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City of Easton, PA
Northampton County
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Table of Contents
Table of Contents
[Adopted 6-13-2007 by Ord. No. 4970 (Art. 149 of the 1965 Codified Ordinances)]
A. 
Creation of Consolidated Firefighters' Pension Fund.
(1) 
The City of Easton, Northampton County, Pennsylvania (the "City") elected to join the Pennsylvania Municipal Retirement System ("PMRS") to provide a Firefighters' Pension Plan for employees hired on or after January 1, 1979, by enactment of Ordinance No. 2475, which was replaced by Ordinance No. 2910. As a result of contract negotiations with IAFF Local 713 and pursuant to the 2003 Act 111 Interest Arbitration Award, the City elected to withdraw from PMRS effective April 1, 2004. In connection with this withdrawal, all assets and liabilities held in PMRS that relate to active, vested, and retired firefighters of the City of Easton as of April 1, 2004 (the "effective date"), have been transferred to this City of Easton Consolidated Firefighters' Pension Plan (the "plan"). Such assets shall be held, invested, and distributed in accordance with the terms of this plan. Consistent with the intent of this plan is that all employees who were previously participants in the PMRS plan enjoy the same benefits as employees participating in the City-managed Firemen's Pension Fund which immediately preceded this plan.
(2) 
In addition, this plan is intended to qualify under Section 401(a) of the Internal Revenue Code of 1986 (the "code"), as amended, and its related trust is intended to be tax-exempt under Section 501(a) of the code.
B. 
Definitions. As used in this article, the following terms shall have the meanings set forth below.
ACCOUNT
The portion of the participant's interest in the plan or the PMRS plan attributable to the participant's voluntary contributions, mandatory contributions and any interest or excess interest earned or awarded thereon.
AGGREGATE PENSION BOARD
The City-wide consolidated pension board of trustees (created by Ordinance 2907, passed 9-23-1987, and codified, as amended, as Article IV of this chapter) to which the City has delegated certain duties, functions and management authority with respect to the City's various employee pension plans, including this plan.
BOARD OF MANAGERS
The Board of Managers of the City of Easton Consolidated Firefighters' Pension Plan as hereinafter set forth.
CITY
The City of Easton, Northampton County, Pennsylvania.
CODE
The Internal Revenue Code of 1986, as amended.
COUNCIL
The City Council for the City of Easton, Northampton County, Pennsylvania.
DISABILITY RETIREMENT BENEFIT
A retirement benefit determined in accordance with § 110-49A(4) of this article.
EARLY RETIREMENT BENEFIT
A retirement benefit determined in accordance with § 110-49A(2) of this article.
EFFECTIVE DATE
April 1, 2004.
FIRE DEPARTMENT
The Fire Department of the City.
FIREFIGHTER
A regular, full-time, paid firefighter who was appointed by the City to serve as a firefighter in the City Fire Department. The term "firefighter" shall not include any firefighter hired on a temporary or seasonal basis or paid on a per diem or fee basis.
FUND
The trust or custody account established by the City to hold the assets of the plan.
INTEREST ACCOUNT
That portion of a participant's interest in the plan exclusively attributable to the guaranteed and excess interest which was earned by the participant as a former member of the Pennsylvania Municipal Retirement System Plan and during the period from the effective date of the plan until December 31, 2004.
MANDATORY CONTRIBUTION ACCOUNT
Each participant's financial obligation toward funding the pension benefits prescribed by this plan as set forth in § 110-48B.
NORMAL RETIREMENT BENEFIT
A retirement benefit determined in accordance with § 110-49A(1) of this article.
PARTICIPANT
Any firefighter who meets the requirements for participation in this plan as set forth in § 110-48.
PENSION BENEFIT
An annuity payable on a monthly basis for the life of the participant.
PENSIONABLE COMPENSATION
A firefighter's total gross annual compensation, including, without limitation, position salary, longevity pay, degree pay, extra-duty pay, and birthday pay. In no event shall a participant's compensation exceed the limit prescribed by Section 401(a)(17) of the Internal Revenue Code.
PERMANENT DISABILITY
The inability to perform the essential duties of a firefighter and a lack of a favorable prognosis for being capable of performing the essential duties of a firefighter in the foreseeable future resulting from a service-connected injury or condition.
PLAN
The City of Easton Consolidated Firefighters' Pension Plan.
PMRS
The Pennsylvania Municipal Retirement System.
