PRINTER'S NO. 1683
No. 1360 Session of 2001
INTRODUCED BY S. H. SMITH, APRIL 25, 2001
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, APRIL 25, 2001
AN ACT
1 Amending the act of December 14, 1988 (P.L.1192, No.147),
2 entitled "An act requiring municipal retirement systems to
3 pay special ad hoc postretirement adjustments to certain
4 retired police officers and firefighters; providing for the
5 financing of these adjustments; providing for the
6 administration of the Commonwealth's reimbursements for these
7 adjustments; and making repeals," further providing for
8 definitions, for special ad hoc postretirement adjustments
9 and for the administration of the Commonwealth's
10 reimbursements for these adjustments; and making editorial
11 changes.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. The definitions of "special ad hoc adjustment"
15 and "special ad hoc municipal police and firefighter
16 postretirement adjustment" in section 102 of the act of December
17 14, 1988 (P.L.1192, No.147), known as the Special Ad Hoc
18 Municipal Police and Firefighter Postretirement Adjustment Act,
19 are amended and the section is amended by adding definitions to
20 read:
21 Section 102. Definitions.
22 The following words and phrases when used in this act shall
1 have the meanings given to them in this section unless the
2 context clearly indicates otherwise:
3 * * *
4 "Retirement benefit." The amount paid on a regular basis to
5 a retired or disabled police officer or firefighter by a
6 municipal retirement system established for police officers or
7 firefighters.
8 * * *
9 ["Special ad hoc adjustment." A special ad hoc municipal
10 police and firefighter postretirement adjustment.]
11 "Special ad hoc municipal police and firefighter
12 postretirement adjustment[."]," "special ad hoc adjustment" or
13 "special ad hoc postretirement adjustment." An increase in [or
14 change in] the amount of a [retirement annuity, retirement
15 benefit, service pension or disability pension benefit granted
16 or effective after active employment ceases,] retirement benefit
17 as provided for [on a one-time basis] under this [statute.] act.
18 "Years of service." The number of whole years of active,
19 full-time employment as a police officer or firefighter credited
20 under the retirement system.
21 "Years on retirement." The number of whole years that a
22 police officer or firefighter has been retired as of January 1,
23 2001.
24 Section 2. Chapter 3 heading of the act is amended to read:
25 CHAPTER 3
26 1989 SPECIAL AD HOC MUNICIPAL POLICE AND
27 FIREFIGHTER POSTRETIREMENT ADJUSTMENT
28 Section 3. Section 301 of the act is amended to read:
29 Section 301. Entitlement to 1989 special ad hoc adjustment.
30 A municipal retirement system shall pay a retired police
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1 officer or firefighter a special ad hoc municipal police and
2 firefighter postretirement adjustment under this chapter if all
3 of the following apply:
4 (1) The retiree has terminated active employment with
5 the municipality as a police officer or firefighter.
6 (2) The retiree is receiving a retirement annuity,
7 retirement benefit, service pension or disability pension
8 benefit from a municipal retirement system on the basis of
9 active employment with a municipality as a police officer or
10 firefighter.
11 (3) The retiree began receiving the retirement annuity,
12 retirement benefit, service pension or disability pension
13 benefit before January 1, 1985.
14 Section 4. Section 302 of the act, amended December 18, 1996
15 (P.L.993, No. 152), is amended to read:
16 Section 302. Amount of 1989 special ad hoc adjustment.
17 (a) General rule.--Except as provided in [subsections (b)
18 and (c)] subsection (b), a municipal retirement system shall pay
19 a retired police officer or firefighter a special ad hoc
20 municipal police and firefighter postretirement adjustment under
21 section 301, as follows:
22 (1) The sum of $25 a month, if on January 1, 1989, the
23 retiree has been retired at least five years but less than
24 ten years.
25 (2) The sum of $50 a month, if on January 1, 1989, the
26 retiree is totally disabled and has been retired less than
27 ten years.
28 (3) The sum of $75 a month, if on January 1, 1989, the
29 retiree has been retired at least ten years but less than 20
30 years.
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1 (4) The sum of $150 a month, if on January 1, 1989, the
2 retiree has been retired at least 20 years.
3 (b) Limitation.--If, under section 301, a retiree is
4 entitled to be paid a special ad hoc municipal police and
5 firefighter postretirement adjustment by more than one municipal
6 retirement system, the amount of the special ad hoc adjustment
7 under subsection (a) shall be reduced so that the total of all
8 these adjustments paid to the retiree does not exceed the amount
9 specified in subsection (a).
