Borough of Boyertown, PA Police Pension Plan

ACCRUED BENEFIT: One-half of the participant's final average monthly compensation multiplied by the ratio of years of service to the date of determination over potential years of service to the date of retirement.

ACT 205: Act 205 of 1984, the Municipal Pension Plan Funding Standard and Recovery Act.[1]

AGE: Age at nearest birthday.

ANNIVERSARY DATE: January 1 of each year.

DISABILITY: A total and permanent disability which renders a participant incapable of performing all normal police duties permanently. In determining total and permanent "disability," the opinion of a physician selected by the Borough shall be controlling. The condition of permanence shall require a six-month waiting period, during the entire length of which the participant shall be totally and permanently disabled. Benefits shall commence on the first day of the month following the six-month waiting period and the determination of total and permanent "disability" by the selected physician.

EFFECTIVE DATE: The original effective date of the plan is October 14, 1958.

EMPLOYER: The Borough of Boyertown, Berks County, Commonwealth of Pennsylvania.

FINAL AVERAGE MONTHLY COMPENSATION: Total monthly compensation during the last 36 months of employment as a full-time police officer of the Borough of Boyertown including longevity pay and night differential pay, and also including court pay, holiday pay, overtime pay and any other remuneration, but excluding accumulated unused sick leave payable as a lump sum.
[Amended 12-30-1998 by Ord. No. 3-98; 6-3-2002 by Ord. No. 5-02]

FUND: The Borough of Boyertown Police Pension Plan Trust Fund.

PARTICIPANT: Any police officer who meets the requirements set forth in § 33-4 of this article. The masculine will include the feminine.

PLAN: The Borough of Boyertown Police Pension Plan.

PLAN YEAR: January 1 to December 31.

SERVICE: Continuous employment with the employer. All military service shall be credited if a police officer has been employed for at least six months before entering the military service, provided that the officer returns to the police force within six months after the officer's discharge.

[1]

Editor's Note: See 53 P.S. § 895.101 et seq.

§ 33-2 Funding.

This plan is to be funded and maintained by any of the following methods, or a combination of each:

Contributions by participants. All participants shall make contributions which shall be 5% of their total compensation but no more than 8% of their total compensation. Borough Council may, on an annual basis, by ordinance or resolution, reduce or eliminate contributions into the plan by participants. The Borough may, but need not, have an actuarial study performed prior to reducing or eliminating participants' contributions into the plan.

[Amended 12-29-2003 by Ord. No. 07-03]

State aid. Funds which are received from the Commonwealth of Pennsylvania pursuant to Act 205, which are directed to this plan as approved by the Borough Council, may be used.

Borough contributions. Contributions from the Borough of Boyertown, as necessary, with appropriate approval by the Borough Council, may be used.

Gifts, grants, devises or bequests. The sums which may be received by the Borough of Boyertown in the form of gifts, grants, devises or bequests may, to the extent authorized by law, be contributed to said fund with the approval of the Borough Council.

Any other sums received or contributed to the Borough, to the extent authorized by law and with prior approval of the Borough Council, may be used.

§ 33-3 Administration.

Subject to the control and direction of the Borough Council, the handling of said Police Pension Fund is hereby committed to a committee to be known as the "Police Pension Fund Committee." Said Committee shall be composed of seven members; namely, a member of the Borough Council selected by the Borough Council; the Borough Manager; a member of the Boyertown Police Department selected by those members of the Police Department who participate in the Police Pension Fund; and four residents of the Borough of Boyertown, who shall be selected by the Borough Council. Upon passage of this article, the Borough Council shall elect the four residents who shall be members of this Committee, one of whom shall serve for a term of one year, one for two years, one for three years and one for four years. At the expiration of the term of a resident member, the Borough Council shall elect a resident member of said Committee to serve for a term of four years. The Police Department representative shall be elected for a term of two years. Said Committee shall be authorized to elect its own President, Vice President, Secretary and Treasurer.

