Borough of Lehighton, PA
Carbon County
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Table of Contents
Table of Contents
[Adopted 12-23-1991 by Ord. No. 420; amended in its entirety 3-22-1993 by Ord. No. 435]
This article hereby amends and recodifies all prior and existing ordinances and resolutions relating to the Police Pension Fund or police annuities of the Borough, so that henceforth all rights, pensions or annuities for full-time members of the police force be governed by this article.
A Police Pension Fund or pension annuity is hereby established for the Borough to be administered by the Borough Council or such agency as may be created by the Council. The funds and property of the existing police pension plan shall be administered under the terms of this article.
This plan shall apply to existing and future full-time or regular members of the police force of the Borough who work for a stated salary or compensation; it does not apply to part-time or special policemen.
A. 
A full-time policeman who shall receive honorable discharge by reasons of age and service shall be entitled to pension on the first day of the month following his 50th birthday, provided that such member has had 25 years of credited service in the Borough. The benefits are hereinafter set forth.
(1) 
Retirement benefits shall be paid in equal monthly installments during the member's lifetime.
(2) 
Policemen who were members of the police force prior to December 21, 1965, for whom a pension fund has heretofore been established who have attained or attain the age of 60 years, or 55 years, if the age had been so fixed by the ordinance or resolution, may retire after a period of total service of 20 years.
B. 
Credited service is service rendered for the Borough only.
A. 
The normal retirement benefit shall be equal to 1/2 the member's average monthly compensation during the last 36 months of employment, continuing for life, in equal monthly payments. Such pension or retirement benefits for any month shall be computed as the sum of any pension benefits from pension plans heretofore established by a private organization or association for the members of the police force but only to the extent that this commonwealth or any of its municipalities shall have contributed to such pension plan moneys raised by taxation, and benefits from the Police Pension Fund established pursuant to this act to the extent necessary to bring the total benefits in any month up to 1/2 the aforesaid monthly average compensation.
B. 
Effective January 1, 2002, "compensation" shall mean all W-2 earnings received by the officer during any applicable period. The calculation of final average salary for officers shall continue to include payment for accumulated, but unused, leave balances; provided, however, that for officers hired on or after July 20, 2005, the inclusion of such payment shall be limited to sums earned over the calculation period (36 months for super annulation, early, invested retirement; 12 months for disability retirement), in accordance with Pennsylvania Auditor General Bulletin 2001-01, as clarified, March 2002. During any applicable period when the officer is not receiving any W-2 wages because the officer is temporarily disabled as defined in the Heart and Lung Act, 53 P.S. § 637, "compensation," as defined by this section, shall also include any salary received by the officer pursuant to the Heart and Lung Act, supra. "Compensation" shall not include any compensation in excess of $200,000 in any calendar year or such other amount as adjusted under Sections 401(a)(17) and 415(d) of the Internal Revenue Code of 1986, as amended.
[Amended 11-8-1993 by Ord. No. 439; 11-20-2000 by Ord. No. 504; 10-22-2007 by Ord. No. 556-2007]
If a police officer ceases employment before reaching retirement age and the service requirements, but has completed at least 12 years of total service, the officer would be able to vest his retirement by filing with the municipality within 90 days of leaving, a written notice of his intention to vest. Then upon reaching his retirement date, had he continued to be an officer, he would be paid a partial retirement base benefit, based on the percentage of years of actual service versus the years of service had he continued employment. For calculating purposes, the monthly average salary during the appropriate period prior to leaving would apply.
[Amended 10-22-2007 by Ord. No. 556-2007]
A. 
Effective as of April 17, 2002, in the event of total and permanent disability, benefits shall become payable to the injured member equal to 75% of the salary of the member as of the date such total and permanent disability is incurred.
B. 
For the purposes of this section, the term "total and permanent disability" means a physical or mental condition of a police member resulting from bodily injury or disease or a mental disorder incurred while perforating police duties for this Borough which renders the police member permanently and totally disabled from performing police work for the Borough.
C. 
A determination by the Council or its agent or agency that a member is totally and permanently disabled shall be required for such member to receive a disability benefit under this section. Before making such determination, the Council or its agent or agency shall secure the opinion of one or more practicing physicians licensed to practice medicine in the Commonwealth of Pennsylvania stating the opinion that a member is permanently and totally disabled from performing police work within a reasonable degree of medical certainty.
D. 
