PRINTER'S NO. 484
No. 471 Session of 1973
INTRODUCED BY REIBMAN, STAUFFER, SCALES, EWING AND MURPHY,
MARCH 12, 1973
REFERRED TO LOCAL GOVERNMENT, MARCH 12, 1973
AN ACT
1 Creating a Pennsylvania Municipal Retirement System for the
2 payment of retirement allowances to officers, employes,
3 firemen and police of political subdivisions and municipal
4 authorities and of institutions supported and maintained by
5 political subdivisions and providing for the administration
6 of the same by a board composed of the State Treasurer and
7 others appointed by the Governor; imposing certain duties on
8 the Pennsylvania Municipal Retirement Board and the actuary
9 thereof; providing the procedure whereby political
10 subdivisions and municipal authorities may join such system,
11 and imposing certain liabilities and obligations on such
12 political subdivisions and municipal authorities in
13 connection therewith, and as to certain existing retirement
14 and pension systems, and upon officers, employes, firemen and
15 police of such political subdivisions, institutions supported
16 and maintained by political subdivisions, and upon municipal
17 authorities; providing for the continuation of certain
18 municipal retirement systems now administered by the
19 Commonwealth; providing certain exemptions from taxation,
20 execution, attachment, levy and sale and providing for the
21 repeal of certain related acts.
22 The General Assembly of the Commonwealth of Pennsylvania
23 hereby enacts as follows:
24 ARTICLE I
25 GENERAL PROVISIONS
26 Section 101. This act shall be known and may be cited as the
27 "Pennsylvania Municipal Retirement Law."
1 Section 102. Definitions.--As used in this act:
2 "Accumulated deductions" means the total amount deducted from
3 the salary or compensation of the contributor and paid over by
4 the municipality or paid by the member or from any existing
5 pension or retirement system directly into the retirement fund
6 and credited to the member's account, together with regular
7 interest thereon, unless interest is excluded in a contract for
8 an optional retirement plan entered into under the provisions of
9 clause (11) of section 104 of this act.
10 "Actuarially sound" means a plan which is being operated
11 under supervision of an actuary and which is being funded
12 annually at a level not lower than the normal cost of the plan
13 plus a contribution towards the unfunded accrued liability
14 sufficient to complete the funding thereof within thirty years
15 of the effective date of the system. If the unfunded accrued
16 liability is increased subsequent to the effective date of the
17 system, such additional liability shall be funded within a
18 period of thirty years from the effective date of the increase.
19 "Actuary" means: (i) a member of the American Academy of
20 Actuaries, or (ii) an individual who has demonstrated to the
21 satisfaction of the Insurance Commissioner of Pennsylvania that
22 he had the educational background necessary for the practice of
23 actuarial science and has had at least seven years of actuarial
24 experience, or (iii) a firm, partnership or corporation of which
25 one or more members meets the requirements of subclauses (i) or
26 (ii) above.
27 "Annuitant" means a former contributor in receipt of a
28 superannuation retirement allowance or other benefit provided by
29 this act.
30 "Beneficiary" means a person designated by a contributor or
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1 an annuitant to receive benefits after the death of such
2 contributor or annuitant.
3 "Board" means the Pennsylvania Municipal Retirement Board
4 created by this act.
5 "Contributor" means a member who has accumulated deductions
6 standing to his credit in the member's account of the fund
7 created by this act.
8 "Equivalent actuarial value" means benefits which have equal
9 present value when computed on the basis of regular interest and
10 the mortality tables adopted by the board and in use at the date
11 the benefit becomes effective.
12 "Final salary" means the average annual salary or
13 compensation earned by a member and paid by the municipality
14 during the last five years immediately preceding retirement, or
15 if not so long employed, then the average annual salary or
16 compensation earned and paid during the whole period of such
17 employment; or, if applicable, the amount or formula stipulated
18 between the municipality and the board in a contract for an
19 optional retirement plan entered into under the provisions of
20 clause (11) of section 104 of this act.
21 "Fund" means the Pennsylvania Municipal Retirement Fund
22 created by this act.
23 "Joint coverage member" means a member who shall have become
24 a member of the retirement system subsequent to the last date
25 permitted by the municipality employing him for statement of
26 preference concerning social security coverage, or who, having
27 become a member on or before such date, shall have filed with
28 the municipality a written statement that he elects social
29 security coverage under an agreement with the Federal Secretary
30 of Health, Education and Welfare entered into by the
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1 Commonwealth.
2 "Member" means a municipal officer, employe, fireman or
3 policeman who has become a member of the Pennsylvania Municipal
4 Retirement System created by this act.
5 "Member's account" means the account to which shall be
6 credited the payroll deductions and other contributions, plus
7 interest, if any, of the members.
8 "Member's annuity" means that portion or component of the
9 retirement allowance which is of equivalent actuarial value, at
10 date of retirement, to the accumulated deductions of the member.
11 "Municipal account" means the account maintained for each
12 municipality, to which shall be credited the contributions made
13 by it toward the superannuation retirement and death benefits of
14 members.
15 "Municipal annuity" means that portion or component of the
16 retirement allowance computed in accordance with the formula
17 applicable to each municipality.
18 "Municipal employe" means a person holding an office or
19 position, other than that of a municipal fireman or municipal
20 policeman, under a municipality and paid on a regular salary or
21 per diem basis. The term shall not include officers and employes
22 paid wholly on a fee basis.
23 "Municipal fireman" means a person holding a full-time
24 position in the fire department of a municipality and who works
25 for a stated salary or compensation.
26 "Municipal policeman" means a person holding a full-time
27 position in the police department of a municipality and who
28 works for a stated salary or compensation.
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1 "Municipality" means a city, borough, town, township, county,
2 institution district, or any newly created governmental unit, or
3 an authority created by a city, borough, town, township, county
4 or county institution district, or jointly by any such political
5 subdivisions, or an institution supported and maintained by a
6 municipality, or an industrial development agency as defined by
7 the act of May 31, 1956 (P.L.1911, No.635), known as the
8 "Industrial Development Assistance Law," which has adopted
9 bylaws and the governing body of which is organized and holds
10 regular public meetings.
11 "New member" means a municipal officer, employe, fireman or
12 policeman who first becomes a member after the date the
13 municipality by which he is employed joined the retirement
14 system created by this act.
15 "Original member" means a municipal officer, employe, fireman
16 or policeman who was employed by the municipality at the date
17 the municipality joined the system.
18 "Prior salary" means the annual salary or compensation earned
19 by a member and paid by the municipality during the year
20 immediately preceding the date the municipality by which he is
21 employed joined the system.
22 "Prior service" means all service as a municipal employe,
23 municipal fireman or municipal policeman completed at the time
24 the municipality by which he is or was employed elected to join
25 the system or the same municipality under a prior name or
26 classification, unless the municipality has elected to limit the
27 period of such service for municipal employes enrolled in a plan
28 under Article II or Article IV of this act.
29 "Regular interest" means the rate fixed by the board, from
30 time to time, on the basis of earnings on investments.
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1 "Retired member's reserve account" means the account from
2 which all retirement allowances shall be paid for superannuation
3 and total disability retirement and voluntary and involuntary
4 withdrawals.
5 "Retirement allowance" means the sum of the municipal annuity
6 and the member's annuity and, if the member is entitled to a
7 disability annuity under the provisions of this act, the
8 disability annuity.
9 "Service connected disability" means total and permanent
10 disability of a member prior to eligibility for superannuation
11 retirement resulting from a condition arising out of and
12 incurred in the course of his employment, and which is
13 compensable under the applicable provisions of the act of June
14 2, 1915 (P.L.736, No.338), known as "The Pennsylvania Workmen's
15 Compensation Act," or the act of June 21, 1939 (P.L.566,
16 No.284), known as "The Pennsylvania Occupational Disease Act."
17 "Single coverage member" means a member who shall become a
18 member of the retirement system on or before the last date
19 permitted by the municipality employing him for statement of
20 preference concerning social security coverage and who either
21 shall have filed with the municipality a written statement that
22 he does not elect social security coverage under any agreement
23 with the Federal Secretary of Health, Education and Welfare
24 entered into by the Commonwealth, or shall not have filed with
25 the municipality any written statement.
26 "Superannuation retirement age" means sixty-five years of age
27 for municipal employes, fifty-five years of age for municipal
28 firemen and municipal police or such other age as may be
29 stipulated between the municipality and the board in a contract
30 for an optional retirement plan entered into under the
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1 provisions of clause (11) of section 104 of this act.
2 "Survivor annuitant" means any person who has been named by a
3 member under a joint and survivor annuity option to receive an
4 annuity upon the death of such member.
5 "System" means the Pennsylvania Municipal Retirement System
6 as established herein.
7 "Total disability reserve account" means the account to which
8 shall be credited the contributions made by municipalities
9 toward the disability retirement of members.
10 Section 103. Pennsylvania Municipal Retirement Board.--A
11 Pennsylvania Municipal Retirement Board is hereby created, which
12 shall consist of the State Treasurer, four municipal employes
13 employed by different classes of municipalities which have
14 joined the system, one municipal fireman employed by a
15 municipality which has joined the system and one municipal
16 policeman employed by a municipality which has joined the
17 system. The six latter members shall be appointed by the
18 Governor from among nominations made by various associations of
19 county and municipal taxing officials and associations
20 representing municipal firemen and municipal police, to serve
21 for a term of four years each and until their successors are
22 appointed and qualified. Appointments of members made by the
23 Governor shall not require the advice and consent of the Senate.
24 The two municipal employe members of the Municipal Employes'
25 Retirement Board, appointed by the Governor from among
26 nominations made by various associations of county and municipal
27 taxing officials, who are serving on the effective date of this
28 act, shall continue to serve as members of the Pennsylvania
29 Municipal Retirement Board until the expiration of their
30 respective terms.
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1 A chairman and vice chairman of the board shall be elected by
2 the board every four years.
3 Vacancies happening from among members appointed from among
4 the nominations made by the associations shall be filled by the
5 appointment of a successor for a full term of four years.
6 No appointed member shall serve more than two consecutive
7 full terms.
8 Each member of the board shall take an oath of office that he
9 will diligently and honestly administer the affairs of the
10 board, and that he will not knowingly violate or wilfully permit
11 to be violated any of the provisions of this act.
