Borough of Zelienople, PA Pensions

Incorporation of Internal Revenue Code § 415 by reference. Notwithstanding anything contained in this subsection to the contrary, the limitations, adjustments and other requirements prescribed in this subsection shall at all times comply with the provisions of Code § 415 and the regulations thereunder (as such apply to governmental plans), the terms of which are specifically incorporated herein by reference. Effective for limitation years beginning on and after July 1, 2007, the plan shall comply with the final regulations issued under Code § 415.

Maximum benefit limitations. Notwithstanding any provision of this plan to the contrary, no benefit provided under this plan attributable to contributions of the employer shall exceed, as an annual amount, the amount specified in Code § 415(b)(1)(A), as adjusted pursuant to Code § 415(d), assuming the form of benefit shall be a straight life annuity (with no ancillary benefits). The limitations described in this Subsection L shall be governed by the following conditions and definitions:

Benefits paid or payable in a form other than a straight life annuity (with no ancillary benefits) or where the employee contributes to the plan or makes rollover contributions shall be adjusted on an actuarially equivalent basis in accordance with applicable regulations to determine the limitation contained herein;

In the case of a benefit which commences prior to the attainment of age 62 by the participant, the limitation herein shall be adjusted on an actuarially equivalent basis in accordance with applicable regulations to the amount determined pursuant to this section commencing at age 62; however, in the case of a qualified participant (a participant with respect to whom a period of at least 15 years of service, as a full-time employee of a police or fire department or as a member of the armed forces of the United States, is taken into account in determining the amount of benefit), the limitation contained herein shall not apply;

In the case of a benefit which commences after attainment of age 65 by the participant, the limitation herein shall be adjusted on an actuarially equivalent basis in accordance with applicable regulations to the amount determined commencing at age 65;

Benefits paid to a participant which total less than $10,000 from all defined benefit plans maintained by the employer expressed as an annual benefit shall be deemed not to exceed the limitation of this section, provided that the employer has not at any time maintained a defined contribution plan in which the participant has participated; however, in the case of a participant who is not receiving a disability retirement benefit pursuant to § 48-6B or a survivor benefit pursuant to § 48-7 with fewer than 10 years of participation, the limitation expressed in this Subsection L(2)(d) shall be reduced by 1/10 for each year of participation less than 10, but in no event shall this limitation be less than $1,000;

The limitations expressed herein shall be based upon plan years for calculation purposes, shall be applied to all defined benefit plans maintained by the employer as one defined benefit plan and to all defined contribution plans maintained by the employer as one defined contribution plan, and shall be applied and interpreted consistent with Code § 415 and regulations thereunder as applicable to government plans in general and this plan in particular;

In the case of a survivor benefit under § 48-7 or a disability retirement benefit under § 48-6B, the adjustment under Subsection L(2)(b) hereof shall not apply and the applicable limitation shall be the limitation contained herein without regard to the age of the benefit recipient;

For mandatory employee contributions, the rules set forth in Treasury Regulation 1.415(b)-1(b)(2)(iii) shall apply; and

Effective for distributions with annuity starting dates beginning on or after December 31, 2002, notwithstanding any other plan provisions to the contrary, the applicable mortality table used solely for purposes of adjusting any benefit or limitation under § 415(b)(2)(B), (C), or (D) of the Internal Revenue Code as set forth in the applicable maximum benefit limitations section of the plan is the applicable mortality table under Code § 417(e)(3)(B).

Assignment. The pension benefit payments prescribed herein shall not be subject to attachment, execution, levy, garnishment or other legal process and shall be payable only to the participant or designated beneficiary and shall not be subject to assignment or transfer unless the subject of a domestic relations order, mandated by a court of competent jurisdiction, that clearly provides for proper distribution of a portion of the pension benefit payments to an alternate payee (former spouse of the participant), and does not require any benefit to paid in excess of the available earned and accrued under the plan.

[Amended 4-26-2010 by Ord. No. 802-10]

Incorporation of Code § 415 by reference. Notwithstanding anything contained in Subsection L to the contrary, the limitations, adjustments and other requirements prescribed in Subsection L shall at all times comply with the provisions of Code § 415 and the regulations thereunder (as such apply to governmental plans), the terms of which are specifically incorporated herein by reference.

§ 48-5 Payment of benefits.

Normal form. The normal form for payment of retirement benefits shall be a monthly annuity for the life of the participant; provided, however, that if the death of the retired participant shall occur after the payments commence but prior to the date on which the total amount paid to the participant exceeds the value of the participant's accumulated contributions determined as of the retirement date, the beneficiary shall be eligible to receive a distribution in an amount equal to the participant's accumulated contributions as of the retirement date, less the total amount paid to the participant. If the total amount paid to the participant exceeds the value of the participant's accumulated contributions determined as of the retirement date, there shall be no other amounts due and payable upon the occurrence of the death of the participant.

Optional form. A participant may receive payment of retirement benefits in an optional form which shall be the actuarial equivalent of the normal form. The optional form of payment hereunder shall be as follows:

Joint and fifty-percent survivor annuity. This form shall be paid as a reduced monthly payment to the participant for life, and thereafter monthly payments shall be made in an amount equal to 50% of the amount the participant was receiving to the beneficiary. If the beneficiary predeceases the participant, then upon the occurrence of the death of the participant no additional amounts shall be payable hereunder.

Commencement of benefits. A participant may elect to commence receiving distribution of retirement benefits as of the early, normal or late retirement date, whichever is applicable, or may defer such payments to a date not later than the required date for commencement of benefits determined under Subsection D of this section.

Required distributions.

Distribution prior to death.

Notwithstanding any other provision of this plan, the entire benefit of any participant who becomes entitled to benefits prior to death shall be distributed either:

Not later than the required beginning date.

Over a period beginning not later than the required beginning date and extending over the life of such participant or over the lives of such participant and a designated beneficiary (or over a period not extending beyond the life expectancy of such participant, or the joint life expectancies of such participant and a designated beneficiary).

If a participant who is entitled to benefits under this plan dies prior to the date when the entire interest has been distributed after distribution of benefits has begun in accordance with Subsection D(1)(a)[2] above, the remaining portion of such benefit shall be distributed at least as rapidly as under the method of distribution being used under Subsection D(1)(a)[2] as of the date of death.

If a participant who is entitled to benefits under this plan dies before distribution of the benefit has begun, the entire interest of such employee shall be distributed within five years of the death of such employee, unless the following sentence is applicable. If any portion of the employee's interest is payable to (or for the benefit of) a designated beneficiary, such portion shall be distributed over the life of such designated beneficiary (or over a period not extending beyond the life expectancy of such beneficiary), and such distributions begin not later than one year after the date of the employee's death or such later date as provided by regulations issued by the Secretary of the Treasury, then for purposes of the five-year rule set forth in the preceding sentence, the benefit payable to the beneficiary shall be treated as distributed on the date on which such distributions begin. Provided, however, that, notwithstanding the preceding sentence, if the designated beneficiary is the surviving spouse of the participant, then the date on which distributions are required to begin shall not be earlier than the date upon which the employee would have attained age 70 1/2 and, further provided, if the surviving spouse dies before the distributions to such spouse begin, this Subsection D(2) shall be applied as if the surviving spouse were the employee.

For purposes of this Subsection D, the following definitions and procedures shall apply:

"Required beginning date" shall mean April 1 of the calendar year following the later of the calendar year in which the employee attains age 70 1/2 or the calendar year in which the employee retires.

The phrase "designated beneficiary" shall mean any individual designated by the employee under this plan according to its rules.

Any amount paid to a child shall be treated as if it had been paid to the surviving spouse if such amount will become payable to the surviving spouse upon such child's reaching majority (or other designated event permitted under regulations issued by the Secretary of the Treasury).

For purposes of this Subsection D, "Required distributions," the life expectancy of an employee and/or the employee's spouse (other than in the case of a life annuity) may be redetermined, but not more frequently than annually.

General rules. The requirements of this § 48-5D will take precedence over any inconsistent provisions of the plan. All distributions required under this § 48-5D will be determined and made in accordance with § 401(a)(9) of the Internal Revenue Code and the Treasury regulations thereunder and the employer's good faith interpretation of such Code and regulations.

[Amended 4-26-2010 by Ord. No. 802-10]

Change of benefit election. Any election permitted hereunder may be revoked or a new election may be made within any applicable election period on a form and in a manner prescribed by the plan administrator and without the knowledge or consent of any applicable beneficiary.

Personal right of participant. Each participant's right to receive any benefits hereunder is personal and shall expire upon the death of the participant. No heir, legatee, devisee, beneficiary, assignee or other person claiming by or through a participant shall have any interest in any benefits hereunder unless clearly and expressly so provided by the terms of this plan. A participant's election, failure to make an election, or revocation of an election hereunder shall be final and binding on all persons.

Direct rollovers.

[Amended 4-26-2010 by Ord. No. 802-10]

This subsection applies to distributions made on or after December 31, 2001. Notwithstanding any provision of the plan to the contrary that would otherwise limit a distributee's election under this subsection, a distributee may elect, at the time and in the manner prescribed by the plan administrator, to have any portion of an eligible rollover distribution that is equal to at least $500 paid directly to an eligible retirement plan specified by the distributee in a direct rollover. For purposes of this subsection, the following definitions shall apply:

DIRECT ROLLOVER

A payment by the plan to the eligible retirement plan specified by the distributee.

Effective January 1, 2008, direct rollovers may be made to a Roth IRA described in § 408A of the Internal Revenue Code to the extent that the applicable requirements of Code § 408A are satisfied with respect to any direct rollover to such Roth IRA.

ELIGIBLE ROLLOVER DISTRIBUTION

This subsection applies to distributions made on or after January 1, 2010. Notwithstanding any provision of the plan to the contrary that would otherwise limit a nonspouse beneficiary's election under this subsection, a nonspouse beneficiary may elect to have any portion of a plan distribution (that is payable to such nonspouse beneficiary due to a participant's death) paid in a direct trustee-to-trustee transfer to an individual retirement account described in Code § 408(a) or to an individual retirement annuity described in § 408(b) (other than an endowment contract) that has been established for the purposes of receiving the distribution on behalf of such nonspouse beneficiary. For these purposes, a "nonspouse beneficiary" is an individual who is a "designated beneficiary" [as defined by § 401(a)(9)(E) of the Internal Revenue Code] of a participant and who is not the surviving spouse of such participant.

DISTRIBUTEE

Includes an employee or former employee. In addition, the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code § 414(p), are distributees with regard to the interest of the spouse or former spouse.

ELIGIBLE RETIREMENT PLAN

A qualified trust described in Code § 401(a), an individual retirement account described in Code § 408(a), an individual retirement annuity described in Code § 408(b), an annuity plan described in Code § 403(a), an annuity contract described in Code § 403(b), an eligible plan under § 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this plan.

Any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include; any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of 10 years or more; any distribution to the extent such distribution is required under Code § 401(a)(9); and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).

For purposes of the direct rollover provisions in this section of the plan, a portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions that are not includible in gross income. However, such portion may be paid only to an individual retirement account or annuity described in § 408(a) or (b) of the Code, or to a qualified defined contribution plan [effective for distributions on or after January 1, 2007, any qualified trust or Code § 403(b) plan] that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

§ 48-6 Disability retirement.

Disability retirement. A participant who shall incur a total and permanent disability before attaining normal retirement age shall be entitled to a disability retirement benefit as of the disability date.

Disability retirement benefit. A participant who shall have completed at least 10 years of service and who shall incur a total and permanent disability shall be entitled to a disability retirement benefit which shall be a monthly benefit equal to the participant's accrued benefit determined as of the first day of the month immediately preceding the last day on which the participant was actively employed by the employer.

Payment of disability benefits. Disability payments shall be made monthly as of the first day of each month, commencing as of the disability date and shall continue until the earliest of the death of the participant, cessation of total and permanent disability or attainment of normal retirement age (such a participant who shall attain normal retirement age shall thereafter receive a normal retirement benefit).

Verification of disability. The plan administrator shall in its sole discretion determine whether a participant shall have incurred a total and permanent disability. The plan administrator shall rely on the report of a physician acceptable to the plan administrator. If the plan administrator shall determine that a participant who is totally and permanently disabled has recovered sufficiently to resume active employment or if a participant refuses to undergo a medical examination as directed by the plan administrator (such a medical examination may not be required more frequently than once in any given twelve-month period), the payment of disability retirement benefits shall cease.

