PRIOR PRINTER'S NO. 4416 PRINTER'S NO. 4716
No. 2865 Session of 2004
INTRODUCED BY STETLER, NICKOL, MANN, CAPPELLI, LEWIS, SOLOBAY,
STERN, TIGUE, YUDICHAK, HORSEY AND FRANKEL,
SEPTEMBER 29, 2004
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
NOVEMBER 15, 2004
AN ACT
1 Amending the act of December 18, 1984 (P.L.1005, No.205),
2 entitled "An act mandating actuarial funding standards for
3 all municipal pension systems; establishing a recovery
4 program for municipal pension systems determined to be
5 financially distressed; providing for the distribution of the
6 tax on the premiums of foreign fire insurance companies; and
7 making repeals," providing authorization for alternate
8 amortization schedules to accommodate extraordinary events.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. The act of December 18, 1984 (P.L.1005, No.205),
12 known as the Municipal Pension Plan Funding Standard and
13 Recovery Act, is amended by adding a section to read:
14 Section 209. Authorization for alternate amortization schedules
15 to accommodate extraordinary events.
16 In the preparation of an actuarial valuation report as of the
17 beginning of the plan year occurring in 2005 or thereafter, a
18 municipality may adopt an alternate amortization schedule rather
19 than the amortization schedule specified in section 202(b)(4)
20 for any increment of unfunded actuarial accrued liability that
1 exceeds $9,000,000, causes at least a 30% increase in the
2 aggregate actuarial accrued liability of the pension plan, and
3 is attributable to a single benefit enhancement GRANTED PRIOR TO <--
4 JANUARY 1, 2004, AND being newly recognized in the actuarial
5 valuation report. The alternate amortization schedule shall be
6 formally adopted by the governing body of the municipality and
7 shall provide for an amortization target date that results in an
8 amortization period of 30 years, level percentage amortization
9 payments increasing by no more than 5% annually if adopted in an
10 actuarial valuation report with a valuation date in 2005, and
11 level dollar amortization payments if adopted in an actuarial
12 valuation report with a valuation date occurring after December
13 31, 2005. The initial and all subsequent actuarial valuation
14 reports filed with the commission during the operation of the
15 alternate amortization schedule shall separately disclose the
16 initial amount of the increment of unfunded actuarial accrued
17 liability, the date that the alternate amortization schedule was
18 established, the amortization target date, the original
19 amortization period, the remaining balance of the increment of
20 unfunded actuarial accrued liability and the amortization
21 payment for the year following the valuation date of the
22 actuarial valuation report.
23 Section 2. This act shall take effect immediately.
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