HOUSE AMENDED PRIOR PRINTER'S NOS. 811, 1079 PRINTER'S NO. 2455
No. 713 Session of 1983
INTRODUCED BY ROCKS, FUMO, LLOYD, WILLIAMS, HANKINS AND LYNCH, MAY 3, 1983
AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, AS AMENDED, NOVEMBER 19, 1984
AN ACT 1 Amending the act of May 12, 1943 (P.L.259, No.120), entitled, as <-- 2 reenacted and amended, "An act providing for the payment by 3 the State Treasurer, of the amount of the tax on premiums 4 paid by foreign casualty insurance companies, to the 5 treasurers of the several cities, boroughs, towns, townships, 6 and certain counties, and for the payment thereof into police 7 pension funds, and in certain cases into the Municipal 8 Employes' Retirement System, and for Pension Annuity 9 Contracts, and in certain other cases into the State 10 Employes' Retirement Fund, for certain purposes," requiring 11 treasurers to make payments within 60 days of receipt of 12 State moneys to the pension or retirement fund. 13 MANDATING ACTUARIAL FUNDING STANDARDS FOR ALL MUNICIPAL PENSION <-- 14 SYSTEMS; ESTABLISHING A RECOVERY PROGRAM FOR MUNICIPAL 15 PENSION SYSTEMS DETERMINED TO BE FINANCIALLY DISTRESSED; 16 PROVIDING FOR THE DISTRIBUTION OF THE TAX ON THE PREMIUMS OF 17 FOREIGN FIRE INSURANCE COMPANIES; AND MAKING REPEALS. 18 TABLE OF CONTENTS 19 CHAPTER 1. PRELIMINARY PROVISIONS 20 SECTION 101. SHORT TITLE. 21 SECTION 102. DEFINITIONS. 22 CHAPTER 2. MUNICIPAL PENSION PLAN ACTUARIAL REPORTING 23 SECTION 201. REQUIREMENT TO FILE ACTUARIAL VALUATION REPORT OR 24 EXPERIENCE INVESTIGATION.
1 SECTION 202. CONTENTS OF ACTUARIAL VALUATION REPORT. 2 SECTION 203. CONTENTS OF EXPERIENCE INVESTIGATION. 3 SECTION 204. DELINQUENT ACTUARIAL VALUATION REPORTS AND 4 EXPERIENCE INVESTIGATIONS. 5 SECTION 205. MODIFICATION OF REQUIREMENTS FOR CONTENTS OF 6 ACTUARIAL VALUATION REPORTS AND EXPERIENCE 7 INVESTIGATIONS. 8 SECTION 206. REQUIREMENT FOR ADDITIONAL INFORMATION IN 9 CERTAIN INSTANCES. 10 SECTION 207. ACTUARIAL VALUATION AND EXPERIENCE INVESTIGATION 11 EXPENSES ALLOWABLE. 12 SECTION 208. MODIFICATION OF ACTUARIAL REPORTING REQUIREMENT IN 13 CERTAIN INSTANCES. 14 CHAPTER 3. MINIMUM FUNDING STANDARD FOR MUNICIPAL PENSION PLANS 15 SECTION 301. MUNICIPAL PENSION PLAN MINIMUM FUNDING STANDARD; 16 APPLICATION AND GENERAL PROVISIONS. 17 SECTION 302. MINIMUM FUNDING STANDARD; DEFINED BENEFIT PLANS 18 SELF-INSURED IN WHOLE OR IN PART. 19 SECTION 303. MINIMUM FUNDING STANDARD; DEFINED BENEFIT PLANS 20 WHOLLY INSURED OR DEFINED CONTRIBUTION PLANS. 21 SECTION 304. CERTIFICATION OF PENSION PLAN FINANCIAL 22 REQUIREMENTS AND MINIMUM MUNICIPAL OBLIGATIONS. 23 SECTION 305. ACTUARIAL COST ESTIMATE REQUIRED FOR BENEFIT PLAN 24 MODIFICATION. 25 SECTION 306. ENFORCEMENT OF FUNDING STANDARD BY MANDAMUS 26 ACTION. 27 SECTION 307. ENFORCEMENT PROCEEDINGS BY COMMISSION. 28 CHAPTER 4. REVISIONS APPLICABLE TO MUNICIPAL PENSION 29 FUND FINANCING 30 SECTION 401. REVISION OF FINANCING FROM LOCAL REVENUE SOURCES. 19830S0713B2455 - 2 -
1 SECTION 402. REVISION OF FINANCING FROM STATE REVENUE SOURCES; 2 GENERAL MUNICIPAL PENSION SYSTEM STATE AID 3 PROGRAM. 4 SECTION 403. GENERAL MUNICIPAL PENSION SYSTEM STATE AID 5 MONEYS. 6 CHAPTER 5. FINANCIALLY DISTRESSED MUNICIPAL PENSION PLAN 7 DETERMINATION PROCEDURE 8 SECTION 501. INITIATION OF DISTRESS DETERMINATION. 9 SECTION 502. PENSION PLANS FOR INCLUSION IN DETERMINATION. 10 SECTION 503. DETERMINATION PROCEDURE. 11 SECTION 504. EFFECT OF DETERMINATION. 12 CHAPTER 6. FINANCIALLY DISTRESSED MUNICIPAL PENSION SYSTEM 13 RECOVERY PROGRAM 14 SECTION 601. ESTABLISHMENT. 15 SECTION 602. APPLICATION. 16 SECTION 603. ELECTION PROCEDURE. 17 SECTION 604. RECOVERY PROGRAM LEVEL I. 18 SECTION 605. RECOVERY PROGRAM LEVEL II. 19 SECTION 606. RECOVERY PROGRAM LEVEL III. 20 SECTION 607. REMEDIES APPLICABLE TO VARIOUS RECOVERY PROGRAM 21 LEVELS. 22 SECTION 608. SUPPLEMENTAL STATE ASSISTANCE PROGRAM AND FUND. 23 SECTION 609. RULES AND REGULATIONS. 24 CHAPTER 7. FOREIGN FIRE INSURANCE TAX DISTRIBUTION 25 SECTION 701. SHORT TITLE. 26 SECTION 702. DEFINITIONS. 27 SECTION 703. PAYMENT BY STATE TREASURER TO MUNICIPALITIES. 28 SECTION 704. DISTRIBUTION FORMULA. 29 SECTION 705. CONDITIONS ON FIRST FIVE PAYMENTS. 30 SECTION 706. USE OF FOREIGN FIRE INSURANCE TAX MONEYS. 19830S0713B2455 - 3 -
1 SECTION 707. WARRANTS FOR PAYMENT. 2 CHAPTER 8. MISCELLANEOUS PROVISIONS 3 SECTION 801. REPEALS. 4 SECTION 802. RECOMMENDATIONS. 5 SECTION 803. EFFECTIVE DATE. 6 The General Assembly of the Commonwealth of Pennsylvania 7 hereby enacts as follows: 8 Section 1. Section 2(d) of the act of May 12, 1943 (P.L.259, <-- 9 No.120), referred to as the Foreign Casualty Insurance Premium 10 Tax Allocation Law, reenacted and amended May 10, 1951 (P.L.250, 11 No.39), is amended to read: 12 Section 2. * * * 13 (d) All moneys paid to the treasurer of any municipality or 14 county shall, within sixty days of receipt, be forthwith paid, 15 or credited, to the pension or retirement fund, or the premium 16 on the pension annuity contract, as the case may be, to provide 17 pension retirement or disability benefits for the policemen of 18 such municipality or county, or the dependents of such 19 policemen. All moneys paid into the State Employes' Retirement 20 Fund shall be credited, in equal proportions, to the State 21 Annuity accounts of the members of the State Police who are 22 contributing members to such fund. 23 * * * 24 Section 2. This act shall take effect immediately. 25 CHAPTER 1 <-- 26 PRELIMINARY PROVISIONS 27 SECTION 101. SHORT TITLE. 28 THIS ACT SHALL BE KNOWN AND MAY BE CITED AS THE MUNICIPAL 29 PENSION PLAN FUNDING STANDARD AND RECOVERY ACT. 30 SECTION 102. DEFINITIONS. 19830S0713B2455 - 4 -
1 EXCEPT AS PROVIDED IN CHAPTER 7, THE FOLLOWING WORDS AND 2 PHRASES WHEN USED IN THIS ACT SHALL HAVE THE MEANINGS GIVEN TO 3 THEM IN THIS SECTION UNLESS THE CONTEXT CLEARLY INDICATES 4 OTHERWISE: 5 "ACTUARIAL ACCRUED LIABILITY." THAT PORTION OF THE ACTUARIAL 6 PRESENT VALUE OF THE PENSION PLANS BENEFITS AND EXPENSES WHICH 7 IS ALLOCATED TO THE PERIOD ENDING AT THE BEGINNING DAY OF THE 8 CURRENT PLAN YEAR BY THE ACTUARIAL COST METHOD. 9 "ACTUARIAL ASSUMPTIONS." THE DEMOGRAPHIC ACTUARIAL 10 ASSUMPTIONS AND THE ECONOMIC ACTUARIAL ASSUMPTIONS WHEN 11 CONSIDERED TOGETHER. 12 "ACTUARIAL COST METHOD." THE PROCEDURE FOR DETERMINING THE 13 ACTUARIAL PRESENT VALUE OF THE BENEFITS AND EXPENSES OF THE 14 PENSION PLAN AND FOR DEVELOPING AN ACTUARIALLY EQUIVALENT 15 ALLOCATION OF THAT VALUE TO VARIOUS TIME PERIODS, USUALLY IN THE 16 FORM OF A NORMAL COST AND AN ACTUARIAL ACCRUED LIABILITY. 17 "ACTUARIAL PRESENT VALUE." THE VALUE OF AN AMOUNT OR SERIES 18 OF AMOUNTS PAYABLE OR RECEIVABLE AT VARIOUS TIMES, DETERMINED AS 19 OF A GIVEN DATE BY THE APPLICATION OF A PARTICULAR SET OF 20 ACTUARIAL ASSUMPTIONS. 21 "ACTUARIAL VALUATION REPORT." A REPORT WHICH SUMMARIZES THE 22 CALCULATIONS USED TO DETERMINE THE NORMAL COST AND ACTUARIAL 23 ACCRUED LIABILITIES OF A BENEFIT PLAN ACCORDING TO A STATED 24 ACTUARIAL COST METHOD AND BASED UPON STATED DEMOGRAPHIC AND 25 ECONOMIC ACTUARIAL ASSUMPTIONS, THE PAYMENT NECESSARY TO 26 AMORTIZE OVER A STATED PERIOD ANY UNFUNDED ACTUARIAL ACCRUED 27 LIABILITY DISCLOSED, THE PAYMENT NECESSARY TO PREVENT ANY 28 INCREASE IN ANY DISCLOSED UNFUNDED ACTUARIAL ACCRUED LIABILITY, 29 THE ACTUARIAL BALANCE SHEET OF THE PENSION PLAN AND ANY OTHER 30 RELEVANT FINANCIAL AND DEMOGRAPHIC DATA. 19830S0713B2455 - 5 -
1 "ACTUARIAL VALUE OF ASSETS." THE VALUE OF CASH, INVESTMENTS 2 AND OTHER PROPERTY BELONGING TO A PENSION PLAN, AS USED BY AN 3 APPROVED ACTUARY FOR THE PURPOSE OF PREPARING AN ACTUARIAL 4 VALUATION REPORT. 5 "APPROVED ACTUARY." A PERSON WHO HAS AT LEAST FIVE YEARS OF 6 ACTUARIAL EXPERIENCE WITH PUBLIC PENSION PLANS AND WHO IS EITHER 7 ENROLLED AS A MEMBER OF THE AMERICAN ACADEMY OF ACTUARIES OR 8 ENROLLED AS AN ACTUARY PURSUANT TO THE FEDERAL EMPLOYEE 9 RETIREMENT INCOME SECURITY ACT OF 1974. 10 "BENEFIT PLAN." THAT PORTION OF A PENSION PLAN WHICH DEALS 11 SPECIFICALLY WITH THE RETIREMENT ANNUITY AND BENEFIT COVERAGE 12 PROVIDED BY THE PENSION PLAN, INCLUDING, BUT NOT LIMITED TO, THE 13 TYPES OF COVERAGE, THE ELIGIBILITY FOR AND ENTITLEMENT TO 14 RETIREMENT ANNUITIES AND BENEFITS, AND THE AMOUNT OF RETIREMENT 15 ANNUITIES AND BENEFITS. 16 "CHIEF ADMINISTRATIVE OFFICER." THE PERSON WHO HAS PRIMARY 17 RESPONSIBILITY FOR THE EXECUTION OF THE ADMINISTRATIVE AFFAIRS 18 OF THE MUNICIPALITY IN THE CASE OF A MUNICIPALITY, OR OF THE 19 PENSION PLAN IN THE CASE OF A PENSION PLAN, OR THE DESIGNEE OF 20 THAT PERSON. 21 "COMMISSION." THE PUBLIC EMPLOYEE RETIREMENT STUDY 22 COMMISSION ESTABLISHED PURSUANT TO THE ACT OF JULY 9, 1981 23 (P.L.208, NO.66), KNOWN AS THE PUBLIC EMPLOYEE RETIREMENT STUDY 24 COMMISSION ACT. 25 "DEFINED BENEFIT PENSION PLAN." A TYPE OF PENSION BENEFIT 26 PLAN WHICH PROVIDES FOR PERIODIC BENEFIT PAYMENTS AT RETIREMENT 27 WHICH ARE PREDETERMINABLE AND WHICH HAVE A VARIABLE FINANCING 28 REQUIREMENT DEPENDENT UPON THE ACTUARIAL CALCULATION OF 29 ACTUARIAL PRESENT VALUE REQUIREMENTS FOR PROJECTED BENEFITS. 30 "DEFINED CONTRIBUTION PENSION PLAN." A TYPE OF PENSION 19830S0713B2455 - 6 -
1 BENEFIT PLAN WHICH PROVIDES FOR A FIXED CONTRIBUTION RATE OR 2 AMOUNT AND WHICH PROVIDES FOR PERIODIC BENEFIT PAYMENTS 3 CALCULABLE AT RETIREMENT DEPENDENT ON THE ACCUMULATED 4 CONTRIBUTIONS, INVESTMENT INCOME, EXPERIENCE GAINS AND LOSSES 5 CREDITED TO THE MEMBER AND THE EXPECTED MORTALITY OF THE MEMBER. 6 "DEMOGRAPHIC ACTUARIAL ASSUMPTIONS." ESTIMATES OF RATES OF 7 FUTURE OCCURRENCES CONCERNING, BUT NOT NECESSARILY LIMITED TO, 8 MORTALITY, TERMINATIONS, DISABLEMENTS AND AGES AT RETIREMENT 9 USED IN THE PREPARATION OF ACTUARIAL VALUATIONS OF THE PENSION 10 PLAN AND OTHER ACTUARIAL CALCULATIONS. 11 "ECONOMIC ACTUARIAL ASSUMPTIONS." ESTIMATES OF RATES OF 12 FUTURE OCCURRENCES CONCERNING, BUT NOT NECESSARILY LIMITED TO, 13 INCREASES IN SALARY, POST RETIREMENT ADJUSTMENTS, INCREASES IN 14 BENEFITS PAYABLE FROM THE FEDERAL OLD AGE, SURVIVORS, DISABILITY 15 AND HEALTH INSURANCE PROGRAM AND INVESTMENT EARNINGS, ASSET 16 APPRECIATION OR DEPRECIATION AND PROCEDURES TO DETERMINE THE 17 ACTUARIAL VALUE OF ASSETS USED IN THE PREPARATION OF ACTUARIAL 18 VALUATIONS OF THE PENSION PLAN AND OTHER ACTUARIAL CALCULATIONS. 19 "ESTABLISHMENT AND MAINTENANCE OF PENSION PLAN." ANY OF THE 20 FOLLOWING RELATIONSHIPS BETWEEN A MUNICIPALITY AND A PUBLIC 21 EMPLOYEE PENSION PLAN: 22 (1) SPECIFICATION OF THE PROVISIONS WHICH COMPRISE THE 23 BENEFIT PLAN OF THE PENSION PLAN IN AN ORDINANCE OR 24 RESOLUTION OF THE MUNICIPALITY OR CONTRACT TO WHICH THE 25 MUNICIPALITY IS A PARTY. 26 (2) PROVISION BY THE MUNICIPALITY OF THE PRINCIPAL 27 AMOUNT OF THE FINANCING OF A PENSION PLAN RECEIVED FROM ANY 28 MUNICIPALITY. 29 (3) EMPLOYMENT BY THE MUNICIPALITY OF THE LARGEST NUMBER 30 OF PERSONS WHO ARE MEMBERS OF THE PENSION PLAN. 19830S0713B2455 - 7 -
1 (4) ANY COMBINATION OF PARAGRAPHS (1), (2) AND (3). 2 "EXPERIENCE INVESTIGATION." A REPORT WHICH FURNISHES DATA ON 3 THE EXPERIENCE OF THE PENSION PLAN AND AN ANALYSIS WHICH 4 SUBSTANTIATES THE ACTUARIAL ASSUMPTIONS ON WHICH ACTUARIAL 5 VALUATIONS ARE BASED. 6 "FIREFIGHTER." A MUNICIPAL EMPLOYEE WHO HOLDS A POSITION OR 7 AN OFFICE IN THE FIRE DEPARTMENT OF THE MUNICIPALITY AND HAS 8 RETIREMENT COVERAGE PROVIDED BY THE FIREFIGHTERS PENSION PLAN. 9 "FOREIGN FIRE INSURANCE TAX DISTRIBUTION LAW." CHAPTER 7 OF 10 THIS ACT, KNOWN AS THE FOREIGN FIRE INSURANCE TAX DISTRIBUTION 11 LAW, RELATING TO THE DISTRIBUTION TO MUNICIPALITIES OF THE TAX 12 ON THE PREMIUMS OF FOREIGN FIRE INSURANCE COMPANIES. 13 "FULLY INSURED PENSION PLAN." A PENSION PLAN FOR WHICH AN 14 INSURANCE CARRIER HAS, OR A NUMBER OF INSURANCE CARRIERS HAVE, 15 UNDERWRITTEN THE TOTAL ACTUARIAL ACCRUED LIABILITY OF THE 16 BENEFIT PLAN. 17 "GENERAL MUNICIPAL PENSION SYSTEM STATE AID PROGRAM." THE 18 STATE AID PROGRAM ESTABLISHED PURSUANT TO SECTION 402. 19 "INSURANCE CARRIER." ANY COMPANY WHICH IS IN THE BUSINESS OF 20 ASSUMING THE RISK OF VARIOUS TYPES OF OCCURRENCES PURSUANT TO 21 CONTRACT OR AGREEMENT AND WHICH IS LICENSED TO DO BUSINESS BY 22 THE COMMONWEALTH. 23 "MULTIEMPLOYER PENSION PLAN OR SYSTEM." A PENSION PLAN WHICH 24 PROVIDES RETIREMENT COVERAGE FOR EMPLOYEES OF MORE THAN ONE 25 MUNICIPALITY. 26 "MUNICIPAL EMPLOYEE." ANY PERSON OTHER THAN AN INDEPENDENT 27 CONTRACTOR WHO PROVIDES REGULAR SERVICES FOR A MUNICIPALITY IN 28 RETURN FOR COMPENSATION FROM THE MUNICIPALITY. 29 "MUNICIPALITY." ANY CITY, BOROUGH, INCORPORATED TOWN, 30 TOWNSHIP, HOME RULE MUNICIPALITY, ASSOCIATION OF MUNICIPALITIES 19830S0713B2455 - 8 -
1 COOPERATING PURSUANT TO THE ACT OF JULY 12, 1972 (P.L.762, 2 NO.180), REFERRED TO AS THE INTERGOVERNMENTAL COOPERATION LAW, 3 OR AUTHORITY ESTABLISHED BY THE ACTIONS OF ANY COUNTY, CITY, 4 BOROUGH, TOWN OR TOWNSHIP OR JOINTLY BY ANY SUCH POLITICAL 5 SUBDIVISIONS. 6 "NORMAL COST." THAT PORTION OF THE ACTUARIAL PRESENT VALUE 7 OF THE PENSION PLAN BENEFITS AND EXPENSES WHICH IS ALLOCATED TO 8 THE PLAN YEAR BY THE ACTUARIAL COST METHOD. 9 "PARTIALLY INSURED PENSION PLAN." A PENSION PLAN FOR WHICH 10 AN INSURANCE CARRIER HAS, OR A NUMBER OF INSURANCE CARRIERS 11 HAVE, UNDERWRITTEN A PORTION OF THE ACTUARIAL ACCRUED LIABILITY 12 OF THE BENEFIT PLAN, BUT LESS THAN THE TOTAL ACTUARIAL ACCRUED 13 LIABILITY. 14 "PENSION FUND." THE ENTITY WHICH IS THE REPOSITORY FOR THE 15 ASSETS AMASSED BY A PENSION PLAN AS RESERVES FOR PRESENT AND 16 FUTURE PERIODIC RETIREMENT PAYMENTS AND BENEFITS OF ACTIVE AND 17 RETIRED MEMBERS OF THE PENSION PLAN. 18 "PENSION PLAN OR SYSTEM." THE VARIOUS ASPECTS OF THE 19 RELATIONSHIP BETWEEN A MUNICIPALITY AND ITS EMPLOYEES WITH 20 RESPECT TO THE RETIREMENT COVERAGE PROVIDED BY A MUNICIPALITY TO 21 THE EMPLOYEES. 22 "PLAN DOCUMENT." THE LAW, ORDINANCE, RESOLUTION OR RELATED 23 DOCUMENT OR DOCUMENTS WHICH GOVERNS THE VARIOUS ASPECTS OF THE 24 RETIREMENT COVERAGE PROVIDED BY A MUNICIPALITY TO ITS EMPLOYEES, 25 INCLUDING PERIODIC RETIREMENT PAYMENTS AND BENEFITS, 26 ADMINISTRATION AND FUNDING. 27 "PLAN YEAR." THE 12 CONSECUTIVE MONTH PERIOD APPLICABLE TO 28 PENSION PLAN WHICH IS UTILIZED FOR VARIOUS ACTUARIAL AND 29 FINANCIAL PURPOSES AND WHICH, UNLESS OTHERWISE SPECIFIED IN THE 30 PLAN DOCUMENT PRIOR TO DECEMBER 31, 1982, SHALL BE A CALENDAR 19830S0713B2455 - 9 -
1 YEAR COMMENCING ON JANUARY 1 AND ENDING ON DECEMBER 31. 2 "POLICE OFFICER." A MUNICIPAL EMPLOYEE WHO HOLDS A POSITION 3 OR AN OFFICE IN THE POLICE DEPARTMENT OF THE MUNICIPALITY AND 4 HAS RETIREMENT COVERAGE PROVIDED BY THE POLICE PENSION PLAN. 5 "SELF-INSURED PENSION PLAN." A PENSION PLAN FOR WHICH ALL OR 6 A PORTION OF THE ACCRUED ACTUARIAL LIABILITY OF THE BENEFIT PLAN 7 IS UNDERWRITTEN BY CURRENT OR FUTURE ACCUMULATIONS OF PENSION 8 PLAN ASSETS. 9 "UNFUNDED ACTUARIAL ACCRUED LIABILITY." THE EXCESS OF THE 10 ACTUARIAL ACCRUED LIABILITY OVER THE ACTUARIAL VALUE OF ASSETS. 11 CHAPTER 2 12 MUNICIPAL PENSION PLAN ACTUARIAL REPORTING 13 SECTION 201. REQUIREMENT TO FILE ACTUARIAL VALUATION REPORT OR 14 EXPERIENCE INVESTIGATION. 15 (A) ACTUARIAL VALUATION REPORT REQUIRED.--EACH MUNICIPALITY 16 WHICH HAS ESTABLISHED OR MAINTAINS A PENSION PLAN FOR ITS 17 EMPLOYEES, INCLUDING ANY MUNICIPALITY WHICH PARTICIPATES IN THE 18 PENNSYLVANIA MUNICIPAL RETIREMENT SYSTEM, SHALL CAUSE TO BE MADE 19 ACTUARIAL VALUATION REPORTS. ACTUARIAL VALUATION REPORTS SHALL 20 BE MADE BIENNIALLY, UNLESS THE APPLICABLE MUNICIPALITY IS 21 APPLYING OR HAS PREVIOUSLY APPLIED FOR SUPPLEMENTAL STATE 22 ASSISTANCE PURSUANT TO SECTION 603, WHEREUPON ACTUARIAL 23 VALUATION REPORTS SHALL BE MADE ANNUALLY. EACH MUNICIPALITY 24 WHICH HAS ESTABLISHED OR MAINTAINS A PENSION PLAN FOR ITS 25 EMPLOYEES AND HAS AN ACTIVE, VESTED INACTIVE AND BENEFIT 26 RECIPIENT MEMBERSHIP EQUAL TO OR GREATER THAN 1,000 SHALL ALSO 27 CAUSE EXPERIENCE INVESTIGATIONS TO BE MADE. EXPERIENCE 28 INVESTIGATIONS SHALL BE MADE QUADRENNIALLY. 29 (B) FILING DATE FOR ACTUARIAL VALUATION REPORT.--THE 30 BIENNIAL ACTUARIAL VALUATION REPORT REQUIRED PURSUANT TO 19830S0713B2455 - 10 -