12 A quorum of the board shall consist of four members.
13 Section 104. General Powers of the Board.--The board shall:
14 (1) Appoint a secretary who shall appoint the clerical and
15 other employes of the board, whose positions, including the
16 secretary's, shall be under the classified service provisions of
17 the act of August 5, 1941 (P.L.752, No.286), as amended and the
18 secretary shall fill future vacancies in accordance with such
19 provisions. The compensation of all persons so appointed shall
20 be fixed by the board and shall be consistent with the standards
21 established by the Executive Board of this Commonwealth;
22 (2) Contract for professional services, including but not
23 limited to actuarial, investment and medical as it deems
24 advisable;
25 (3) Keep in convenient form such data as shall be deemed
26 necessary for actuarial valuation purposes;
27 (4) From time to time, through its actuary, make an
28 actuarial investigation into the mortality and service
29 experience of the contributors and annuitants and of the various
30 accounts created by this act;
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1 (5) Adopt for the system one or more mortality tables and
2 such other tables as shall be deemed necessary;
3 (6) Certify the rates of deduction from salary necessary to
4 pay the member's annuities;
5 (7) Certify annually the amount of appropriation which each
6 municipality shall pay into the retirement fund, which amounts
7 shall be based on estimates furnished by the actuary, and shall
8 be credited to the municipal account of the fund;
9 (8) Prepare and publish annually a financial statement
10 showing the condition of the fund and the various accounts
11 thereof, and setting forth such other facts, recommendations and
12 data as may be of use in the advancement of knowledge concerning
13 the Pennsylvania Municipal Retirement System, and furnish a copy
14 thereof to each municipality which has joined the system, and to
15 such persons as may request copies thereof;
16 (9) Keep a record of all its proceedings, which will be open
17 to inspection by the public;
18 (10) From time to time, with the advice of the Attorney
19 General and the actuary, adopt and promulgate such rules and
20 regulations as may be required for the proper administration of
21 the fund created by this act and the several accounts thereof,
22 and for the transaction of the business of the board;
23 (11) Be authorized to approve any optional retirement plan
24 for municipal employes, municipal firemen or municipal police,
25 with any municipality as long as it is actuarially sound and
26 benefits under the plan are not in excess of or member's minimum
27 contribution rates are not less than those provided in other
28 existing retirement laws pertaining to that class of
29 municipality;
30 (12) Perform such other functions as are required for the
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1 execution of the provisions of this act.
2 Section 105. Preliminary Actuarial Investigation Tables and
3 Rates.--As soon as may be after the passage of this act, the
4 actuary shall make an investigation of the mortality, service
5 and salary experience of municipal employes, municipal firemen
6 and municipal police as he shall deem necessary, for the purpose
7 of determining upon tentative tables and municipal
8 contributions. On the basis of such investigation and
9 recommendation, the board shall adopt such tentative tables and
10 certify such tentative rates for the purpose of giving
11 municipalities and municipal employes, municipal firemen and
12 municipal police estimates of the cost involved in electing to
13 join the retirement system established by this act. Such tables
14 may thereafter be accepted or changed by the board, as
15 experience may require.
16 Section 106. Information to Municipalities.--The board
17 shall, with the aid of its actuary, prepare a circular of
18 information relative to the system, showing estimates of the
19 costs thereof to municipalities and members, including costs of
20 administration, the benefits to be derived therefrom, the
21 methods of administration by the board and the municipality, and
22 such other information as may be deemed appropriate. Such
23 circular of information shall be furnished to municipalities
24 upon request.
25 Section 107. Election by Municipalities to Join Retirement
26 System.--Any municipality may elect, by ordinance or resolution
27 adopted by the tax levying body, or in the case of municipal
28 authorities by the board of such municipal authority to join the
29 system: Provided, however, That any municipality electing
30 coverage under the provisions of Article II of this act must
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1 have first placed its municipal employes in so far as they are
2 eligible under the Federal Social Security Act. In the case of
3 townships of the second class, no resolution shall be adopted,
4 except by unanimous vote of all three supervisors.
5 Any municipality, by action of its tax levying body, may and
6 upon petition of electors equal to at least five per cent of the
7 registered electors of the municipality, shall, submit the
8 question of joining such system to the voters of the
9 municipality at any municipal or general election, in the same
10 manner as other questions are submitted to the electors under
11 the election code of the Commonwealth. If the majority of the
12 electors voting on the question vote in favor thereof, the tax
13 levying body shall adopt an ordinance or resolution electing to
14 join such system. If the electors vote against joining the
15 system, then no further action shall be taken in the
16 municipality for a period of two years.
17 A duly certified copy of any such ordinance or resolution
18 electing to join the system shall be filed with the board.
19 Section 108. Retirement Funds and Accounts.--The
20 Pennsylvania Municipal Retirement Fund shall consist of the
21 money received from municipalities arising from contributions by
22 municipalities, and from payroll deductions from salary or
23 compensation of members, and other contributions made by members
24 through the municipality to the system, from transfers made from
25 municipal retirement or pension systems and credited as provided
26 in this act, and investment earnings thereon.
27 Contributions made by municipalities toward superannuation
28 retirement and death benefits of members shall be credited to
29 the municipal account of said fund, contributions made by
30 municipalities toward disability retirement of members shall be
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1 credited to the total disability reserve account of said fund,
2 and payroll deductions and other contributions of members shall
3 be credited to the member's account of said fund. Transfers made
4 from existing municipal retirement or pension systems shall be
5 credited as provided in this act.
6 The board shall keep separate accounts of each municipality
7 and for each separate class of employes enrolled by that
8 municipality under the several articles of this act, except the
9 total disability reserve account and the retired member's
10 reserve account which shall be maintained as pooled accounts.
11 Each municipality and the members thereof shall be liable to the
12 board for the amount of contributions required to cover the cost
13 of the retirement allowance and other benefits payable to such
14 members.
15 Upon the granting of a superannuation or voluntary or
16 involuntary withdrawal retirement allowance to any contributor,
17 the amount of such contributor's accumulated deductions in the
18 member's account shall lose their status as accumulated
19 deductions and shall be transferred to the retired member's
20 reserve account and the actuarial equivalent of the municipal
21 annuity shall be similarly transferred from the municipal
22 account to the retired member's reserve account.
23 Upon the granting of a disability retirement allowance to any
24 contributor, there shall be transferred to the retired member's
25 reserve account the amount of the contributor's accumulated
26 deductions in the member's account, the amount of the equivalent
27 actuarial value to the municipal annuity, and such additional
28 amount from the total disability reserve account as is needed in
29 addition thereto to provide the actuarial equivalent of the
30 total disability allowance to which the contributor is entitled.
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1 Section 109. Custody of and Payments from Fund.--All moneys
2 and securities in the fund shall be placed in the custody of the
3 State Treasurer for safekeeping, and all payments on account of
4 retirement allowances shall be made on requisition signed by the
5 chairman and secretary of the board.
6 Section 110. Management and Investment of Fund; Interest
7 Credits.--The members of the board shall be trustees of the
8 fund, and shall have the exclusive management of said fund, with
9 full power to invest the moneys therein, subject to the terms,
10 conditions, limitations and restrictions imposed by law upon
11 fiduciaries. The said trustees shall have power to hold,
12 purchase, sell, assign, transfer and dispose of any securities
13 and investments in said fund, as well as the proceeds of such
14 investments, and of the money belonging to such fund.
15 The board shall annually allow regular interest to the credit
16 on each account, including each contributor's account.
17 Section 111. Municipal Guarantee.--The regular interest
18 charges payable and the creation and maintenance of the
19 necessary reserves for the payment of the municipal and member's
20 annuities, as to any municipality in accordance with this act,
21 are hereby made the obligation of that municipality.
22 Section 112. Annual Estimates to Municipalities;
23 Administrative Expenses.--The board shall prepare and submit to
24 each municipality, on or before the first day of the fourth
25 month preceding the commencing of each municipality's fiscal
26 year, an itemized estimate of the amounts necessary to be
27 appropriated by the municipality to complete the payments of the
28 obligations of the municipality to the fund during its next
29 fiscal year.
30 The board shall annually prepare and approve a budget
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1 covering the administrative expenses of this act. Such expenses
2 as approved by the board shall be paid from receipts from
3 assessments made against each municipality for administrative
4 expenses. This assessment shall be based on the number of
5 members in each municipality and shall not exceed the sum of ten
6 dollars ($10) per member during calendar year 1973 and a sum of
7 twenty dollars ($20) per member in any succeeding year. If in
8 any year the amount received from such assessments, when imposed
9 at the maximum rate, is not sufficient to cover the
10 administrative expenses, then the balance of such expenses shall
11 be paid from interest earnings on the fund in excess of the
12 regular interest credited to the municipal and member's
13 accounts.
14 Section 113. Existing Local Retirement Systems.--Where a
15 municipality elects to join the system established by this act,
16 and is then maintaining a retirement or pension system or
17 systems covering its employes in whole or in part, those
18 employes so covered, and employes thereafter eligible to join
19 such pension system, shall not become members of the retirement
20 system established by this act, unless at the time the
21 municipality elects to join the system, the members of such
22 existing retirement or pension system shall, by the affirmative
23 vote of seventy-five per cent of all the members thereof, elect
24 to be covered by the retirement system established by this act.
25 At any time thereafter, within a period of three years after the
26 municipality has elected to join the system, but not thereafter,
27 the members of an existing retirement or pension system may, in
28 like manner, elect to join the system established by this act.
29 In any such case, provisions may be made for the transfer of
30 moneys and securities in its retirement or pension fund or
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1 funds, in whole or in part, to the fund established by this act.
2 Securities so transferred shall be only those acceptable to the
3 board. Securities not so acceptable shall be converted into
4 cash, and said cash transferred to the fund created by this act.
5 In any such transfer, provision shall be made to credit the
6 accumulated deductions of each member, at least the amount he
7 has paid into the retirement or pension system of the
8 municipality, which moneys shall be credited against the prior
9 service contributions of such member, or a municipality may turn
10 over to the retirement system created by this act any existing
11 local pension system on a completely funded basis, as to
12 pensioners and pension credits of members related to prior
13 service to the date of transfer, or on a partially funded basis
14 if the municipality pays annually into the retirement system
15 amounts sufficient to completely liquidate the municipality's
16 liability for prior service within a period not to exceed thirty
17 years.
18 No liability, on account of retirement allowances or pensions
19 being paid from any retirement or pension fund of the
20 municipality, shall attach against the fund, except as provided
21 in the agreement, making a transfer of an existing system in
22 accordance with this section. The liability to continue payment
23 of pensions not so transferred shall attach against the
24 municipality, which shall annually make appropriations from its
25 tax revenues sufficient to pay the same. In cases where workers
26 covered by an existing retirement or pension system elect to
27 join the system created by this act, the election to join shall
28 be deemed to have been made at the time the municipality elected
29 to join the system, and the liabilities of the municipality
30 shall be fixed accordingly.
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1 Section 114. Monthly Payments.--Any retirement allowance
2 created under the provisions of this act shall be paid in equal
3 monthly installments and shall not be increased, decreased,
4 revoked or repealed, except where specifically otherwise
5 provided by this act.
6 Section 115. Exemption of Retirement Allowance.--The
7 retirement allowance and the contributions of members to the
8 fund, all contributions returned to contributors under the
9 provisions of this act and the moneys in the fund created by
10 this act, shall be exempt from any State or municipal tax, and
11 from any levy, sale, garnishment, attachment or other process
12 whatsoever, and shall be unassignable except to a beneficiary.
13 Section 116. Source of Municipal Funds.--The amounts to be
14 paid by municipalities under the provisions of this act shall be
15 paid out of moneys raised annually by general taxation, or in
16 the case of townships of the second class, out of taxes levied
17 for road, bridge and general township purposes and out of moneys
18 received from the State which are designated for pension
19 purposes.
20 ARTICLE II
21 PROVISIONS RELATING TO MUNICIPAL EMPLOYES
22 Section 201. Purpose.--This article shall provide for the
23 uninterrupted continuation of retirement plans established under
24 the act of June 4, 1943 (P.L.886, No.371), known as the
25 "Municipal Employes' Retirement Law." It shall also provide for
26 the enrollment of municipal employes' of new municipalities
27 joining the system, at the contribution rates and benefit rates
28 outlined in this article of the act.