A member shall be ineligible to receive, at the same time, both his normal retirement benefit and disability benefits under the plan during any period in which he is disabled if he elects to receive the disability retirement benefits. During the time benefits shall be paid to a police member for disability under this article, any benefits under the Workers' Compensation Act or the Social Security Act received or collected for the same injuries by any such police member for such period shall be turned over to the Borough which shall deposit said funds into the Fund; and, if such payment shall not be so made by the police member, the amount of said benefits so due the Borough shall be deducted from any disability benefit under the plan then or thereafter becoming due and owing. Notwithstanding the above, the disability benefit payable under this § 23-18 shall not be less than 50% of the member's salary at the time the disability was incurred, provided that any member who receives benefits for the same injuries under the Social Security Act shall have his disability benefits offset or reduced by the amount of such benefits.
[Amended 8-20-2002 by Ord. No. 517; 10-22-2007 by Ord. No. 556-2007]
A. 
The following applies for non-service-related deaths after retirement: Effective as of April 17, 2002, if the member shall die after retirement or after completing the requirements for eligibility in §§ 23-14 and 23-15, the surviving spouse of such member, including surviving spouses whose spouse died on or before April 17, 2002, and who were not remarried as of such date, shall receive, for life, a pension equal to no less than 50% of the pension the member was receiving or was eligible to receive at the time of his death. If there is no surviving spouse or the spouse subsequently dies, the child or children of the deceased member shall share equally in a pension equal to no less than 50% of the pension the member was receiving or was eligible to receive at the time of his death until each reach the age of 18 years or, if attending college, until each such child is under or attaining the age of 23.
B. 
(Reserved)[1]
[1]
Editor’s Note: Former Subsection B, Killed-in-service benefit, was repealed 2-27-2012 by Ord. No. 601-2012.
C. 
For purposes of this article, the phrase "attending college" shall have the meaning described in 53 P.S. § 767(b).
A. 
The Borough Council agrees to contribute the payments made by the State Treasurer to the Treasurer of the municipality from the moneys received from taxes paid upon premiums by foreign casualty insurance companies for purposes of pension, retirement, death or disability benefits for policemen which shall be used as follows: to reduce the unfunded liability; after such liability has been funded, to apply against the annual obligation of the municipality for future service cost; or to the extent that the payment may be in excess of such obligation, to reduce the member's contribution. It shall be the duty of the Borough Council to apply such payments as set forth.
(1) 
If the actuarial study shows that the plan is actuarially sound and the minimum municipal obligation is $0, the Borough Council may by resolution apply the moneys received from taxes paid upon premiums by foreign casualty insurance companies to the Borough of Lehighton Nonuniform Pension Plan.
(2) 
If the minimum municipal obligation for the plan is greater than $0 but less than the amount of moneys received from taxes paid upon premiums by foreign casualty insurance companies, the Borough Council shall by resolution distribute the amount of the minimum municipal obligation, as required, to the Police Pension Plan and the excess moneys to the Borough of Lehighton Nonuniform Pension Plan.
(3) 
This Subsection shall be in compliance with Pennsylvania Act 205[1] and any federal or state governing laws.
[1]
Editor's Note: See 53 P.S. § 770.
B. 
Members shall pay into the plan not less then 5% and no more than 8% of his compensation, as determined by the Council. The Council may, however, reduce or eliminate such contributions on an annual basis by ordinance or resolution. The employer shall, on an annual basis, commission a cost study in accordance with Act 205 to determine the financial impact of maintaining, reducing or eliminating pension contributions on the financial requirements of the plan. From the results of the actuarial study the Council shall, by ordinance or resolution, determine the amount to be contributed by the Borough, if any.
[Amended 10-22-2007 by Ord. No. 556-2007]
A. 
All the funds of this plan shall be held by a trustee or trustees appointed by the Borough Council, in trust, under a trust agreement which shall be a part of this plan for use in providing the benefits of this plan. No part of the corpus or income of the trust shall be used for or diverted to purposes other than the exclusive benefit of the members and contingent annuitants of this plan prior to the satisfaction of all liabilities under the plan with respect to such persons. No person shall have any interest in or right to any part of the earnings of the trust or any part of the assets thereof, except as and to the extent expressly provided in the plan and in the trust agreement. Neither the Borough Council nor the Pension Committee shall have any responsibility for the administration of the trust funds or any liability for any loss with respect thereto.
B. 