1 SUBSECTION (A) SHALL BE MADE AS OF THE BEGINNING OF EACH PLAN 2 YEAR OCCURRING IN AN ODD-NUMBERED CALENDAR YEAR AND SHALL BE 3 FILED WITH THE EXECUTIVE DIRECTOR OF THE COMMISSION NO LATER 4 THAN THE LAST BUSINESS DAY OF MARCH OCCURRING IN THE FOLLOWING 5 CALENDAR YEAR. FOR THE INITIAL FILING PURSUANT TO THIS CHAPTER, 6 THE ACTUARIAL VALUATION REPORT SHALL BE MADE AS OF THE BEGINNING 7 OF THE PLAN YEAR OCCURRING IN CALENDAR YEAR 1985. 8 (C) FILING DATE FOR EXPERIENCE INVESTIGATION.--THE 9 QUADRENNIAL EXPERIENCE INVESTIGATION REQUIRED PURSUANT TO 10 SUBSECTION (A) SHALL ACCOMPANY EVERY OTHER ACTUARIAL VALUATION 11 REPORT AND SHALL COVER THE FIVE-YEAR PERIOD ENDING AS OF THE END 12 OF THE PLAN YEAR PRECEDING THE PLAN YEAR FOR WHICH THE ACTUARIAL 13 VALUATION REPORT IS FILED. FOR THE INITIAL FILING PURSUANT TO 14 THIS CHAPTER, THE EXPERIENCE INVESTIGATION SHALL BE MADE FOR THE 15 FIVE-YEAR PERIOD ENDING AS OF THE END OF THE PLAN YEAR OCCURRING 16 ON OR AFTER DECEMBER 31, 1984, AND BEFORE DECEMBER 31, 1985. THE 17 EXPERIENCE INVESTIGATION SHALL BE FILED WITH THE EXECUTIVE 18 DIRECTOR OF THE COMMISSION. 19 (D) RESPONSIBILITY FOR PREPARATION AND FILING OF REPORTS AND 20 INVESTIGATIONS.--THE ACTUARIAL VALUATION REPORT OR EXPERIENCE 21 INVESTIGATION REQUIRED PURSUANT TO SUBSECTION (A) SHALL BE 22 PREPARED UNDER THE SUPERVISION AND AT THE DIRECTION OF THE CHIEF 23 ADMINISTRATIVE OFFICER OF THE MUNICIPALITY, WHO SHALL ALSO BE 24 RESPONSIBLE FOR THE FILING OF THE DOCUMENT. THE ACTUARIAL 25 VALUATION REPORT OR EXPERIENCE INVESTIGATION SHALL BE SIGNED BY 26 THE CHIEF ADMINISTRATIVE OFFICER, INDICATING THAT TO THE EXTENT 27 OF THE UNDERSTANDING AND KNOWLEDGE OF THE OFFICER, THE REPORT OR 28 INVESTIGATION REPRESENTS A TRUE AND ACCURATE PORTRAYAL OF THE 29 ACTUARIAL, FINANCIAL AND DEMOGRAPHIC CONDITION OF THE PENSION 30 PLAN OF THE MUNICIPALITY. 19830S0713B2455 - 11 -
1 (E) ACTUARIAL VALUATION REPORT AND EXPERIENCE INVESTIGATION 2 AS PUBLIC RECORD.--EACH ACTUARIAL VALUATION REPORT AND 3 EXPERIENCE INVESTIGATION IS A PUBLIC RECORD. THE CHIEF 4 ADMINISTRATIVE OFFICER OF THE MUNICIPALITY TO WHICH THE PENSION 5 PLAN IS ASSOCIATED SHALL TAKE WHATEVER STEPS ARE DEEMED 6 NECESSARY TO INSURE THAT THE INFORMATION CONTAINED IN THE 7 ACTUARIAL VALUATION REPORT OR EXPERIENCE INVESTIGATION IS MADE 8 AVAILABLE TO ACTIVE MEMBERS OR BENEFIT RECIPIENTS OF THE PENSION 9 PLAN. 10 SECTION 202. CONTENTS OF ACTUARIAL VALUATION REPORT. 11 (A) GENERALLY.--THE ACTUARIAL VALUATION REPORT SHALL CONTAIN 12 ACTUARIAL EXHIBITS, FINANCIAL EXHIBITS AND DEMOGRAPHIC EXHIBITS. 13 THE ACTUARIAL EXHIBITS SHALL BE PREPARED AND CERTIFIED BY AN 14 APPROVED ACTUARY. THE REMAINING EXHIBITS MAY BE PREPARED BY A 15 QUALIFIED PERSON OTHER THAN AN APPROVED ACTUARY. THE FINANCIAL 16 AND DEMOGRAPHIC EXHIBITS SHALL BE PREPARED AS OF THE END OF THE 17 PRIOR YEAR. THE SUBMISSION BY A MUNICIPALITY OF A SINGLE REPORT 18 SETTING FORTH THE VARIOUS REQUIRED CONTENTS ITEMS IN TOTAL FOR 19 THE VARIOUS PENSION PLANS ASSOCIATED WITH THE PENNSYLVANIA 20 MUNICIPAL RETIREMENT SYSTEM SHALL BE DEEMED TO BE COMPLIANCE BY 21 THAT MUNICIPALITY WITH THE REQUIREMENTS OF THIS CHAPTER ONLY IF 22 THE REPORT ALSO SEPARATELY SETS FORTH THE VARIOUS REQUIRED 23 CONTENTS ITEMS FOR THE MUNICIPALITY. 24 (B) CONTENTS OF ACTUARIAL EXHIBITS; DEFINED BENEFIT PLANS 25 SELF-INSURED IN WHOLE OR IN PART.--FOR ANY PENSION PLAN WHICH IS 26 A DEFINED BENEFIT PLAN AND WHICH IS SELF-INSURED IN WHOLE OR IN 27 PART, ALL APPLICABLE ACTUARIAL EXHIBITS SHALL BE PREPARED IN 28 ACCORDANCE WITH THE ENTRY AGE NORMAL ACTUARIAL COST METHOD WITH 29 ENTRY AGE ESTABLISHED AS THE ACTUAL ENTRY AGE FOR ALL PLAN 30 MEMBERS UNLESS THE MUNICIPALITY APPLIES FOR AND IS GRANTED 19830S0713B2455 - 12 -
1 AUTHORIZATION BY THE COMMISSION TO USE AN ALTERNATIVE ACTUARIAL 2 COST METHOD. AUTHORIZATION SHALL BE GRANTED IF THE MUNICIPALITY 3 DEMONSTRATES ON AN INDIVIDUAL PENSION PLAN BASIS THAT THERE ARE 4 COMPELLING REASONS OF AN ACTUARIAL NATURE FOR THE USE OF AN 5 ALTERNATIVE ACTUARIAL COST METHOD. THE COMMISSION SHALL ISSUE 6 RULES AND REGULATIONS SPECIFYING THE CRITERIA WHICH THE 7 COMMISSION WILL USE TO DETERMINE THE QUESTION OF THE EXISTENCE 8 OF COMPELLING REASONS FOR THE USE OF AN ALTERNATIVE ACTUARIAL 9 COST METHOD, THE DOCUMENTATION WHICH A MUNICIPALITY SEEKING THE 10 AUTHORIZATION WILL BE REQUIRED TO SUPPLY AND THE ACCEPTABLE 11 ALTERNATIVE ACTUARIAL COST METHODS WHICH THE COMMISSION MAY 12 AUTHORIZE. THE ACTUARIAL COST METHOD SHALL BE USED TO VALUE ALL 13 ASPECTS OF THE BENEFIT PLAN OR PLANS OF THE PENSION PLAN UNLESS 14 THE MUNICIPALITY APPLIES FOR AND IS GRANTED AUTHORIZATION BY THE 15 COMMISSION TO USE APPROXIMATION TECHNIQUES OTHER THAN THE 16 ACTUARIAL COST METHOD FOR ASPECTS OF THE BENEFIT PLAN OR PLANS 17 OF THE PENSION PLAN OTHER THAN THE RETIREMENT BENEFIT. 18 AUTHORIZATION SHALL BE GRANTED IF THE MUNICIPALITY DEMONSTRATES 19 ON AN INDIVIDUAL PENSION PLAN BASIS THAT THERE ARE COMPELLING 20 REASONS OF AN ACTUARIAL NATURE FOR THE USE OF THESE 21 APPROXIMATION TECHNIQUES. THE COMMISSION SHALL ISSUE RULES AND 22 REGULATIONS SPECIFYING THE CRITERIA WHICH THE COMMISSION WILL 23 USE TO DETERMINE THE QUESTION OF THE EXISTENCE OF COMPELLING 24 REASONS FOR THE USE OF APPROXIMATION TECHNIQUES, THE 25 DOCUMENTATION WHICH A MUNICIPALITY SEEKING THE AUTHORIZATION 26 WILL BE REQUIRED TO SUPPLY AND THE ACCEPTABLE APPROXIMATION 27 TECHNIQUE WHICH THE COMMISSION MAY AUTHORIZE. THE ACTUARIAL 28 EXHIBITS SHALL USE ACTUARIAL ASSUMPTIONS WHICH ARE, IN THE 29 JUDGMENT OF THE ACTUARY AND THE GOVERNING BODY OF THE PLAN, THE 30 BEST AVAILABLE ESTIMATE OF FUTURE OCCURRENCES IN THE CASE OF 19830S0713B2455 - 13 -
1 EACH ASSUMPTION. WITH RESPECT TO ECONOMIC ACTUARIAL ASSUMPTIONS, 2 THE ASSUMPTIONS SHALL EITHER BE WITHIN THE RANGE SPECIFIED IN 3 RULES AND REGULATIONS ISSUED BY THE COMMISSION OR DOCUMENTATION 4 EXPLAINING AND JUSTIFYING THE CHOICE OF ASSUMPTIONS OUTSIDE THE 5 RANGE SHALL ACCOMPANY THE REPORT. THE ACTUARIAL EXHIBITS SHALL 6 MEASURE ALL ASPECTS OF THE BENEFIT PLAN OR PLANS OF THE PENSION 7 PLAN IN ACCORDANCE WITH MODIFICATIONS IN THE BENEFIT PLAN OR 8 PLANS, IF ANY, AND SALARIES WHICH AS OF THE VALUATION DATE ARE 9 KNOWN OR CAN REASONABLY BE EXPECTED TO BE IN FORCE DURING THE 10 ENSUING PLAN YEAR. THE ACTUARIAL VALUATION REPORT SHALL CONTAIN 11 THE FOLLOWING ACTUARIAL EXHIBITS: 12 (1) AN EXHIBIT OF THE NORMAL COST OF THE BENEFITS 13 PROVIDED BY THE BENEFIT PLAN AS OF THE DATE OF THE ACTUARIAL 14 VALUATION, EXPRESSED AS A PERCENTAGE OF THE FUTURE COVERED 15 PAYROLL OF THE ACTIVE MEMBERSHIP OF THE PENSION PLAN AS OF 16 THE DATE OF THE ACTUARIAL VALUATION. 17 (2) AN EXHIBIT OF THE ACTUARIAL ACCRUED LIABILITY OF THE 18 BENEFIT PLAN AS OF THE DATE OF THE ACTUARIAL VALUATION IN 19 TOTAL WHICH SHALL BE THE ACTUARIAL PRESENT VALUE OF ALL 20 PROJECTED BENEFITS PROVIDED BY THE BENEFIT PLAN REDUCED BY 21 THE ACTUARIAL PRESENT VALUE OF FUTURE NORMAL COSTS, AND IN 22 PARTICULAR, WHICH SHALL INCLUDE THE FOLLOWING REQUIRED 23 ACTUARIAL PRESENT VALUES FOR PENSION PLAN BENEFITS OF RELATED 24 ITEMS: 25 (I) REQUIRED ACTUARIAL PRESENT VALUES ON ACCOUNT OF 26 ACTIVE MEMBERS: 27 (A) RETIREMENT BENEFITS. 28 (B) DISABILITY BENEFITS. 29 (C) SURVIVOR BENEFITS. 30 (D) REFUND LIABILITY DUE TO WITHDRAWAL FROM 19830S0713B2455 - 14 -
1 ACTIVE SERVICE OR DEATH. 2 (E) OTHER BENEFITS, SPECIFYING THE NATURE OF 3 EACH TYPE. 4 THIS ITEM SHALL INCLUDE A FOOTNOTE INDICATING THE AMOUNT 5 OF ACCUMULATED MEMBER CONTRIBUTIONS WITHOUT ACCRUED 6 INTEREST. 7 (II) REQUIRED ACTUARIAL PRESENT VALUES ON ACCOUNT OF 8 FORMER MEMBERS WITH A DEFERRED, VESTED OR OTHERWISE 9 NONFORFEITABLE RIGHT TO A RETIREMENT BENEFIT. 10 (III) REQUIRED ACTUARIAL PRESENT VALUES ON ACCOUNT 11 OF FORMER MEMBERS WHO DO NOT HAVE A DEFERRED, VESTED OR 12 OTHERWISE NONFORFEITABLE RIGHT TO THE RETIREMENT BENEFIT 13 AND WHO HAVE NOT WITHDRAWN ANY ACCUMULATED MEMBER 14 CONTRIBUTIONS. 15 (IV) REQUIRED ACTUARIAL PRESENT VALUES ON ACCOUNT OF 16 BENEFIT RECIPIENTS: 17 (A) RETIREMENT BENEFITS. 18 (B) DISABILITY BENEFITS. 19 (C) SURVIVING SPOUSE BENEFITS. 20 (D) SURVIVING CHILD BENEFITS. 21 (E) OTHER BENEFITS, SPECIFYING THE NATURE OF 22 EACH TYPE. 23 (V) REQUIRED ACTUARIAL PRESENT VALUES FOR OTHER 24 BENEFITS PROVIDED BY THE BENEFIT PLAN, SPECIFYING THE 25 NATURE OF EACH TYPE. 26 (VI) ACTUARIAL PRESENT VALUE OF FUTURE NORMAL COST. 27 (3) AN EXHIBIT OF THE UNFUNDED ACTUARIAL ACCRUED 28 LIABILITY OF THE PENSION PLAN IN TOTAL, WHICH SHALL BE THE 29 ACTUARIAL ACCRUED LIABILITY OF THE PENSION PLAN CALCULATED 30 PURSUANT TO PARAGRAPH (2) LESS THE ACTUARIAL VALUE OF ASSETS 19830S0713B2455 - 15 -
1 OF THE PENSION PLAN CALCULATED PURSUANT TO SUBSECTION (E)(1), 2 AND WHICH, IN PARTICULAR, SHALL INCLUDE THE FOLLOWING: 3 (I) THE REMAINING BALANCE OF THE UNFUNDED ACTUARIAL 4 ACCRUED LIABILITY IN EXISTENCE AS OF THE FIRST ACTUARIAL 5 VALUATION REPORT REQUIRED BY THIS SECTION OCCURRING NEXT 6 FOLLOWING THE DATE OF ENACTMENT OF THIS SECTION. 7 (II) THE REMAINING BALANCE OF EACH INCREMENT OF 8 UNFUNDED ACTUARIAL ACCRUED LIABILITY ATTRIBUTABLE TO 9 MODIFICATIONS IN THE BENEFIT PLAN GOVERNING THE PENSION 10 PLAN WHICH WERE APPLICABLE TO ACTIVE MEMBERS, SEPARATELY 11 INDICATING EACH AND DESIGNATING EACH BY THE PLAN YEAR IN 12 WHICH THE BENEFIT PLAN MODIFICATION WAS MADE EFFECTIVE. 13 (III) THE REMAINING BALANCE OF EACH INCREMENT OF 14 UNFUNDED ACTUARIAL ACCRUED LIABILITY ATTRIBUTABLE TO 15 MODIFICATIONS IN THE BENEFIT PLAN GOVERNING THE PENSION 16 PLAN WHICH WERE APPLICABLE TO RETIRED MEMBERS AND OTHER 17 BENEFIT RECIPIENTS, SEPARATELY INDICATING EACH AND 18 DESIGNATING EACH BY THE PLAN YEAR IN WHICH THE BENEFIT 19 PLAN MODIFICATION WAS MADE EFFECTIVE. 20 (IV) THE REMAINING BALANCE OF EACH INCREMENT OF NET 21 UNFUNDED ACTUARIAL ACCRUED LIABILITY ATTRIBUTABLE TO 22 MODIFICATIONS IN THE ACTUARIAL ASSUMPTIONS USED TO 23 CALCULATE THE ACTUARIAL ACCRUED LIABILITY OF THE PENSION 24 PLAN SEPARATELY INDICATING EACH AND DESIGNATING EACH BY 25 THE PLAN YEAR IN WHICH THE ACTUARIAL ASSUMPTION 26 MODIFICATION WAS MADE EFFECTIVE. 27 (V) THE REMAINING BALANCE OF EACH INCREMENT OR 28 DECREMENT OF NET UNFUNDED ACTUARIAL ACCRUED LIABILITY 29 ATTRIBUTABLE TO NET ACTUARIAL EXPERIENCE LOSSES OR GAINS, 30 SEPARATELY INDICATING EACH AND DESIGNATING EACH BY THE 19830S0713B2455 - 16 -
1 PLAN YEAR IN WHICH THE ACTUARIAL EXPERIENCE LOSS OR GAIN 2 WAS RECOGNIZED. 3 THE INITIAL DETERMINATION OF THE UNFUNDED ACTUARIAL ACCRUED 4 LIABILITY ATTRIBUTABLE TO A MODIFICATION IN THE BENEFIT PLAN 5 GOVERNING THE PENSION PLAN OR TO A MODIFICATION IN THE 6 ACTUARIAL ASSUMPTIONS USED TO CALCULATE THE ACTUARIAL ACCRUED 7 LIABILITY OF THE PENSION PLAN SHALL BE MADE BY CALCULATING 8 THE UNFUNDED ACTUARIAL ACCRUED LIABILITY OF THE PENSION PLAN 9 IN ACCORDANCE WITH THE BENEFIT PLAN PROVISIONS AND ACTUARIAL 10 ASSUMPTIONS WHICH WERE IN EFFECT PRIOR TO THE MODIFICATION 11 AND BY CALCULATING THE UNFUNDED ACTUARIAL ACCRUED LIABILITY 12 OF THE PENSION PLAN IN ACCORDANCE WITH THE MODIFICATION IN 13 THE PROVISIONS OF THE BENEFIT PLAN GOVERNING THE PENSION PLAN 14 OR THE ACTUARIAL ASSUMPTIONS USED TO CALCULATE THE ACTUARIAL 15 ACCRUED LIABILITY OF THE PENSION PLAN, WHICHEVER IS 16 APPLICABLE, AND THE REMAINING BENEFIT PLAN PROVISIONS AND 17 ACTUARIAL ASSUMPTIONS. THE INITIAL DETERMINATION OF THE 18 UNFUNDED ACTUARIAL ACCRUED LIABILITY ATTRIBUTABLE TO AN 19 ACTUARIAL LOSS SHALL BE MADE IN CONJUNCTION WITH THE ANALYSIS 20 OF INCREASES OR DECREASES IN THE UNFUNDED ACTUARIAL ACCRUED 21 LIABILITY OF THE PENSION PLAN REQUIRED PURSUANT TO PARAGRAPH 22 (6). 23 (4) AN EXHIBIT OF ANY ADDITIONAL FUNDING COSTS 24 ASSOCIATED WITH THE AMORTIZATION OF ANY UNFUNDED ACTUARIAL 25 ACCRUED LIABILITY OF THE PENSION PLAN, INDICATING FOR EACH 26 INCREMENT OF UNFUNDED ACTUARIAL ACCRUED LIABILITY SPECIFIED 27 IN PARAGRAPH (3), THE LEVEL ANNUAL DOLLAR CONTRIBUTION 28 REQUIRED TO PAY AN AMOUNT EQUAL TO THE ACTUARIAL ASSUMPTION 29 AS TO INVESTMENT EARNINGS APPLIED TO THE PRINCIPAL AMOUNT OF 30 THE REMAINING BALANCE OF THE INCREMENT OF UNFUNDED ACTUARIAL 19830S0713B2455 - 17 -
1 ACCRUED LIABILITY AND TO RETIRE BY THE APPLICABLE 2 AMORTIZATION TARGET DATE SPECIFIED IN THIS PARAGRAPH THE 3 PRINCIPAL AMOUNT OF THE REMAINING BALANCE OF THE INCREMENT OF 4 UNFUNDED ACTUARIAL ACCRUED LIABILITY. THE AMORTIZATION TARGET 5 DATE APPLICABLE FOR EACH TYPE OF INCREMENT OF UNFUNDED 6 ACTUARIAL ACCRUED LIABILITY SHALL BE AS FOLLOWS: 7 (I) (A) IN THE CASE OF A PENSION PLAN ESTABLISHED 8 ON OR PRIOR TO JANUARY 1, 1985 FOR THE UNFUNDED 9 ACTUARIAL ACCRUED LIABILITY IN EXISTENCE AS OF THE 10 BEGINNING OF THE PLAN YEAR OCCURRING IN CALENDAR YEAR 11 1985, AT THE END OF THE PLAN YEAR OCCURRING IN 12 CALENDAR YEAR 2015; OR 13 (B) IN THE CASE OF A PENSION PLAN ESTABLISHED 14 AFTER JANUARY 1, 1985, FOR THE UNFUNDED ACTUARIAL 15 ACCRUED LIABILITY THEN OR SUBSEQUENTLY DETERMINED TO 16 BE OR TO HAVE BEEN IN EXISTENCE AS OF THE DATE OF THE 17 ESTABLISHMENT OF THE PLAN, AT THE END OF THE PLAN 18 YEAR OCCURRING 30 YEARS AFTER THE CALENDAR YEAR IN 19 WHICH THE PENSION PLAN WAS ESTABLISHED. 20 (II) INCREMENT OR DECREMENT OF NET UNFUNDED 21 ACTUARIAL ACCRUED LIABILITY ATTRIBUTABLE TO A CHANGE IN 22 ACTUARIAL ASSUMPTIONS, AT THE END OF THE PLAN YEAR 23 OCCURRING 20 YEARS AFTER THE CALENDAR YEAR IN WHICH 24 ACTUARIAL ASSUMPTION MODIFICATION WAS EFFECTIVE. 25 (III) INCREMENT OF NET UNFUNDED ACTUARIAL ACCRUED 26 LIABILITY ATTRIBUTABLE TO A MODIFICATION IN THE BENEFIT 27 PLAN APPLICABLE TO ACTIVE MEMBERS, AT THE END OF THE PLAN 28 YEAR OCCURRING 20 YEARS AFTER THE CALENDAR YEAR IN WHICH 29 THE BENEFIT PLAN MODIFICATION WAS EFFECTIVE. 30 (IV) INCREMENT OF UNFUNDED ACTUARIAL ACCRUED 19830S0713B2455 - 18 -
1 LIABILITY ATTRIBUTABLE TO A MODIFICATION IN THE BENEFIT 2 PLAN APPLICABLE TO RETIRED MEMBERS AND OTHER BENEFIT 3 RECIPIENTS, AT THE END OF THE PLAN YEAR OCCURRING 10 4 YEARS AFTER THE CALENDAR YEAR IN WHICH THE BENEFIT PLAN 5 MODIFICATION WAS EFFECTIVE. 6 (V) INCREMENT OR DECREMENT OF NET UNFUNDED ACTUARIAL 7 ACCRUED LIABILITY ATTRIBUTABLE TO AN ACTUARIAL EXPERIENCE 8 LOSS OR GAIN, AT THE END OF PLAN YEAR OCCURRING 15 YEARS 9 AFTER THE CALENDAR YEAR IN WHICH THE ACTUARIAL EXPERIENCE 10 LOSS OR GAIN WAS RECOGNIZED. 11 WITH RESPECT TO ANY APPLICABLE PENSION PLAN OTHER THAN A PLAN 12 WHICH COMPRISES ALL OR PART OF A SEVERELY DISTRESSED 13 MUNICIPAL PENSION SYSTEM, IF THE REMAINING AVERAGE PERIOD 14 BETWEEN THE CURRENT AVERAGE ATTAINED AGE OF ACTIVE MEMBERS AS 15 OF THE VALUATION DATE AND THE LATER OF THEIR EARLIEST AVERAGE 16 NORMAL RETIREMENT AGE OR THEIR AVERAGE ASSUMED RETIREMENT AGE 17 IS LESS THAN THE APPLICABLE PERIOD OR PERIODS ENDING WITH THE 18 AMORTIZATION TARGET DATE OR DATES SPECIFIED IN SUBPARAGRAPH 19 (I), (II), (III) OR (V), THE APPROPRIATE AMORTIZATION TARGET 20 DATE FOR THE APPLICABLE SUBPARAGRAPH DETERMINED WITH 21 REFERENCE TO THE LONGEST APPLICABLE REMAINING AVERAGE PERIOD 22 ROUNDED TO THE NEXT LARGEST WHOLE NUMBER SHALL BE USED. THE 23 EXHIBIT SHALL INDICATE THE TOTAL DOLLAR AMOUNT OF ADDITIONAL 24 FUNDING COSTS ASSOCIATED WITH THE AMORTIZATION OF ANY 25 UNFUNDED ACTUARIAL ACCRUED LIABILITY OF THE PENSION PLAN 26 APPLICABLE FOR THAT PLAN YEAR AND ANY SUBSEQUENT PLAN YEAR 27 OCCURRING PRIOR TO THE PREPARATION OF THE NEXT REQUIRED 28 ACTUARIAL VALUATION REPORT, WHICH SHALL BE THE TOTAL OF THE 29 ADDITIONAL FUNDING COSTS ASSOCIATED WITH THE AMORTIZATION OF 30 EACH INCREMENT OF UNFUNDED ACTUARIAL ACCRUED LIABILITY. THE 19830S0713B2455 - 19 -
1 EXHIBIT SHALL ALSO INDICATE THE PLAN YEAR IN WHICH ANY 2 UNFUNDED ACTUARIAL ACCRUED LIABILITY OF THE PENSION PLAN 3 WOULD BE FULLY AMORTIZED IF THE TOTAL ANNUAL ADDITIONAL 4 FUNDING COST CALCULATED PURSUANT TO THIS PARAGRAPH WERE MET 5 CONTINUOUSLY WITHOUT INCREASE OR DECREASE IN AMOUNT UNTIL THE 6 TOTAL UNFUNDED ACTUARIAL ACCRUED LIABILITY CURRENTLY EXISTING 7 WAS FULLY AMORTIZED. IN CALCULATING THE ADDITIONAL FUNDING 8 COSTS ASSOCIATED WITH THE AMORTIZATION OF ANY UNFUNDED 9 ACTUARIAL ACCRUED LIABILITY OF THE PENSION PLAN IN ANY PLAN 10 YEAR, ANY AMORTIZATION CONTRIBUTION MADE IN THE INTERVAL 11 SINCE THE LAST ACTUARIAL VALUATION REPORT SHALL BE ALLOCATED 12 TO EACH TYPE OF INCREMENT OF UNFUNDED ACTUARIAL ACCRUED 13 LIABILITY IN PROPORTION TO THE REMAINING DOLLAR AMOUNT OF 14 EACH TYPE. 15 (5) AN EXHIBIT OF THE TOTAL ADMINISTRATIVE COST OF THE 16 PENSION PLAN FOR THE PLAN YEAR OCCURRING IMMEDIATELY PRIOR TO 17 THE PLAN YEAR FOR WHICH THE ACTUARIAL VALUATION REPORT IS 18 MADE. 19 (6) AN EXHIBIT CONTAINING AN ANALYSIS OF THE INCREASE OR 20 DECREASE IN THE UNFUNDED ACTUARIAL ACCRUED LIABILITY OF THE 21 PENSION PLAN SINCE THE MOST RECENT PRIOR ACTUARIAL VALUATION 22 REPORT, INCLUDING SPECIFICALLY AN INDICATION OF INCREASES OR 23 DECREASES DUE TO THE FOLLOWING: 24 (I) MODIFICATIONS IN THE BENEFIT PLAN OR PLANS OF 25 THE PENSION PLAN. 26 (II) CHANGES IN ACTUARIAL ASSUMPTIONS. 27 (III) DEVIATIONS IN THE ACTUAL EXPERIENCE OF THE 28 PENSION PLAN FROM THE EXPERIENCE EXPECTED BY VIRTUE OF 29 THE ACTUARIAL ASSUMPTIONS. 30 (IV) PRESENCE OR ABSENCE OF PAYMENTS TO AMORTIZE THE 19830S0713B2455 - 20 -