SPOUSE
The participant's husband or wife as determined at the relevant time under the state law in which the participant was most recently domiciled.
SURVIVING SPOUSE
A participant's spouse who survives the participant by more than one week.
VOLUNTARY CONTRIBUTION ACCOUNT
The portion of the participant's interest in the plan attributable exclusively to the voluntary contributions which the firefighter made to the former PMRS plan while a participant of the PMRS plan.
YEAR OF SERVICE
The period between a participant's employment commencement date as a firefighter and the first anniversary thereof and each successive one-year period thereafter that ends before the participant terminates employment as a firefighter. Notwithstanding anything herein to the contrary, the retirement provisions of the Easton Firemen's Relief Association, Inc., pertaining to age and length of service shall remain applicable to all participants who were members of the Bureau of Fire on December 31, 1966.
C. 
Gender references. Any references in this article to "firefighter," "participant" or "member" which are utilized in the masculine gender are done so out of convenience and brevity, and any reference to a masculine gender made in this article shall also be understood to include the feminine gender as well.
A. 
Establishment of fund. The City shall establish a fund for the purpose of holding the assets of the plan. All assets transferred from PMRS with respect to the benefits of transferred plan participants, as well as any assets previously held under the Firemen's Pension Fund established under Original Article 149 of the Easton administrative code (Ordinance 1944, passed 12-22-1966, as amended), shall be held in the fund. The City shall annually set aside, apportion and appropriate to the fund a sum of money not less than 1/2 of 1% nor more than 3% of all City taxes levied by the City, other than taxes levied to pay interest on or extinguish the debt of the City or any part thereof.
B. 
Segregation of plan assets.
(1) 
The assets which comprise the plan's fund shall be kept separate and apart from other assets and funds of the City, and any proper payment or distribution from the plan's fund shall not be a charge on any other asset or fund of the City.
(2) 
The assets which comprise the fund shall be deemed to be assets which are held by the City in trust for administration, investment, management and distribution as directed by the Aggregate Pension Board in accordance with and subject to all applicable Pennsylvania laws.
C. 
Establishment of plan accounts. Within the fund, the City shall establish, for recordkeeping purposes only, the following plan accounts:
(1) 
Mandatory contribution account. A participant's mandatory contribution account shall consist of all after-tax mandatory contributions made by the participant to the plan on or after the effective date plus all mandatory contributions made by the participant to PMRS prior to the effective date less any distributions of mandatory contributions to the participant or the participant's beneficiary made in accordance with § 110-48B.
(2) 
Voluntary contribution account. A participant's voluntary contribution account shall consist of all after-tax voluntary contributions previously made by the participant to PMRS prior to the effective date when sums were transferred by PMRS to the plan, and excluding any sums transferred from PMRS to the plan that are attributable to pre-tax interest awarded or earned on such voluntary contributions while held by PMRS.
(3) 
Interest account. A participant's interest account shall consist of:
(a) 
Pre-tax guaranteed interest credited to the participant's account under PMRS prior to the effective date and under this plan through December 31, 2004;
(b) 
Pre-tax excess interest credited to the participant's account under PMRS prior to December 31,2004; and
(c) 
Pre-tax actual investment experience on the participant's voluntary contribution account and interest account for periods beginning on and after January 1, 2005.
D. 
Employment of actuary and auditor. The City, through its Aggregate Pension Board, shall select and employ an actuary to calculate participant benefits in accordance with the terms of the plan, applicable actuarial customs (where not inconsistent with the plan), applicable Pennsylvania law, and the Internal Revenue Code. Likewise, the City may employ an independent auditor for the purpose of reviewing and reporting on the fund on a periodic basis.
E. 
Investments. The assets of the pension fund shall be invested by the Aggregate Pension Board or its delegate in the manner in which a reasonably prudent expert with like aims and in like circumstances would invest such assets. Participants shall not have the right to direct the investment of any portion of the fund, including their mandatory and voluntary contribution accounts and their interest account.
F. 
Authority to administer plan. Although the City may delegate to others the authority to administer, invest, manage or distribute the assets of the plan, the responsibility for the funding, solvency, administration, investment, management, and actuarial soundness of the plan in all its aspects cannot be delegated, and that responsibility shall always remain with the City and its governing body. The City's authority with respect to the plan shall, except as prohibited by law, include the ability to receive gifts, grants, devises or bequests to the fund of any money, real or personal property or mixed.
