SENATE AMENDED
PRIOR PRINTER'S NO. 1683 PRINTER'S NO. 3980
No. 1360 Session of 2001
INTRODUCED BY S. H. SMITH, NICKOL, HENNESSEY, SCHULER, FICHTER,
GEORGE, CAPPELLI, MANN, PERZEL, SAINATO, LAUGHLIN, WILT,
CREIGHTON, T. STEVENSON, SOLOBAY, DALEY, WOJNAROSKI, GEIST,
McCALL, CALTAGIRONE, BROWNE, YOUNGBLOOD, HARHAI, McNAUGHTON,
THOMAS, LEWIS, MARSICO, GRUCELA, BUNT, CURRY, J. TAYLOR,
JAMES, TRELLO, HUTCHINSON, GABIG, COLAFELLA, DIVEN, COLEMAN,
HERMAN, NAILOR, RAYMOND, TANGRETTI, M. BAKER AND BELFANTI,
APRIL 25, 2001
SENATOR THOMPSON, APPROPRIATIONS, IN SENATE, RE-REPORTED AS
AMENDED, JUNE 10, 2002
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
1 Municipal Police and Firefighter Postretirement Adjustment Act,
2 are amended and the section is amended by adding definitions to
3 read:
4 Section 102. Definitions.
5 The following words and phrases when used in this act shall
6 have the meanings given to them in this section unless the
7 context clearly indicates otherwise:
8 * * *
9 "Retirement benefit." The amount paid on a regular basis to
10 a retired or disabled police officer or firefighter by a
11 municipal retirement system established for police officers or
12 firefighters.
13 * * *
14 ["Special ad hoc adjustment." A special ad hoc municipal
15 police and firefighter postretirement adjustment.]
16 "Special ad hoc municipal police and firefighter
17 postretirement adjustment[."]," "special ad hoc adjustment" or
18 "special ad hoc postretirement adjustment." An increase in [or
19 change in] the amount of a [retirement annuity, retirement
20 benefit, service pension or disability pension benefit granted
21 or effective after active employment ceases,] retirement benefit
22 as provided for [on a one-time basis] under this [statute.] act.
23 "Years of service." The number of whole years of active,
24 full-time employment as a police officer or firefighter credited
25 under the retirement system.
26 "Years on retirement." The number of whole years that a
27 police officer or firefighter has been retired as of January 1,
28 2001.
29 Section 2. Chapter 3 heading of the act is amended to read:
30 CHAPTER 3
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1 1989 SPECIAL AD HOC MUNICIPAL POLICE AND
2 FIREFIGHTER POSTRETIREMENT ADJUSTMENT
3 Section 3. Section 301 of the act is amended to read:
4 Section 301. Entitlement to 1989 special ad hoc adjustment.
5 A municipal retirement system shall pay a retired police
6 officer or firefighter a special ad hoc municipal police and
7 firefighter postretirement adjustment under this chapter if all
8 of the following apply:
9 (1) The retiree has terminated active employment with
10 the municipality as a police officer or firefighter.
11 (2) The retiree is receiving a retirement annuity,
12 retirement benefit, service pension or disability pension
13 benefit from a municipal retirement system on the basis of
14 active employment with a municipality as a police officer or
15 firefighter.
16 (3) The retiree began receiving the retirement annuity,
17 retirement benefit, service pension or disability pension
18 benefit before January 1, 1985.
19 Section 4. Section 302 of the act, amended December 18, 1996
20 (P.L.993, No. 152), is amended to read:
21 Section 302. Amount of 1989 special ad hoc adjustment.
22 (a) General rule.--Except as provided in [subsections (b)
23 and (c)] subsection (b), a municipal retirement system shall pay
24 a retired police officer or firefighter a special ad hoc
25 municipal police and firefighter postretirement adjustment under
26 section 301, as follows:
27 (1) The sum of $25 a month, if on January 1, 1989, the
28 retiree has been retired at least five years but less than
29 ten years.
30 (2) The sum of $50 a month, if on January 1, 1989, the
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1 retiree is totally disabled and has been retired less than
2 ten years.
