[HISTORY: Adopted by the Board of Supervisors of the Township of Pine as indicated in article histories. Amendments noted where applicable.]
[Adopted 12-18-1985 by Res. No. 287]
The following words and phrases, as used in this plan and trust shall have the meanings set forth in this article, unless a different meaning is otherwise clearly required by the context:
- ACCRUED BENEFIT
- As of any given date, the monthly benefit determined in accordance with the formula contained in § 32-4, which amount shall be based upon the participant's years of credited service determined as of such date and which shall represent as of any given date the monthly benefit that would be payable at the participant's normal retirement date (or the actuarial equivalent thereof), provided that the participant satisfies any requirements set forth hereafter for entitlement to receive such benefit. In no event, however, shall the accrued benefit exceed the maximum limitation, determined as of the date of computation, provided under § 32-10. All accrued benefits are subject to all applicable limitations, reductions, offsets and actuarial adjustments provided by the plan prior to the actual payment thereof.
- The Municipal Pension Plan Funding Standard and Recovery Act which was enacted as Act 205 of 1984.
- ACTUARIAL EQUIVALENTS
- Notwithstanding any other provision of this plan, wherever the plan provides for actuarially equivalent amounts, "actuarial equivalent" shall mean two forms of payment of equal actuarial present value on a specified date. The actuarial present values shall be determined by the use of the UP 1984 Group Annuity Mortality Table rates and 6 1/2% compound interest per annum.
- AVERAGE MONTHLY EARNINGS
- The average monthly compensation paid by the employer and to an employee (excluding therefrom overtime, bonuses, commissions and any other extra or additional forms of compensation) during the final sixty-month period of his employment with the employer prior to retirement or other termination of employment with the employer.
- Any person or legal entity designated by a participant to receive benefits under the plan.
- The Board of Supervisors of the Township of Pine.
- The Internal Revenue Code of 1954, as amended.
- CONTINUOUS EMPLOYMENT
- An employee's period of continuous employment with the employer. For purposes of this section, an employee's employment shall not be deemed to have been interrupted by any periods of authorized leave of absence expressly granted by the employer nor shall it be deemed interrupted by any period of absence during which he served in the Armed Forces of the United States of America, provided that the employee returns to his employment at the time and under the circumstances required to give him reemployment rights under any federal or state law. In the event that an employee does not return to employment within the specified period or at the end of an authorized leave, he shall be deemed to have terminated his employment when he originally left the service of the employer.
- CONTRACT or POLICY
- Any insurance or annuity contract issued by an insurance company in accordance with the requirements of the plan.
- EARLY RETIREMENT DATE
- The date when a participant retires or terminates employment with the employer if such date is prior to the participant's normal retirement date but on or after the later of the date when he attains age 55 and the date when he completes five years of service.
- Any nonuniformed person who is employed on a full-time salaried basis by the employer; for this purpose, a full-time "employee" is one who is regularly employed for at least 35 hours per week.
- The Township of Pine, a political subdivision of the Commonwealth of Pennsylvania.
- EMPLOYMENT COMMENCEMENT DATE
- The date on which an employee first completes an hour of service for the employer.
- A. Each hour for which an employee is paid or entitled to payment for the performance of duties for the employer.
- B. Each hour for which an employee is paid, or entitled to payment, by the employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity, including disability, layoff, jury duty, military duty or leave of absence.
- C. In the case of any dispute hereunder regarding completion of an "hour of service," "hours of service" shall be determined and credited in accordance with Department of Labor Regulations under 2530.200b-2.
- LATE RETIREMENT DATE
- The first day of the month coincident with or next following the date when a participant retires pursuant to the provisions of § 32-6.
- NORMAL RETIREMENT AGE
- The later of the dates when an employee attains age 65 or completes five years of service.
- NORMAL RETIREMENT DATE
- The first of the month coincident with or next following the date when an employee attains normal retirement age.
- Any employee who has commenced participation in this plan in accordance with § 32-2 and has not for any reason ceased to participate hereunder.
- The Township of Pine Employees' Pension Plan, restated effective as of January 1, 1985.
- PLAN ADMINISTRATOR
- The Board of Supervisors of the Township of Pine or any individual or committee to whom the Board delegates such function.
- PLAN YEAR
- The twelve-month period commencing each January and ending on the subsequent December 31.
- RESTATEMENT DATE
- January 1, 1985, the date upon which this amended and restated plan becomes effective.
- The initial and any successor trustee or trustees of the trust.
- TRUST FUND
- The trust fund established pursuant to the agreement of trust entered into pursuant to the plan by the employer and the trustee specified herein, for the purpose of receiving and holding in trust the assets held under the plan.
- YEAR OF CREDITED SERVICE
- The period of continuous employment with the employer, calculated in whole years and completed months of continuous employment.
- YEAR OF SERVICE
- Each completed twelve-month period of continuous employment with the employer. Such twelve-month periods shall be measured beginning on the employee's employment commencement date and anniversaries thereof. "Years of service" shall be expressed in completed years only and shall not take into account any partial years of fewer than 12 completed months with respect to any employee.
