[Adopted 1-22-2008 by Ord. No. 415[1]]
For the purposes of this article, the following
definitions shall apply:
Age at nearest birthday.
The member's normal retirement benefit multiplied by the
ratio of A over B where:
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A
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=
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The years and months of service completed by
the member as of the date of his termination of employment.
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B
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=
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The years and months of service the member would
have completed if he had continued to participate until his normal
retirement date.
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The average of a member's monthly compensation earned over
the last 36 months of employment.
The total compensation paid to an employee for services rendered
as a police officer, excluding buybacks and severance pay.
Upper Pottsgrove Township, Montgomery County, Commonwealth
of Pennsylvania.
The Upper Pottsgrove Township Police Pension Plan Trust Fund.
All police employees who meet the requirements set forth in § 43-4 of this article. The masculine pronoun will include the feminine.
Upper Pottsgrove Township, Montgomery County, Commonwealth
of Pennsylvania.
The Upper Pottsgrove Township Police Pension Plan. The plan's
fiscal year is the calendar year.
Upper Pottsgrove Township, Montgomery County, Commonwealth
of Pennsylvania.
The Upper Pottsgrove Township Board of Commissioners or its
designee.
This plan is to be funded and maintained by
any of the following methods, or a combination of each:
A.
General fund: contributions from the general fund
of the Township which may be required after appropriate approval of
the Township Commissioners.
B.
Member contributions: All members shall make contributions,
which shall be 5% of their total compensation. The Board of Commissioners
may, on an annual basis, by ordinance or resolution, reduce or eliminate
contributions into the plan by members. The Township may, but need
not, have an actuarial study performed prior to reducing or eliminating
member contributions into the plan.
D.
Gifts, grants, devises or bequests: Sums received
by the Township may, to the extent authorized by law, be contributed
to such fund so long as prior approval of the Township Board of Commissioners
is obtained.
A.
Pension committee.
(1)
The general administration and management of the plan
shall be under the direction of a Pension Committee, as appointed
by the Township Board of Commissioners. The Committee shall consist
of two duly appointed Township representatives and one pension plan
member.
(2)
The Pension Committee shall have all powers necessary
to enable it properly to carry out its duties, including but not limited
to the power to construe the provisions of the fund, to direct the
investment advisor, to determine all questions relating to eligibility
of members and to authorize all disbursements for benefits to members.
The decisions of the Pension Committee on all matters within the scope
of its authority shall be final, subject to approval of the Board
of Commissioners.
B.
Trustee.
(1)
The fund shall be under the direction of a trustee,
designated by resolution by the Township Board of Commissioners. The
trustee shall have full responsibility for administration of the program
established hereunder and shall hold, invest, reinvest and distribute
all funds and other property received pursuant hereto in trust for
the purposes of this article. The trustee may receive, at any time,
gifts, grants, devises, or bequests to the Pension Fund of any money
or property, real, personal or mixed, to be held by it in trust for
the benefit of this fund and in accordance with the provisions hereof.
The trustee shall be subject to such rules and regulations as may
from time to time be adopted by the governing body of this Township
by ordinance or by resolution.
(2)
The trustee shall have full power and authority by
a majority action, 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 plan members 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:
(a)
To hold, invest and reinvest all funds received pursuant
to this article and such legal investments as may be authorized as
legal investments under the laws of the Commonwealth of Pennsylvania.
(b)
To retain any property which may at any time become
an asset of the fund, as long as said trustee may deem it advisable.
(c)
To make distribution of the monies in the fund, in
accordance with the terms of this article.
(3)
The expense of administering this pension fund, including
compensation of any actuary, any custodian of the fund, and any other
charges or expenses related thereto, exclusive of the payment of pensions,
may be paid by the Township or by the pension fund, as determined
by the Township Board of Commissioners.
Each full-time police employee (regularly working a minimum of 35 hours per week during the calendar year) employed by the employer is eligible to participate and shall be a member in the Upper Pottsgrove Township Police Pension Plan and Fund as of his/her date of hire. For the purpose of this § 43-4, "service" shall mean the period of an employee's total employment by the employer. The following types of absence shall not break continuity, and the time elapsed shall be included in computing the aggregate length of service:
A.
