[HISTORY: Adopted by the Borough Council of the Borough of Walnutport as indicated in article histories. Amendments noted where applicable.]
GENERAL REFERENCES
Officers and employees — See Ch. 40.
Salaries and compensation — See Ch. 74.
[Adopted 12-3-1990 by Ord. No. 90-12 (Ch. 1, Part 7C, of the 1983 Code of Ordinances)]
This plan shall be entitled the "Defined Contribution Retirement Plan for the Secretary/Treasurer."
The effective date of this plan is April 1, 1991. The anniversary date is the last day of a plan year.
As used in this article, the following terms shall have the meanings indicated:
COMPENSATION
All base pay, overtime pay, night duty extra pay, vacation pay and bonuses.
FULL-TIME EMPLOYEES
An employee hired as a permanent employee who regularly works 35 or more hours per week.
PLAN YEAR
The period of 12 consecutive months which ends on each anniversary date.
RETIREMENT DATE
The first day of the month immediately following the month in which the participant attains the normal retirement age or the early retirement age.
YEARS OF SERVICE
Each full year employed by the employer from the date of hire to the retirement date, termination date, date of death or disability. A year of service is one in which the employee works 1,000 or more hours during a plan year.
Each permanent full-time employee who attained age 20 and has one year of service and is not over age 64 may participate in the plan.
A. 
A monthly retirement benefit shall be payable to each eligible participant commencing on the retirement date or the early retirement date. The retirement benefit shall be payable over the lifetime of the retiree and shall be an amount which is determined actuarially based on the amount of the participants account, the age and sex of the participant on the retirement date and the type of annuity selected.
B. 
The normal retirement annuity is a "life only" annuity providing monthly benefits from the retirement date until the payment of the benefit due just prior to the retiree's death. Other annuity options which are actuarially equivalent, may be selected by the retiree such as life income with a ten- or twenty-year period certain, life income with a cash refund or a joint life and survivor option with joint payees being the retiree and the retiree's spouse or another payee designated by the retiree approved by the employer, plan administrator or pension committee.
An eligible participant may retire after attaining the age of 62 with 10 or more years of credited service. An eligible participant who is age 65 or older may retire after five or more years of credited service.
An eligible employee may retire at any age after 25 years of credited service.
An eligible participant who has not attained the normal or early retirement age but who terminates employment, will have a vested right to a percentage of that participant's allocated account(s) according to completed years of service based on the following schedule:
Years of Service
Account Value Employer Contributions
Account Value Employee Contributions
1
0%
100%
2
0%
100%
3
20%
100%
4
40%
100%
5
60%
100%
6
80%
100%
7
100%
100%
Over 7
100%
100%
A. 
An eligible participant who dies or becomes disabled prior to a retirement date will receive a benefit equal to all contributions made to that employee's account from whatever source, with earnings compounded at 5% per annum.
B. 
Disability is defined as a total disability which prevents the participant from working in a gainful occupation resulting from a sickness or accident that occurred while a participant was a full-time employee and would cause the participant to be eligible for social security disability benefits.
A. 
The plan will be funded by annual contributions from the employer of up to 6% of eligible participant's compensation.
B. 
Any payments received by the employer from the State Treasurer from monies received from taxes paid upon premiums of foreign casualty insurance companies shall be applied to the plan and can be used to satisfy some or all of the employer's obligation under this article or may be deposited to the plan in addition to the employer's contribution, as determined solely by the employer.
C. 
Monies from lawful gifts received from outside sources will be counted as additional employer contributions and contributions from participants, if any, as provided by § 45-9 of this article will be applied to participants' accounts.
Eligible participants may voluntarily contribute up to 10% of compensation per annum.
Pension funds must be deposited with a depository or an institution empowered to conduct its business in the Commonwealth of Pennsylvania including banks, life insurance companies and investment companies but investments are restricted to bank accounts, certificates of deposit, annuities, life insurance policies, group deferred annuity policies, mutual funds and stocks and bond of investment grades which would be selected by a prudent investor.
The Plan Administrator may incur necessary lawful expenses to administrate the plan, including, but not limited to, actuarial fees necessary to determine the adequacy of the plan, administrative, filing, legal, consulting, accounting, insurance, investment and other fees and expenses necessary for the proper administration of the plan.
The employer may appoint a Plan Administrator or pension committee to oversee the operation of the plan.
The pension payments provided by this plan shall not be subject to attachment, execution, levy, garnishment or other legal process and shall be payable only to the participant, retiree or designated beneficiary, or the estate of a lawful payee and shall not be subject to assignment or transfer.