1 UNFUNDED ACCRUED LIABILITY OF THE PENSION PLAN. 2 (V) OTHER REASONS. 3 THE ANALYSIS SHALL BE BASED ON THE BEST PROFESSIONAL JUDGMENT 4 OF THE APPROVED ACTUARY REACHED AFTER PREPARING THE VARIOUS 5 APPLICABLE ACTUARIAL EXHIBITS OF THE ACTUARIAL VALUATION 6 REPORT. IF, IN THE OPINION OF THE APPROVED ACTUARY, THE 7 INCLUSION OF ANY PORTION OF THIS INFORMATION IS NOT 8 APPROPRIATE, THAT PORTION OF THE ANALYSIS MAY BE OMITTED WITH 9 THE PROVISION OF ADEQUATE EXPLANATION OR JUSTIFICATION OF THE 10 APPROPRIATENESS OF THE OMISSION. 11 (7) AN EXHIBIT SUMMARIZING THE ECONOMIC AND DEMOGRAPHIC 12 ACTUARIAL ASSUMPTIONS USED IN THE PREPARATION OF THE 13 ACTUARIAL EXHIBITS. 14 (8) A SUMMARY OF THE PRINCIPAL PROVISIONS OF THE BENEFIT 15 PLAN OF THE PENSION PLAN UPON WHICH THE ACTUARIAL EXHIBITS 16 ARE BASED. 17 (C) CONTENTS OF ACTUARIAL EXHIBITS; DEFINED CONTRIBUTION 18 PLANS SELF-INSURED IN WHOLE OR IN PART.--FOR ANY PENSION PLAN 19 WHICH IS A DEFINED CONTRIBUTION PLAN AND WHICH IS SELF-INSURED, 20 IN WHOLE OR IN PART, FOR THE LIABILITY ATTRIBUTABLE TO BENEFIT 21 RECIPIENTS AND ANNUITANTS, THE ACTUARIAL VALUATION REPORT SHALL 22 CONTAIN THE FOLLOWING ACTUARIAL EXHIBITS: 23 (1) AN EXHIBIT OF THE REQUIRED ACTUARIAL PRESENT VALUES 24 ON ACCOUNT OF BENEFIT RECIPIENTS AND ANNUITANTS, WHICH SHALL 25 INCLUDE THE FOLLOWING REQUIRED ACTUARIAL PRESENT VALUES: 26 (I) RETIREMENT BENEFITS. 27 (II) DISABILITY BENEFITS. 28 (III) SURVIVING SPOUSE BENEFITS. 29 (IV) SURVIVING CHILD BENEFITS. 30 (V) OTHER BENEFITS, SPECIFYING THE NATURE OF EACH 19830S0713B2455 - 21 -
1 TYPE. 2 (2) AN EXHIBIT INDICATING THE MEMBER CONTRIBUTIONS 3 ACCUMULATED AT INTEREST AS APPORTIONED TO MEMBER ACCOUNTS TO 4 THE DATE OF THE VALUATION REPORT, WHICH SHALL BE ITEMIZED AS 5 FOLLOWS: 6 (I) BALANCE OF MEMBER CONTRIBUTIONS AND INTEREST 7 ATTRIBUTABLE TO BENEFITS RECIPIENTS. 8 (II) MEMBER CONTRIBUTIONS AND INTEREST ATTRIBUTABLE 9 TO ACTIVE MEMBERS. 10 (III) MEMBER CONTRIBUTIONS AND INTEREST ATTRIBUTABLE 11 TO FORMER MEMBERS WITH A DEFERRED, VESTED OR OTHERWISE 12 NONFORFEITABLE RIGHT TO A RETIREMENT BENEFIT. 13 (IV) MEMBER CONTRIBUTIONS AND INTEREST ATTRIBUTABLE 14 TO FORMER MEMBERS WITHOUT A DEFERRED, VESTED OR OTHERWISE 15 NONFORFEITABLE RIGHT TO A RETIREMENT BENEFIT. 16 THE ACCUMULATIONS SHALL BE SEPARATED IN A MANNER WHICH 17 PROPERLY REFLECTS ANY DIFFERENCES IN RETIREMENT BENEFIT 18 PURCHASE OR CALCULATION RATES WHICH MAY APPLY. 19 (3) AN EXHIBIT OF THE TOTAL ADMINISTRATIVE COST OF THE 20 PENSION PLAN FOR THE PLAN YEAR OCCURRING IMMEDIATELY PRIOR TO 21 THE PLAN YEAR FOR WHICH THE ACTUARIAL VALUATION REPORT IS 22 MADE. 23 (4) AN EXHIBIT SUMMARIZING THE ACTUARIAL ASSUMPTIONS AS 24 TO PRERETIREMENT MORTALITY, POST RETIREMENT MORTALITY, 25 DISABLEMENT AND INVESTMENT INCOME USED IN THE PREPARATION OF 26 THE ACTUARIAL EXHIBITS. 27 (5) A SUMMARY OF THE PRINCIPAL PROVISIONS OF THE BENEFIT 28 PLAN OF THE PENSION PLAN UPON WHICH THE ACTUARIAL EXHIBITS 29 ARE BASED. 30 (D) CONTENTS OF ACTUARIAL EXHIBITS; DEFINED BENEFIT OR 19830S0713B2455 - 22 -
1 DEFINED CONTRIBUTION PLANS INSURED IN WHOLE BY AN INSURANCE 2 CARRIER.--FOR ANY PENSION PLAN WHICH IS A DEFINED BENEFIT PLAN 3 OR A DEFINED CONTRIBUTION PLAN AND WHICH IS INSURED IN WHOLE BY 4 AN INSURANCE CARRIER AUTHORIZED TO DO BUSINESS IN THE 5 COMMONWEALTH, THE ACTUARIAL VALUATION REPORT SHALL CONTAIN THE 6 FOLLOWING ACTUARIAL EXHIBITS: 7 (1) AN EXHIBIT INDICATING THE TYPE, NATURE AND ISSUER OF 8 THE INSURANCE COVERAGE, AS FOLLOWS: 9 (I) TYPE OF INSURANCE COVERAGE. 10 (A) INDIVIDUAL POLICIES. 11 (B) GROUP MASTER CONTRACT. 12 (II) NATURE OF INSURANCE COVERAGE. 13 (A) RETIREMENT ANNUITY. 14 (B) RETIREMENT INCOME ENDOWMENT. 15 (C) COMBINATION OF RETIREMENT ANNUITIES AND 16 ENDOWMENT. 17 (III) ISSUER OF INSURANCE COVERAGE FOR EACH POLICY 18 OR CONTRACT. 19 (2) AN EXHIBIT INDICATING THE FOLLOWING: 20 (I) ACTUARIAL PRESENT VALUE OF ALL BENEFITS PROVIDED 21 BY THE BENEFIT PLAN. 22 (II) ACTUARIAL VALUE OF THE CURRENT INSURANCE 23 COVERAGE. 24 (III) ACTUARIAL PRESENT VALUE OF FUTURE INSURANCE 25 PREMIUM PAYMENTS. 26 (IV) ADMINISTRATIVE COST INCLUDED IN CURRENT 27 INSURANCE PREMIUM PAYMENTS. 28 (3) A CERTIFICATION BY AN APPROVED ACTUARY THAT THE 29 AGGREGATE INSURANCE AND ANNUITY COVERAGE APPLICABLE TO THE 30 PENSION PLAN IS IN THE OPINION OF THE ACTUARY SUFFICIENT TO 19830S0713B2455 - 23 -
1 FULLY ASSUME THE RISK OF THE PROVISION OF ALL RETIREMENT 2 ANNUITIES AND OTHER RETIREMENT BENEFITS APPLICABLE TO THE 3 BENEFIT PLAN OF THE PENSION PLAN. 4 (4) A SUMMARY OF THE PRINCIPAL PROVISIONS OF THE BENEFIT 5 PLAN OF THE PENSION PLAN UPON WHICH THE CERTIFICATION OF 6 SUFFICIENCY IS BASED. 7 (5) AN EXHIBIT SUMMARIZING ANY RELEVANT SIGNIFICANT 8 ACTUARIAL ASSUMPTIONS AND METHODS USED BY THE ACTUARY IN 9 FORMULATING THE OPINION OF SUFFICIENCY. 10 (E) CONTENTS OF FINANCIAL EXHIBITS.--EACH FINANCIAL EXHIBIT 11 SHALL BE PREPARED IN A MANNER WHICH IS CONSISTENT WITH THE OTHER 12 FINANCIAL EXHIBITS CONTAINED IN THE ACTUARIAL VALUATION REPORT 13 AND THE FINANCIAL EXHIBITS CONTAINED IN MOST RECENT PRIOR 14 ACTUARIAL REPORT. THE ACCOUNTING BASIS FOR THE FINANCIAL 15 EXHIBITS SHALL BE DISCLOSED. THE FINANCIAL EXHIBITS SHALL BE 16 PREPARED IN A FASHION WHICH IS REASONABLY CALCULATED TO FAIRLY 17 AND ACCURATELY DISCLOSE THE FINANCIAL CONDITION AND AFFAIRS OF 18 THE PENSION PLAN. IN THE EVENT THAT THERE IS IMPLEMENTED A 19 CHANGE IN THE MANNER IN WHICH THE FINANCIAL EXHIBITS ARE 20 PREPARED, THE FINANCIAL EXHIBITS PREPARED FOR INCLUSION IN THE 21 ACTUARIAL VALUATION REPORT FOR THE YEAR IN WHICH THE CHANGE IS 22 IMPLEMENTED SHALL BE PREPARED IN ACCORDANCE WITH BOTH THE CHANGE 23 AND THE MANNER PREVIOUSLY EMPLOYED. THE ACTUARIAL VALUATION 24 REPORT SHALL INCLUDE THE FOLLOWING FINANCIAL EXHIBITS: 25 (1) AN EXHIBIT OF THE ASSETS OF THE PENSION PLAN AT 26 THEIR FAIR MARKET VALUE AND VALUED PURSUANT TO RULES AND 27 REGULATIONS ISSUED BY THE COMMISSION, WHICH SHALL REFLECT 28 VARIATIONS IN ASSET MIX AND REDUCE THE IMPACT OF MARKET 29 FLUCTUATIONS. 30 (2) AN EXHIBIT OF THE CURRENT LIABILITIES OF THE PENSION 19830S0713B2455 - 24 -
1 PLAN IN TOTAL AND IN PARTICULAR, WHICH SHALL INCLUDE THE 2 FOLLOWING ITEMS: 3 (I) ACCOUNTS PAYABLE. 4 (II) RETIREMENT BENEFIT PAYMENTS. 5 (III) DISABILITY BENEFIT PAYMENTS. 6 (IV) SURVIVOR BENEFIT PAYMENTS. 7 (V) REFUNDS TO MEMBERS. 8 (VI) ACCRUED ADMINISTRATIVE EXPENSES. 9 (VII) SUSPENSE ITEMS. 10 (VIII) OUTSTANDING LOANS AGAINST INSURANCE POLICIES 11 OR CONTRACTS. 12 (IX) OTHER CURRENT LIABILITIES, IF ANY, SPECIFYING 13 THE NATURE OF EACH TYPE. 14 (3) A STATEMENT OF THE ACCUMULATED MEMBER CONTRIBUTIONS, 15 IF ANY ARE REQUIRED, WITHOUT INTEREST CREDITED TO THEM. 16 (4) AN EXHIBIT OF THE INCOME OF THE PENSION PLAN, IN 17 TOTAL AND IN PARTICULAR, WHICH SHALL INCLUDE THE FOLLOWING 18 ITEMS: 19 (I) MEMBER CONTRIBUTIONS. 20 (II) ALLOCATIONS FROM THE COMMONWEALTH DEDICATED TO 21 PENSION PLAN PURPOSES, IF ANY. 22 (III) MUNICIPAL CONTRIBUTIONS. 23 (IV) INTEREST ON DEBT SECURITIES. 24 (V) DIVIDENDS ON EQUITY SECURITIES. 25 (VI) REALIZED CAPITAL GAINS ON EQUITY SECURITIES. 26 (VII) RECOGNIZED UNREALIZED CAPITAL GAINS ON EQUITY 27 SECURITIES. 28 (VIII) DIVIDENDS ON INSURANCE POLICIES OR CONTRACTS. 29 (IX) OTHER INCOME, IF ANY, SPECIFYING THE NATURE OF 30 EACH TYPE. 19830S0713B2455 - 25 -
1 (5) AN EXHIBIT OF THE DEDUCTIONS FROM THE INCOME OF THE 2 PENSION PLAN IN TOTAL AND IN PARTICULAR, WHICH SHALL INCLUDE 3 THE FOLLOWING ITEMS: 4 (I) PENSION PLAN BENEFIT PAYMENTS. 5 (A) RETIREMENT BENEFITS. 6 (B) DISABILITY BENEFITS. 7 (C) SURVIVING SPOUSE BENEFITS. 8 (D) SURVIVING CHILD BENEFITS. 9 (E) REFUNDS TO MEMBERS TERMINATING EMPLOYMENT. 10 (F) REFUNDS ON BEHALF OF DECEASED ACTIVE, FORMER 11 OR RETIRED MEMBERS. 12 (G) OTHER BENEFIT PAYMENTS, IF ANY. 13 (II) ADMINISTRATIVE EXPENSES INCURRED. 14 (III) REALIZED CAPITAL LOSSES ON EQUITY SECURITIES. 15 (IV) RECOGNIZED UNREALIZED CAPITAL LOSSES ON EQUITY 16 SECURITIES. 17 (V) OTHER DEDUCTIONS FROM INCOME, IF ANY, SPECIFYING 18 THE NATURE OF EACH TYPE. 19 THE EXHIBIT SHALL INDICATE THE ACCOUNTING BASIS ON WHICH THE 20 INFORMATION PRESENTED IN THE EXHIBIT WAS PREPARED. 21 (6) AN EXHIBIT INDICATING THE ADMINISTRATIVE COST 22 INCURRED BY THE PENSION PLAN IN SUCH DETAIL AS IS DEEMED 23 APPROPRIATE BY THE CHIEF ADMINISTRATIVE OFFICER OF THE 24 PENSION PLAN. 25 (F) CONTENTS OF DEMOGRAPHIC EXHIBITS.--EACH ACTUARIAL 26 VALUATION REPORT SHALL INCLUDE THE FOLLOWING DEMOGRAPHIC EXHIBIT 27 IN THE FORM OF A SUMMARY TABULATION OF NUMBERS AND AMOUNTS, 28 WHICH SHALL BE PRESENTED IN THE FOLLOWING FORM: 29 ANNUAL 30 (1) ACTIVE MEMBERS NUMBER PAYROLL 19830S0713B2455 - 26 -
1 AS OF LAST VALUATION DATE 2 NEW ENTRANTS 3 TOTAL 4 SEPARATIONS FROM ACTIVE 5 SERVICE 6 REFUND OF CONTRIBUTIONS 7 SEPARATION WITH DEFERRED 8 BENEFIT 9 SEPARATION WITH NEITHER 10 REFUND NOR DEFERRED 11 BENEFIT 12 DISABILITY 13 DEATH 14 RETIREMENT WITH SERVICE 15 RETIREMENT BENEFIT 16 TOTAL SEPARATIONS 17 AS OF CURRENT VALUATION DATE 18 ANNUAL 19 (2) BENEFIT RECIPIENTS NUMBER BENEFIT 20 AS OF LAST VALUATION DATE 21 NEW BENEFIT RECIPIENTS 22 TOTAL 23 TERMINATIONS 24 DEATHS 25 OTHER 26 TOTAL TERMINATIONS 27 AS OF CURRENT VALUATION DATE 28 THE TABULATION REQUIRED PURSUANT TO THIS PARAGRAPH SHALL 29 BE MADE SEPARATELY FOR EACH OF THE FOLLOWING CLASSES OF 30 BENEFIT RECIPIENTS: 19830S0713B2455 - 27 -
1 (I) SERVICE RETIREMENT BENEFIT RECIPIENTS. 2 (II) DISABILITY BENEFIT RECIPIENTS. 3 (III) SURVIVING SPOUSE BENEFIT RECIPIENTS. 4 (IV) SURVIVING CHILDREN BENEFIT RECIPIENTS. 5 (V) DEFERRED BENEFIT RECIPIENTS. 6 SECTION 203. CONTENTS OF EXPERIENCE INVESTIGATION. 7 (A) GENERALLY.--THE EXPERIENCE INVESTIGATION SHALL CONTAIN 8 SUFFICIENT INFORMATION TO SUBSTANTIATE THE ACTUARIAL ASSUMPTIONS 9 UPON WHICH THE ACTUARIAL EXHIBITS OF THE MOST RECENT ACTUARIAL 10 REPORT SHALL BE BASED. THE EXPERIENCE INVESTIGATION SHALL BE 11 PREPARED ONLY BY AN APPROVED ACTUARY. 12 (B) CONTENTS OF EXPERIENCE INVESTIGATION; DEFINED BENEFIT 13 PLANS SELF-INSURED IN WHOLE OR IN PART.--FOR ANY PENSION PLAN 14 WHICH IS A DEFINED BENEFIT PLAN AND WHICH IS SELF-INSURED IN 15 WHOLE OR IN PART, THE EXPERIENCE INVESTIGATION SHALL CONTAIN THE 16 FOLLOWING ITEMS: 17 (1) A COMPARISON FOR EACH YEAR OF THE LAST FIVE-YEAR 18 PERIOD OF THE ACTUAL EXPERIENCE OF THE PENSION PLAN AND THE 19 EXPERIENCE OF THE PENSION PLAN EXPECTED PURSUANT TO THE 20 ACTUARIAL ASSUMPTIONS OTHER THAN THE RETIREMENT AGE 21 ASSUMPTION WHICH WERE USED IN PREPARING THE ACTUARIAL 22 EXHIBITS OF THE ACTUARIAL VALUATION REPORT OF THE PENSION 23 PLAN AND WHICH IN THE JUDGMENT OF THE APPROVED ACTUARY 24 SIGNIFICANTLY AFFECT THE RESULTS CONTAINED IN THOSE ACTUARIAL 25 EXHIBITS. 26 (2) A STATEMENT OF THE AVERAGE AGES AT WHICH RETIREMENT 27 BENEFIT RECIPIENTS HAVE TERMINATED SERVICE AS AN ACTIVE 28 MEMBER AND COMMENCED RECEIPT OF RETIREMENT BENEFITS FOR THE 29 FOLLOWING GROUPS: 30 (I) ALL PERSONS CURRENTLY RECEIVING A RETIREMENT 19830S0713B2455 - 28 -
1 BENEFIT AS OF THE DATE OF THE EXPERIENCE STUDY. 2 (II) PERSONS NEWLY BECOMING RETIREMENT BENEFIT 3 RECIPIENTS AS A SEPARATE GROUP FOR EACH OF THE LAST FIVE 4 PLAN YEARS. 5 (3) A RECOMMENDATION BY THE APPROVED ACTUARY CONCERNING 6 THE RETENTION OR MODIFICATION OF THE ACTUARIAL ASSUMPTIONS 7 PREVIOUSLY USED TO PREPARE THE ACTUARIAL EXHIBITS OF THE 8 ACTUARIAL VALUATION REPORT OF THE PENSION PLAN. 9 (C) CONTENTS OF EXPERIENCE INVESTIGATION; DEFINED 10 CONTRIBUTION PLANS OR DEFINED BENEFIT PLANS INSURED IN WHOLE BY 11 AN INSURANCE CARRIER.--FOR ANY PENSION PLAN WHICH IS A DEFINED 12 CONTRIBUTION PLAN OR WHICH IS A DEFINED BENEFIT PLAN AND IS 13 INSURED IN WHOLE BY AN INSURANCE CARRIER, THE EXPERIENCE 14 INVESTIGATION SHALL PROVIDE SPECIFIC INFORMATION CONCERNING 15 THOSE ITEMS WHICH RELATE TO ANY ACTUARIAL ASSUMPTIONS USED IN 16 DETERMINING THE ACTUARIAL CONDITION OF THE PENSION PLAN. 17 SECTION 204. DELINQUENT ACTUARIAL VALUATION REPORTS AND 18 EXPERIENCE INVESTIGATIONS. 19 IF A COMPLETE ACTUARIAL VALUATION REPORT OR EXPERIENCE 20 INVESTIGATION IS NOT FILED IN A TIMELY FASHION, ANY AND ALL 21 FINANCING WHICH IS PROVIDED TO THE MUNICIPALITY BY THE 22 COMMONWEALTH AND IS DEDICATED FOR PENSION PLAN PURPOSES SHALL BE 23 WITHHELD UNTIL THE REPORT OR INVESTIGATION IS FILED. IF A 24 MUNICIPALITY FAILS TO FILE AN ACTUARIAL VALUATION REPORT OR 25 EXPERIENCE INVESTIGATION, THE COMMISSION SHALL HAVE THE REPORT 26 OR INVESTIGATION PREPARED AND THE MUNICIPALITY SHALL REIMBURSE 27 THE COMMISSION FOR THE ACTUAL COST OF THE PREPARATION OF THE 28 REPORT OR INVESTIGATION. THE COMMISSION SHALL ISSUE RULES AND 29 REGULATIONS SPECIFYING THE PROCEDURES WHICH THE COMMISSION SHALL 30 FOLLOW IN OBTAINING DELINQUENT ACTUARIAL VALUATION REPORTS OR 19830S0713B2455 - 29 -
1 EXPERIENCE INVESTIGATIONS. 2 SECTION 205. MODIFICATION OF REQUIREMENTS FOR CONTENTS OF 3 ACTUARIAL VALUATION REPORTS AND EXPERIENCE 4 INVESTIGATIONS. 5 THE COMMISSION MAY ISSUE RULES AND REGULATIONS SPECIFYING 6 MODIFICATIONS IN, ADDITIONS TO OR ELIMINATION OF REQUIREMENTS 7 FOR THE CONTENTS OF ACTUARIAL VALUATION REPORTS AND EXPERIENCE 8 INVESTIGATIONS. ANY RULES AND REGULATIONS SHALL BE ISSUED IN 9 ACCORDANCE WITH ANY PROVISION OF LAW GOVERNING THE ISSUANCE OF 10 RULES AND REGULATIONS BY COMMONWEALTH AGENCIES. 11 SECTION 206. REQUIREMENT FOR ADDITIONAL INFORMATION IN CERTAIN 12 INSTANCES. 13 THE COMMISSION MAY REQUEST ANY ADDITIONAL INFORMATION, DATA 14 OR CALCULATIONS IN CONNECTION WITH ANY REQUIRED ACTUARIAL 15 VALUATION REPORT OR EXPERIENCE INVESTIGATION WHICH IT DEEMS 16 NECESSARY OR DESIRABLE. THE REQUESTED INFORMATION, DATA OR 17 CALCULATIONS SHALL BE TRANSMITTED TO THE COMMISSION AS SOON AS 18 IS PRACTICABLE FOLLOWING RECEIPT OF THE REQUEST. 19 SECTION 207. ACTUARIAL VALUATION AND EXPERIENCE INVESTIGATION 20 EXPENSES ALLOWABLE. 21 NOTWITHSTANDING ANY PROVISION OF LAW, MUNICIPAL ORDINANCE, 22 MUNICIPAL RESOLUTION, MUNICIPAL CHARTER, PENSION PLAN AGREEMENT 23 OR PENSION PLAN CONTRACT TO THE CONTRARY, THE EXPENSES 24 ATTRIBUTABLE TO THE PREPARATION OF ANY ACTUARIAL VALUATION 25 REPORT OR EXPERIENCE INVESTIGATION REQUIRED PURSUANT TO THIS 26 CHAPTER SHALL BE AN ALLOWABLE ADMINISTRATIVE EXPENSE PAYABLE 27 FROM THE ASSETS OF THE PENSION PLAN. 28 SECTION 208. MODIFICATION OF ACTUARIAL REPORTING REQUIREMENT IN 29 CERTAIN INSTANCES. 30 ANY MUNICIPALITY WHICH COMPLIES WITH THE MUNICIPAL PENSION 19830S0713B2455 - 30 -
1 PLAN ACTUARIAL REPORTING REQUIREMENTS SPECIFIED IN THIS CHAPTER 2 SHALL BE DEEMED TO HAVE COMPLIED WITH THE ACT OF DECEMBER 6, 3 1972 (P.L.1383, NO.293), ENTITLED "AN ACT REQUIRING MUNICIPAL 4 PENSION SYSTEMS TO HAVE AN ACTUARIAL INVESTIGATION OF THE FUND 5 MADE BY AN ACTUARY WHO SHALL REPORT HIS FINDINGS TO THE 6 DEPARTMENT OF COMMUNITY AFFAIRS." 7 CHAPTER 3 8 MINIMUM FUNDING STANDARD FOR MUNICIPAL 9 PENSION PLANS 10 SECTION 301. MUNICIPAL PENSION PLAN MINIMUM FUNDING STANDARD; 11 APPLICATION AND GENERAL PROVISIONS. 12 (A) APPLICATION.--NOTWITHSTANDING ANY PROVISION OF LAW, 13 MUNICIPAL ORDINANCE, MUNICIPAL RESOLUTION, MUNICIPAL CHARTER, 14 PENSION PLAN AGREEMENT OR PENSION PLAN CONTRACT TO THE CONTRARY, 15 THE APPLICABLE PROVISIONS OF THIS CHAPTER SHALL APPLY TO ANY 16 MUNICIPALITY WHICH HAS ESTABLISHED AND MAINTAINS, DIRECTLY OR 17 INDIRECTLY, A PENSION PLAN FOR THE BENEFIT OF ITS EMPLOYEES, 18 IRRESPECTIVE OF THE MANNER IN WHICH THE PENSION PLAN IS 19 ADMINISTERED, AND TO THE RESPECTIVE PENSION PLAN. 20 (B) DISCLOSURE OF NONCOMPLIANCE.--IN THE EVENT THAT ANY 21 MUNICIPALITY OR PENSION PLAN FAILS IN A MATERIAL WAY TO COMPLY 22 WITH ANY APPLICABLE PROVISION OF THIS CHAPTER, THE COMMISSION 23 SHALL NOTIFY THE GOVERNOR AND THE GENERAL ASSEMBLY OF THAT 24 NONCOMPLIANCE IN A PUBLIC REPORT ISSUED ANNUALLY FOR THIS 25 PURPOSE. 26 SECTION 302. MINIMUM FUNDING STANDARD; DEFINED BENEFIT PLANS 27 SELF-INSURED IN WHOLE OR IN PART. 28 (A) GENERALLY.--THIS SECTION APPLIES TO ANY MUNICIPALITY 29 WHICH HAS ESTABLISHED AND MAINTAINS A PENSION PLAN WHICH IS A 30 DEFINED BENEFIT PLAN AND WHICH IS SELF-INSURED IN WHOLE OR IN 19830S0713B2455 - 31 -
1 PART. 2 (B) FINANCIAL REQUIREMENTS OF THE PENSION PLAN.-- 3 (1) ANNUALLY, THE CHIEF ADMINISTRATIVE OFFICER OF THE 4 PENSION PLAN SHALL DETERMINE THE FINANCIAL REQUIREMENTS OF 5 THE PENSION PLAN FOR THE FOLLOWING PLAN YEAR. THE FINANCIAL 6 REQUIREMENTS OF THE PENSION PLAN FOR THE FOLLOWING PLAN YEAR 7 SHALL BE BASED ON THE MOST RECENT ACTUARIAL VALUATION REPORT 8 OF THE PENSION PLAN PREPARED PURSUANT TO CHAPTER 2. UNLESS 9 THE ASSETS OF THE PENSION PLAN EQUAL THE PRESENT VALUE OF 10 FUTURE BENEFITS AS REPORTED PURSUANT TO SECTION 202(B)(2), 11 THE FINANCIAL REQUIREMENTS OF THE PENSION PLAN SHALL BE THE 12 NORMAL COST AND ADMINISTRATIVE EXPENSE REQUIREMENTS FOR THE 13 FOLLOWING PLAN YEAR AND, IF THE PENSION PLAN HAS AN UNFUNDED 14 ACTUARIAL ACCRUED LIABILITY PURSUANT TO THE MOST RECENT 15 ACTUARIAL VALUATION REPORT, THE AMORTIZATION CONTRIBUTION 16 REQUIREMENT FOR THE FOLLOWING PLAN YEAR. THE FINANCIAL 17 REQUIREMENTS OF THE PENSION PLAN, HOWEVER, SHALL AT LEAST BE 18 EQUAL TO THE ANNUAL AMOUNT OF RETIREMENT AND OTHER BENEFITS 19 ANTICIPATED TO BE PAYABLE FROM THE PENSION PLAN FOR THE 20 FOLLOWING PLAN YEAR LESS THE MARKET VALUE OF THE ASSETS OF 21 THE PENSION PLAN AS OF THE DATE ON WHICH THE FINANCIAL 22 REQUIREMENTS OF THE PENSION PLAN ARE DETERMINED. 23 (2) THE NORMAL COST AND ADMINISTRATIVE EXPENSE 24 REQUIREMENTS FOR THE FOLLOWING PLAN YEARS SHALL BE EXPRESSED 25 AS A DOLLAR AMOUNT AND SHALL BE DETERMINED BY APPLYING THE 26 NORMAL COST OF THE BENEFIT PLAN AND THE ADMINISTRATIVE 27 EXPENSE PAYABLE FROM THE ASSETS ATTRIBUTABLE TO THE BENEFIT 28 PLAN, AS REPORTED IN THE ACTUARIAL VALUATION REPORT OF THE 29 PENSION PLAN AND EXPRESSED AS A PERCENTAGE OF COVERED 30 PAYROLL, TO THE ESTIMATED COVERED PAYROLL OF THE ACTIVE 19830S0713B2455 - 32 -