G. 
Additional audits. In addition to any audit of the fund which is made by the Pennsylvania Department of the Auditor General ("Auditor General"), the independent auditor appointed by the City or the Aggregate Pension Board under § 110-47D of this plan to audit the accounts and records of the fund shall perform an audit at the same time and in the same manner as the audits of the other accounts and records of the City.
H. 
Plan expenses. Except as prohibited by the Pennsylvania Municipal Pension Plan Funding Standard and Recovery Act (Act 205), Act of December 18, 1984, P.L. 1005, as amended, 53 P.S. § 895.101 et seq., or by a regulation, directive, opinion, or the like issued by the Auditor General, the costs, charges, fees and other expenses of administering, managing, protecting and distributing the assets of the fund (including the charges or fees of the actuary and the independent auditor appointed pursuant to § 110-47D, a trustee or fiduciary custodian, an investment advisor, or the like) shall be paid from the fund.
I. 
Public records. The accounts, records and audit reports of the fund shall be public records within the meaning and scope of the Pennsylvania Right to Know Act.
J. 
Board of Managers.
(1) 
Composition and terms. Any duties and functions related to the fund not retained by the City or delegated to the Aggregate Pension Board, including eligibility determinations, shall be under the direction and control of a Board of Managers consisting of the Mayor, Director of Finance, Chairman of the Police and Fire Committee of Council, City Controller and two members of the Fire Bureau to be chosen by the members of the Fire Bureau, and the Chief of the Fire Bureau. Of the first Managers chosen by the members of the Fire Bureau, one shall be chosen for a term of two years and one for a term of four years. Biennially thereafter, one Manager shall be chosen for a term of four years to take the place of the one whose term expires. In case of vacancy among the Managers chosen by the members of the Bureau of Fire, a successor shall be chosen for the unexpired term.
[Amended 2-11-2009 by Ord. No. 5156]
(2) 
Regulations. The fund shall be applied, under such regulations as the Board of Managers shall prescribe, for the benefit of such members of the Fire Bureau as shall receive honorable discharge therefrom by reason of service, age or disability and the families of such as may be killed in the service. All such pensions as shall be allowed to those who are retired by reason of disability, service or age shall be in conformity with a uniform scale, together with service increments as hereinafter provided. Benefits allowed from such fund to families of such as are killed in service shall take into consideration the member's widow and his minor children under 18 years of age, if any survive.
K. 
The Director of Finance or their designee shall serve as the Chief Administrative Officer of the Aggregated Pension Plans.
[Added 8-28-2013 by Ord. No. 5428; amended 11-21-2017 by Ord. No. 5611]
A. 
Participation in plan. Every firefighter who was an active or retired participant in either PMRS or the predecessor pension plan to this plan (i.e., the City of Easton Firemen's Pension Fund, Ordinance 1944 § 1, passed 12-22-1966, as amended, also known as Article 149 of the Easton administrative code) immediately prior to the effective date shall continue as a participant in this plan as of the effective date. Any person who becomes a firefighter on or after the effective date shall become a participant in this plan as of the later of the date on which he becomes a firefighter or the date on which he signs and files with the City Secretary an agreement in a form prescribed by the City containing:
(1) 
A statement by the firefighter that he agrees to join the plan;
(2) 
A statement by the firefighter that he agrees to be bound by the provisions of all statutes, laws, ordinances, resolutions, rules and regulations pertaining to the plan;
(3) 
A statement by the firefighter that he authorizes the City to deduct from his compensation and to deposit in the fund the amount which he is required to pay into the fund as his contribution; and
(4) 
A designation of beneficiary provision by which the firefighter names, but reserves the right to revoke, the primary and contingent beneficiaries who in the event of his death are to receive any payment or refund of his contributions under this plan
B. 
Mandatory contributions.
(1) 
Every firefighter shall pay into the fund through payroll deductions on an after-tax basis:
(a) 
A monthly contribution equal to 4 1/2% of his compensation, provided that, if any benefits are granted to a firefighter who has not contributed to the fund for an aggregate period of 20 years, such firefighter shall pay into the fund monthly by deduction from his benefit payments an amount equal to such maximum deductible percentage of his compensation until such time as he has contributed for a period of 20 years, including any years in which he contributed to PMRS and any predecessor funds.
(b) 
An additional monthly contribution equal to 1% of his compensation as a contribution towards the survivor benefit set forth herein.