A temporary leave of absence or layoff which shall,
if not otherwise stated, expire in six months, unless sooner renewed.
B.
An absence during which regular remuneration is paid.
C.
A regularly appointed member of the police force who
has been employed as such for at least six months, and who enters
active military service for the United States, must receive retirement
credit for the period of active military service. To be eligible,
the member must return to employment within six months of separation
from such military service and be ineligible to receive military retirement
pay as a result of that service.
The benefits from the fund shall be payable
to members who have served in the Township in a full-time capacity
and who attain their normal retirement date. "Normal retirement date"
shall mean the first of the month coincident with or next following
the attainment of the 50th birthday and the completion of 25 years
of total service. Benefits commence on the first day of the month
coincident with or next following actual retirement.
[Amended 9-19-2011 by Ord. No. 452]
The normal retirement benefit shall equal 50%
of the average monthly compensation, plus a cost-of-living adjustment
(COLA). The annual COLA increase equals the lesser of 3% or the consumer
price index for the previous calendar year, with an overall benefit
limit equal to 75% of the average monthly compensation or 130% of
the original benefit, whichever is less. To be eligible for the COLA,
a retiree must have been receiving retirement benefits for at least
one complete year. The normal form of payment is a life annuity.
In the event of any member's service-related
total and permanent disability, the member shall become eligible for
a monthly disability pension as set forth below:
A.
"Total and permanent disability" shall mean a service-related
physical or mental condition of a member, incurred in the course and
scope of employment as a Township police officer, which precludes
him from engaging in his normal duties as a police officer.
B.
The monthly total and permanent disability pension
benefit shall be in conformity with a uniform scale and shall be equal
to 50% of the member's salary on the date the disability occurred,
reduced by the amount of Social Security disability benefits received
for the same illness or injury. Disability pension benefits shall
commence on the first of the month coincident with or next following
the date of disability, as determined by a qualified physician selected
by the employer. Such determination shall be final and conclusive.
The employer shall have the right to require the disabled member to
undergo medical examination at monthly intervals. Disability benefit
payments shall cease upon recovery from disability as determined by
the employer's physician. Disability benefit payments shall also cease
upon death.
Any member who has completed 12 years of service
in this plan shall become 100% vested in his accrued benefit. Upon
termination of employment with the employer, a vested member shall
be eligible to receive his accrued benefit starting as a monthly annuity
at his normal retirement date under this article. However, any member
who separates from service prior to his normal retirement date for
any reason other than death or total and permanent disability shall
receive a complete refund of the total amount of his member contributions
with interest, if such refund is greater in value than the actuarial
equivalent of the accrued benefit.
A.
Survivor benefits. In the event of the death of a
member or the death of a member who has retired 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 member 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 courseload
of seven credit hours per semester.
B.
Pre-vesting benefits. The surviving spouse of any
member 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 member shall be entitled to receive repayment of
all money which the member invested in the pension fund, plus interest
or other increases in value of the member's investment in the pension
fund, unless the member has designated another beneficiary for this
purpose. 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 courseload
of seven credit hours per semester.
[Amended 9-19-2011 by Ord. No. 452]
If a member is killed in service, there shall
be no benefit payable to the plan. However, the Commonwealth of Pennsylvania
shall fund and provide the killed-in-service death benefit defined
in Act 51.[1]
[1]
Editor's Note: See 53 P.S. § 891.
[Added 6-19-2017 by Ord.
No. 496]
A.
DROP
DROP ACCOUNT
Definitions. For purposes of this section only, the words and phrases
used in this section shall have the meanings ascribed below:
Deferred Retirement Option Plan.
Separate account created to accept DROP the monthly pension
check of an officer who is participating in DROP.
B.
Eligibility. Effective January 1, 2014, members of the Upper Pottsgrove
Township 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 the date on which the officer reaches his normal retirement
date. The length of DROP participation shall be a maximum of 36 months.