10 [(c) Modification in amount of postretirement adjustment.--
11 In a municipality where, as of the most recent actuarial
12 valuation prepared under the act of December 18, 1984 (P.L.1005,
13 No.205), known as the Municipal Pension Plan Funding Standard
14 and Recovery Act, the actuarial value of aggregated assets as a
15 percentage of the aggregated actuarial accrued liabilities of
16 the municipality's retirement systems is less than 50%, if a
17 retiree entitled to receive a special ad hoc municipal police
18 and firefighters postretirement adjustment will receive a
19 postretirement adjustment from the applicable municipal police
20 or paid firefighters retirement system after the effective date
21 of this act, the amount of the special ad hoc postretirement
22 adjustment under subsection (a) shall be reduced by the total
23 amount of any municipal postretirement adjustment.]
24 (d) Construction.--[Subsections (b) and (c)] Subsection (b)
25 shall not be construed to reduce the amount of any retirement
26 [annuity, retirement benefit, service pension or disability
27 pension] benefit payable to a retiree immediately prior to [the
28 effective date of this act] February 12, 1989.
29 Section 5. Section 303 of the act is amended to read:
30 Section 303. Payment of 1989 special ad hoc adjustment.
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1 The special ad hoc adjustment is effective on the date of the
2 first payment of the retiree's retirement annuity, retirement
3 benefit, service pension or disability pension benefit due after
4 December 31, 1988. The municipal retirement system shall pay
5 this as soon as practicable after that and shall include in the
6 first payment any omitted amount payable between the effective
7 date of the adjustment and the date of the first payment.
8 Section 6. The act is amended by adding a chapter to read:
9 CHAPTER 4
10 2001 SPECIAL AD HOC MUNICIPAL POLICE AND
11 FIREFIGHTER POSTRETIREMENT ADJUSTMENT
12 Section 401. Entitlement to 2001 special ad hoc postretirement
13 adjustment.
14 A municipal retirement system shall pay a retired police
15 officer or firefighter a special ad hoc postretirement
16 adjustment under this chapter if all of the following apply:
17 (1) The retiree has terminated active employment with
18 the municipality as a police officer or firefighter.
19 (2) The retiree is receiving a retirement benefit from a
20 municipal retirement system on the basis of active employment
21 with the municipality as a police officer or firefighter.
22 (3) The retiree began receiving the retirement benefit
23 before January 1, 1996.
24 Section 402. Amount of 2001 special ad hoc postretirement
25 adjustment.
26 (a) General rule.--Except as provided in subsections (b) and
27 (c), a municipal retirement system shall pay a retired police
28 officer or firefighter a monthly special ad hoc postretirement
29 adjustment under section 401 that shall be calculated as
30 follows:
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1 (1) The base adjustment shall be determined by
2 multiplying 15¢ by the years of service and then multiplying
3 that product by the years on retirement.
4 (2) The longevity factor shall be determined as the sum
5 of the products calculated by multiplying 0.025 by the years
6 on retirement and 0.05 by the years on retirement in excess
7 of 25, if any.
8 (3) The longevity adjustment shall be determined by
9 multiplying the base adjustment calculated under paragraph
10 (1) by the longevity factor calculated under paragraph (2).
11 (4) The special ad hoc postretirement adjustment payable
12 under section 401 shall be the sum of the base adjustment
13 calculated under paragraph (1) and the longevity adjustment
14 calculated under paragraph (3).
15 (b) Limitation.--If, under section 401, a retiree is
16 entitled to be paid a special ad hoc postretirement adjustment
17 by more than one municipal retirement system, the amount of the
18 special ad hoc postretirement adjustment under subsection (a)
19 shall be reduced so that the total of all these adjustments paid
20 to the retiree does not exceed the amount specified in
21 subsection (a).
22 (c) Modification in amount of 2001 special ad hoc
23 postretirement adjustment.--The amount of the special ad hoc
24 postretirement adjustment calculated under subsection (a) shall
25 be reduced annually by 65% of the total amount of any
26 postretirement adjustments provided to the retiree under the
27 municipal retirement plan after December 31, 1988, and before
28 January 1, 2001 and paid in the immediately preceding year.
29 Section 7. Section 502 of the act is amended to read:
30 Section 502. Reimbursement by Commonwealth for special 1989 ad
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1 hoc adjustment.
2 (a) General rule.--Except as provided in subsection (b),
3 beginning January 1, 1990, the Commonwealth shall reimburse a
4 municipality, from the special account established under section
5 701, for the actual special ad hoc adjustment under Chapter 3
6 paid during the previous calendar year.
7 (b) Limitation of eligibility.--
8 (1) The Commonwealth shall not reimburse any
9 municipality if the information required under section [901]
10 901(a)(1) either was not certified to the Auditor General or
11 was certified after April 1 of the year the certification was
12 due.
