[Ord. 489, 12/14/1987, § 1; as amended by Ord.
524, 12/31/1991; by Ord. 567, 5/8/2000, § 1; by Ord. 572,
12/11/2000, §§ 1-3; by Ord. 598, 10/12/2004, § 1;
and by Ord. 10-658, 9/14/2010]
As used in this Part, the following terms shall have the meanings
indicated:
As of any date of determination, a participant's accrued
monthly pension shall be calculated as follows:
For employees who were participants of the plan prior to January
1, 2003, 50% of the average monthly compensation calculated as of
the date of determination, multiplied by the ratio of (i) completed
years of service as of the date of determination, to (ii) completed
years of service as of normal retirement date.
For employees who first became participants of the plan on or
after January 1, 2003, and prior to October 1, 2004, 50% of the average
monthly compensation calculated as of the date of determination, multiplied
by the ratio of (i) completed years of service as of the date of determination,
excluding any service with the West Norriton Township Authority prior
to January 1, 2003, to (ii) the greater of completed years of service
as of normal retirement date, including any service with the West
Norriton Township Authority prior to January 1, 2003.
Not withstanding anything in Subsections A and B above to the contrary, for participants who terminate employment on or after October 1, 2004, the accrued benefit will not be less than 2% of the average monthly compensation times completed years and months of service as of the date of determination, to a maximum of 25 years of service.
For participants who are hired on or after October 1, 2004,
2% of the average monthly compensation time completed years and months
of service as of the date of determination, to a maximum of 25 years
of service.
Actual salary of a participant during a calendar year.
For years beginning after December 31, 1988, the annual compensation
of each participant taken into account for determining all benefits
provided under the plan for any determination period shall not exceed
$200,000. This limitation shall be adjusted by the Secretary at the
same time and in the same manner as under § 415(d) of the
Internal Revenue Code (the "Code"), except that the dollar increase
in effect on January 1 of any calendar year is effective for years
beginning in such calendar year and the first adjustment to the $200,000
limitation is effected on January 1, 1990. The plan year is the calendar
year. If the period for determining compensation used in calculating
an employee's allocation for a determination period is a short plan
year (i.e., shorter than 12 months), the annual compensation limit
is an amount equal to the otherwise applicable annual compensation
limit multiplied by the fraction, the numerator of which is the number
of months in the short plan year, and the denominator of which is
12.
In addition to other applicable limitations set forth in the
plan, and notwithstanding any other provisions of the plan to the
contrary, for plan years beginning on or after January 1, 1994, the
annual compensation of each employee taken into account under the
plan shall not exceed the OBRA '93 annual compensation limit. The
OBRA '93 annual compensation limit is $150,000, as adjusted by the
Commissioner of the Internal Revenue for increases in the cost-of-living
in accordance with Code § 401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which annual compensation is determined
(determination period) beginning in such calendar year. If a determination
period consists of fewer than 12 months, the OBRA '93 annual compensation
limit will be multiplied by a fraction, the numerator of which is
the number of months in the determination period, and the denominator
of which is 12.
For plan years beginning on or after January 1, 1997, any reference
in this plan to the limitation under § 401(a)(17) of the
Code shall mean the OBRA '93 annual compensation limit as set forth
in this provision.
If compensation for any prior determination period is taken
into account in determining a participant's benefits accruing in the
current plan year, the compensation for that prior determination period
is subject to the OBRA '93 annual compensation limit in effect for
that prior determination period. For this purpose, for determination
periods beginning after the first day of the first plan year beginning
on or after January 1, 1994, the OBRA '93 annual compensation limit
is $150,000.
The average monthly earnings of a participant during the
last 36 months of employment, excluding overtime. The last 36 months
of employment shall encompass any vacation days or approved personal
days which remain unused as of the last day of work.
Any person designated by a participant to receive any death
benefits upon death of participant.
The Commissioners of West Norriton Township for the time
in office at any time of reference.
The first day of the month next following participant's retirement
after passing his normal retirement date.
For each participant who terminates employment prior to January
1, 2000, the first day of any month coincident with or next following
his/her 60th birthday, but prior to normal retirement date. For each
participant who terminates employment on or after January 1, 2000,
the first day of any month coincident with or next following his/her
55th birthday but prior to normal retirement date.