3 (3) The sum of $75 a month, if on January 1, 1989, the
4 retiree has been retired at least ten years but less than 20
5 years.
6 (4) The sum of $150 a month, if on January 1, 1989, the
7 retiree has been retired at least 20 years.
8 (b) Limitation.--If, under section 301, a retiree is
9 entitled to be paid a special ad hoc municipal police and
10 firefighter postretirement adjustment by more than one municipal
11 retirement system, the amount of the special ad hoc adjustment
12 under subsection (a) shall be reduced so that the total of all
13 these adjustments paid to the retiree does not exceed the amount
14 specified in subsection (a).
15 [(c) Modification in amount of postretirement adjustment.--
16 In a municipality where, as of the most recent actuarial
17 valuation prepared under the act of December 18, 1984 (P.L.1005,
18 No.205), known as the Municipal Pension Plan Funding Standard
19 and Recovery Act, the actuarial value of aggregated assets as a
20 percentage of the aggregated actuarial accrued liabilities of
21 the municipality's retirement systems is less than 50%, if a
22 retiree entitled to receive a special ad hoc municipal police
23 and firefighters postretirement adjustment will receive a
24 postretirement adjustment from the applicable municipal police
25 or paid firefighters retirement system after the effective date
26 of this act, the amount of the special ad hoc postretirement
27 adjustment under subsection (a) shall be reduced by the total
28 amount of any municipal postretirement adjustment.]
29 (d) Construction.--[Subsections (b) and (c)] Subsection (b)
30 shall not be construed to reduce the amount of any retirement
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1 [annuity, retirement benefit, service pension or disability
2 pension] benefit payable to a retiree immediately prior to [the
3 effective date of this act] February 12, 1989.
4 Section 5. Section 303 of the act is amended to read:
5 Section 303. Payment of 1989 special ad hoc adjustment.
6 The special ad hoc adjustment is effective on the date of the
7 first payment of the retiree's retirement annuity, retirement
8 benefit, service pension or disability pension benefit due after
9 December 31, 1988. The municipal retirement system shall pay
10 this as soon as practicable after that and shall include in the
11 first payment any omitted amount payable between the effective
12 date of the adjustment and the date of the first payment.
13 Section 6. The act is amended by adding a chapter to read:
14 CHAPTER 4
15 2001 2002 SPECIAL AD HOC MUNICIPAL POLICE AND <--
16 FIREFIGHTER POSTRETIREMENT ADJUSTMENT
17 Section 401. Entitlement to 2001 2002 special ad hoc <--
18 postretirement adjustment.
19 A municipal retirement system shall pay a retired police
20 officer or firefighter a special ad hoc postretirement
21 adjustment under this chapter if all of the following apply:
22 (1) The retiree has terminated active employment with
23 the municipality as a police officer or firefighter.
24 (2) The retiree is receiving a retirement benefit from a
25 municipal retirement system on the basis of active employment
26 with the municipality as a police officer or firefighter.
27 (3) The retiree began receiving the retirement benefit
28 before January 1, 1996.
29 Section 402. Amount of 2001 2002 special ad hoc postretirement <--
30 adjustment.
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1 (a) General rule.--Except as provided in subsections (b) and
2 (c), a municipal retirement system shall pay a retired police
3 officer or firefighter a monthly special ad hoc postretirement
4 adjustment under section 401 that shall be calculated as
5 follows:
6 (1) The base adjustment shall be determined by
7 multiplying 15¢ by the years of service and then multiplying
8 that product by the years on retirement.
9 (2) The longevity factor shall be determined as the sum
10 of the products calculated by multiplying 0.025 by the years
11 on retirement and 0.05 by the years on retirement in excess
12 of 25, if any.
13 (3) The longevity adjustment shall be determined by
14 multiplying the base adjustment calculated under paragraph
15 (1) by the longevity factor calculated under paragraph (2).
16 (4) The special ad hoc postretirement adjustment payable
17 under section 401 shall be the sum of the base adjustment
18 calculated under paragraph (1) and the longevity adjustment
19 calculated under paragraph (3).