(c) 
An additional $1 per month for every month during which the firefighter participates in the plan until the firefighter reaches age 65, as payment for the service increment provided under the plan.
(2) 
Mandatory contributions shall be credited to a participant's mandatory contribution account, which is done solely for the purpose of determining the amount of return of a participant's mandatory contributions where no pension benefit is payable under the plan.
(3) 
Participants who receive normal retirement, early retirement or disability retirement pension benefits of any kind or amount under this plan shall not receive a return of any part of their mandatory contribution account, nor shall return of contributions to any person or entity take place where survivor benefits are also payable under this plan.
(4) 
Participants who are entitled to a return of mandatory contributions will receive such contributions without interest, except for any interest earned and transferred to the participant's interest account pursuant to § 110-48C below.
(5) 
Unless and until such time that a return of mandatory contributions becomes payable under this plan, said amount of each participant's mandatory contribution account shall be deemed a plan asset for purposes of funding the defined-benefit component of the pension benefits described under § 110-49 below and shall defray any actuarial funding obligations of the City toward the plan that may be required by Act 205 and as determined by the plan actuary.
C. 
Guaranteed interest through December 31, 2004. From the effective date through December 31, 2004, the City shall ensure that the balance of each firefighters' mandatory contribution, voluntary contribution and interest accounts earns interest at the rate of 6.5% per year. All interest earned under this subsection shall be paid to each individual member's interest account. No interest shall be guaranteed on any firefighter's mandatory contribution, voluntary contribution or interest account for any time period after December 31, 2004.
D. 
Interest after December 31, 2004. As of January 1, 2005, the City shall no longer provide a guaranteed interest rate for a participant's mandatory contribution, voluntary contribution or interest account. Rather, each firefighter's interest account shall experience and be adjusted to reflect the actual investment performance, whether gain or loss, which the entire fund experiences. Such adjustments based upon the plan's actual investment experience shall only apply to a participant's voluntary contribution account and interest account, whereas each participant's mandatory contribution account shall not earn interest (or experience a loss) after December 31, 2004.
E. 
Record of contribution. The City shall maintain a record for each firefighter which shall show the amount of such contribution and the date on which it was deposited in the fund.
A. 
Pension benefits.
(1) 
Normal retirement. Any firefighter who was first employed by the City after January 1, 1967, and who is age 50 or older may retire from the Fire Department with a pension benefit upon completing 20 consecutive years of service in the Fire Department. Any firefighter who was employed by the City on or prior to January 1, 1967, may retire from the Fire Department with a pension benefit if he meets the age and service requirements of the constitution and/or bylaws of the Easton Firemen's Relief Association, Inc., as in effect on January 1, 1967.
(2) 
Early retirement for participants with 12 or more years of service in the Fire Department. Any firefighter having served 12 years or more with the Fire Department and terminating his or her employment or having his or her employment terminated for any reason (other than those constituting grounds for forfeiture under § 110-49D below) before the expiration of 20 consecutive years of service shall, upon reaching age 50, be entitled to receive such portion of the full pension benefit otherwise payable at normal retirement as the period of his or her service up to the date of its termination bears to the full 20 years of service, provided that such firefighter has continued his or her contributions into the Firemen's Pension Fund (in the amount in effect immediately prior to his or her termination) until he or she attains age 50.
[Amended 6-8-2011 by Ord. No. 5318[1]]
[1]
Editor's Note: This ordinance provided that it would "apply retroactively to the limited extent necessary to comply with the Interim Arbitration Award issued on March 8, 2010, pursuant to the Policemen and Firemen Collective Bargaining Act ("Act 111"), in the matter captioned as American Arbitration Association Case No. 14 360 L 0138 08."
(3) 
Any firefighter who, other than by reason of death or permanent disability (addressed below), ceases being an employee of the Department before having served 12 year or more with the Fire Department or who, having served 12 years or more with the Fire Department, fails to meet his or her obligation with respect to continued contributions into the Firemen's Pension Fund as required under Subsection A(2), above, shall be entitled only to a return of contributions under § 110-49B(3) along with any distribution to which he or she may be entitled under Subsection A(5).
[Amended 6-8-2011 by Ord. No. 5318]
(4) 
Disability retirement. Regardless of length of service, each firefighter permanently disabled as a result of duties or activities performed during the course of employment, which shall include time during which a firefighter is responding to a call to report for duty (but not while reporting for regularly scheduled shift), voluntarily reporting to a fire scene to report for duty and/or time actually spent on duty shall receive the full benefits provided by the plan.