Cessation of disability.

A participant who is receiving payment of disability retirement benefits under this plan must notify the plan administrator of any change which may cause a cessation of entitlement to receipt of such benefits hereunder. If a participant fails to provide immediate notice to the plan administrator of any such change in status and continues to receive payment of benefits hereunder to which the participant is not entitled, then the plan may take whatever action is necessary to recover any amount of improperly paid amounts, including legal action or offsetting such amounts against any future payments of retirement or other benefits under the plan, including the costs of such actions.

A participant who shall fail to return within three months to employment as an employee of the employer upon cessation of total and permanent disability prior to attainment of normal retirement age shall be deemed to have terminated employment as of the disability date, shall not be entitled to any distribution of accumulated contributions pursuant to § 48-8E of this article unless the amount of accumulated contributions determined as of the disability date exceeds the total amount of disability benefits paid under the plan, and shall not be entitled to any other benefits under the plan on account of any aggregate service as of the disability date. If the amount of accumulated contributions determined as of the disability date exceeds the total amount of disability benefits paid to the participant, the participant shall be entitled to receive a distribution in an amount equal to the accumulated contributions determined as of the disability date minus the total amount of disability benefits paid under the plan.

§ 48-7 Death benefits.

Death benefit. Except as hereinafter set forth, no benefit shall be payable hereunder upon or by reason of the death of any participant.

Death of participant prior to retirement. In the event that a participant shall die prior to the receipt of any benefits under the plan, the beneficiary shall be entitled to the amount of the accumulated contributions of the participant as of the first day of the month during which the death shall occur.

Death of participant after retirement. In the event that a participant shall die after the receipt of any benefit payments under the plan, the beneficiary shall be entitled to a benefit only to the extent and in the manner consistent with the provisions of the form of payment of benefits selected by the participant pursuant to the provisions of this plan.

Veterans' survivor benefits. Notwithstanding anything else in the plan to the contrary, in the case of the death of a participant who dies on or after January 1, 2007, while performing qualified military service [as defined in Code § 414(u)], the survivors of the participant are entitled to any additional benefits under the plan (if any) had the participant resumed and then terminated employment on account of death.

[Added 4-26-2010 by Ord. No. 802-10]

§ 48-8 Termination of employment.

Rights of terminated employees. A participant who shall cease to be an employee, except as otherwise hereinbefore provided, shall have all interest and rights under this plan limited to those contained in the following subsections of this section.

Vested benefits upon termination. A participant who shall have completed 10 years of service with the employer and who ceases to be an employee of the employer for any reason other than death, retirement or total and permanent disability shall be entitled to a deferred vested benefit equal to the participant's accrued benefit as of the date when employment terminates. A participant shall be eligible to receive benefit payments upon attainment of what would have been the participant's normal retirement date or early retirement date, pursuant to § 48-4B and E, determined as of the date on which employment ceased.

Forfeiture upon death. A participant who terminates employment with the employer at a time when such participant is not vested in any portion of the accrued benefit derived from employer contributions shall cease to be a participant hereunder and shall not be entitled to any benefits under the plan derived from employer contributions. Payment of a participant's vested retirement benefit depends upon the participant's continued survival to the date of actual retirement on either an early retirement date or normal retirement date hereunder, or such participant's attainment of his normal retirement age.

Application of forfeitures. Amounts forfeited by any participant may not be used to increase the benefits which other participants would otherwise receive under the plan, but they shall be used only to reduce the employer's contributions to the plan.

Refund of accumulated contributions. A participant whose employment with the employer has been terminated for any reason other than retirement, death or total and permanent disability and who is not entitled to a deferred vested benefit pursuant to Subsection B of this section, or the participant's beneficiary if the participant died prior to receiving payment of his deferred vested benefit, shall be entitled to receive a refund of the participant's accumulated contributions payable in one cash lump-sum payment as soon as practicable following the participant's termination of employment, or in the case of payment to a beneficiary, as soon as practicable following the participant's death.

§ 48-9 Administration.

Plan administrator. The Council may appoint a pension plan committee or an individual to administer the provisions of the plan. The plan administrator shall have the power and authority to do all acts and to execute, acknowledge and deliver all instruments necessary to implement and effectuate the purpose of this plan. The plan administrator may delegate authority to act on its behalf to any persons it deems appropriate. If the Council does not appoint a plan administrator, the Council shall be the plan administrator.

Pension committee. If a pension plan committee shall be appointed, it shall consist of at least three members chosen by the Council. Each member may resign by delivering written notice to the Council and to other members of the committee. Vacancies on the committee shall be filled by the Council; provided, however, that the remaining members of the committee shall have full power to act pending the filling of such vacancies.

Authority and duties of the plan administrator.

The plan administrator shall have full power and authority to do whatever shall, in its judgment, be reasonably necessary for the proper administration and operation of the plan. The interpretation or construction placed upon any term or provision of the plan by the plan administrator or any action of the plan administrator taken in good faith shall, upon the Board's review and approval thereof, be final and conclusive upon all parties hereto, whether employees, participants or other persons concerned. By way of specification and not limitation and except as specifically limited hereafter, the plan administrator is authorized:

To construe this plan.

To determine all questions affecting the eligibility of any employee to participate herein.

To compute the amount and source of any benefit payable hereunder to any participant or beneficiary.

To authorize any and all disbursements.

To prescribe any procedure to be followed by any participant and/or other person in filing any application or election.

To prepare and distribute, in such manner as may be required by law or as the plan administrator deems appropriate, information explaining the plan.

To require from the employer or any participant such information as shall be necessary for the proper administration of the plan.

To appoint and retain any individual to assist in the administration of the plan, including such legal, clerical, accounting and actuarial services as may be required by any applicable law or laws.

The plan administrator shall have no power to add to, subtract from or modify the terms of the plan or change or add to any benefits provided by the plan, or to waive or fail to apply any requirements of eligibility for benefits under the plan. Further, the plan administrator shall have no power to adopt, amend or terminate the plan, to select or appoint any trustee, or to determine or require any contributions to the plan, said powers being exclusively reserved to the Council.

Pension plan committee organization. The committee, if one is appointed, may organize itself in any manner deemed appropriate to effectuate its purposes hereunder, subject to the following:

The committee shall act by a majority of its members at the time in office, and such action may be taken either by vote at a meeting or in writing without a meeting.

The committee shall, from time to time, appoint a chairman, a secretary who may, but need not, be a committee member and such other agents as it may deem advisable.

The committee may, from time to time, authorize any one or more of its members to execute any document or documents, including any application, request, certificate, notice, consent, waiver or direction, and shall notify the Council in writing of the name or names of the member or members so authorized. In the absence of a designation, the chairman shall be deemed to be so authorized. Any trustee or other fiduciary appointed hereunder shall accept and be fully protected in relying upon any document executed by the designated member or members (or the chairman in the absence of a designation) as representing a valid action by the committee until the committee shall file with such fiduciary a written revocation of such designation.

The committee or its delegate shall maintain and keep such records as are necessary for the efficient operation of the plan or as may be required by any applicable law, regulation or ruling and shall provide for the preparation and filing of such forms or reports as may be required to be filed with any governmental agency or department and with the participants and/or other persons entitled to benefits under the plan.

Plan administrator costs. The plan administrator shall serve without compensation for services unless otherwise agreed by the Council in writing. All reasonable expenses incident to the functioning of the plan administrator, including, but not limited to, fees of accountants, counsel, actuaries and other specialists, and other costs of administering the plan, may be paid from the pension fund upon approval by the Council to the extent permitted under applicable law and not otherwise paid by the employer.

Hold harmless. No member of the Council nor the plan administrator nor the enrolled actuary nor any other person involved in the administration of the plan shall be liable to any person on account of any act or failure to act which is taken or omitted to be taken in good faith in performing their respective duties under the terms of this plan. To the extent permitted by law, the employer shall, and hereby does agree to, indemnify and hold harmless each person and each successor and each of any such individual's heirs, executors and administrators, and the plan administrator's delegates and appointees (other than any person, bank, firm or corporation which is independent of the employer and which renders services to the plan for a fee) from any and all liability and expenses, including counsel fees, reasonably incurred in any action, suit or proceeding to which he is or may be made a party by reason of being or having been a member, delegate or appointee of the plan administrator, except in matters involving criminal liability, intentional or willful misconduct. If the employer purchases insurance to cover claims of a nature described above, then there shall be no right of indemnification except to the extent of any deductible amount under the insurance coverage or to the extent of the amount the claims exceed the insured amount.

Approval of benefits. The plan administrator shall review and approve or deny any application for retirement benefits within 30 days following receipt thereof or within such longer time as may be necessary under the circumstances. Any denial of an application for retirement benefits shall be in writing and shall specify the reason for such denial.

Appeal procedure. Any person whose application for retirement benefits is denied, who questions the amount of benefit paid, who believes a benefit should have commenced which did not so commence or who has some other claim arising under the plan ("claimant"), shall first seek a resolution of such claim under the procedure hereinafter set forth.

Any claimant shall file a notice of the claim with the plan administrator which shall fully describe the nature of the claim. The plan administrator shall review the claim and make an initial determination approving or denying the claim.

If the claim is denied in whole or in part, the plan administrator shall, within 90 days (or such other period as may be established by applicable law) from the time the application is received, mail notice of such denial to the claimant. Such ninety-day period may be extended by the plan administrator if special circumstances so require for up to 90 additional days by the plan administrator's delivering notice of such extension to the claimant within the first ninety-day period. Any notice hereunder shall be written in a manner calculated to be understood by the claimant and, if a notice of denial, shall set forth: (i) the specific plan provisions on which the denial is based; (ii) an explanation of additional material or information, if any, necessary to perfect such claim and a statement of why such material or information is necessary; and (iii) an explanation of the review procedure.

Upon receipt of notice denying the claim, the claimant shall have the right to request a full and fair review by the Council of the initial determination. Such request for review must be made by notice to the Council within 60 days of receipt of such notice of denial. During such review, the claimant or a duly authorized representative shall have the right to review any pertinent documents and to submit any issues or comments in writing. The Council shall, within 60 days after receipt of the notice requesting such review (or in special circumstances, such as where the Council in its sole discretion holds a hearing, within 120 days of receipt of such notice), submit its decision in writing to the person or persons whose claim has been denied. The decision shall be final, conclusive and binding on all parties, shall be written in a manner calculated to be understood by the claimant and shall contain specific references to the pertinent plan provisions on which the decision is based.

Any notice of a claim questioning the amount of a benefit in pay status shall be filed within 90 days following the date of the first payment which would be adjusted if the claim is granted unless the plan administrator allows a later filing for good cause shown.

A claimant who does not submit a notice of a claim or a notice requesting a review of a denial of a claim within the time limitations specified above shall be deemed to have waived such claim or right to review.

§ 48-10 Pension fund.

Operation of the pension fund.

The Council is hereby authorized to hold and supervise the investment of the assets of the pension fund, subject to the provisions of the laws of the Commonwealth of Pennsylvania and of this plan and any amendment thereto.

The pension fund shall be used to pay benefits as provided in the plan and, to the extent not paid directly by the employer, to pay the expenses of administering the plan pursuant to authorization by the employer.

The pension fund will consist of all funds held by the employer under the plan, including contributions made pursuant to the provisions hereof and the investments, reinvestments and proceeds thereof. The pension fund shall be held, managed and administered pursuant to the terms of the plan. Except as otherwise expressly provided in the plan, the employer has exclusive authority and discretion to manage and control the pension fund assets. The employer may, however, appoint a trustee, custodian and/or investment manager, at its sole discretion.

Powers and duties of employer. With respect to the pension fund, the employer shall have the following powers, rights and duties, in addition to those vested in it elsewhere in the plan or by law, unless such duties are delegated:

To retain in cash so much of the pension fund as it deems advisable and to deposit any cash so retained in any bank or similar financial institution (including any such institution which may be appointed to serve as trustee hereunder), without liability for interest thereon.