29 Section 202. Transfer of the Municipal Employes' Retirement
30 Fund to the Pennsylvania Municipal Retirement Fund.--On the
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1 effective date of this act all of the assets and liabilities of
2 the Municipal Employes' Retirement Fund shall be transferred
3 intact to the Pennsylvania Municipal Retirement Fund. The rights
4 and benefits of the members and of the municipalities which have
5 joined the Municipal Employes' Retirement System shall not be
6 impaired in any way as a result of this transfer. Likewise, the
7 obligations and responsibilities of both the members and the
8 member municipalities which have joined the system shall not be
9 changed and the contractual arrangements as they existed at the
10 time the municipalities joined the Municipal Employes'
11 Retirement System shall continue in force. Prior service credits
12 for any members so transferred shall be computed from the date
13 on which the municipality joined the Municipal Employes'
14 Retirement System.
15 Section 203. Compulsory and Optional Membership.--If a
16 municipality elects to join the system under the provisions of
17 this Article II, then each officer other than elected officers,
18 and each employe thereof other than a municipal fireman and a
19 municipal policeman, employed on a permanent basis, except one
20 who is not eligible for Federal Social Security coverage and
21 except one who is covered by an existing retirement or pension
22 system and is exempted under section 113 of this act, shall be
23 required to become a member of the system. Each municipality
24 shall determine whether membership in said system for elected
25 officials and employes hired on a temporary or seasonal basis
26 shall be compulsory, optional or prohibited. Where membership
27 may be optional with an elected officer or an employe hired on a
28 temporary or seasonal basis, an election to join the system must
29 be made within one year after the municipality elected to join
30 the system or within one year after the officer or temporary or
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1 seasonal employe first entered the service of the municipality.
2 Officers and employes paid only on a fee basis shall not be
3 eligible to join the system.
4 Section 204. Service Allowance; Change of Employment.--In
5 computing the length of service of a contributor for retirement
6 purposes, full credit shall be given to each original member for
7 each year of service rendered to the municipality prior to the
8 time the municipality joined the system, whether or not such
9 service was continuous.
10 As soon as practicable, the board shall issue to each
11 original member a certificate certifying the aggregate length of
12 service rendered to the municipality prior to the time it joined
13 the system. Such certificate shall be final and conclusive as to
14 his prior service unless thereafter modified by the board, upon
15 application of the member.
16 The time during which a member was absent from service
17 without pay shall not be counted in computing the service of a
18 contributor in his certificate, or upon retirement, unless
19 specifically allowed by the municipality, with the approval of
20 the board.
21 When a contributor leaves the employ of a municipality which
22 has joined the system, and enters into the employ of another
23 municipality which has also joined the system, his service
24 credits shall remain unimpaired, but in such cases the unpaid
25 municipal liability for prior service shall be prorated by the
26 board between the municipalities on an equitable basis.
27 Section 205. Determination of Municipal Liability.--The
28 actuary shall as soon as may be, determine the present value of
29 the liability of each municipality for the prior service credits
30 to its original members, and shall establish an amount payable
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1 annually over a period not exceeding thirty years, through which
2 payments such prior service liability may be funded. Each
3 municipality shall have the option to spread the payment of such
4 prior service liability over such period of years.
5 The municipal liability to be determined by the actuary shall
6 be based upon credit for all years of prior service toward the
7 municipal annuity of each original member, subject to such of
8 the following options as the municipality may elect:
9 (1) The municipality may limit to ten years the credit for
10 prior service toward the municipal annuity of each original
11 member;
12 (2) The municipality may assume the liability for payment of
13 the member's contributions for the prior service or any portion
14 thereof of each original member.
15 The actuary shall also determine, from time to time, the
16 amount which shall be contributed annually by each municipality
17 for service credits of original and new members subsequent to
18 the time the municipality joined the system, and the additional
19 amount which shall be contributed annually by each municipality
20 toward a reserve account for disability allowances payable to
21 original or new members, in order that all future service
22 liability may be fully funded on an actuarial basis.
23 The amounts so determined by the actuary may be expressed in
24 a percentage of the payroll of the municipality covering its
25 contributing members.
26 The cost of making the valuations required by this section
27 and in the transfer of any existing pension system of any
28 municipality, shall be part of the costs of administration of
29 this act.
30 Section 206. Contributions by Members; Consolidation of
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1 Credits; Change of Employment.--Each member of the system shall
2 be required to contribute to the fund such per cent of his
3 actual salary or compensation, including fees where paid in part
4 on a fee basis, as shall be computed by the actuary to be
5 approximately sufficient to procure for him on a superannuation
6 retirement age, a member's annuity of approximately one two-
7 hundred-fiftieth of that portion of his final salary on which
8 social security benefits are payable and of one one-hundred-
9 twenty-fifth of any portion of his final salary in excess of the
10 amount on which social security benefits are payable for each
11 year of service, after the time the municipality by which he is
12 employed joined the system.
13 In order to increase his member's annuity, each member shall
14 also have the option to make contributions for his prior
15 service. Such contributions for prior service may be anticipated
16 in whole or in part at the time the municipality joins the
17 system, or payment thereof or such part thereof as is not
18 anticipated may be spread over a period of time by increasing
19 the payroll deduction of the member by at least one-third. When
20 a member elects to contribute on account of all of his unpaid
21 prior service, his rate of contribution shall be calculated as
22 of his age at the time he first entered the service of the
23 municipality: Provided, however, That any municipality may, at
24 the time it elects to join the system, or at any time
25 thereafter, agree with the board to pay into the fund as part of
26 its liability under and in accordance with section 205 hereof,
27 the moneys necessary to provide the member's contributions for
28 prior service, and in such case no contributions for prior
29 service shall be made by the members.
30 Member's contributions shall be paid into the fund by the
19730S0471B0484 - 20 -
1 municipality through payroll deductions in such manner and at
2 such time as the board may by rule and regulation determine.
3 When a municipal employe is employed by more than one
4 municipality, he shall be required to make contributions on
5 account of his salary paid by each municipality. In such cases
6 the board shall provide for the consolidation of credits of the
7 contributor and, upon his retirement, for a consolidated
8 retirement allowance.
9 Section 207. Withdrawal; Return to Service; Death in
10 Service.--(a) Should a contributor, before reaching
11 superannuation retirement age, for any reason cease to be a
12 municipal employe, he shall be paid by the board the full amount
13 of the accumulated deductions standing to his credit in the
14 member's account, unless he is entitled to vesting rights or to
15 a retirement allowance for retirement not voluntarily, and
16 elects to exercise such vesting rights or take such retirement
17 allowance. Should such former contributor thereafter return to
18 the service of the same municipality and restore to the fund, in
19 such manner as may be agreed upon by such person and the board,
20 his withdrawn accumulated deductions as they were at the time of
21 his separation from service, his annuity rights as they existed
22 at the time of separation from service shall be restored and his
23 obligations as a member shall begin again. The rate of
24 contribution of such returning member shall be the same as it
25 was at the time he separated from service.
26 (b) Should a contributor, having attained or passed
27 superannuation age, elect, upon leaving the service of the
28 municipality, not to claim the retirement allowance to which he
29 is entitled, he shall, upon written application, be paid by the
30 board the full amount of the accumulated deductions standing to
19730S0471B0484 - 21 -
1 his credit in the member's account.
2 (c) Should a person who has been retired on a retirement
3 allowance under this act, return to employment on a regular
4 full-time basis in the same municipality, his retirement
5 allowance shall cease, and all his rights as they existed at the
6 time of retirement shall be restored, and such person may by
7 further service and further payroll deductions add to such
8 rights on account of future retirement. For the purposes of this
9 section if a person is reemployed on a temporary or seasonal
10 basis and his gross post-retirement earnings from such
11 reemployment during the calendar year are less than two thousand
12 one hundred dollars ($2,100) or such other maximum as the board
13 may establish, he shall not be deemed reemployed, but if and
14 when his gross post-retirement earnings exceed two thousand one
15 hundred dollars ($2,100) or such other maximum as the board may
16 establish in any calendar year he shall not be entitled to
17 receive his retirement allowance for that month or any
18 subsequent month in the calendar year in which he continues in
19 service. The municipality is required to notify the board
20 immediately of the reemployment status of any retired former
21 employe and file separate monthly reports of his gross earnings
22 as prescribed by the board.
23 (d) Should a contributor die while in service, prior to
24 becoming eligible for a retirement allowance, his accumulated
25 deductions shall be paid to his estate, or to such person, if
26 living, as he shall have designated in writing, filed with the
27 board as his beneficiary. In case any contributor has failed to
28 designate a beneficiary, or if the named beneficiary has
29 predeceased the member and no such successor beneficiary has
30 been named, and upon the death in service shall have less than
19730S0471B0484 - 22 -
1 one hundred dollars ($100) in accumulated deductions standing to
2 his credit, the board may, if letters testamentary or of
3 administration have not been taken out on his estate within six
4 months after death, pay such accumulated deductions on the claim
5 of the undertaker, or to any person or municipality which shall
6 have paid the claim of the undertaker.
7 Section 208. Superannuation Retirement.--Retirement for
8 superannuation shall be as follows:
9 (a) Any contributor who has reached superannuation
10 retirement age may retire for superannuation by filing with the
11 board a written statement, duly attested, setting forth on what
12 date he desires to be retired. Said application shall make the
13 superannuation retirement allowance effective on the date so
14 specified, if such application was filed in the office of the
15 board or deposited in the United States mail, addressed to the
16 board, before the date specified in the application and before
17 the death of the contributor, but the date so specified in the
18 application shall not be more than ninety days after the date of
19 filing, or the date the application was deposited in the mail.
20 (b) On retirement for superannuation, a contributor shall be
21 entitled to a retirement allowance throughout his life, which
22 shall consist of:
23 (1) A member's annuity of equivalent actuarial value of his
24 accumulated deductions; and
25 (2) A municipal annuity which shall be equal to (i) for
26 current service, one two-hundred-fiftieth of that portion of his
27 final salary on which social security benefits are payable plus
28 one one-hundred-twenty-fifth of any portion of his final salary
29 in excess of the amount on which social security benefits are
30 payable for each year of service while a member, and in addition
19730S0471B0484 - 23 -
1 thereto, (ii) for prior service in case of an original member,
2 one two-hundred-fiftieth of that portion of his prior salary on
3 which social security benefits are payable plus one one-hundred-
4 twenty-fifth of any portion of his prior salary in excess of the
5 amount on which social security benefits are payable for each
6 year of prior service or for a maximum of ten years if the
7 municipality has so limited the period of prior service, and in
8 addition thereto, one two-hundred-fiftieth of his prior salary
9 on which social security benefits are payable plus one one-
10 hundred-twenty-fifth of any portion of his prior salary in
11 excess of the amount on which social security benefits are
12 payable for each year of prior service for which the
13 municipality has paid or has obligated itself to pay the
14 member's contributions.
15 (c) In no event shall the municipal annuity exceed fifty per
16 cent of the final salary.
17 Sections 209. Death Benefits.--(a) The provisions of
18 subsection (b) and (c) of this section shall not apply to any
19 member unless the municipality by which he is employed has
20 elected by ordinance or resolution, to extend the provisions of
21 this section to its employes. A duly certified copy of such
22 ordinance or resolution shall be filed with the board.