The Police Pension Fund Committee shall have full responsibility for administration of the plan and fund. The Committee shall hold, invest, reinvest and distribute all funds and property received pursuant hereto in trust for purposes of this article. The Committee may receive at any time gifts, grants, devises or bequests to the Police Pension Fund of any money or property, real or personal or mixed, to be held by the Committee in trust for the benefit of this fund and in accordance with the provisions hereof. The Committee shall be subject to such rules and regulations as may from time to time be adopted by the Borough Council through ordinance or resolution.

The Police Pension Fund Committee shall have full power and authority, either directly or through its designated representatives, to do all acts, to execute, acknowledge and deliver all instruments and to exercise for the sole benefit of the participants hereunder any and all powers and discretions necessary to implement and effectuate the purposes of this article, including, for purposes of illustration, but not limited to any of the following:

(1)

To hold, invest and reinvest all funds received pursuant to this article in such investments as may be authorized as legal investments under the laws of the Commonwealth of Pennsylvania.

(2)

To retain any property which may at any time become an asset of the fund, as long as the Committee may deem it advisable.

(3)

To make distribution of the moneys in the fund in accordance with the terms of this article.

(4)

To appoint a trustee or custodian to hold, invest and reinvest plan funds in accordance with this article. Such trustee or custodian may be removed or resign by giving 60 days' written notice to the other party. The Committee shall maintain the authority to oversee and review the performance of the trustee or custodian both on an investment and administrative basis. Plan funds may be invested in pooled funds designated for employee benefit trust funds.

Any administrative expense which is an allowable administrative expense under Act 205 of the Commonwealth of Pennsylvania will be payable from the assets of the fund. If administrative expenses are not or cannot be paid from the fund, the expense will be paid by the Borough of Boyertown.

§ 33-4 Eligibility.

Each police officer of the Borough of Boyertown will be eligible to participate upon becoming a full-time police officer.

§ 33-5 Normal retirement and early retirement benefits.

Every full-time police officer of the Borough of Boyertown who shall have served as such for an aggregate of 25 years in the Borough of Boyertown and shall have attained the age of 50 years may retire from active duty at any time thereafter. Upon such retirement, such officer shall be paid out of the fund a monthly pension which shall equal 1/2 of the final average monthly compensation of such officer.

An early retirement benefit shall be provided to a participant with 20 or more years of service who terminates employment prior to the completion of superannuation retirement age and service requirements and who files a written application for an early retirement benefit with the Borough Council. The early retirement shall become effective as of the date the application is filed with the Borough Council or the date designated on the application, whichever is later, and shall be the actuarial equivalent of a partial superannuation retirement benefit calculated as follows:

(1)

A partial superannuation retirement benefit shall be determined by applying the percentage that the participant's years of service bear to the years of service that the participant would have rendered had the participant continued to be employed until his superannuation retirement date to the gross pension amount calculated using the monthly average compensation during the thirty-six-month period prior to his termination of employment.

(2)

The actuarial equivalent of the partial superannuation retirement benefit to reflect that it will commence on the effective date of the early retirement rather than on the date on which the participant would have completed superannuation age and service requirements. The actuarial reduction shall be calculated using the actuarial assumptions reported in the last actuarial valuation report filed with the Public Employee Retirement Commission under the act of December 18, 1984 (P.L. 1005, No. 205), known as the "Municipal Pension Plan Funding Standard and Recovery Act."[1]

[1]

Editor's Note: See 53 P.S. § 895.101 et seq.

§ 33-6 Service-related disability benefits.

[Amended 10-2-1995 by Ord. No. 13-95; 12-29-2003 by Ord. No. 07-03]

Every participant who shall receive an honorable discharge from the police force of the Borough of Boyertown by reason of his or her service-related disability shall, upon such discharge (following the required six-month waiting period), be paid out of the plan a monthly pension which shall be calculated at a rate of 50% of the participant's salary at the time the disability was incurred; provided, however that any participant who receives benefits for the same injuries under the Social Security Act, 49 Stat. 620, 42 U.S.C. § 301 et seq., shall have his or her disability benefits received under this section offset or reduced by the amount of such Social Security Act benefits.

§ 33-7 Death benefits.