To invest and reinvest the principal and income of the fund and keep said fund invested, without distinction between principal and income, in securities which are at the time legal investments for fiduciaries under the Pennsylvania Fiduciaries Investment Act, or as the same may be subsequently modified or amended.

To sell property held in the fund at either public or private sale for cash or on credit at such times as it may deem appropriate; to exchange such property; to grant options for the purchase or exchange thereof.

To consent to and participate in any plan of reorganization, consolidation, merger, extension or other similar plan affecting property held in the fund; to consent to any contract, lease, mortgage, purchase, sale or other action by any corporation pursuant to any such plan.

To exercise all conversion and subscription rights pertaining to property held in the fund.

(6)

To exercise all voting rights with respect to property held in the fund and, in connection therewith, to grant proxies, discretionary or otherwise.

(7)

To place money at any time in a deposit bank deemed to be appropriate for the purposes of this plan no matter where situated, including in those cases where a bank has been appointed to serve as trustee hereunder, the savings department of its own commercial bank.

(8)

In addition to the foregoing powers, the employer shall also have all of the powers, rights and privileges conferred upon trustees by the Pennsylvania Fiduciaries Investment Act, or as the same may be subsequently modified or amended, and the power to do all acts, take all proceedings and execute all rights and privileges, although not specifically mentioned herein, as the employer may deem necessary to administer the pension fund.

(9)

To maintain and invest the assets of this plan on a collective and co-mingled basis with the assets of other pension plans maintained by the employer, provided that the assets of each respective plan shall be accounted for and administered separately.

(10)

To invest the assets of the pension fund in any collective co-mingled trust fund maintained by a bank or trust company, including any bank or trust company which may act as a trustee hereunder. In this connection, the co-mingling of the assets of this plan with assets of other eligible participating plans through such a medium is hereby specifically authorized. Any assets of the plan which may be so added to such collective trusts shall be subject to all of the provisions of the applicable declaration of trust, as amended from time to time, which declaration, if required by its terms or by applicable law, is hereby adopted as part of the plan to the extent of the participation in such collective or co-mingled trust fund by the plan.

(11)

To make any payment or distribution required or advisable to carry out the provisions of the plan, provided that, if a trustee is appointed by the employer, such trustee shall make such distribution only at the direction of the employer.

(12)

To compromise, contest, arbitrate, enforce or abandon claims and demands with respect to the plan.

(13)

To retain any funds or property subject to any dispute without liability for the payment of interest thereon, and to decline to make payment or delivery thereof until final adjudication is made by a court of competent jurisdiction.

(14)

To pay, and to deduct from and charge against the pension fund, any taxes which may be imposed thereon, whether with respect to the income, property or transfer thereof, or upon or with respect to the interest of any person therein, which the fund is required to pay; to contest, in its discretion, the validity or amount of any tax, assessment, claim or demand which may be levied or made against or in respect of the pension fund, the income, property or transfer thereof, or in any matter or thing connected therewith.

(15)

To appoint any persons or firms (including, but not limited to, accountants, investment advisors, counsel, actuaries, physicians, appraisers, consultants, professional plan administrators and other specialists) or otherwise act to secure specialized advice or assistance, as it deems necessary or desirable in connection with the management of the fund; to the extent not prohibited by applicable law, the employer shall be entitled to rely conclusively upon and shall be fully protected in any action or omission taken by it in good faith reliance upon the advice or opinion of such persons or firms, provided such persons or firms were prudently chosen by the employer, taking into account the interests of the participants and beneficiaries and with due regard to the ability of the persons or firms to perform their assigned functions.

(16)

To retain the services of one or more persons or firms for the management of (including the power to acquire and dispose of) all or any part of the fund assets, provided that each of such persons or firms is registered as an investment advisor under the Investment Advisors Act of 1940; is a bank (as defined in that act); or is an insurance company qualified to manage, acquire or dispose of pension trust assets under the laws of more than one state; in such event, the employer shall follow the directions of such investment manager or managers with respect to the acquisition and disposition of fund assets but shall not be liable for the acts or omissions of such investment managers, nor shall it be under any obligation to review or otherwise manage any fund assets which are subject to the management of such investment manager or managers. If the employer appoints a trustee, the trustee shall not be permitted to retain such an investment manager except with the express written consent of the employer.

Common investments. The employer shall not be required to make separate investments for individual participants or to maintain separate investments for each participant's account, but may invest contributions and any profits or gains therefrom in common investments.

Compensation and expenses of appointed trustee. If a trustee is appointed, the trustee shall be entitled to such reasonable compensation as shall from time to time be agreed upon by the employer and the trustee, unless such compensation is prohibited by law. Such compensation, and all expenses reasonably incurred by the trustee in carrying out its functions, shall constitute a charge upon the employer or the pension fund, which may be executed at any time after 30 days' written notice to the employer. The employer shall be under no obligation to pay such costs and expenses, and in the event of its failure to do so, the trustee shall be entitled to pay the same or to reimburse itself for the payment thereof from the pension fund.

Periodic accounting. If a trustee is appointed, the pension fund shall be evaluated annually or at more frequent intervals by the trustee and a written accounting rendered as of each fiscal year end of the fund, and as of the effective date of any removal or resignation of the trustee, and such additional dates as requested by the employer, showing the condition of the fund and all receipts, disbursements and other transactions effected by the trustee during the period covered by the accounting, based on fair market values prevailing as of such date.

Value of the pension fund. All determinations as to the value of the assets of the pension fund and as to the amount of the liabilities thereof shall be made by the employer or its appointed trustee, whose decisions shall be final and conclusive and binding on all parties hereto, the participants and beneficiaries and their estates. In making any such determination, the employer or trustee shall be entitled to seek and rely upon the opinion of or any information furnished by brokers, appraisers and other experts and shall also be entitled to rely upon reports as to sales and quotations, both on security exchanges and otherwise as contained in newspapers and in financial publications.

§ 48-11 Amendment and termination.

Amendment of the plan. The employer may amend this plan at any time or from time to time by an instrument in writing executed in the name of the employer under its municipal seal by officers duly authorized to execute such instrument and delivered to the Council; provided, however:

No amendment shall deprive any participant or any beneficiary of a deceased participant of any of the benefits to which each is entitled under this plan with respect to contributions previously made.

No amendment shall provide for the use of funds or assets held under this plan other than for the benefit of employees, and no funds contributed to this plan or assets of this plan shall, except as provided in Subsection E of this section, ever revert to or be used or enjoyed by the employer.

No amendment to the plan which provides for a benefit modification shall be made unless the cost estimate described in § 48-12C of this article has been prepared and presented to the Council in accordance with the Act.

Termination of the plan. The employer shall have the power to terminate this plan in its entirety at any time by an instrument in writing executed in the name of the employer.

Automatic termination of contributions. Subject to the provisions of the applicable law governing financially distressed municipalities, the liability of the employer to make contributions to the pension fund shall automatically terminate upon liquidation or dissolution of the employer, upon its adjudication as a bankrupt, or upon the making of a general assignment for the benefit of its creditors.

Distribution upon termination.

In the event of the termination of the plan, all amounts of vested benefits accrued by the affected participants as of the date of such termination, to the extent funded on such date, shall be nonforfeitable hereunder. In the event of termination of the plan, the employer shall direct either: (i) that the plan administrator continue to hold the vested accrued benefits of participants in the pension fund in accordance with the provisions of the plan (other than those provisions related to forfeitures) without regard to such termination until all funds have been distributed in accordance with the provisions; or (ii) that the plan administrator immediately distribute to each participant an amount equal to the vested accrued benefit to the date.

If there are insufficient assets in the pension fund to provide for all vested accrued benefits as of the date of plan termination, priority shall first be given to the distribution of any amounts attributable to mandatory or voluntary employee contributions before assets are applied to the distribution of any vested benefits attributable to other sources hereunder.

All other assets attributable to the terminated plan shall be distributed and disposed of in accordance with the provisions of applicable law and the terms of any instrument adopted by the employer which effects such termination.

Residual assets. If all liabilities to vested participants and any others entitled to receive a benefit under the terms of the plan have been satisfied and there remain any residual assets in the pension fund, such residual assets remaining shall be returned to the employer insofar as such return does not contravene any provision of law, and any remaining balance in excess of employer contributions shall be returned to the Commonwealth of Pennsylvania.

Exclusive benefit rule. In the event of the discontinuance and termination of the plan as provided herein, the employer shall dispose of the pension fund in accordance with the terms of the plan and applicable law; at no time prior to the satisfaction of all liabilities under the plan shall any part of the corpus or income of the pension fund, after deducting any administrative or other expenses properly chargeable to the pension fund, be used for or diverted to purposes other than for the exclusive benefit of the participants in the plan, their beneficiaries or their estates.

§ 48-12 Provisions to comply with Municipal Pension Plan Funding Standard and Recovery Act of 1984.

Actuarial valuations.

The plan's actuary shall perform an actuarial valuation at least biennially unless the employer is applying or has applied for supplemental state assistance pursuant to § 603 of the Act,[1] whereupon actuarial valuation reports shall be made annually. Such biennial actuarial valuation report shall be made as of the beginning of each plan year occurring in an odd-numbered calendar year, beginning with the year 1985. Any such actuarial valuation shall be prepared and certified by an approved actuary, as such term is defined in the Act.

Editor's Note: See 53 P.S. § 895.603.

The expenses attributable to the preparation of any actuarial valuation report or investigation required by the Act or any other expense which is permissible under the terms of the Act and which are directly associated with administering the plan shall be an allowable administrative expense payable from the assets of the pension fund. Such allowable expenses shall include, but not be limited to, the following:

Investment costs associated with obtaining authorized investments and investment management fees.

Accounting expenses.

Premiums for insurance coverage on fund assets.

Reasonable and necessary counsel fees incurred for advice or to defend the fund.

ACCUMULATED CONTRIBUTIONS

Legitimate travel and education expenses for plan officials; provided, however, that the municipal officials of the employer, in their fiduciary role, shall monitor the services provided to the plan to ensure that the expenses are necessary, reasonable and benefit the plan; and, further provided, that the plan administrator shall document all such expenses item by item and, where necessary, hour by hour.

Duties of chief administrative officer. Such actuarial reports shall be prepared and filed under the supervision of the chief administrative officer. The chief administrative officer shall determine the financial requirements of the plan on the basis of the most recent actuarial report and shall determine the minimum municipal obligation of the employer with respect to funding the plan for any given plan year. The chief administrative officer shall submit the financial requirements of the plan and the minimum municipal obligation of the employer to the Council annually and shall certify the accuracy of such calculations and their conformance with the Act.

Benefit plan modifications. Prior to the adoption of any benefit plan modification by the employer, the chief administrative officer shall provide to the Council a cost estimate of the proposed benefit plan modification. Such estimate shall be prepared by an approved actuary, which estimate shall disclose to the Council the impact of the proposed benefit plan modification on the future financial requirements of the plan and the future minimum municipal obligation of the employer with respect to the plan.

§ 48-13 Miscellaneous provisions.

Plan not a contract of employment. No employee of the employer nor anyone else shall have any rights whatsoever against the employer or the plan administrator as a result of this plan except those expressly granted hereunder. Nothing herein shall be construed to give any employee the right to remain in the employ of the employer.

Masculine/feminine; singular/plural. For purposes of this plan, the masculine shall be read for the feminine and the singular shall be read for the plural, and vice versa, wherever the person or context shall plainly so require.

Construction of document. This plan may be executed and/or conformed in any number of counterparts, each of which shall be deemed an original and shall be construed and enforced according to the laws of the Commonwealth of Pennsylvania, excepting such commonwealth's choice of law rules.

Headings. The headings of articles are included solely for convenience of reference, and if there be any conflict between such headings and the text of the plan, the text shall control.

Severability of provisions. In case any provisions of this plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of this plan, and the plan shall be construed and enforced as if said illegal and invalid provisions had never been inserted therein.

Incapacity of participant. If any participant shall be physically or mentally incapable of receiving or acknowledging receipt of any payment of pension benefits hereunder, the plan administrator, upon the receipt of satisfactory evidence that such participant is so incapacitated and that another person or institution is maintaining him, may provide for such payment of pension benefits hereunder to such person or institution so maintaining him, and any such payments so made shall be deemed for every purpose to have been made to such participant.

