HOUSE AMENDED
PRIOR PRINTER'S NO. 657 PRINTER'S NO. 1831
No. 633 Session of 1995
INTRODUCED BY MOWERY, HECKLER, SALVATORE, STAPLETON, HELFRICK,
WENGER, AFFLERBACH, SHUMAKER, SCHWARTZ, LEMMOND, RHOADES,
PETERSON AND HART, FEBRUARY 28, 1995
AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF
REPRESENTATIVES, AS AMENDED, MARCH 18, 1996
AN ACT
1 Amending the act of May 29, 1956 (1955 P.L.1804, No.600),
2 entitled "An act providing for the establishment of police
3 pension funds or pension annuities in certain boroughs, towns
4 and townships, and the regulation and maintenance thereof;
5 providing for an actuary; continuance of existing funds or
6 transfer thereof to funds herein established; prescribing
7 rights of beneficiaries; contributions by members; providing
8 for expenses of administration; continuation of existing
9 authority to provide annuity contracts; credit for military
10 service; refunds; exempting allowances from judicial process;
11 and repealing certain acts," providing for the establishment
12 of police pension funds or pension annuities by regional
13 police departments; further providing for employment of an
14 actuary and for payments by the State Treasurer; and making
15 editorial changes.
16 The General Assembly of the Commonwealth of Pennsylvania
17 hereby enacts as follows:
18 Section 1. The title of the act of May 29, 1956 (1955
19 P.L.1804, No.600), referred to as the Municipal Police Pension
20 Law, is amended to read:
21 AN ACT
22 Providing for the establishment of police pension funds or
23 pension annuities in certain boroughs, towns and townships[,
1 and the regulation and maintenance thereof]; authorizing the
2 establishment of police pension funds or pension annuities by
3 regional police departments; providing for the regulation and
4 maintenance of police pension funds or pension annuities;
5 providing for an actuary; continuance of existing funds or
6 transfer thereof to funds herein established; prescribing
7 rights of beneficiaries; contributions by members; providing
8 for expenses of administration; continuation of existing
9 authority to provide annuity contracts; credit for military
10 service; refunds; exempting allowances from judicial process;
11 and repealing certain acts.
12 Section 2. Section 1 of the act, amended June 23, 1970
13 (P.L.417, No.139), is amended to read:
14 Section 1. Each borough, town and township of this
15 Commonwealth maintaining a police force of three or more full-
16 time members and each regional police department organized and
17 operated by two or more boroughs, cities, towns or townships
18 through an intermunicipal agreement under the act of July 12,
19 1972 (P.L.762, No.180), referred to as the Intergovernmental
20 Cooperation Law, shall, and all other boroughs, towns or
21 townships may, establish, by ordinance or resolution, a police
22 pension fund or pension annuity to be maintained by a charge
23 against each member of the police force, by annual
24 appropriations made by the borough, town [or], township or
25 regional police department, by payments made by the State
26 Treasurer to the municipal treasurer from the moneys received
27 from taxes paid upon premiums by foreign casualty insurance
28 companies for purposes of pension retirement for policemen, and
29 by gifts, grants, devises or bequests granted to the pension
30 fund pursuant to section two of this act. Such fund shall be
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1 under the direction of the governing body of the borough, town
2 [or], township or regional police department, and applied under
3 such regulations as such governing body, by ordinance or
4 resolution, may prescribe for the benefit of such members of the
5 police force as shall receive honorable discharge therefrom by
6 reason of age and service, or disability, and may prescribe for
7 the benefit (i) of widows, and if no widow survives or if she
8 survives and subsequently dies or remarries, then (ii) of child
9 or children under the age of eighteen years, of members of the
10 police force or of members retired on pension. All such pensions
11 as shall be allowed to those who are retired by reason of
12 disabilities shall be in conformity with a uniform scale. The
13 widow of a member of the police force or a member who retires on
14 pension who dies or if no widow survives or if she survives and
15 subsequently dies or remarries, then the child or children under
16 the age of eighteen years of a member of the police force or a
17 member who retires on pension who dies on or after the effective
18 date of this amendment, may, during her lifetime or so long as
19 she does not remarry in the case of a widow or until reaching
20 the age of eighteen years in the case of a child or children, be
21 entitled to receive a pension calculated at the rate of fifty
22 per centum of the pension the member was receiving or would have
23 been receiving had he been retired at the time of his death.