20 (b) Limitation.--If, under section 401, a retiree is
21 entitled to be paid a special ad hoc postretirement adjustment
22 by more than one municipal retirement system, the amount of the
23 special ad hoc postretirement adjustment under subsection (a)
24 shall be reduced so that the total of all these adjustments paid
25 to the retiree does not exceed the amount specified in
26 subsection (a).
27 (c) Modification in amount of 2001 2002 special ad hoc <--
28 postretirement adjustment.--The amount of the special ad hoc
29 postretirement adjustment calculated under subsection (a) shall
30 be reduced annually by 65% of the total amount of any
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1 postretirement adjustments provided to the retiree under the
2 municipal retirement plan after December 31, 1988, and before
3 January 1, 2001 2002 and paid in the immediately preceding year. <--
4 Section 7. Section 502 of the act is amended to read:
5 Section 502. Reimbursement by Commonwealth for special 1989 ad
6 hoc adjustment.
7 (a) General rule.--Except as provided in subsection (b),
8 beginning January 1, 1990, the Commonwealth shall reimburse a
9 municipality, from the special account established under section
10 701, for the actual special ad hoc adjustment under Chapter 3
11 paid during the previous calendar year.
12 (b) Limitation of eligibility.--
13 (1) The Commonwealth shall not reimburse any
14 municipality if the information required under section [901]
15 901(a)(1) either was not certified to the Auditor General or
16 was certified after April 1 of the year the certification was
17 due.
18 (2) Beginning January 1, 2002, the Commonwealth shall
19 not make any payment under subsection (a) to a municipality
20 that in the immediately preceding year received an allocation
21 of general municipal pension system State aid that was
22 limited to the pension cost of the municipality under section
23 402(f)(2) of the act of December 18, 1984 (P.L.1005, No.205),
24 known as the Municipal Pension Plan Funding Standard and
25 Recovery Act.
26 Section 8. The act is amended by adding a section to read:
27 Section 502.1. Reimbursement by Commonwealth for 2001 2002 <--
28 special ad hoc adjustment.
29 (a) General rule.--
30 (1) Except as provided in subsection (b), beginning in
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1 the year following the year in which the amortization
2 contribution requirement attributable to a special ad hoc
3 postretirement adjustment under Chapter 4 is first reflected
4 in the financial requirements of the retirement system
5 determined under Chapter 3 of the act of December 18, 1984
6 (P.L.1005, No.205), known as the Municipal Pension Plan
7 Funding Standard and Recovery Act, the Auditor General shall
8 determine the Commonwealth reimbursement payable to the
9 municipality representing the amortization contribution
10 requirement attributable to the special ad hoc postretirement
11 adjustment under Chapter 4 that was paid with revenues of the
12 municipality other than general municipal pension system
13 State aid provided under the Municipal Pension Plan Funding
14 Standard and Recovery Act.
15 (2) The determination of the reimbursable amount of the
16 amortization contribution requirement attributable to the
17 special ad hoc postretirement adjustment under Chapter 4 in
18 any year shall be calculated as the amortization contribution
19 requirement attributable to the special ad hoc postretirement
20 adjustments under Chapter 4 and reflected in the
21 determination of the financial requirements of the pension
22 plan under Chapter 3 of the Municipal Pension Plan Funding
23 Standard and Recovery Act for the immediate prior year less
24 the product of that amortization contribution requirement
25 multiplied by the ratio of the amount of general municipal
26 pension system State aid allocated to the retirement system
27 in the immediate prior year to the total amount of municipal
28 contributions made to the retirement system from all sources
29 other than employee contributions in the immediate prior
30 year. WHERE A MUNICIPALITY HAS ISSUED BONDS OR NOTES TO FUND <--
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1 AN UNFUNDED ACTUARIAL ACCRUED LIABILITY UNDER 53 PA.C.S. PT.