Liability of officers of the plan administrator and/or employer. Subject to the provisions of the Act and unless otherwise specifically required by other applicable laws, no past, present or future officer of the employer shall be personally liable to any participant, beneficiary or other person under any provision of the plan.

Assets of the fund. Nothing contained herein shall be deemed to give any participant or beneficiary any interest in any specific property of the pension fund or any right except to receive such distributions as are expressly provided for under the plan.

Pension fund for sole benefit of participants. The income and principal of the pension fund are for the sole use and benefit of the participants covered hereunder and, to the extent permitted by law, shall be free, clear and discharged from and are not to be in any way liable for debts, contracts or agreements, now contracted or which may hereafter be contracted, and from all claims and liabilities now or hereafter incurred by any participant or beneficiary.

Article II Police Pension Plan

[Adopted 4-26-2010 by Ord. No. 803-10]

§ 48-14 Definitions.

The following words and phrases as used in this article shall have the meaning set forth in this section, unless a different meaning is otherwise clearly required by the context:

ACCRUED BENEFIT

As of any given date, the benefit determined under § 48-17B, calculated on the basis of final monthly average salary as of the date of determination and multiplied by a fraction, the numerator of which shall be the participant's aggregate service determined as of such date and the denominator of which shall be the projected aggregate service of the participant as if the participant continues in employment until attainment of normal retirement age. Notwithstanding anything contained herein to the contrary, in no event shall the fraction exceed one.

The accrued benefit shall include any service increment benefit determined pursuant to § 48-17D attributable to the participant's aggregate service as of the determination date. The accrued benefit shall not exceed the maximum limitation, determined as of the date of computation, provided under § 48-17F. All accrued benefits are subject to all applicable limitations, reductions, offsets and actuarial adjustments provided pursuant to the terms of the plan prior to the actual payment thereof.

The total amount contributed by any participant to this fund or its predecessor by way of payroll deduction or otherwise, plus interest credited at 4% per annum. Interest shall be credited in the form of a compound interest rate from the midpoint of the plan year during which the contributions were paid to the first day of the month preceding the date on which a participant's employment terminates.

ACT

The Municipal Pension Plan Funding Standard and Recovery Act which was enacted as Act 205 of 1984, as amended, 53 P.S. § 895.101 et seq.

ACTUARIAL EQUIVALENT

ACTUARY

The person, partnership, association or corporation which at any given time is serving as actuary, provided that such actuary must be an "approved actuary" as defined in the Act.

AGGREGATE SERVICE

The total period or periods of the participant's employment with the employer whether or not interrupted. Notwithstanding the preceding sentence, should any such participant receive a distribution of accumulated contributions with respect to a period of employment for which employee contributions are required, such period of employment shall not be included in aggregate service thereafter unless, at the commencement of the next period of employment, the participant repays to the fund the amount of such distribution with interest. For purposes of this definition, interest shall accrue as of the date the employee receives a distribution of accumulated contributions and shall be computed at the same rate and in the same manner as described in the definition of "accumulated contributions." Aggregate service shall be calculated in completed years and shall not include any period of a voluntary leave of absence without pay.

ATTENDING COLLEGE

The eligible children are registered at an accredited institution of higher learning and are carrying a minimum course load of seven credit hours per semester.

BENEFICIARY

The person or entity designated by the participant to receive a distribution of the participant's accumulated contributions should the participant die prior to becoming entitled to a retirement benefit. In the event that a participant does not designate a beneficiary or the beneficiary does not survive the participant, the beneficiary shall be the surviving spouse, or if there is no surviving spouse, the issue, per stirpes, or if there is no surviving issue, the estate; but if no personal representative has been appointed, to those persons who would be entitled to the estate under the intestacy laws of the Commonwealth of Pennsylvania if the participant had died intestate and a resident of Pennsylvania.

CHIEF ADMINISTRATIVE OFFICER

The person designated by the Borough who has the primary responsibility for the execution of the administrative affairs for the plan.

CODE

The Internal Revenue Code of 1986, as amended.

COMMITTEE

The Police Pension Committee as determined pursuant to § 48-21B.

COMMONWEALTH

The Commonwealth of Pennsylvania.

COMPENSATION

[Amended 10-14-2013 by Ord. No. 831-13; 6-12-2017 by Ord. No. 854-17; 3-26-2018 by Ord. No. 860-18]

The total remuneration of the employee, whether salary or hourly wages, including overtime pay, holiday pay, longevity pay and any other form of compensation paid by the employer for police services rendered, such as workers' compensation or Pennsylvania Heart and Lung Act benefits. Compensation shall be limited on an annual basis to the amount specified for government plans pursuant to Code § 401(a)(17), as adjusted under Code § 415(d).

Effective January 1, 2005, compensation shall mean the total remuneration of the employee, whether salary or hourly wages, including overtime pay, holiday pay, longevity pay and any other form of compensation paid by the employer for police services rendered, such as workers' compensation or Pennsylvania Heart and Lung Act benefits, excluding any stipends paid to the employee by the employer and any pay generated from participation in the Butler County Joint Drug Task Force.

Compensation shall only include for participants hired after January 1, 2005, base pay, shift pay, vacation pay, sick pay, sick day buy-back pay, personal day pay, and workers' compensation or Pennsylvania Heart and Lung Act benefits. Overtime pay and any pay generated from participation in the Butler County Joint Drug Task Force shall not be included in compensation for participants hired after January 1, 2005.

Compensation shall only include for participants hired on or after January 1, 2017, base pay, shift pay, vacation pay, sick pay, personal day pay, and workers' compensation or Pennsylvania Heart and Lung Act benefits. Sick day buy-back shall be excluded. Overtime pay and any pay generated from participation in the Butler County Joint Drug Task Force shall not be included in compensation for participants hired after January 1, 2017.

COUNCIL

The Council of the Borough of Zelienople.

DISABILITY DATE

The date when a participant is determined by the plan administrator to be incapacitated due to total and permanent disability, or the date when the participant's employment terminates due to such total and permanent disability, if later.

EARLY RETIREMENT AGE

Shall be effective January 1, 2017, continuing through November 30, 2020, and shall mean the date on which the participant has completed 20 years of aggregate service and reached the age of 60.

[Added 6-12-2017 by Ord. No. 854-17]

EMPLOYEE

Any individual employed by the employer on a regular, full-time basis as a police officer of the employer's police force.

EMPLOYER

Borough of Zelienople, Butler County, Pennsylvania.

EMPLOYMENT

For the purpose of determining aggregate service:

The period of time for which an employee is directly or indirectly compensated or entitled to compensation by the employer for the performance of duties as a police officer;

Any period of time for which an employee is paid, either directly by the employer or through a program to which the employer has made contributions on behalf of the employee, a fixed, periodic amount in the nature of salary continuation payments for reasons other than the performance of duties (such as vacation, holidays, sickness, entitlement to benefits under workers' compensation or similar laws);

Any period during which an employee is entitled to disability benefits under this plan, provided that the employee returns to employment within three months of the date on which it is determined that the employee is no longer totally and permanently disabled if such determination occurs prior to the date a participant attains normal retirement age;

Any period of voluntary or involuntary military service with the armed forces of the United States of America, provided that the participant has been employed as a regular full-time member of the employer's police force for a period of at least six months immediately prior to the period of military service and the participant returns to employment within six months following discharge from military service or within such longer period during which employment rights are guaranteed by applicable law or under the terms of a collective bargaining agreement with the employer; and

Any period of voluntary or involuntary military service with the armed forces of the United States of America, not to exceed a total of five years, which occurred prior to the date on which a participant first became employed as an employee of the employer, provided that the participant shall purchase such credit and that such participant is not entitled to receive, eligible to receive or is receiving retirement benefits for such military service under a retirement system administered and wholly or partially paid for by any other governmental agency, except military retirement pay earned by a combination of active and nonactive duty with a reserve or national guard component of the armed forces which is payable upon the attainment of a specified age and period of service under 10 U.S.C. Ch. 67 (relating to retired pay for nonregular service). The purchase price for such service shall be computed by multiplying the average normal cost rate for the plan as certified by the Public Employee Retirement Commission and not to exceed 10% times the participant's average annual rate of compensation during the first three years of employment as an employee of the employer and multiplying the result times the number of years and fractions thereof being purchased. Interest shall be paid at a rate of 4.75% compounded annually from the first date of employment as an employee of the employer to the date of payment.

Any period of qualified military service as determined under the requirements of Chapter 43 of Title 38, United States Code, provided that the participant returns to employment following such period of qualified military service and the participant makes payment to the plan in an amount equal to the participant contributions that would otherwise have been paid to the plan during such period of qualified military service. The amount of participant contributions shall be based upon an estimate of the compensation that would have been paid to the participant during such period of qualified military service as determined by the average compensation paid to the participant during the 12 months immediately preceding the period of qualified military service. The amount of participant contributions calculated must be paid into the plan before the end of the period that begins on the date of reemployment and ends on the earlier of the date that ends the period that has a duration of three times the period of qualified military service or the date that is five years after the date of reemployment.

For the purpose of determining aggregate service, "employment" shall not mean any period of disability for a participant who was disabled as a result of a non-service-related disability.

FINAL MONTHLY AVERAGE COMPENSATION

[Amended 6-27-2011 by Ord. No. 812-11; 10-14-2013 by Ord. No. 831-13; 6-12-2017 by Ord. No. 854-17; 3-26-2018 by Ord. No. 860-18]

The average monthly "compensation," as defined in this section and as set forth in this definition, earned by the participant and paid by the employer during the final 48 months of active employment, as "employment" is defined in this section. Active employment shall include time spent at work, time spent away from work on paid leave, and time spent receiving workers' compensation or Pennsylvania Heart and Lung Act benefits, but shall not include periods of time spent on non-work-related disability. Compensation shall include the regular gross pay of the employee, whether salary or hourly wages, including, overtime pay, holiday pay, longevity pay and any other types of additions to compensation by the employer for police services rendered. For years of service which have been completed, the employee's Internal Revenue Service Form W-2 will be deemed to reflect the entire compensation paid to that employee during the calendar year, excluding any stipends paid to the employee by the employer and any pay generated from participation in the Butler County Joint Drug Task Force. Compensation shall also include fixed periodic payments made to the employee under the provisions of workers' compensation laws or the Pennsylvania Heart and Lung Act. To the extent that these fixed periodic payments made to the employee are not reflected in the employee's Internal Revenue Service Form W-2, said payments shall be added thereto for the purposes of computing final monthly average salary.

For participants hired after January 1, 2005, final monthly average salary shall mean the average monthly compensation earned by the participant and paid by the employer during the final 48 months of active employment. Compensation shall only include the "compensation" of the participant as that term is defined in this section for participants hired after January 1, 2005, or January 1, 2017, as applicable.

Final monthly average salary shall be calculated by taking into account only those periods during which an employee receives "compensation", as that term is defined in this definition. Therefore, for example, the final monthly average salary for a participant who receives disability benefits from this plan or who is voluntarily or involuntarily serving in the United States Armed Forces during the final 48 months of aggregate service shall be based on the period during which the employee last received "compensation" (as defined in the preceding subsections) from the employer.

Compensation used to determine final monthly average salary shall be limited on an annual basis to the amount specified for government plans in accordance with Code § 401(a)(17), as adjusted under Code § 415(d).

Effective January 1, 2009, final monthly average salary shall also include any amounts of salary continuation payments made by the employer (if any) to an individual during periods in which the individual does not perform services due to qualified military service (as defined in § 414(u)(1) of the Internal Revenue Code) to the extent the payments do not exceed the amounts the individual would have received if the individual would have continued performing services.

INSURER or INSURANCE COMPANY

A legal reserve life insurance company authorized to do business in the Commonwealth of Pennsylvania.

LATE RETIREMENT DATE

The first day of the month coincident with or next following the date on which the participant retires from employment on which the payment of retirement benefits pursuant to this plan shall commence.

MEMBER'S SALARY AT THE TIME THE DISABILITY WAS INCURRED

The "final monthly average salary," as defined above; however, the averaging period shall be determined by substituting "final 12 months" wherever "final 48 months" shall appear in the said definition.

MINIMUM MUNICIPAL OBLIGATION

The minimum obligation of the municipality as determined pursuant to the provisions of the Act.