C.
Written election.
(1)
To participate in DROP, the officer must identify a date certain
in the future ("termination date") on which he will cease employment.
The termination date can be no sooner than 12 months from the date
DROP participation begins and no later than 36 months from the date
DROP participation begins. Election to participate in DROP is irrevocable
and, therefore, once an officer elects to participate in DROP, the
officer cannot thereafter leave DROP and resume participation in the
Township's pension plan. However, the officer may cease employment
at any time during DROP participation, but, in no event shall the
officer's employment continue after the identified termination date.
(2)
The officer shall make the election to participate in DROP by
using forms and procedures as prescribed by the plan trustee. The
documentation that must be executed before an officer may participate
in the DROP Program shall include a provision releasing the Township
from any liability with regard to investment and other losses (subject
to the guaranteed rate of return set forth herein). As a condition
precedent to participation in DROP, the officer must also acknowledge
and agree to hold the Township harmless for any consequences flowing
from the officer's decision to participate in DROP, including, but
not limited to, any tax consequences or other financial or other implications
of DROP participation.
(3)
In addition, all retirement documents required by the Police
Pension Board Administrator must be filed and presented to the Board
of Commissioners for acceptance and approval of retirement and payment
of pension. Once a retirement application has been approved by the
Upper Pottsgrove Township Board of Commissioners, it is irrevocable.
D.
Limitation on pension accrual. As of the effective date of DROP participation,
the officer shall no longer earn or accrue additional years of continuous
service for pension purposes, and the officer shall no longer make
any required contributions to the Township's Police Pension Fund.
E.
Benefit calculation. For all Township Police Pension Fund purposes,
continuous service of an officer participating in DROP shall remain
as it existed on the effective date of commencement of participation
in DROP. Service thereafter shall not be recognized or used for the
calculation or determination of any benefits payable by the Upper
Pottsgrove Township Police Pension Fund. The officer's pension benefit
shall remain as it existed on the effective date of commencement of
participation in DROP. Earnings or increases in earnings thereafter
shall not be recognized or used for the calculation or determination
of any benefits payable by the Township Police Pension Fund. The pension
benefit payable to the officer shall increase only as a result of
cost-of-living adjustments in effect on the effective date of the
officer's participation in DROP or by applicable cost-of-living adjustments
granted thereafter.
F.
Payments to the DROP Account. The monthly retirement benefits that
would have been payable had the officer elected to cease employment
and receive a normal retirement benefit instead of entering DROP shall,
upon the officer commencing participation in DROP, be paid into an
Act 44 DROP Account designated as "Upper Pottsgrove Township, DROP
FBO John Smith." Each such account shall be accounted for separately
from the Township's Police Pension Fund. In accordance with applicable
law, the Township shall guarantee that, at a minimum, the annual return
for the contents of the DROP Account shall not be less than 0% nor
greater than 4.5% annually.
G.
Accrual of nonpension benefits. After an officer elects to participate
in the DROP Program, all other contractual benefits shall continue
to accrue, with the exception of those provisions relating to the
Township's Police Pension Plan and the buyback of any qualifying accrued,
but unused, leave time. An officer may utilize leave time during the
DROP period, but the Township shall not be required to buy back any
such unused leave time at the end of the DROP period unless otherwise
expressly stated in the governing collective bargaining agreement.
H.
Payout. Upon the termination date established by the officer before
entering DROP, or such date that the officer terminates from employment
before the termination date or on the date the Township separates
the officer from employment, the retirement benefits payable to the
officer or officer's beneficiary, if applicable, shall be paid to
the officer or beneficiary and shall no longer be paid to the officer's
DROP Account. Within 45 days following termination of an officer's
employment pursuant to their participating in the DROP Program, the
balance in the officer's DROP Account shall be paid to the officer
in a single, lump-sum payment or, at the officer's option, in any
fashion permitted by law. As a condition of participation in DROP,
the officer acknowledges that the Township plays no role nor has any
responsibility in advising the officer regarding the appropriate payout
vehicle. Accordingly, any officer participating in DROP assumes all
financial consequences for his/her participation in DROP, including,
but not limited to, the manner in which a permitted payout from the
DROP Account is made. The participating officer agrees to hold the
Township harmless for any tax or other financial consequences which
flow directly or indirectly from the officer's participation in DROP.