23 (b) A contributor to the system who is entitled to a
24 superannuation retirement allowance by reason of having reached
25 superannuation retirement age or who is entitled to a withdrawal
26 allowance by reason of having completed twenty-four years of
27 total service, may file with the board a written application for
28 retirement, in the form required for such application, but
29 requesting that such retirement shall become effective as of the
30 time of his death, electing one of the options provided in
19730S0471B0484 - 24 -
1 section 211 and nominating a person having an insurable interest
2 in his life under said option as required in said section. In
3 all such cases, the application shall be held by the board until
4 the contributor shall file a later application in the usual
5 manner for a superannuation retirement allowance or until the
6 death of the contributor occurring while in municipal service,
7 at which time his retirement shall become effective with the
8 same benefits to the person designated as if the contributor had
9 retired on the day immediately preceding his death.
10 (c) A contributor to the system who is entitled to a
11 superannuation retirement allowance by reason of having reached
12 superannuation retirement age or who is entitled to a withdrawal
13 allowance by reason of having completed twenty-four years of
14 total service and who has died in municipal service before
15 filing with the board a written application for a superannuation
16 retirement allowance as provided in subsection (b) of this
17 section shall be considered as having elected Option 1 as
18 provided in section 211 as of the date of his death. In such
19 event, payment under Option 1 shall be made to the beneficiary
20 designated in the nomination of beneficiary form on file with
21 the board, or if said beneficiary has predeceased the
22 contributor, to the legal representative of said contributor.
23 Section 210. Early Retirement.--Should a contributor be
24 discontinued from service not voluntarily, after having
25 completed eight years of total service, or voluntarily after
26 having completed twenty-four years of total service, but in
27 either event before reaching superannuation retirement age, he
28 shall be paid as he may elect, as follows:
29 (1) The full amount of the accumulated deductions standing
30 to his credit in the member's account of the fund; or
19730S0471B0484 - 25 -
1 (2) Upon the filing of an application in the manner outlined
2 in subsection (a) of section 208, a retirement allowance which
3 shall consist of (i) a member's annuity of equivalent actuarial
4 value to his accumulated deductions; and (ii) a municipal
5 annuity of equivalent actuarial value to the present value of a
6 municipal annuity, beginning at superannuation retirement age,
7 calculated in accordance with the provisions of section 208; or
8 (3) If qualified, a deferred retirement allowance as
9 provided in section 213.
10 Section 211. Options on Superannuation or Early
11 Retirement.--At the time of his superannuation or early
12 retirement, a contributor may elect to receive his benefits in a
13 retirement allowance payable throughout his life, which shall be
14 known as a single life annuity, or instead, he may elect to
15 receive the equivalent actuarial value at that time of his
16 retirement allowance in a lesser allowance, payable throughout
17 life with provisions that:
18 (1) Option 1. If he shall die before receiving in payments
19 the present value of his retirement allowance as it was at the
20 time of his retirement, the balance, if less than five thousand
21 dollars ($5,000), shall be paid in a lump sum to his legal
22 representative, or to or in trust for his beneficiary. If the
23 balance is five thousand dollars ($5,000) or more, the
24 beneficiary may elect by application duly acknowledged and filed
25 with the board to receive payment of such balance according to
26 any one of the following provisions: (i) a lump sum payment;
27 (ii) an annuity having a present value equal to the balance
28 payable; (iii) a lump sum payment and an annuity. Such annuity
29 shall be of equivalent actuarial value to the balance payable
30 less the amount of the lump sum payment specified by the
19730S0471B0484 - 26 -
1 beneficiary.
2 (2) Option 2. Upon his death, his retirement allowance
3 shall be continued throughout the life of and paid to his
4 survivor annuitant, if then living.
5 (3) Option 3. Upon his death, one-half of his retirement
6 allowance shall be continued throughout the life of and paid to
7 his survivor annuitant, if then living.
8 Section 212. Disability Retirement.--(a) After a contributor
9 has had ten or more years of total service, he may, upon
10 application or on the application of one acting in his behalf,
11 or upon application of a head of the department of the
12 municipality by which he is employed, be retired by the board on
13 a disability allowance if he is under superannuation retirement
14 age, and on a superannuation retirement allowance if he has
15 attained or passed such age, if the physician designated by the
16 board, after medical examination of the contributor made at the
17 place of residence of the contributor or at a place mutually
18 agreed upon, shall certify to the board that the contributor is
19 unable to engage in any gainful employment and that said
20 contributor ought to be retired. When the disability of a
21 contributor is determined to be service-connected, as defined in
22 this act, no minimum period of service shall be required for
23 eligibility. Application filing requirements shall be identical
24 to those outlined in subsection (a) of section 208.
25 (b) On retirement for disability a member shall receive a
26 retirement allowance which shall consist of:
27 (1) A member's annuity of the equivalent actuarial value to
28 his accumulated deductions;
29 (2) A municipal annuity of the equivalent actuarial value to
30 the present value of a municipal annuity, beginning at
19730S0471B0484 - 27 -
1 superannuation retirement age, calculated in accordance with the
2 provision of section 208; and
3 (3) A disability annuity payable from the total disability
4 reserve account which, together with the member's annuity and
5 the municipal annuity, shall be sufficient to produce a
6 retirement allowance of thirty per cent of the final salary.
7 Where the disability of the member is determined to be service-
8 connected, as defined in this act, the retirement allowance
9 shall equal fifty per cent of his final salary. The disability
10 annuity shall be reduced by the amount of any payments for which
11 the member shall be eligible under the act of June 2, 1915
12 (P.L.736, No.338), known as "The Pennsylvania Workmen's
13 Compensation Act," or the act of June 21, 1939 (P.L.566,
14 No.284), known as "The Pennsylvania Occupational Disease Act."
15 (c) Once every year the board may require any disability
16 annuitant, while still under superannuation retirement age, to
17 undergo medical examination by a physician designated by the
18 board. Such examination shall be made at the place of residence
19 of the beneficiary or other place mutually agreed upon. Should
20 the physician report and certify to the board that such
21 disability beneficiary is no longer physically or mentally
22 incapacitated for the performance of duty and is able to engage
23 in a gainful occupation, then his disability retirement
24 allowance shall be discontinued, and in lieu thereof an early
25 involuntary retirement allowance shall at that time be granted
26 as if such person had been retired not voluntarily, if such
27 person shall have had eight or more years of total service.
28 (d) Should a disability annuitant, while under
29 superannuation retirement age, refuse to submit to at least one
30 medical examination in any year by a physician designated by the
19730S0471B0484 - 28 -
1 board, his disability retirement allowance shall be discontinued
2 until the withdrawal of such refusal, and should such refusal
3 continue for one year, then all his rights in and to any
4 disability retirement allowance or for early involuntary
5 retirement allowance provided for by this act, shall be
6 forfeited.
7 (e) Any contributor entitled to retire for disability may,
8 in lieu of such retirement, if he has eight or more years of
9 total service, elect to retire not voluntarily under the
10 provisions of this act.
11 (f) Should a disability annuitant die before the total
12 disability retirement allowance received shall be at least equal
13 to the amount of his accumulated deductions at the time of
14 disability retirement, then the board shall pay to the named
15 beneficiary, if living, or if the beneficiary predeceased the
16 annuitant, or no beneficiary was named, then to the annuitant's
17 estate, an amount equal to the difference between such total
18 retirement allowance received and the annuitant's accumulated
19 deductions, and if such difference is less than one hundred
20 dollars ($100) and no letters have been taken out on the estate
21 within six months after death, then such difference may be paid
22 to the undertaker or to any person or municipality who or which
23 shall have paid the claim of the undertaker.
24 Section 213. Vesting.--(a) Should a contributor, before
25 reaching superannuation retirement age and after having
26 completed twelve years of total service, for any reason cease to
27 be a municipal employe, he shall be entitled to vest his
28 retirement benefits until he attains superannuation retirement
29 age, by filing with the board a written notice of his intentions
30 to vest, within ninety days of the date of his termination.
19730S0471B0484 - 29 -
1 (b) A contributor, who was terminated not voluntarily, may
2 elect, after he has vested, to be paid as follows:
3 (1) The full amount of the accumulated deductions, including
4 interest to the date of termination, standing to his credit in
5 the member's account of the fund; or
6 (2) An early retirement allowance as computed under the
7 provisions of clause (2) of section 210; or
8 (3) Upon reaching superannuation retirement age, a
9 superannuation retirement allowance as computed under the
10 provisions of section 208.
11 (c) A contributor, who voluntarily terminated his service,
12 may elect, after he has vested, to be paid as follows:
13 (1) The full amount of the accumulated deductions, including
14 interest to the date of termination, standing to his credit in
15 the member's account of the fund; or
16 (2) If the contributor has completed twenty-four years or
17 more of total service, a voluntary withdrawal allowance computed
18 in accordance with the provisions of section 210; or
19 (3) Upon reaching superannuation retirement age, a
20 superannuation retirement allowance as computed under the
21 provisions of section 208.
22 (d) Should a contributor, who has vested, die before he
23 becomes eligible for a retirement allowance, the full amount of
24 the accumulated deductions, including interest to the date of
25 his termination, standing to his credit in the member's account
26 of the fund shall be paid to his estate or to his named
27 beneficiary in accordance with the provisions of subsection (d)
28 of section 207.
29 Section 214. Withdrawal Prohibited.--No municipality, after
30 it has joined the system under the provisions of this Article
19730S0471B0484 - 30 -
1 II, shall be permitted to withdraw therefrom, and, in the case
2 of failure to make payments as required by this act, the
3 Commonwealth shall withhold payment to the municipality any
4 funds to which the municipality may be entitled for pension
5 purposes. The board may recover any sums due to the fund by suit
6 at law, or other appropriate remedy.
7 Section 215. Procedures for Amending Contracts.--Any
8 municipality which has joined the system under the provisions of
9 this Article II may, with the approval of the board, enter into
10 a contract with the board as outlined in Article IV of this act,
11 to increase any of the benefits enumerated in Article IV. The
12 board shall not enter into any contract with any municipality
13 which decreases benefits, nor shall it enter into any contract
14 with a municipality which provides for benefits in excess of or
15 minimum member's contribution rates less than those available to
16 it under any other existing law pertaining to the establishment
17 of retirement systems for that class of municipality. Before the
18 board approves any such contract it shall first determine,
19 through its actuary, that the plan outlined in the contract is
20 actuarially sound. Any municipality which elects to enter into a
21 contract for increased benefits which would result in an
22 increase in its employes contribution rates shall first obtain
23 the written consent of at least seventy-five per cent of its
24 then member employes. Additional costs for contracted increases
25 in benefits shall become the responsibility of the municipality
26 and/or the members as specified in the contract.
27 ARTICLE III
28 PROVISIONS RELATING TO MUNICIPAL FIREMEN AND MUNICIPAL POLICE
29 Section 301. Purpose.--This article shall provide for the
30 uninterrupted continuation of retirement plans established under
19730S0471B0484 - 31 -
1 the act of July 31, 1968 (P.L.944, No.291), known as the
2 "Municipal Police Retirement Law." It shall also provide for the
3 enrollment of municipal firemen and municipal police of new
4 municipalities joining the system at the contribution rates and
5 benefit rates outlined in this article of the act.
6 Section 302. Transfer of the Municipal Police Retirement
7 Fund to the Pennsylvania Municipal Retirement Fund.--On the
8 effective date of this act all of the assets and liabilities of
9 the Municipal Police Retirement Fund shall be transferred intact
10 to the Pennsylvania Municipal Retirement Fund. The rights and
11 benefits of the members and of the municipalities which have
12 joined the Municipal Police Retirement System shall not be
13 impaired in any way as a result of this transfer. Likewise, the
14 obligations and responsibilities of both the members and the
15 municipalities which have joined the system shall not be changed
16 and the contractual arrangements as they existed at the time the
17 municipalities joined the Municipal Police Retirement System
18 shall continue in force. Prior service credits for any members
19 so transferred shall be computed from the date on which the
20 municipality joined the Municipal Police Retirement System.