The employer shall have the right to amend this plan.
[Adopted 6-14-2007 by Ord. No. 2007-02]
[Amended 9-8-2011 by Ord. No. 2011-07]
A. 
The Borough of Walnutport (the "employer"), on July 25, 1979, established a retirement plan for certain of its employees known as the "Borough of Walnutport Police Pension Plan" (the "prior plan");
B. 
The employer now desires to adopt the restated master plan and trust currently administered by the Pennsylvania State Association of Boroughs Master Retirement Trust (the "PSAB Master Retirement Trust"), effective as of January 1, 2011;
C. 
In accordance with such purpose, the employer hereby adopts the PSAB Master Retirement Trust and the accompanying joinder agreement, which documents together shall constitute the retirement plan known as the Borough of Walnutport Police Pension Plan (the "plan");
D. 
Said plan shall be deemed to be a continuation of and a successor to the prior plan; and
E. 
Revisions have been made to the current joinder agreement to eliminate the killed-in-service survivor benefit in compliance with Act 51, which eliminated this benefit from the plan.
[Added 9-8-2011 by Ord. No. 2011-07; amended 3-9-2017 by Ord. No. 2017-02]
A. 
Effective as of January 1, 2017, the accompanying joinder agreement and the terms of the Pennsylvania State Association of Boroughs Municipal Retirement Trust are hereby adopted by the employer, to be known as the "Borough of Walnutport Police Pension Plan"; and
B. 
Said plan shall be deemed to be a successor to and a continuation of the prior plan.
The Borough of Walnutport Police Pension Plan is hereby amended by adding the following:
A. 
Definitions. As used in this article, the following terms shall have the meanings indicated:
BENEFICIARY
The individual identified by a police officer to receive the contents of an officer's DROP account in the event of the death of an officer during the period in which the officer is participating in the DROP, but before the officer separates from employment.
BOROUGH
The Borough of Walnutport, Northampton County, Pennsylvania.
DROP
Deferred Retirement Option Plan.
DROP ACCOUNT
Separate account created to accept DROP participants' monthly pension check while a DROP participant.
FUND or PLAN
The Police Pension Plan for the Borough of Walnutport.
POLICE OFFICER
A duly appointed police officer serving as a member of the Walnutport Borough Police Department.
B. 
Eligibility. As of the effective date of this article, members of the Walnutport Borough Police Department who have not retired prior to the implementation of the DROP program may enter into DROP on the first day of any month following completion of 25 years of credited service and attaining the age of 50.
C. 
Written election.
(1) 
A member of the Police Department electing to participate in the DROP must complete and execute a "DROP option form" prepared by the Borough of Walnutport, which shall evidence the member's participation in the DROP. The form must be signed by the member and notarized and submitted to the Borough of Walnutport prior to the date on which the member wishes the DROP option to be effective. The DROP option notice shall include an irrevocable notice to the Borough, by the member, that the member shall resign from employment with the Walnutport Borough Police Department effective on a specific date (the "resignation date"). In no event shall the resignation date be shorter than 12 months or longer than 48 months from the execution of the DROP option form. An officer shall cease to work as a Borough police officer on the officer's resignation date, unless the Borough terminates or honorably discharges the officer prior to the resignation date. The DROP option notice shall also provide that, as a condition of participation in the DROP program, a participating officer holds the Borough harmless with respect to any tax consequences or investment performance related to a participant's DROP account or participation in the DROP program.
(2) 
In addition, all retirement documents required by the Police Pension Board Administrator must be filed and presented to the Pension Board for approval of retirement and payment of pension. Once a retirement application has been approved by the Police Pension Board, it is irrevocable.
D. 
Pension contributions. A police officer shall not be required to make any contributions to the fund during his/her DROP period.
E. 
Limitation on pension accrual. After the effective date of the DROP option, the member shall no longer earn or accrue additional years of continuous service for pension purposes.
F. 
Benefit calculation. For all retirement fund purposes, continuous service of a member participating in the DROP shall remain as it existed on the effective date of commencement of participation in the DROP. Service thereafter shall not be recognized or used for the calculation or determination of any benefits payable by the Walnutport Borough Police Pension Fund. The average applicable compensation of the member for pension calculation purposes shall remain as it existed on the effective date of commencement of participation in the DROP in accordance with Part I-5 of the Pension Joinder Agreement. Earnings or increases in earnings thereafter shall not be recognized or used for the calculation or determination of any benefits payable by the pension fund. The pension benefit payable to the members shall increase only as a result of cost of living adjustments in effect on the effective date of the member's participation in the DROP or by applicable cost of living adjustments granted thereafter.