NORMAL RETIREMENT AGE

The date on which the participant has completed 25 years of aggregate service with the employer and has attained age 50. For participants hired on or after January 1, 2017, the normal retirement age shall mean the date on which the participant has completed 25 years of aggregate service with the employer and has attained age 55.

[Amended 6-12-2017 by Ord. No. 854-17]

NORMAL RETIREMENT DATE

The first day of the month coincident with or next following the date on which the participant retires from employment which is subsequent to the date on which the participant attains normal retirement age.

NOTICE or ELECTION

A written document prepared in the form specified by the plan administrator. If such notice or election is to be provided by the employer or the plan administrator, it shall be mailed in a properly addressed envelope, postage prepaid, to the last known address of the person entitled thereto on or before the last day of the specified notice or election period. If such notice or election is to be provided to the employer or the plan administrator, it must be received by the intended recipient on or before the last day of the specified notice or election period.

PARTICIPANT

An employee who has met the eligibility requirements to participate in the plan as provided in § 48-15 and who has not for any reason ceased to be a participant hereunder.

PENSION FUND

The police pension fund administered under the terms of this plan and which shall include all money, property, investments, policies and contracts standing in the name of the plan.

PLAN

The plan set forth herein, as amended from time to time, and designated as the "Borough of Zelienople Police Pension Plan."

PLAN ADMINISTRATOR

The committee or the individual appointed for the purpose of supervising and administering the provisions of the plan. In the event that no such appointment is made, the plan administrator shall be the Council.

PLAN YEAR

The twelve-month period beginning on January 1 and ending on December 31 of each year.

POLICY or CONTRACT

RESTATEMENT DATE

January 1, 2010, the date upon which this amendment and restatement of the plan becomes effective, except as otherwise set forth herein.

SERVICE INCREMENT

The amount calculated pursuant to § 48-17D on behalf of a participant for each completed year of service in excess of 25 years, not to exceed $100.

TOTAL AND PERMANENT DISABILITY

A condition of physical or mental impairment due to which a participant is unable to perform the usual and customary duties of employment and which is reasonably expected to continue to be permanent for the remainder of the participant's lifetime. For purposes of this definition and § 48-18, a condition shall not be treated as a total and permanent disability unless such condition is a direct result of and occurs in the line of duty of employment. Therefore, an employee whose physical or mental impairment does not occur in the line of duty or which is the result of alcoholism, addiction to narcotics, perpetration of a felonious criminal activity or is willfully self-inflicted is not entitled to receive disability benefits under the plan.

§ 48-15 Participation in plan.

Eligibility requirements. Each employee who is employed as a regular, full-time permanent member of the police department of the employer shall participate herein as of the date on which such employee's employment first commences or recommences provided all prerequisites to participation under this plan shall have been fulfilled, including, but not limited to, completion of all forms required by the plan administrator. Each employee who was a participant in the plan on the day prior to the restatement date shall continue to be a participant on and after the restatement date subject to the terms and conditions of the plan as set forth herein.

Participation requirements. The Council shall furnish the plan administrator with written notification of the appointment of any new full-time permanent employee who is eligible for participation hereunder. Each participant hereunder shall be required to make contributions to the plan, as provided in § 48-16A hereof, and shall execute and complete any enrollment or application forms as required by the plan administrator.

Designation of beneficiary. Any new, full-time employee who becomes a participant hereunder shall provide a written notice in the manner prescribed by the plan administrator which designates a beneficiary at the time participation commences. The participant's election of any such beneficiary may be rescinded or changed, without the consent of the beneficiary, at any time, provided the participant provides the written notice of the changed designation to the plan administrator in the manner prescribed by the plan administrator. Any designation of a beneficiary made in any manner other than one acceptable to the plan administrator shall be null and void and have no effect under the terms of this plan.

Change in status. A participant who remains in the service of the employer but ceases to be an employee eligible for participation hereunder, or ceases or fails to make any contributions which are required as a condition of participation hereunder, shall have no further benefit accruals occur until the individual again qualifies as a participant hereunder eligible to resume such accrual of benefits.

Recordkeeping. The employer shall furnish the plan administrator with such information as will aid the plan administrator in the administration of the plan. Such information shall include all pertinent data on employees for purposes of determining their eligibility to participate in this plan.

§ 48-16 Contributions.

Participant contributions.

[Amended 12-10-2012 by Ord. No. 826-12]

Each participant shall as a requirement of participation pay regular contributions to the pension fund in an amount equal to 8% of the participant's compensation. Each participant shall complete the necessary forms to authorize the payment of participant contributions by way of payroll deductions.

Effective as of May 1, 2010, participant contributions, although designated as such, are "picked up" and paid by the employer in accordance with the requirements of the Code.

Reduction of participant contributions.

[Amended 12-10-2012 by Ord. No. 826-12]

Notwithstanding the preceding Subsection A, payments into the pension fund by participants may be reduced below the minimum percentages prescribed in Subsection A, or may be eliminated, and that if such payments are reduced or eliminated, contributions by the employer will not be required to keep the pension fund actuarially sound, the employer may, by ordinance or resolution, reduce or eliminate payments into the pension fund by participants.

Effective January 1, 2013, and continuing through and including December 31, 2013, the amount of participant contributions due shall be 6% of compensation.

Effective January 1, 2014, and continuing through and including December 31, 2014, the amount of participant contributions due shall be 7% of compensation.

Effective January 1, 2015, and continuing through and including December 31, 2015, the amount of participant contributions due shall be 7% of compensation.

Effective January 1, 2016, and continuing through and including December 31, 2016, the amount of participant contributions due shall be 8% of compensation.

(6)

The obligation to pay participant contributions pursuant to Act 600 in the amount specified therein and as provided in Subsection A herein shall resume effective as of January 1, 2017.

(7)

Effective January 1, 2017, and continuing through and including December 31, 2017, the amount of participant contributions due shall be 8% of compensation. The obligation to pay participant contributions pursuant to Act 600 in the amount specified therein shall resume effective as of January 1, 2018.

[Added 12-23-2016 by Res. No. 345-16]

(8)

Effective January 1, 2018, and continuing through and including December 31, 2018, the amount of participant contributions due shall be 8% of compensation. The obligation to pay participant contributions pursuant to Act 600 in the amount specified therein shall resume effective as of January 1, 2019.

[Added 10-9-2017 by Res. No. 372-17]

(9)

Effective January 1, 2020, and continuing through and including December 31, 2020, the amount of participant contributions due shall be 8% of compensation. The obligation to pay participant contributions pursuant to Act 600 in the amount specified therein shall resume effective as of January 1, 2020.

[Added 9-30-2019 by Res. No. 415-19]

(10)

Effective January 1, 2021, and continuing through and including December 31, 2021, the amount of participant contributions due shall be 8% of compensation.

[Added 10-12-2020 by Res. No. 442-20]

(11)

Effective January 1, 2022, and continuing through and including December 31, 2022, the amount of participant contributions due shall be 8% of compensation.

[Added 11-29-2021 by Res. No. 461-21]

(12)

Effective January 1, 2023, and continuing through and including December 31, 2023, the amount of participant contributions due shall be 8% of compensation.

[Added 10-10-2022 by Res. No. 479-22]

Employer contributions. The actuary, in accordance with the Act, shall determine the minimum municipal obligation of the employer. The employer shall pay into the pension fund, by annual appropriations or otherwise, the contributions necessary to satisfy the minimum municipal obligation. Notwithstanding the foregoing, nothing contained herein shall preclude the employer from contributing an amount in excess of the minimum municipal obligation.

State aid. General Municipal Pension System State Aid, or any other amount of state aid received by the employer in accordance with the Act from the commonwealth may be deposited into the pension fund governed by this plan in amounts determined by the Council, and shall be used to reduce the amount of the minimum municipal obligation of the employer.

Gifts. The Council is authorized to take by gift, grant, devise or otherwise any money or property, real or personal, for the benefit of the plan and cause the same to be held as a part of the pension fund. The care, management, investment and disposal of such amounts shall be vested in the Council or its delegate, the plan administrator, subject to the direction of the donor and not inconsistent with applicable laws and the terms of the plan.

§ 48-17 Retirement benefits.

Normal retirement. Each participant shall be entitled to a normal retirement benefit after retirement on or after the participant has attained normal retirement age.

Normal retirement benefit. Each participant who shall become entitled to a benefit pursuant to § 48-17A shall receive a benefit paid monthly in an amount equal to 50% of the participant's final monthly average salary as determined herein.

Late retirement. A participant may continue in employment beyond the attainment of normal retirement age subject to the employer's rules and regulations regarding retirement age. If a participant who has met the requirements of § 48-17A continues in employment beyond normal retirement age, there shall be no retirement benefits paid until employment ceases and the participant's retirement actually begins. The retirement benefit of a participant who continues employment after attainment of normal retirement age shall be calculated in accordance with § 48-17B on the basis of the final monthly average salary as of such participant's actual retirement and shall commence on the participant's late retirement date.

Service increment benefit. Notwithstanding anything contained herein to the contrary, each participant who shall retire upon completion of the 26th year of aggregate service or thereafter, may be entitled to receive a monthly service increment benefit. Such service increment benefit shall only be available to a participant who shall retire on a retirement date after attainment of normal retirement age and whose aggregate service for purposes of this § 48-17D shall only include periods of time when the participant actively renders service in employment and shall not include any period of time during which the participant received a disability benefit under the terms of this plan or was not otherwise in active employment. Such service increment benefit shall be an amount equal to $100 and shall be paid monthly in addition to the amount of normal retirement benefit calculated pursuant to § 48-17B.

Payment of benefits. Retirement benefit payments shall be payable as of the participant's retirement date and the first day of each month thereafter during the participant's lifetime. A participant must complete an application for benefit in the manner prescribed by the plan administrator and deliver such application to the plan administrator at least 30 days prior to the date on which benefit payments shall commence. Notwithstanding anything contained herein to the contrary, no retirement benefit payments nor any other payments shall be due or payable on or before the date that is 30 days after the date the plan administrator receives the application for benefits. Payment of benefits hereunder shall cease as of the date of death of the participant.

Defined benefit dollar limitation.

Incorporation of Code § 415 by reference. Notwithstanding anything contained in this § 48-17F to the contrary, the limitations, adjustments, and other requirements prescribed in § 48-17F shall at all times comply with the provisions of Code § 415 and the regulations thereunder (as such apply to governmental plans), the terms of which are specifically incorporated herein by reference. Effective for limitation years beginning on and after July 1, 2007, the plan shall comply with the final regulations issued under Code § 415.

Maximum benefit limitations. Notwithstanding any provision of this plan to the contrary, no benefit provided under this plan attributable to contributions of the employer shall exceed, as an annual amount, the amount specified in Code § 415(b)(1)(A) as adjusted pursuant to Code § 415(d), assuming the form of benefit shall be a straight life annuity (with no ancillary benefits). The limitations described in this Subsection F shall be governed by the following conditions and definitions:

In the case of a benefit which commences prior to the attainment of age 62 by the participant, the limitation herein shall be adjusted on an actuarially equivalent basis in accordance with applicable regulations to the amount determined pursuant to this section commencing at age 62; however, in the case of a qualified participant (a participant with respect to whom a period of at least 15 years of service, as a full-time employee of a police or fire department or as a member of the armed forces of the United States is taken into account in determining the amount of benefit), the limitation contained herein shall not apply;

Benefits paid to a participant which total less than $10,000 from all defined benefit plans maintained by the employer expressed as an annual benefit shall be deemed not to exceed the limitation of this section, provided that the employer has not at any time maintained a defined contribution plan in which the participant has participated; however, in the case of a participant who is not receiving a disability retirement benefit pursuant to § 48-18B or a survivor benefit pursuant to § 48-19B or E, with fewer than 10 years of participation, the limitation expressed in this Subsection F(2)(d) shall be reduced by 1/10 for each year of participation less than 10, but in no event shall this limitation be less than $1,000;

In the case of a survivor benefit under § 48-19B or E or a disability retirement benefit under § 48-18B, the adjustment under Subsection F(2)(b) hereof shall not apply, and the applicable limitation shall be the limitation contained herein without regard to the age of the benefit recipient;

For mandatory employee contributions, the rules set forth in Treasury Regulation 1.415(b)-1(b)(2)(iii) shall apply; and

Effective for distributions with annuity starting dates beginning on or after December 31, 2002, notwithstanding any other plan provisions to the contrary, the applicable mortality table used solely for purposes of adjusting any benefit or limitation under § 415(b)(2)(B), (C) or (D) of the Internal Revenue Code as set forth in the applicable maximum benefit limitations section of the plan is the applicable mortality table under Code § 417(e)(3)(B).

