
to public office or public employment," as that phrase is defined
in Pennsylvania's Pension Forfeiture Act, 43 P.S. §§ 1311
through 1314, shall forfeit his/her right to receive a pension, including
any amounts currently deposited in the DROP account. In such a case,
the officer shall only be entitled to receive the contributions, if
any, made by the officer to the fund, without interest.
K.
Account manager. The Borough will appoint an investment manager to administer the DROP accounts. The Borough and the participating police officers agree that the Borough shall not be responsible for any investment loss incurred in the plan or for the failure of an investment to earn a specific or expected return or to earn as much as any other opportunity, whether or not such other investment opportunity was offered or available for DROP accounts. As a condition of participation in the DROP program, participating officers agree to hold the Borough harmless for any financial loss incurred as the result of the DROP, subject to the guaranteed rate of return set forth in Subsection E of this section.
L.
Cost of management for DROP program. The participating officers agree
that any costs or fees associated with the management of the DROP
accounts shall be paid directly from the Police Pension Fund and not
by the Borough.
M.
Amendment. Any amendments to this DROP 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 deferred retirement option accounts. The DROP
plan may only be amended by a written instrument, not by any oral
agreement or past practice.
N.
Construal of provisions. An officer's election to participate
in the DROP program shall in no way be construed as a limitation on
the Borough'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.
[Amended 5-10-1983 by Ord. No. 83-7; 2-19-1991 by Ord. No.
91-2; 6-19-1995 by Ord. No. 95-4; 12-18-2001 by Ord. No. 2001-8; 2-18-2020 by Ord. No. 2020-2]
A.
Employee contributions shall not be required if it
is determined that the actuarial valuation of the plan exceeds 110%.
If the actuarial valuation of the plan in any given year is determined
to be 110% or lower, employee contributions will be required as follows:
3.5% of the member' s monthly salary up to the social security wage
base for the calendar year plus 5% of the monthly salary in excess
of the social security wage base for the calendar year.
B.
All state aid, Act 205 monies, attributable to the
Borough's officers is to be paid into the plan before member contributions,
if any, are required; and member contributions are required only if
ten percent 10% of the negative unfunded actuarial accrued liability
and all available state aid attributable to the Borough's police officers
are not sufficient to fund the Plan's full financial requirements.
[Amended 5-10-1983 by Ord. No. 83-7; 12-13-1988 by Res. No.
272; 2-19-1991 by Ord. No. 91-2; 6-19-1995 by Ord. No. 95-4]
A.
Except in cases of termination by death or disability,
any member whose service is terminated before the completion of 12
years of service shall have refunded to him or her an amount equal
to his or her total member contributions to the fund, plus interest,
and shall receive no further benefits hereunder.
B.
The member whose service is terminated on or after
the completion of 12 years of service and before the member's 55th
birthday shall have the following options:
(1)
He or she shall be entitled to vest his or her retirement benefits by filing with the Borough Secretary, within 90 days of the date he or she ceases to be a full-time police officer, a written notice of his or her intention to vest his or her benefits. Upon reaching the date which would have been his or her normal retirement date if he or she had continued to be employed as a full-time officer, he or she shall be paid a partial benefit equal to the benefit described in § 32-13 (based on his or her service and average monthly salary as of his or her date of termination) multiplied by factor "(a)" divided by "(b)," where "(a)" is the number of years of continuous service (including a fraction representing completed months) at the date of termination, and "(b)" is the number of years of service which he or she would have rendered had he or she continued to work until his or her normal retirement date; or
(2)
He or she shall have refunded to him or her an amount
equal to his or her total member contributions, plus interest, to
the date of termination, in which event he or she shall receive no
further benefits hereunder.
C.
Notwithstanding the provisions of this section, any
member who is discharged by the Borough for commission of a felony
or proven dishonesty in the course of employment to the injury of
the Borough or fellow employees shall thereby forfeit his entire interest
under this plan, other than those amounts attributable to his own
contributions, if any, accumulated with interest.
D.
When a member's contributions are refunded to him
or her in accordance with the provisions of this article, interest
accrued thereon shall be paid to the member in the amount determined
as follows: at the rate of 5% through the end of 1982, and 7% thereafter,
compounded annually from the end of the plan year in which paid to
the date of termination.
[Amended 5-10-1983 by Ord. No. 83-7; 7-21-1992 by Ord. No.
92-6; 6-19-1995 by Ord. No. 95-4]
A.