This restated Plan is effective January 1, 1987. The original
Plan took effect January 1, 1964.
A permanent, full-time employee of West Norriton Township
who is not a member of the police force. "Full-time" shall mean working
12 months each calendar year and at least 32 1/2 hours per week.
The first day of the month coincident with or next following
the 65th birthday or completion of five years of full-time employment,
whichever is later. Notwithstanding the above, effective January 1,
2011, in no event will the Township Manager's normal retirement date
be later than the first day of the month coincident with or next following
the later of the 55th birthday or completion of 18 years of full-time
employment.
Any employee who has qualified as a member of this Plan.
West Norriton Township, Montgomery County, Commonwealth of
Pennsylvania.
The Commissioners of West Norriton Township, Montgomery,
Commonwealth of Pennsylvania.
[Ord. 489, 12/14/1987, § 1]
A pension fund, to be known as "West Norriton Township Pension
Fund for Employees Other than Police," is hereby established by West
Norriton Township for the benefit of such full time employees of its
work force, other than policemen, as shall receive honorable discharge
therefrom, by reason of age and service, and the families of such
as may die while still so employed.
[Ord. 489, 12/14/1987, § 1; as amended by Ord.
559, 3/9/1998, § I]
The pension fund for employees other than police shall be maintained
by annual payments and contributions in the following order:
A.
Payments made by the State Treasurer to the Township Treasurer from
the monies received from taxes paid upon premiums by foreign casualty
insurance companies for purposes of pension retirement for such employees.
B.
Proceeds of appropriate polices of insurance designed to protect
the integrity of said pension fund.
C.
Gifts, grants, devises or bequests granted to the said pension fund
pursuant to § 804 hereof.
D.
Employee contributions required by the Trustees as deemed necessary
to meet Act 205 funding requirements.
[Ord. 489, 12/14/1987, § 1]
The Pension Fund for Employees Other than Police is hereby authorized
to take, by gift, grant, devise or bequest, any money or property,
real, personal or mixed, in trust for the benefit of such fund and
the care, management, investment and disposal of such trust funds
or property shall be vested in the Trustees of the West Norriton Township
Pension Fund for Employees Other than Police and the trust funds shall
be governed thereby, subject to such directions, not inconsistent
therewith, as the donors of such funds and property may prescribe.
[Ord. 489, 12/14/1987, § 1; as amended by Ord.
572, 12/11/2000, § 4]
The Pension Fund for Employees Other than Police shall be under
the direction of the Board of Commissioners of the West Norriton Township
or such committee or persons as the Board of Commissioners may from
time to time designate by resolution, who shall be known as the Plan
Administrator and who shall act as Trustees of the pension fund, and
such Trustees shall have full responsibility for the administration
of the program established hereunder and shall hold, invest, reinvest
and distribute all funds or other property received pursuant hereto
in trust for the purpose of this Part 8. The Trustees shall be subject
to such rules and regulations as may from time to time be adopted
by the Board of Commissioners by ordinance or resolution. The Trustees
shall have full power and authority by a majority action of its members
either directly or through their designated representatives, to do
all acts, 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 Part 8, including for purposes of illustration but
not limited to any and all for the following:
A.
To hold, invest and reinvest all funds received pursuant to this
Part 8, in such legal investments as may be authorized as legal investments
under the laws of the Commonwealth of Pennsylvania;
B.
To enter into contracts or deposit agreements on behalf of West Norriton
Township with one or more insurance companies, in order to provide
the pension and other benefits herein set forth, and to pay the premiums
and deposits required by the purchase of said contracts;
C.
To retain or purchase as an investment any form of annuity or contracts
of similar nature, and to exercise with respect thereto, any right
or incident of ownership;
D.
To retain any property which may at any time become an asset of the
fund, as long as said Trustees may deem it advisable; and
E.
To make distribution of the monies in the fund, in accordance with
the terms of this Part 8.
F.
To, with full discretion and authority, interpret the terms of the
Pension Fund for Employees Other Than Police and make any and all
findings of fact regarding benefit eligibility.