Eligibility for participation. Each employee who was a participant on the day preceding the restatement date shall continue to be a participant on and after the restatement date, subject to the terms and conditions hereof. Each other employee shall be eligible to participate in the plan on his eligibility date, provided that he is an employee of the employer on such date. An employee's eligibility date shall be the first day of any month on or after an employee's employment commencement date upon which he has met the requirement of attainment of age 21.
Employer contributions. The employer shall contribute an amount sufficient to maintain the trust fund at an amount at least equal to that certified from time to time by the plan's actuary as the amount necessary to adequately fund the benefits provided hereunder.
Employee contributions. Employees shall neither be required nor permitted to make contributions to the trust fund.
No reversion to the employer. At no time shall it be possible for the plan assets to be used for, or diverted to, any purpose other than for the exclusive benefit of the participants and their beneficiaries, except that contributions made by the employer may be returned to the employer if:
Upon retirement on his normal retirement date, a participant who retires on or after the effective date shall be entitled to a monthly retirement benefit, expressed in the form of a life annuity with 10 years certain and commencing at normal retirement date which shall be equal to 1 1/2% of his average monthly earnings multiplied by his years of credited service.
The benefit amount of a participant who retired prior to the restatement date shall not be in any way altered by this amended and restated plan and shall continue to be determined on the basis of the terms of the plan (or, where applicable, of the heretofore unfunded pension program) in effect on the day preceding the effective date.
If a participant shall retire on an early retirement date, he shall be entitled to receive, upon making an election therefor, either:
A deferred pension commencing at normal retirement date equal to his accrued benefit determined as of his early retirement date; or
An immediate pension commencing on his early retirement date (or on any date intervening between his early retirement date and his normal retirement date) equal to the amount in Subsection A(1) above reduced by 1/180 for each of the first 60 months by which the early commencement date precedes the participant's normal retirement date and by 1/360 for each of the 61st through 120th months by which such early commencement date precedes his normal retirement date.
If a participant remains in the employ of the employer subsequent to his normal retirement date, he shall continue to be eligible to participate hereunder but he shall not be credited with any additional years of credited service subsequent to his normal retirement date; provided, however, that in no case shall a participant's late retirement date be later than the first of the month coincident with or immediately following the date when he attains age 70. A participant who retires on a late retirement date shall be entitled to receive a monthly pension which shall be the actuarial equivalent of his normal retirement benefit determined in accordance with the formula set forth in § 32-4 and based upon his years of credited service as of his normal retirement date.
If a participant who is an employee of the employer becomes totally and permanently disabled, as defined in Subsection B, such participant's disability retirement date shall be the date as of which he is first eligible to receive social security benefits. A participant's disability retirement benefit shall be equal to his accrued benefit determined as of the first day of the month immediately preceding the last day on which he was actively employed by the employer.
"Totally and permanently disabled" shall mean a condition of physical or mental impairment due to which a participant is unable to perform any and every duty of a gainful occupation for which he is reasonably fitted through training, education and experience, which continues for a period of at least six months and will be permanent and continuous for the remainder of the participant's lifetime and due to which a participant is certified by the Social Security Administration as being eligible for social security disability benefits; provided, however, that no participant shall be deemed to be "totally and permanently disabled" for the purpose of this plan if his incapacity results from chronic alcoholism or addiction to narcotics or was engaged in a felonious criminal enterprise or resulted therefrom or resulted from an intentionally self-inflicted injury or if such disability was incurred while in the armed services of any country.
The employer may require proof of continued disability but not more frequently than once in any six-month period. If any participant shall refuse to submit to a medical examination or furnish proof of his continued disability upon the request of the employer, his disability payments shall cease.
Preretirement surviving spouse benefit. If a married participant dies while in the active service of the employer at a time when he is eligible to retire on an early retirement date or if such a participant terminates employment with the employer at a time when he is eligible to receive early or normal retirement benefits and dies thereafter but prior to the date when his benefits commence, then the spouse of such participant shall be eligible to receive a monthly benefit, provided that the participant and his spouse have been married throughout the one-year period ending on the date of the participant's death. The monthly benefit payable to the spouse shall be equal to the pension such spouse would have been eligible to receive if the participant had retired under the early retirement provisions of the plan on the first day of the month in which his death occurs with a fifty-percent contingent annuitant option in effect, with the spouse as contingent annuitant.
Postretirement death benefit. If a terminated participant shall die after benefit payments have commenced, no death benefits shall be payable under this section, and the death benefit payable, if any, shall be that which is specified pursuant to the form of benefit payment in force for the benefit of such person at the time of his death.
The automatic form of payment of retirement benefits shall be the form specified in § 32-4 unless a participant elects to receive his benefits in some other form as provided herein. If a participant who retires under this article elects not to take his benefits in the automatic form of payment, any such retirement benefit may be distributed by the trustee in such manner as the plan administrator, in its sole discretion, shall determine, after consultation with the participant. Such distribution, as determined by the plan administrator, may be in any actuarially equivalent optional method of settlement that is permitted by the plan administrator. Any optional form of payment shall be the actuarial equivalent of the automatic form of payment.