21 Section 303. Compulsory Membership.--If a municipality
22 elects to cover its municipal firemen under the provisions of
23 the system created by this Article III, then each municipal
24 fireman shall be required to become a member of the system.
25 If a municipality elects to cover its municipal police under
26 the provisions of the system created by this Article III, then
27 each municipal policeman shall be required to become a member of
28 the system.
29 Section 304. Separate Ordinances or Resolutions; Separate
30 Accounts.--Any municipality electing to cover both its municipal
19730S0471B0484 - 32 -
1 firemen and municipal police under the system created by this
2 Article III shall be required to pass separate ordinances or
3 resolutions covering each class of employes.
4 The board shall maintain separate accounting records for
5 municipal firemen and for municipal police. However, in the
6 interest of good investment practice, the board may, in its
7 discretion, comingle moneys received from municipalities,
8 municipal employes, municipal firemen and municipal police.
9 Section 305. Service Allowance; Military Service; Change of
10 Employment.--In computing the length of service of a contributor
11 for retirement purposes, full credit shall be given to each
12 original member for each year of service rendered to the
13 municipality prior to the time the municipality joined the
14 system.
15 Any municipal fireman or municipal policeman employed by a
16 municipality who has been a regularly appointed fireman or
17 policeman for a period of at least six months and who
18 thereafter, heretofore, or hereafter, shall be inducted into the
19 military service of the United States in times of war, armed
20 conflict, or national emergency, so proclaimed by the President
21 of the United States, shall have credited to his employment
22 record, for pension or retirement benefits, all of the time
23 spent by him in such military service during the continuance of
24 such war, armed conflict, or national emergency if such person
25 returns or has heretofore returned to his employment within six
26 months after his separation from the service.
27 As soon as practicable, the board shall issue to each
28 original member a certificate certifying the aggregate length of
29 service rendered to the municipality prior to the time it joined
30 the system. Such certificate shall be final and conclusive as to
19730S0471B0484 - 33 -
1 his prior service unless thereafter modified by the board, upon
2 application of the member.
3 The time during which a member was absent from service
4 without pay, except for military service, shall not be counted
5 in computing the service of a contributor in his certificate, or
6 upon retirement unless specially allowed by the municipality,
7 with the approval of the board.
8 When a contributor leaves the employ of a municipality which
9 has joined the system, and enters into the employ of another
10 municipality which has also joined the system, his service
11 credits shall remain unimpaired, but in such cases the unpaid
12 municipal liability for prior service shall be prorated by the
13 board between the municipalities on an equitable basis.
14 Section 306. Determination of Municipal Liability.--The
15 actuary shall, as soon as may be, determine the present value of
16 the liability of each municipality for the prior service credits
17 to its original members, and shall establish an amount payable
18 annually over a period not exceeding thirty years, through which
19 payments such prior service liability may be funded. Each
20 municipality shall have the option to spread the payment of such
21 prior service liability over such period of years.
22 The municipal liability to be determined by the actuary shall
23 be based upon credit for all years of prior service toward the
24 municipal annuity of each original member.
25 The actuary shall also determine, from time to time, the
26 amount which shall be contributed annually by each municipality,
27 for service credits of original and new members subsequent to
28 the time the municipality joined the system, and the additional
29 amount which shall be contributed annually by each municipality
30 toward a reserve account for disability allowances payable to
19730S0471B0484 - 34 -
1 original and new members, in order that all future service
2 liability may be fully funded on an actuarial basis.
3 The amounts so determined by the actuary may be expressed in
4 a percentage of payroll of the municipality covering its
5 contributing members.
6 The payments made by the State Treasurer to the treasurer of
7 the municipality from moneys received from taxes paid upon
8 premiums by foreign fire insurance companies for purposes of
9 pension, retirement or disability benefits for municipal firemen
10 shall be used as follows: (i) to reduce the unfunded liability
11 or, after such liability has been funded, (ii) to apply against
12 the annual obligation of the municipality for future service and
13 disability reserve costs. It shall be the duty of the governing
14 body to apply such payments in accordance with the provisions of
15 this act.
16 The payments made by the State Treasurer to the treasurer of
17 the municipality from the moneys received from taxes paid upon
18 premiums by foreign casualty insurance companies for purposes of
19 pension, retirement or disability benefits for municipal
20 policemen shall be used as follows: (i) to reduce the unfunded
21 liability or, after such liability has been funded, (ii) to
22 apply against the annual obligation of the municipality for
23 future service and disability reserve costs. It shall be the
24 duty of the governing body to apply such payments in accordance
25 with the provisions of this act.
26 The cost of making the valuations required by this section
27 and in the transfer of any existing pension system of any
28 municipality, shall be part of the costs of administration of
29 this act.
30 Section 307. Contributions by Members; Consolidation of
19730S0471B0484 - 35 -
1 Credits.--Each single coverage member of the system created
2 under this Article III, shall be required to contribute to the
3 fund such per cent of his actual salary or compensation as shall
4 be computed by the actuary to be approximately sufficient to
5 procure for him on superannuation retirement, a member's annuity
6 of approximately one one-hundredth of his final salary for each
7 year of service after the time the municipality by which he is
8 employed joined the system. The member shall not be required to
9 contribute more than eight per cent of his salary or
10 compensation to the fund.
11 The amount of contribution by each joint coverage member
12 shall be computed in the manner described above for a single
13 coverage member, except that the amount of such deductions from
14 salary or compensation shall be reduced with respect to wages
15 (as defined in the Federal Insurance Contributions Act) by forty
16 per cent of the tax on employes prescribed by the Federal
17 Insurance Contributions Act exclusive of that portion of such
18 tax attributable to disability coverage.
19 Members' contributions shall be paid into the fund by the
20 municipality through payroll deductions in such manner and at
21 such time as the board may by rule and regulation determine.
22 Section 308. Withdrawal; Return to Service; Death in
23 Service.--(a) Should a contributor, before reaching
24 superannuation retirement age, for any reason cease to be a
25 municipal fireman or a municipal policeman, he shall be paid by
26 the board the full amount of the accumulated deductions standing
27 to his credit in the member's account, unless he is entitled to
28 vesting rights or to a retirement allowance for retirement not
29 voluntarily, and elects to exercise such vesting rights or take
30 such retirement allowance. Should such former contributor
19730S0471B0484 - 36 -
1 thereafter return to the service of the same municipality and
2 restore to the fund, in such manner as may be agreed upon by
3 such person and the board, his withdrawn accumulated deductions
4 as they were at the time of his separation from service, his
5 annuity rights as they existed at the time of separation from
6 service shall be restored and his obligations as a member shall
7 begin again.
8 (b) Should a contributor, having attained or passed
9 superannuation age, elect, upon leaving the service of the
10 municipality, not to claim the retirement allowance to which he
11 is entitled, he shall, upon written application, be paid by the
12 board the full amount of the accumulated deductions standing to
13 his credit in the member's account.
14 (c) Should a person who has been retired on a retirement
15 allowance under this act, return to employment on a regular
16 full-time basis in the same municipality, his retirement
17 allowance shall cease, and all his rights as they existed at the
18 time of retirement shall be restored, and such person may by
19 further service and further payroll deductions add to such
20 rights on account of future retirement. For the purposes of this
21 section if a person is reemployed on a temporary or seasonal
22 basis and his gross post-retirement earnings from such
23 reemployment during the calendar year are less than two thousand
24 one hundred dollars ($2,100) or such other maximum as the board
25 may establish, he shall not be deemed reemployed, but if and
26 when his gross post-retirement earnings exceed two thousand one
27 hundred dollars ($2,100) or such other maximum as the board may
28 establish in any calendar year he shall not be entitled to
29 receive his retirement allowance for that month or any
30 subsequent month in the calendar year in which he continues in
19730S0471B0484 - 37 -
1 service. The municipality is required to notify the board
2 immediately of the reemployment status of any retired former
3 employe and file separate monthly reports of his gross earnings
4 as prescribed by the board.
5 (d) Should a contributor die while in service, prior to
6 become eligible for a retirement allowance, his accumulated
7 deductions shall be paid to his estate, or to such person, if
8 living, as he shall have designated, in writing, filed with the
9 board as his beneficiary. In case any contributor has failed to
10 designate a beneficiary, or if the named beneficiary has
11 predeceased the member and no successor beneficiary has been
12 named, and upon the death in service shall have less than one
13 hundred dollars ($100) in accumulated deductions standing to his
14 credit, the board may, if letters testamentary or of
15 administration have not been taken out on his estate within six
16 months after his death, pay such accumulated deductions on the
17 claim of the undertaker, or to such person or municipality which
18 shall have paid the claim of the undertaker.
19 Section 309. Superannuation Retirement.--Retirement for
20 superannuation shall be as follows:
21 (1) Any contributor who has reached superannuation
22 retirement age may retire for superannuation by filing with the
23 board a written statement, duly attested, setting forth on what
24 date he desires to be retired. Said application shall make the
25 superannuation retirement allowance effective on the date so
26 specified, if such application was filed in the office of the
27 board or deposited in the United States mail, addressed to the
28 board, before the date specified in the application and before
29 the death of the contributor, but the date so specified in the
30 application shall not be more than ninety days after the date of
19730S0471B0484 - 38 -
1 filing, or the date the application was deposited in the mail.
2 (2) On retirement for superannuation, a contributor shall be
3 entitled to a retirement allowance throughout his life, which
4 shall consist of (i) a member's annuity of equivalent actuarial
5 value to his accumulated deductions, and (ii) a municipal
6 annuity which shall be equal to, for current service, one one-
7 hundredth of his final salary for each year of service while a
8 member, and, in addition thereto for prior service in the case
9 of an original member, one one-hundredth of his prior salary for
10 each year of prior service.
11 (3) The superannuation retirement allowance provided in this
12 section or the withdrawal allowance provided in section 311, as
13 the case may be, payable to a joint coverage member after the
14 age at which social security old age insurance benefits become
15 payable shall be reduced by an amount equal to forty per cent of
16 the primary insurance amount of social security paid or payable
17 to him. Such reduction shall be subject to the following
18 provisions: (i) the reduction in benefits in accordance with
19 this clause (3) shall not be applied in the case of an annuitant
20 until age sixty-five, unless such annuitant shall have elected
21 to receive social security benefits prior to age sixty-five,
22 (ii) the eligibility of such member for the old age insurance
23 benefit (primary insurance amount) and the amount of such old
24 age insurance benefit upon which the reduction in his allowance
25 shall be based, shall be determined by the board in accordance
26 with the provisions of the Federal Social Security Act, in
27 effect on the effective date of superannuation retirement, or
28 withdrawal, of the member, except that in determining such
29 eligibility and such amount only wages or compensation for
30 service covered by the system shall be included, (iii) the
19730S0471B0484 - 39 -
1 reduction in benefits in accordance with this clause (3) shall
2 apply only to that portion of benefits based on wages as defined
3 in the Federal Insurance Contribution Act,(iv) the reduction of
4 benefits in accordance with this clause (3) shall be limited to
5 the municipal annuity calculated in accordance with clause (2)
6 of this section, (v) the total sum including social security old
7 age insurance benefits to be received upon superannuation
8 retirement or withdrawal by a joint coverage member shall not be
9 less than the allowance that he would be paid as a single
10 coverage member, (vi) whenever the amount of the reduction from
11 the superannuation retirement allowance or the withdrawal
12 allowance shall have been once determined, it shall remain fixed
13 for the duration of the allowance, except that any decrease in
14 the old age insurance benefit under the Federal Social Security
15 Act shall result in a corresponding decrease in the amount of
16 the reduction in the allowance, (vii) the reduction provided for
17 in this clause (3) shall not apply to disability allowances
18 payable under section 313 of this act.