G. 
Payments to the DROP account. The monthly retirement benefits that would have been payable had the member elected to cease employment and receive a normal retirement benefit, shall, upon the member commencing participation in DROP, be paid into the separate account established to receive the participant's monthly pension payments. This account shall be designated the DROP account.
H. 
Accrual of nonpension benefits. After an officer elects to participate in the DROP program, all other contractual benefits shall continue to accrue. All buyback of accrued, but unused, sick or vacation time shall be paid at the time the officer ceases employment with the Borough. An officer may utilize leave time during the DROP period, but the Borough shall not be required to buy back any such unused leave time at the end of the DROP period.
I. 
Payout. Upon the termination date set forth in the member's DROP option notice or such date as the Borough separates the member from employment, the retirement benefits payable to the member or member's beneficiary, if applicable, shall be paid to the member or beneficiary and shall no longer be paid to the member's deferred retirement option account. Within 30 days following termination of a member's employment pursuant to their participating in the DROP program, the balance in the members' DROP account shall be paid to the member in a single lump sum payment or at the member's option, in any fashion permitted by law. By participation in the DROP, each officer agrees to hold the Borough harmless for any tax or other consequences flowing from the officer's disposition of the payout under this section.
J. 
Disability during DROP. If a bargaining unit member becomes temporarily incapacitated during his participation in DROP, that member shall continue to participate in the DROP program as if fully employed. The member shall receive disability pay in the same amount as disabled Police Officers that are not participating in DROP. In no event shall a member on temporary disability have the ability to draw from his DROP account. However, notwithstanding any other provision in this subsection, if an officer is disabled and has not returned to work as of the date of his required resignation, then such resignation shall take precedence over all other provisions herein and said officer shall be required to resign. Nothing contained in this plan shall be construed as conferring any legal rights upon any police employee or other person to a continuation of employment nor shall participation in the DROP Program supersede or limit in any way the right of the Borough to honorably discharge a police employee based upon an inability to perform his or her full duties as a police officer. If a police officer becomes permanently disabled during the DROP period, the officer shall be honorably discharged from employment, on the date that the police officer may obtain the contents of his DROP account and, thereafter, commence receiving his normal pension benefit.
K. 
Death during DROP period. If a DROP participant dies during the DROP period and the Act 600 killed-in-service death benefit is payable to the deceased DROP participant, then the DROP election shall be revoked and the DROP account shall not be payable to any designated beneficiary of the deceased DROP participant, but the Act 600 pension shall be payable. If death occurs during the DROP period but the Act 600 killed-in-service death benefit is not payable, then the DROP participant's designated beneficiary shall be entitled to a lump-sum payment of the DROP account balance.
L. 
Forfeiture of benefits. Notwithstanding an officer's participation in the DROP Plan, an officer who is convicted or pleads guilty to engaging in criminal misconduct which constitutes a "crime related to public office or public employment," as that phrase is defined in Pennsylvania's Pension Forfeiture Act, 43 P.S. §§ 1311-1314, shall forfeit his right to receive a pension, including any amounts currently deposited in the DROP account. In such a case, the member shall only be entitled to receive the contributions, if any, made by the member to the fund, without interest.
M. 
Account manager. The Borough and the police officers will mutually agree upon an investment manager to administer the DROP accounts. The Borough and the police officers further agree that the Borough shall not be responsible for any investment loss incurred in the plan or for the failure of an investment to earn a specific or expected return or to earn as much as any other opportunity, whether or not such other investment opportunity was offered or available to participants in the plan.
N. 
Cost of management for DROP program. The police officers and the Borough agree that any costs or fees associated with the management of the DROP accounts shall be paid directly from the Police Pension Fund and not by the Borough.
O. 
Amendment. Any amendments to the DROP ordinance shall be consistent with the provisions covering deferred retirement option plans set forth in any applicable collective bargaining agreement and shall be binding upon all future DROP participants and upon all DROP participants who have balances in their deferred retirement option accounts. The DROP plan may only be amended by a written instrument, not by any oral agreement or past practice.
P. 
Construal of provisions. An officer's election to participate in the DROP program shall in no way be construed as a limitation on the Borough's right to suspend or terminate an officer for just cause or to grant the officer an honorable discharge based upon a physical or mental inability to perform his or her duties.