24 Section 3. Section 2 of the act is amended to read:
25 Section 2. Any borough, town [or], township or regional
26 police pension fund shall be authorized to take by gift, grant,
27 devise or bequest, any money or property, real, personal or
28 mixed, in trust, for the benefit of such fund and the care,
29 management, investment and disposal of such trust funds or
30 property shall be vested in the person or persons having the
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1 management of such police pension fund, and the said trust funds
2 shall be governed thereby subject to such directions not
3 inconsistent therewith as the donors of such funds and property
4 may prescribe.
5 Section 4. Section 3 of the act, amended October 21, 1965
6 (P.L.643, No.317), is amended to read:
7 Section 3. Each ordinance or resolution establishing a
8 police pension fund shall prescribe a minimum period of total
9 service in the aggregate of twenty-five years in the same
10 borough, town [or], township or regional police department and
11 shall fix the age of the members of the force at fifty-five
12 years, or, if an actuarial study of the cost shows that such
13 reduction in age is feasible, may fix the age of the members of
14 the force at fifty years, after which they may retire from
15 active duty, and such members as are retired shall be subject to
16 service, from time to time, as a police reserve, in cases of
17 riot, tumult or preservation of the public peace until unfitted
18 for such service, when they may be finally discharged by reason
19 of age or disability.
20 Section 5. Section 4 of the act, amended December 19, 1990
21 (P.L.1238, No.205), is amended to read:
22 Section 4. (a) Any member of the police force employed by a
23 borough, town [or], township or regional police department, who
24 has been a regularly appointed employe of any such political
25 subdivision or regional police department for a period of at
26 least six months and who thereafter shall enter into the
27 military service of the United States, shall have credited to
28 his employment record for pension or retirement benefits all of
29 the time spent by him in such military service, if such person
30 returns or has heretofore returned to his employment within six
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1 months after his separation from the service.
2 (b) The ordinance or resolution establishing the police
3 pension fund may provide full service credit for each year of
4 military service or fraction thereof, not to exceed five years,
5 to any member of the police force who was not employed by the
6 political subdivision or regional police department prior to
7 such military service. The amount due for the purchase of credit
8 for military service other than intervening military service
9 shall be computed by applying the average normal cost rate for
10 borough [and], town, township and regional police pension plans
11 as certified by the Public Employee Retirement [Study]
12 Commission, but not to exceed ten per centum, to the member's
13 average annual rate of compensation over the first three years
14 of municipal service and multiplying the result by the number of
15 years and fractional part of a year of creditable nonintervening
16 military service being purchased together with interest at the
17 rate of four and three-quarters per centum compounded annually
18 from the date of initial entry into municipal service to the
19 date of payment.
20 (c) Any member of the police force shall be eligible to
21 receive service credit for intervening or nonintervening
22 military service as provided in subsections (a) and (b) provided
23 that he is not entitled to receive, eligible to receive now or
24 in the future or is receiving retirement benefits for such
25 service under a retirement system administered and wholly or
26 partially paid for by any other governmental agency with the
27 exception of a member eligible to receive or receiving military
28 retirement pay earned by a combination of active duty and
29 nonactive duty with a reserve or national guard component of the
30 armed forces which retirement pay is payable only upon the
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1 attainment of a specified age and period of service under 10
