[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.
ACCOUNT
AGGREGATE PENSION BOARD
BOARD OF MANAGERS
CITY
CODE
COUNCIL
DISABILITY RETIREMENT BENEFIT
EARLY RETIREMENT BENEFIT
EFFECTIVE DATE
FIRE DEPARTMENT
FIREFIGHTER
FUND
INTEREST ACCOUNT
MANDATORY CONTRIBUTION ACCOUNT
NORMAL RETIREMENT BENEFIT
PARTICIPANT
PENSION BENEFIT
PENSIONABLE COMPENSATION
PERMANENT DISABILITY
PLAN
PMRS
SPOUSE
SURVIVING SPOUSE
VOLUNTARY CONTRIBUTION ACCOUNT
YEAR OF SERVICE
Definitions. As used in this article, the following
terms shall have the meanings set forth below.
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.
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.
The Board of Managers of the City of Easton Consolidated
Firefighters' Pension Plan as hereinafter set forth.
The City of Easton, Northampton County, Pennsylvania.
The Internal Revenue Code of 1986, as amended.
The City Council for the City of Easton, Northampton County,
Pennsylvania.
A retirement benefit determined in accordance with § 110-49A(4) of this article.
A retirement benefit determined in accordance with § 110-49A(2) of this article.
April 1, 2004.
The Fire Department of the City.
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.
The trust or custody account established by the City to hold
the assets of the plan.
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.
Each participant's financial obligation toward funding the pension benefits prescribed by this plan as set forth in § 110-48B.
A retirement benefit determined in accordance with § 110-49A(1) of this article.
Any firefighter who meets the requirements for participation in this plan as set forth in § 110-48.
An annuity payable on a monthly basis for the life of the
participant.
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.
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.
The City of Easton Consolidated Firefighters' Pension Plan.
The Pennsylvania Municipal Retirement System.
The participant's husband or wife as determined at the relevant
time under the state law in which the participant was most recently
domiciled.
A participant's spouse who survives the participant by more
than one week.
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.
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.
(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)
QUALIFIED MILITARY SERVICE
RETURNING VETERAN
UNIFORMED SERVICES
The following definitions shall apply for purposes of this subsection:
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.
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.
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.
(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.
(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.