Required distributions.

Distribution prior to death.

Notwithstanding any other provision of this plan, the entire benefit of any participant who becomes entitled to benefits prior to death shall be distributed either:

Not later than the required beginning date; or

Over a period beginning not later than the required beginning date and extending over the life of such participant or over the lives of such participant and a designated beneficiary (or over a period not extending beyond the life expectancy of such participant or the joint life expectancies of such participant and a designated beneficiary).

If a participant who is entitled to benefits under this plan dies prior to the date when the entire interest has been distributed after distribution of the benefits has begun in accordance with Subsection G(1)(a)[2] above, the remaining portion of such benefit shall be distributed at least as rapidly as under the method of distribution being used under Subsection G(1)(a)[2] as of the date of the death.

If a participant who is entitled to benefits under this plan dies before distribution of the benefit has begun, the entire interest of such employee shall be distributed within five years of the death of such employee, unless the following sentence is applicable. If any portion of the employee's interest is payable to (or for the benefit of) a designated beneficiary, such portion shall be distributed over the life of such designated beneficiary (or over a period not extending beyond the life expectancy of such beneficiary), and such distributions begin not later than one year after the date of the employee's death or such later date as provided by regulations issued by the Secretary of the Treasury, then for purposes of the five-year rule set forth in the preceding sentence, the benefit payable to the beneficiary shall be treated as distributed on the date on which such distributions begin. Provided, however, that notwithstanding the preceding sentence, if the designated beneficiary is the surviving spouse of the participant, then the date on which distributions are required to begin shall not be earlier than the date upon which the employee would have attained age 70 1/2 and, further provided, if the surviving spouse dies before the distributions to such spouse begin, this subparagraph shall be applied as if the surviving spouse were the employee.

For purposes of this section, the following definitions and procedures shall apply:

"Required beginning date" shall mean April 1 of the calendar year following the later of the calendar year in which the employee attains age 70 1/2, or the calendar year in which the employee retires.

The phrase "designated beneficiary" shall mean any individual designated by the employee under this plan according to its rules.

For purposes of this section, the life expectancy of an employee and/or the employee's spouse (other than in the case of a life annuity) may be redetermined, but not more frequently than annually.

General rules. The requirements of this § 48-17G will take precedence over any inconsistent provisions of the plan. All distributions required under this § 48-17G will be determined and made in accordance with Section 401(a)(9) of the Internal Revenue Code and the Treasury regulations thereunder and the employer's good faith interpretation of such Code and regulations.

Assignment. The pension benefit payments prescribed herein shall not be subject to the attachment, execution, levy, garnishment or other legal process and shall be payable only to the participant or designated beneficiary and shall not be subject to assignment or transfer unless the subject of a domestic relations order, mandated by a court of competent jurisdiction, that clearly provides for proper distribution of a portion of the pension benefit payments to an alternate payee (former spouse of the participant) and does not require any benefit to paid in excess of the available earned and accrued under the plan.

Retired participants. Any participant who shall have retired prior to the restatement date shall not have the benefit altered in any way by the provisions of this amended and restated plan, except where otherwise expressly provided herein. Such retired participants shall continue to have their benefits governed by the terms of the plan in effect on the day preceding the restatement date. Any participant who shall have terminated employment and elected to receive a deferred retirement benefit under § 48-20C shall have such benefit determined based upon the provisions of the plan in effect as of the date of such termination of employment and shall not have the benefit altered by the provisions of this amended and restated plan.

Limitation of liability. Nothing contained herein shall obligate the employer, the plan administrator, any fiduciary or any agent or representative of any of the foregoing to provide any retirement or other benefit to any participant or beneficiary which cannot be provided from the assets available in the pension fund, whether such benefits are in pay status or otherwise payable under the terms of the plan. The Council retains the right to amend or terminate this plan consistent with applicable law at any time, with or without cause and whether or not such action directly or indirectly results in the suspension, reduction or termination of any benefit payable under the plan or in pay status, and without liability to any person for any such action.

Personal right of participant. The right to receive any benefits under this plan is a personal right of the participant and shall expire upon the death of the participant. No heir, legatee, devisee, beneficiary, assignee or other person claiming by or through a participant shall have any interest in any benefits hereunder unless clearly and expressly so provided by the terms of this plan or the provisions of applicable law. A participant's election, failure to make an election or revocation of an election hereunder shall be final and binding on all persons.

Nonduplication of benefit. To avoid any duplication of benefits, a participant who is receiving a retirement benefit under the plan and who shall resume employment shall have benefit payments suspended until the first day of the month coincident with or next following the date such employment shall cease. Upon resumption of benefit payments, such participant shall receive the greater of the amount of the suspended benefit or the amount of benefit based upon final monthly average salary and aggregate service as of the date that such period of resumed employment shall cease.

Direct rollovers.

Notwithstanding any provision of the plan to the contrary that would otherwise limit a distributee's election under this section, a distributee may elect, at the time and in the manner prescribed by the plan administrator, to have any portion of an eligible rollover distribution that is equal to at least $500 paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

This § 48-17M(2) shall apply to distributions made on or after January 1, 2006. Notwithstanding any provision of the plan to the contrary that would otherwise limit a distributee's election under this section, if a distribution in excess of $1,000 is made and the distributee does not make an election under § 48-17M(1) and does not elect to receive the distribution directly, the plan administrator shall make such transfer to an individual retirement plan of a designated trustee or issuer pursuant to § 48-21C(1)(i). The plan administrator shall notify the distributee in writing, within a reasonable period of time and as otherwise prescribed by law, that the distribution may be transferred to another individual retirement plan.

ELIGIBLE ROLLOVER DISTRIBUTION

For purposes of this section, the following definitions shall apply:

DIRECT ROLLOVER

Is a payment by the plan to the eligible retirement plan specified by the distributee or the plan administrator, if the distributee does not make an election.

DISTRIBUTEE

ELIGIBLE RETIREMENT PLAN

Is a qualified trust described in Code § 401(a), an individual retirement account described in Code § 408(a), an individual retirement annuity described in Code § 408(b), an annuity plan described in Code § 403(a), an annuity contract described in Code § 403(b), an eligible deferred compensation plan described in Code § 457(b), which is maintained by a state, political subdivision of a state, and any agency or instrumentality of a state or a political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this plan.

Any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life or (life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of 10 years or more; any distribution to the extent such distribution is required under Code § 401(a)(9); and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).

For purposes of the direct rollover provisions in this section of the plan, a portion of the distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions that are not includible in gross income. However, such portion may only be paid to an individual retirement account or annuity described in § 408(a) or (b) of the Code, or to a qualified defined contribution plan [effective for distributions on or after January 1, 2007, any qualified trust or Code § 403(b) plan] that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion which is not includible.

This section applies to distributions made on or after January 1, 2010. Notwithstanding any provision of the plan to the contrary that would otherwise limit a nonspouse beneficiary's election under this section, a nonspouse beneficiary may elect to have any portion of a plan distribution (that is payable to such nonspouse beneficiary due to a participant's death) paid in a direct trustee-to-trustee transfer to an individual retirement account described in Code § 408(a) or to an individual retirement annuity described in § 408(b) (other than an endowment contract) that has been established for the purposes of receiving the distribution on behalf of such nonspouse beneficiary. For these purposes, a "nonspouse beneficiary" is an individual who is a designated beneficiary [as defined by § 401(a)(9)(E) of the Internal Revenue Code] of a participant and who is not the surviving spouse of such participant.

EARLY RETIREMENT

A participant shall be entitled to an early retirement benefit after retirement on or after attainment of early retirement age. The early retirement benefit will only be available to be elected from January 1, 2017, through November 30, 2020.

[Added 6-12-2017 by Ord. No. 854-17]

EARLY RETIREMENT BENEFIT

Each participant who shall become entitled to a benefit pursuant to Subsection N and who shall make written application to commence such early retirement benefit shall receive a benefit paid monthly in an amount equal to the actuarial equivalent of the participant's accrued benefit. The actuarial equivalent calculation shall be completed using the applicable factors contained in the last actuarial valuation report filed with the Public Employee Retirement Commission under the Act and for the purpose of adjusting the amount of benefit to recognize the early commencement of benefit payments prior to attainment of normal retirement age.

[Added 6-12-2017 by Ord. No. 854-17]

§ 48-18 Disability retirement.

Disability retirement. A participant who shall be entitled to a disability retirement benefit under Subsection A shall receive a monthly benefit in an amount equal to 50% of the member's salary at the time the disability was incurred, as defined pursuant to § 48-14, determined as of the disability date, provided that any member who receives benefits for the same injuries under social security disability shall have the participant's disability benefits offset or reduced by the amount of such benefits.

Payment of disability benefits.

Disability payments shall be made monthly, commencing as of the first day of the month coincident with or immediately following the participant's disability date and continuing until the earliest of the death of the participant or cessation of total and permanent disability, (such a participant who attains normal retirement age while disabled shall continue to receive a disability retirement benefit until death).

Verification of disability. The plan administrator shall in its sole discretion determine whether a participant shall have incurred a total and permanent disability. The plan administrator shall rely on the report of a physician acceptable to the plan administrator. If the plan administrator shall determine that a participant who is totally and permanently disabled has recovered sufficiently to resume active employment as a police officer or if a participant refuses to undergo a medical examination as directed by the plan administrator (such a medical examination may not be required more frequently than once in any given twelve-month period), the payment of disability retirement benefits shall cease.

Cessation of disability. A participant who is receiving payment of disability retirement benefits under this plan must notify the plan administrator of any change which may cause a cessation of entitlement to receipt of such benefits hereunder. If a participant fails to provide immediate notice to the plan administrator of any such change in status and continues to receive payment of benefits hereunder to which the participant is not entitled, then the plan may take whatever action is necessary to recover any amount of improperly paid amounts, including legal action or offsetting such amounts against any future payments of retirement or other benefits under the plan, including the costs of such actions.

§ 48-19 Death benefits.

Death of participant. Upon the occurrence of the death of a participant, there shall be benefits payable in accord with the following subsections of this § 48-19.

Survivor benefit. If a participant shall die after commencement of benefit payments or after participant is eligible to retire under § 48-17A, a survivor benefit shall be paid pursuant to § 48-19C in an amount equal to 50% of the benefit the participant was receiving or was eligible to receive as of the date of death.

Payment of survivor benefit. The survivor benefit shall be paid to the surviving spouse, if any, until the date of death of the surviving spouse. Upon the death of the surviving spouse, the survivor benefit shall be paid monthly in equal shares to the surviving dependent children of deceased participant until attainment of age 18 or, if attending college, under or attaining the age of 23.

Death of participant prior to retirement. If a participant shall die before payment of a benefit has commenced and without eligibility for payment of a survivor benefit under § 48-19B, the beneficiary shall be eligible to receive a distribution in an amount equal to the accumulated contributions of the participant as of the date of death of the participant. If the participant has received disability retirement benefits hereunder, the amount of distribution of accumulated contributions shall be reduced by the amount of disability retirement benefits which have been paid hereunder.

§ 48-20 Termination of employment.

Rights of terminated employees. A participant who shall cease to be an employee except as otherwise hereinbefore provided shall have all interest and rights under this plan limited to those contained in the following subsections of this section.

Distribution of accumulated contributions. A participant whose employment with the employer shall terminate for any reason other than death or total and permanent disability prior to attainment of normal retirement age shall be entitled to receive a distribution of accumulated contributions. Upon receipt of such accumulated contributions, said participant and beneficiary shall not be entitled to any further payments from the plan.