2 U.S.C. Ch. 67 (relating to retired pay for non-regular service).
3 (d) Whenever two or more boroughs, cities, towns or
4 townships establish a regional police department through an
5 intermunicipal agreement under the act of July 12, 1972
6 (P.L.762, No.180), referred to as the Intergovernmental
7 Cooperation Law, any member of the police force of any of the
8 boroughs, cities, towns or townships establishing the regional
9 police department who is appointed as a member of the regional
10 police force within six months of its establishment shall have
11 credited to his employment record for pension or retirement
12 benefit purposes all of the time spent by him as a full-time
13 member of the police pension fund of the municipality. Prior to
14 the adoption of the pension plan for the regional police
15 department, the municipalities shall obtain an actuarial
16 valuation report on the proposed pension plan. The actuarial
17 valuation report shall be prepared under Chapter 2 of the act of
18 December 18, 1984 (P.L.1005, No.205), known as the "Municipal
19 Pension Plan Funding Standard and Recovery Act."
20 (E) IF A BOROUGH, TOWN OR TOWNSHIP DISBANDS ITS POLICE FORCE <--
21 AND ENTERS INTO AN INTERMUNICIPAL AGREEMENT WITH ANOTHER
22 BOROUGH, TOWN OR TOWNSHIP FOR THE PROVISION OF POLICE SERVICES
23 UNDER THE INTERGOVERNMENTAL COOPERATION LAW, THE INTERMUNICIPAL
24 AGREEMENT MAY PROVIDE FOR THE TRANSFER OF SERVICE CREDITS FOR
25 ANY ACTIVE MEMBER OF THE DISBANDED POLICE FORCE WHO IS EMPLOYED
26 ON OR AFTER JANUARY 1, 1995, AS A MEMBER OF THE POLICE FORCE
27 PROVIDING POLICE SERVICES TO THE BOROUGH, TOWN OR TOWNSHIP THAT
28 DISBANDED ITS POLICE FORCE, PROVIDED THAT THE MEMBER IS EMPLOYED
29 WITHIN SIX MONTHS OF THE EFFECTIVE DATE OF THE DISBANDMENT. IF
30 AUTHORIZED IN AN INTERMUNICIPAL AGREEMENT, THE SERVICE CREDITS
19950S0633B1831 - 6 -
1 TRANSFERRED FOR EACH ELIGIBLE MEMBER SHALL BE EQUAL TO THE TOTAL
2 TIME SPENT BY THE MEMBER AS A FULL-TIME MEMBER OF THE DISBANDED
3 POLICE FORCE. THE INTERMUNICIPAL AGREEMENT PROVIDING FOR THE
4 TRANSFER OF SERVICE CREDITS MAY PROVIDE FOR THE TRANSFER OF
5 ASSETS FROM THE POLICE PENSION FUND OF THE DISBANDED POLICE
6 FORCE TO THE POLICE PENSION FUND OF THE POLICE FORCE OF THE
7 BOROUGH, TOWN OR TOWNSHIP PROVIDING THE POLICE SERVICES,
8 PROVIDED THAT THE AMOUNT OF THE ASSETS TRANSFERRED DOES NOT
9 EXCEED THE ACTUARIAL ACCRUED LIABILITY OF THE TRANSFERRED
10 MEMBERS AS CALCULATED BY THE ACTUARY OF THE POLICE PENSION FUND
11 OF THE POLICE FORCE OF THE BOROUGH, TOWN OR TOWNSHIP PROVIDING
12 THE POLICE SERVICES. THE ACTUARIAL VALUATION PREPARED BY THE
13 ACTUARY SHALL BE PREPARED UNDER CHAPTER 2 OF THE "MUNICIPAL
14 PENSION PLAN FUNDING STANDARD AND RECOVERY ACT."
15 Section 6. Section 5 of the act, amended December 7, 1979
16 (P.L.475, No.99), is amended to read:
17 Section 5. (a) Payments made under the provisions of this
18 act shall not be a charge on any other fund in the treasury of
19 any borough, town [or], township or regional police department,
20 or under its control, save the police pension fund herein
21 provided for.
22 (b) The basis for determining any pension payable under this
23 act, following retirement of any member of the force meeting the
24 service and age qualifications of the ordinance or resolution
25 establishing a police pension fund, shall be as [follows:]
26 provided in subsections (c) and (d).
27 (c) Monthly pension or retirement benefits other than length
28 of service increments shall be computed at one-half the monthly
29 average salary of such member during not more than the last
30 sixty nor less than the last thirty-six months of employment.
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1 Such pension or retirement benefits for any month shall be
2 computed as the sum of [(i)] (1) any pension benefits from
3 pension plans heretofore established by a private organization
4 or association for the members of the police force but only to
5 the extent that this Commonwealth or any of its municipalities
6 shall have contributed to such pension plan moneys raised by
7 taxation[, (ii)]; (2) if positions covered by the fund are
8 included in an agreement under the Federal Social Security Act,
9 up to seventy-five per centum of his full social security old-
10 age insurance benefit calculated in accordance with the
11 provisions of the Federal Social Security Act in effect on the
12 date of his termination of employment, except that such amount
13 shall be included only upon attainment of the age at which the
14 officer would be eligible to receive full social security old-
15 age insurance benefits and in determining such eligibility and
16 such amount only compensation for services actually rendered by
17 the officer and covered by the police pension fund shall be
18 included[,]; and [(iii)] (3) benefits from the police pension
19 fund established pursuant to this act to the extent necessary to
20 bring the total benefits in any month up to one-half the
21 aforesaid monthly average salary[: Provided, however, That]
22 except that any officer who receives pension or retirement
23 benefits from any plan established at any time pursuant to this
24 act and who is also entitled to receive social security old-age
25 insurance benefits shall not regardless of when the officer
26 retired from active service have his pension or retirement
27 benefits offset or reduced by more than seventy-five per centum
28 of the social security old-age insurance benefits which he
29 receives.