1 MEMBERSHIP OF THE PENSION PLAN INCLUDING ANY PROJECTED 2 INCREASE IN ACTIVE MEMBERSHIP FOR THE FOLLOWING YEAR. 3 (3) THE AMORTIZATION CONTRIBUTION REQUIREMENT FOR THE 4 FOLLOWING PLAN YEAR SHALL BE EXPRESSED AS A DOLLAR AMOUNT AND 5 SHALL BE THE ADDITIONAL AMOUNT REPORTED IN THE ACTUARIAL 6 VALUATION REPORT OF THE PENSION PLAN AS SUFFICIENT TO 7 AMORTIZE ON A LEVEL DOLLAR BASIS THE VARIOUS INCREMENTS OF 8 THE UNFUNDED ACTUARIAL ACCRUED LIABILITY OF THE BENEFIT PLAN 9 BY THE APPLICABLE AMORTIZATION TARGET DATES AS ESTABLISHED IN 10 SECTION 202(B)(4). 11 (C) MINIMUM OBLIGATION OF THE MUNICIPALITY.--ANNUALLY, THE 12 CHIEF ADMINISTRATIVE OFFICER OF THE PENSION PLAN SHALL DETERMINE 13 THE MINIMUM OBLIGATION OF THE MUNICIPALITY WITH RESPECT TO THE 14 PENSION PLAN FOR THE FOLLOWING PLAN YEAR. THE MINIMUM OBLIGATION 15 OF THE MUNICIPALITY WITH RESPECT TO THE PENSION PLAN SHALL BE 16 EQUAL TO THE FINANCIAL REQUIREMENTS OF THE PENSION PLAN REDUCED 17 BY THE FOLLOWING AMOUNTS: 18 (1) THE AMOUNT OF ANY GENERAL MUNICIPAL PENSION PLAN 19 STATE AID FROM THE COMMONWEALTH ANTICIPATED AS RECEIVABLE BY 20 THE MUNICIPALITY PURSUANT TO SECTION 402 AND TO BE ALLOCATED 21 TO THE PENSION PLAN FOR THE FOLLOWING PLAN YEAR. 22 (2) THE AMOUNT OF ANY MEMBER CONTRIBUTIONS ANTICIPATED 23 AS RECEIVABLE FOR THE FOLLOWING YEAR. 24 (3) IF THE ACTUARIAL VALUE OF THE ASSETS OF THE PENSION 25 PLAN EXCEED THE ACTUARIAL ACCRUED LIABILITY OF THE PENSION 26 PLAN, AN AMOUNT EQUAL TO ONE-TENTH OF THE AMOUNT BY WHICH THE 27 ACTUARIAL VALUE EXCEEDS THE ACTUARIAL ACCRUED LIABILITY. 28 (D) PAYMENT OF MINIMUM MUNICIPAL OBLIGATION.--ANNUALLY THE 29 MUNICIPALITY SHALL PROVIDE FOR THE FULL AMOUNT OF THE MINIMUM 30 OBLIGATION OF THE MUNICIPALITY IN THE BUDGET OF THE 19830S0713B2455 - 33 -
1 MUNICIPALITY. THE MINIMUM OBLIGATION OF THE MUNICIPALITY SHALL 2 BE PAYABLE TO THE PENSION PLAN FROM THE REVENUE OF THE 3 MUNICIPALITY. PAYMENT OF THE MINIMUM OBLIGATION OF THE 4 MUNICIPALITY SHALL BE MADE BY THE MUNICIPALITY AND IF MADE 5 DURING THE MONTH OF JANUARY, SHALL BE PAYABLE WITHOUT ANY 6 INTEREST, AND IF MADE SUBSEQUENT TO THE MONTH OF JANUARY BUT 7 PRIOR TO DECEMBER 31, SHALL BE PAYABLE WITH INTEREST FOR THE 8 PERIOD SINCE JANUARY 1 AT A RATE EQUAL TO THE INTEREST 9 ASSUMPTION USED FOR THE ACTUARIAL VALUATION REPORT, EXPRESSED ON 10 A MONTHLY BASIS. 11 (E) INTEREST PENALTY ON OMITTED MUNICIPAL CONTRIBUTIONS.-- 12 ANY AMOUNT OF THE MINIMUM OBLIGATION OF THE MUNICIPALITY WHICH 13 REMAINS UNPAID AS OF DECEMBER 31 OF THE YEAR IN WHICH THE 14 MINIMUM OBLIGATION IS DUE SHALL BE ADDED TO THE MINIMUM 15 OBLIGATION OF THE MUNICIPALITY FOR THE FOLLOWING YEAR, WITH 16 INTEREST FROM JANUARY 1 OF THE YEAR IN WHICH THE MINIMUM 17 OBLIGATION WAS FIRST DUE UNTIL THE DATE THE PAYMENT IS PAID AT A 18 RATE EQUAL TO THE INTEREST ASSUMPTION USED FOR THE ACTUARIAL 19 VALUATION REPORT OR THE DISCOUNT RATE APPLICABLE TO TREASURY 20 BILLS ISSUED BY THE DEPARTMENT OF TREASURY OF THE UNITED STATES 21 WITH A SIX MONTH MATURITY AS OF THE LAST BUSINESS DAY IN 22 DECEMBER OF THE PLAN YEAR IN WHICH THE OBLIGATION WAS DUE, 23 WHICHEVER IS GREATER, EXPRESSED AS A MONTHLY RATE AND COMPOUNDED 24 MONTHLY. 25 SECTION 303. MINIMUM FUNDING STANDARD; DEFINED BENEFIT PLANS 26 WHOLLY INSURED OR DEFINED CONTRIBUTION PLANS. 27 (A) GENERALLY.--THIS SECTION APPLIES TO ANY MUNICIPALITY 28 WHICH HAS ESTABLISHED AND MAINTAINS A PENSION PLAN WHICH IS ONE 29 OF THE FOLLOWING: 30 (1) A DEFINED BENEFIT PLAN WHICH IS FULLY INSURED BY AN 19830S0713B2455 - 34 -
1 AUTHORIZED INSURANCE CARRIER. 2 (2) A DEFINED CONTRIBUTION PLAN WHICH IS SELF-INSURED IN 3 WHOLE OR IN PART. 4 (3) A DEFINED CONTRIBUTION PLAN WHICH IS FULLY INSURED 5 BY AN AUTHORIZED INSURANCE CARRIER. 6 (B) FINANCIAL REQUIREMENTS OF THE PENSION PLAN.--ANNUALLY, 7 THE CHIEF ADMINISTRATIVE OFFICER OF THE PENSION PLAN SHALL 8 DETERMINE THE FINANCIAL REQUIREMENTS OF THE PENSION PLAN FOR THE 9 FOLLOWING PLAN YEAR. THE FINANCIAL REQUIREMENTS OF THE PENSION 10 PLAN SHALL BE DETERMINED PURSUANT TO THE TERMS OF THE CONTRACT 11 OR POLICY WITH THE INSURANCE CARRIER OR THE PLAN DOCUMENT 12 GOVERNING THE PENSION PLAN, WHICHEVER IS APPLICABLE. 13 (C) MINIMUM OBLIGATION OF THE MUNICIPALITY.--ANNUALLY, THE 14 CHIEF ADMINISTRATIVE OFFICER OF THE PENSION PLAN SHALL DETERMINE 15 THE MINIMUM OBLIGATION OF THE MUNICIPALITY WITH RESPECT TO THE 16 PENSION PLAN FOR THE FOLLOWING PLAN YEAR. THE MINIMUM OBLIGATION 17 OF THE MUNICIPALITY WITH RESPECT TO THE PENSION PLAN SHALL BE 18 THE EMPLOYER CONTRIBUTION PORTION OF FINANCIAL REQUIREMENTS 19 DETERMINED PURSUANT TO THE TERMS OF THE CONTRACT OR POLICY WITH 20 THE INSURANCE CARRIER OR THE PLAN DOCUMENT GOVERNING THE PENSION 21 PLAN, WHICHEVER IS APPLICABLE, REDUCED BY THE AMOUNT OF ANY 22 GENERAL MUNICIPAL PENSION PLAN STATE AID FROM THE COMMONWEALTH 23 ANTICIPATED AS RECEIVABLE BY THE MUNICIPALITY PURSUANT TO 24 SECTION 402 AND TO BE ALLOCATED TO THE PENSION PLAN FOR THE 25 FOLLOWING PLAN YEAR. 26 (D) PAYMENT OF MINIMUM MUNICIPAL OBLIGATION.--ANNUALLY, THE 27 MUNICIPALITY SHALL PROVIDE FOR THE FULL AMOUNT OF THE MINIMUM 28 OBLIGATION OF THE MUNICIPALITY IN THE BUDGET OF THE 29 MUNICIPALITY. THE MINIMUM OBLIGATION OF THE MUNICIPALITY SHALL 30 BE PAYABLE TO THE PENSION PLAN FROM THE REVENUE OF THE 19830S0713B2455 - 35 -
1 MUNICIPALITY. PAYMENT OF THE MINIMUM OBLIGATION OF THE 2 MUNICIPALITY SHALL BE MADE BY THE MUNICIPALITY. 3 (E) INTEREST PENALTY ON OMITTED MUNICIPAL CONTRIBUTION.--ANY 4 AMOUNT OF THE MINIMUM OBLIGATION OF THE MUNICIPALITY WHICH 5 REMAINS UNPAID AS OF DECEMBER 31 OF THE YEAR IN WHICH THE 6 MINIMUM OBLIGATION IS DUE SHALL BE ADDED TO THE MINIMUM 7 OBLIGATION OF THE MUNICIPALITY FOR THE FOLLOWING YEAR, WITH 8 INTEREST FROM JANUARY 1 OF THE YEAR IN WHICH THE MINIMUM 9 OBLIGATION WAS FIRST DUE UNTIL THE DATE THE PAYMENT IS PAID AT A 10 RATE EQUAL TO THE INTEREST ASSUMPTION USED FOR THE ACTUARIAL 11 VALUATION REPORT OR THE DISCOUNT RATE APPLICABLE TO TREASURY 12 BILLS ISSUED BY THE TREASURY DEPARTMENT OF THE UNITED STATES 13 WITH A SIX-MONTH MATURITY AS OF THE LAST BUSINESS DAY IN 14 DECEMBER OF THE PLAN YEAR IN WHICH THE OBLIGATION WAS DUE, 15 WHICHEVER IS GREATER, EXPRESSED AS A MONTHLY RATE AND COMPOUNDED 16 MONTHLY. 17 SECTION 304. CERTIFICATION OF PENSION PLAN FINANCIAL 18 REQUIREMENTS AND MINIMUM MUNICIPAL OBLIGATIONS. 19 THE CHIEF ADMINISTRATIVE OFFICER OF EACH PENSION PLAN SHALL 20 SUBMIT THE FINANCIAL REQUIREMENTS OF THE PENSION PLAN AND THE 21 MINIMUM OBLIGATION OF THE MUNICIPALITY WITH RESPECT TO THE 22 PENSION PLAN, WITH APPROPRIATE DOCUMENTING DETAIL, TO THE 23 GOVERNING BODY OF THE MUNICIPALITY ON OR BEFORE THE LAST 24 BUSINESS DAY IN SEPTEMBER, ANNUALLY. THE SUBMISSION SHALL 25 INCLUDE A CERTIFICATION BY THE CHIEF ADMINISTRATIVE OFFICER AS 26 TO THE ACCURACY OF THE CALCULATIONS AND THEIR CONFORMANCE WITH 27 THE APPLICABLE PROVISIONS OF THIS CHAPTER. 28 SECTION 305. ACTUARIAL COST ESTIMATE REQUIRED FOR BENEFIT PLAN 29 MODIFICATION. 30 (A) PRESENTATION OF COST ESTIMATE.--PRIOR TO THE ADOPTION OF 19830S0713B2455 - 36 -
1 ANY BENEFIT PLAN MODIFICATION BY THE GOVERNING BODY OF THE 2 MUNICIPALITY, THE CHIEF ADMINISTRATIVE OFFICER OF EACH PENSION 3 PLAN SHALL PROVIDE TO THE GOVERNING BODY OF THE MUNICIPALITY A 4 COST ESTIMATE OF THE EFFECT OF THE PROPOSED BENEFIT PLAN 5 MODIFICATION. 6 (B) DEFINED BENEFIT PLAN.--IF THE PENSION PLAN IS A DEFINED 7 BENEFIT PLAN WHICH IS SELF-INSURED IN WHOLE OR IN PART, THE COST 8 ESTIMATE SHALL BE PREPARED BY AN APPROVED ACTUARY AND SHALL BE 9 EITHER THE UPDATED ACTUARIAL EXHIBITS OF AN ACTUARIAL VALUATION 10 REPORT SPECIFIED IN CHAPTER 2 OR AN ESTIMATE OF THE EXPECTED 11 ACTUARIAL IMPACT ATTRIBUTABLE TO THE PROPOSED BENEFIT PLAN 12 MODIFICATION. 13 (C) INSURED DEFINED BENEFIT PLAN.--IF THE PENSION PLAN IS A 14 DEFINED BENEFIT PLAN WHICH IS FULLY INSURED BY AN AUTHORIZED 15 INSURANCE CARRIER, THE COST ESTIMATE SHALL BE PREPARED BY ANY 16 QUALIFIED PERSON AND SHALL BE A COMPARISON OF CURRENT AND FUTURE 17 INSURANCE PREMIUMS OR INSURANCE CONTRACT AMOUNTS. 18 (D) DEFINED CONTRIBUTION PLAN.--IF THE PENSION PLAN IS A 19 DEFINED CONTRIBUTION PLAN WHICH IS EITHER SELF-INSURED IN WHOLE 20 OR IN PART OR FULLY INSURED BY AN AUTHORIZED INSURANCE CARRIER, 21 THE COST ESTIMATE SHALL BE PREPARED BY ANY QUALIFIED PERSON AND 22 SHALL BE A COMPARISON OF CURRENT AND FUTURE CONTRIBUTION RATES. 23 (E) CONTENTS OF COST ESTIMATE.--ANY COST ESTIMATE OF THE 24 EFFECT OF THE PROPOSED BENEFIT PLAN MODIFICATION SHALL BE 25 COMPLETE AND ACCURATE AND SHALL BE PRESENTED IN A WAY REASONABLY 26 CALCULATED TO DISCLOSE TO THE AVERAGE PERSON COMPRISING THE 27 MEMBERSHIP OF THE GOVERNING BODY OF THE MUNICIPALITY, THE IMPACT 28 OF THE PROPOSED BENEFIT PLAN, THE MODIFICATION ON THE FUTURE 29 FINANCIAL REQUIREMENTS OF THE PENSION PLAN AND THE FUTURE 30 MINIMUM OBLIGATION OF THE MUNICIPALITY WITH RESPECT TO THE 19830S0713B2455 - 37 -
1 PENSION PLAN. 2 SECTION 306. ENFORCEMENT OF FUNDING STANDARD BY MANDAMUS 3 ACTION. 4 (A) LEGISLATIVE FINDING AND DECLARATION.--THE GENERAL 5 ASSEMBLY FINDS AND DECLARES THAT ANY ACTUAL OR POTENTIAL FAILURE 6 BY A MUNICIPALITY TO COMPLY WITH THE APPLICABLE FUNDING STANDARD 7 ESTABLISHED BY THIS ACT THREATENS SERIOUS INJURY TO THE AFFECTED 8 MUNICIPAL PENSION PLAN, TO THE ENTIRE SYSTEM OF PUBLIC EMPLOYEE 9 PENSION PLANS IN THE COMMONWEALTH AND TO THE COMMONWEALTH 10 ITSELF. BY EXPRESSLY AUTHORIZING THE REMEDY OF MANDAMUS IN THIS 11 SECTION, THE GENERAL ASSEMBLY INTENDS TO ASSIST ALL PERSONS WITH 12 A BENEFICIAL OR SPECIAL INTEREST IN A MUNICIPAL PENSION PLAN, IN 13 ADDITION TO ALL PERSONS OR ENTITIES WITH A SPECIAL 14 RESPONSIBILITY OR DUTY IN RELATION TO MUNICIPAL PENSION PLANS, 15 IN SECURING THAT COMPLIANCE. 16 (B) GENERALLY.--IN THE EVENT THAT A MUNICIPALITY FAILS TO 17 COMPLY WITH ITS DUTY EITHER TO PROVIDE FOR IN ITS BUDGET, OR TO 18 PAY, THE FULL AMOUNT OF THE MINIMUM OBLIGATION OF THE 19 MUNICIPALITY TOWARDS THE MUNICIPAL PENSION PLAN AS SPECIFIED IN 20 THIS CHAPTER, OR AS MODIFIED PURSUANT TO SECTION 605(6) OR 21 606(A)(4) AND SECTION 607(G) OR (H), WHICHEVER DETERMINATION OF 22 THE MINIMUM OBLIGATION OF THE MUNICIPALITY TOWARDS THE MUNICIPAL 23 PENSION PLAN IS APPLICABLE, THE FAILURE MAY BE REMEDIED BY THE 24 INSTITUTION OF LEGAL PROCEEDINGS FOR MANDAMUS. EVERY 25 MUNICIPALITY IS BY THIS ACT ON NOTICE AS TO ITS DUTY TO FUND ITS 26 MUNICIPAL PENSION PLAN. THE PROVISIONS OF THIS ACT SHALL BE 27 DEEMED TO BE SUFFICIENT DEMAND TO THE MUNICIPALITY FOR IT TO 28 COMPLY WITH ITS DUTY AND THE FAILURE BY THE MUNICIPALITY FOR THE 29 YEAR OR YEARS IN QUESTION TO INCLUDE IN ITS BUDGET, OR TO PAY, 30 THE FULL AMOUNT OF THE MINIMUM OBLIGATION OF THE MUNICIPALITY 19830S0713B2455 - 38 -
1 TOWARDS THE MUNICIPAL PENSION PLAN SHALL BE DEEMED TO BE 2 SUFFICIENT REFUSAL BY THE MUNICIPALITY TO COMPLY WITH ITS DUTY 3 ANTECEDENT TO THE COMMENCEMENT OF THE ACTION. NO OTHER REMEDY AT 4 LAW SHALL BE DEEMED TO BE SUFFICIENTLY ADEQUATE AND APPROPRIATE 5 TO BAR THE COMMENCEMENT OF THIS ACTION. ANY PERSON OR ENTITY 6 AUTHORIZED PURSUANT TO SUBSECTION (C) OR (D) TO INSTITUTE THE 7 ACTION SHALL BE DEEMED TO HAVE BEEN INJURED BY THE FAILURE OF 8 THE MUNICIPALITY TO COMPLY WITH ITS LEGAL DUTY TO FUND ITS 9 MUNICIPAL PENSION PLAN AND THAT INJURY SHALL BE DEEMED TO BE 10 IMMEDIATE. NO ISSUANCE OF MANDAMUS IN CONNECTION WITH THE LEGAL 11 DUTY OF A MUNICIPALITY TO FUND ITS MUNICIPAL PENSION PLAN SHALL 12 BE DEEMED TO THREATEN THE CREATION OF CONFUSION, DISORDER OR 13 EXCESSIVE BURDEN ON THE MUNICIPALITY OR TO THREATEN A RESULT 14 WHICH IS DETRIMENTAL TO THE PUBLIC INTEREST. 15 (C) PERSONS BENEFICIALLY INTERESTED.--ANY PERSON WHO IS 16 BENEFICIALLY INTERESTED IN THE AFFAIRS OF THE MUNICIPAL PENSION 17 PLAN SHALL HAVE STANDING TO INSTITUTE A LEGAL PROCEEDING FOR 18 MANDAMUS AS PROVIDED FOR IN THIS SECTION. A BENEFICIALLY 19 INTERESTED PERSON IS ANY PERSON WHO: 20 (1) HAS THE RELATIONSHIP WITH THE MUNICIPAL PENSION PLAN 21 OF: 22 (I) AN ACTIVE MEMBER, WHETHER OR NOT ANY MINIMUM 23 SERVICE REQUIREMENT FOR ACQUIRING A VESTED RIGHT TO A 24 RETIREMENT BENEFIT HAS BEEN MET; 25 (II) AN INACTIVE MEMBER WITH A VESTED RIGHT TO 26 DEFERRED RECEIPT OF A RETIREMENT BENEFIT; 27 (III) A RETIRED MEMBER; 28 (IV) A RECIPIENT OF RETIREMENT BENEFIT OTHER THAN A 29 RETIRED MEMBER; 30 (V) A FORMER MEMBER WITH MEMBER CONTRIBUTIONS TO THE 19830S0713B2455 - 39 -
1 CREDIT OF THE MEMBER WITH THE MUNICIPAL PENSION PLAN; OR 2 (VI) A SPOUSE, CHILD OR OTHER POTENTIAL BENEFICIARY 3 PURSUANT TO THE TERMS OF THE PLAN DOCUMENT OF THE 4 MUNICIPAL PENSION PLAN OF ANY PERSON DESCRIBED IN 5 SUBPARAGRAPHS (I) AND (V); 6 (2) SERVES IN THE POSITION OF A FIDUCIARY WITH RESPECT 7 TO THE MUNICIPAL PENSION PLAN; 8 (3) REPRESENTS ACTIVE MEMBERS OF THE MUNICIPAL PENSION 9 PLAN AS COLLECTIVE BARGAINING AGENT; OR 10 (4) SERVES AS AN ELECTED OR APPOINTED OFFICIAL OF THE 11 MUNICIPALITY. 12 (D) OTHERS WITH STANDING TO BRING ACTION.--THE PUBLIC 13 EMPLOYEE RETIREMENT STUDY COMMISSION SHALL HAVE STANDING TO 14 INSTITUTE A LEGAL PROCEEDING FOR MANDAMUS AS PROVIDED FOR IN 15 THIS SECTION. THE ATTORNEY GENERAL, OR THE DISTRICT ATTORNEY OF 16 THE COUNTY IN WHICH THE MUNICIPALITY IS LOCATED, IN ADDITION TO 17 ANY OTHER POWERS AND DUTIES CONFERRED ON THAT OFFICE BY LAW, 18 SHALL ALSO PROCEED IN THE NAME OF THE COMMONWEALTH, UPON REQUEST 19 OF THE COMMISSION OR UPON THE PERSON'S OWN MOTION, TO INSTITUTE 20 A LEGAL PROCEEDING FOR MANDAMUS AS PROVIDED FOR IN THIS SECTION. 21 (E) SCOPE OF REMEDY.--ANY MANDAMUS PURSUANT TO THIS SECTION 22 MAY COMPEL THE ADDITION BY THE MUNICIPALITY TO THE CURRENT 23 MUNICIPAL BUDGET OF ANY OMITTED AMOUNT OF THE MINIMUM OBLIGATION 24 OF THE MUNICIPALITY AND THE SUBSEQUENT PAYMENT OF ANY BUDGETED 25 AMOUNT, OR THE IMMEDIATE OR SCHEDULED PERIODIC PAYMENT OF ANY 26 OMITTED AMOUNT OF MINIMUM OBLIGATION OF THE MUNICIPALITY WITH 27 INTEREST AT THE APPLICABLE COMPOUND RATE, WHICHEVER IS 28 APPLICABLE. 29 (F) REIMBURSEMENT FOR CERTAIN COSTS.--IN ANY ACTION PURSUANT 30 TO THIS SECTION WHICH IS INSTITUTED OR JOINED BY ANY PERSON WHO 19830S0713B2455 - 40 -
1 IS BENEFICIALLY INTERESTED, UNLESS THE COURT OTHERWISE DIRECTS, 2 PARTY COSTS, DISBURSEMENTS, REASONABLE ATTORNEY FEES AND WITNESS 3 FEES RELATING TO THE ACTION SHALL BE ALLOWED TO THE PREVAILING 4 PARTY UPON A MOTION BY THE PREVAILING PARTY IF: 5 (1) THE PREVAILING PARTY IS A PERSON WHO IS BENEFICIALLY 6 INTERESTED AND HAS GIVEN THE OPPOSING PARTY OR PARTIES TIMELY 7 NOTICE OF INTENT TO CLAIM AN AWARD, WHICH NOTICE SHALL HAVE 8 BEEN GIVEN PRIOR TO THE ISSUANCE OF THE MANDAMUS; OR 9 (2) THE PREVAILING PARTY IS THE MUNICIPALITY AND THE 10 COMPLAINING PARTY HAS BROUGHT AN ACTION WHICH THE COMPLAINING 11 PARTY KNEW OR OUGHT TO HAVE KNOWN WAS GROUNDLESS, FRIVOLOUS, 12 WITHOUT MERIT AND WITHOUT A BASIS IN FACT. 13 SECTION 307. ENFORCEMENT PROCEEDINGS BY COMMISSION. 14 (A) ENFORCEMENT BY COMMISSION.--WHENEVER THE COMMISSION IS 15 OF THE OPINION THAT ANY MUNICIPALITY HAS FAILED, OMITTED, 16 NEGLECTED OR REFUSED TO PERFORM ANY DUTY ENJOINED UPON IT 17 PURSUANT TO THIS ACT, THE COMMISSION SHALL HAVE THE POWER AND 18 ITS DUTY SHALL BE TO ORDER COMPLIANCE BY THE MUNICIPALITY WITH 19 THAT DUTY. IF THE MUNICIPALITY FAILS, OMITS, NEGLECTS OR REFUSES 20 TO COMPLY WITH ANY LAWFUL ORDER OF THE COMMISSION, THEN THE 21 COMMISSION MAY INSTITUTE LEGAL PROCEEDINGS FOR INJUNCTION, 22 MANDAMUS OR OTHER APPROPRIATE REMEDY AT LAW OR EQUITY TO ENFORCE 23 COMPLIANCE WITH, OR RESTRAIN VIOLATION OF, THE ORDER OF THE 24 COMMISSION. 25 (B) USE OF APPROPRIATE BASIS FOR FUNDING.--THE USE BY A 26 MUNICIPALITY IN DETERMINING THE MINIMUM MUNICIPAL OBLIGATION 27 TOWARD THE MUNICIPAL PENSION PLAN OF AN ACTUARIAL VALUATION 28 METHOD, ONE OR MORE ACTUARIAL ASSUMPTIONS, OR A COMBINATION OF 29 METHOD AND ASSUMPTION OR ASSUMPTIONS WHICH ARE DETERMINED TO BE 30 INAPPROPRIATE BY THE COMMISSION SHALL CONSTITUTE FAILURE, 19830S0713B2455 - 41 -