2 V SUBPT. B (RELATING TO INDEBTEDNESS AND BORROWING) OR UNDER
3 OTHER LAWS APPLICABLE TO THE MUNICIPALITY, THE GENERAL
4 MUNICIPAL PENSION SYSTEM STATE AID AND MUNICIPAL
5 CONTRIBUTIONS USED BY THE MUNICIPALITY TO MAKE DEBT SERVICE
6 PAYMENTS ON THE BONDS OR NOTES, OR BOTH, ISSUED TO FUND AN
7 UNFUNDED ACTUARIAL ACCRUED LIABILITY SHALL BE INCLUDED IN THE
8 CALCULATION OF THE RATIO APPLIED TO THE AMORTIZATION
9 CONTRIBUTION REQUIREMENT.
10 (3) The Commonwealth shall reimburse a municipality,
11 from the special account established under section 701, for
12 the reimbursable amount determined for each year under this
13 paragraph.
14 (b) Limitation of eligibility.--
15 (1) The Commonwealth shall not reimburse any
16 municipality for a special ad hoc adjustment paid under
17 Chapter 4 if the information required under section 901(a)(2)
18 either was not certified to the Auditor General or was
19 certified after April 1 of the year the certification was
20 due.
21 (2) The Commonwealth shall not reimburse a municipality
22 for the reimbursable amount of the amortization contribution
23 requirement attributable to the special ad hoc postretirement
24 adjustment under Chapter 4 if the municipality fails to
25 submit a complete certification of the reimbursable amount of
26 the amortization contribution requirement determined under
27 subsection (a) to the Auditor General before April 1 of the
28 year in which the reimbursement is payable.
29 (c) Variable definition of amortization contribution
30 requirement.--For purposes of this section, the term
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1 "amortization contribution requirement" shall have the meaning
2 specified in this subsection as follows:
3 (1) In a municipal pension plan with defined benefits
4 for which the municipality determines the financial
5 requirements of the pension plan under section 302 of the
6 Municipal Pension Plan Funding Standard and Recovery Act, the
7 term "amortization contribution requirement" shall mean the
8 amortization contribution requirement attributable to the
9 special ad hoc postretirement adjustments under Chapter 4
10 that was reflected in the financial requirements of the
11 pension plan determined for the immediate prior year.
12 (2) In a municipal pension plan without defined benefits
13 for which the municipality determines the financial
14 requirements of the pension plan under section 303 of the
15 Municipal Pension Plan Funding Standard and Recovery Act, the
16 term "amortization contribution requirement" shall mean the
17 sum of the payments made to the retirement system in the
18 immediate prior year in order to provide the special ad hoc
19 postretirement adjustments under Chapter 4 in that year.
20 Section 9. Sections 702, 901, 902, 903 and 1101 of the act
21 are amended to read:
22 Section 702. Deposits into special account.
23 Notwithstanding any applicable provision of the act of May
24 12, 1943 (P.L.259, No.120), referred to as the Foreign Casualty
25 Insurance Premium Tax Allocation Law, or any applicable
26 provisions of the act of March 4, 1971 (P.L.6, No.2), known as
27 the Tax Reform Code of 1971, or the provisions of sections
28 402(b) and 803(c) of the act of December 18, 1984 (P.L.1005,
29 No.205), known as the Municipal Pension Plan Funding Standard
30 and Recovery Act, beginning on January 1, 1990, prior to the
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1 deposit of the proceeds of the insurance premium tax on foreign
2 casualty insurance premiums into the General Municipal Pension
3 System State Aid Program revenue account, an amount sufficient
4 to provide for the Commonwealth's reimbursement payments and
5 reimbursable amounts to municipalities for special ad hoc
6 adjustments under this act shall be deposited in the separate
7 account created under section 701.
8 Section 901. Municipal retirement system certification of
9 adjustments paid and of reimbursable amounts.
10 (a) Certification.--
11 (1) Beginning January 1, 1989, the chief administrative
12 officer of a municipal retirement system that pays a special
13 ad hoc adjustment under Chapter 3 in that year shall certify
14 the total of all adjustments under Chapter 3 paid during that
15 year to the Auditor General not later than April 1 of the
16 following year.