13 (2) Beginning January 1, 2002, the Commonwealth shall
14 not make any payment under subsection (a) to a municipality
15 that in the immediately preceding year received an allocation
16 of general municipal pension system State aid that was
17 limited to the pension cost of the municipality under section
18 402(f)(2) of the act of December 18, 1984 (P.L.1005, No.205),
19 known as the Municipal Pension Plan Funding Standard and
20 Recovery Act.
21 Section 8. The act is amended by adding a section to read:
22 Section 502.1. Reimbursement by Commonwealth for 2001 special
23 ad hoc adjustment.
24 (a) General rule.--
25 (1) Except as provided in subsection (b), beginning in
26 the year following the year in which the amortization
27 contribution requirement attributable to a special ad hoc
28 postretirement adjustment under Chapter 4 is first reflected
29 in the financial requirements of the retirement system
30 determined under Chapter 3 of the act of December 18, 1984
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1 (P.L.1005, No.205), known as the Municipal Pension Plan
2 Funding Standard and Recovery Act, the Auditor General shall
3 determine the Commonwealth reimbursement payable to the
4 municipality representing the amortization contribution
5 requirement attributable to the special ad hoc postretirement
6 adjustment under Chapter 4 that was paid with revenues of the
7 municipality other than general municipal pension system
8 State aid provided under the Municipal Pension Plan Funding
9 Standard and Recovery Act.
10 (2) The determination of the reimbursable amount of the
11 amortization contribution requirement attributable to the
12 special ad hoc postretirement adjustment under Chapter 4 in
13 any year shall be calculated as the amortization contribution
14 requirement attributable to the special ad hoc postretirement
15 adjustments under Chapter 4 and reflected in the
16 determination of the financial requirements of the pension
17 plan under Chapter 3 of the Municipal Pension Plan Funding
18 Standard and Recovery Act for the immediate prior year less
19 the product of that amortization contribution requirement
20 multiplied by the ratio of the amount of general municipal
21 pension system State aid allocated to the retirement system
22 in the immediate prior year to the total amount of municipal
23 contributions made to the retirement system from all sources
24 other than employee contributions in the immediate prior
25 year.
26 (3) The Commonwealth shall reimburse a municipality,
27 from the special account established under section 701, for
28 the reimbursable amount determined for each year under this
29 paragraph.
30 (b) Limitation of eligibility.--
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1 (1) The Commonwealth shall not reimburse any
2 municipality for a special ad hoc adjustment paid under
3 Chapter 4 if the information required under section 901(a)(2)
4 either was not certified to the Auditor General or was
5 certified after April 1 of the year the certification was
6 due.
7 (2) The Commonwealth shall not reimburse a municipality
8 for the reimbursable amount of the amortization contribution
9 requirement attributable to the special ad hoc postretirement
10 adjustment under Chapter 4 if the municipality fails to
11 submit a complete certification of the reimbursable amount of
12 the amortization contribution requirement determined under
13 subsection (a) to the Auditor General before April 1 of the
14 year in which the reimbursement is payable.
15 (c) Variable definition of amortization contribution
16 requirement.--For purposes of this section, the term
17 "amortization contribution requirement" shall have the meaning
18 specified in this subsection as follows:
19 (1) In a municipal pension plan with defined benefits
20 for which the municipality determines the financial
21 requirements of the pension plan under section 302 of the
22 Municipal Pension Plan Funding Standard and Recovery Act, the
23 term "amortization contribution requirement" shall mean the
24 amortization contribution requirement attributable to the
25 special ad hoc postretirement adjustments under Chapter 4
26 that was reflected in the financial requirements of the
27 pension plan determined for the immediate prior year.
28 (2) In a municipal pension plan without defined benefits
29 for which the municipality determines the financial
30 requirements of the pension plan under section 303 of the
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1 Municipal Pension Plan Funding Standard and Recovery Act, the
2 term "amortization contribution requirement" shall mean the
3 sum of the payments made to the retirement system in the
4 immediate prior year in order to provide the special ad hoc
5 postretirement adjustments under Chapter 4 in that year.
6 Section 9. Sections 702, 901, 902, 903 and 1101 of the act
7 are amended to read:
8 Section 702. Deposits into special account.
9 Notwithstanding any applicable provision of the act of May
10 12, 1943 (P.L.259, No.120), referred to as the Foreign Casualty
11 Insurance Premium Tax Allocation Law, or any applicable
12 provisions of the act of March 4, 1971 (P.L.6, No.2), known as
13 the Tax Reform Code of 1971, or the provisions of sections
14 402(b) and 803(c) of the act of December 18, 1984 (P.L.1005,
15 No.205), known as the Municipal Pension Plan Funding Standard
16 and Recovery Act, beginning on January 1, 1990, prior to the
17 deposit of the proceeds of the insurance premium tax on foreign
18 casualty insurance premiums into the General Municipal Pension
19 System State Aid Program revenue account, an amount sufficient
20 to provide for the Commonwealth's reimbursement payments and
21 reimbursable amounts to municipalities for special ad hoc
22 adjustments under this act shall be deposited in the separate
23 account created under section 701.