1 OMISSION, NEGLECT OR REFUSAL ON THE PART OF A MUNICIPALITY TO 2 PERFORM A DUTY ENJOINED UPON IT PURSUANT TO THIS ACT. ANY 3 COMMISSION ORDER FOR COMPLIANCE BY THE MUNICIPALITY WITH THAT 4 DUTY MAY SPECIFY THE APPROPRIATE ACTUARIAL VALUATION METHOD, 5 ACTUARIAL ASSUMPTION OR ASSUMPTIONS, OR COMBINATION OF METHOD 6 AND ASSUMPTION OR ASSUMPTIONS, WHICHEVER IS APPLICABLE. 7 (C) COMPLIANCE WITH COMMISSION ORDER.--IN ANY LEGAL ACTION 8 INVOLVING ANY ALLEGED VIOLATION BY A MUNICIPALITY OF ANY LAWFUL 9 ORDER OF THE COMMISSION, THE BURDEN OF PROOF SHALL BE UPON THE 10 MUNICIPALITY COMPLAINED AGAINST TO SHOW THAT COMPLIANCE WITH THE 11 ORDER OF THE COMMISSION HAS BEEN EFFECTED. 12 CHAPTER 4 13 REVISIONS APPLICABLE TO MUNICIPAL 14 PENSION FUND FINANCING 15 SECTION 401. REVISION OF FINANCING FROM LOCAL REVENUE SOURCES. 16 (A) EVALUATION.--PRIOR TO APPLYING FOR ANY REMEDY OR 17 COMBINATION OF REMEDIES PURSUANT TO CHAPTER 6, A MUNICIPALITY 18 SHALL EVALUATE THE CURRENT SOURCES OF FINANCING FOR MUNICIPAL 19 PENSION PLANS AND SHALL IDENTIFY ANY REVENUE SOURCES FROM WHICH 20 OTHER PERSONNEL COSTS, INCLUDING, BUT NOT LIMITED TO, SALARIES, 21 EMPLOYER CONTRIBUTIONS TO THE FEDERAL OLD AGE, SURVIVORS, 22 DISABILITY AND HEALTH INSURANCE PROGRAM OR PREMIUMS FOR HEALTH 23 INSURANCE COVERAGE, ARE PAYABLE BUT FROM WHICH MUNICIPAL PENSION 24 PLAN COSTS, INCLUDING THE AMORTIZATION OF ANY UNFUNDED ACTUARIAL 25 ACCRUED LIABILITY, ARE NOT FULLY ALLOCATED. UPON IDENTIFYING 26 THESE OMITTED OR UNDERUTILIZED MUNICIPAL REVENUE SOURCES, THE 27 MUNICIPALITY SHALL UNDERTAKE STEPS TO UTILIZE OR INCREASE 28 UTILIZATION OF THESE REVENUE SOURCES. FULL UTILIZATION OF THESE 29 REVENUE SOURCES SHALL OCCUR WITHIN ONE YEAR OF IDENTIFICATION. 30 (B) MULTIEMPLOYER PLANS.--IF A MUNICIPAL PENSION PLAN OF THE 19830S0713B2455 - 42 -
1 MUNICIPALITY IS A MULTIEMPLOYER PENSION PLAN, THE IDENTIFICATION 2 AND UTILIZATION OF OMITTED OR UNDERUTILIZED MUNICIPAL REVENUE 3 SOURCES SHALL INCLUDE THE MUNICIPAL PENSION PLAN FINANCING 4 PROVIDED BY OTHER PARTICIPATING EMPLOYERS. FOR ANY MUNICIPALITY, 5 MUNICIPAL REVENUE SOURCES SHALL INCLUDE MUNICIPAL ENTERPRISES 6 AND FEDERAL, STATE OR PRIVATE GRANTS. 7 SECTION 402. REVISION OF FINANCING FROM STATE REVENUE SOURCES; 8 GENERAL MUNICIPAL PENSION SYSTEM STATE AID 9 PROGRAM. 10 (A) ESTABLISHMENT OF PROGRAM.--THERE IS HEREBY ESTABLISHED A 11 GENERAL MUNICIPAL PENSION SYSTEM STATE AID PROGRAM. 12 NOTWITHSTANDING ANY APPLICABLE PROVISION OF THE ACT OF JUNE 28, 13 1895 (P.L.408, NO.289), REFERRED TO AS THE FOREIGN FIRE 14 INSURANCE PREMIUM TAX ALLOCATION LAW, THE ACT OF MAY 12, 1943 15 (P.L.259, NO.120), REFERRED TO AS THE FOREIGN CASUALTY INSURANCE 16 PREMIUM TAX ALLOCATION LAW, OR THE ACT OF MARCH 4, 1971 (P.L.6, 17 NO.2), KNOWN AS THE TAX REFORM CODE OF 1971, TO THE CONTRARY, 18 THE PROVISIONS OF THIS SECTION AND SECTIONS 607 AND 706 SHALL 19 GOVERN WITH RESPECT TO THE INSURANCE PREMIUM TAXES ON FOREIGN 20 FIRE INSURANCE COMPANIES AND FOREIGN CASUALTY INSURANCE 21 COMPANIES FOR ALLOCATION PURSUANT TO THE GENERAL MUNICIPAL 22 PENSION SYSTEM STATE AID PROGRAM. 23 (B) FINANCING OF THE GENERAL MUNICIPAL PENSION SYSTEM STATE 24 AID PROGRAM.--EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE 25 GENERAL MUNICIPAL PENSION SYSTEM STATE AID PROGRAM SHALL 26 ALLOCATE THE ENTIRE PROCEEDS OF THE INSURANCE PREMIUM TAX ON 27 FOREIGN CASUALTY INSURANCE COMPANIES, WHICH SHALL BE PLACED INTO 28 A REVENUE ACCOUNT, AND ANY INVESTMENT INCOME EARNED ON THOSE 29 PROCEEDS, AND THE PORTION OF THE PROCEEDS OF THE INSURANCE 30 PREMIUM TAX ON FOREIGN FIRE INSURANCE COMPANIES WHICH REPRESENTS 19830S0713B2455 - 43 -
1 THE AMOUNT OF THE DISTRIBUTIONS APPLICABLE TO PAID FIREFIGHTERS 2 PURSUANT TO SECTION 706 AND ANY INVESTMENT INCOME EARNED ON THE 3 AMOUNT OF THOSE DISTRIBUTIONS. 4 (C) AMOUNT OF AID AVAILABLE FOR ALLOCATION.--DURING THE 5 PERIOD JULY 1, 1985 TO DECEMBER 31, 1988, A PORTION OF THE TOTAL 6 AMOUNT SPECIFIED AS PAYABLE TO THE STATE EMPLOYEES' RETIREMENT 7 FUND PURSUANT TO SECTION 1 OF THE ACT OF MAY 12, 1943 (P.L.259, 8 NO.120), REFERRED TO AS THE FOREIGN CASUALTY INSURANCE PREMIUM 9 TAX ALLOCATION LAW, SHALL BE DEPOSITED FOR SUBSEQUENT 10 DISTRIBUTION IN THE SUPPLEMENTAL ASSISTANCE ACCOUNT OF THE 11 SUPPLEMENTAL STATE ASSISTANCE FUND PURSUANT TO SECTION 607 12 INSTEAD OF DEPOSITED FOR SUBSEQUENT DISTRIBUTION IN THE GENERAL 13 MUNICIPAL PENSION SYSTEM STATE AID PROGRAM, AS FOLLOWS: 14 DEPOSITED IN 15 GENERAL MUNICIPAL DEPOSITED IN 16 CALENDAR PENSION SYSTEM SUPPLEMENTAL STATE 17 YEAR STATE AID PROGRAM ASSISTANCE FUND 18 1985 25% 75% 19 1986 50% 50% 20 1987 75% 25% 21 1988 100% 0% 22 (D) ELIGIBLE RECIPIENTS OF GENERAL MUNICIPAL PENSION SYSTEM 23 STATE AID.--ANY COUNTY OF THE SECOND CLASS WHICH, PRIOR TO THE 24 EFFECTIVE DATE OF THIS CHAPTER, RECEIVED ALLOCATIONS FOR ITS 25 POLICE PENSION FUND PURSUANT TO THE ACT OF MAY 12, 1943 26 (P.L.259, NO.120), OR ANY CITY, BOROUGH, INCORPORATED TOWN OR 27 TOWNSHIP OR ANY HOME RULE MUNICIPALITY FORMERLY CLASSIFIED AS A 28 CITY, BOROUGH, INCORPORATED TOWN OR TOWNSHIP WHICH EMPLOYS ONE 29 OR MORE FULL-TIME MUNICIPAL EMPLOYEE AND PROVIDES PENSION COVER- 30 AGE FOR THAT EMPLOYEE OR THOSE EMPLOYEES BY A PENSION PLAN WHICH 19830S0713B2455 - 44 -
1 WAS ESTABLISHED AND MAINTAINED ON THE EFFECTIVE DATE OF THIS ACT 2 OR WHICH WAS ESTABLISHED SUBSEQUENT TO THE EFFECTIVE DATE OF 3 THIS ACT AND HAS BEEN MAINTAINED FOR AT LEAST THREE PLAN YEARS, 4 SHALL BE ENTITLED TO RECEIVE GENERAL MUNICIPAL PENSION SYSTEM 5 STATE AID. 6 (E) ALLOCATION OF GENERAL MUNICIPAL PENSION SYSTEM STATE 7 AID.-- 8 (1) GENERAL MUNICIPAL PENSION SYSTEM STATE AID SHALL BE 9 DISTRIBUTED ANNUALLY TO EACH ELIGIBLE RECIPIENT MUNICIPALITY 10 NO LATER THAN THE FIRST BUSINESS DAY OCCURRING IN THE MONTH 11 OF OCTOBER. FOR THE PERIOD ENDING WITH THE DISTRIBUTION MADE 12 DURING CALENDAR YEAR 1995, THE ALLOCATION OF AID FOR 13 DISTRIBUTION SHALL BE PURSUANT TO PARAGRAPH (4). FOR THE 14 PERIOD COMMENCING WITH THE DISTRIBUTION MADE DURING CALENDAR 15 YEAR 1996, THE ALLOCATION OF AID FOR DISTRIBUTION SHALL BE 16 PURSUANT TO PARAGRAPH (5). ANY ALLOCATION OF AID PER UNIT 17 SHALL BE BASED ON THE NUMBER OF UNITS PURSUANT TO PARAGRAPH 18 (2) AS CERTIFIED BY THE APPLICABLE ELIGIBLE MUNICIPALITIES. 19 ANY ALLOCATION OF AID SHALL BE PURSUANT TO THE MAXIMUMS 20 SPECIFIED IN SUBSECTION (F). 21 (2) THE APPLICABLE NUMBER OF UNITS SHALL BE ATTRIBUTABLE 22 TO EACH ACTIVE EMPLOYEE WHO WAS EMPLOYED ON A FULL-TIME BASIS 23 FOR A MINIMUM OF SIX CONSECUTIVE MONTHS PRIOR TO DECEMBER 31 24 PRECEDING THE DATE OF CERTIFICATION AND WHO WAS PARTICIPATING 25 IN A PENSION PLAN MAINTAINED BY THAT MUNICIPALITY, PROVIDED 26 THAT THE MUNICIPALITY MAINTAINS A GENERALLY APPLICABLE 27 PENSION PLAN FOR THAT TYPE OF EMPLOYEE WHICH WAS EITHER 28 ESTABLISHED ON OR PRIOR TO DECEMBER 31, 1984, OR, IF 29 ESTABLISHED AFTER DECEMBER 31, 1984, HAS BEEN MAINTAINED BY 30 THAT MUNICIPALITY FOR AT LEAST THREE PLAN YEARS. THE 19830S0713B2455 - 45 -
1 APPLICABLE NUMBER OF UNITS PER EMPLOYEE ATTRIBUTABLE TO EACH 2 ELIGIBLE RECIPIENT COUNTY OF THE SECOND CLASS SHALL BE TWO 3 UNITS FOR EACH POLICE OFFICER. THE APPLICABLE NUMBER OF UNITS 4 ATTRIBUTABLE TO EACH ELIGIBLE RECIPIENT CITY, BOROUGH, 5 INCORPORATED TOWN AND TOWNSHIP SHALL BE AS FOLLOWS: 6 (I) POLICE OFFICER - TWO UNITS. 7 (II) FIREFIGHTER - TWO UNITS. 8 (III) EMPLOYEE OTHER THAN POLICE OFFICER OR 9 FIREFIGHTER - ONE UNIT. 10 (3) THE AMOUNT OF GENERAL MUNICIPAL PENSION SYSTEM STATE 11 AID PER UNIT SHALL BE INITIALLY DETERMINED BY DIVIDING THE 12 TOTAL AMOUNT OF THE GENERAL MUNICIPAL PENSION SYSTEM STATE 13 AID AVAILABLE BY THE TOTAL NUMBER OF UNITS CERTIFIED BY ALL 14 ELIGIBLE MUNICIPALITIES. IF THE MAXIMUM SPECIFIED IN 15 SUBSECTION (F)(1) IS APPLICABLE, THE AMOUNT OF GENERAL 16 MUNICIPAL PENSION SYSTEM STATE AID PER UNIT APPLICABLE TO ALL 17 MUNICIPALITIES OTHER THAN THE MUNICIPALITY OR MUNICIPALITIES 18 SUBJECT TO THE MAXIMUM AID AMOUNT SPECIFIED IN SUBSECTION 19 (F)(1) SHALL BE ADJUSTED. THE ADJUSTED AMOUNT OF GENERAL 20 MUNICIPAL PENSION SYSTEM STATE AID PER UNIT ATTRIBUTABLE TO 21 MUNICIPALITIES UNAFFECTED BY THE AID MAXIMUM SPECIFIED IN 22 SUBSECTION (F)(1) SHALL BE DETERMINED BY DIVIDING THE TOTAL 23 AMOUNT OF THE GENERAL MUNICIPAL PENSION SYSTEM STATE AID 24 AVAILABLE, AFTER EXCLUDING 25% OF THE TOTAL FOR EACH 25 MUNICIPALITY TO WHICH THE MAXIMUM AID AMOUNT IS APPLICABLE, 26 BY THE TOTAL NUMBER OF UNITS CERTIFIED BY ALL ELIGIBLE 27 MUNICIPALITIES UNAFFECTED BY THE AID MAXIMUM SPECIFIED IN 28 SUBSECTION (F)(1). 29 (4) FOR THE PERIOD ENDING WITH THE DISTRIBUTION MADE 30 DURING CALENDAR YEAR 1995, EACH ELIGIBLE MUNICIPALITY SHALL 19830S0713B2455 - 46 -
1 BE ENTITLED TO RECEIVE AS GENERAL MUNICIPAL PENSION SYSTEM 2 STATE AID THE GREATER OF THE FOLLOWING AMOUNTS: 3 (I) THE ADJUSTED AMOUNT OF GENERAL MUNICIPAL PENSION 4 SYSTEM STATE AID PER UNIT MULTIPLIED BY THE NUMBER OF 5 UNITS CERTIFIED BY THAT MUNICIPALITY AND AN ADDITIONAL 6 AMOUNT NECESSARY FOR THE TOTAL TO EQUAL THE LESSER OF THE 7 TOTAL AMOUNT OF ANY FOREIGN CASUALTY INSURANCE PREMIUM 8 TAX ALLOCATION AND ANY FOREIGN FIRE INSURANCE PREMIUM TAX 9 ALLOCATION ATTRIBUTABLE TO PAID FIREFIGHTERS WHICH THE 10 MUNICIPALITY WAS ENTITLED TO RECEIVE DURING THE REGULAR 11 ALLOCATION OCCURRING IN CALENDAR YEAR 1982, OR THE 12 AGGREGATE ACTUAL FINANCIAL REQUIREMENT OF ANY POLICE OR 13 PAID FIRE PENSION PLANS MAINTAINED BY THE MUNICIPALITY 14 LESS THE AMOUNT OF AGGREGATE ANNUAL MEMBER OF EMPLOYEE 15 CONTRIBUTIONS DURING THE PLAN YEAR AS REPORTED IN THE 16 MOST RECENT COMPLETE ACTUARIAL REPORT FILED WITH THE 17 COMMISSION. 18 (II) THE REVISED AMOUNT OF GENERAL MUNICIPAL PENSION 19 SYSTEM STATE AID PER UNIT MULTIPLIED BY THE NUMBER OF 20 UNITS CERTIFIED BY THAT MUNICIPALITY, WHICH REVISED 21 AMOUNT SHALL BE DETERMINED PURSUANT TO PARAGRAPH (6). 22 (5) FOR THE PERIOD COMMENCING WITH THE DISTRIBUTION MADE 23 DURING CALENDAR YEAR 1996, EACH ELIGIBLE MUNICIPALITY SHALL 24 BE ENTITLED TO RECEIVE AS GENERAL MUNICIPAL PENSION SYSTEM 25 STATE AID THE LESSER OF THE FOLLOWING AMOUNTS: 26 (I) THE ADJUSTED AMOUNT OF GENERAL MUNICIPAL PENSION 27 SYSTEM STATE AID PER UNIT MULTIPLIED BY THE NUMBER OF 28 UNITS CERTIFIED BY THAT MUNICIPALITY LESS ANY AMOUNT BY 29 WHICH THE ADJUSTED AMOUNT EXCEEDS THE MAXIMUM AID AMOUNT 30 APPLICABLE TO THE MUNICIPALITY PURSUANT TO SUBSECTION 19830S0713B2455 - 47 -
1 (F)(2); OR 2 (II) THE REVISED AMOUNT OF GENERAL MUNICIPAL PENSION 3 SYSTEM STATE AID PER UNIT MULTIPLIED BY THE NUMBER OF 4 UNITS CERTIFIED BY THAT MUNICIPALITY, WHICH REVISED 5 AMOUNT SHALL BE DETERMINED PURSUANT TO PARAGRAPH (6). 6 (6) THE REVISED AMOUNT OF GENERAL MUNICIPAL PENSION 7 SYSTEM STATE AID PER UNIT SHALL BE DETERMINED BY THE 8 FOLLOWING PROCEDURE: 9 (I) THE AMOUNT OF THE TOTAL DISTRIBUTION MADE 10 PURSUANT TO PARAGRAPH (4)(I) OR (5)(I), WHICHEVER IS 11 APPLICABLE, THE AMOUNT OF THE GENERAL MUNICIPAL PENSION 12 SYSTEM STATE AID PAYABLE TO ANY MUNICIPALITY OR 13 MUNICIPALITIES TO WHICH THE LIMITATION PROVIDED IN 14 SUBSECTION (F)(1) IS APPLICABLE AND THE AMOUNT OF THE 15 TOTAL POTENTIAL DISTRIBUTION PURSUANT TO PARAGRAPH (7) 16 SHALL BE TOTALED. 17 (II) THE TOTAL CALCULATED PURSUANT TO SUBPARAGRAPH 18 (I) SHALL BE SUBTRACTED FROM THE TOTAL AMOUNT OF THE 19 GENERAL MUNICIPAL PENSION SYSTEM STATE AID AVAILABLE. 20 (III) THE NUMBER OF UNITS ATTRIBUTABLE TO THE 21 MUNICIPALITIES WHICH ARE ENTITLED TO RECEIVE AN AID 22 AMOUNT CALCULATED PURSUANT TO PARAGRAPH (4)(I) OR (5)(I), 23 WHICHEVER IS APPLICABLE, THE NUMBER OF UNITS ATTRIBUTABLE 24 TO THE MUNICIPALITIES OR MUNICIPALITY TO WHICH THE 25 LIMITATION PROVIDED IN SUBSECTION (F)(1) APPLIES AND THE 26 NUMBER OF UNITS ATTRIBUTABLE TO THE MUNICIPALITIES 27 INCLUDED IN THE POTENTIAL DISTRIBUTION PURSUANT TO 28 PARAGRAPH (7) SHALL BE TOTALED. 29 (IV) THE TOTAL CALCULATED PURSUANT TO SUBPARAGRAPH 30 (III) SHALL BE SUBTRACTED FROM THE TOTAL NUMBER OF UNITS 19830S0713B2455 - 48 -
1 CERTIFIED BY ALL ELIGIBLE MUNICIPALITIES. 2 (V) THE NUMBER RESULTING FROM THE CALCULATION 3 PURSUANT TO SUBPARAGRAPH (II) SHALL BE DIVIDED BY THE 4 NUMBER RESULTING FROM THE CALCULATION PURSUANT TO 5 SUBPARAGRAPH (IV), WHICH SHALL BE THE REVISED AMOUNT OF 6 GENERAL MUNICIPAL PENSION SYSTEM STATE AID PER UNIT. 7 (7) ANY MUNICIPALITY WHICH HAS NOT FILED WITH THE 8 COMMISSION ON A TIMELY BASIS PURSUANT TO THE APPLICABLE 9 MUNICIPAL PENSION PLAN ACTUARIAL REPORTING LAW AN ACTUARIAL 10 REPORT FOR EACH OF THE MUNICIPAL PENSION PLANS WHICH IT HAS 11 ESTABLISHED OR MAINTAINS SHALL BE ENTITLED TO RECEIVE AS 12 GENERAL MUNICIPAL PENSION SYSTEM STATE AID, AT SUCH TIME AS 13 COMPLIANCE WITH THE ACTUARIAL REPORTING REQUIREMENT OCCURS, 14 THE ADJUSTED AMOUNT OF GENERAL MUNICIPAL PENSION SYSTEM STATE 15 AID PER UNIT PURSUANT TO PARAGRAPH (3) MULTIPLIED BY THE 16 NUMBER OF UNITS CERTIFIED BY THAT MUNICIPALITY, BUT NOT TO 17 EXCEED THE MAXIMUM AID AMOUNT APPLICABLE TO THE MUNICIPALITY 18 PURSUANT TO SUBSECTION (F). THE AMOUNT OF ANY DIFFERENCE 19 BETWEEN THE ADJUSTED AMOUNT OF GENERAL MUNICIPAL PENSION 20 SYSTEM STATE AID PER UNIT MULTIPLIED BY THE NUMBER OF UNITS 21 CERTIFIED BY A MUNICIPALITY AND THE MAXIMUM AID AMOUNT 22 APPLICABLE TO THE MUNICIPALITY PURSUANT TO SUBSECTION (F) FOR 23 THAT MUNICIPALITY SHALL BE ADDED TO THE AMOUNT OF THE GENERAL 24 MUNICIPAL PENSION SYSTEM STATE AID AVAILABLE FOR DISTRIBUTION 25 IN THE SUCCEEDING CALENDAR YEAR. 26 (F) MAXIMUM GENERAL MUNICIPAL PENSION SYSTEM STATE AID 27 AMOUNT.-- 28 (1) NO MUNICIPALITY SHALL BE ENTITLED TO RECEIVE AN 29 ALLOCATION OF GENERAL MUNICIPAL PENSION SYSTEM STATE AID IN 30 AN AMOUNT GREATER THAN 25% OF THE TOTAL AMOUNT OF THE GENERAL 19830S0713B2455 - 49 -
1 MUNICIPAL PENSION SYSTEM STATE AID AVAILABLE. 2 (2) NO MUNICIPALITY SHALL BE ENTITLED TO RECEIVE AN 3 ALLOCATION OF GENERAL MUNICIPAL PENSION SYSTEM STATE AID IN 4 AN AMOUNT WHICH EXCEEDS THE AGGREGATE ACTUAL FINANCIAL 5 REQUIREMENTS OF ANY MUNICIPAL PENSION PLANS FOR POLICE 6 OFFICERS, PAID FIREFIGHTERS OR EMPLOYEES OTHER THAN POLICE 7 OFFICERS OR PAID FIREFIGHTERS MAINTAINED BY THAT 8 MUNICIPALITY, LESS THE AMOUNT OF ANY AGGREGATE ANNUAL MEMBER 9 OR EMPLOYEE CONTRIBUTIONS DURING THE NEXT SUCCEEDING PLAN 10 YEAR, AS REPORTED IN THE MOST RECENT COMPLETE ACTUARIAL 11 REPORT FILED WITH THE COMMISSION. 12 (3) IN THE CASE OF ANY MUNICIPAL PENSION PLAN WHICH IS 13 NOT A DEFINED BENEFIT PLAN IN WHOLE OR IN PART AND FOR WHICH 14 NO PROVISION OF LAW, MUNICIPAL ORDINANCE OR MUNICIPAL 15 RESOLUTION REQUIRES A PARTICULAR ANNUAL CONTRIBUTION ON THE 16 PART OF THE MUNICIPALITY OF A SPECIFIC IDENTIFIABLE PER 17 EMPLOYEE DOLLAR OR PERCENTAGE AMOUNT WHICH IS OR WILL BE 18 APPLICABLE FOR A PERIOD LONGER THAN 12 CALENDAR MONTHS, THE 19 AGGREGATE FINANCIAL REQUIREMENT OF THE PLAN SHALL BE EQUAL TO 20 THE AVERAGE NORMAL COST REQUIREMENT FOR ALL POLICE AND PAID 21 FIREFIGHTERS PENSION PLANS OF THE SAME CLASS OF MUNICIPALITY 22 IF THE MUNICIPAL PENSION PLAN IS EITHER A POLICE OR A PAID 23 FIREFIGHTERS PENSION PLAN OR FOR ALL PENSION PLANS FOR 24 EMPLOYEES OTHER THAN POLICE OFFICERS AND PAID FIREFIGHTERS OF 25 THE SAME CLASS OF MUNICIPALITY IF THE MUNICIPAL PENSION PLAN 26 IS OTHER THAN A POLICE OR A PAID FIREFIGHTERS PENSION PLAN. 27 THE AVERAGE NORMAL COST REQUIREMENT SHALL BE DETERMINED BY 28 THE COMMISSION, EXPRESSED AS A PERCENTAGE OF PAYROLL AND 29 APPLIED TO THE COVERED PAYROLL APPLICABLE TO THE MUNICIPAL 30 PENSION PLAN. 19830S0713B2455 - 50 -
1 (G) AUTHORIZED EXPENDITURES OF GENERAL MUNICIPAL PENSION 2 SYSTEM STATE AID.--ANY GENERAL MUNICIPAL PENSION SYSTEM STATE 3 AID RECEIVED BY A MUNICIPALITY SHALL ONLY BE USED TO DEFRAY THE 4 COST OF THE PENSION PLAN OR PENSION PLANS MAINTAINED BY THE 5 MUNICIPALITY. IF ONLY ONE PENSION PLAN IS MAINTAINED BY THE 6 MUNICIPALITY, THEN THE TOTAL AMOUNT OF THE GENERAL MUNICIPAL 7 PENSION SYSTEM STATE AID RECEIVED BY THE MUNICIPALITY SHALL, 8 WITHIN 30 DAYS OF RECEIPT BY THE TREASURER OF THE MUNICIPALITY, 9 BE DEPOSITED IN THE PENSION FUND OR THE ALTERNATE FUNDING 10 MECHANISM APPLICABLE TO THE PENSION PLAN. IF MORE THAN ONE 11 PENSION PLAN IS MAINTAINED BY THE MUNICIPALITY, THEN THE 12 GOVERNING BODY OF THE MUNICIPALITY SHALL ANNUALLY DETERMINE THE 13 PROPORTION OF THE TOTAL AMOUNT OF THE GENERAL MUNICIPAL PENSION 14 SYSTEM STATE AID RECEIVED BY THE MUNICIPALITY WHICH SHALL BE 15 CREDITED TO EACH PENSION PLAN AND THE TOTAL AMOUNT OF THE 16 GENERAL MUNICIPAL PENSION SYSTEM STATE AID RECEIVED BY THE 17 MUNICIPALITY SHALL, WITHIN 30 DAYS OF RECEIPT BY THE TREASURER 18 OF THE MUNICIPALITY, BE DEPOSITED IN THE PENSION FUNDS OR 19 ALTERNATE FUNDING MECHANISMS APPLICABLE TO THE RESPECTIVE 20 PENSION PLANS IN ACCORDANCE WITH THAT DETERMINATION. 21 (H) CERTIFICATION OF EMPLOYEES BY ELIGIBLE RECIPIENT 22 MUNICIPALITIES.--EACH ELIGIBLE RECIPIENT COUNTY OF THE SECOND 23 CLASS SHALL CERTIFY ANNUALLY TO THE AUDITOR GENERAL THE NUMBER 24 OF POLICE OFFICERS AND EACH OTHER ELIGIBLE RECIPIENT 25 MUNICIPALITY SHALL CERTIFY ANNUALLY TO THE AUDITOR GENERAL THE 26 NUMBER OF POLICE OFFICERS, FIREFIGHTERS AND MUNICIPAL EMPLOYEES 27 OTHER THAN POLICE OFFICERS AND FIREFIGHTERS WHO MEET THE 28 QUALIFICATION REQUIREMENTS SPECIFIED IN SUBSECTION (E)(2), AND 29 WHATEVER ADDITIONAL INFORMATION THE AUDITOR GENERAL REQUIRES TO 30 VERIFY THE NUMBER OF UNITS ATTRIBUTABLE TO THE MUNICIPALITY. NO 19830S0713B2455 - 51 -
