PRINTER'S NO. 1452
No. 1259 Session of 1989
INTRODUCED BY VAN HORNE AND MOWERY, APRIL 24, 1989
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, APRIL 24, 1989
AN ACT 1 Amending the act of May 28, 1915 (P.L.596, No.259), entitled "An 2 act requiring cities of the second class to establish a 3 pension fund for employes of said cities, and regulating the 4 administration and the payment of such pensions," further 5 providing for payments by contributors and the city to the 6 board of pensions. 7 The General Assembly of the Commonwealth of Pennsylvania 8 hereby enacts as follows: 9 Section 1. Section 4.1 of the act of May 28, 1915 (P.L.596, 10 No.259), referred to as the Second Class City Employe Pension 11 Law, amended May 2, 1961 (P.L.171, No.83) and August 24, 1961 12 (P.L.1131, No.505), is amended to read: 13 Section 4.1. In every city of the second class, in addition 14 to the pension which is authorized by law and notwithstanding 15 the limitations therein placed upon pensions and upon 16 contributions, every contributor who shall have otherwise become 17 entitled to the pension and who has reached the age of fifty 18 years shall also be entitled to the payment of a service 19 increment in accordance with and subject to the conditions
1 hereinafter set forth: 2 (1) Service increment shall be the sum obtained by computing 3 the number of whole years after the completion of twenty years 4 service during which a contributor has been employed by the city 5 and paid out of the city treasury and multiplying the number of 6 years so computed by an amount equal to five dollars ($5) for 7 each month of service beyond twenty years of service. This sum 8 shall be divided by twelve to arrive at the monthly increment 9 payment. In computing the service increment, no employment after 10 the contributor has reached the age of sixty-five years shall be 11 included, and no service increment shall be paid in excess of 12 one hundred dollars ($100) per month. 13 (2) [Each] Except to the extent that section 607(c) of the 14 act of December 18, 1984 (P.L.1005, No.205), known as the 15 "Municipal Pension Plan Funding Standard and Recovery Act," 16 applies, each contributor, from and after the effective date of 17 this amendment, shall pay into the retirement fund as the 18 contribution to the increment fund a monthly sum in addition to 19 his or her retirement contribution, which shall be equal to one- 20 half of one per centum of his or her salary. Such payment shall 21 not exceed the sum of one dollar per month. The service 22 increment contribution shall not be paid after a contributor has 23 reached the age of sixty-five years. 24 (3) Persons, who are contributors on the effective date of 25 this amendment, who have already reached the age of sixty-five 26 years, shall have his or her service increment computed on the 27 years of employment prior to the date of reaching his or her 28 sixty-fifth birthday. Such person, however, shall be entitled to 29 the increment only by paying in the one dollar ($1) per month 30 contribution for the number of months his or her service exceeds 19890H1259B1452 - 2 -
1 twenty years, but such contribution shall not exceed a total of 2 one hundred dollars ($100). 3 (4) Service increment contributions shall be paid at the 4 same time and in the same manner as pension contributions, and 5 may be withdrawn in full, without interest, by persons who leave 6 the employment of the city, subject to the same conditions by 7 which pension contributions may be withdrawn or by persons who 8 retire before becoming entitled to any service increment. When 9 any person is reemployed by the city after withdrawal of pension 10 contributions, his or her prior service shall not be used in the 11 computation of service increment unless the amount of such 12 contributions be repaid into the pension fund, subject to the 13 same conditions by which pension fund withdrawals are permitted 14 to be repaid. 15 (5) All employes of the city who are now contributors to the 16 pension fund and all persons who are employed by the city after 17 the effective date of this amendment, who are required to become 18 contributors to the pension fund, shall be subject to the 19 provisions of this section. 20 Section 2. Section 5 of the act, amended January 14, 1970 21 (1969 P.L.516, No.194), is amended to read: 22 Section 5. [The] Except to the extent that section 607(c) of 23 the act of December 18, 1984 (P.L.1005, No.205), known as the 24 "Municipal Pension Plan Funding Standard and Recovery Act," 25 applies, the city employes shall, after the passage of this act, 26 pay unto the board of pensions monthly an amount equal to not 27 less than two nor more than five per centum of their monthly 28 salaries or wages, as fixed by the board of pensions; in no 29 event, however, paying at a rate greater than thirty-two dollars 30 and fifty cents per month, which shall be applied to the 19890H1259B1452 - 3 -
1 purposes of this act. Payment of the monthly amount or 2 contribution herein mentioned shall cease and be discontinued at 3 the time the beneficiary received the pension herein provided if 4 such beneficiary has so contributed to the pension fund during a 5 period of twenty years. If at the time the beneficiary received 6 the pension herein provided he or she shall not have been a 7 contributor to the pension fund during a period of twenty years, 8 such person shall be required to pay unto the board of pensions 9 an amount equal to such amount as he or she would have been 10 required to contribute had he or she contributed during such 11 period as required by this act, until such time as his or her 12 contributions shall have extended during a period of twenty 13 years. If, for any cause, an employe contributing to the pension 14 fund shall cease to be an employe of any such cities of the 15 second class before said employe becomes entitled to the pension 16 conferred by this act, the total amount of the contributions 17 paid unto the pension fund by such employe shall be refunded to 18 him or her in full without interest unless he or she has less 19 than full pension rights under the provisions of section four of 20 this act, and elects at once to exercise such rights by keeping 21 such contributions in the fund and making such further payments 22 as may be required: Provided, however, If any such employe shall 23 have returned to him or her the amount contributed, as 24 aforesaid, and shall afterwards reenter the employ of such city, 25 said employe shall not be entitled to the pension designated 26 until twenty years after said reemployment, unless he or she 27 shall return to the pension fund the amount withdrawn; in which 28 event the period of twenty years shall be computed from the time 29 the said employe first entered the service of said city. In the 30 event of the death of any such employe before the said employe 19890H1259B1452 - 4 -
1 becomes entitled to the pension aforesaid, the said total amount 2 of contributions aforesaid shall be paid over to such person or 3 persons as he or she shall have designated in writing and filed 4 with the board of pensions as his or her beneficiary or to his 5 or her estate. 6 Section 3. Section 9 of the act, amended May 14, 1925 7 (P.L.742, No.404), is amended to read: 8 Section 9. The public authorities of every city of the 9 second class, charged with the disbursements, expenditures, and 10 appropriations, shall annually set aside, apportion, and 11 appropriate, out of all taxes and income of the said cities, 12 unto the board of pensions, a sum sufficient to [maintain the 13 pensions or compensations due under this act. If the total 14 disbursements from the pension fund for the payment of pensions, 15 refund of contributions of employes, and administration expenses 16 shall exceed in any year the total revenues of the pension fund 17 from the contributions of employes and the interest and premiums 18 earned on investments and bank deposits, then the amount to be 19 set aside, apportioned, and appropriated by the public 20 authorities of such city of the second class to the pension fund 21 shall not be less than the difference between the total 22 disbursements and receipts of the pension fund, as aforesaid.] 23 meet the minimum obligation of the municipality with respect to 24 the pension plan pursuant to the act of December 18, 1984 25 (P.L.1005, No.205), known as the "Municipal Pension Plan Funding 26 Standard and Recovery Act." 27 Section 4. This act shall take effect immediately. L27L11JRW/19890H1259B1452 - 5 -