The provisions of this section shall be subject to the limitation that no participant shall elect an interest option or an installment distribution to be paid over a period which shall exceed the greater of:
A participant may not elect an optional form of pension providing monthly benefits to a contingent annuitant who is other than his spouse, or to a beneficiary, unless the actuarial present value of the payments expected to be made to the participant is more than 50% of the actuarial present value of the total payment expected to be made under such optional form.
Notwithstanding any other provision of this plan, no benefit provided under this plan attributable to contributions of the employer shall exceed, as an annual amount, the lesser of:
Ninety thousand dollars, assuming a single life annuity or qualified joint and survivor annuity (as defined for purposes of Code Section 415), subject to cost-of-living adjustments made from time to time by plan amendments or automatically in accordance with and in such amounts as are prescribed in or pursuant to regulations promulgated under Section 415(d) of the code (which adjustments shall not become effective prior to January 1 of the year for which such adjustment is made); or
Editor's Note: See the Internal Revenue Code of 1954, as amended.
One hundred percent of the participant's average compensation for the three consecutive years of employment (or such lesser number as may apply if the employee does not have three consecutive years) in which he received the highest aggregate compensation while a participant, and the rate of benefit accrual shall be frozen or reduced accordingly, subject to the provisions of Subsection B below.
The limitation provided in Subsection A above shall be subject to the following conditions:
For purposes of the above limitations, "compensation" shall mean the participant's wages, salaries, fees for professional services and other amounts received for personal services actually rendered in the course of employment with an employer maintaining the plan (including, but not limited to, commissions paid salesmen, commissions on insurance premiums, tips and bonuses). The term "compensation," as used in this section, shall not include items such as the following:
Contributions made by the employer to a plan of deferred compensation to the extent that before the application of Code Section 415 limitations to that plan, the contributions are not includable in the gross income of the employee for the taxable year in which contributed. In addition, employer contributions made on behalf of an employee to a simplified employee pension described in Code Section 408(k) are not considered as compensation for the taxable year in which contributed to the extent such contributions are deductible by the employee under Code Section 219(b)(7). Additionally, any distributions from a plan of deferred compensation are not considered as compensation for Section 415 purposes, regardless of whether such amounts are includable in the gross income of the employee when distributed. However, any amounts received by an employee pursuant to an unfunded nonqualified plan may be considered as compensation for Code Section 415 purposes in the year such amounts are includable in the gross income of the employee.
Editor's Note: See the Internal Revenue Code of 1954, as amended.
Other amounts which receive special tax benefits, such as premiums for group-term life insurance (but only to the extent that the premiums are not includable in the gross income of the employee) or contributions made by an employer (whether or not under a salary reduction agreement) towards the purchase of an annuity contract described in the Internal Revenue Code Section 403(b) (whether or not the contributions are excludable from the gross income of the employee).
For purposes of the above limitations, if the benefit under the plan is payable in any form other than in the forms described therein (without regard to ancillary benefits) or if the employees contribute to the plan or make rollover contributions, the determination as to whether the limitations have been satisfied shall be made by adjusting the benefit so that it is the actuarial equivalent of the benefit described in Subsection A. For the purpose of making the adjustment in the form of the benefit to an actuarial equivalent, the interest rate shall not be less than the greater of 5% or the rate specified under the plan's definition of actuarial equivalent.
If retirement income benefits commence prior to a participant's attainment of age 62, the limitation contained in Subsection A(1) shall be adjusted to the actuarial equivalent of an annual benefit of $90,000 commencing at age 62. The reduction under this subsection shall not reduce the limitation of Subsection A(1) below $75,000, if the benefit begins at or after age 55 or, if the benefit begins before age 55, the amount which is the equivalent to the limitation of $75,000 for age 55. For the purpose of making this adjustment, the interest rate used shall not be less than the greater of 5% or the rate specified in the plan's definition of actuarial equivalent.
If retirement income benefits commence after the participant's attainment of age 65, the limitation described in Subsection A(1) shall be adjusted so that such limitation (as so increased) equals an annual benefit (beginning when such retirement income benefit begins) which is the actuarial equivalent of an annual benefit of $90,000 commencing at age 65; provided, however, that in no case shall such benefit exceed the limitation contained in Subsection A(2). For the purpose of making this adjustment, the interest rate assumption shall not be greater than the lesser of 5% or the rate specified in the plan's definition of actuarial equivalent.
Benefits payable to a participant under this plan shall be deemed not to exceed the limitations imposed by Subsection A if the annual benefit payable to such participant does not exceed $10,000 (for this year or any prior year), provided that such participant has never participated in a defined contribution plan maintained by the employer.
For purposes of applying the limitations of this section, all defined benefit plans of the employer shall be treated as one defined benefit plan, and all defined contribution plans shall be treated as one defined contribution plan.