1 UNIT OR UNITS SHALL BE ATTRIBUTABLE TO ANY MUNICIPAL EMPLOYEE 2 WHO IS NOT CERTIFIED TO THE AUDITOR GENERAL IN A TIMELY MANNER. 3 (I) WARRANTS.--WARRANTS FOR PURPOSES OF MAKING THE 4 ALLOCATION OF GENERAL MUNICIPAL PENSION SYSTEM STATE AID SHALL 5 BE DRAWN BY THE AUDITOR GENERAL, PAYABLE TO THE TREASURERS OF 6 THE ELIGIBLE RECIPIENT MUNICIPALITIES IN ACCORDANCE WITH THIS 7 SECTION. 8 (J) ADMINISTRATION.--THE AUDITOR GENERAL SHALL HAVE THE DUTY 9 OF ADMINISTERING THE GENERAL MUNICIPAL PENSION SYSTEM STATE AID 10 PROGRAM. THE AUDITOR GENERAL MAY PROMULGATE RULES AND 11 REGULATIONS NECESSARY FOR THE EFFICIENT ADMINISTRATION OF THIS 12 PROGRAM AND MAY SPECIFY THE FORM AND CONTENT OF ANY FORMS 13 APPLICABLE TO THE PROGRAM. THE AUDITOR GENERAL, AS DEEMED 14 NECESSARY, SHALL MAKE AN AUDIT OF EVERY MUNICIPALITY WHICH 15 RECEIVES GENERAL MUNICIPAL PENSION SYSTEM STATE AID AND OF EVERY 16 MUNICIPAL PENSION PLAN AND FUND IN WHICH GENERAL MUNICIPAL 17 PENSION SYSTEM STATE AID IS DEPOSITED. 18 SECTION 403. GENERAL MUNICIPAL PENSION SYSTEM STATE AID MONEYS. 19 (A) MONEYS PAID.--ANY FUNDS PAID TO A MUNICIPALITY PURSUANT 20 TO THE ACT OF MAY 12, 1943 (P.L.259, NO.120), REFERRED TO AS THE 21 FOREIGN CASUALTY INSURANCE PREMIUM TAX ALLOCATION LAW, PRIOR TO 22 THE EFFECTIVE DATE OF THIS ACT, AND WHICH HAVE BEEN EITHER 23 ACTUALLY EXPENDED OR, BY ACTION OF THE MUNICIPALITY, ARE 24 IRREVOCABLY COMMITTED TO BE EXPENDED ONLY IN ACCORDANCE WITH THE 25 FOREIGN CASUALTY INSURANCE PREMIUM TAX ALLOCATION LAW, SHALL NOT 26 BE RETURNED FOR REDISTRIBUTION PURSUANT TO SECTION 1.2 OF THE 27 FOREIGN CASUALTY INSURANCE PREMIUM TAX ALLOCATION LAW. 28 (B) MONEYS WITHHELD.--ANY FUNDS PAYABLE TO A MUNICIPALITY, 29 THE PAYMENT OF WHICH HAS BEEN WITHHELD OR PREVENTED BY ACTION OF 30 THE AUDITOR GENERAL PURSUANT TO SECTION 1.2 OF THE FOREIGN 19830S0713B2455 - 52 -
1 CASUALTY INSURANCE PREMIUM TAX ALLOCATION LAW, TAKEN SINCE 2 JANUARY 1, 1982, SHALL BE PAID TO THE RESPECTIVE MUNICIPALITY. 3 FURTHER, IF THE FUNDS ARE EITHER ACTUALLY EXPENDED, OR, BY 4 ACTION OF THE MUNICIPALITY, IRREVOCABLY COMMITTED TO BE EXPENDED 5 ONLY IN ACCORDANCE WITH THE FOREIGN CASUALTY INSURANCE PREMIUM 6 TAX ALLOCATION LAW, THEN THE FUNDS SHALL NOT BE RETURNED FOR 7 REDISTRIBUTION PURSUANT TO SECTION 1.2 OF THE FOREIGN CASUALTY 8 INSURANCE PREMIUM TAX ALLOCATION LAW. 9 CHAPTER 5 10 FINANCIALLY DISTRESSED MUNICIPAL PENSION 11 PLAN DETERMINATION PROCEDURE 12 SECTION 501. INITIATION OF DISTRESS DETERMINATION. 13 EACH MUNICIPALITY WHICH WISHES TO AVAIL ITSELF OF ANY OF THE 14 PROVISIONS OF SECTIONS 604, 605 AND 606 SHALL APPLY TO THE 15 COMMISSION FOR A DETERMINATION OF ITS STATUS PURSUANT TO THIS 16 CHAPTER. THE APPLICATION SHALL BE IN THE FORM AND SHALL CONTAIN 17 THE REQUIRED INFORMATION AS PRESCRIBED IN RULES AND REGULATIONS 18 ISSUED BY THE COMMISSION. DETERMINATIONS PURSUANT TO THIS 19 CHAPTER SHALL BE MADE ANNUALLY. 20 SECTION 502. PENSION PLANS FOR INCLUSION IN DETERMINATION. 21 THE DETERMINATION PROVIDED FOR IN THIS CHAPTER SHALL BE MADE 22 FOR A MUNICIPALITY TAKING INTO ACCOUNT ALL PENSION PLANS WHICH 23 THE MUNICIPALITY HAS ESTABLISHED AND MAINTAINS. 24 SECTION 503. DETERMINATION PROCEDURE. 25 (A) GENERALLY.--THE DETERMINATION PROVIDED FOR IN THIS 26 CHAPTER SHALL BE MADE BY THE COMMISSION USING THE ACTUARIAL 27 INDICATORS SPECIFIED IN SUBSECTION (B) AND THE MUNICIPAL FINANCE 28 INDICATORS SPECIFIED IN SUBSECTION (C), AND THE SCORING SYSTEM 29 ASSOCIATED WITH EACH. 30 (B) ACTUARIAL INDICATORS.--THE ACTUARIAL INDICATORS SHALL BE 19830S0713B2455 - 53 -
1 BASED ON THE MOST CURRENT ACTUARIAL VALUATION REPORT OR REPORTS 2 FILED BY THE APPLICABLE MUNICIPALITY WITH THE COMMISSION 3 PURSUANT TO LAW AND SHALL BE MADE IN AGGREGATE FOR ALL PENSION 4 PLANS MAINTAINED BY THE APPLICABLE MUNICIPALITY. THE ACTUARIAL 5 INDICATORS AND THE ASSOCIATED SCORING SYSTEM FOR EACH SHALL BE 6 AS FOLLOWS: 7 (1) THE AGGREGATE AMOUNT OF CURRENT PENSION PLAN 8 BENEFITS PAYABLE SHALL BE COMPUTED AS A PERCENTAGE OF THE 9 CURRENT MARKET VALUE OF AGGREGATE PLAN ASSETS: 10 BENEFITS PAYABLE 11 AS PERCENTAGE 12 OF ASSETS SCORING 13 0 - 5% 0 14 6 - 10% 10 15 11 - 15% 20 16 16 - 20% 30 17 21 - 30% 40 18 31 - 40% 50 19 41 - 50% 60 20 51 - 60% 70 21 61 - 70% 80 22 71 - 80% 90 23 81% OR GREATER 100 24 (2) THE AGGREGATE ACTUARIAL VALUE OF PLAN ASSETS SHALL 25 BE COMPUTED AS A PERCENTAGE OF THE AGGREGATE ACCRUED 26 ACTUARIAL LIABILITY: 27 ASSETS AS PERCENTAGE 28 OF ACCRUED ACTUARIAL 29 LIABILITY SCORING 30 50.0% OR GREATER 0 19830S0713B2455 - 54 -
1 40.0 - 49.0% 10 2 30.0 - 39.0% 20 3 25.0 - 29.0% 30 4 20.0 - 24.0% 40 5 15.0 - 19.0% 50 6 10.0 - 14.0% 60 7 7.5 - 9.0% 70 8 5.0 - 7.4% 80 9 2.5 - 4.9% 90 10 0 - 2.4% 100 11 (3) THE AGGREGATE AMOUNT OF NORMAL COST EXPRESSED AS A 12 PERCENTAGE OF COVERED PAYROLL REDUCED BY THE AGGREGATE AMOUNT 13 OF ANY MEMBER CONTRIBUTIONS EXPRESSED AS A PERCENTAGE OF 14 COVERED PAYROLL IS ADDED TO THE AGGREGATE AMOUNT OF ANY 15 EMPLOYER CONTRIBUTIONS TO THE FEDERAL OLD AGE, SURVIVORS, 16 DISABILITY AND HEALTH INSURANCE PROGRAM EXPRESSED AS A 17 PERCENTAGE OF COVERED PAYROLL: 18 TOTAL EMPLOYER 19 RETIREMENT COST SCORING 20 0 - 9.99% 0 21 10.00 - 11.99% 10 22 12.00 - 12.99% 20 23 13.00 - 13.99% 30 24 14.00 - 14.99% 40 25 15.00 - 15.99% 50 26 16.00 - 16.99% 60 27 17.00 - 17.99% 70 28 18.00 - 18.99% 80 29 19.00 - 19.99% 90 30 20.00% OR GREATER 100 19830S0713B2455 - 55 -
1 (4) THE AGGREGATE REQUIREMENT TO AMORTIZE THE UNFUNDED 2 ACCRUED ACTUARIAL LIABILITY ON A LEVEL ANNUAL DOLLAR BASIS 3 ACCORDING TO THE APPLICABLE AMORTIZATION SCHEDULES SPECIFIED 4 IN SECTION 202(4) IS DIVIDED BY THE AGGREGATE NORMAL COST 5 REQUIREMENT: 6 AMORTIZATION REQUIREMENT 7 DIVIDED BY NORMAL 8 COST RESULT SCORING 9 0 - 0.39 0 10 0.40 - 0.79 10 11 0.80 - 1.19 20 12 1.20 - 1.39 30 13 1.40 - 1.59 40 14 1.60 - 1.79 50 15 1.80 - 1.99 60 16 2.00 - 2.19 70 17 2.20 - 2.39 80 18 2.40 - 2.59 90 19 2.60 OR OVER 100 20 (5) THE DIFFERENCE BETWEEN THE AGGREGATE AMOUNT OF 21 NORMAL COST PLUS THE REQUIREMENT TO AMORTIZE THE UNFUNDED 22 ACCRUED ACTUARIAL LIABILITY ON A LEVEL ANNUAL DOLLAR BASIS 23 ACCORDING TO THE APPLICABLE AMORTIZATION SCHEDULES SPECIFIED 24 IN SECTION 202(4), AND THE TOTAL AGGREGATE AMOUNT OF MEMBER 25 CONTRIBUTIONS, STATE ALLOCATIONS DEDICATED FOR PENSION 26 PURPOSES AND MUNICIPAL CONTRIBUTIONS RECEIVED FOR THE 27 PREVIOUS YEAR IS COMPUTED AND EXPRESSED AS A PERCENTAGE OF 28 COVERED PAYROLL: 29 DIFFERENCE BETWEEN 30 FULL ACTUARIAL 19830S0713B2455 - 56 -
1 REQUIREMENT AND 2 CURRENT CONTRIBUTIONS SCORING 3 0 - 2.4% 0 4 2.5 - 4.9% 10 5 5 - 9.9% 20 6 10 - 14.9% 30 7 15 - 19.9% 40 8 20 - 24.9% 50 9 25 - 29.9% 60 10 30 - 34.9% 70 11 35 - 39.9% 80 12 40 - 44.9% 90 13 45% OR OVER 100 14 (6) THE COMPOUND ANNUAL PERCENTAGE RATE OF INCREASE IN 15 THE AGGREGATE AMOUNT OF THE UNFUNDED ACCRUED ACTUARIAL 16 LIABILITY OVER THE MOST RECENT FOUR-YEAR PERIOD IS COMPUTED, 17 UNLESS THE AMOUNT OF THE UNFUNDED ACCRUED ACTUARIAL LIABILITY 18 EQUALS LESS THAN 10% OF THE AMOUNT OF ASSETS IN EITHER THE 19 FIRST OR FOURTH YEAR: 20 COMPOUND RATE 21 OF INCREASE IN 22 UNFUNDED ACCRUED 23 ACTUARIAL LIABILITY SCORING 24 0.0 - 9.9% 0 25 10.0 - 12.4% 10 26 12.5 - 14.9% 20 27 15.0 - 17.4% 30 28 17.5 - 19.9% 40 29 20.0 - 22.4% 50 30 22.5 - 24.9% 60 19830S0713B2455 - 57 -
1 25% OR OVER 70 2 (7) THE COMPOUND ANNUAL PERCENTAGE RATE OF INCREASE IN 3 THE AGGREGATE AMOUNT OF MUNICIPAL CONTRIBUTIONS OVER THE MOST 4 RECENT FOUR-YEAR PERIOD IS COMPUTED: 5 COMPOUND RATE 6 OF INCREASE IN 7 MUNICIPAL CONTRIBUTIONS SCORING 8 20% OR OVER 0 9 15 - 19.9% 10 10 10 - 14.9% 20 11 0 - 9.9% 30 12 (C) MUNICIPAL FINANCE INDICATORS.--THE MUNICIPAL FINANCE 13 INDICATORS SHALL BE BASED ON THE MOST RECENT FINANCIAL REPORT OR 14 REPORTS FILED BY THE APPLICABLE MUNICIPALITY WITH THE DEPARTMENT 15 OF COMMUNITY AFFAIRS AND CERTIFIED BY THE SECRETARY OR BY THE 16 DESIGNEE OF THE SECRETARY. THE MUNICIPAL FINANCE INDICATORS AND 17 THE ASSOCIATED SCORING SYSTEM FOR EACH SHALL BE AS FOLLOWS: 18 (1) THE TOTAL AMOUNT OF TAXES COLLECTED BY THE 19 MUNICIPALITY FOR THE CURRENT YEAR ARE DIVIDED BY THE 20 POPULATION OF THE MUNICIPALITY AS OF THE LAST FEDERAL CENSUS, 21 AND THE PERCENTAGE INCREASE IN THE AMOUNT OF MUNICIPAL TAXES 22 COLLECTED PER CAPITA IN THE MOST RECENT FIVE-YEAR PERIOD: 23 TAXES COLLECTED GROSS PERCENTAGE 24 INCREASE IN TAXES 25 PER CAPITA SCORING PER CAPITA SCORING 26 $ 0.00- 79.99 0 0.00-19.99% 0 27 80.00- 84.99 5 20.00-29.99% 3 28 85.00- 89.99 10 30.00-34.99% 6 29 90.00- 99.99 15 35.00-39.99% 9 30 100.00-109.99 20 40.00-44.99% 12 19830S0713B2455 - 58 -
1 110.00-124.99 25 45.00-49.99% 15 2 125.00-139.99 30 50.00-54.99% 18 3 140.00-159.99 35 55.00-59.99% 21 4 160.00-179.99 40 60.00-64.99% 24 5 180.00-199.99 45 65.00-69.99% 27 6 200.00 OR GREATER 50 70.00% OR GREATER 30 7 (2) THE MUNICIPAL TAX RATE ON THE MARKET VALUE OF REAL 8 PROPERTY (ADJUSTED MILL RATE) IN THE MUNICIPALITY FOR THE 9 MOST RECENT YEAR, AND WHERE THE PERCENTAGE INCREASE IN THE 10 AMOUNT OF THAT ADJUSTED MILL RATE IN THE MOST RECENT FIVE- 11 YEAR PERIOD: 12 GROSS PERCENTAGE 13 INCREASE IN 14 ADJUSTED ADJUSTED MILL 15 MILL RATE SCORING RATE SCORING 16 0.00- 5.99 0 0.00- 3.99% 0 17 6.00- 7.99 5 4.00- 6.99% 3 18 8.00- 9.99 10 7.00- 9.99% 6 19 10.00-11.99 15 10.00-12.99% 9 20 12.00-12.99 20 13.00-15.99% 12 21 13.00-13.99 25 16.00-18.99% 15 22 14.00-14.99 30 19.00-21.99% 18 23 15.00-15.99 35 22.00-24.99% 21 24 16.00-16.99 40 25.00-27.99% 24 25 17.00-17.99 45 28.00-30.99% 27 26 18.00 OR GREATER 50 31.00% OR GREATER 30 27 (3) FOR THE MOST RECENT YEAR, THE RESULT OF THE TOTAL 28 MUNICIPAL BONDED DEBT PLUS THE TOTAL MUNICIPAL FLOATING DEBT 29 LESS THE TOTAL MUNICIPAL CREDITS AGAINST MUNICIPAL DEBT IS 30 DIVIDED BY THE POPULATION OF THE MUNICIPALITY AS OF THE LAST 19830S0713B2455 - 59 -
1 FEDERAL CENSUS: 2 NET DEBT 3 PER CAPITA SCORING 4 $ 0.00- 9.99 0 5 10.00-19.99 8 6 20.00-29.99 16 7 30.00-39.99 24 8 40.00-49.99 32 9 50.00-59.99 40 10 60.00-69.99 48 11 70.00-79.99 56 12 80.00-89.99 64 13 90.00-99.99 72 14 100.00 OR GREATER 80 15 (4) FOR THE MOST RECENT YEAR, THE RESULT OF THE TOTAL 16 MUNICIPAL BONDED DEBT PLUS THE TOTAL MUNICIPAL FLOATING DEBT 17 LESS THE TOTAL MUNICIPAL CREDITS AGAINST MUNICIPAL DEBT IS 18 COMPUTED AS A PERCENTAGE OF THE ASSESSED VALUE OF REAL 19 PROPERTY IN THE MUNICIPALITY: 20 MUNICIPAL DEBT 21 AS PERCENTAGE 22 OF MUNICIPAL PROPERTY 23 TAX BASE SCORING 24 0.00-0.49% 0 25 0.50-0.99% 6 26 1.00-1.99% 12 27 2.00-2.99% 18 28 3.00-4.49% 24 29 4.50-5.99% 30 30 6.00-6.99% 36 19830S0713B2455 - 60 -
1 7.00-7.99% 42 2 8.00-8.99% 48 3 9.00-9.99% 54 4 10.00% OR GREATER 60 5 (5) FOR THE MOST RECENT YEAR, THE RESULT OF THE TOTAL 6 MUNICIPAL BONDED DEBT PLUS THE TOTAL MUNICIPAL FLOATING DEBT 7 LESS THE TOTAL MUNICIPAL CREDITS AGAINST MUNICIPAL DEBT IS 8 COMPUTED AS A PERCENTAGE OF THE MARKET VALUE OF REAL PROPERTY 9 IN THE MUNICIPALITY: 10 MUNICIPAL DEBT AS 11 PERCENTAGE OF 12 POTENTIAL MUNICIPAL 13 PROPERTY TAX BASE SCORING 14 0.00-0.24% 0 15 0.25-0.49% 6 16 0.50-0.99% 12 17 1.00-1.49% 18 18 1.50-1.99% 24 19 2.00-2.99% 30 20 3.00-3.49% 36 21 3.50-3.99% 42 22 4.00-4.49% 48 23 4.50-4.99% 54 24 5.00% OR GREATER 60 25 (6) FOR THE MOST RECENT YEAR, THE MUNICIPAL BONDED DEBT 26 RETIRED DURING THE PRECEDING 12 MONTHS PLUS THE INTEREST PAID 27 DURING THE PRECEDING 12 MONTHS ON ALL MUNICIPAL DEBT IS 28 COMPUTED AS A PERCENTAGE OF THE TOTAL TAXES COLLECTED BY THE 29 MUNICIPALITY FOR THE SAME PERIOD: 30 DEBT SERVICE AS 19830S0713B2455 - 61 -
1 PERCENTAGE OF 2 MUNICIPAL TAX 3 REVENUE SCORING 4 0.00- 4.49% 0 5 4.50- 5.49% 8 6 5.50- 6.49% 16 7 6.50- 7.49% 24 8 7.50- 8.49% 32 9 8.50- 9.49% 40 10 9.50-10.49% 48 11 10.50-11.49% 56 12 11.50-12.49% 64 13 12.50-13.49% 72 14 13.50% OR GREATER 80 15 (7) THE MARKET VALUE OF REAL PROPERTY IN THE 16 MUNICIPALITY FOR THE CURRENT YEAR IS DIVIDED BY THE 17 POPULATION OF THE MUNICIPALITY AS OF THE LAST FEDERAL CENSUS, 18 AND THE PERCENTAGE INCREASE IN THE AMOUNT OF MARKET VALUE PER 19 CAPITA IN THE MOST RECENT YEAR OVER THE AMOUNT OF MARKET 20 VALUE PER CAPITA IN THE MOST RECENT FIVE-YEAR PERIOD: 21 GROSS PERCENTAGE 22 INCREASE IN 23 MARKET VALUE MARKET VALUE 24 PER CAPITA SCORING PER CAPITA SCORING 25 $8,000 OR GREATER 0 41.00% OR GREATER 0 26 7,500-7,999 5 39.00-40.99% 3 27 7,000-7,499 10 35.00-38.99% 6 28 6,500-6,999 15 31.00-34.99% 9 29 6,000-6,499 20 27.00-30.99% 12 30 5,500-5,999 25 23.00-26.99% 15 19830S0713B2455 - 62 -
1 5,000-5,499 30 19.00-22.99% 18 2 4,500-4,999 35 15.00-18.99% 21 3 4,000-4,499 40 11.00-14.99% 24 4 3,500-3,999 45 7.00-10.99% 27 5 0-3,499 50 0.00- 6.99% 30 6 (8) FOR THE MOST RECENT YEAR, ADJUSTED TOTAL MUNICIPAL 7 EXPENDITURES (TOTAL MUNICIPAL EXPENDITURES LESS ANY MUNICIPAL 8 URBAN RENEWAL EXPENDITURES AND LESS ANY MUNICIPAL ENTERPRISE 9 EXPENDITURES) DIVIDED BY THE POPULATION OF THE MUNICIPALITY 10 AS OF THE LAST FEDERAL CENSUS AND THE PERCENTAGE INCREASE IN 11 THE AMOUNT OF ADJUSTED TOTAL MUNICIPAL EXPENDITURES PER 12 CAPITA IN THE MOST RECENT YEAR OVER THE AMOUNT OF ADJUSTED 13 TOTAL MUNICIPAL EXPENDITURES PER CAPITA IN THE MOST RECENT 14 FIVE-YEAR PERIOD: 15 GROSS PERCENTAGE 16 INCREASE IN 17 ADJUSTED TOTAL ADJUSTED TOTAL 18 MUNICIPAL EXPENDITURES MUNICIPAL EXPENDITURES 19 PER CAPITA SCORING PER CAPITA SCORING 20 $ 0.00-149.99 0 0.00-13.99% 0 21 150.00-164.99 5 14.00-17.99% 3 22 165.00-179.99 10 18.00-21.99% 6 23 180.00-194.99 15 22.00-25.99% 9 24 195.00-209.99 20 26.00-29.99% 12 25 210.00-224.99 25 30.00-33.99% 15 26 225.00-239.99 30 34.00-37.99% 18 27 240.00-254.99 35 38.00-41.99% 21 28 255.00-269.99 40 42.00-45.99% 24 29 270.00-284.99 45 46.00-48.99% 27 30 285.00 OR GREATER 50 49.00% OR GREATER 30 19830S0713B2455 - 63 -
1 (D) LEVELS OF DISTRESS.--THE THREE LEVELS OF MUNICIPAL 2 PENSION SYSTEM FINANCIAL DISTRESS SHALL BE AS FOLLOWS: 3 (1) MINIMAL FINANCIAL DISTRESS, WHICH SHALL INCLUDE ANY 4 MUNICIPALITY WHICH HAS A DISTRESS DETERMINATION SCORING 5 GREATER THAN ZERO BUT NOT GREATER THAN 299. 6 (2) MODERATE FINANCIAL DISTRESS, WHICH SHALL INCLUDE ANY 7 MUNICIPALITY WHICH HAS A DISTRESS DETERMINATION SCORING EQUAL 8 TO OR GREATER THAN 300 BUT NOT GREATER THAN 499. 9 (3) SEVERE FINANCIAL DISTRESS, WHICH SHALL INCLUDE ANY 10 MUNICIPALITY WHICH HAS A DISTRESS DETERMINATION SCORING EQUAL 11 TO OR GREATER THAN 500. 12 SECTION 504. EFFECT OF DETERMINATION. 13 THE DETERMINATION OF THE COMMISSION WITH RESPECT TO ANY 14 MUNICIPALITY SHALL BE FINAL. ANY APPEAL OF A DETERMINATION SHALL 15 BE THE SOLE JURISDICTION OF COMMONWEALTH COURT. 16 CHAPTER 6 17 FINANCIALLY DISTRESSED MUNICIPAL PENSION 18 SYSTEM RECOVERY PROGRAM 19 SECTION 601. ESTABLISHMENT. 20 THERE IS HEREBY ESTABLISHED A RECOVERY PROGRAM FOR 21 FINANCIALLY DISTRESSED MUNICIPAL PENSION SYSTEMS. 22 SECTION 602. APPLICATION. 23 (A) GENERALLY.--THE VARIOUS REMEDIES CONTAINED IN THIS 24 RECOVERY PROGRAM SHALL BE AVAILABLE TO MUNICIPALITIES BASED ON 25 THE EXTENT OF FINANCIAL DISTRESS OF THE MUNICIPAL PENSION SYSTEM 26 DETERMINED BY THE COMMISSION, AS PROVIDED IN THIS SECTION. 27 (B) MINIMALLY DISTRESSED MUNICIPAL PENSION SYSTEMS.--THE 28 REMEDIES CONTAINED IN LEVEL I OF THE RECOVERY PROGRAM AS 29 SPECIFIED IN SECTION 604 SHALL APPLY TO ANY MUNICIPALITY WHICH 30 SEEKS TO UTILIZE THEM, WHETHER THE MUNICIPALITY BASED UPON THE 19830S0713B2455 - 64 -