[Amended 4-5-1993 by Ord. No. 1-93; 12-29-2003 by Ord. No. 07-03; 12-3-2012 by Ord. No. 08-2012]

In the event of the death of a participant or a participant who retires or is honorably discharged on pension, the surviving spouse, or if no spouse survives or if he or she survives and subsequently dies, then the child(ren) under the age of 18 or, if then attending college, under or reaching the age of 23, shall, during his or her lifetime in the case of a surviving spouse, or, in the case of a child(ren), until reaching the age of 18 or, if then attending college, under or reaching the age of 23, be entitled to receive a pension calculated at 50% of the pension the participant was receiving or would have been receiving had he or she been retired or honorably discharged on pension at the time of his or her death. For the purposes of this section, the phrase "attending college" shall mean the eligible child(ren) is registered at an accredited institution of higher learning and is carrying a minimum course load of seven credit hours per semester.

§ 33-8 Termination benefits and vesting.

Any full-time police officer shall be one-hundred-percent vested after 12 years of service in the accrued benefit to the date of termination.

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 fund established pursuant to this article and/or to a police pension fund of the Borough existing prior to the effective date of this article shall be entitled to a refund of all such moneys paid by him or her into such police pension fund, plus interest earned on such moneys calculated at the rate to be determined annually by the Police Pension Fund Committee. If any former police officer who received said refund is again employed by the Borough as a full-time police officer, he or she shall be reinstated as a participating member of the fund and receive credit for past service upon contributing to the fund the amount of the refund and interest, if any, received by him or her when employed.

The surviving spouse of any participant who dies before his or her pension has vested or if no spouse survives or if he or she survives and subsequently dies, the child(ren) under the age of 18 or, if attending college, under or reaching the age of 23, of the participant shall be entitled to receive repayment of all money which the participant invested in the pension fund plus interest or other increases in value of the participant's investment in the pension fund unless the participant has designated another beneficiary for this purpose. For the purposes of this section, the phrase "attending college" shall have the same meaning as described in § 33-7 hereof. The benefits available to surviving spouses under this section do not apply to surviving spouses whose spouse died on or before April 17, 2002, and who were not remarried as of said date.

[Added 12-29-2003 by Ord. No. 07-03]

§ 33-9 Transfer or assignment.

The pension payments herein provided for shall not be subject to attachment, execution, levy, garnishment or other legal process and shall be payable only to the participant or his or her designated beneficiary. No participant or his or her beneficiary shall have any right to alienate, encumber or assign any assets of the fund held by the Police Pension Fund Committee on his or her behalf or any of the benefits or payments or proceeds of any contract or agreement purchased or acquired by the Borough hereunder.

§ 33-10 When effective.

This chapter shall become effective on the date of enactment as provided by law, except that §§ 33-5 and 33-7 shall be considered to have been effective as of January 1, 1987.

Article II: Amendments to Plan

[Adopted 3-4-2002 by Ord. No. 2-02]

§ 33-11 Definitions.

As used in this article, the following terms shall have the meanings indicated:

CODE: The Internal Revenue Code, as amended periodically.

COMPENSATION: Plan members' wages, as defined in Code Section 3401(a), for a plan year for which the municipality is required to provide the plan member a written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Such 415 compensation shall include any elective deferrals defined in Code Section 402(g)(3) and all amounts contributed or deferred at the election of the plan members which are not includible in the gross income of the plan member by reason of either Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b), 414(h)(2) or 457.

MUNICIPALITY: The political subdivision named at the top of this page.[1]

PLAN: The pension plan specified at the top of this page.[2]

PLAN YEAR: The calendar year.

REGULATION(S): The income tax regulations, as amended periodically.

[1]

Editor's Note: Said political subdivision refers to the Borough of Boyertown, as indicated in the preamble of Ord. No. 2-02.

[2]

Editor's Note: Said plan refers to the Borough of Boyertown Police Pension Plan, as indicated in the preamble of Ord. No. 2-02.

§ 33-12 Distribution of benefits.