For purposes of the above limitations, the limitation year shall be the plan year, unless such period is otherwise defined in a written resolution adopted by the employer.
To avoid any duplication of benefits, if any participant ceases to be employed for any reason and is reemployed, any benefit payments then being paid pursuant to the terms of this plan shall be suspended, and future retirement benefits shall be coordinated in such a manner as to preclude any duplication hereunder.
In its sole discretion, the Committee may direct the trustee to distribute in the form of a lump sum payment to a participant who is terminating his participation in the plan such participant's vested benefit if the actuarial present value of such benefit is $3,500 or less and such participant is one-hundred-percent vested in his accrued benefit hereunder. Any distribution made pursuant to this section shall be made within one year after a participant terminates service with the employer.
A participant may elect to commence receiving distribution of his retirement benefits as of his normal retirement date, late retirement date or disability retirement date, whichever is applicable, or may defer such payments to a date not later than the required date for commencement of benefits determined under § 32-14. If a participant elects immediate commencement of his retirement benefit, payments shall commence as soon as administratively feasible following his retirement date.
Unless the participant otherwise elects, payment of his benefits under the plan shall commence not later than 60 days following the close of the plan year in which occurs the latest of the following dates:
Interest of participant entitled to benefits prior to death.
Notwithstanding any other provision of this plan, the entire interest of each participant under this plan who becomes entitled to benefits prior to his death shall be distributed either:
Not later than the required beginning date; or
Beginning not later than the required beginning date over the life of such participant or over the lives of such participant and a designated beneficiary (or over a period not extending beyond the life expectancy of such participant or the life expectancy of such participant and a designated beneficiary).
If a participant who is entitled to benefits under this plan dies prior to the date when his entire interest has been distributed to him after distribution of his benefits has begun in accordance with Subsection A(1)(b) above, the remaining portion of such benefit shall be distributed at least as rapidly as under the method of distribution being used under Subsection A(1)(b) as of the date of his death.
If a participant who is entitled to benefits under this plan dies before distribution of his benefit has begun, the entire interest of such employee shall be distributed within five years of the death of such employee, unless the following sentence is applicable, if any portion of the employee's interest is payable to (or for the benefit of) a designated beneficiary, such portion shall be distributed over the life of such designated beneficiary (or over a period not extending beyond the life expectancy of such beneficiary), and such distributions begin not later than one year after the date of the employee's death or such later date as provided by regulations issued by the Secretary of the Treasury, then, for purposes of the five-year rule set forth in the preceding sentence, the benefit payable to the beneficiary shall be treated as distributed on the date on which such distributions begin; provided, however, that, notwithstanding the preceding sentence, if the designated beneficiary is the surviving spouse of the participant, then the date on which distributions are required to begin shall not be earlier than the date upon which the employee would have attained age 70 1/2 and, provided, further, that if the surviving spouse dies before the distributions to such spouse begin, this subsection shall be applied as if the surviving spouse were the employee.
Definitions; payment to children; redetermination of life expectancy.
For purposes of this section, the following definitions and procedures shall apply:
- DESIGNATED BENEFICIARY
- Any individual designated by the employee under this plan according to its rules.
Any amount paid to a child shall be treated as if it has been paid to the surviving spouse if such amount will become payable to the surviving spouse upon such child reaching majority (or other designated event permitted under regulations issued by the Secretary of the Treasury).
For purposes of this section, the life expectancy of an employee and/or the employee's spouse (other than in the case of a life annuity) may be redetermined, but not more frequently than annually.
Deferred vested benefits. Subject to Subsection C, a deferred vested benefit shall accrue to a participant who terminates his employment prior to his normal retirement age for any reason other than retirement, death or disability, in accordance with the following provisions:
Such participant's vested benefit shall be a percentage of his accrued benefit (attributable to employer contributions) determined as of such date of termination and based upon the following schedule:
Payments of a participant's vested benefit shall be made by the trustee, at the direction of the plan administrator, and subject to the provisions of § 32-9, at the date which would have been such participant's normal retirement date had he continued his employment. Notwithstanding the preceding, a participant with an entitlement to a vested benefit may elect to commence receiving such benefit as of the date when he would have been eligible for an early retirement pension as provided in § 32-5 had he continued employment with the employer; provided, however, that any payment of a vested accrued benefit as of a participant's early retirement date shall be subject to the reduction factor for early payment set forth in § 32-5. A participant eligible to receive his vested benefit shall be permitted to receive such benefit in any form of payment authorized for payment of retirement benefits under the provisions of § 32-9; provided, however, that he may elect an optional form of payment only with the consent of the plan administrator. The plan administrator shall, after consulting with the participant, and subject to the provisions of § 32-14, determine the time and form of any distribution of vested benefits hereunder in a nondiscriminatory manner and not contrary to any laws or regulations which may govern such distributions.
A participant shall always be one-hundred-percent vested in any portion of his accrued benefit attributable to employee contributions.
Vesting at normal retirement date. Notwithstanding the preceding, a participant shall become one-hundred-percent vested as of his normal retirement date.