19 (4) In no event shall the municipal annuity exceed fifty per
20 cent of the contributor's final salary.
21 (5) Other provisions of this act notwithstanding, any member
22 of a police force who was a member of a pension fund created
23 under the provisions of the act of May 29, 1956 (P.L.1804,
24 No.600), and who was entitled to retire at the age of fifty-five
25 or sixty years after twenty years of total service, or at the
26 age of fifty or fifty-five after twenty-five years of service,
27 and to receive the pension provided by that act, shall have the
28 same entitlement under the system created pursuant to this act.
29 The municipal annuity, computed under subclause (ii) of clause
30 (3) above, shall be increased as needed, in addition to the
19730S0471B0484 - 40 -
1 member's annuity, in order to pay any increased retirement
2 allowance resulting from the provisions of the act.
3 Section 310. Death Benefits.--(a) A contributor to the
4 system who is entitled to a superannuation retirement allowance
5 by reason of having reached superannuation retirement age or who
6 is entitled to a withdrawal allowance by reason of having
7 completed twenty-four years of total service, may file with the
8 board a written application for retirement in the form required
9 for such application, but requesting that such retirement shall
10 become effective as of the time of his death, electing one of
11 the options provided in section 312 of this act and nominating a
12 person having an insurable interest in his life under said
13 option as required in said section. In all such cases, the
14 application shall be held by the board until the contributor
15 shall file a later application in the usual manner for a
16 superannuation retirement allowance or until the death of the
17 contributor occurring while in the municipal service, at which
18 time his retirement shall become effective with the same
19 benefits to the person designated as if the contributor had
20 retired on the day immediately preceding his death.
21 (b) A contributor to the system who is entitled to a
22 superannuation retirement allowance by reason of having reached
23 superannuation retirement age or who is entitled to a withdrawal
24 allowance by reason of having completed twenty-four years of
25 service and who has died in municipal service before filing with
26 the board a written application for a superannuation retirement
27 allowance as provided in subsection (a) of this section shall be
28 considered as having elected Option 1 as provided in section 312
29 as of the date of his death. In such event, payment under Option
30 1 shall be made to the beneficiary designated in the nomination
19730S0471B0484 - 41 -
1 of beneficiary form on file with the board, or if said
2 beneficiary has predeceased the contributor, to the legal
3 representative of said contributor.
4 Section 311. Early Retirement.--Should a contributor be
5 discontinued from service not voluntarily after having completed
6 eight years of total service, or voluntarily after having
7 completed twenty-four years of total service, but in either
8 event before reaching superannuation retirement age, he shall be
9 paid as he may elect, as follows:
10 (1) The full amount of his accumulated deductions standing
11 to his credit in the member's account of the fund; or
12 (2) Upon the filing of an application in the manner outlined
13 in section 309 (a) a retirement allowance which shall consist of
14 (i) a member's annuity of equivalent actuarial value to his
15 accumulated deductions, and (ii) a municipal annuity of
16 equivalent actuarial value to the present value of a municipal
17 annuity, beginning at superannuation retirement age, calculated
18 in accordance with the provisions of section 309; or
19 (3) If qualified, a deferred retirement allowance as
20 provided in section 314.
21 Section 312. Options on Superannuation or Early
22 Retirement.--At the time of his superannuation or early
23 retirement, a contributor may elect to receive his benefits in a
24 retirement allowance payable throughout his life, which shall be
25 known as a single life annuity, or instead, he may elect, to
26 receive the actuarial equivalent value at that time of his
27 retirement allowance in a lesser allowance, payable throughout
28 life with provisions that:
29 (1) Option 1. If he shall die before receiving in payments
30 the present value of his retirement allowance as it was at the
19730S0471B0484 - 42 -
1 time of his retirement, the balance, if less than five thousand
2 dollars ($5,000) shall be paid in a lump sum to his legal
3 representative, or to or in trust for his beneficiary. If the
4 balance is five thousand dollars ($5,000) or more, the
5 beneficiary may elect by application duly acknowledged and filed
6 with the board to receive payment of such balance according to
7 any of the following provisions: (i) a lump sum payment, (ii) an
8 annuity having a present value equal to the balance payable,
9 (iii) a lump sum payment and an annuity. Such annuity shall be
10 of equivalent actuarial value to the balance payable less the
11 amount of the lump sum payment specified by the beneficiary.
12 (2) Option 2. Upon his death his retirement allowance shall
13 be continued throughout the life of and paid to his survivor
14 annuitant, if then living.
15 (3) Option 3. Upon his death, one-half of his retirement
16 allowance shall be continued throughout the life of and paid to
17 his survivor annuitant, if then living.
18 Section 313. Disability Retirement.--(a) After a contributor
19 has had ten or more years of total service, he may, upon
20 application or on application of one acting in his behalf, or
21 upon application of a head of the department of the municipality
22 by which he is employed, be retired by the board on a disability
23 allowance if he is under superannuation retirement age, and on a
24 superannuation retirement allowance if he has attained or passed
25 such age, if the physician designated by the board, after
26 medical examination of the contributor made at the place of
27 residence of the contributor or at a place mutually agreed upon,
28 shall certify to the board that the contributor is unable to
29 engage in any gainful employment and that said contributor ought
30 to be retired. When the disability of a contributor is
19730S0471B0484 - 43 -
1 determined to be service-connected, as defined in this act, no
2 minimum period of service shall be required for eligibility.
3 Application filing requirements shall be identical to those
4 outlined in clause (1) of section 309.
5 (b) On retirement for disability, a member shall receive a
6 retirement allowance which shall consist of:
7 (1) A member's annuity of equivalent actuarial value to his
8 accumulated deductions;
9 (2) A municipal annuity of equivalent actuarial value to the
10 present value of a municipal annuity, beginning at
11 superannuation retirement age, calculated in accordance with the
12 provisions of section 309; and
13 (3) A disability annuity payable from the total disability
14 reserve account which, together with the member's annuity and
15 the municipal annuity, shall be sufficient to produce a
16 retirement allowance of thirty per cent of the contributor's
17 final salary. Where the disability of the member is determined
18 to be service-connected, as defined in this act, the retirement
19 allowance shall equal fifty per cent of his final salary. The
20 disability annuity shall be reduced by the amount of any
21 payments for which the member shall be eligible under the act of
22 June 2, 1915 (P.L.736, No.338), known as "The Pennsylvania
23 Workmen's Compensation Act," or the act of June 21, 1939
24 (P.L.566, No.284), known as "The Pennsylvania Occupational
25 Disease Act."
26 (c) Once every year the board may require any disability
27 annuitant, while still under superannuation retirement age, to
28 undergo medical examination by a physician designated by the
29 board, and such examination shall be made at the place of
30 residence of the annuitant or other place mutually agreed upon.
19730S0471B0484 - 44 -
1 Should the physician report and certify to the board that such
2 disabled annuitant is no longer physically or mentally
3 incapacitated for the performance of duty and is able to engage
4 in a gainful occupation, then his disability retirement
5 allowance shall be discontinued, and in lieu thereof an early
6 involuntary retirement allowance shall at that time be granted
7 as if such person had been retired not voluntarily, if such
8 person shall have eight or more years of total service.
9 (d) Should a disability annuitant, while under
10 superannuation retirement age, refuse to submit to at least one
11 medical examination in any year by a physician designated by the
12 board, his disability retirement allowance shall be discontinued
13 until withdrawal of such refusal, and should such refusal
14 continue for one year, then all his rights in and to any
15 disability retirement allowance or for early involuntary
16 retirement allowance provided by this act shall be forfeited.
17 (e) Any contributor entitled to retire for disability may,
18 in lieu of such retirement, if he has eight or more years of
19 total service, elect to retire not voluntarily under the
20 provisions of this act.
21 (f) Should a disability annuitant die before the total
22 disability retirement allowance received shall be at least equal
23 to the amount of his accumulated deductions at the time of
24 disability retirement, then the board shall pay to the named
25 beneficiary, if living, or if the named beneficiary predeceased
26 the annuitant, or no beneficiary was named, then to the
27 annuitant's estate, an amount equal to the difference between
28 such total retirement allowance received and the annuitant's
29 accumulated deductions, and if such difference is less than one
30 hundred dollars ($100) and no letters have been taken out on the
19730S0471B0484 - 45 -
1 estate within six months after death, then such difference may
2 be paid to the undertaker or to any person or municipality who
3 or which shall have paid the claim of the undertaker.
4 Section 314. Vesting.--(a) Should a contributor, before
5 reaching superannuation retirement age and after having
6 completed twelve years of total service, for any reason cease to
7 be a municipal fireman or a municipal policeman, he shall be
8 entitled to vest his retirement benefits until he attains
9 superannuation retirement age, by filing with the board a
10 written notice of his intentions to vest, within ninety days of
11 the date of his termination.
12 (b) A contributor, who was terminated not voluntarily, may
13 elect, after he has vested, to be paid as follows:
14 (1) The full amount of the accumulated deductions, including
15 interest to the date of termination, standing to his credit in
16 the member's account of the fund; or
17 (2) An early retirement allowance as computed under the
18 provisions of clause (2) of section 311; or
19 (3) Upon reaching superannuation retirement age, a
20 superannuation retirement allowance as computed under the
21 provisions of section 309.
22 (c) A contributor, who voluntarily terminated his service,
23 may elect, after he has vested, to be paid as follows:
24 (1) The full amount of the accumulated deductions, including
25 interest to the date of termination, standing to his credit in
26 the member's account of the fund; or
27 (2) If the contributor has completed twenty-four years or
28 more of total service, a voluntary withdrawal allowance computed
29 in accordance with the provisions of section 311; or
30 (3) Upon reaching superannuation retirement age, a
19730S0471B0484 - 46 -
1 superannuation retirement allowance as computed under the
2 provisions of section 309.
3 (d) Should a contributor, who has vested, die before he
4 becomes eligible for a retirement allowance, the full amount of
5 the accumulated deductions, including interest to the date of
6 his termination, standing to his credit in the member's account
7 of the fund shall be paid to his estate or to his named
8 beneficiary in accordance with the provisions of subsection (d)
9 of section 308.
10 Section 315. Compliance.--When a municipality joins the
11 system, its action shall be construed as compliance with the
12 provisions of the act of May 29, 1956 (P.L.1804, No.600), or any
13 other statute requiring the creation of a pension or retirement
14 system for firemen or police.