The trust fund to be created pursuant to this plan is designed to be and shall be the sole source of the benefits provided under the plan. The Borough Council does not guarantee such benefits or payments nor assume any obligation with respect thereto other than to pay into the trust fund the contributions provided for in § 23-20, subject to the limitations set forth in said section.
A. 
Any member of the police force who, for any reason whatsoever, shall be ineligible to receive a pension after having contributed any moneys to the Police Pension Fund, shall be entitled to a refund of all such moneys paid by him into said fund within 60 days upon discontinuance of his employment with the Borough police force, plus interest earned by such moneys while in the Police Pension Fund. The interest rate shall be based on a calculation by the trust agent whereby an average percent will be determined based on the rate(s) of interest earned during the period of the investment. The interest rate, as determined by the trust agent, shall be approved by the Police Pension Committee and Lehighton Borough Council.
B. 
Notwithstanding any other provision of the Fund to the contrary, the surviving spouse of a member of the police force who dies before his or her pension has vested shall be entitled to receive repayment of all money which the member invested in the Fund, plus interest or other increases in value of the member's investment in the Fund. If there is no surviving spouse or the spouse subsequently dies, the child or children of the member under the age of 18 years or, if attending college, under or attaining the age of 23 years, shall be entitled to receive repayment of all money which the member invested in the Fund, plus interest or other increases in value of the member's investment in the Fund.
[Amended 10-22-2007 by Ord. No. 556-2007]
Any member of the police force who has been a legally appointed employee for a period of at least six months and thereafter shall enter into the military service of the United States shall have credited to his employment record for pension or retirement benefits all of the time spent by him in such military service, if such person returns or has heretofore returned to his employment within six months after his separation from the service.
No benefit under the plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt so to do shall be void, except as specifically provided in the plan, nor shall any such benefits be in any manner liable for or subject to garnishment, attachment, execution, levy or other legal process of the collection of debts or liable for or subject to the debts, contract, liabilities, engagements or torts of the person entitled to such benefit. In the event Council or its agency shall find that any member or beneficiary under the plan has become incompetent, bankrupt or insolvent or that any attempt has been made to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any of his benefits under the plan, except as specifically provided in the plan, then such benefit shall cease and terminate, and in the event Council or its agency shall hold or apply the same to or for the benefit of such member or beneficiary, his spouse, children or other dependents, or any of them, in such manner as the Borough Council may find proper from time to time.
A. 
Appointment of Committee. A Committee, consisting of not fewer than three individuals, at least one member being a member of Borough Council and at least one member being a member of the Police Department, shall be appointed by a resolution of Lehighton Borough Council and shall administer this plan in accordance with its terms and with such powers as herein described. Any member of the Committee may resign at any time by giving written notice to Borough Council and to the other Committee members.
B. 
Powers and duties of Committee. The Committee shall administer the plan in accordance with its terms and shall have all powers necessary to carry out the provisions of the plan. The Committee shall interpret the plan and shall determine all questions arising in the administration, interpretation and application of the plan. Any such determination by the Committee shall be conclusive and binding on all persons.
C. 
Organization and operation of the Committee. The Committee shall act by a majority of its members at the time in office and such action may be taken either by a vote at a meeting or in writing without a meeting. The Committee, with Borough Council approval, may authorize any one or more of its members to execute any document or documents on behalf of the Committee, in which event the Committee shall notify the trustee in writing of such action and the name or names of its members or members so designated. The trustee thereafter shall accept and rely upon any document executed by such member or members as representing action by the Committee until the Committee shall file with the trustee a written revocation of such designation. The Committee may adopt such bylaws and regulations as it deems desirable for the conduct of its affairs, and may appoint such accountants, actuaries, counsel, specialists, consultants and other persons as it may deem necessary or desirable in connection with the administration of this plan. The Committee shall be entitled to rely exclusively upon, and shall be fully protected in any action taken by it in good faith in relying upon any opinions or reports which shall be furnished to it by any such accountant, actuary, counsel or other consultants.
D. 
Actuarial calculations. The Committee shall adopt from time to time tables for use in all actuarial calculations required in connection with the plan and shall establish from time to time the rate or rates of regular interest which shall be used in all actuarial calculations required in connection with the plan. As an aid to the Committee in adopting tables, the consultant appointed by the employer shall evaluate the assets of the plan annually, shall make such actuarial valuations of the contingent assets and liabilities of the plan as the Committee may require, and shall certify to the Committee the tables and rates of contributions which such consultants recommend for use by the employer.