Forfeiture upon death. A participant who terminates his employment with the employer at a time when he is not vested in any portion of his accrued benefit derived from employer contributions shall cease to be a participant hereunder and shall not be entitled to any benefits under the plan derived from employer contributions. Payment of a participant's vested retirement benefit depends upon his continued survival to the date of his actual retirement on either an early retirement date or normal retirement date hereunder.
Application of forfeitures. Amounts forfeited by any participant may not be used to increase the benefits which other participants would otherwise receive under the plan; they shall be used only to reduce the employer's contributions to the plan.
The administration of this plan shall be vested in the plan administrator, who shall have the power and duty to operate and administer the provisions of the plan and to make and enforce such rules and regulations as may be necessary and proper for the efficient administration of the plan.
The plan administrator hereunder shall be the Board of Supervisors of the Township of Pine.
The plan administrator may appoint such subcommittees with such powers as it shall determine; may authorize one or more of its members to execute or deliver any instrument or do any act on its behalf; and may employ counsel and agents and such clerical, accounting and actuarial services as it may require in carrying out the provisions of the plan.
Any act which the plan administrator is authorized or required to perform hereunder may be performed by a majority of its members. The action of such majority expressed from time to time by voting at a meeting, or in writing without a meeting, shall constitute the action of the plan administrator and shall have the same effect for all purposes as if assented to by all members then in office.
The plan administrator shall have the power to determine the eligibility of any employee to participate in or receive benefits under this plan, to settle any disputes which may arise in the operation of the plan, to determine the interest of any participant in the trust fund on the basis of their present market value in such manner, consistently applied, as the plan administrator or, at the direction of the plan administrator, the trustee, may deem appropriate, in the form of periodic payments, or any combination of the foregoing.
All discretionary acts which may be taken pursuant to this plan by the plan administrator with respect to participants or their beneficiaries shall be uniform and nondiscriminatory in their nature and shall be applicable to all participants and their beneficiaries in substantially identical situations.
Any decision by the plan administrator denying a claim by a participant or a beneficiary for benefits under the plan shall be communicated in writing to the participant or beneficiary, setting forth the specific reasons for such denial. Any such participant or beneficiary whose claim has been denied, or his or her duly authorized representative, may appeal to the plan administrator in writing within 90 days after receipt of the notice of denial for a full review of the decision by the plan administrator; review pertinent documents; and submit issues and comments in writing. The decision by the plan administrator following such review shall be made no later than 60 days after the date of receipt by the plan administrator of the request for review and shall be conclusive as to all persons affected thereby. Such decision shall be in writing and shall include both specific reasons for the decision, written in a manner calculated to be understood by the claimant, and specific references to the pertinent plan provisions on which the decision is based.
The Township's governing body shall serve as trustee hereunder to hold and invest the contributions in accordance with the terms of the agreement of trust, incorporated as § 32-17 hereof.
The trust shall be used to pay benefits as provided in the plan and, to the extent not paid directly by the employer, to pay the expenses of administering the plan pursuant to authorization by the employer.
The employer intends the plan to be permanent and for the exclusive benefit of its employees. It expects to make the contributions to the trust required under the plan. The employer shall not be liable in any manner for any insufficiency in the trust; benefits are payable only from the trust, and only to the extent that there are moneys available therein.
Establishment and acceptance of trust. The trust will consist of all funds held by the trustee under the plan, including contributions made pursuant to the provisions hereof and the investments, reinvestments and proceeds thereof. The trust shall be held, managed and administered in trust pursuant to the terms of the plan. The trustee hereby accepts the trust created hereunder and agrees to perform the duties under the plan on its part to be performed. Except as otherwise expressly provided for in the plan, the trustee has exclusive authority and discretion to manage and control the trust assets. The duties, powers and responsibilities reserved to the trustee may be allocated among the trustees (if there be more than one) so long as such allocation is pursuant to action taken by the employer, or by written agreement executed by the trustee and approved by the employer, in which case no trustee shall have any liability, with respect to any duties, powers or responsibilities not allocated to him, for the acts or omissions of any other trustee.
Powers and duties of trustee. With respect to the trust the trustee shall have the following powers, rights and duties, in addition to those vested in it elsewhere in the plan or by law:
To retain in cash so much of the trust as it deems advisable and to deposit any cash so retained in any bank or similar financial institution, including any such institution which may be a trustee hereunder, without liability for interest thereon.
To invest and reinvest the principal and income of the fund and keep said fund invested, without distinction between principal and income, in securities which are at the time legal investments for fiduciaries under the Pennsylvania Fiduciaries Investment Act of 1949, or as the same may be subsequently modified or amended.
To sell property held in the fund at either public or private sale for cash or on credit at such times as it may deem appropriate; to exchange such property, and to grant options for the purchase or exchange thereof.
To consent to and participate in any plan of reorganization, consolidation, merger, extension or other similar plan affecting property held in the fund; to consent to any contract, lease mortgage, purchase, sale or other action by any corporation pursuant to any such plan.