24 Section 901. Municipal retirement system certification of
25 adjustments paid and of reimbursable amounts.
26 (a) Certification.--
27 (1) Beginning January 1, 1989, the chief administrative
28 officer of a municipal retirement system that pays a special
29 ad hoc adjustment under Chapter 3 in that year shall certify
30 the total of all adjustments under Chapter 3 paid during that
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1 year to the Auditor General not later than April 1 of the
2 following year.
3 (2) Beginning in the year 2001, a municipality with a
4 retirement system that pays a special ad hoc postretirement
5 adjustment under Chapter 4 in a year shall certify its
6 reimbursable amount under section 502.1(a) to the Auditor
7 General not later than April 1 of the following year.
8 (b) [Form] Certification form.--
9 (1) Not later than February 1 of the year in which the
10 form is due, the Auditor General shall send the retirement
11 system the proper form on which to make the certification
12 under subsection [(a)] (a)(1).
13 (2) Not later than February 1 of each year, the Auditor
14 General shall send each municipality maintaining a retirement
15 system for police officers or firefighters a notice of the
16 filing requirement for the certification of the reimbursable
17 amount under section 502.1(a), which shall include a detailed
18 description of the formula for determining the reimbursable
19 amount and the proper form on which to make the
20 certifications under subsection (a)(2).
21 Section 902. Commonwealth disbursement of reimbursement
22 payment.
23 (a) Payment to account.--Not later than June 1 of the year
24 in which the form is due, the Auditor General shall certify to
25 the State Treasurer the amount to be deposited into the special
26 account created in section 701 and shall draw a warrant, payable
27 to the treasurer of the municipality, on the State Treasurer
28 from the special account created in section 701 for the amount
29 certified under section 901(a).
30 (b) [Disbursement] Disbursements.--
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1 (1) Not later than September 1 of the year in which the
2 form is due, the State Treasurer shall disburse the
3 reimbursement payment for the special ad hoc postretirement
4 adjustments under Chapter 3 out of the special account
5 created in section 701.
6 (2) Not later than the first business day of October of
7 the year in which the certification form is due, the State
8 Treasurer shall disburse the reimbursement payment for the
9 postretirement adjustments under Chapter 4 out of the special
10 account created in section 701.
11 Section 903. Municipal receipt of reimbursement payment.
12 (a) 1989 postretirement adjustment reimbursement.--Upon
13 receipt of the reimbursement payment from the Commonwealth for
14 the postretirement adjustments under Chapter 3, the treasurer of
15 the municipality shall deposit the reimbursement payment into
16 the municipality's general fund.
17 (b) 2001 postretirement adjustment reimbursement.--Upon
18 receipt of the reimbursement payment from the Commonwealth for
19 the postretirement adjustments under Chapter 4, the treasurer of
20 the municipality shall deposit the reimbursement payment into
21 the municipality's general fund.
22 Section 1101. Limitation of prior act.
23 [The provisions of section 7 of the act of July 9, 1981
24 (P.L.208, No.66), known as the Public Employee Retirement Study
25 Commission Act, shall not be applied to this act.] To the extent
26 that a special ad hoc municipal police postretirement adjustment
27 granted by the Commonwealth causes the calculation of total
28 benefits to be paid to a member of a police force receiving
29 retirement benefit to exceed the limitations contained in the
30 act of May 29, 1956 (1955 P.L.1804, No.600), referred to as the
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1 Municipal Police Pension Law, the police pension fund may exceed
2 the limitations therein provided to pay the adjustment to the
3 retired or disabled member.
4 Section 10. The special ad hoc postretirement adjustment
5 under section 401 of the act is effective on the date of the
6 first retirement benefit made after the effective date of this
7 act. If the special ad hoc postretirement adjustment under
8 section 401 of the act is not included in the initial retirement
9 benefit payment occurring after the effective date of this act,
10 the special ad hoc postretirement adjustment shall be included
11 as soon as practicable in the retirement benefit payment of the
12 retiree, and the initial retirement benefit payment that
13 includes the special ad hoc postretirement adjustment also shall
14 include the total amount of the special ad hoc postretirement
15 adjustments previously omitted from the retirement benefit
16 payments made after the effective date of this act.
17 Section 11. This act shall take effect in 60 days.
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