(5) 
Distribution of voluntary contribution account and interest account. Any participant who ceases to be employed as a firefighter with the Department, and thus ceases to be a participant as defined in this plan, shall be entitled to receive the balance, if any, of his voluntary contribution account and interest account, regardless of whether or not said participant also qualifies for a pension benefit of any kind.
B. 
Benefit calculations.
(1) 
Calculation of normal retirement benefit. A firefighter's normal retirement benefit shall be calculated by multiplying the greater of the firefighter's compensation at the date of his retirement or 1/12 of the highest average annual salary which he received during any five years of service preceding retirement; by the pension payment percentage set forth in the chart below that corresponds to the firefighter's years of service as of his retirement date.
Years of Service
Pension Payment Percentage
20
50%
21
52.5%
22
55%
23
57.5%
24
60%
25
62.5%
26
65%
27
67.5%
28
70%
29
72.5%
30
75%
(2) 
Service increment. In addition to any other pension benefits to which a firefighter is entitled under this plan, each participant shall also be entitled to the payment of a service increment, as hereinafter provided. The service increment shall be the sum obtained by computing the number of whole years after having served the minimum required to qualify for normal retirement under the plan, including credit for any intervening military service to the extent required by Pennsylvania law, and multiplying the number of years so computed by an amount equal to 1/40 of the pension benefit which has become payable to such firefighter in accordance with the provisions of the plan. In computing the service increment, no employment after the firefighter has reached the age of 65 years shall be included, and no service increment shall be paid in excess of $100 per month.
(3) 
Return of contributions.
(a) 
If for any reason any participant contributing to the plan shall cease to be a participant before he becomes entitled to a pension benefit, an amount equal to his mandatory contributions account and any balance remaining in his voluntary contribution account and/or interest account shall be refunded to him.
(b) 
Participants who receive normal retirement, early retirement or disability retirement pension benefits of any kind or amount under this plan shall not receive a return of any part of their mandatory contribution account.
(c) 
If any such former participant shall have received such a distribution and shall afterward again become a participant, he shall not be entitled to the pension benefit designated until 20 years after his reemployment, unless he shall return to the fund the full amount of his mandatory contributions account, in which event the period of 20 years shall be computed from the time the participant first became a firefighter, excluding therefrom any period of time during which the member was not employed by the City.
(4) 
Minimum benefit. Notwithstanding anything herein to the contrary, the pension benefit of any participant who, on or after the effective date, becomes entitled to a pension benefit under the plan shall not be less than $3,000 annually.
(5) 
Benefit limitation. As required by Section 415 of the Internal Revenue Code, any other provision of the plan to the contrary notwithstanding, the maximum annual benefit under the plan (exclusive of any benefits derived from the participant's own contributions and exclusive of any benefits which are not directly related to retirement income benefits) shall not exceed the lesser of $165,000 or 100% of the participant's average annual compensation from the City during the three consecutive calendar years of participation during which his compensation was highest.
C. 
Survivor benefits.
(1) 
Killed-in-service benefit where participant has fewer than 20 full years of completed service. In the event that a participant with fewer than 20 years of service dies in the line of duty while working as a firefighter for the City, the surviving spouse shall receive the full pension benefit the firefighter would have received had he been eligible to retire at the time of his death.
(2) 
Non-service-related death benefits where participant has 20 or more years of service. The surviving spouse of any participant who has retired or died while in service as a firefighter after having served as a firefighter for a minimum period of 20 years, shall during his lifetime receive a pension benefit of the amount which would have been payable had the firefighter been retired and 50 years of age at the time of his death.
(3) 
In the event that the participant referred to in Subsection C(1) and (2) above is not survived by a surviving spouse or is survived by a surviving spouse who subsequently dies and such participant is survived by a child or children under the age of 18 years, the aforesaid surviving spouse's pension benefit shall be paid equally to such children until they reach their 18th birthday.
(4) 
Non-service-related death benefits where participant has fewer than 20 years but at least 12 years of completed service. The surviving spouse of any participant who dies and who, at the time of his death, has served in the Fire Department for at least 12 years shall be entitled to receive a pension benefit equivalent to 1/2 of the pension benefit such participant would have received had he been entitled to retire at the time of his death.
