PRINTER'S NO. 3079
No. 2232 Session of 1984
INTRODUCED BY FRYER, A. C. FOSTER, JR., SHOWERS, LEVI, GAMBLE
AND DUFFY, MAY 30, 1984
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, MAY 30, 1984
AN ACT
1 Amending the act of May 29, 1956 (1955 P.L.1804, No.600),
2 entitled "An act providing for the establishment of police
3 pension funds or pension annuities in certain boroughs, towns
4 and townships, and the regulation and maintenance thereof;
5 providing for an actuary; continuance of existing funds or
6 transfer thereof to funds herein established; prescribing
7 rights of beneficiaries; contributions by members; providing
8 for expenses of administration; continuation of existing
9 authority to provide annuity contracts; credit for military
10 service; refunds; exempting allowances from judicial process;
11 and repealing certain acts," further providing for payments
12 to the fund.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 6 of the act of May 29, 1956 (1955
16 P.L.1804, No.600), referred to as the Municipal Police Pension
17 Law, amended June 15, 1972 (P.L.396, No.118), is amended to
18 read:
19 Section 6. When a police pension fund is established under
20 the provisions of this act, the governing body of the borough,
21 town or township, may employ an actuary, and may fix his
22 compensation. The actuary shall determine the present value of
1 the liability on account of pensions payable under section five
2 of this act to original members for service prior to the date of
3 the establishment of the fund, and shall offset the value of any
4 assets transferred to the fund from a previous pension fund to
5 determine the unfunded liability. The unfunded liability shall
6 be paid entirely by the borough, town or township: Provided,
7 That it may be funded over a period not to exceed twenty-five
8 years. The actuary shall also determine the amount which shall
9 be contributed annually into the fund for the service of members
10 subsequent to the establishment of the fund (to be known as
11 "future service cost").
12 Members shall pay into the fund, monthly, an amount equal to
13 not less than five per centum nor more than eight per centum of
14 monthly [compensation] salary. Where positions covered by the
15 fund are included in an agreement under the Federal Social
16 Security Act, members shall pay into the fund, monthly, an
17 amount determined as follows: (1) if the pension plan
18 established under the provisions of this act provides for no
19 offset under subclause (ii) of the second paragraph of section
20 5, five per centum of total [compensation] salary or (2) if such
21 pension plan provides for an offset under subclause (ii) of the
22 second paragraph of section 5: (i) on [compensation] salary on
23 which social security taxes are payable, at a rate calculated by
24 subtracting from five per centum the product obtained by
25 multiplying three per centum by such offset percentage; and (ii)
26 on [compensation] salary in excess of that on which social
27 security taxes are payable, if any, five per centum. The
28 remainder of the needed annual contributions, as determined by
29 the actuary, shall become the obligation of the borough, town or
30 township, and shall be paid by it to the pension fund by annual
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1 appropriations.
2 If an actuarial study shows that the condition of the police
3 pension fund of any borough, town or township is such that
4 payments into the fund by members may be reduced below the
5 minimum percentages hereinbefore prescribed, or eliminated, and
6 that if such payments are reduced or eliminated contributions by
7 the borough, town or township will not be required to keep the
8 fund actuarially sound, the governing body of the borough, town
9 or township may, on an annual basis, by ordinance or resolution,
10 reduce or eliminate payments into the fund by members.
11 The payments made by the State Treasurer to the municipal
12 treasurer from the moneys received from taxes paid upon premiums
13 by foreign casualty insurance companies for purposes of pension
14 retirement or disability benefits for policemen shall be used,
15 as follows: (1) to reduce the unfunded liability or, after such
16 liability has been funded, (2) to apply against the annual
17 obligation of the borough, town or township for future service
18 cost to or to the extent that the payment may be in excess of
19 such obligation, (3) to reduce member contribution. Unless
20 otherwise specifically provided, any other moneys paid into the
21 police pension fund shall be applied equally against the member
22 and the municipal portions of the future service cost.
23 It shall be the duty of the governing body to apply such
24 payments in accordance with the provisions of this act.
25 Section 2. This act shall take effect in 30 days.
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