15 Section 316. Withdrawal Provisions.--No municipality, after
16 it has joined the system under the provisions of this Article
17 III, shall be permitted to withdraw therefrom, except as
18 hereinafter provided, and in any case of failure to make
19 payments as required by this act, the Commonwealth shall withold
20 payments to the municipality of any funds to which the
21 municipality may be entitled for pension purposes. The board may
22 recover any sums due to the fund by suit at law or other
23 appropriate remedy. Any municipality may withdraw from the
24 retirement system if (i) the fire department or the police
25 department is abolished, or (ii) if the municipality is
26 completely annexed by or consolidated with another municipality,
27 or (iii) if an ordinance signifying an intention to withdraw is
28 approved by an affirmative vote of seventy-five per cent of the
29 entire membership of the municipal legislative body: Provided,
30 That where the legislative body consist of only three persons,
19730S0471B0484 - 47 -
1 the ordinance or resolution shall be approved by a unanimous
2 vote: And provided further, That in the case of (iii) the
3 withdrawal ordinance shall not become effective without the
4 affirmative vote of seventy-five per cent of the municipal
5 firemen or the municipal police, as the case may be, affected by
6 the ordinance.
7 In any such withdrawal, the election to withdraw shall be
8 deemed to have been made at the time the municipality elected to
9 withdraw or the members approved the withdrawal, as the case may
10 be, and the liabilities of the municipality and the rights and
11 privileges of the members shall be fixed accordingly. No member
12 who becomes entitled to a benefit or who is receiving a benefit
13 under the provisions of this act shall be deprived of or lose
14 such benefit as a result of such withdrawal.
15 When a municipality elects to withdraw from the system
16 created by this Article III, by an ordinance approved by
17 seventy-five per cent or more of the entire membership, of its
18 governing body, and such withdrawal is approved by an
19 affirmative vote of seventy-five per cent of the municipal
20 firemen or the municipal police of such municipality, as the
21 case may be, the municipality shall, at the time of its election
22 to withdraw, again be subject to any act of the General Assembly
23 of this Commonwealth which requires the creation of a pension or
24 retirement system for firemen or police. In any such withdrawal,
25 provisions shall be made to credit to the accumulated deductions
26 of each member at least the amount he has paid into the member's
27 account of the retirement fund created by this act, which moneys
28 shall be transferred to and credited to his account in a
29 retirement or pension fund established by the municipality after
30 its withdrawal from the system created by this Article III.
19730S0471B0484 - 48 -
1 No liability, on account of retirement or disability
2 allowance being paid from the fund, shall attach against the
3 fund unless the board specifically agrees to accept such
4 liability, in which case adequate reserves, as determined by the
5 board, shall be retained in the fund to continue such payments.
6 If the board does not agree to accept liability to continue the
7 payment of such allowances, the liability shall attach against
8 the municipality and be paid from funds transferred to a
9 retirement system established subsequent to its withdrawal from
10 the system or from moneys appropriated annually from tax
11 revenues sufficient to pay the same.
12 Section 317. Procedures for Amending Contracts.--Any
13 municipality which has joined the system under the provisions of
14 this Article III may, with the approval of the board, enter into
15 a contract with the board as outlined in Article IV of this act,
16 to increase any of the benefits enumerated in Article IV. The
17 board shall not enter into any contract with any municipality
18 which decreases benefits, nor shall it enter into any contract
19 with a municipality which provides for benefits in excess of or
20 minimum members contribution rates less than those available to
21 it under any other existing law pertaining to the establishment
22 of retirement systems for that class of municipality. Before the
23 board approves any such contract it shall first determine,
24 through its actuary, that the plan outlined in the contract is
25 actuarially sound. Any member municipality which elects to enter
26 into a contract for increased benefits which would result in an
27 increase in its employes contribution rates shall first obtain
28 the written consent of at least seventy-five per cent of its
29 then member employes. Additional costs for contracted increases
30 in benefits shall become the responsibility of the municipality
19730S0471B0484 - 49 -
1 and/or the members as specified in the contract.
2 ARTICLE IV
3 OPTIONAL RETIREMENT PLANS
4 Section 401. Purpose.--This article shall provide for the
5 enrollment of those municipalities in the Pennsylvania Municipal
6 Retirement System which want to offer retirement benefits to
7 their employes different from those available under Article II
8 and Article III of this act. It shall also provide for
9 increasing member benefits for municipalities formerly enrolled
10 under the provisions of Article II and Article III of this act.
11 Section 402. Compulsory and Optional Membership.--If a
12 municipality elects to join the system under the provisions of
13 this Article IV, it shall first negotiate a contract with the
14 board, acceptable to both the municipality and the board, which
15 shall set forth all the specific details of municipal and member
16 contribution rates and benefits. The municipality shall then
17 pass an ordinance or resolution electing to join the system, and
18 confirming the terms of the contract by reference thereto.
19 Separate contracts and separate resolutions shall be executed
20 for each class of employes, namely municipal employes, municipal
21 firemen and municipal police in those cases where the
22 municipality elects to bring more than one class of its employes
23 into the system.
24 When a municipality elects to enroll its municipal employes
25 into the system, then each officer other than elected officers,
26 and each municipal employe thereof, employed on a permanent
27 basis, shall be required to become a member of the system. Each
28 municipality shall determine whether membership in said system
29 for elected officials and employes hired on a temporary or
30 seasonal basis shall be compulsory, optional or prohibited.
19730S0471B0484 - 50 -
1 Where membership may be optional with an elected officer or an
2 employe hired on a temporary or seasonal basis, an election to
3 join the system must be made within one year after the
4 municipality elected to join the system or within one year after
5 the officer or temporary or seasonal employe first entered the
6 service of the municipality. Officers and employes paid only on
7 a fee basis shall not be eligible to join the system.
8 When a municipality elects to enroll its municipal firemen or
9 its municipal police into the system, then each municipal
10 fireman or each municipal policeman, as defined in section 102
11 of this act, shall be required to become a member of the system.
12 When a municipality has established a policy of placing new
13 employes on a probationary status it may elect to refrain from
14 enrolling such employes into the system for a period of up to
15 six months from the date the probationary employe first entered
16 the service of the municipality. In such cases service credits
17 shall not be earned by the employe for probationary time served
18 prior to enrollment.
19 Section 403. Contract Provisions.--Any contract for an
20 optional retirement plan entered into between a municipality and
21 the board shall not provide for any benefits in excess of or
22 minimum member's contribution rates less than those available to
23 that municipality for that class of employes under any existing
24 law pertaining to the establishment of a retirement or pension
25 system.
26 The contract shall specifically state the following terms and
27 conditions:
28 (1) The superannuation retirement age at which a member
29 shall become eligible for a full normal retirement allowance in
30 accordance with the formula specified in the contract.
19730S0471B0484 - 51 -
1 (2) Length of service requirements which must be met before
2 a member becomes eligible for either a superannuation retirement
3 allowance, an early retirement allowance and the method of
4 determining any reduction factors involved in the computation of
5 the amount of the allowance because of retirement prior to
6 attaining superannuation age.
7 (3) Provisions for the refunding of accumulated deductions
8 to employes who leave the service of the municipality before
9 they become eligible for any type of retirement benefit and
10 whether or not the employe shall be entitled to interest earned
11 on contributions.
12 (4) Provisions relating to the types and amounts of
13 disability retirement benefits for which a member may become
14 eligible, and the qualifications therefore.
15 (5) The availability of any vesting or deferred benefits to
16 which a member may become entitled.
17 (6) A description of the amount and the manner in which a
18 member may qualify for any death benefits, both before and after
19 retirement, including any prescribed payments to widows or
20 children under eighteen years of age.
21 (7) The formula used to determine the amount of normal
22 retirement benefits, including an explanation of the salary or
23 compensation to be used in the computations, and a statement
24 concerning any social security offset provisions included in the
25 contract.
26 (8) A description of any optional methods of payment of
27 retirement allowances available to a member.
28 (9) Any provisions for cost-of-living increases, and
29 limitations thereon, which may be included.
30 (10) The manner in which the rate or rates of employe
19730S0471B0484 - 52 -
1 contributions shall be determined, together with any provisions
2 for additional voluntary contributions.
3 (11) The manner in which the rates of contribution from the
4 municipalities shall be determined.
5 (12) The manner in which costs for prior service for which
6 the municipality is willing to assume liability shall be
7 determined, with respect to both the municipality's share and
8 the member's share, if any.
9 (13) Any other information which might have a bearing on the
10 costs or benefits of the retirement plan which might be required
11 by the board in the administration of the plan.
12 Section 404. Determination of Municipal Liability.--The
13 actuary shall, as soon as may be, determine the present value of
14 the liability of each municipality for any prior service credits
15 it has elected to extend to its original members, and shall
16 establish an amount payable annually over a period not exceeding
17 thirty years, through which payments such prior service
18 liability may be funded. Each municipality shall have the option
19 to spread the payment of such prior service liability over such
20 period of years.
21 The municipal liability to be determined by the actuary shall
22 be based upon credit for those years of prior service toward the
23 municipal annuity of each original member, for which the
24 municipality has agreed to pay, plus any liability for payment
25 of the member's contributions for the prior service or any
26 portion thereof of each original member which the municipality
27 has agreed to pay.
28 The actuary shall also determine, from time to time, the
29 amount which shall be contributed annually by each municipality
30 for service credits of original and new members subsequent to
19730S0471B0484 - 53 -
1 the time the municipality joined the system, and the additional
2 amount which shall be contributed annually by each municipality
3 toward a reserve account for disability allowance payable to
4 original and new members, in order that all future service
5 liability may be fully funded on an actuarial basis.
6 The amounts so determined by the actuary may be expressed in
7 a percentage of the payroll of the municipality covering its
8 contributing members.
9 The payments made by the State Treasurer to the treasurer of
10 the municipality from moneys received from taxes paid upon
11 premiums by foreign fire insurance companies for purposes of
12 pension, retirement or disability benefits for municipal firemen
13 shall be used as follows: (i) to reduce the unfunded liability
14 or, after such liability has been funded, (ii) to apply against
15 the annual obligation of the municipality for future service and
16 disability reserve costs, and (iii) to reduce member
17 contributions. It shall be the duty of the governing body to
18 apply such payments in accordance with the provisions of this
19 act.
20 The payments made by the State Treasurer to the treasurer of
21 the municipality from the moneys received from taxes paid upon
22 premiums by foreign casualty insurance companies for purposes of
23 pension, retirement or disability benefits for municipal
24 policemen shall be used as follows: (i) to reduce the unfunded
25 liability or, after such liability has been funded, (ii) to
26 apply against the annual obligation of the municipality for
27 future service and disability reserve costs, and (iii) to reduce
28 member contributions. It shall be the duty of the governing body
29 to apply such payments in accordance with the provisions of this
30 act.
19730S0471B0484 - 54 -
1 The cost of making the valuations required by this section
2 and in the transfer of any existing pension system of any
3 municipality, shall be part of the costs of administration of
4 this act.
5 Section 405. Contributions by Members; Consolidation of
6 Credits; Change of Employment.--Each member of the system shall
7 be required to contribute to the fund such per cent of his
8 actual salary or compensation, including fees where paid in part
9 on a fee basis, as specified in the contract, which
10 contributions shall be paid into the fund by the municipality
11 through payroll deductions in such manner and at such time as
12 the board may by rule and regulation determine.
13 If such provision is contained in the contract between the
14 municipality and the board, each member may increase his
15 member's annuity by electing to make such additional voluntary
16 contributions as prescribed therein.
17 When a member is employed by more than one municipality, he
18 shall be required to make contributions on account of his salary
19 paid by each municipality. In such cases the board shall provide
20 for the consolidation of credits of the contributor, and upon
21 his retirement, for a consolidated retirement allowance.
22 When a contributor leaves the employ of a municipality which
23 has joined the system, and enters into the employ of another
24 municipality which has also joined the system, his service
25 credits shall remain unimpaired, but in such cases any unpaid
26 municipal liability for prior service shall be prorated by the
27 board between the municipalities on an equitable basis.