(5) 
Non-service-related death benefits where participant has fewer than 12 years of completed service. No survivor benefits shall be payable where a participant has died before attaining 12 years of service. However, the surviving spouse, or child(ren) in the absence of a surviving spouse, shall receive a return of the participant's mandatory contributions along with the balance, if any, of the participant's voluntary contribution and interest accounts. In the absence of both a surviving spouse and child(ren), such mandatory contributions and any balance in the participant's voluntary contribution and interest accounts shall be paid over to the participant's estate.
(6) 
The surviving spouse of any participant who, before January 1, 1960, was retired and receiving a pension benefit or became entitled to pension benefits at the time of the participant's death, shall, during her lifetime receive pension benefits of 1/2 the amount payable to the participant or which would have been payable had the participant been retired at the time of death, but in no case shall such amount be less than $1,500 annually.
(7) 
Any person(s) or entity entitled to receive survivor benefits under Subsection C(1), (2) or (4) shall not be entitled to receive a return of the participant's mandatory contributions.
(8) 
In the event a participant dies while employed as a firefighter, regardless of his years of service and circumstances of death, the balance of his voluntary contribution account and interest account, if any, shall be paid to his surviving spouse or, in the absence thereof, divided equally among any children under the age of 18. In the absence of any children under the age of 18, the balance of the participant's voluntary contribution account and interest account, if any, shall be paid over to his estate.
D. 
Forfeiture of rights in fund. The Board of Managers may terminate and forfeit the rights of any member entitled to receive a pension and admitted to participation therein for one or more of the following reasons: conviction of a felony, becoming a habitual drunkard, or failing to comply with some general regulation relating to the management of such fund made by the Board and which provides that a failure to comply therewith shall terminate the right to participate in the fund. Any such termination shall be only after due notice and hearing as prescribed by regulations of the Board.
E. 
Military service.
[Added 10-26-2011 by Ord. No. 5331]
(1) 
The rights of any returning veteran who resumes employment with the City on or after December 12, 1994, shall be modified as set forth in this subsection.
(2) 
The following definitions shall apply for purposes of this subsection:
QUALIFIED MILITARY SERVICE
Any service (either voluntary or involuntary) by an individual in the uniformed services if such individual is entitled to reemployment rights with the City with respect to such service. An individual's qualified military service shall include any absence from employment necessitated by service in the uniformed services, including absences required to prepare for service or to recuperate from injuries sustained in active duty.
RETURNING VETERAN
A former employee of the City who on or after December 12, 1994, returns from qualified military service to employment by the City within the period of time during which his/her reemployment rights are protected by law.
UNIFORMED SERVICES
The armed forces, the Army National Guard and Air National Guard (when engaged in active duty for training, inactive duty training, or full-time National Guard duty), the Commissioned Corps of the Public Health Service, and any other category of persons designated by the President of the United States in time of war or emergency.
(3) 
For purposes of § 110-48A, a returning veteran who was participating in the plan immediately prior to his/her qualified military service shall be deemed to have continued participating in the plan throughout his/her qualified military service. A returning veteran who would have become eligible to participate in the plan during the period of his/her qualified military service, but for the resulting absence from employment, shall be deemed to have commenced participation in the plan as of the date he/she would have commenced participation in the plan if he/she had not entered into qualified military service.
(4) 
A returning veteran shall receive credit for "years of service" under § 110-46B for the period of his/her qualified military service and will receive service increments under § 110-49B, provided he/she makes the contributions required under Subsection E § 110-46B (5) below.
(5) 
A returning veteran's benefit under the plan will be increased to reflect his/her period of qualified military service once he/she has made the contributions required under § 110-48B, in an amount equal to those which he/she would have made during his/her period of qualified military service.
(a) 
Such contributions must be made during a period starting with the date of reemployment with the City and ending with:
[1] 
The expiration of a period of five years; or
[2] 
If shorter a period of three times the period of qualified military service.
(b) 
Such contributions may only be made while the returning veteran is an employee of the City and shall not include interest.
(6) 
For purposes of determining the amount of a participant's "pensionable compensation," and for applying the limits of § 110-49B(5), a participant's compensation during any period of qualified military service shall be deemed to equal either:
(a) 
The compensation he/she would have received but for such qualified military service, based on the rate of pay he/she would have received from the City; or
(b) 
If the amount described in Subsection E(6)(a) above is not reasonably certain, his/her average compensation from the City during the twelve-month period immediately preceding the qualified military service (or, if shorter, the period of employment immediately preceding the qualified military service). Such amount shall be adjusted as necessary to reflect the length of the participant's qualified military service.