To exercise all conversion and subscription rights pertaining to property held in the fund.
To exercise all voting rights with respect to property held in the fund and in connection therewith to grant proxies, discretionary or otherwise.
To cause any securities or other property held as part of the trust fund to be registered in its own name or in the name of one or more of its nominees, without designating the same as trust property, and to hold any investments in bearer form, but the books and records of the trustee shall at all times show that all such investments are part of the trust fund.
Generally, to do all such acts, execute all such instruments, take all such proceedings and exercise all such rights and privileges with relation to property constituting the trust fund as if the trustee were the absolute owner thereof.
If bonds, preferred stocks or other securities shall be purchased at a premium, it shall not be necessary for the trustee to set aside a sinking fund from the earnings to retire or absorb the premium.
To place money at any time in a deposit bank deemed by the trustee to be appropriate for the purposes of this trust, no matter where situated, including the savings department of its on commercial bank. Such deposits may be for such duration as the trustee, in its sole discretion, may determine.
In addition to the foregoing powers, the trustee shall also have all of the powers, rights and privileges conferred upon Trustees by the Pennsylvania Fiduciaries Act of 1949, 20 P.S. § 320, or as the same may be subsequently modified or amended, and the power to do all acts, take all proceedings and execute all rights and privileges, although not specifically mentioned herein, as the trustee may deem necessary to administer the trust fund and to carry out the purposes of this trust.
To invest the assets of the trust in any collective commingled trust fund maintained by a bank or trust company, including any bank or trust company which may act as a trustee hereunder. In this connection, the commingling of the assets of the trust with assets of other eligible, participating trusts through such a medium is hereby specifically authorized. Any assets of the trust which may be so added to such collective trusts shall be subject to all of the provisions of the applicable declaration of trust, as amended from time to time, which declaration, if required by its terms or by applicable law, is hereby adopted as part of the plan, to the extent of the participation in such collective or commingled trust fund by the trust.
To make any payment or distribution directed by the employer or otherwise required or advisable to carry out the provisions of the plan.
To compromise, content, arbitrate, enforce or abandon claims and demands.
To retain any funds or property subject to any dispute without liability for the payment of interest thereon and to decline to make payment or delivery thereof until final adjudication is made by a court of competent jurisdiction.
After advance notice to the employer, to pay, and to deduct from the charge against the trust, any taxes which may be imposed upon the trust, the income, property or transfer thereof, or upon or with respect to the interest of any person therein, which the trustee is required to pay; to contest, in its discretion, the validity or amount of any tax, assessment, claim or demand which may be levied or made against or in respect of the trust, the income, property or transfer thereof, or in any matter or thing connected therewith, provided that the trustee is indemnified to its satisfaction.
Management authority. Except as otherwise provided in Subsection B, the powers granted the trustee thereunder shall be exercised in the discretion of the trustee; however, the employer may at any time affirmatively direct the trustee with regard to the investment of the trust, or direct the trustee to obtain the employer's approval before exercising any of the powers granted the trustee. Any such direction may be of a continuing nature or otherwise, may be revoked at any time and shall be complied with as promptly as possible by the trustee. The trustee shall not be liable for any loss or depreciation in value of the trust or any adverse effect upon the exempt status of the trust under the code, resulting from actions taken in accordance with the employer's affirmative direction or from the failure or refusal of the employer to give any required approval, nor shall the trustee be obliged to review the assets of the trust acquired on the direction of the employer.
Successor trustee. Pending the appointment of any successor trustee and the acceptance of such appointment, the existing trustee or trustees shall have full power to take any action hereunder. Each successor or additional trustee shall have all rights and powers, as well as duties and liabilities, vested in the original trustee without the signing or filing of any further instrument, but any resigning or removed trustee shall execute all documents and do all acts necessary to vest title of record to any assets of the trust in any successor trustee or in the remaining trustee or trustees. With the approval of the employer, a successor trustee may accept the account rendered and the property delivered to it by a predecessor trustee as a full and complete discharge of the predecessor trustee, without incurring any liability or responsibility for so doing.
Common investments. The trustee shall not be required to make separate investments for individual participants or to maintain separate investments for each participant's account, but may invest contributions and any profits or gains therefrom in common investments.
Compensation and expenses of trustee. The trustee shall be entitled to such reasonable compensation as shall from time to time be agreed upon by the employer and the trustee, unless such compensation is prohibited by law. Such compensation, and all expenses reasonably incurred by the trustee in carrying out its functions, shall constitute a charge upon the employer or the trust fund which may be executed at any time after 30 days written notice to the employer. The employer shall be under no obligation to pay such costs and expenses, and, in the event of its failure to do so, the trustee shall be entitled to pay the same, or to reimburse itself for the payment thereof from the trust.
Immunity and liability of trustee.
The trustee shall not be liable for the making, retention or sale of any investment or reinvestment made by it, as herein provided, nor for any loss to, or diminution of, the trust fund, unless due to its own intentional or willful misconduct, lack of good faith or gross negligence.