Benefits payable hereunder shall be paid pursuant
to the beneficiary designation made by the member on his membership
form or subsequent change of beneficiary designation.
B.
In the event a member dies before his pension had
vested, his named beneficiary shall be entitled to receive repayment
of all money which the member invested in the pension fund plus interest.
In the event there is no named beneficiary, the surviving spouse of
a member of the police force who dies before his pension has vested
or, if no spouse survives or if he 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, 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.
[Amended 11-15-2005 by Ord. No. 2005-7; 12-15-2009 by Ord. No.
2009-8]
C.
If a member dies while in the employ of the Borough
beyond his or her normal retirement age, or who subsequently dies
after retirement, the member’s surviving spouse 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, shall be entitled to receive
a pension calculated at 50% the member was receiving or would have
been entitled to receive had the member been retired at the time of
death. Payments shall commence as of the first day of the month following
the member’s date of death.
[Amended 11-15-2005 by Ord. No. 2005-7]
D.
Any member who becomes totally and permanently disabled, due to an injury incurred in the line of duty, shall be entitled to receive a pension benefit described in § 32-13, equal to 50% of the member’s salary at the time the disability occurred, offset by any social security/disability benefits received by the member for the same injury. The disability income shall commence on the first day of the month next following the termination of member’s Borough salary or next following the termination of member’s worker’s compensation benefit or Borough-sponsored disability insurance benefit, if any, whichever occurs last, and shall continue for life or until the date of recovery, if recovery occurs. For the purposes of determining whether recovery has occurred, the Borough may require evidence of continued disability, which may include examination by a physician selected by the Borough. The member’s refusal to submit to medical examinations shall render member ineligible for disability benefits. The permanence and degree of the impairment shall be supported by medical evidence. No disability benefit shall be paid from the plan for a non-service-related disability.
[Amended 11-15-2005 by Ord. No. 2005-7]
E.
Upon the death of any member of the police force or
upon the death of any member of the police force who shall have retired
on pension, the surviving spouse, or if no spouse survives or if he
or she survives and subsequently dies or remarries, then the child
or children under the age of 18 years, shall, during the lifetime
of such surviving spouse so long as he or she shall not remarry, or
until reaching the age of 18 years in the case of a child or children,
be entitled to receive the pension calculated at a rate of 50% of
the pension the member was receiving or would have been receiving
had such member been retired at the time of such member’s death.
[Added 11-15-2005 by Ord. No. 2005-7]
A.
The Borough shall make contributions to the trust
fund from time to time in such amounts as are determined by the actuary
to be necessary to be added to moneys received from the commonwealth,
received as gifts to the plan and received as member contributions,
to provide the benefits under the plan.
B.
All benefits payable under the plan shall be paid
or provided for by the Trustee out of the trust fund as a source of
such benefits.
C.
Contributions by the Borough to the trust fund shall
be irrevocably held for use in providing the benefits of this plan,
and in no event prior to the satisfaction of all liabilities for benefits
under this plan shall any part of the assets of the trust fund be
used for or diverted to any purposes other than for the exclusive
benefit of members, their beneficiaries, or of other persons entitled
to benefits under this plan as hereinbefore provided. Any forfeitures
which may arise under the plan shall be applied to reduce the Borough's
cost and shall not be used to increase benefits for any member.
A.
No person shall have any interest in or right to any
part of the assets of the trust fund except as and to the extent expressly
provided in this article. Each person who shall claim the right to
any payment or benefit under this article shall be entitled to look
only to the trust fund for such payment or benefit and shall not have
any right, claim or demand therefor against the Borough.
B.
Participation in the plan will not give a member the
right to be retained in the employ of the Borough or any right to
claim benefits unless such right is granted under the terms of this
article.
C.
Borough Council, in its discretion, may direct that
if any person receiving or entitled to receive benefit payment hereunder
shall be a minor, or shall be in the opinion of the Council legally
incapable of giving valid receipt and discharge for any payment due
him, in lieu thereof, payment may be made to a duly appointed guardian,
or in the absence of such appointment, to such other person or persons
as in the judgment of the Council are caring for or supporting him.
Payments so made will be a complete discharge of the benefits due
under this plan, and payments so made shall be a complete release
and acquittance as to Council's responsibility, under applicable payment
provisions of this article.
D.
