PRINTER'S NO. 660
No. 595 Session of 1997
INTRODUCED BY STEIL, SCHULER, BELARDI, COLAIZZO, LAUGHLIN, COLAFELLA, READSHAW, CLARK, MILLER, PETRARCA, CAWLEY, GORDNER, DALEY, SATHER, DERMODY, CASORIO, NICKOL, MICOZZIE, SERAFINI, SURRA, BENNINGHOFF, D. W. SNYDER, VAN HORNE, SHANER, BOSCOLA, STERN, HENNESSEY, STABACK, BARD, E. Z. TAYLOR, ROBERTS, McCALL, TRELLO, SAYLOR AND ITKIN, FEBRUARY 13, 1997
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, FEBRUARY 13, 1997
AN ACT 1 Amending the act of May 29, 1956 (1955 P.L.1804, No.600), 2 entitled, as amended, "An act providing for the establishment 3 of police pension funds or pension annuities in certain 4 boroughs, towns and townships; authorizing the establishment 5 of police pension funds or pension annuities by regional 6 police departments; providing for the regulation and 7 maintenance of police pension funds or pension annuities; 8 providing for an actuary; continuance of existing funds or 9 transfer thereof to funds herein established; prescribing 10 rights of beneficiaries; contributions by members; providing 11 for expenses of administration; continuation of existing 12 authority to provide annuity contracts; credit for military 13 service; refunds; exempting allowances from judicial process; 14 and repealing certain acts," providing for early retirement. 15 The General Assembly of the Commonwealth of Pennsylvania 16 hereby enacts as follows: 17 Section 1. Section 5 of the act of May 29, 1956 (1955 18 P.L.1804, No.600), referred to as the Municipal Police Pension 19 Law, amended May 10, 1996 (P.L.162, No.33), is amended to read: 20 Section 5. (a) Payments made under the provisions of this 21 act shall not be a charge on any other fund in the treasury of
1 any borough, town, township or regional police department, or 2 under its control, save the police pension fund herein provided 3 for. 4 (b) The basis for determining any pension payable under this 5 act, following retirement of any member of the force meeting the 6 service and age qualifications of the ordinance or resolution 7 establishing a police pension fund, shall be as provided in 8 subsections (c) [and], (d) and (i). 9 (c) Monthly pension or retirement benefits other than length 10 of service increments shall be computed at one-half the monthly 11 average salary of such member during not more than the last 12 sixty nor less than the last thirty-six months of employment. 13 Such pension or retirement benefits for any month shall be 14 computed as the sum of (1) any pension benefits from pension 15 plans heretofore established by a private organization or 16 association for the members of the police force but only to the 17 extent that this Commonwealth or any of its municipalities shall 18 have contributed to such pension plan moneys raised by taxation; 19 (2) if positions covered by the fund are included in an 20 agreement under the Federal Social Security Act, up to seventy- 21 five per centum of his full social security old-age insurance 22 benefit calculated in accordance with the provisions of the 23 Federal Social Security Act in effect on the date of his 24 termination of employment, except that such amount shall be 25 included only upon attainment of the age at which the officer 26 would be eligible to receive full social security old-age 27 insurance benefits and in determining such eligibility and such 28 amount only compensation for services actually rendered by the 29 officer and covered by the police pension fund shall be 30 included; and (3) benefits from the police pension fund 19970H0595B0660 - 2 -
1 established pursuant to this act to the extent necessary to 2 bring the total benefits in any month up to one-half the 3 aforesaid monthly average salary except that any officer who 4 receives pension or retirement benefits from any plan 5 established at any time pursuant to this act and who is also 6 entitled to receive social security old-age insurance benefits 7 shall not regardless of when the officer retired from active 8 service have his pension or retirement benefits offset or 9 reduced by more than seventy-five per centum of the social 10 security old-age insurance benefits which he receives. 11 (d) If this Commonwealth or one of its municipalities shall 12 have contributed moneys raised by taxation to a pension plan 13 established by a private organization or association for the 14 members of the police force, the pension benefits to be taken 15 into account under clause (1) of subsection (c) shall be that 16 proportion of the total pension benefits payable under clause 17 (1) as the assets attributable to contributions of moneys raised 18 by taxation bear to the total assets of the pension plan. 19 (e) In the case of the payment of pensions for permanent 20 injuries incurred in service and to families of members killed 21 in service, the amount and commencement of the payments shall be 22 fixed by regulations of the governing body of the borough, town, 23 township or regional police department. 24 (f) Any borough, town, township or regional police 25 department may establish and pay length of service increments 26 for years of service beyond twenty-five years for each completed 27 year of service in excess of twenty-five years, not to exceed 28 one hundred dollars ($100). Such length of service increments 29 may be paid in addition to other monthly pension or retirement 30 allowances. 19970H0595B0660 - 3 -