The trustee shall be fully protected in acting upon any instrument, certificate or paper believed by it to be genuine and to be signed or presented by the proper person or persons, and the trustee shall be under no duty to make any investigation or any inquiry as to any statement contained in any writing, but may accept the same as conclusive evidence of the truth and accuracy of the statements therein contained.
The trustee shall not be liable for the proper application of any part of the trust if payments are made in accordance with the directions of the employer as herein provided, and the trustee shall not be obliged to inquire as to whether any payee is entitled to any payment or distribution, pursuant to such directions, or as to whether any payment or distribution, pursuant to such directions, is proper or within the terms of the plan. The trustee shall not be required to make any investigation to determine the identity or mailing address of any person entitled to benefits under the plan and shall be entitled to withhold making any payments or deliveries upon instructions from the employer.
The trustee shall not be responsible for the adequacy of the trust to meet and discharge any and all payments and liabilities under the plan. The trustee shall be responsible only for such sums as shall actually be received by it as trustee, hereunder, and it shall not be the duty of the trustee to collect, or to ascertain the correctness of the amount of, any sum receivable or received from the employer.
The trustee shall discharge its duties with respect to the assets of the trust solely in the interest of the participants and beneficiaries, administering the assets of the plan with the care and diligence, under the then prevailing circumstances, that a prudent man acting in like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims.
Financial records. The trustee shall maintain records and accounts reflecting all receipts and disbursements made by it under the plan and showing such other items and information as the employer from time to time may specify. The trustee's records and accounts shall be open to the inspection of the employer at all reasonable times and may be audited from time to time by such person or persons as the employer may specify.
Periodic accounting. The trust will be evaluated annually, or at more frequent intervals, by the trustee, and a written accounting rendered as of each fiscal year end of the trust, and as of the effective date of any removal of resignation of the trustee, and such additional dates as requested by the employer, showing the condition of the trust and all receipts, disbursements and other transactions effected by the trustee during the period covered by the accounting, based on fair market values prevailing as of such date. Any such accounting shall be due within 90 days after the date thereof; to the extent permitted by law, upon the expiration of 180 days from the filing of such accounting, the trustee shall be forever released, revised and discharged from all liability and accountability to anyone with respect to the propriety of its accounts and transactions shown in such accounts except with respect to any such accounts or transactions as to which the employer shall within such one-hundred-eighty-day period file written exceptions. All determinations as to the value of the assets of the trust, and as to the amount of the liabilities thereof shall be made by the trustee, whose decisions shall be final and conclusive and binding on all parties hereto, the participants and beneficiaries and their estates. In making any such determination, the trustee shall be entitled to seek and rely upon the opinion of or any information furnished by brokers, appraisers and other experts, and the trustee shall also be entitled to rely upon reports as to sales and quotations, both on security exchanges and otherwise as contained in newspapers and in financial publications.
Rights of trustee. The rights and interest of any participant on whose life or in whose name a contract is issued shall not be expanded by such an investment and any and all rights provided under the contract or permitted by the insurer shall be reserved to the trustee. Such rights shall include the right to surrender, reduce or split the contract, the right to name and change the payee to receive thereunder on the happening of any contingency specified in the contract, the right to exercise any loan provisions to pay premiums or for any other reason and such other rights as may be reserved to the owner of the policy.
Actions of insurer. No insurer which may issue a policy for the purpose of this plan shall be required to take or permit any action contrary to the provisions of said policy nor shall the insurer be required to look into the terms of this plan, or question any action as authorized by the trustee in the application for a policy or changes in an existing policy.
Insurer not a party to plan. The insurer shall not be deemed to be a party to this plan for any purpose nor shall it be responsible for the validity of this plan.
The employer shall have the right to amend the plan and trust, at any time, and with respect to any provisions thereof, and all parties thereto or claiming any interest thereunder shall be bound thereby; provided, however, that no amendment shall revise the accrued benefit of a participant determined as of the later of the date such amendment is adopted, or the date such amendment becomes effective, is such revised vested accrued benefit is less than that computed under the plan without regard to such amendment.
Right to terminate. It is the present intention of the employer to maintain the plan indefinitely. Nevertheless, the employer reserves the right, at any time, to permanently discontinue further contributions to the trust or to terminate the entire plan and trust.
Automatic termination of contributions. The liability of the employer to make contributions to the trust shall automatically terminate upon liquidation of the employer, upon its adjudication as bankrupt, upon the making of a general assignment for the benefit of creditors or upon its merger into or consolidation with any other corporation or corporations and failure of the surviving corporation or consolidated corporation to specifically adopt and agree to continue the plan.
Distribution upon termination. In the event of the termination or partial termination of the plan, all amounts of benefits accrued by the affected participant to the date of such termination, to the extent funded on such date, shall immediately become fully vested and nonforfeitable. In the event of termination of the plan, the employer shall direct that:
[Amended 2-3-1992 by Res. No. 394]
The trustee continue to hold the accrued benefits of participants in the trust fund in accordance with the provisions of the plan (other than those provisions related to forfeitures) without regard to such termination until all funds have been distributed in accordance with such provisions;
The trustee immediately distribute to each participant an amount equal to his accrued benefit as of such date; or
The trustee transfer the accrued benefits of participants in the trust fund to another qualified retirement plan.
