PRINTER'S NO. 2050
No. 1648 Session of 1997
INTRODUCED BY LYNCH, FARGO, STERN, BENNINGHOFF AND NICKOL,
JUNE 11, 1997
REFERRED TO COMMITTEE ON STATE GOVERNMENT, JUNE 11, 1997
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," further providing for supplemental State
8 assistance.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. Section 607(j) of the act of December 18, 1984
12 (P.L.1005, No.205), known as the Municipal Pension Plan Funding
13 Standard and Recovery Act, amended December 10, 1996 (P.L.934,
14 No.150), is amended to read:
15 Section 607. Remedies applicable to various recovery program
16 levels.
17 * * *
18 (j) Supplemental State assistance.--
19 (1) If every pension plan of the municipality which is a
20 defined benefit plan and which is self-insured in whole or in
1 part has filed an actuarial valuation report utilizing the
2 standardized actuarial cost method and economic actuarial
3 assumptions within the range of actuarial assumptions
4 specified in section 202(b) and if the municipality has
5 implemented the aggregation of trust funds pursuant to
6 subsection (b), the municipality may receive supplemental
7 State assistance from the Supplemental State Assistance Fund
8 established pursuant to section 608. The amount of the
9 supplemental State assistance to which the municipality is
10 entitled shall be determined annually based on the
11 determination scoring which the municipality received from
12 the commission pursuant to section 503, as follows:
13 [(1)] (i) The determination score of the municipality
14 shall be reduced by an amount equal to 25% of the maximum
15 possible determination score.
16 [(2)] (ii) The result calculated pursuant to [paragraph
17 (1)] subparagraph (i) shall be expressed as a percentage
18 of the maximum possible determination score.
19 [(3) The] (iii) For the supplemental State assistance
20 distributed in December of 1997, the percentage
21 calculated pursuant to subparagraph (ii) shall be applied
22 to the dollar amount of difference between the greater of
23 the amount of the municipal contribution or the amount of
24 the actual municipal deposit to all municipal pension
25 plans in aggregate and the full minimum municipal
26 obligation with respect to the pension plans pursuant to
27 section 302 or 303, whichever is applicable, to determine
28 the amount of supplemental State assistance for the
29 municipality.
30 (iv) For the supplemental State assistance
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1 distributed in December of 1998 and thereafter, the
2 percentage calculated pursuant to [paragraph (2)]
3 subparagraph (ii) shall be applied to the dollar amount
4 of difference between the amount of the municipal
5 contribution to all municipal pension plans in aggregate
6 and the full minimum municipal obligation with respect to
7 the pension plan pursuant to section 302 or 303,
8 whichever is applicable, to determine the amount of
9 supplemental State assistance for the municipality. For
10 the purposes of this [paragraph] subparagraph, the
11 municipal contribution of a municipality that has issued
12 bonds or notes to fund an unfunded actuarial accrued
13 liability under the act of July 12, 1972 (P.L.781,
14 No.185), known as the Local Government Unit Debt Act, or
15 under other laws applicable to the municipality, shall
16 include debt service on the bonds or notes, or both,
17 issued to fund an unfunded actuarial accrued liability.
18 (2) In the event that the total amount of supplemental
19 State assistance determined as payable to all municipalities
20 entitled to receive supplemental State assistance exceeds the
21 maximum appropriation provided for in section 608(b), the
22 amount of supplemental State assistance which shall be
23 payable to each municipality shall be proportionately
24 reduced. The supplemental State assistance shall be
25 distributed annually on the first business day occurring in
26 December.
27 (3) As used in this subsection, the term "municipal
28 contribution" means the sum of the current year's minimum
29 municipal obligation, the annual interest payable on any
30 current or prior period funding deficiencies and the total
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1 amount of any discretionary deposits to the pension fund in
2 the current year.
3 * * *
4 Section 2. This act shall take effect in 60 days.
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