Benefits payable under this plan shall not be subject
in any manner to anticipation, assignment or pledge, and any attempt
to anticipate, assign or pledge the same shall be void; and benefits
shall not be in any manner liable for, or subject to the debts, contracts,
liabilities, engagements or torts of any member or beneficiary, nor
be subject to attachment, execution, levy, garnishment or other legal
process.
E.
Notwithstanding other provisions in the plan, no benefits of any kind shall be paid to or on behalf of any member who retires or whose service with the Borough is terminated, if such member is convicted of any felony or of any other criminal act relating to property of the Borough, of its other employees or of its citizens. In the event benefit payments have commenced to a former member who is thereafter convicted of any criminal act noted above, such payments shall cease as soon as the Borough has knowledge of the conviction. In the event of any such conviction, neither the former member nor his beneficiaries shall have any further rights under the plan. In applying the provisions of this subsection to members and former members, the Borough shall act uniformly with respect to all persons in similar situations, however, the provisions of this section shall not apply to cause a forfeiture of any benefit that previously had become vested in a member, beneficiary or other person under § 32-19 of this article.
F.
In the event that (a) the program is terminated prior to date or (b) benefits become payable to any person who was one the Borough's 25 highest-paid members on September l, 1974, or (c) if at any time benefits become payable to one of such 25 highest-paid members and current costs of the plan through September l, 1984, are unfunded, then the amount of the trust fund assets which may be used for the benefit of any one of such 25 highest-paid members shall be limited to the greater of $20,000 or 20% of the first $50,000 of his annual salary multiplied by the number of years between the date of the plan's establishment and the date of termination of the plan, payment of benefits to such persons or failure to meet current costs as aforesaid. Any assets remaining as a result of the application of this restriction shall be included as part of the trust fund for distribution to unrestricted members in conformity with § 32-19 hereof. This provision shall not restrict the current payment of benefits while the plan is in full effect and its full current costs have been met, nor shall it restrict the payment of any pensions or other benefit under the plan withheld for a prior year after all deficits for prior years and full current costs have been met.
G.
The Borough reserves the right to amend the plan from
time to time by ordinance. However, the plan shall exist for the exclusive
benefit of members and their beneficiaries and no amendment shall
serve to divest any member or beneficiary of any benefits which have
become vested at the date of the amendment.
A.
This plan may be terminated by the Borough for any
reason whatsoever. In the event of termination, or upon complete discontinuance
of contributions under the plan by the Borough, all of the assets
then in the trust fund shall be used to purchase annuities or distributed
in the following order:
(1)
To provide for the return of the member's own contributions
with interest to the date of termination of the trust agreement or,
if the member has retired, an amount shall be allocated equal to his
contributions with interest less the retirement income payments made
to him or his beneficiary prior to said termination.
(2)
To provide with respect to each person to whom payments
are being made at the date of termination, whether a member or beneficiary,
and with respect to each member who is beyond his normal retirement
date but has not as yet retired, an amount sufficient to purchase
an immediate or deferred life annuity, as the case may be, from a
life insurance company or companies, to be selected by the Council,
said annuity to provide for payments equal to the accrued retirement
income to which the member or other payee was entitled under the terms
of the plan as of the date of termination (reduced for service less
than 25 years).
(3)
There shall be allocated among the remaining members,
pro rata, to the extent of the value of their respective accrued benefits
at the date of termination of this plan, the remaining assets of the
trust fund but not more than the full current value of such accrued
benefits. If assets are not sufficient to meet the full costs of benefits
for all persons in one of the aforementioned categories, they shall
be applied to members or payees in such category in the proportion
that the cost of accrued benefits for each bears to the total cost
of accrued benefits for all such members or payees.
(4)
If after the satisfaction of all liabilities for benefits accrued to the date of termination of the plan as provided in Subsection A(1), (2) and (3) above, there shall be any remaining assets in the trust fund, such balance shall be returned to the Borough for its own account or may be disposed of by the Borough for the benefit of persons entitled to benefit under the plan in such equitable and proportionate manner as the Borough shall determine.
B.
The application of the trust fund on the basis of § 32-19 shall be calculated by the Council as of the date of termination of the plan or the date on which contributions are completely discontinued. The distribution may be in the form of insured nontransferable annuities or in cash as the Council shall determine in its sole discretion.
Provisions of this article shall be severable
and if any of its provisions shall be held unconstitutional, illegal
or invalid such decision shall not affect the validity of any of the
remaining provisions of this article. It is hereby declared as a legislative
intent that this article would have been adopted had such unconstitutional,
illegal or invalid provision not been included herein.