1 ACTUARIAL CONSIDERATIONS AND MUNICIPAL FINANCE CONSIDERATIONS OF 2 THE DETERMINATION PROCEDURE PURSUANT TO SECTION 503 IS NOT 3 DETERMINED TO BE DISTRESSED OR IS DETERMINED TO BE DISTRESSED 4 BUT ELECTS NOT TO PARTICIPATE IN LEVEL II OF SECTION 605 OR 5 LEVEL III OF SECTION 606 OF THE RECOVERY PROGRAM, WHICHEVER IS 6 APPLICABLE. 7 (C) MODERATELY DISTRESSED MUNICIPAL PENSION SYSTEMS.--THE 8 REMEDIES CONTAINED IN LEVEL II OF THE RECOVERY PROGRAM AS 9 SPECIFIED IN SECTION 605 SHALL APPLY TO ANY MUNICIPALITY WHICH 10 IS DETERMINED TO BE MODERATELY DISTRESSED, AS THAT STATUS IS 11 DEFINED BASED ON THE ACTUARIAL CONSIDERATIONS AND MUNICIPAL 12 FINANCE CONSIDERATIONS OF THE DETERMINATION PROCEDURE IN RULES 13 AND REGULATIONS ISSUED BY THE COMMISSION PURSUANT TO SECTION 14 503, WHICH COMPLIES WITH ANY APPLICABLE PRECONDITIONS FOR 15 PARTICIPATION IN THIS LEVEL OF THE RECOVERY PROGRAM AND WHICH 16 ELECTS TO PARTICIPATE IN THIS LEVEL OF THE RECOVERY PROGRAM. 17 (D) SEVERELY DISTRESSED MUNICIPAL PENSION SYSTEMS.--THE 18 REMEDIES CONTAINED IN LEVEL III OF THE RECOVERY PROGRAM AS 19 SPECIFIED IN SECTION 606 SHALL APPLY TO ANY MUNICIPALITY WHICH 20 IS DETERMINED TO BE SEVERELY DISTRESSED, AS THAT STATUS IS 21 DEFINED BASED ON THE ACTUARIAL CONSIDERATIONS AND MUNICIPAL 22 FINANCE CONSIDERATIONS OF THE DETERMINATION PROCEDURE IN RULES 23 AND REGULATIONS ISSUED BY THE COMMISSION PURSUANT TO SECTION 24 503, WHICH COMPLIES WITH ANY APPLICABLE PRECONDITIONS FOR 25 PARTICIPATION IN THIS LEVEL OF THE RECOVERY PROGRAM AND WHICH 26 ELECTS TO PARTICIPATE IN THIS LEVEL OF THE RECOVERY PROGRAM. 27 SECTION 603. ELECTION PROCEDURE. 28 THE ELECTION TO UTILIZE THE VARIOUS REMEDIES CONTAINED IN ONE 29 OF THE LEVELS OF THE RECOVERY PROGRAM SHALL BE MADE BY THE 30 GOVERNING BODY OF THE MUNICIPALITY. THE ELECTION PROCESS SHALL 19830S0713B2455 - 65 -
1 BE INITIATED BY AN APPLICATION FILED WITH THE COMMISSION FOR THE 2 DETERMINATION OF FINANCIAL DISTRESS WITH RESPECT TO THE 3 MUNICIPAL PENSION SYSTEM PURSUANT TO SECTION 501. UPON 4 NOTIFICATION OF THE DETERMINATION OF FINANCIAL DISTRESS BY THE 5 COMMISSION, THE MUNICIPALITY SHALL ELECT WHETHER OR NOT TO 6 UTILIZE THE REMEDIES OF ANY LEVEL OF THE RECOVERY PROGRAM WHICH 7 MAY BE APPLICABLE TO THE MUNICIPALITY. ANY ELECTION TO UTILIZE 8 THE REMEDIES CONTAINED IN A LEVEL OF THE RECOVERY PROGRAM SHALL 9 BE MADE ON FORMS PRESCRIBED BY THE COMMISSION AND SHALL INCLUDE 10 ANY INFORMATION REQUIRED BY THE COMMISSION. 11 SECTION 604. RECOVERY PROGRAM LEVEL I. 12 ANY MUNICIPALITY TO WHICH LEVEL I OF THE RECOVERY PROGRAM 13 APPLIES MAY UTILIZE THE FOLLOWING REMEDIES: 14 (1) THE AGGREGATION OF TRUST FUNDS PURSUANT TO SECTION 15 607(B). 16 (2) THE ESTABLISHMENT OF TOTAL MEMBER CONTRIBUTION 17 PURSUANT TO SECTION 607(C). 18 SECTION 605. RECOVERY PROGRAM LEVEL II. 19 ANY MUNICIPALITY TO WHICH LEVEL II OF THE RECOVERY PROGRAM 20 APPLIES MAY UTILIZE THE FOLLOWING REMEDIES: 21 (1) THE AGGREGATION OF TRUST FUNDS PURSUANT TO SECTION 22 607(B). 23 (2) THE ESTABLISHMENT OF TOTAL MEMBER CONTRIBUTIONS 24 PURSUANT TO SECTION 607(C). 25 (3) THE DEVIATION FROM MUNICIPAL CONTRIBUTION 26 LIMITATIONS PURSUANT TO SECTION 607(D). 27 (4) THE ESTABLISHMENT OF A REVISED BENEFIT PLAN FOR 28 NEWLY HIRED MUNICIPAL EMPLOYEES PURSUANT TO SECTION 607(E). 29 (5) THE SPECIAL MUNICIPAL TAXING AUTHORITY PURSUANT TO 30 SECTION 607(F). 19830S0713B2455 - 66 -
1 (6) THE DELAYED IMPLEMENTATION OF FUNDING STANDARD OVER 2 TEN YEARS PURSUANT TO SECTION 607(G). 3 (7) SUPPLEMENTAL STATE ASSISTANCE PURSUANT TO SECTION 4 607(K). 5 SECTION 606. RECOVERY PROGRAM LEVEL III. 6 (A) OPTIONAL REMEDIES.--ANY MUNICIPALITY TO WHICH LEVEL III 7 OF THE RECOVERY PROGRAM APPLIES MAY UTILIZE THE FOLLOWING 8 REMEDIES: 9 (1) THE ESTABLISHMENT OF TOTAL MEMBER CONTRIBUTIONS 10 PURSUANT TO SECTION 607(C). 11 (2) THE DEVIATION FROM MUNICIPAL CONTRIBUTION 12 LIMITATIONS PURSUANT TO SECTION 607(D). 13 (3) THE SPECIAL MUNICIPAL TAXING AUTHORITY PURSUANT TO 14 SECTION 607(F). 15 (4) THE DELAYED IMPLEMENTATION OF FUNDING STANDARD OVER 16 TEN YEARS PURSUANT TO SECTION 607(G) OR THE DELAYED 17 IMPLEMENTATION OF FUNDING STANDARD OVER 15 YEARS WITH 40-YEAR 18 AMORTIZATION PURSUANT TO SECTION 607(H). 19 (5) SUPPLEMENTAL STATE ASSISTANCE PURSUANT TO SECTION 20 607(K). 21 (B) MANDATORY REMEDIES.--ANY MUNICIPALITY TO WHICH LEVEL III 22 OF THE RECOVERY PROGRAM APPLIES SHALL UTILIZE THE FOLLOWING 23 REMEDIES: 24 (1) THE AGGREGATION OF TRUST FUNDS PURSUANT TO SECTION 25 607(B). 26 (2) THE ESTABLISHMENT OF A REVISED BENEFIT PLAN FOR 27 NEWLY HIRED MUNICIPAL EMPLOYEES PURSUANT TO SECTION 607(E). 28 THE REVISED BENEFIT PLAN SHALL HAVE A NORMAL COST WHICH IS 29 LESS THAN THE NORMAL COST OF THE BENEFIT PLAN APPLICABLE TO 30 CURRENT MUNICIPAL EMPLOYEES AS REPORTED IN THE MOST RECENT 19830S0713B2455 - 67 -
1 PRIOR ACTUARIAL VALUATION REPORT FOR THE PENSION PLAN. IN 2 MAKING THIS DETERMINATION, THE NORMAL COST FOR THE REVISED 3 BENEFIT PLAN SHALL BE CALCULATED BY APPLYING THE REVISED 4 BENEFIT PLAN TO THE CURRENT ACTIVE MEMBERSHIP DEMOGRAPHICS. 5 (3) THE PREPARATION SUBMISSION AND IMPLEMENTATION OF A 6 PLAN FOR IMPROVEMENT OF THE ADMINISTRATION OF THE PENSION 7 PLAN OR PLANS PURSUANT TO SECTION 607(I). 8 (4) THE STABILIZATION OF PENSION PLAN COST PURSUANT TO 9 SECTION 607(J). 10 SECTION 607. REMEDIES APPLICABLE TO VARIOUS RECOVERY PROGRAM 11 LEVELS. 12 (A) GENERALLY.--NOTWITHSTANDING ANY PROVISION OF LAW, 13 MUNICIPAL CHARTER, MUNICIPAL ORDINANCE, MUNICIPAL RESOLUTION, OR 14 PENSION PLAN AGREEMENT, DOCUMENT OR INSTRUMENT TO THE CONTRARY, 15 THE REMEDIES SPECIFIED IN THIS SECTION SHALL BE AVAILABLE TO THE 16 APPLICABLE MUNICIPALITIES. 17 (B) AGGREGATION OF TRUST FUNDS.--IF THE MUNICIPALITY HAS 18 ESTABLISHED AND MAINTAINED MORE THAN ONE PENSION PLAN FOR ITS 19 EMPLOYEES AND THERE ARE PENSION FUNDS ASSOCIATED WITH THOSE 20 PENSION PLANS, THE MUNICIPALITY MAY AGGREGATE THE ASSETS TO THE 21 CREDIT OF THE VARIOUS PENSION FUNDS INTO A SINGLE PENSION TRUST 22 FUND. SUBSEQUENT TO THE AGGREGATION, THE PENSION TRUST FUND 23 SHALL BE THE FUNDING MECHANISM FOR ALL PENSION PLANS CONNECTED 24 WITH THE AGGREGATION. 25 (1) EACH PENSION PLAN SUBJECT TO THE AGGREGATION SHALL 26 HAVE AN UNDIVIDED PARTICIPATION IN THE ASSETS OF THE COMBINED 27 PENSION TRUST FUND. FOR ACCOUNTING PURPOSES, THE VALUE OF THE 28 PARTICIPATION BY EACH PLAN SHALL BE CALCULATED ANNUALLY. THE 29 VALUE FOR THE INITIAL YEAR FOLLOWING AGGREGATION SHALL BE 30 THAT PORTION OF THE TOTAL VALUE OF THE PENSION TRUST FUND 19830S0713B2455 - 68 -
1 WHICH BEARS THE SAME RELATIONSHIP THAT THE VALUE OF THE 2 ASSETS OF THE PENSION PLAN AS OF THE DATE OF THE AGGREGATION 3 PLUS THE CONTRIBUTIONS RECEIVED BY THE PENSION TRUST FUND 4 WITH RESPECT TO THAT PENSION PLAN SINCE THE DATE OF 5 AGGREGATION AND REDUCED BY THE AMOUNT OF RETIREMENT ANNUITIES 6 AND BENEFITS PAID FROM THE PENSION TRUST FUND FOR ANNUITANTS 7 AND BENEFIT RECIPIENTS OF THAT PENSION PLAN SINCE THE DATE OF 8 AGGREGATION BEARS TO THE TOTAL VALUE OF ALL ASSETS 9 TRANSFERRED TO THE PENSION TRUST FUND AS OF THE DATE OF 10 AGGREGATION PLUS THE TOTAL CONTRIBUTIONS RECEIVED BY THE 11 PENSION TRUST FUND SINCE THE DATE OF AGGREGATION AND REDUCED 12 BY THE TOTAL AMOUNT OF RETIREMENT ANNUITIES AND BENEFITS PAID 13 FOR ALL ANNUITANTS AND BENEFIT RECIPIENTS SINCE THE DATE OF 14 AGGREGATION. THE VALUE OF THE PARTICIPATION FOR EACH YEAR 15 SUBSEQUENT TO THE INITIAL YEAR FOLLOWING AGGREGATION SHALL BE 16 THAT PORTION OF THE TOTAL VALUE OF THE PENSION TRUST FUND 17 WHICH BEARS THE SAME RELATIONSHIP THAT THE VALUE OF THE 18 PARTICIPATION OF THE PENSION PLAN AS OF THE CLOSE OF THE 19 PRECEDING YEAR PLUS THE CONTRIBUTIONS RECEIVED BY THE PENSION 20 TRUST FUND WITH RESPECT TO THAT PENSION PLAN DURING THE YEAR 21 AND REDUCED BY THE AMOUNT OF RETIREMENT ANNUITIES AND 22 BENEFITS PAID FROM THE PENSION TRUST FUND FOR ANNUITANTS AND 23 BENEFIT RECIPIENTS OF THAT PENSION PLAN DURING THE YEAR BEARS 24 TO THE TOTAL VALUE OF ALL PARTICIPATION IN THE PENSION TRUST 25 FUND AS OF THE CLOSE OF THE PRECEDING YEAR PLUS THE TOTAL 26 CONTRIBUTIONS RECEIVED BY THE PENSION TRUST FUND DURING THE 27 YEAR AND REDUCED BY THE TOTAL AMOUNT OF RETIREMENT ANNUITIES 28 AND BENEFITS PAID FOR ALL ANNUITANTS AND BENEFIT RECIPIENTS 29 DURING THE YEAR. 30 (2) LEGAL TITLE TO ASSETS IN THE AGGREGATED PENSION 19830S0713B2455 - 69 -
1 TRUST FUND SHALL BE IN THE MUNICIPALITY AS TRUSTEE, OR ITS 2 NOMINEES AS TRUSTEES, FOR ANY PERSON HAVING A BENEFICIAL 3 INTEREST IN A PARTICULAR PENSION PLAN WHICH IS ASSOCIATED 4 WITH THE PENSION TRUST FUND. 5 (3) THE ASSETS OF THE AGGREGATED PENSION TRUST FUND 6 SHALL BE INVESTED IN INVESTMENT SECURITIES WHICH ARE 7 AUTHORIZED INVESTMENTS PURSUANT TO ANY APPLICABLE LAW FOR ANY 8 OF THE ASSOCIATED PENSION PLANS. 9 (4) INVESTMENT EARNINGS SHALL BE ALLOCATED TO EACH 10 ASSOCIATED PENSION PLAN IN PROPORTION TO THE MOST RECENTLY 11 DETERMINED PARTICIPATION VALUE. 12 (5) VALUATION OF ASSETS SHALL BE PURSUANT TO THE 13 PROVISIONS OF SECTION 202(E)(1) AND ANY APPLICABLE RULES AND 14 REGULATIONS ISSUED BY THE COMMISSION. 15 (6) THE AGGREGATED PENSION TRUST FUND SHALL BE MANAGED 16 BY A BOARD OF TRUSTEES. THE BOARD OF TRUSTEES SHALL INCLUDE 17 AT LEAST ONE REPRESENTATIVE OF THE ACTIVE MEMBERSHIP OF EACH 18 PENSION PLAN INCLUDED IN THE AGGREGATED PENSION TRUST FUND, 19 WHO SHALL BE ELECTED BY THE ACTIVE MEMBERSHIP OF THE 20 APPLICABLE PENSION PLAN. THE REMAINING MEMBERS OF THE BOARD 21 OF TRUSTEES SHALL BE DRAWN FROM THE MANAGING BOARDS OR 22 ENTITIES OF THE ASSOCIATED PENSION PLANS. 23 (C) TOTAL MEMBER CONTRIBUTION.-- 24 (1) THE MUNICIPALITY MAY SPECIFY TOTAL MEMBER 25 CONTRIBUTIONS TO THE PENSION PLAN. THE MEMBER CONTRIBUTIONS 26 SHALL BE SPECIFIED AS A PERCENTAGE OF COVERED SALARY. 27 (2) FOR A DEFINED BENEFIT PLAN IN EXISTENCE ON THE 28 EFFECTIVE DATE OF THIS SUBSECTION, THE TOTAL MEMBER 29 CONTRIBUTION SHALL NOT EXCEED 50% OF THE NORMAL COST OF THE 30 PENSION PLAN, EXPRESSED AS A PERCENTAGE OF COVERED PAYROLL, 19830S0713B2455 - 70 -
1 AS REPORTED IN THE MOST RECENT ACTUARIAL VALUATION REPORT OF 2 THE PENSION PLAN OR THE APPLICABLE MAXIMUM PERCENTAGE RATE OF 3 COVERED SALARY SPECIFIED IN PARAGRAPH (4), WHICHEVER IS LESS. 4 (3) FOR A DEFINED BENEFIT PLAN WHICH IS IMPROVED 5 SUBSEQUENT TO THE EFFECTIVE DATE OF THIS SUBSECTION AND WHICH 6 BENEFIT PLAN IMPROVEMENT CAUSES AN INCREASE IN THE NORMAL 7 COST OF THE BENEFIT PLAN OF AN AMOUNT EQUAL TO OR GREATER 8 THAN ONE PERCENT OF COVERED PAYROLL AS REPORTED IN THE MOST 9 RECENT ACTUARIAL VALUATION REPORT OF THE IMPROVED PENSION 10 PLAN, THE MEMBER CONTRIBUTION SHALL ALSO BE INCREASED. THE 11 INCREASED TOTAL MEMBER CONTRIBUTION SHALL NOT BE LESS THAN 12 30% OF THE NORMAL COST OR MORE THAN THE LESSER OF 50% OF THE 13 NORMAL COST OR THE APPLICABLE MAXIMUM PERCENTAGE RATE OF 14 COVERED SALARY SPECIFIED IN PARAGRAPH (4). THE NORMAL COST 15 FOR USE IN ESTABLISHING THE INCREASED TOTAL MEMBER 16 CONTRIBUTION SHALL BE THE NORMAL COST OF THE IMPROVED BENEFIT 17 PLAN, EXPRESSED AS A PERCENTAGE OF COVERED PAYROLL, AS 18 REPORTED IN THE MOST RECENT ACTUARIAL VALUATION REPORT OF THE 19 IMPROVED PENSION PLAN. 20 (4) THE MAXIMUM PERCENTAGE OF COVERED SALARY TOTAL 21 CONTRIBUTIONS SHALL BE EQUAL TO THE GREATER OF THE TOTAL 22 EMPLOYEE CONTRIBUTION RATE TO THE FEDERAL OLD AGE, SURVIVORS, 23 DISABILITY AND HEALTH INSURANCE PROGRAM PURSUANT TO THE 24 APPLICABLE FEDERAL LAW IN EFFECT ON JANUARY 1, 1984 APPLIED 25 TO TOTAL COVERED SALARY OR THE EMPLOYEE CONTRIBUTION THEN IN 26 EFFECT OR SUBSEQUENTLY NEGOTIATED IN CONJUNCTION WITH A 27 BENEFIT INCREASE. 28 (5) IF ANY INCREASE IN MEMBER CONTRIBUTIONS EQUAL TO OR 29 GREATER THAN ONE PERCENT OF COVERED SALARY IS REQUIRED 30 PURSUANT TO THE OPERATION OF THIS SUBSECTION, THE INCREASE 19830S0713B2455 - 71 -
1 SHALL BE IMPLEMENTED OVER A PERIOD OF FOUR YEARS THROUGH AN 2 ANNUAL INCREASE EQUAL TO ONE FOURTH OF THE TOTAL REQUIRED 3 INCREASE, WHICH SUCCESSIVE INCREASES SHALL BE EFFECTIVE ON 4 THE FIRST DAY OF THE FIRST PAY PERIOD OCCURRING ON OR AFTER 5 JANUARY 1 ON EACH OF THE SUCCEEDING FOUR YEARS. 6 (6) THE ESTABLISHMENT OF TOTAL MEMBER CONTRIBUTIONS 7 PURSUANT TO THIS SUBSECTION SHALL BE WITHIN THE SCOPE OF 8 COLLECTIVE BARGAINING PURSUANT TO THE APPLICABLE LAW WITH 9 REPRESENTATIVES OF THE COLLECTIVE BARGAINING UNIT FOR THE 10 AFFECTED TYPE OF MUNICIPAL EMPLOYEE, IF ANY. 11 (D) DEVIATION FROM MUNICIPAL CONTRIBUTION LIMITATIONS.--THE 12 MUNICIPALITY MAY EXCEED ANY LIMITATIONS ON MUNICIPAL 13 CONTRIBUTIONS TO MUNICIPAL PENSION PLANS OTHERWISE APPLICABLE TO 14 THE MUNICIPALITY. 15 (E) ESTABLISHMENT OF A REVISED BENEFIT PLAN FOR NEWLY HIRED 16 MUNICIPAL EMPLOYEES.--THE MUNICIPALITY MAY ESTABLISH A REVISED 17 BENEFIT PLAN OF THE PENSION PLAN APPLICABLE TO ANY EMPLOYEE 18 FIRST HIRED ON OR AFTER THE EFFECTIVE DATE OF THE INSTRUMENT 19 ESTABLISHING THE REVISED BENEFIT PLAN. AT THE OPTION OF THE 20 MUNICIPALITY, THE REVISED BENEFIT PLAN MAY BE EXTENDED TO 21 INCLUDE AN EMPLOYEE FIRST HIRED PRIOR TO THE EFFECTIVE DATE OF 22 THE INSTRUMENT ESTABLISHING THE REVISED BENEFIT WHO ELECTS THE 23 COVERAGE. MEMBER CONTRIBUTIONS WITH RESPECT TO THE REVISED 24 BENEFIT PLAN OF THE PENSION PLAN SHALL AT A MINIMUM BE EQUAL TO 25 OR EXCEED 30% AND AT A MAXIMUM NOT TO EXCEED 50%, OF THE NORMAL 26 COST OF THE PENSION PLAN, EXPRESSED AS A PERCENTAGE OF COVERED 27 PAYROLL, AS REPORTED IN THE MOST RECENT ACTUARIAL VALUATION 28 REPORT OF THE PENSION PLAN. NOTWITHSTANDING ANY PROVISION OF 29 SUBSECTION (J) TO THE CONTRARY, A REVISED BENEFIT PLAN FOR NEWLY 30 HIRED MUNICIPAL EMPLOYEES SHALL BE DEVELOPED WITH CONSULTATION 19830S0713B2455 - 72 -
1 WITH REPRESENTATIVES OF THE COLLECTIVE BARGAINING UNIT 2 APPLICABLE TO THE AFFECTED TYPE OF MUNICIPAL EMPLOYEE, IF ANY, 3 AND SHALL BE WITHIN THE SCOPE OF COLLECTIVE BARGAINING PURSUANT 4 TO THE APPLICABLE LAW SUBSEQUENT TO THE ESTABLISHMENT OF THE 5 REVISED BENEFIT PLAN. 6 (F) SPECIAL MUNICIPAL TAXING AUTHORITY.--IF THE TAX RATES 7 SET BY THE MUNICIPALITY ON EARNED INCOME AND ON REAL PROPERTY 8 ARE AT THE MAXIMUM PROVIDED BY APPLICABLE LAW, THE MUNICIPALITY 9 MAY INCREASE ITS TAX ON EITHER EARNED INCOME OR REAL PROPERTY 10 ABOVE THOSE MAXIMUM RATES. THE PROCEEDS OF THIS SPECIAL 11 MUNICIPAL TAX INCREASE SHALL BE USED SOLELY TO DEFRAY THE 12 ADDITIONAL COSTS REQUIRED TO BE PAID PURSUANT TO THIS ACT WHICH 13 ARE DIRECTLY RELATED TO THE PENSION PLANS OF THE MUNICIPALITY. 14 THE MUNICIPALITY UTILIZING THIS SPECIAL MUNICIPAL TAXING 15 AUTHORITY SHALL NOT REDUCE THE LEVEL OF MUNICIPAL CONTRIBUTIONS 16 TO THE PENSION PLANS PRIOR TO THE IMPLEMENTATION OF THE SPECIAL 17 MUNICIPAL TAXING AUTHORITY. THE AVERAGE LEVEL OF MUNICIPAL 18 CONTRIBUTIONS TO THE PENSION PLANS FROM ALL REVENUE SOURCES FOR 19 THE THREE YEARS IMMEDIATELY PRIOR TO THE IMPLEMENTATION OF THE 20 SPECIAL MUNICIPAL TAXING AUTHORITY SHALL BE EXPRESSED AS A 21 PERCENTAGE OF THE AVERAGE COVERED PAYROLL FOR THAT SAME THREE- 22 YEAR PERIOD. IN EACH YEAR SUBSEQUENT TO THE IMPLEMENTATION OF 23 THE SPECIAL MUNICIPAL TAXING AUTHORITY, THE MUNICIPAL 24 CONTRIBUTIONS TO THE PENSION PLAN FROM ALL REVENUE SOURCES 25 EXISTING PRIOR TO THE IMPLEMENTATION OF THE SPECIAL EXISTING 26 MUNICIPAL TAXING AUTHORITY SHALL EQUAL OR EXCEED THIS AVERAGE 27 PERCENTAGE OF THE CURRENT COVERED PAYROLL. 28 (G) DELAYED IMPLEMENTATION OF FUNDING STANDARD OVER TEN 29 YEARS.--THE MUNICIPALITY MAY DELAY FULL IMPLEMENTATION OF THE 30 ACTUARIAL FUNDING STANDARD SPECIFIED IN SECTION 302 OR 303, 19830S0713B2455 - 73 -
1 WHICHEVER IS APPLICABLE, OVER A PERIOD NOT TO EXCEED TEN YEARS 2 IN DURATION. DURING THE DELAYED IMPLEMENTATION PERIOD, THE 3 MUNICIPALITY SHALL MAKE A MUNICIPAL CONTRIBUTION TO EACH 4 MUNICIPAL PENSION PLAN OF AN AMOUNT EQUAL TO NOT LESS THAN THE 5 MUNICIPAL CONTRIBUTION TO THE MUNICIPAL PENSION PLAN MADE IN THE 6 IMMEDIATE PRIOR YEAR AND THE FOLLOWING PERCENTAGE OF THE 7 DIFFERENCE BETWEEN THAT AMOUNT AND THE FULL MINIMUM MUNICIPAL 8 OBLIGATION WITH RESPECT TO THE PENSION PLAN PURSUANT TO SECTION 9 302 OR 303, WHICHEVER IS APPLICABLE: 10 YEAR PERCENTAGE OF DIFFERENCE 11 1985 10% 12 1986 20% 13 1987 30% 14 1988 40% 15 1989 50% 16 1990 60% 17 1991 70% 18 1992 80% 19 1993 90% 20 1994 AND THEREAFTER 100% 21 THE MUNICIPALITY MAY CALCULATE THE ANNUAL AMORTIZATION 22 CONTRIBUTION ON THE BASIS OF A LEVEL PERCENTAGE OF FUTURE 23 INCREASING COVERED PAYROLL AMORTIZATION CONTRIBUTION RATHER THAN 24 ON THE BASIS OF THE LEVEL ANNUAL DOLLAR AMORTIZATION 25 CONTRIBUTION SPECIFIED IN SECTION 202. 26 (H) DELAYED IMPLEMENTATION OF FUNDING STANDARD OVER 15 27 YEARS; 40-YEAR AMORTIZATION PERIOD.--THE MUNICIPALITY MAY DELAY 28 FULL IMPLEMENTATION OF THE ACTUARIAL FUNDING STANDARD SPECIFIED 29 IN SECTION 302 OR 303, WHICHEVER IS APPLICABLE, OVER A PERIOD 30 NOT TO EXCEED 15 YEARS IN DURATION AND MAY CALCULATE THAT 19830S0713B2455 - 74 -
1 ACTUARIAL FUNDING STANDARD ON THE BASIS OF A 40-YEAR 2 AMORTIZATION PERIOD FOR THE INCREMENT OF UNFUNDED ACTUARIAL 3 ACCRUED LIABILITY IN EXISTENCE AS OF THE BEGINNING OF THE PLAN 4 YEAR OCCURRING IN CALENDAR YEAR 1985. DURING THE DELAYED 5 IMPLEMENTATION PERIOD, THE MUNICIPALITY SHALL MAKE A MUNICIPAL 6 CONTRIBUTION TO EACH MUNICIPAL PENSION PLAN OF AN AMOUNT EQUAL 7 TO NOT LESS THAN THE MUNICIPAL CONTRIBUTION TO THE MUNICIPAL 8 PENSION PLAN MADE IN THE IMMEDIATE PRIOR YEAR AND THE FOLLOWING 9 PERCENTAGE OF THE DIFFERENCE BETWEEN THAT AMOUNT AND THE FULL 10 MINIMUM MUNICIPAL OBLIGATION WITH RESPECT TO THE PENSION PLAN 11 PURSUANT TO SECTION 302 OR 303, WHICHEVER IS APPLICABLE, 12 CALCULATED USING THE APPLICABLE 40-YEAR AMORTIZATION PERIOD: 13 YEAR PERCENTAGE OF DIFFERENCE 14 1985 6.7% 15 1986 13.4% 16 1987 20.1% 17 1988 26.8% 18 1989 33.5% 19 1990 40.2% 20 1991 46.9% 21 1992 53.6% 22 1993 60.3% 23 1994 67.0% 24 1995 73.7% 25 1996 80.4% 26 1997 87.1% 27 1998 93.8% 28 1999 100.0% 29 THE MUNICIPALITY MAY CALCULATE THE ANNUAL AMORTIZATION 30 CONTRIBUTION ON THE BASIS OF A LEVEL PERCENTAGE OF FUTURE 19830S0713B2455 - 75 -