Deferred retirement benefit. A participant who shall have completed at least 12 years of aggregate service and whose employment shall terminate for any reason other than due to death or total and permanent disability prior to attainment of normal retirement age shall be entitled to elect, by filing a written notice of the intention to vest with the plan administrator within 90 days of the date employment ceases, to receive a deferred retirement benefit in lieu of a distribution of accumulated contributions under § 48-20B. Such a deferred retirement benefit shall be equal to the participant's accrued benefit as of the date employment terminates and shall commence after application pursuant to § 48-17E and not earlier than the date which would be the participant's normal retirement date under the plan if the participant remained in employment until such date.

§ 48-21 Administration.

Plan administrator. The plan administrator shall be the committee or the individual appointed by the Council who shall have the power and authority to do all acts and to execute, acknowledge and deliver all instruments necessary to implement and effectuate the purpose of this plan. The plan administrator may delegate authority to act on its behalf to any persons it deems appropriate. If a plan administrator is not appointed, the Council shall be the plan administrator.

Police pension committee. The Council may appoint a police pension committee to administer the affairs of the plan. The Council shall delegate such authority as it shall deem appropriate to the committee. The committee, if one is appointed, shall consist of not more than five members. Each member of the committee shall serve in that capacity until death, resignation, removal or otherwise. Each member may resign by delivering written notice to the Council and other members of the committee. Vacancies on the committee shall be filled in the same manner as the position was originally filled by the Council; provided, however, that the remaining members of the committee shall have full power to act pending the filling of such vacancies.

Authority and duties of the plan administrator.

The plan administrator shall have full power and authority to do whatever shall, in its judgment, be reasonably necessary for the proper administration and operation of the plan. The interpretation or construction placed upon any term or provision of the plan by the plan administrator or any action of the plan administrator taken in good faith shall, upon the Council's review and approval thereof, be final and conclusive upon all parties hereto, whether employees, participants or other persons concerned. By way of specification and not limitation and except as specifically limited hereafter, the plan administrator is authorized:

To construe this plan;

To determine all questions affecting the eligibility of any employee to participate herein;

To compute the amount and source of any benefit payable hereunder to any participant or beneficiary;

To authorize any and all disbursements;

To prescribe any procedure to be followed by any participant or other person in filing any application or election;

To prepare and distribute, in such manner as may be required by law or as the plan administrator deems appropriate, information explaining the plan;

To require from the employer or any participant such information as shall be necessary for the proper administration of the plan;

To appoint and retain any individual to assist in the administration of the plan, including such legal, clerical, accounting and actuarial services as may be required by any applicable law or laws; and

(i)

To select an individual retirement plan provider (either the state or a federally regulated financial institution) and invest funds in connection with the rollover of mandatory distributions as described in § 48-17M(2).

The plan administrator shall have no power to add to, subtract from or modify the terms of the plan, or change or add to any benefits provided by the plan, or to waive or fail to apply any requirements of eligibility for benefits under the plan. Further, the plan administrator shall have no power to adopt, amend or terminate the plan, to select or appoint any trustee or to determine or require any contributions to the plan, said powers being exclusively reserved to the Council.

Police pension committee organization. The committee may organize itself in any manner deemed appropriate to effectuate its purposes hereunder provided that it shall operate and act by a majority of its members at the time in office either by vote at a meeting or in writing without a meeting. The committee shall appoint a chairman, a secretary who may, but need not be a committee member, and such other agents as it may deem advisable. The committee may authorize any one or more of its members to execute any document or documents, including any application, request, certificate, notice, consent, waiver or direction, and shall notify the Council, in writing, of each such member so authorized; however, if no such member is so authorized, the chairman shall be deemed to be so authorized. Any trustee or other fiduciary appointed hereunder shall accept and be fully protected in relying upon any document executed by the designated members (or the chairman in the absence of a designation) as representing a valid action by the committee until the committee shall file with such fiduciary a written revocation of such designation. The committee shall meet at least one time in each plan year, and it shall maintain and keep such records as are necessary for the efficient operation of the plan or as may be required by any applicable law, regulation or ruling, and shall provide for the preparation and filing of such forms, reports or documents as may be required to be filed with any governmental agency or department and with the participants or other persons entitled to benefits under the plan.

Hold harmless. No member of the Council, the plan administrator, nor any other person involved in the administration of the plan shall be liable to any person on account of any act or failure to act which is taken or omitted to be taken in good faith in performing their respective duties under the terms of this plan. To the extent permitted by law, the employer shall, and hereby does agree to, indemnify and hold harmless the plan administrator and each successor and each of any such individual's heirs, executors and administrators, and the delegates and appointees (other than any person, bank, firm or corporation which is independent of the employer and which renders services to the plan for a fee) from any and all liability and expenses, including counsel fees, reasonably incurred in any action, suit or proceeding to which he is or may be made a party by reason of being or having been a member, delegate or appointee of the plan administrator, except in matters involving criminal liability, intentional or willful misconduct. If the employer purchases insurance to cover claims of a nature described above, then there shall be no right of indemnification except to the extent of any deductible amount under the insurance coverage or to the extent of the amount the claims exceed the insured amount.

Appeal procedure. Any person whose application for retirement benefits is denied, who questions the amount of benefit paid, who believes a benefit should have commenced which did not so commence or who has some other claim arising under the plan ("claimant") shall first seek a resolution of such claim under the procedure hereinafter set forth.

The specific plan provisions on which the denial is based;

An explanation of additional material or information, if any, necessary to perfect such claim and a statement of why such material or information is necessary; and

An explanation of the review procedure.

Nothing contained herein is intended to abridge any right of a claimant to appeal any final decision hereunder to a court of competent jurisdiction under 2 Pa.C.S.A. § 752. No decision hereunder is a final decision from which such an appeal may be taken until the entire appeal procedure of this § 48-21H of the plan has been exhausted.

§ 48-22 Pension fund.

Operation of the pension fund.

The Council is hereby authorized to hold and supervise the investment of the assets of the pension fund, subject to the provisions of the laws of the commonwealth and of this plan and any amendment thereto.

The employer intends the plan to be permanent and for the exclusive benefit of its employees. It expects to make the contributions to the pension fund required under the plan. The employer shall not be liable in any manner for any insufficiency in the pension fund; benefits are payable only from the pension fund, and only to the extent that there are monies available therein. The pension fund will consist of all funds held by the employer under the plan, including contributions made pursuant to the provisions hereof and the investments, reinvestments and proceeds thereof. The pension fund shall be held, managed and administered pursuant to the terms of the plan. Except as otherwise expressly provided in the plan, the employer has exclusive authority and discretion to manage and control the pension fund assets. The employer may, however, appoint a trustee, custodian or investment manager, at its sole discretion.

To exercise all conversion and subscription rights pertaining to property held in the fund.

(6)

To exercise all voting rights with respect to property held in the fund and, in connection therewith, to grant proxies, discretionary or otherwise.

(7)

To place money at any time in a deposit bank deemed to be appropriate for the purposes of this plan, no matter where situated, including in those cases where a bank has been appointed to serve as trustee hereunder the savings department of its own commercial bank.

To compromise, contest; arbitrate, enforce or abandon claims and demands with respect to the plan.

(13)

(14)

To pay and to deduct from and charge against the pension fund any taxes which may be imposed thereon, whether with respect to the income, property or transfer thereof, or upon or with respect to the interest of any person therein, which the fund is required to pay; to contest, in its discretion, the validity or amount of any tax, assessment, claim or demand which may be levied or made against or in respect of the pension fund, the income, property or transfer thereof, or in any matter or thing connected therewith.

(15)

To appoint any persons or firms (including, but not limited to, accountants, investment advisors, counsel, actuaries, physicians, appraisers, consultants professional plan administrators and other specialists) or otherwise act to secure specialized advice or assistance, as it deems necessary or desirable in connection with the management of the fund; to the extent not prohibited by applicable law, the employer shall be entitled to rely conclusively upon and shall be fully protected in any action or omission taken by it in good faith reliance upon the advice or opinion of such persons or firms, provided such persons or firms were prudently chosen by the employer, taking into account the interests of the participants and beneficiaries and with due regard to the ability of the persons or firms to perform their assigned functions.

(16)

To retain the services of one or more persons or firms for the management of (including the power to acquire and dispose of) all or any part of the fund assets, provided that each of such persons or firms is registered as an investment advisor under the Investment Advisors Act of 1940, is a bank (as defined in that Act), or is an insurance company qualified to manage, acquire or dispose of pension trust assets under the laws of more than one state; in such event, the employer shall follow the directions of such investment manager or managers with respect to the acquisition and disposition of fund assets, but shall not be liable for the acts or omissions of such investment manager or managers, nor shall it be under any obligation to review or otherwise manage any fund assets which are subject to the management of such investment manager or managers. If the employer appoints a trustee, the trustee shall not be permitted to retain such an investment manager except with the express written consent of the employer.

Common investments. The employer shall not be required to make separate investments for individual participants or to maintain separate investments for each participant's account but may invest contributions and any profits or gains therefrom in common investments.

Compensation and expenses of appointed trustee.

If a trustee is appointed, the trustee shall be entitled to such reasonable compensation as shall from time to time be agreed upon by the employer and the trustee, unless such compensation is prohibited by law.

Such compensation, and all expenses reasonably incurred by the trustee in carrying out its functions, shall constitute a charge upon the employer or the pension fund which may be executed at any time after 30 days' written notice to the employer. The employer shall be under no obligation to pay such costs and expenses, and in the event of its failure to do so, the trustee shall be entitled to pay the same or to be reimbursed for the payment thereof from the pension fund.

Periodic accounting. If a trustee is appointed, the pension fund shall be evaluated annually or at more frequent intervals by the trustee and a written accounting rendered as of each fiscal year end of the fund and as of the effective date of any removal or resignation of the trustee and such additional dates as requested by the employer, showing the condition of the fund and all receipts, disbursements and other transactions effected by the trustee during the period covered by the accounting, based on fair market values prevailing as of such date.

§ 48-23 Amendment and termination.

That no amendment shall deprive any participant or any beneficiary of a deceased participant of any of the benefits to which each is entitled under this plan with respect to contributions previously made;

That no amendment shall provide for the use of funds or assets held under this plan other than for the benefit of employees, and no funds contributed to this plan or assets of this plan shall, except as provided in § 48-23E, ever revert to or be used or enjoyed by the employer; and

That no amendment to the plan which provides for a benefit modification shall be made unless the cost estimate described in § 48-24C has been prepared and presented to the Council in accordance with the Act.

Termination of the plan. The employer shall have the power to terminate this plan in its entirety at any time by an instrument in writing executed in the name of the employer.

Automatic termination of contributions. Subject to the provisions of the act governing financially distressed municipalities, the liability of the employer to make contributions to the pension fund shall automatically terminate upon liquidation or dissolution of the employer, upon its adjudication as a bankrupt or upon the making of a general assignment for the benefit of its creditors.

Distribution upon termination.

That the plan administrator continue to hold the vested accrued benefits of participants in the pension fund in accordance with the provisions of the plan (other than those provisions related to forfeitures) without regard to such termination until all funds have been distributed in accordance with the provisions; or

That the plan administrator immediately distribute to each participant an amount equal to the vested accrued benefit to the date.

Residual assets. If all liabilities to vested participants and any others entitled to receive a benefit under the terms of the plan have been satisfied and there remain any residual assets in the pension fund, such residual assets remaining shall be returned to the employer insofar as such return does not contravene any provision of law, and any remaining balance, in excess of employer contributions, shall be returned to the commonwealth.

§ 48-24 Funding standard requirements.

Actuarial valuations.

The plan's actuary shall perform an actuarial valuation at least biennially unless the employer is applying or has applied for supplemental state assistance pursuant to Section 603 of the Act,[1] whereupon actuarial valuation reports shall be made annually.

Editor's Note: See the Municipal Pension Plan Funding Standard and Recovery Act of 1984, 53 P.S. § 895.603.

Such biennial actuarial valuation report shall be made as of the beginning of each plan year occurring in an odd-numbered calendar year beginning with the year 1985.

Such actuarial valuation shall be prepared and certified by an approved actuary, as such term is defined in the Act.

Investment costs associated with obtaining authorized investments and investment management fees;

Accounting expenses;

Premiums for insurance coverage on fund assets;

Reasonable and necessary counsel fees incurred for advice or to defend the fund; and

Legitimate travel and education expenses for plan officials; provided, however, that the municipal officials of the employer in their fiduciary role shall monitor the services provided to the plan to ensure that the expenses are necessary, reasonable and benefit the plan; and further provided, that the plan administrator shall document all such expenses item by item and, where necessary, hour by hour.