(7) 
If a returning veteran received a distribution of all or a portion of his/her benefit as a result of his/her qualified military service, he/she shall be permitted to repay the amount of such distribution, plus interest. Such repayment shall be made during the period that begins with his/her reemployment with the City and ends with the expiration of a period of five years, or, if shorter, a period of three times the period of qualified military service, and may only be made while the returning veteran is an employee of the City.
(8) 
Effective January 1, 2007, notwithstanding any provision of the plan to the contrary, in the case of a participant who dies while performing qualified military service, the survivors of the participant are entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service) provided under the plan had the participant resumed then terminated employment on account of death. This provision shall be applied in accordance with guidance issued under Section 401(a)(37) of the Code.[2]
[2]
Editor's Note: See Internal Revenue Code.
(9) 
The City shall establish such rules and procedures as it deems necessary or desirable to implement the provisions of this article, provided that they are not in violation of the Uniformed Services Employment and Reemployment Rights Act of 1994, any regulations thereunder, or any other applicable law.
A. 
Creation of deferred retirement option. Effective April 2, 2007, a Deferred Retirement Option Plan ("DROP") will be available to firefighters who qualify and who so voluntarily elect. Participation in DROP shall not affect a firefighter's eligibility for a City pension.
B. 
Eligibility to participate in DROP. Any firefighter who has satisfied the requirements for full retirement benefits may elect to become a participant in the DROP.
C. 
Election to participate. Election to participate in DROP is irrevocable. The firefighter shall make the election by using forms and procedures as prescribed by the Pension Board Trustees. A firefighter participating in DROP must establish a date certain upon which the firefighter shall resign from service as a City firefighter. This date certain must be within the minimum and maximum participation periods as set forth below. As a condition of participation in the DROP program, the individual firefighter acknowledges that the union and the City shall have no responsibility for the financial impact and/or consequences of a firefighter's participation in DROP, including, but not limited to, the investment of the contents of a firefighter's DROP account; the performance of any such investments; the firefighter's decision to participate in DROP; or any tax consequences flowing from DROP participation.
D. 
DROP pension payments. Upon entry into the DROP, a firefighter's pensionable service, as that term is defined and utilized in the collective bargaining agreement, and the average applicable compensation shall be frozen and his/her pension and retirement payments shall be calculated as if he/she actually retired on the date he/she entered the DROP. The monthly DROP pension payment, plus any applicable COLA, shall be paid to an individual DROP investment account. A third-party administrator shall maintain the account, independent of the City of Easton. The DROP plan shall be actuarially neutral to the City of Easton.
E. 
Individual DROP investment account. Each firefighter shall select the investments in his/her individual investment account from an array of options as selected by the Trustees. The Trustees will select a third party to provide mutual fund or other investment options, recordkeeping and reporting to the firefighters and the Trustees. All investment and administrative costs shall be charged against the individual DROP investment accounts of the participants.
F. 
Employee contributions. Upon entry into the DROP, all City and employee contributions shall cease, with no additional costs to the City. In the event the DROP plan is not actuarially neutral and requires City contributions to maintain the actuarial soundness of the DROP plan, the DROP plan shall be null and void, at the sole option of the City of Easton. In the event the City exercises such discretion, the firefighters shall have the right to bargain over the impact of the decision in accordance with Act 111.
G. 
Participation period. An eligible firefighter may participate in the DROP plan for no less than 12 months nor more than 36 months. Once the maximum participation has been achieved, the firefighter must terminate employment and separate from service.
H. 
Distribution options.
(1) 
Commensurate with DROP participation, a firefighter shall make an election, on forms designated by the Pension Board Trustees, of the payout option(s) he/she wishes at the termination of the DROP period. This election may be changed at any time prior to termination. The distribution options are as follows:
(a) 
A full and lump-sum distribution.
(b) 
Roll over to another qualified retirement plan (as permitted by law) or to an IRA.
(c) 
Purchase of an annuity.
(d) 
Keep the monies in the individual DROP investment account. Monies kept in the individual DROP investment account may be withdrawn in any manner desired by the firefighter.
(e) 
Any other distribution provided by the Pension Board Trustees/third party administrator or any manner permitted by law.