Unless the plan member otherwise elects, the payment of benefits under the plan to the plan member will begin not later than the 60th day after the latest of the close of the plan year in which:

(1)

The plan member attains the earlier of age 65 or the normal retirement age specified under the plan;

(2)

Occurs the 10th anniversary of the year in which the plan member commenced participation in the plan; or

(3)

The plan member terminates his service with the municipality.

In the case of a plan which provides for the payment of an early retirement benefit, a plan member who satisfied the service requirements for such early retirement benefit, but separated from the service (with any nonforfeitable right to an accrued benefit) before satisfying the age requirement for such early retirement benefit, is entitled upon satisfaction of such age requirement to receive a benefit not less than the benefit to which he would be entitled at the normal retirement age, actuarially reduced under regulations prescribed by the Secretary.

A plan member's benefits must commence to be paid not later than April 1st of the calendar year following the later of the calendar year in which the member attains age 70 1/2 or the calendar year in which the member retires. Such distributions must equal or exceed the required minimum distribution, and otherwise be made in a manner consistent with the requirements of Code Section 401(a)(9) and the regulations thereunder.

Required distributions must be made over the lifetime or the life expectancy of the plan member or the joint life times or joint life expectancy of the plan member and the plan member's designated beneficiary. The life expectancy of the plan member and the plan member's spouse may be redetermined at the election of the plan member or the plan member's spouse. Such an election is irrevocable, once made. If no such election is made by the date benefit distributions must commence, then the life expectancy of the plan member and the plan member's spouse shall not be recalculated. Tables V and VI of Regulation 1.72-9 shall be used for computing life expectancy or joint and survivor life expectancy.

All benefit distributions to a plan member or the plan member's beneficiary shall be in accordance with the incidental death benefit requirements of Code Section 401(a)(9)(G) and the related regulations.

§ 33-13 Compensation and benefit limitations.

The limitations and other requirements outlined below are intended to comply with Code Section 415 and the regulations thereunder, the terms of which are specifically incorporated herein by reference. The maximum compensation limit and benefits limitations under the Code are as follows:

The compensation used in calculating a plan member's benefit cannot exceed the limits of Code Section 401(a)(17), as adjusted for cost-of-living increases, per Code Section 415(d).

General rule. In no event shall the annual retirement benefit payable to a plan member under this plan, together with retirement benefits provided under all qualified benefit plans maintained or previously maintained by the municipality, for any limitation year, which shall be the calendar year, exceed the maximum benefit permitted, as adjusted annually per Code Section 415(d), under Code Section 415(b) (including any applicable grandfathering rules). This plan section shall be applied in accordance with Code Section 415 and the regulations thereunder.

Adjustments of limits.

(1)

Where a retirement benefit commences before age 62, the Code Section 415(b)(1)(A) dollar limit shall be reduced in accordance with Code Section 415(b)(2)(F). This reduction shall not result in a limit that is less than $75,000 if the benefit begins at or after age 55, or the actuarial equivalent of $75,000 at age 55 (determined in accordance with Code Section 415) if the benefit begins before age 55.

(2)

Where a retirement benefit commences after age 65, the Code Section 415(b)(1)(A) dollar limit shall be increased as described in Code Section 415(b)(2)(F).

(3)

The maximum benefit limit of Code Section 415(b)(1) shall be applied to benefits in the form of a straight life annuity (with no ancillary benefits) without regard to benefits attributed to plan member contributions and rollover contributions. If the form payable to a plan member is other than a single life annuity or a Code Section 417(b) qualified joint and survivor annuity, the plan member's benefit shall not exceed the actuarial equivalent of the Code Section 415(b)(1) maximum payable in the form of a single life annuity unless no such adjustment is required under Code Section 415 and related regulations.

(4)

Notwithstanding the other rules of the plan and Code Section 415, if the plan member has not participated in a defined contribution plan of the municipality, the plan member's annual retirement benefit shall not be deemed to exceed the maximum benefit limit if it does not exceed the Code Section 415(b)(4) limit of $10,000, as adjusted for plan participation or service of less than 10 years in accordance with Code Section 415(b)(5).

Special limitation for qualified police or firefighters. For any plan member who is a qualified participant, as defined under Code Section 415(b)(2)(H), the limitation under Code Section 415(b)(2)(C) shall not be reduced to an amount less than $50,000 [as adjusted per Code Section 415(d)] as required by Code Section 415(b)(2)(G).