[Ord. 489, 12/14/1987, § 1]
Each full-time, permanent employee of the Township, other than
members of the police force, on the effective date of the restated
Plan is covered immediately. Each new full-time employee hired after
January 1, 1987, other than members of the police force, shall become
eligible on the first day of the month on or after completion of six
consecutive months of full time employment.
[Ord. 489, 12/14/1987, § 1; as amended by Ord.
572, 12/11/2000, § 5]
Non-full-time, temporary or seasonal employees, and employees
hired as members of the police force are not eligible to participate
in the plan.
[Ord. 489, 12/14/1987, § 1]
The monthly retirement benefit to which a participant shall
be entitled upon retirement at his normal retirement date shall be
an amount equal to 50% of the average monthly compensation of said
participant, payable for the remainder of the participant's life;
but in no circumstance shall the monthly retirement benefit of a participant
be less than $10.
[Ord. 489, 12/14/1987, § 1; as amended by Ord.
598, 10/12/2004, § 2]
1.
The monthly lifetime retirement benefit to which a participant shall
be entitled upon retirement at his early retirement date shall equal
his accrued benefit determined as of his date of termination, reduced
by 5/12% for each completed month by which such actual retirement
date precedes the normal retirement date.
2.
Not withstanding the above, the early retirement benefit for a participant
who terminates employment on or after October 1, 2004, with at least
25 years of service shall equal his accrued benefit determined as
of his date of termination, reduced by 5/12% for each completed month,
if any, by which such actual retirement date precedes the first day
of the month coincident with or next following age 62.
3.
In no circumstance shall the monthly retirement benefit of a participant
be less than $10.
[Ord. 489, 12/14/1987, § 1; as amended by Ord.
572, 12/11/2000, § 6; and by Ord. 10-658, 9/14/2010]
1.
If a participant continues his employment with the employer beyond
his normal retirement date, no retirement benefit will be paid to
the participant until he actually retires. At the close of each plan
year following his normal retirement date and prior to his actual
retirement date, a participant shall be entitled to a retirement benefit
equal to the greater of (1) the actuarial equivalent of the monthly
retirement benefit such participant was entitled to at the close of
the prior plan year, or (2) his accrued benefit determined at the
close of the plan year.
2.
For purposes of this § 810, the provisions relating to
the Township Manager under the "normal retirement date" definition
in § 801 shall be disregarded.
3.
At the participant's actual retirement date, he shall be entitled
to the greater of (1) the actuarial equivalent of the monthly retirement
benefit he was entitled to at the close of the plan year, or (2) his
accrued benefit determined as of his actual retirement date.
[Ord. 489, 12/14/1987, § 1]
If a participant dies after age 60 and before retirement, the
surviving spouse, or in the absence of a surviving spouse another
beneficiary, shall be entitled to receive an annuity equal to 50%
of the accrued benefit that would have been payable if the participant
had retired with an immediate joint and 50% contingent annuity on
the day before his death.
[Ord. 489, 12/14/1987, § 1]
When required by the Trustees, the employees shall make such
contributions as are deemed necessary to meet Act 205 funding requirements,
and said contributions shall be paid to the pension fund by way of
periodic deductions from employee compensation.
[Ord. 489, 12/14/1987, § 1]
Payments made by the State Treasurer to the Township Treasurer
from the monies received from taxes paid upon premiums by foreign
casualty insurance companies for purposes of pension retirement or
disability benefits for employees other than policemen shall be used
as follows:
[Ord. 489, 12/14/1987, § 1; as amended by Ord.
572, 12/11/2000, § 7; and by Ord. 598, 10/12/2004, § 3]
1.
If a Township employee's employment is terminated, or if he ceased
to be a fulltime employee as defined above prior to October 1, 2004,
and before his normal retirement date, he shall be vested in his accrued
benefit as of his termination date according to the following schedule:
|
Completed Years of Service
|
Vesting Percentage
| |
|---|---|---|
|
Less than 5
|
0%
| |
|
5
|
50%
| |
|
6
|
60%
| |
|
7
|
70%
| |
|
8
|
80%
| |
|
9
|
90%
| |
|
10
|
100%
|
2.