28 Section 406. Withdrawal; Return to Service; Death in
29 Service.--(a) Should a contributor, before reaching
30 superannuation retirement age, for any reason terminate his
19730S0471B0484 - 55 -
1 employment with the municipality, he shall receive a refund of
2 his contributions in full, either with or without interest
3 earned as specified in the contract, unless he may be entitled
4 to a retirement allowance for early retirement, and elects to
5 take such retirement allowance. Should such former contributor
6 thereafter return to the service of the same municipality and
7 restore to the fund in such manner as may be agreed upon by such
8 person and the board, his withdrawn contributions as they were
9 at the time of his separation from service, his annuity rights
10 as they existed at the time of separation from service, shall be
11 restored and his obligations as a member shall begin again. The
12 rate of contribution of such returning member shall be the same
13 as it was at the time he separated from service.
14 (b) Should a contributor, having attained or passed
15 superannuation age, elect, upon leaving the service of the
16 member municipality, not to claim the retirement allowance to
17 which he is entitled, he shall, upon written application, be
18 paid by the board the full amount of his contributions standing
19 to his credit in the member's account, either with or without
20 interest earned as stipulated in the contract.
21 (c) Should a person who has been retired on a retirement
22 allowance under this act, return to employment on a regular
23 full-time basis in the same municipality, his retirement
24 allowance shall cease, and all his rights as they existed at the
25 time of retirement shall be restored, and such person may by
26 further service and further payroll deductions add to such
27 rights on account of future retirement. For the purposes of this
28 section if a person is reemployed on a temporary or seasonal
29 basis and his gross post-retirement earnings from such
30 reemployment during the calendar year are less than two thousand
19730S0471B0484 - 56 -
1 one hundred dollars ($2,100) or such other maximum as the board
2 may establish, he shall not be deemed reemployed, but if and
3 when his gross post-retirement earnings exceed two thousand one
4 hundred dollars ($2,100) or such other maximum as the board may
5 establish in any calendar year he shall not be entitled to
6 receive his retirement allowance for that month or any
7 subsequent month in the calendar year in which he continues in
8 service. The municipality is required to notify the board
9 immediately of the reemployment status of any retired former
10 employe and file separate monthly reports of his gross earnings
11 as prescribed by the board.
12 (d) Should a contributor die while in service, any death or
13 survivor benefits for which he may be eligible under the
14 provisions of the contract shall be paid in accordance with the
15 terms of the contract.
16 (e) Should a contributor die while in service, and before
17 becoming eligible for any other benefits contained in the
18 contract, the full amount of his contributions, either with or
19 without interest earned as stipulated in the contract, shall be
20 paid to his estate, or to such person, if living, as he shall
21 have designated in writing, filed with the board as his
22 beneficiary. In case any contributor has failed to designate a
23 beneficiary, or if the named beneficiary has predeceased the
24 member and no such successor beneficiary has been named, and
25 upon the death in service shall have less than one hundred
26 dollars ($100) in accumulated deductions standing to his credit,
27 the board may, if letters testamentary or of administration have
28 not been taken out on his estate within six months after death,
29 pay such accumulated deductions on the claim of the undertaker,
30 or to any person or municipality which shall have paid the claim
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1 of the undertaker.
2 Section 407. Superannuation Retirement.--Retirement for
3 superannuation shall be as follows:
4 (1) Any contributor who has reached superannuation
5 retirement age may retire for superannuation by filing with the
6 board a written statement, duly attested, setting forth on what
7 date he desires to be retired. Said application shall make the
8 superannuation retirement allowance effective on the date so
9 specified, if such application was filed in the office of the
10 board or deposited in the United States mail, addressed to the
11 board, before the date specified in the application and before
12 the death of the contributor, but the date so specified in the
13 application shall not be more than ninety days after the date of
14 filing, or the date the application was deposited in the mail.
15 (2) On retirement for superannuation, a contributor shall be
16 entitled to a retirement allowance throughout his life, which
17 shall consist of an amount computed in accordance with the
18 formula specified in the contract.
19 Section 408. Early Retirement.--Should a member be
20 discontinued from service not voluntarily, after having
21 completed a required number of years of total service, or
22 voluntarily after having completed a required number of years of
23 total service, but in either event before reaching
24 superannuation retirement age, he shall be paid, as he may
25 elect, as follows:
26 (1) The full amount of the accumulated deductions standing
27 to his credit in the member's account of the fund; or
28 (2) The early retirement allowance, if any, specified in the
29 contract.
30 Section 409. Options on Superannuation or Early
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1 Retirement.--At the time of his superannuation or early
2 retirement, a contributor may elect to receive his benefits in a
3 retirement allowance payable throughout his life, which shall be
4 known as a single life annuity, or instead, he may elect to
5 receive the actuarial equivalent at that time of his retirement
6 allowance in a lesser allowance, payable throughout life with
7 provisions that:
8 (1) Option 1. If he shall die before receiving in payments
9 the present value of his retirement allowance as it was at the
10 time of his retirement, the balance, if less than five thousand
11 dollars ($5,000), shall be paid in a lump sum to his legal
12 representative, or to or in trust for his beneficiary. If the
13 balance is five thousand dollars ($5,000) or more, the
14 beneficiary may elect by application duly acknowledged and filed
15 with the board to receive payment of such balance according to
16 any one of the following provisions: (i) a lump sum payment,
17 (ii) an annuity having a present value equal to the balance
18 payable, (iii) a lump sum payment and an annuity. Such annuity
19 shall be of equivalent actuarial value to the balance payable
20 less the amount of the lump sum payment specified by the
21 beneficiary.
22 (2) Option 2. Upon his death, his retirement allowance
23 shall be continued throughout the life of and paid to his
24 survivor annuitant, if then living.
25 (3) Option 3. Upon his death, one-half of his retirement
26 allowance shall be continued throughout the life of and paid to
27 his survivor annuitant, if then living.
28 (4) Option 4. Any other optional form of payment contained
29 in the contract.
30 Section 410. Vesting.--Provisions for vesting may be
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1 included in the contract between the municipality and the board.
2 When such provision is made it shall mean that a contributor who
3 terminates his employment with the municipality after a
4 stipulated age or length of service, or both, may, if he so
5 elects in writing, leave his contributions, as credited to his
6 account, in the fund, and, upon reaching superannuation
7 retirement age, receive a superannuation retirement allowance.
8 Section 411. Disability Retirement.--(a) After a member has
9 had the required number of years of total service as stated in
10 the contract, he may, upon application or on the application of
11 one acting in his behalf, or upon application of a head of the
12 department of the municipality by which he is employed, be
13 retired by the board on a disability allowance if he is under
14 superannuation retirement age, and on a superannuation
15 retirement allowance if he has attained or passed such age, if
16 the physician designated by the board, after medical examination
17 of the member made at the place of residence of the member or at
18 a place mutually agreed upon, shall certify to the board that
19 the member is unable to engage in any gainful employment and
20 that said member ought to be retired. Where the disability of a
21 member is determined to be service-connected, as defined in this
22 act, no minimum period of service shall be required for
23 eligibility. Requirements for filing applications shall be
24 identical to those outlined in clause (1) of section 407.
25 (b) On retirement for disability a member shall receive a
26 retirement allowance which shall consist of an amount computed
27 in accordance with the formula specified in the contract.
28 (c) Once every year the board may require any disability
29 annuitant, while still under superannuation retirement age, to
30 undergo medical examination by a physician designated by the
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1 board. Such examination shall be made at the place of residence
2 of the beneficiary or other place mutually agreed upon. Should
3 the physician report and certify to the board that such
4 disability beneficiary is no longer physically or mentally
5 incapacitated for the performance of duty and is able to engage
6 in a gainful occupation, then his disability retirement
7 allowance shall be discontinued, and in lieu thereof an early
8 involuntary retirement allowance shall at that time be granted
9 as if such person had been retired not voluntarily, if such a
10 provision is included in the contract and if such person shall
11 have had the required number of years of total service as stated
12 in the contract.
13 (d) Should a disability annuitant, while under
14 superannuation retirement age, refuse to submit to at least one
15 medical examination in any year by a physician designated by the
16 board, his disability retirement allowance shall be discontinued
17 until the withdrawal of such refusal, and should such refusal
18 continue for one year, then all his right in and to any
19 disability retirement allowance or for early involuntary
20 retirement allowance provided for by this act, shall be
21 forfeited.
22 (e) Any contributor entitled to retire for disability may,
23 in lieu of such retirement, if he has a required number of years
24 of total service, elect to retire not voluntarily under the
25 provisions of this act if such provisions are included in the
26 contract.
27 (f) Should a disability annuitant die before the total
28 disability retirement allowance received shall be at least equal
29 to the amount of the credit in his member's account at the time
30 of disability retirement, then the board shall pay to the named
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1 beneficiary, if living, or if the beneficiary predeceased the
2 annuitant, or no beneficiary was named, then to the annuitant's
3 estate, an amount equal to the difference between such total
4 retirement allowance received and the annuitant's accumulated
5 deductions, and if such difference is less than one hundred
6 dollars ($100) and no letters have been taken out on the estate
7 within six months after death, then such difference may be paid
8 to the undertaker or to any person or municipality who or which
9 shall have paid the claim of the undertaker. If the contract
10 between the municipality and the board provides that upon the
11 death of a disability annuitant payments in a specific amount
12 shall be continued to certain beneficiaries, then the provisions
13 of subsection (f), above, shall not apply and payments shall be
14 made in accordance with the terms of the contract.
15 Section 412. Withdrawal Prohibited.--No municipality, after
16 it has joined the system under the provisions of this Article
17 IV, shall be permitted to withdraw therefrom, and, in the case
18 of failure to make payments as required by this act, the
19 Commonwealth shall withhold payments to the municipality of any
20 funds to which the municipality may be entitled for pension
21 purposes. The board may recover any sums due to the fund by suit
22 at law, or other appropriate remedy.
23 Section 413. Procedures for Amending Contracts.--Any
24 municipality which has joined the system under the provisions of
25 this Article IV may, with the approval of the board, amend the
26 contract with the board to increase any of the benefits
27 enumerated in Article IV to its members. The board shall not
28 enter into any amended contract with any municipality which
29 decreases benefits, nor shall it enter into any amended contract
30 with a municipality which provides for benefits in excess of or
19730S0471B0484 - 62 -
1 minimum member's contribution rates less than those available to
2 it under any other existing law pertaining to the establishment
3 of retirement systems for that class of municipality. Before the
4 board approves any such amended contract it shall first
5 determine, through its actuary, that the plan outlined is
6 actuarially sound. Any member municipality which elects to enter
7 into an amended contract for increased benefits which would
8 result in an increase in its employes contribution rates shall
9 first obtain the written consent of at least seventy-five per
10 cent of its then member employes. Additional costs for increases
11 in benefits shall become the responsibility of the municipality
12 and/or the member as specified in the contract.
13 ARTICLE V
14 REPEALS AND EFFECTIVE DATE
15 Section 501. Repeals.--The following act are repealed
16 absolutely:
17 (1) The act of June 4, 1943 (P.L.886, No.371), known as the
18 "Municipal Employes' Retirement Law."
19 (2) The act of July 31, 1968 (P.L.944, No.291), known as the
20 "Municipal Police Retirement Law,"
21 Section 502. Effective Date.--This act shall take effect in
22 ninety days.
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