Duties of chief administrative officer.

Such actuarial reports shall be prepared and filed under the supervision of the chief administrative officer.

NORMAL RETIREMENT BENEFIT

The chief administrative officer of the plan shall determine the financial requirements of the plan on the basis of the most recent actuarial report and shall determine the minimum municipal obligation of the employer with respect to funding the plan for any given plan year. The chief administrative officer shall submit the financial requirements of the plan and the minimum municipal obligation of the employer to the Council annually and shall certify the accuracy of such calculations and their conformance with the Act.

Benefit plan modifications. Prior to the adoption of any benefit plan modification by the employer, the chief administrative officer of the plan shall provide to the Council a cost estimate of the proposed benefit plan modification. Such estimate shall be prepared by an approved actuary, which estimate shall disclose to the Council the impact of the proposed benefit plan modification on the future financial requirements of the plan and the future minimum municipal obligation of the employer with respect to the plan.

§ 48-25 Miscellaneous provisions.

Employment rights. No employee of the employer nor anyone else shall have any rights whatsoever against the employer or the plan administrator as a result of this plan except those expressly granted hereunder. Participation in this plan shall not give any right to any employee to be retained in the employ of the employer, nor shall it interfere with the right of the employer to discharge any employee and to deal with such employee without regard to the effect such treatment might have upon participation in this plan.

Meaning of certain words. For purposes of this plan, the masculine gender shall include the feminine gender and the singular shall include the plural, and vice versa, in all cases wherever the person or context shall plainly so require. Headings of sections and subsections are inserted only for convenience of reference and are not to be considered in the construction of the plan.

Information to be furnished by the employer. The employer shall furnish to the plan administrator (and, where applicable, the trustee) information in the employer's possession as the plan administrator and the trustee shall require from time to time to perform their duties under the plan.

Severability of provisions. Should any provisions of this plan be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of this plan, and the plan shall be construed and enforced as if said illegal and invalid provisions had never been inserted herein.

Incapacity of participant. If any participant shall be physically or mentally incapable of receiving or acknowledging receipt of any payment of pension benefits hereunder, the plan administrator, upon the receipt of satisfactory evidence that such participant is so incapacitated and that another person or institution is maintaining the participant and that no guardian or committee has been appointed for the participant, may provide for such payment of pension benefits hereunder to such person or institution so maintaining the participant, and any such payments so made shall be deemed for every purpose to have been made to such participant.

Benefits for a deceased participant. If any benefit shall be payable under the plan to or on behalf of a participant who has died, if the plan provides that the payment of such benefits shall be made to the participant's estate, and if no administration of such participant's estate is pending in the court of proper jurisdiction, then the plan administrator, at its sole option, may pay such benefits to the surviving spouse of such deceased participant, or if there is no surviving spouse, to such participant's then living issue, per stirpes; provided, however, that nothing contained herein shall prevent the plan administrator from insisting upon the commencement of estate administration proceedings and the delivery of any such benefits to a duly appointed executor or administrator.

Personal liability. Subject to the provisions of the Act and unless otherwise specifically required by other applicable laws, no past, present or future officer or agent of the employer or plan administrator shall be personally liable to any participant, beneficiary or other person under any provision of the plan.

Construction of document. This plan may be executed and/or confirmed in any number of counterparts, each of which shall be deemed an original, and shall be construed and enforced according to the laws of the commonwealth, excepting such commonwealth's choice of law rules.

§ 48-26 Deferred retirement option plan. [1]

Definitions. The following words and phrases, when used in this section, shall have the meanings given to them in this subsection only, unless the context clearly indicates otherwise:

DROP

A deferred retirement option plan established as an optional form of benefit under the plan and being operated by the Borough of Zelienople.

DROP PARTICIPANT

A retired participant of the Borough of Zelienople Police Pension Plan who is eligible to participate in a DROP under Subsection B(1) and who has elected to participate in a DROP under Subsection B(2).

DROP PARTICIPANT ACCOUNT

The separate DROP participant account established by the DROP participant under Subsection E(2).

The retirement benefit payable to a participant of a defined benefit pension plan at the point in time when the participant satisfies the age and service requirements for full, unreduced retirement benefits.

Eligibility and participation.

Eligibility of employee to participate in DROP.

An employee who is eligible for a Normal Retirement Benefit under the pension Plan or will be eligible for a Normal Retirement Benefit under the pension Plan prior to participation in the DROP is eligible to participate in the DROP by filing a written application with the retirement plan administrator at least 30 days before the employee's effective date of retirement.

For purposes of determining eligibility pursuant to this Subsection B(1), only participants who have satisfied the above criteria (by accruing the age and service requirements for normal retirement benefits) as of December 31, 2012, shall be eligible to participate in the DROP plan, which eligibility shall continue for the duration of such officers' employment.

Participation in DROP.

An eligible participant may elect to participate in this DROP for a period not to exceed three years, or four years for participant elections on or after January 1, 2009. Upon deciding to participate in a DROP, a participant must submit, on forms provided by the Borough, all of the following:

A binding and irrevocable letter of resignation from regular employment with the Borough of Zelienople which discloses the participant's intent to retire and specifies the participant's retirement date.

An irrevocable written election to participate in the DROP, which must specify the effective date of DROP participation that shall be one day after the participant's specified retirement date, specify the DROP termination date which satisfies the limitation in Subsection B(4), detail a DROP participant's rights and obligations under the DROP and include an agreement to forgo:

[a]

Active membership in the plan;

[b]

Any growth in the salary base used for calculating the normal retirement benefit;

[c]

Any additional benefit accrual for retirement purposes; and

[d]

Any eligibility for disability pension benefits.

[3]

A signed delayed retirement option plan release agreement approved by the Borough of Zelienople.

The DROP participant shall be required to provide any other information required by the Borough.

Effective dates of DROP participation. A retired participant's effective date of participation in a DROP shall begin on the day following the effective date of the participant's regular retirement and a retired participant's in a DROP shall end on the last day of the participation period specified in the ordinance establishing the DROP, based on the effective date of the retired participant's participation in the DROP.

DROP participation termination.

A DROP participant may change the DROP termination date to an earlier date within the limitations of Subsection B(2) but may not change it to a later date than elected at the time of initial DROP participation. No penalty shall be imposed for early termination of DROP participation. Upon either early or regular termination of DROP participation, the DROP participant shall be separated from employment with the Borough of Zelienople and shall receive the balance in the DROP participant's DROP participant account as provided in Subsection C(3). The DROP participant shall be ineligible to reenroll in the DROP thereafter even if the former DROP participant is reemployed by the Borough of Zelienople with renewed active membership in the Borough of Zelienople Police Pension Plan.

If a DROP participant becomes eligible for a disability benefit under § 48-18, all payments to the DROP participant account shall cease and the participant shall thereafter receive a disability benefit.

DROP participant contributions. DROP participants shall neither be required nor permitted to pay contributions into the plan during the DROP participation period.

DROP benefits.

Fixed retirement benefits, retirement date and DROP dates. Effective with the date of retirement, which must be the day before the effective date of DROP participation, the participant's monthly normal retirement benefit as calculated under § 48-17B of this article, the participant's effective date of retirement and the participant's effective dates of beginning and terminating participation in the DROP shall be fixed. There shall be no further retirement benefit accruals after the participant's effective date of retirement.

Normal retirement benefit payments and accruals. The retired participant's monthly retirement benefit, including any applicable service increment benefit pursuant to § 48-17D shall be credited to the DROP participant's DROP participant account.

Payment of DROP benefits. On the effective date of a DROP participant's termination of employment with the Borough as a DROP participant, participation in the DROP shall cease, and the accumulated DROP benefits in the DROP participant's DROP participant account shall be payable subject to the following provisions:

The terminating DROP participant or, if the participant is deceased, the participant's named beneficiary shall elect on a form provided by the plan administrator to receive payment of the DROP benefits in accordance with one of the following options:

The balance in the DROP participant's DROP participant account, less withholding taxes, if any, remitted to the Internal Revenue Service, shall be paid within 45 days of the receipt of the election form by the plan from the account to the DROP participant or surviving beneficiary.

The balance in the DROP participant's DROP participant account shall be paid within 45 days of the receipt of the election form by the plan from the account directly to the custodian of an eligible retirement plan, as defined in § 402(c)(8)(B) of the Internal Revenue Code of 1986, or in the case of an eligible rollover distribution to the surviving spouse of a deceased participant, to an eligible retirement plan which is an individual retirement account or an individual retirement annuity as described in § 402(c)(9) of the Internal Revenue Code of 1986.

[3]

The balance in the DROP participant's DROP participant account shall be used to purchase an annuity.

[4]

The balance in the DROP participant's DROP participant account shall remain in the DROP participant account, if permitted by the Internal Revenue Code of 1986 and the custodian of such account.

[5]

If the DROP participant or beneficiary fails to elect a method of payment within 60 days after the participant's termination date, the plan shall pay the balance directly to the custodian of an eligible retirement plan as provided in Subsection C(3)(a)[2].

The form of payment selected by the DROP participant or surviving beneficiary shall comply with the minimum distribution requirements of the Internal Revenue Code of 1986.

The terminating DROP participant shall commence receipt of the monthly retirement benefit directly starting with the first day of the month coincident with or next following termination of employment with the Borough.

Preretirement benefits. Except for those benefits specified in Subsection B(2)(a)[2] as forgone by the member, a DROP participant shall be eligible for any employee benefits provided to active employees before retirement by the Borough of Zelienople and those otherwise provided by law, including but not limited to, benefits under the act of June 2, 1915 (P.L. 736, No. 338), known as the Workers' Compensation Act; the act of June 28, 1935 (P.L. 477, No. 193), referred to as the Enforcement Officer Disability Benefits Law; the act of December 5, 1936 (2nd Sp. Sess., 1937, P.L. 2897, No. 1), known as the Unemployment Compensation Law; the act of June 24, 1976 (P.L. 424, No. 101), referred to as the Emergency and Law Enforcement Personnel Death Benefits Act; and the Public Safety Officers' Benefit Act of 1976 (Public Law 94-430, 42 U.S.C. § 3796 et seq.).

DROP death benefits.

DROP benefits for designated beneficiary. If a DROP participant dies, the participant's designated beneficiary shall be entitled to apply for and receive the benefits accrued in the DROP participant's DROP participant account as provided in Subsection C(3).

Final credited monthly retirement benefit. The monthly retirement benefit accrued in the DROP participant's DROP participant account during the month of a DROP participant's death shall be the final monthly retirement benefit credited for DROP participation.

DROP eligibility terminates upon participant's death. A DROP participant's eligibility to participate in the DROP terminates upon the death of the DROP participant. If a DROP participant dies on or after the effective date of participation in the DROP but before the initial monthly retirement benefit of the participant accruable for the month has accrued in the DROP participant's DROP participant account, the Borough of Zelienople shall pay the monthly retirement benefit as though the participant had not elected DROP participation and had died after the employee's effective date of retirement but before receipt of the retired participant's first normal retirement benefit.

Survivors ineligible for active employee's death benefit. The survivors of a DROP participant who dies shall not be eligible to receive retirement death benefits payable in the event of the death of an active employee.

Administrative provisions.

Subsequent employment and renewal of active membership. After both the termination of the participant's employment as a DROP participant with the Borough of Zelienople and the expiration of the DROP participation period, a former DROP participant shall be subject to such reemployment limitations as other retired employees and shall be eligible for renewed membership as an active participant in the plan and the DROP participant shall be ineligible to reenroll in the DROP pursuant to Subsection B(4).

DROP participant account.

As the Borough of Zelienople establishes a DROP, each DROP participant shall establish a separate account to receive his DROP benefits. When a DROP participant terminates employment with the Borough of Zelienople as a DROP participant, the participant's total accumulated benefits shall be distributed as elected under Subsection C(3).

The balance in the DROP participant's account shall be excluded from actuarial valuation reports of the plan prepared and filed under this legislation. The DROP participant's account shall be held for the exclusive benefit of DROP retired participants who are or were DROP participants and for the beneficiaries of these participants or an alternate payee pursuant to Subsection C(3).