If a Township employee's employment is terminated, or if he ceases
to be a full time employee as defined above on or after October 1,
2004, and before his normal retirement date, he shall be vested in
his accrued benefit as of his termination date according to the following
schedule:
|
Completed Years of Service
|
Vesting Percentage
| |
|---|---|---|
|
Less than 5
|
0%
| |
|
5
|
100%
|
|
For the purpose of this subsection, completed years of service
will also include service with the West Norriton Township Authority,
provided such service was earned immediately prior to becoming an
employee of the Township.
|
3.
Each participant who has not terminated or ceased to be a full-time
employee as defined above shall become 100% vested upon attainment
of his normal retirement date.
[Ord. 489, 12/14/1987, § 1]
Retirement benefits, as defined above, shall be payable monthly
during the balance of each participant's life following actual retirement.
[Ord. 489, 12/14/1987, § 1; as amended by Ord.
572, 12/11/2000, §§ 8, 9]
1.
Instead of the retirement benefit payable for life, the employee
may elect to have the retirement benefit he is entitled to receive
in any of the following forms, whereby the annual amount of retirement
benefit so received shall be the actuarial equivalent of the annual
amount of the retirement benefit, payable for life, as the employee
is entitled to on his retirement date.
A.
Life Annuity with Payments for 10 Years Certain. This form of retirement
benefit provides for monthly payments to be made for life, commencing
on the retirement date, but in the event of death of the annuitant
before 120 payments have been made, such payments shall be continued
to the beneficiary named by the annuitant until a total of 120 payments
have been made.
B.
Joint and 50% Survivor Annuity Option. This form of retirement benefit
provides for monthly payments to be made commencing on the retirement
date, until the later of the death of the annuitant or the death of
the contingent annuitant specified by the participant. If the annuitant
is not living to receive the monthly payments, the remaining payments
will be made to the contingent annuitant, and the amount of each monthly
payment to the contingent annuitant shall be 50% of the amount of
each monthly payment to the annuitant.
C.
Joint and 100% Survivor Annuity Option. The terms of payment under
joint and 100% survivor annuity are the same as those described above
for the joint and 50% survivor annuity except, under the joint 100%
survivor annuity, the amount payable to the contingent annuitant upon
the original annuitant's death remains the same amount payable during
their joint life-time.
2.
The annual retirement benefit, in the case of any eligible employee who was married throughout the year preceding the annuity starting date, shall be in the form a joint and 50% survivor annuity, unless he has elected otherwise in writing provided in Subsection 3 below.
3.
Written Explanation.
A.
At least 90 days and no more than six months before an employee shall
reach the earliest date on which an eligible employee could elect
to receive retirement benefits as provided herein, the Plan Administrator
shall give each such employee a written statement of his approximate
anticipated benefits if he should take early retirement during the
next year. If the employee is married, the statement shall clearly
explain the difference between the joint and 50% survivor annuity
and other available annuities, both in terms of the anticipated annuity
amounts in each case, and the effect of each type, and shall explain
to the eligible employee that if he does not elect otherwise prior
to his retirement, his benefit will be paid in the form of a joint
and 50% survivor annuity if he has been married throughout the year
preceding his retirement. The employee shall have 90 days after the
receipt of such statement to file with the Plan Administrator, on
a form provided the Plan Administrator, an election to take the single
life annuity or the life annuity with payments for 10 years certain
or the joint and 100% survivor annuity.
B.
The written explanation described in Subsection 3A above may be provided after the annuity starting date. The ninety-day applicable election period to waive the qualified joint-and-survivor annuity shall not end before the 30th day after the date on which such explanation is provided. However, a participant may elect (with any applicable spousal consent) to waive any requirement that the written explanation be provided at least 30 days before the annuity starting date (or waive the thirty-day requirement under the above paragraph) if the distribution commences more than seven days after such explanation is provided, during which seven-day period the participant may revoke his then existing election.
4.
Notwithstanding any provision in the plan to the contrary, a participant's
benefits shall commence being distributed to him not later than April
1 of the calendar year following the later of (i) the calendar year
in which the participant attains age 70 1/2 or (ii) the calendar
year in which the participant retires.
[Ord. 489, 12/14/1987, § 1]
Actuarially equivalent annuity conversion factors shall be derived
based on the 1971 Group Annuity Mortality Table with an assumed interest
rate of 8% per annum. Such conversion factors shall be sex-neutral.