30 (d) If this Commonwealth or one of its municipalities shall
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1 have contributed moneys raised by taxation to a pension plan
2 established by a private organization or association for the
3 members of the police force, the pension benefits to be taken
4 into account under clause [(i)] (1) of [this paragraph]
5 subsection (c) shall be that proportion of the total pension
6 benefits payable under clause [(i)] (1) as the assets
7 attributable to contributions of moneys raised by taxation bear
8 to the total assets of the pension plan.
9 (e) In the case of the payment of pensions for permanent
10 injuries incurred in service and to families of members killed
11 in service, the amount and commencement of the payments shall be
12 fixed by regulations of the governing body of the borough, town
13 [or], township or regional police department.
14 (f) Any borough, town [or], township or regional police
15 department may establish and pay length of service increments
16 for years of service beyond twenty-five years for each completed
17 year of service in excess of twenty-five years, not to exceed
18 one hundred dollars ($100). Such length of service increments
19 may be paid in addition to other monthly pension or retirement
20 allowances.
21 (g) (1) The ordinance or resolution establishing the police <--
22 pension fund may provide for a cost of living increase for
23 members of the police force receiving retirement benefits[:
24 Provided, however, That such]. The cost of living increase shall
25 not exceed the percentage increase in the Consumer Price Index
26 from the year in which the police member last worked[: Provided
27 further, That in no case], shall not cause the total police
28 pension benefits to exceed seventy-five per centum of the salary
29 for computing retirement benefits[: And provided further, That]
30 and shall not cause the total cost of living increase [shall
19950S0633B1831 - 9 -
1 not] to exceed thirty per centum. No cost of living increase
2 shall be granted which would impair the actuarial soundness of
3 the pension fund.
4 (2) IF THE ASSETS OF THE POLICE PENSION FUND EXCEED THE <--
5 PRESENT VALUE OF FUTURE BENEFITS AS REPORTED IN THE LAST
6 ACTUARIAL VALUATION REPORT FILED WITH THE PUBLIC EMPLOYEE
7 RETIREMENT COMMISSION UNDER THE ACT OF DECEMBER 18, 1984
8 (P.L.1005, NO.205), KNOWN AS THE "MUNICIPAL PENSION PLAN FUNDING
9 STANDARD AND RECOVERY ACT," A COST-OF-LIVING INCREASE FOR
10 MEMBERS OF THE POLICE FORCE RECEIVING RETIREMENT BENEFITS FOR 20
11 OR MORE YEARS MAY BE PROVIDED IN EXCESS OF THE LIMITS HEREIN
12 PRESCRIBED.
13 (h) The ordinance or resolution establishing the police
14 pension fund may provide for a vested benefit provided that such
15 would not impair the actuarial soundness of the pension fund.
16 Under the provisions of such benefit, should a police officer,
17 before completing superannuation retirement age and service
18 requirements but after having completed twelve years of total
19 service, for any reason cease to be employed as a full-time
20 police officer by the municipality or regional police department
21 in whose pension fund he has been a member, he shall be entitled
22 to vest his retirement benefits by filing with the governing
23 body within ninety days of the date he ceases to be a full-time
24 police officer a written notice of his intention to vest. Upon
25 reaching the date which would have been his superannuation
26 retirement date if he had continued to be employed as a full-
27 time police officer he shall be paid a partial superannuation
28 retirement allowance determined by applying the percentage his
29 years of service bears to the years of service which he would
30 have rendered had he continued to work until his superannuation
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1 retirement date to the gross pension, using however the monthly
2 average salary during the appropriate period prior to his
3 termination of employment. Such pension or retirement benefits
4 for any month shall be the sum of clauses [(i), (ii) and (iii)]
5 (1), (2) and (3) of subsection (c) of such benefits from the
6 police pension fund established pursuant to this act to the
7 extent necessary to bring the total benefits in any month up to
8 his partial superannuation retirement allowance outlined above.
9 Section 7. Section 6 of the act, amended June 15, 1972
10 (P.L.396, No.108), is amended to read:
11 Section 6. [When a police pension fund is established under
12 the provisions of this act, the governing body of the borough,
13 town or township, may employ an actuary, and may fix his
14 compensation. The actuary shall determine the present value of
15 the liability on account of pensions payable under section five
16 of this act to original members for service prior to the date of
17 the establishment of the fund, and shall offset the value of any
18 assets transferred to the fund from a previous pension fund to
19 determine the unfunded liability. The unfunded liability shall
20 be paid entirely by the borough, town or township: Provided,
21 That it may be funded over a period not to exceed twenty-five
22 years. The actuary shall also determine the amount which shall
23 be contributed annually into the fund for the service of members
24 subsequent to the establishment of the fund (to be known as
25 "future service cost").]