E. 
Records and reports. The Committee shall keep a record of all its proceedings and acts, and shall keep all such books of accounts, records and other data as may be necessary for the proper administration of the plan. The Committee shall notify the trustee and the Borough Council of any action taken by the Committee, and when required, shall notify any other interested person or persons.
F. 
Payments of expenses.
(1) 
The members of the Committee shall serve without compensation for services as such, but all expenses of the Committee shall be paid by the employer in such manner as the employer shall determine. Such expenses shall include any expenses incident to the functioning of the Committee, including but not limited to fees of accountants, actuaries, counsel, consultants and other specialists and any other costs of administering the plan.
(2) 
Any administrative expense or other expense attributable to the preparation of any actuarial valuation report shall be an allowable administrative expense, payable from the assets of the pension plan effective January 1, 1986.
G. 
Immunity from liability. No member of the Committee shall incur any liability for any action or failure to act excepting only liability for his own gross negligence or willful misconduct. The Borough Council shall and does hereby indemnify each member of the Committee against any and all claims, losses, damages, expense and liability arising from any action or failure to act, except when the same is judicially determined to be due to the gross negligence or willful misconduct of such member. In addition, the Committee and any member or agent thereof shall be fully protected in relying upon the advice of any accountant, actuary, counsel or consultant appointed by the Committee or the Borough Council.
The monthly benefit as determined in this article, payable to retirees and survivors of retirees shall be increased the sum of $50 from the amount as set forth and/or established under original Ordinance No. 276-A on or about December 12, 1973, or such lesser amount for retirees and/or survivors of retirees who may have reached the maximum amount allowable under Pennsylvania Act 600 of 1955.[1] This increase shall become effective retroactively as of January 1, 1987.
[1]
Editor's Note: See 53 P.S. § 761 et seq.
In addition to the normal retirement benefits and any other benefits provided by this article, retirement benefits payable to a member receiving benefits shall be increased each year by a cost of living increase under the applicable provisions of 53 P.S. § 771, also known as "Act 600." This increase shall become effective retroactively as of January 1, 1993.
[Added 1-24-2011 by Ord. No. 592-2011[1]]
A. 
Deferred Retirement Option Program.
(1) 
Effective March 1, 2011, an active participant who has satisfied the eligibility requirements for normal retirement under § 23-15 may elect to participate in the DROP, defer receipt of his/her normal retirement benefit, and continue employment with the Borough by filing a written application with the Borough before the participant's specified date of participation in the DROP. Participation in the DROP shall be for a period of not less than 12 months nor more than 60 months.
(2) 
Prior to participating in the DROP, an eligible participant must do the following:
(a) 
Identify a binding and irrevocable resignation date from employment with the Borough that also discloses the date on which the employee will begin participation in the DROP.
(b) 
Execute an irrevocable written election to participate in the DROP that includes the following acknowledgements:
[1] 
That, as of the date on which participation in the DROP commences, the participant's pension calculation will freeze and no service rendered nor compensation received during the period of participation in the DROP will be considered for pension calculation purposes;
[2] 
As of the date on which the participant's participation in the DROP commences, the participant will no longer make any pension contributions to the pension fund;
[3] 
Participation in the DROP in no way limits or diminishes the Borough's right to discipline or discharge an employee for proper cause.
(c) 
Complete all other retirement documents requested by the Pension Committee.
B. 
Benefit under Deferred Retirement Option Program.
(1) 
Effective with the participant's date of participation in the DROP, the participant's normal retirement benefit under the plan, effective date of participation in the DROP, and effective date of termination of participation in the DROP shall be fixed.
(2) 
The participant's effective date of participation in the DROP shall begin on the day specified in his election.
(3) 
The participant's participation in the DROP shall end on the last day of the participation period specified in his election.
(4) 
The participant's normal retirement benefit shall be calculated under § 23-16 as of his effective date of participation in the DROP.
(5) 
The participant's normal retirement benefit may be increased by cost-of-living increases as provided by § 23-27.
(6) 
The participant's participation in the DROP does not guarantee his employment with the Borough during the participation period specified in his election.
(7) 
In the event that the participant is temporarily unable to perform his duties due to sickness or injury, his participation in the DROP shall continue. However, notwithstanding any other provision in this subsection, if the participant is disabled and has not returned to work as of the date of his required resignation, then such resignation shall take precedence over all other provisions herein and the participant shall be required to resign. In addition, as a condition of participation in the DROP, the participant shall not be eligible to receive a disability benefit from the plan. In no event shall a participant on temporary disability have the ability to draw from or access his DROP account.