Participants and beneficiaries of the same age shall be treated the
same regardless of sex.
[Ord. 489, 12/14/1987, § 1]
The Township shall employ an approved actuary. The actuary shall
prepare and certify the actuarial valuation report, make cost estimates
prior to the adoption of any benefit plan modification, and perform
experience investigations when needed. The actuary's tasks shall be
conducted in conformity with the requirements of the Municipal Pension
Plan Funding Standard and Recovery Act (Act 205) and related regulations
and guidelines.
[Ord. 489, 12/14/1987, § 1]
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 designated beneficiary.
No participant or his beneficiary shall have any right to alienate,
encumber or assign any assets of the fund held by the Trustees on
his behalf, or any of the benefits or payments or proceeds of any
contract or agreement purchased or acquired pursuant to this Part
8 upon the life of such participant shall contain a provision, in
substance, that to the extent permitted by law, none of the benefits
or payments or proceeds of such contract or agreement shall be subject
to any legal process by any creditor of such participant or beneficiary
of such participant.
[Ord. 489, 12/14/1987, § 1]
Benefit payments made pursuant to the pension plan shall be
charged to the pension fund. Expenses of administering the pension
plan, which are directly associated with the plan, are necessary,
reasonable, and which benefit the plan, including the compensation
of the actuary, shall be paid from the assets of the pension fund,
from payments made by the State Treasurer, or by appropriations of
the Township. Disbursements of such administrative expenses shall
be documented in sufficient detail to satisfy the Office of the Auditor
General.
[Ord. 489, 12/14/1987, § 1]
Pension payments made under the provisions of this Part 8 shall
not be a charge on any other fund in the Treasury of the Township
or under its control except the pension fund herein provided for.
[Ord. 489, 12/14/1987, § 1; as amended by Ord.
572, 12/11/2000, § 10]
Any person employed by West Norriton Township, other than a
member of the police force, who has served as an employee, on a full-time
basis, for a period of at least six months, and who shall thereafter
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 to his employment within six months after his separation from
the military service. Notwithstanding any provision of this plan to
contrary, effective December 12, 1994 contributions, benefits and
service credits will be not less than that required to be provided
under Code § 414(u).
[Ord. 489, 12/14/1987, § 1]
In the absence of an effective beneficiary designation, the
Plan Administrator shall first pay death benefits to the spouse of
the employee, if any, then to his children, if any, then to the employee's
estate.
[Ord. 489, 12/14/1987, § 1]
In the event that for any reason the benefits payable to any
employee under this Plan are determined by the Plan Administrator
in his sole discretion to be too small to feasibly provide the normal
or optional retirement benefits, then a lump sum distribution calculated
to be actuarially equivalent shall be made.
[Ord. 489, 12/14/1987, § 1]
The Plan shall be self-insured and self-administered by the
Trustees.
[Ord. 489, 12/14/1987, § 1]
Under no circumstances, prior to the satisfaction of all liabilities
with respect to participants and their beneficiaries under this plan,
shall any part of the assets of the trust be used or diverted to any
purpose other than the exclusive benefit of Plan participants and
their beneficiaries.
[Ord. 489, 12/14/1987, § 1]
Unless the context specifically indicates otherwise, the plural
shall include the singular and the masculine shall include the feminine,
and vice versa, wherever used in this Part 8.
[Ord. 489, 12/14/1987, § 1; as added by Ord. 524,
12/31/1991]
Benefit commencement date shall be the first day of the month
coincident with or next following (1) satisfaction of the age and
service requirements for early, normal or deferred retirement, or
(2) exhaustion of any unused vacation days and/or all personal days
which have been allowed by the Board of Commissioners, whichever is
later.
[Ord. 489, 12/14/1987, § 1; as added by Ord. 572,
12/11/2000, § 11]
In the event the plan is terminated, all participants shall
be fully vested in their accrued benefit determined as of the date
of termination, and such accrued benefit shall not be subject to forfeiture,
to the extent then funded.