(2) 
As with the decision to participate in the DROP program, the City assumes no responsibility for the consequences of the rollover election made by a participating firefighter, including tax consequences and issues of the legality of a rollover; of the manner of distribution which a firefighter selects for the distribution, and both the union and the individual DROP participants agree to hold the City harmless for any consequences flowing from the firefighter's receipt of a full or partial distribution of the contents of the firefighter's DROP account.
I. 
Beneficiary designation. Commensurate with DROP participation, a firefighter shall make an election, on forms designated by the Pension Board Trustees, of the beneficiary or beneficiaries he/she wishes to receive the monies in his/her individual DROP investment account in the event of his/her death before all monies have been distributed.
J. 
Disability.
(1) 
A firefighter who becomes permanently disabled during the DROP period shall be retired from service and, thereafter, shall revert to his/her normal retirement pension. He will directly receive those pension payments which were being deposited into his/her DROP investment account. The participant will then have access to the distributions from his/her individual DROP investment account.
(2) 
If a firefighter becomes temporarily disabled during his/her participation in DROP, the time period while on disability counts toward the thirty-six-month participation limit. During such period of temporary disability, a firefighter shall receive disability pay in the same amount as disabled firefighters that are not participating in DROP. In no event shall a firefighter on temporary disability have the ability to draw from the DROP account. However, notwithstanding any other provision in this section, if an firefighter is disabled and has not returned to work as of the date of his required resignation, then such resignation shall take precedence over all other provisions herein, and said firefighter shall immediately resign.
K. 
Forfeiture of benefits. Notwithstanding a firefighter's participation in the DROP program, a firefighter 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 through 1314, shall forfeit his right to receive amounts currently deposited in the DROP account.
L. 
Cost of management for DROP program. Any costs or fees associated with the management and/or administration of the DROP accounts shall be paid directly from the pension fund and not by the City.
M. 
Amendment. Any amendments to the DROP plan shall be consistent with the provisions covering deferred retirement option plans set forth in any applicable collective bargaining agreement and shall be binding upon all future DROP participants and upon all DROP participants who have balances in their deferred retirement option accounts. The DROP plan may only be amended by a written instrument, not by any oral agreement or past practice.
N. 
Interpretation of provisions. The DROP shall be interpreted under the laws of the Commonwealth of Pennsylvania. Participation in the DROP program does not create any separate entitlement to employment. In addition, nothing provided hereunder shall be construed as a change to the parties' practice of calculating pensionable compensation, and except for the ability to establish a DROP account and participate in the DROP program; nothing herein is intended to create new pension benefits of any kind which did not exist as of December 31, 2007.
O. 
Severability. The provisions of the DROP 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 plan shall not be affected thereby. It is hereby expressly declared as the intent of the City that this plan would have been adopted had such unconstitutional or illegal provision or provisions not been included herein. 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 firefighters shall have the right to bargain in accordance with Act 111 over deletion of this provision.
P. 
No change to other existing benefits. The creation of the DROP pursuant to this section is not intended to change any existing procedure or practice between the union and the City or individual firefighters and the City and the current rights and obligations of all parties shall remain unchanged, except as modified by this section for those individual firefighters who elect to participate in the DROP program.
A. 
Right of appeal. The sole and exclusive remedy for any participant or beneficiary who alleges that a requirement, order or decision has been made which incorrectly interprets, administers, applies or enforces a provision of this plan shall be to file a grievance under the then-operative collective bargaining agreement in effect between the City and the duly certified labor organization representing the firefighters.
B. 
Anti-alienation provision. To the fullest extent permitted by law, the interest of any participant or beneficiary in the plan or in any benefit payable therefrom shall not be in subject to anticipation, alienation, transfer, assignment or pledge; shall not be subject to any debts or obligations of a participant or beneficiary; shall not be subject to bank attachment, garnishment or other legal process.
C. 
Benefit upgrade. The City of Easton, having elected to join the Pennsylvania Municipal Retirement System under Article III of Act 15 of 1974, effective January 1, 1979, for the firefighters, upgraded the benefit provisions set forth herein in the manner described in the agreement between the City and the Pennsylvania Municipal Retirement Board, dated September 23, 1987 (the "PMRS agreement"). As a result, all benefit provisions set forth in PMRS agreement shall govern this plan where inconsistent with the provisions of this article as otherwise expressed herein.