(8) 
Notwithstanding a participant's election to participate in the DROP, a participant who is convicted or pleads guilty to engaging in criminal misconduct which constitutes a "crime related to public office or public employment," as that phrase is defined in Pennsylvania's Pension Forfeiture Act, 43 P.S. §§ 1311 to 1314, shall forfeit his right to receive a pension, including amounts currently deposited in the participant's DROP account. In such case, the participant shall only be entitled to receive the contributions, if any, made by the participant to the fund, without interest.
C. 
Deferred Retirement Option Program account.
(1) 
During the period of participation in the DROP, the participant's monthly normal retirement benefit shall be credited to his DROP account on the first day of each month.
(2) 
Interest shall be credited on the balance in the DROP account at the rate of 1% per annum.
(3) 
The participant shall receive an annual statement showing the accumulated balance in the DROP account.
(4) 
The monthly normal retirement benefit credited to the DROP account during the month of the participant's death or termination of participation in the DROP, if earlier, shall be a fraction of the final monthly normal retirement benefit credited to the DROP account pro rated for the month.
(5) 
The participant may not draw from nor access his DROP account during the period of participation in the DROP.
D. 
Termination of participation in Deferred Retirement Option Program.
(1) 
A participant in the DROP may change the termination date of participation in the DROP to an earlier date without penalty.
(2) 
Upon termination of participation in the DROP:
(a) 
The participant shall be separated from employment with the Borough.
(b) 
The participant shall receive distribution of the balance in his DROP account in a lump sum within 30 days following the participant's separation from employment with the Borough.
(c) 
The monthly normal retirement benefit shall commence to the participant as described in § 23-16.
(d) 
The participant shall be ineligible to reparticipate in the DROP.
E. 
Death benefits.
(1) 
Upon the death of a participant during his participation in the DROP, the participant's named beneficiary shall be entitled to payment of the balance in the participant's DROP account in a lump sum. The survivor benefit under § 23-19 shall be payable to the participant's surviving spouse or eligible child.
(2) 
If the participant dies on or after the effective date of his participation in the DROP but before the first monthly normal retirement benefit has been credited to the DROP account, the participant's election to participate in the DROP shall be null and void.
[1]
Editor's Note: This ordinance also redesignated former §§ 23-28 through 23-30 as §§ 23-29 through 23-31, respectively, and provided for an effective date of 3-1-2011.
[Amended 10-22-2007 by Ord. No. 556-2007]
In addition to the normal retirement benefits and any other benefits provided by this article, length-of-service increments shall be provided to each member, which will be the maximum allowable length-of-service benefit under the applicable provisions of 53 P.S. § 771, also known as "Act 600." This increase shall become effective retroactively as of January 1, 1993.
A. 
Subject to the provisions hereinafter set forth, the employer may at any time and from time to time modify or amend, in whole or in part, any or all of the provisions of this article and/or trust agreement, including the method of financing the plan, provided that:
(1) 
No modification or amendment may be made which would have the effect of depriving any retired member or contingent annuitant receiving a retirement benefit or any benefits under the plan to which he would otherwise be entitled by reason of the accumulated funds held under this article at that time, unless such member or contingent annuitant consents thereto; and
(2) 
No such modification or amendment shall make it possible for any part of the funds of the plan to be used for or diverted to purposes other than for the exclusive benefit of members and contingent annuitants under the plan prior to the satisfaction of all liabilities with respect to them.
B. 
Notwithstanding the foregoing, any modification or amendments of this article may be made, retroactively if necessary, which the employer may deem necessary or appropriate to make the plan conform to the requirements of any law or governmental regulation now or hereafter enacted or promulgated or to qualify such Article and trust forming a part thereof as exempt under existing or future federal, state or local income tax or estate tax laws and regulations.
A. 
This article represents codification of and amendments to all ordinances and resolutions of the Borough relating to Police Employee Pension Plan; all pension funds and all the assets and liabilities of the existing plan or fund are hereby transferred to the fund established pursuant to the provisions of this article.
B. 
This plan shall be construed, regulated and administered under the laws of the Commonwealth of Pennsylvania and resolutions and ordinances made by the Borough of Lehighton.