[Ord. 489, 12/14/1987, § 1; as added by Ord. 572,
12/11/2000, § 12]
In addition to any other limitations set forth in this plan,
and notwithstanding any other provisions of the plan, no benefit shall
be paid with respect to a participant which exceeds the limitation
under the provisions of Code § 415, Code § 415
is hereby incorporated by reference. With respect to plan years commencing
prior to 1999, to whatever extent the Code § 415(e) would
restrict the combined benefits payable under this plan and any other
plan and such other plan does not require the reduction in benefits
under such other plan to prevent the payment of benefits in excess
of those allowed, the benefits under this plan shall be reduced.
[Ord. 489, 12/14/1987, § 1; as added by Ord. 572,12/11/2000,
§ 13]
1.
This section applies to distributions made on or after January 1,
1993. 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 any time and in any manner prescribed
by the Administrator, to have any part of an "eligible rollover distribution"
paid directly to an "eligible retirement plan" specified by the distributee
in a "direct rollover."
2.
DIRECT ROLLOVER
DISTRIBUTEE
ELIGIBLE RETIREMENT PLAN
ELIGIBLE ROLLOVER DISTRIBUTION
Definitions.
A payment by the plan to the eligible retirement plan specified
by the distributee.
A distributee may be an employee or former employee.
An individual retirement account described in § 408(a)
of the Code, an individual retirement annuity described in § 408(b)
of the Code, an annuity plan described in § 403(a) of the
Code, or a qualified trust described in § 401 (a) of the
Code, that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual retirement account
or an individual retirement annuity.
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
§ 401(a)(9) of the Code; and the portion of any distribution
that is not includable in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities).
[Ord. 2015-692, 7/14/2015]
1.
DROP
DROP PARTICIPANT
DROP PARTICIPANT ACCOUNT
NORMAL RETIREMENT BENEFIT
SUBSIDIARY DROP PARTICIPANT ACCOUNT
WEST NORRITON TOWNSHIP PENSION PLAN or PLAN
Definitions. The following words and phrases when used in this § 832
shall have the meanings given to them in this section only, unless
the context clearly indicates otherwise:
A deferred retirement option plan established and being operated
by the West Norriton Township, Montgomery County, Pennsylvania, effective
as of January 1, 2015.
The pension trust fund ledger account.
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.
The separate, interest-bearing, subsidiary DROP participant account established for a DROP participant under Subsection 5B.
The West Norriton Township Pension Plan and Trust for Township
employees Other Than Police.
2.
Eligibility and Participation.
A.
Eligibility of Employee to Participate in DROP.
[Amended by Ord. 2015-695, 9/8/2015; by Ord. 2017-713, 8/8/2017;
by Ord. No. 2018-717, 3/13/2018; and by Ord. No. 2022-758, 12/13/2022]
(1)
An employee who has attained age 60 and completed five years of aggregate
service with the employer, or who has attained age 55 and has completed
25 years of aggregate service with the employer, is eligible to elect
to participate in the DROP by filing a written application with the
retirement plan administrator at least 30 days prior to the date that
the employee is eligible to receive a normal retirement benefit under
the plan.
B.
Participation in DROP.
(1)
An eligible participant may elect to participate in this DROP for
a period not to exceed five years. Upon deciding to participate in
a DROP, a participant must submit, on forms provided by the Township,
all of the following:
[Amended by Ord. No. 2018-717, 3/13/2018; and by Ord. No. 2022-758, 12/13/2022]
(a)
A binding and irrevocable letter of resignation from regular
employment with the West Norriton Township which discloses the participant's
intent to retire and specifies the participant's retirement date.
(b)
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 2D, a DROP participant's rights and obligations under the DROP and include an agreement to forgo:
(2)
The DROP participant shall be required to provide any other information
required by the Township.
C.
Eligibility for Disability. If a DROP participant becomes eligible
for a disability benefit provided under the West Norriton Township
Pension Plan, if applicable, and terminates employment, the monthly
normal retirement benefit of the DROP participant shall terminate.
D.
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 retirement, and a retired participant's
participation in a DROP shall end on the last day of the participation
period specified in the Resolution establishing the DROP based on
the effective date of the retired participant's participation in the
DROP.
E.
DROP Participation Termination. A DROP participant may change the DROP termination date to an earlier date within the limitations of Subsection 2B 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 by the West Norriton Township and the Plan shall pay the balance in the DROP participant's subsidiary DROP participant account to the terminating participant as provided in Section 832.09. The DROP participant shall be ineligible to re-enroll in the DROP thereafter even if the former DROP participant is re-employed by the West Norriton Township with renewed active membership in the West Norriton Township Pension Plan.