Order of defined benefit plan reductions. If the plan member participates or participated in any other defined benefit plan of the municipality, and the plan member's aggregate annual retirement benefit under this plan and such other plan exceeds the limits permitted under Code Section 415, such plan member's benefit shall be first reduced under this plan.

§ 33-14 Vesting.

Notwithstanding the plan's vesting schedule, upon any amendment or restatement of the plan, a plan member's vested accrued benefit shall not be less than the vested accrued benefit immediately preceding such amendment or restatement.

Notwithstanding the plan's vesting schedule, a plan member shall be 100% vested when the plan member completes the age and service requirements for normal retirement at his normal retirement date under the plan.

Notwithstanding the plan's vesting schedule, a plan member shall be 100% vested in his accrued benefit (to the extent funded) as of the date of partial or complete plan termination.

§ 33-15 Qualified domestic relations order.

Notwithstanding § 33-14, the plan shall recognize any qualified domestic relations order (QDRO) set forth under Code Section 414(p). Any plan member's benefits, rights or elections shall be subject to any rights afforded to the alternate payee by a QDRO. Further, a distribution to an alternate payee is permitted if authorized by a QDRO, even if the plan member involved has not separated from service and has not reached the earliest retirement age under the plan.

§ 33-16 Alienation.

No plan member or beneficiary shall have any benefit subject to any type of alienation, anticipation, assignment, charge, encumbrance, pledge, sale or transfer. Further, no benefits shall be subject to or liable for any debts, contracts, engagements, liabilities or torts. The only exceptions to this section are those in § 33-15 above and those referenced in Code Sections 401(a)(13)(C) and (D).

§ 33-17 Unlocatable member or beneficiary.

If any portion of a plan benefit is payable to a plan member or beneficiary at the later of the plan member's 62nd birthday or his normal retirement age and such benefit remains unpaid solely by reason that the municipality, after sending a registered letter, to the last known address, return receipt requested, and after diligent effort fails to locate the plan member or beneficiary, the actuarial value of the benefit shall be forfeited and applied towards reducing plan costs. If, subsequent to the forfeiture, a plan member or beneficiary is located, the actuarial value of the forfeiture at the time it was forfeited (no adjustments for gains or losses) shall be restored.

§ 33-18 Forfeitures.

Forfeitures must not be applied to increase the benefits any municipal employee would otherwise receive under the plan.

§ 33-19 Merger or consolidation.

In the case of any merger or consolidation with, or transfer of plan assets or liabilities to any other plan, each plan member would (if the plan then terminated) receive a benefit immediately after the merger, consolidation, or transfer which is equal to or greater than the benefit he would have been entitled to receive immediately before the merger, consolidation, or transfer (if the plan had then terminated).

§ 33-20 Actuarial assumptions.

As required by Code Section 401(a)(25), the actuarial assumptions used to calculate plan benefits shall not be subject to the municipality's discretion.

§ 33-21 Optional direct transfer of eligible rollover distributions.

Distribution shall be made in the form of a direct trustee-to-trustee transfer to the eligible retirement plan so specified if any distributee of any eligible rollover distribution:

(1)

Elects to have such distribution paid directly to an eligible retirement plan; and

(2)

Specifies the eligible retirement plan to which such distribution is to be paid (in such form and at such time as the plan administrator may prescribe).

Limitation. Subsection A(1) shall apply only to the extent that the eligible rollover distribution would be includible in gross income if not transferred as provided in Subsection A(1) [determined without regard to Code Sections 402(c) and 403(a)(4)].

Eligible rollover distribution. For purposes of this subsection, the term "eligible rollover distribution" has the meaning given such term by Code Section 402(f)(2)(A).

Eligible retirement plan. For purposes of this subsection, the term "eligible retirement plan" has the meaning given such term by Code Section 402(c)(8)(B), except that a qualified trust shall be considered an eligible retirement plan only if it is a defined contribution plan, the terms of which permit the acceptance of rollover distributions.