1 INCREASING COVERED PAYROLL AMORTIZATION CONTRIBUTION RATHER THAN 2 ON THE BASIS OF THE LEVEL ANNUAL DOLLAR AMORTIZATION 3 CONTRIBUTION SPECIFIED IN SECTION 202. 4 (I) PLAN FOR ADMINISTRATIVE IMPROVEMENT.--THE MUNICIPALITY 5 SHALL PREPARE AND SUBMIT TO THE COMMISSION A COMPREHENSIVE PLAN 6 FOR ADMINISTRATIVE IMPROVEMENTS IN THE PENSION PLANS, INCLUDING, 7 BUT NOT LIMITED TO, AN IMPROVEMENT IN INVESTMENT PERFORMANCE, AN 8 INCREASE IN THE LIQUIDITY OF INVESTED ASSETS, AN IMPROVED 9 PROJECTION OF FUTURE CASH FLOW REQUIREMENTS, A REDUCTION IN ANY 10 TIME DELAYS FOR THE DEPOSIT OF MEMBER DEDUCTIONS AND MUNICIPAL 11 CONTRIBUTIONS IN THE FUNDING MECHANISM FOR THE PENSION PLAN OR 12 AN IMPROVEMENT IN THE COLLECTION OF ANY OTHER ACCOUNTS 13 RECEIVABLE. UPON APPROVAL OF THE COMMISSION, THE MUNICIPALITY 14 SHALL IMPLEMENT THE PLAN FOR ADMINISTRATIVE IMPROVEMENTS. 15 (J) PENSION PLAN COST STABILIZATION.--THE MUNICIPALITY SHALL 16 NOT MODIFY ANY PROVISION OF THE BENEFIT PLAN APPLICABLE TO 17 ACTIVE MEMBERS OR RETIREMENT OR OTHER BENEFIT RECIPIENTS WHICH 18 RESULTS IN AN INCREASE IN EITHER THE NORMAL COST OR THE 19 AMORTIZATION CONTRIBUTION OF THE PENSION PLAN. 20 (K) SUPPLEMENTAL STATE ASSISTANCE.--IF EVERY PENSION PLAN OF 21 THE MUNICIPALITY WHICH IS A DEFINED BENEFIT PLAN AND WHICH IS 22 SELF-INSURED IN WHOLE OR IN PART HAS FILED AN ACTUARIAL 23 VALUATION REPORT UTILIZING THE STANDARDIZED ACTUARIAL COST 24 METHOD AND ECONOMIC ACTUARIAL ASSUMPTIONS WITHIN THE RANGE OF 25 ACTUARIAL ASSUMPTIONS SPECIFIED IN SECTION 202(B) AND IF THE 26 MUNICIPALITY HAS IMPLEMENTED THE AGGREGATION OF TRUST FUNDS 27 PURSUANT TO SUBSECTION (B), THE MUNICIPALITY MAY RECEIVE 28 SUPPLEMENTAL STATE ASSISTANCE FROM THE SUPPLEMENTAL STATE 29 ASSISTANCE FUND ESTABLISHED PURSUANT TO SECTION 608. THE AMOUNT 30 OF THE SUPPLEMENTAL STATE ASSISTANCE TO WHICH THE MUNICIPALITY 19830S0713B2455 - 76 -
1 IS ENTITLED SHALL BE DETERMINED ANNUALLY BASED ON THE 2 DETERMINATION SCORING WHICH THE MUNICIPALITY RECEIVED FROM THE 3 COMMISSION PURSUANT TO SECTION 503, AS FOLLOWS: 4 (1) THE DETERMINATION SCORE OF THE MUNICIPALITY SHALL BE 5 REDUCED BY AN AMOUNT EQUAL TO 25% OF THE MAXIMUM POSSIBLE 6 DETERMINATION SCORE. 7 (2) THE RESULT CALCULATED PURSUANT TO PARAGRAPH (1) 8 SHALL BE EXPRESSED AS A PERCENTAGE OF THE MAXIMUM POSSIBLE 9 DETERMINATION SCORE. 10 (3) THE PERCENTAGE CALCULATED PURSUANT TO PARAGRAPH (2) 11 SHALL BE APPLIED TO THE DOLLAR AMOUNT OF DIFFERENCE BETWEEN 12 THE AMOUNT OF THE MUNICIPAL CONTRIBUTION TO ALL MUNICIPAL 13 PENSION PLANS IN AGGREGATE AND THE FULL MINIMUM MUNICIPAL 14 OBLIGATION WITH RESPECT TO THE PENSION PLAN PURSUANT TO 15 SECTION 302 OR 303, WHICHEVER IS APPLICABLE, TO DETERMINE THE 16 AMOUNT OF SUPPLEMENTAL STATE ASSISTANCE FOR THE MUNICIPALITY. 17 IN THE EVENT THAT THE TOTAL AMOUNT OF SUPPLEMENTAL STATE 18 ASSISTANCE DETERMINED AS PAYABLE TO ALL MUNICIPALITIES ENTITLED 19 TO RECEIVE SUPPLEMENTAL STATE ASSISTANCE EXCEEDS THE MAXIMUM 20 APPROPRIATION PROVIDED FOR IN SECTION 608(B), THE AMOUNT OF 21 SUPPLEMENTAL STATE ASSISTANCE WHICH SHALL BE PAYABLE TO EACH 22 MUNICIPALITY SHALL BE PROPORTIONATELY REDUCED. THE SUPPLEMENTAL 23 STATE ASSISTANCE SHALL BE DISTRIBUTED ANNUALLY ON THE FIRST 24 BUSINESS DAY OCCURRING IN DECEMBER. 25 (L) EMERGENCY LOAN PROCEDURES.--THE MUNICIPALITY MAY RECEIVE 26 A LOAN FROM THE SUPPLEMENTAL STATE ASSISTANCE FUND IN ANY YEAR 27 DURING THE EXISTENCE OF THE FUND IN AN AMOUNT CERTIFIED BY THE 28 COMMISSION. THE LOAN AMOUNT SHALL BE SUFFICIENT TO ELIMINATE THE 29 POSSIBILITY OF IMMINENT DEFAULT DURING THE NEXT 12 CONSECUTIVE 30 CALENDAR MONTHS IN THE PAYMENT OF RETIREMENT AND OTHER BENEFITS 19830S0713B2455 - 77 -
1 BY ONE OR MORE OF THE PENSION PLANS MAINTAINED BY THE 2 MUNICIPALITY. TERMS FOR THE REPAYMENT OF ANY LOAN SHALL BE 3 ESTABLISHED BY AGREEMENT BETWEEN THE MUNICIPALITY AND THE 4 COMMISSION PRIOR TO THE LOAN. 5 SECTION 608. SUPPLEMENTAL STATE ASSISTANCE PROGRAM AND FUND. 6 (A) ESTABLISHMENT.--THERE IS HEREBY ESTABLISHED A 7 SUPPLEMENTAL STATE ASSISTANCE PROGRAM AND FUND. THE SUPPLEMENTAL 8 STATE ASSISTANCE FUND SHALL BE COMPRISED OF A SUPPLEMENTAL STATE 9 ASSISTANCE ACCOUNT. THE SUPPLEMENTAL STATE ASSISTANCE PROGRAM 10 AND FUND SHALL BE ADMINISTERED BY THE AUDITOR GENERAL. 11 (B) SUPPLEMENTAL STATE ASSISTANCE ACCOUNT.--SUPPLEMENTAL 12 STATE ASSISTANCE PAYABLE PURSUANT TO SECTION 607(K) SHALL BE 13 PAID FROM THE SUPPLEMENTAL STATE ASSISTANCE ACCOUNT. THE 14 SUPPLEMENTAL STATE ASSISTANCE ACCOUNT SHALL BE FUNDED FROM AN 15 APPROPRIATION BY THE COMMONWEALTH FROM THE GENERAL FUND OF THE 16 COMMONWEALTH. ANNUALLY THE COMMISSION SHALL CALCULATE THE AMOUNT 17 OF SUPPLEMENTAL STATE ASSISTANCE PAYABLE TO ALL ELIGIBLE 18 MUNICIPALITIES AND SHALL CERTIFY THE REQUIRED AMOUNT TO THE 19 GENERAL ASSEMBLY. THE AMOUNT OF ANY ANNUAL CERTIFICATION OF AN 20 APPROPRIATION BY THE COMMISSION SHALL NOT EXCEED $35,000,000. 21 THE GENERAL ASSEMBLY SHALL MAKE AN APPROPRIATION TO THE 22 SUPPLEMENTAL STATE ASSISTANCE ACCOUNT SUFFICIENT TO PROVIDE FOR 23 THE AMOUNT CERTIFIED BY THE COMMISSION. THE APPROPRIATION SHALL 24 BE DEPOSITED ON THE LAST BUSINESS DAY IN NOVEMBER ANNUALLY. 25 (C) PRECONDITIONS.--AS A PRECONDITION FOR THE RECEIPT OF ANY 26 SUPPLEMENTAL STATE ASSISTANCE, THE MUNICIPALITY SHALL 27 DEMONSTRATE PRIOR GOOD FAITH COMPLIANCE WITH ANY APPLICABLE 28 MUNICIPAL PENSION PLAN ACTUARIAL FUNDING STANDARD IN EFFECT. 29 THE MUNICIPALITY SHALL ALSO IMPLEMENT ANY MANDATORY ASPECTS OF 30 THE APPLICABLE RECOVERY PROGRAM LEVEL. 19830S0713B2455 - 78 -
1 (D) WARRANTS.--ANY SUPPLEMENTAL STATE ASSISTANCE SHALL BE 2 PAYABLE ON WARRANTS DRAWN BY THE AUDITOR GENERAL BASED ON 3 CERTIFICATIONS OF THE COMMISSION. 4 (E) EXPIRATION.--THE SUPPLEMENTAL STATE ASSISTANCE PROGRAM 5 AND FUND SHALL TERMINATE IN 2003 OR IN THE FIRST YEAR IN WHICH 6 THERE ARE NO MUNICIPALITIES ENTITLED TO RECEIVE SUPPLEMENTAL 7 STATE ASSISTANCE, WHICHEVER OCCURS EARLIER. 8 SECTION 609. RULES AND REGULATIONS. 9 THE COMMISSION MAY ISSUE ANY RULES AND REGULATIONS NECESSARY 10 FOR THE EFFECTIVE ADMINISTRATION AND OPERATION OF THE PROVISIONS 11 OF THIS ACT. 12 CHAPTER 7 13 FOREIGN FIRE INSURANCE TAX DISTRIBUTION 14 SECTION 701. SHORT TITLE. 15 THIS CHAPTER SHALL BE KNOWN AND MAY BE CITED AS THE FOREIGN 16 FIRE INSURANCE TAX DISTRIBUTION LAW. 17 SECTION 702. DEFINITIONS. 18 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS CHAPTER 19 SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE 20 CONTEXT CLEARLY INDICATES OTHERWISE: 21 "FUND." THE NET AMOUNT RECEIVED BY THE COMMONWEALTH FROM THE 22 TAX ON GROSS PREMIUMS PAID BY FOREIGN FIRE INSURANCE COMPANIES 23 PURSUANT TO SECTION 902 OF THE ACT OF MARCH 4, 1971 (P.L.6, 24 NO.2), KNOWN AS THE TAX REFORM CODE OF 1971. 25 "GOVERNING BODY." THE COUNCIL OF A CITY, BOROUGH OR 26 INCORPORATED TOWN, THE COMMISSIONERS OF A TOWNSHIP OF THE FIRST 27 CLASS, THE SUPERVISORS OF A TOWNSHIP OF THE SECOND CLASS OR ANY 28 SIMILAR BODY IN HOME RULE CHARTER MUNICIPALITIES. 29 "MUNICIPALITY." ANY CITY, BOROUGH, INCORPORATED TOWN, 30 TOWNSHIP OR OTHER SIMILAR UNIT OF GOVERNMENT CREATED PURSUANT TO 19830S0713B2455 - 79 -
1 THE ACT OF APRIL 13, 1972 (P.L.184, NO.62), KNOWN AS THE HOME 2 RULE CHARTER AND OPTIONAL PLANS LAW. 3 "TREASURER." THE ELECTED OR APPOINTED TREASURER IN ANY CITY, 4 BOROUGH, INCORPORATED TOWN, TOWNSHIP OR OTHER SIMILAR OFFICER IN 5 HOME RULE CHARTER MUNICIPALITIES. 6 SECTION 703. PAYMENT BY STATE TREASURER TO MUNICIPALITIES. 7 MONEYS IN THE FUND SHALL BE PAID BY THE STATE TREASURER TO 8 THE TREASURER OF EACH MUNICIPALITY IN THE COMMONWEALTH IN 9 ACCORDANCE WITH SECTIONS 704 AND 705. 10 SECTION 704. DISTRIBUTION FORMULA. 11 EXCEPT AS PROVIDED IN SECTION 705, THE AMOUNT TO BE PAID TO 12 EACH MUNICIPALITY SHALL BE DETERMINED AS FOLLOWS: 13 (1) FIFTY PERCENT OF THE FUND SHALL BE DISTRIBUTED BASED 14 ON THE POPULATION OF EACH MUNICIPALITY IN PROPORTION TO THE 15 POPULATION OF THE ENTIRE COMMONWEALTH, BASED UPON THE LATEST 16 NATIONAL POPULATION CENSUS AS REPORTED BY THE UNITED STATES 17 BUREAU OF CENSUS; AND 18 (2) FIFTY PERCENT OF THE FUND SHALL BE DISTRIBUTED BASED 19 ON THE MARKET VALUE OF REAL ESTATE OF EACH MUNICIPALITY IN 20 PROPORTION TO THE MARKET VALUE OF REAL ESTATE FOR THE ENTIRE 21 COMMONWEALTH, BASED UPON THE MOST RECENT STATISTICS FROM THE 22 STATE TAX EQUALIZATION BOARD. 23 SECTION 705. CONDITIONS ON FIRST FIVE PAYMENTS. 24 FOR THE FIRST FIVE YEARS OF DISTRIBUTIONS PURSUANT TO THIS 25 CHAPTER, PAYMENTS SHALL, NOTWITHSTANDING THE FORMULA CONTAINED 26 IN SECTION 704, BE SUBJECT TO THE FOLLOWING CONDITIONS: 27 (1) NO MUNICIPALITY SHALL RECEIVE LESS THAN AN AMOUNT 28 EQUAL TO THE AVERAGE OF THE DISTRIBUTION WHICH IT RECEIVED IN 29 1981, 1982 AND 1983. 30 (2) MUNICIPALITIES ENTITLED UNDER SECTION 704 TO AN 19830S0713B2455 - 80 -
1 AMOUNT LARGER THAN THE AVERAGE REFERRED TO IN PARAGRAPH (1) 2 SHALL RECEIVE THE FORMER AMOUNT, REDUCED BY SUCH UNIFORM 3 PERCENTAGE AS IS NECESSARY TO AVOID ANY DEFICIT IN THE FUND. 4 (3) NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS 5 SECTION, IF TAX REVENUES IN ANY YEAR ARE INSUFFICIENT TO FUND 6 ALL MUNICIPALITIES IN AT LEAST THE AMOUNT REFERRED TO IN 7 PARAGRAPH (1), THEN PAYMENTS TO ALL MUNICIPALITIES SHALL BE 8 REDUCED BY SUCH UNIFORM PERCENTAGE AS IS NECESSARY TO AVOID 9 ANY DEFICIT IN THE FUND. 10 SECTION 706. USE OF FOREIGN FIRE INSURANCE TAX MONEYS 11 (A) CERTIFICATION OF SERVICE TO MUNICIPALITIES BY PAID AND 12 VOLUNTEER FIREFIGHTERS.-- 13 (1) EACH MUNICIPALITY SERVED SOLELY BY PAID FIREFIGHTERS 14 SHALL ANNUALLY CERTIFY THAT FACT TO THE AUDITOR GENERAL IN 15 ORDER TO DETERMINE THE ULTIMATE DISTRIBUTION OF FOREIGN FIRE 16 INSURANCE PREMIUM TAX AMOUNT APPLICABLE TO THAT MUNICIPALITY 17 PURSUANT TO SUBSECTION (B)(1). 18 (2) EACH MUNICIPALITY SERVED SOLELY BY VOLUNTEER 19 FIREFIGHTERS SHALL ANNUALLY CERTIFY THAT FACT TO THE AUDITOR 20 GENERAL IN ORDER TO DETERMINE THE DISTRIBUTION OF THE FOREIGN 21 FIRE INSURANCE PREMIUM TAX PURSUANT TO SUBSECTION (B)(2). 22 (3) EACH MUNICIPALITY SERVED BY BOTH PAID FIREFIGHTERS 23 AND VOLUNTEER FIREFIGHTERS SHALL ANNUALLY CERTIFY TO THE 24 AUDITOR GENERAL THE PROPORTION OF THE ACTUAL FIRE PROTECTION 25 SERVICE IN THE MUNICIPALITY PROVIDED BY THE PAID FIREFIGHTERS 26 AND THE PROPORTION OF THE ACTUAL FIRE PROTECTION SERVICE IN 27 THE MUNICIPALITY PROVIDED BY THE VOLUNTEER FIREFIGHTERS IN 28 ORDER TO DETERMINE THE DISTRIBUTION OF THE FOREIGN FIRE 29 INSURANCE PREMIUM TAX PURSUANT TO SUBSECTION (B)(3). 30 (4) THE CERTIFICATION TO THE AUDITOR GENERAL SHALL BE BY 19830S0713B2455 - 81 -
1 AN ACTION INITIATED OR RATIFIED BY THE GOVERNING BODY OF THE 2 MUNICIPALITY AND SHALL BE IN A FORM PRESCRIBED BY THE AUDITOR 3 GENERAL. 4 (B) DISTRIBUTION OF FOREIGN FIRE INSURANCE TAX MONEYS.-- 5 (1) THE FOREIGN FIRE INSURANCE PREMIUM TAX AMOUNT 6 APPLICABLE TO A MUNICIPALITY SERVED SOLELY BY PAID 7 FIREFIGHTERS SHALL BE ALLOCATED NO LATER THAN SEPTEMBER 30 TO 8 THE GENERAL MUNICIPAL PENSION SYSTEM STATE AID PROGRAM 9 ESTABLISHED PURSUANT TO CHAPTER 4 FOR ULTIMATE DISTRIBUTION 10 PURSUANT TO SECTION 402. 11 (2) THE FOREIGN FIRE INSURANCE PREMIUM TAX AMOUNT 12 APPLICABLE TO A MUNICIPALITY SERVED SOLELY BY VOLUNTEER 13 FIREFIGHTERS SHALL BE PAID TO THE MUNICIPALITY, WHICH SHALL 14 WITHIN 60 DAYS OF THE DATE OF THE RECEIPT OF THE MONEYS FROM 15 THE STATE TREASURER PAY THE AMOUNT RECEIVED TO THE RELIEF 16 ASSOCIATION FUND OF THE FIRE DEPARTMENT OR DEPARTMENTS, OR 17 FIRE COMPANY OR COMPANIES, NOW EXISTING OR HEREAFTER 18 ORGANIZED, INSIDE OR OUTSIDE OF THE MUNICIPALITY, WHICH IS OR 19 ARE ACTIVELY ENGAGED IN THE SERVICE OF THE MUNICIPALITY AND 20 DULY RECOGNIZED BY THE GOVERNING BODY OF THE MUNICIPALITY. 21 (3) THE FOREIGN FIRE INSURANCE PREMIUM TAX AMOUNT 22 APPLICABLE TO A MUNICIPALITY SERVED BY BOTH PAID FIREFIGHTERS 23 AND VOLUNTEER FIREFIGHTERS SHALL BE DIVIDED INTO THE PORTION 24 APPLICABLE TO PAID FIREFIGHTERS AND THE PORTION APPLICABLE TO 25 VOLUNTEER FIREFIGHTERS. THE DIVISION OF THE AMOUNT SHALL BE 26 BASED ON THE PROPORTION OF THE ACTUAL FIRE PROTECTION SERVICE 27 IN THE MUNICIPALITY PROVIDED BY EACH TYPE OF FIREFIGHTER AS 28 CERTIFIED BY THE MUNICIPALITY, EXCEPT THAT IN NO EVENT SHALL 29 THE PORTION APPLICABLE TO PAID FIREFIGHTERS BE LESS THAN THE 30 SMALLER OF THE AMOUNT OF FOREIGN FIRE INSURANCE PREMIUM TAX 19830S0713B2455 - 82 -
1 APPLICABLE TO THE MUNICIPALITY OR THE REVISED AMOUNT OF 2 GENERAL MUNICIPAL PENSION SYSTEM STATE AID PER UNIT FOR THE 3 PREVIOUS YEAR DETERMINED PURSUANT TO SECTION 402, PER PAID 4 FIREFIGHTER, WHICH FOR 1985 SHALL BE DEEMED TO BE $1,100. THE 5 ULTIMATE DISTRIBUTION OF THE PORTION APPLICABLE TO PAID 6 FIREFIGHTERS SHALL BE GOVERNED BY PARAGRAPH (1). THE 7 DISTRIBUTION OF THE PORTION APPLICABLE TO VOLUNTEER 8 FIREFIGHTERS SHALL BE GOVERNED BY PARAGRAPH (2). 9 SECTION 707. WARRANTS FOR PAYMENT. 10 WARRANTS FOR THE PURPOSES OF MAKING PAYMENTS PURSUANT TO 11 THIS CHAPTER SHALL BE DRAWN BY THE STATE TREASURER, PAYABLE TO 12 THE TREASURERS OF THE SEVERAL CITIES, INCORPORATED TOWNS, 13 TOWNSHIPS AND BOROUGHS, IN ACCORDANCE WITH THIS ACT, NO LATER 14 THAN THE FIRST BUSINESS DAY OCCURRING IN THE MONTH OF OCTOBER. 15 CHAPTER 8 16 MISCELLANEOUS PROVISIONS 17 SECTION 801. REPEALS. 18 (A) SPECIFIC REPEAL.--THE ACT OF JUNE 28, 1895 (P.L.408, 19 NO.289), ENTITLED, AS AMENDED, "A SUPPLEMENT TO THE TWENTY- 20 FOURTH SECTION OF AN ACT, ENTITLED 'AN ACT TO PROVIDE REVENUE BY 21 TAXATION, APPROVED THE SEVENTH DAY OF JUNE, ONE THOUSAND EIGHT 22 HUNDRED AND SEVENTY-NINE,' APPROVED THE FIRST DAY OF JUNE, ONE 23 THOUSAND EIGHT HUNDRED AND EIGHTY-NINE, AMENDING THE TWENTY- 24 FOURTH SECTION, BY PROVIDING FOR THE PAYMENT BY THE STATE 25 TREASURER OF THE TWO PER CENTUM TAX ON PREMIUMS PAID BY FOREIGN 26 FIRE INSURANCE COMPANIES TO THE TREASURERS OF THE SEVERAL 27 CITIES, TOWNS, TOWNSHIPS AND BOROUGHS, WITHIN THIS 28 COMMONWEALTH," IS REPEALED. 29 (B) INCONSISTENT REPEAL.--ALL ACTS AND PARTS OF ACTS ARE 30 REPEALED INSOFAR AS THEY ARE INCONSISTENT WITH THIS ACT. 19830S0713B2455 - 83 -
1 SECTION 802. RECOMMENDATIONS. 2 THE COMMISSION SHALL WITHIN ONE YEAR OF THE DATE OF ENACTMENT 3 OF THIS ACT, FORMULATE AND RECOMMEND TO THE GENERAL ASSEMBLY AND 4 TO THE GOVERNOR THE SPECIFIC LEGISLATION AMENDING THE CURRENT 5 LAWS GOVERNING MUNICIPAL PENSION PLANS WHICH IS REQUIRED TO 6 EFFECT CONFORMITY OF THOSE LAWS WITH THE PROVISIONS OF THIS ACT. 7 SECTION 803. EFFECTIVE DATE. 8 (A) IN GENERAL.--EXCEPT AS PROVIDED IN SUBSECTIONS (B), (C) 9 AND (D), THIS ACT SHALL TAKE EFFECT IMMEDIATELY. 10 (B) CHAPTER 3.--THE PROVISIONS OF CHAPTER 3 RELATING TO THE 11 CALCULATION OF THE FINANCIAL REQUIREMENTS OF THE PENSION PLAN 12 AND THE MINIMUM OBLIGATION OF THE MUNICIPALITY WITH RESPECT TO 13 THE PENSION PLAN SHALL TAKE EFFECT ON JULY 1 NEXT FOLLOWING THE 14 DATE OF ENACTMENT. THE PROVISIONS OF CHAPTER 3 RELATING TO THE 15 PAYMENT BY A MUNICIPALITY OF THE MINIMUM OBLIGATION OF THE 16 MUNICIPALITY WITH RESPECT TO THE PENSION PLAN SHALL TAKE EFFECT 17 JANUARY 1 NEXT FOLLOWING THE DATE ON WHICH THE PROVISIONS 18 RELATING TO THE CALCULATION OF THE FINANCIAL REQUIREMENTS OF THE 19 PENSION PLAN AND THE MINIMUM OBLIGATION OF THE MUNICIPALITY WITH 20 RESPECT TO THE PENSION PLAN ARE EFFECTIVE. 21 (C) CHAPTER 4.--THE ESTABLISHMENT OF THE REVENUE ACCOUNT FOR 22 THE ENTIRE PROCEEDS OF THE INSURANCE PREMIUM TAX ON FOREIGN 23 CASUALTY INSURANCE COMPANIES SHALL OCCUR AS SOON AS IS 24 PRACTICABLE FOLLOWING THE GENERAL EFFECTIVE DATE SPECIFIED IN 25 SUBSECTION (A), PROVIDED HOWEVER THAT THE PROVISIONS OF SECTION 26 402 RELATING TO THE TRANSFER OF FUNDS PAYABLE TO THE STATE 27 EMPLOYEES' RETIREMENT FUND, TO THE GENERAL MUNICIPAL PENSION 28 SYSTEM STATE AID PROGRAM AND THE SUPPLEMENTAL ASSISTANCE ACCOUNT 29 SHALL NOT TAKE EFFECT UNTIL JULY 1, 1985. 30 (D) CHAPTER 6.--THE EMERGENCY LOAN PROCEDURE ESTABLISHED 19830S0713B2455 - 84 -
1 PURSUANT TO SECTION 607(M) AND THE ESTABLISHMENT OF THE 2 SUPPLEMENTAL STATE ASSISTANCE FUND PURSUANT TO SECTION 608 SHALL 3 TAKE EFFECT JULY 1, 1985. ALLOCATIONS OF SUPPLEMENTAL STATE 4 ASSISTANCE PURSUANT TO SECTION 607(K) SHALL TAKE EFFECT DECEMBER 5 1, 1988. 6 (E) CHAPTER 7.--THE PROVISIONS OF CHAPTER 7 RELATING TO THE 7 DISTRIBUTION OF THE PROCEEDS OF THE FOREIGN FIRE INSURANCE TAX 8 SHALL TAKE EFFECT ON JANUARY 1, 1985. B23L72RZ/19830S0713B2455 - 85 -