1 (g) (1) The ordinance or resolution establishing the police 2 pension fund may provide for a cost of living increase for 3 members of the police force receiving retirement benefits. The 4 cost of living increase shall not exceed the percentage increase 5 in the Consumer Price Index from the year in which the police 6 member last worked, shall not cause the total police pension 7 benefits to exceed seventy-five per centum of the salary for 8 computing retirement benefits and shall not cause the total cost 9 of living increase to exceed thirty per centum. No cost of 10 living increase shall be granted which would impair the 11 actuarial soundness of the pension fund. 12 (2) (i) Subject to the limitations in clause (ii), if the 13 assets of the police pension fund exceed the present value of 14 future benefits as reported in the last actuarial valuation 15 report filed with the Public Employee Retirement Commission 16 under the act of December 18, 1984 (P.L.1005, No.205), known as 17 the "Municipal Pension Plan Funding Standard and Recovery Act," 18 a cost of living increase for members of the police force 19 receiving retirement benefits for twenty or more years may be 20 provided in excess of the limits herein prescribed. 21 (ii) If the total benefits to be paid to a retired member 22 from the police pension fund exceed ten thousand dollars 23 ($10,000) a year, then the police pension fund shall not pay 24 benefits to a retired member in excess of one hundred per centum 25 of the retired member's average compensation as defined in 26 section 415 of the Internal Revenue Code of 1986 (Public Law 99- 27 514, 26 U.S.C. § 415) or in any successor statute. 28 (h) The ordinance or resolution establishing the police 29 pension fund may provide for a vested benefit provided that such 30 would not impair the actuarial soundness of the pension fund. 19970H0595B0660 - 4 -
1 Under the provisions of such benefit, should a police officer, 2 before completing superannuation retirement age and service 3 requirements but after having completed twelve years of total 4 service, for any reason cease to be employed as a full-time 5 police officer by the municipality or regional police department 6 in whose pension fund he has been a member, he shall be entitled 7 to vest his retirement benefits by filing with the governing 8 body within ninety days of the date he ceases to be a full-time 9 police officer a written notice of his intention to vest. Upon 10 reaching the date which would have been his superannuation 11 retirement date if he had continued to be employed as a full- 12 time police officer he shall be paid a partial superannuation 13 retirement allowance determined by applying the percentage his 14 years of service bears to the years of service which he would 15 have rendered had he continued to work until his superannuation 16 retirement date to the gross pension, using however the monthly 17 average salary during the appropriate period prior to his 18 termination of employment. Such pension or retirement benefits 19 for any month shall be the sum of clauses (1), (2) and (3) of 20 subsection (c) of such benefits from the police pension fund 21 established pursuant to this act to the extent necessary to 22 bring the total benefits in any month up to his partial 23 superannuation retirement allowance outlined above. 24 (i) The ordinance or resolution establishing the police 25 pension fund shall provide for an early retirement benefit. The 26 early retirement benefit shall be provided to a member of the 27 police force with twenty or more years of service who terminates 28 employment prior to the completion of superannuation retirement 29 age and service requirements and who files a written application 30 for an early retirement benefit with the governing body of the 19970H0595B0660 - 5 -
1 municipality or regional police department. The early retirement 2 benefit shall become effective as of the date the application is 3 filed with the governing body or the date designated on the 4 application, whichever is later, and shall be the actuarial 5 equivalent of a partial superannuation retirement benefit 6 calculated as follows: 7 (1) A partial superannuation retirement benefit shall be 8 determined by applying the percentage that the member's years of 9 service bear to the years of service that the member would have 10 rendered had the member continued to be employed until his 11 superannuation retirement date to the gross pension amount 12 calculated using the monthly average salary during the 13 appropriate period prior to his termination of employment. 14 (2) The actuarial equivalent of the partial superannuation 15 retirement benefit shall be determined by actuarially reducing 16 the partial superannuation retirement benefit to reflect that it 17 will commence on the effective date of the early retirement 18 rather than on the date on which the member would have completed 19 superannuation age and service requirements. The actuarial 20 reduction shall be calculated using the actuarial assumptions 21 reported in the last actuarial valuation report filed with the 22 Public Employee Retirement Commission under the act of December 23 18, 1984 (P.L.1005, No.205), known as the "Municipal Pension 24 Plan Funding Standard and Recovery Act." 25 Section 2. This act shall take effect in 60 days. A17L53JS/19970H0595B0660 - 6 -