26 (a) Members shall pay into the fund, monthly, an amount
27 equal to not less than five per centum nor more than eight per
28 centum of monthly compensation. Where positions covered by the
29 fund are included in an agreement under the Federal Social
30 Security Act, members shall pay into the fund, monthly, an
19950S0633B1831 - 11 -
1 amount determined as follows: (1) if the pension plan
2 established under the provisions of this act provides for no
3 offset under [subclause (ii) of the second paragraph] clause (2)
4 of subsection (c) of section 5, five per centum of total
5 compensation; or (2) if such pension plan provides for an offset
6 under [subclause (ii) of the second paragraph] clause (2) of
7 subsection (c) of section 5: (i) on compensation on which social
8 security taxes are payable, at a rate calculated by subtracting
9 from five per centum the product obtained by multiplying three
10 per centum by such offset percentage; and (ii) on compensation
11 in excess of that on which social security taxes are payable, if
12 any, five per centum.
13 (b) The remainder of the needed annual contributions, as
14 determined by the actuary, shall become the obligation of the
15 borough, town [or], township or regional police department, and
16 shall be paid by it to the pension fund by annual
17 appropriations.
18 (c) If an actuarial study shows that the condition of the
19 police pension fund of any borough, town [or], township or
20 regional police department is such that payments into the fund
21 by members may be reduced below the minimum percentages
22 hereinbefore prescribed, or eliminated, and that if such
23 payments are reduced or eliminated contributions by the borough,
24 town [or], township or regional police department will not be
25 required to keep the fund actuarially sound, the governing body
26 of the borough, town [or], township or regional police
27 department may, on an annual basis, by ordinance or resolution,
28 reduce or eliminate payments into the fund by members.
29 [The payments made by the State Treasurer to the municipal
30 treasurer from the moneys received from taxes paid upon premiums
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1 by foreign casualty insurance companies for purposes of pension
2 retirement or disability benefits for policemen shall be used,
3 as follows: (1) to reduce the unfunded liability or, after such
4 liability has been funded, (2) to apply against the annual
5 obligation of the borough, town or township for future service
6 cost to or to the extent that the payment may be in excess of
7 such obligation, (3) to reduce member contribution. Unless
8 otherwise specifically provided, any other moneys paid into the
9 police pension fund shall be applied equally against the member
10 and the municipal portions of the future service cost.
11 It shall be the duty of the governing body to apply such
12 payments in accordance with the provisions of this act.]
13 Section 8. Section 9 of the act, amended September 9, 1971
14 (P.L.435, No.104), is amended to read:
15 Section 9. Any member of a police force of a borough, town
16 [or], township or regional police department, who for any reason
17 whatsoever, shall be ineligible to receive a pension after
18 having contributed any charges to a police pension fund
19 established pursuant to the provisions of this act, or to a
20 police pension fund existing on the effective date of this act
21 supplanted by a police pension fund established pursuant to the
22 provisions of this act, shall be entitled to a refund of all
23 such moneys paid by him into such funds plus all interest earned
24 by such moneys while in the police pension fund as determined by
25 regulations of the governing body immediately upon
26 discontinuance of his employment with the police force. If such
27 discontinuance is due to death, such moneys shall be paid to his
28 designated beneficiary or, in the absence thereof, to his
29 estate.
30 Section 9. Section 11 of the act is amended to read:
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1 Section 11. The expense of the administration of this act,
2 including the compensation of an actuary and the custodian of
3 the fund, exclusive of the payments of retirement allowances,
4 shall be paid by the borough, town [or], township or regional
5 police department by appropriations made by the governing bodies
6 thereof.
7 Section 10. The act is amended by adding a section to read:
8 Section 11.1. Notwithstanding any provision of this act, a
9 regional police department retirement system established prior
10 to the effective date of this amendatory act may retain the
11 eligibility and benefit provisions specified in the retirement
12 system's pension plan on the effective date of this amendatory
13 act. Any subsequent modification of the eligibility or benefit
14 provisions of the regional police department retirement system's
15 pension plan shall be made under the provisions of this
16 amendatory act.
17 Section 11. This act shall take effect immediately.
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