It is strongly suggested that officers participating in DROP obtain
appropriate financial advice and guidance.
I.
Disability during DROP.
(1)
If an officer becomes temporarily disabled during his participation
in DROP, any such time lost due to disability shall be counted towards
the officer's termination date. Upon return to duty, membership in
DROP shall continue with the remaining time left until the officer's
termination date. If eligible, the officer shall receive disability
pay in the same amount as disabled Police Officers that are not participating
in DROP. In no event shall an officer 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 termination date identified
prior to DROP participation, 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 officer or other person to the continuation
of employment nor shall participation in the DROP Program supersede
or limit in any way the right of the Township to grant the officer
an honorable discharge based upon an inability to perform his or her
full duties as a Police Officer.
(2)
If an officer is determined to have sustained a permanent work-related
injury in the course of employment, the officer's participation in
DROP shall immediately cease. In such case, the officer shall have
the same options for the payout of the officer's DROP Account and,
thereafter, shall receive a normal monthly pension benefit payment
in the same manner as an officer who completed his full participation
in DROP.
J.
Death. If an officer participating in DROP dies before the DROP Account
balances are paid, the officer's legal beneficiary shall have the
same rights as the officer to withdraw the account balance.
K.
Forfeiture of benefits. Notwithstanding an officer's participation
in DROP, 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 officer shall only be entitled
to receive the contributions, if any, made by the officer to the Township's
Police Pension Fund, without interest.
L.
Cost of management for DROP Program. The Police Association and the
Township 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 Township.
M.
Amendment. Any amendments to this DROP enclosure 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 DROP Accounts. The DROP Plan may only be
amended by a written instrument, not by any oral agreement or past
practice.
N.
Effective date. The effective date of this DROP eligibility is January
1, 2014; however, the implementation of the DROP Program will be provided
as in this chapter and the CBA.
O.
Construal of provisions. An officer's election to participate in
the DROP Program shall in no way be construed as a limitation on the
Township's right to suspend or terminate an officer or to grant the
officer an honorable discharge based upon a physical or mental inability
to perform his or her duties.
Q.
Severability.
(1)
The provisions of this agreement shall be severable; and if
any of its provisions shall be held to be unconstitutional or illegal,
the validity of any of the remaining provisions of the agreement shall
not be affected thereby. It is hereby expressly declared as the intent
of the Township's Board of Commissioners that this agreement would
have been adopted had such unconstitutional or illegal provision or
provisions not been included herein.
(2)
In the event that the DROP provision is declared invalid or
illegal by a court of competent jurisdiction or through an administrative
determination of the Office of the Auditor General, the Police Association
shall have the right to bargain in accordance with Act 111[2] over deletion of this benefit. It is expressly understood
that this shall not involve bargaining over a replacement provision.
[2]
Editor's Note: See 43 P.S. § 217.1 et seq.
R.
Repealer/ratification. All other ordinances outlined in the Code
of the Township of Upper Pottsgrove to the extent not inconsistent
herewith are hereby reenacted and reordained.
S.
Effective date. This section shall become effective immediately upon
enactment.
This plan is intended to be tax-qualified under
the applicable provisions of Section 401(a) of the Internal Revenue
Code, as amended, and shall be construed in a manner consistent with
such intent. The attached addendum to the Upper Pottsgrove Police
Pension Plan and Trust is hereby incorporated to be part of this article.[1]
[1]
Editor's Note: The addendum is on file in
the Township offices.
All ordinances or parts of ordinances inconsistent
with the provisions of this article are hereby repealed insofar as
they are inconsistent with this article, except for any ordinance
provisions mandated by the Internal Revenue Service.