F.
DROP Participant Contributions. DROP participants shall neither be
required nor permitted to pay contributions into the Plan during the
DROP participation period.
3.
DROP Benefits.
A.
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, late retirement
benefit as calculated under § 810 of the Plan, 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.
B.
Normal Retirement Benefit Payments and Accruals. The retired participant's
monthly retirement benefit shall be credited to the DROP participant's
subsidiary DROP participant account in the pension trust fund. Interest
shall be compounded and credited monthly at the actual rate earned
by the DROP participant account, which shall not be less than 0% nor
greater than 4 1/2%, on the existing account balance in the DROP
participant's subsidiary DROP participant account as of the first
day of the month coincident with or following the participant's retirement
date. The participant's monthly retirement benefit shall be credited
to the account after the interest has been credited to the existing
account balance in the DROP participant's subsidiary DROP participant
account. The participant's retirement benefit and interest on that
benefit shall continue to accrue in this manner on the first day of
each month thereafter during the participant's DROP participation.
A separate accounting of the DROP participant's accrued benefit accumulation
under the DROP shall be calculated annually and provided to the participant.
C.
Payment of DROP Benefits. On the effective date of a DROP participant's
termination of employment with the Township as a DROP participant,
participation in the DROP shall cease; and the Plan shall calculate
and pay to the participant the participant's total accumulated DROP
benefits in the DROP participant's subsidiary DROP participant account
subject to the following provisions:
(1)
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:
(a)
The balance in the DROP participant's subsidiary 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.
(b)
The balance in the DROP participant's subsidiary 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.
(c)
The Plan Administrator shall arrange for the purchase of an
annuity equal in value to the balance in the DROP participant's subsidiary
DROP participant account.
(d)
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 3C(1)(b).
(e)
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.
(2)
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
Township.
(3)
The monthly retirement benefits that would have been payable had
the DROP participant elected to cease employment and receive a normal
retirement benefit or late retirement benefit shall, upon the DROP
participant commencing participation in the DROP program, be credited
on the first day of each month into a separate ledger account established
by the Plan Administrator to track and accumulate the participant's
DROP benefits. This account shall be designated the DROP account.
The DROP account shall not contain a guaranteed interest rate but
shall be credited with interest at the actual rate earned by the pension
fund but shall not be less than 0% nor greater than 4.5%, and shall
be compounded monthly. All earnings or losses credited to the DROP
account will be included in the final cash settlement.
(4)
The DROP shall at all times comply with the annual benefit limitations
of Internal Revenue Code § 415 and the regulations thereto.
D.
Pre-retirement Benefits. Except for those benefits specified in Subsection 2B(1)(b) as forgone by the member, a DROP participant shall be eligible for any employee benefits provided to active employees before retirement by West Norriton Township 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. § 90 stat. 1347).
4.
DROP Death Benefits.
A.
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 subsidiary DROP participant account as provided in Subsection 3B.
B.
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.
C.
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 subsidiary DROP participant account, the West
Norriton Township 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.
D.
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.
5.
Administrative Provisions.
A.
Subsequent Employment and Renewal of Active Membership. After both the termination of the participant's employment as a DROP participant by the West Norriton Township 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 2D.
B.
DROP Participant Account.
[Amended by Ord. 2015-695, 9/8/2015]
(1)
As the West Norriton Township establishes a DROP, it shall establish
a DROP participant account as a separate interest-bearing, ledger
account in its pension trust fund for each DROP participant. The account
balance shall be accounted for separately but need not be physically
segregated from other pension trust fund assets. A separate, interest-bearing,
subsidiary DROP participant account shall be established for each
DROP participant.
(2)
While a retired participant is employed as a DROP participant, the participant's monthly, retirement benefit and interest on that benefit shall be credited to the DROP participant account under Subsection 3B. When a DROP participant terminates employment with the West Norriton Township as a DROP participant, the participant's total accumulated benefits shall be calculated, charged to the DROP participant account and paid out of the pension trust fund under Subsection 3C.