Residual assets. If all liabilities under the plan to participants and others entitled to receive a benefit have been satisfied and there remain any residual assets in the trust fund, the residual assets shall be divided among the participants in the plan at the date of termination of the plan pursuant to an allocation formula set forth by the employer which does not contravene any provision of the law.
[Amended 2-3-1992 by Res. No. 394]
Actuarial evaluations. The plan's actuary shall perform an actuarial valuation at least biennially unless the employer is applying or has applied for supplemental state assistance pursuant to section 603 of the Act, whereupon actuarial valuation reports shall be made annually. Such biennial actuarial valuation report shall be made as of the beginning of each plan year occurring in an off-numbered calendar year, beginning with the year 1985. Such actuarial valuation shall be prepared and certified by an approved actuary, as such term is defined in the Act.
Reporting requirements. Such actuarial reports shall be prepared and filed under the supervision of the Chief Administrative Officer of the municipality. The Chief Administrative Officer of the pension plan shall determine the financial requirements of the pension plan on the basis of the most recent actuarial report and shall determine the minimum obligation of the employer with respect to funding the plan for any given plan year. The Chief Administrative Officer shall submit the financial requirements of the plan and the minimum obligation of the employer to the Board and/or to the employer annually and shall certify the accuracy of such calculations and their conformance with the Act.
Benefit modifications. Prior to the adoption of any benefit plan modification by the Board, the Chief Administrative Officer of the plan shall provide to the Board a cost estimate of the proposed benefit plan modification. Such estimate shall be prepared by an approved actuary, which estimate shall disclose to the Board the impact of the proposed benefit plan modification on the future financial requirements of the plan and the future minimum obligation of the employer with respect to the plan.
If any pensioner shall be physically or mentally incapable of receiving or acknowledging receipt of any payment of pension benefits hereunder, the trustee, upon the receipt of satisfactory evidence that such pensioner is so incapacitated and that another person or institution is maintaining him and that no guardian or committee has been appointed for him, may provide for such payment of pension benefits hereunder to such person or institution so maintaining him, and any such payments so made shall be deemed for every purpose to have been made to such pensioner.
If any benefit shall be payable under the plan to or on behalf of a participant who has died, if the plan provides that the payment of such benefits shall be made to the participant's estate, and if no administration of such participant's estate is pending in the court of proper jurisdiction, then the trustee, at its sole option, may pay such benefits to the surviving spouse of such deceased participant, or, if there be no such surviving spouse, to such participant's then living issue, per stirpes; provided, however, that nothing contained herein shall prevent the trustee from insisting upon the commencement of estate administration proceedings and the delivery of any such benefits to a duly appointed executor or administrator.
Subject to the provisions of the Act, no past, present or future officer of the employer shall be personally liable to any participant, beneficiary or other person under any provision of the plan or trust or any policy issued pursuant thereto.
Nothing contained herein shall be deemed to give any participant or his beneficiary any interest in any specific property of the trust or any right except to receive such distributions as are expressly provided for in this plan.
Participation in this plan shall not give any right to any employee to be retained in the employ of the employer, nor shall it interfere with the right of the employer to discharge any employee and to deal with him without regard to the effect that such treatment might have upon him as a participant in this plan.
The income and principal of the trust fund are for the sole use and benefit of the participants of this plan, and, to the extent permitted by law, shall be free, clear and discharged of and from and are not to be in any way liable for, debts, contracts or agreements, now contracted or which may hereafter be contracted, and from all claims and liabilities now or hereafter incurred by any participant or beneficiary.
As used herein, the masculine gender shall include the feminine gender and the singular shall include the plural in all cases where such meaning would be appropriate. Headings of sections are inserted only for convenience of reference and are not to be considered in the construction of the plan.
The employer shall furnish to the Retirement Committee and the trustee information in the employer's possession as the Retirement Committee and the trustee shall require from time to time to perform their duties under the plan and the trust.
The employer intends that the trust herein created shall qualify as an exempt organization within the meaning of Section 501(a) of the Internal Revenue Code of 1954, or under any comparable section of any future legislation which amends, supplements or supersedes said section, and until advised to the contrary, the trustee may assume that the trust is so qualified and is entitled to tax exemption. Nevertheless, all taxes of any and all kinds whatsoever that may be levied or assessed under the existing or future laws upon the trust fund or the income thereof and investment charges, shall be paid from the trust fund. The trustee may assume that any such taxes are lawfully levied or assessed unless, subsequent to notification to the plan administrator of such action as the plan administrator shall direct, but all expenses incident thereto shall be chargeable to the Trust Fund, unless otherwise directed by the plan administrator.
[Adopted 1-21-1987 by Res. No. 301]
Gerald W. Weaver is designated as the Chief Administrative Officer for the purpose of certifying information to the Department of the Auditor General.