17 (2) Beginning in the year 2001 2002, a municipality with <--
18 a retirement system that pays a special ad hoc postretirement
19 adjustment under Chapter 4 in a year shall certify its
20 reimbursable amount under section 502.1(a) to the Auditor
21 General not later than April 1 of the following year.
22 (b) [Form] Certification form.--
23 (1) Not later than February 1 of the year in which the
24 form is due, the Auditor General shall send the retirement
25 system the proper form on which to make the certification
26 under subsection [(a)] (a)(1).
27 (2) Not later than February 1 of each year, the Auditor
28 General shall send each municipality maintaining a retirement
29 system for police officers or firefighters a notice of the
30 filing requirement for the certification of the reimbursable
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1 amount under section 502.1(a), which shall include a detailed
2 description of the formula for determining the reimbursable
3 amount and the proper form on which to make the
4 certifications under subsection (a)(2).
5 Section 902. Commonwealth disbursement of reimbursement
6 payment.
7 (a) Payment to account.--Not later than June 1 of the year
8 in which the form is due, the Auditor General shall certify to
9 the State Treasurer the amount to be deposited into the special
10 account created in section 701 and shall draw a warrant, payable
11 to the treasurer of the municipality, on the State Treasurer
12 from the special account created in section 701 for the amount
13 certified under section 901(a).
14 (b) [Disbursement] Disbursements.--
15 (1) Not later than September 1 of the year in which the
16 form is due, the State Treasurer shall disburse the
17 reimbursement payment for the special ad hoc postretirement
18 adjustments under Chapter 3 out of the special account
19 created in section 701.
20 (2) Not later than the first business day of October of
21 the year in which the certification form is due, the State
22 Treasurer shall disburse the reimbursement payment for the
23 postretirement adjustments under Chapter 4 out of the special
24 account created in section 701.
25 Section 903. Municipal receipt of reimbursement payment.
26 (a) 1989 postretirement adjustment reimbursement.--Upon
27 receipt of the reimbursement payment from the Commonwealth for
28 the postretirement adjustments under Chapter 3, the treasurer of
29 the municipality shall deposit the reimbursement payment into
30 the municipality's general fund.
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1 (b) 2001 2002 postretirement adjustment reimbursement.--Upon <--
2 receipt of the reimbursement payment from the Commonwealth for
3 the postretirement adjustments under Chapter 4, the treasurer of
4 the municipality shall deposit the reimbursement payment into
5 the municipality's general fund.
6 Section 1101. Limitation of prior act.
7 [The provisions of section 7 of the act of July 9, 1981
8 (P.L.208, No.66), known as the Public Employee Retirement Study
9 Commission Act, shall not be applied to this act.] To the extent
10 that a special ad hoc municipal police postretirement adjustment
11 granted by the Commonwealth causes the calculation of total
12 benefits to be paid to a member of a police force receiving
13 retirement benefit to exceed the limitations contained in the
14 act of May 29, 1956 (1955 P.L.1804, No.600), referred to as the
15 Municipal Police Pension Law, the police pension fund may exceed
16 the limitations therein provided to pay the adjustment to the
17 retired or disabled member.
18 Section 10. The special ad hoc postretirement adjustment
19 under section 401 of the act is effective on the date of the
20 first retirement benefit made after the effective date of this <--
21 act JULY 1, 2002. If the special ad hoc postretirement <--
22 adjustment under section 401 of the act is not included in the
23 initial retirement benefit payment occurring after the effective <--
24 date of this act JULY 1, 2002, the special ad hoc postretirement <--
25 adjustment shall be included as soon as practicable in the
26 retirement benefit payment of the retiree, and the initial
27 retirement benefit payment that includes the special ad hoc
28 postretirement adjustment also shall include the total amount of
29 the special ad hoc postretirement adjustments previously omitted
30 from the retirement benefit payments made after the effective <--
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1 date of this act JULY 1, 2002. <--
2 Section 11. This act shall take effect in 60 days.
D12L53MSP/20010H1360B3980 - 14 -