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SENATE AMENDED
PRIOR PRINTER'S NOS. 449, 1837
PRINTER'S NO. 2545
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
414
Session of
2015
INTRODUCED BY BRIGGS, THOMAS, GODSHALL, COHEN AND BARBIN,
FEBRUARY 9, 2015
SENATOR EICHELBERGER, FINANCE, IN SENATE, AS AMENDED,
NOVEMBER 18, 2015
AN ACT
Amending the act of December 18, 1984 (P.L.1005, No.205),
entitled, as amended, "An act mandating actuarial funding
standards for all municipal pension systems; establishing a
recovery program for municipal pension systems determined to
be financially distressed; providing for the distribution of
the tax on the premiums of foreign fire insurance companies;
and making repeals," in standards for municipal pension
systems, further providing for definitions and providing for
special procedures for certain professional services
contracts AND FOR SPECIAL PROVISIONS TO STABILIZE MUNICIPAL
RETIREMENT PLANS.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definition of "professional service contract"
in section 701-A of the act of December 18, 1984 (P.L.1005,
No.205), known as the Municipal Pension Plan Funding Standard
and Recovery Act, added September 18, 2009 (P.L.396, No.44), is
amended to read:
Section 701-A. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
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context clearly indicates otherwise:
* * *
"Professional services contract." A contract to which [the]
a municipal pension system having 100 or more active members is
a party that is:
(1) for the purchase or provision of professional
services, including investment services, legal services, real
estate services and other consulting services; and
(2) not subject to a requirement that the lowest bid be
accepted.
Section 2. The act is amended by adding a section to read:
Section 702.1-A. Special procedures for certain professional
services contracts.
The governing body of each municipal pension plan system,
having less than 100 active members, shall select the most
qualified person to enter into a contract to administer, manage
or service the municipal pension plan. To ensure that the
availability of a contract to administer, manage or service a
municipal pension plan is provided to potential participants,
the governing body shall:
(1) Announce at two consecutive regularly scheduled
public meetings the availability of the contract.
(2) Post the availability of the contract on the
official Internet website of the municipality, if any, for a
period of no less than two weeks.
SECTION 3. THE ACT IS AMENDED BY ADDING A CHAPTER TO READ:
CHAPTER 12
SPECIAL PROVISIONS TO STABILIZE
MUNICIPAL RETIREMENT PLANS
SUBCHAPTER A
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PRELIMINARY PROVISIONS
SECTION 1201. LEGISLATIVE FINDINGS AND PURPOSES.
THE GENERAL ASSEMBLY FINDS AND DECLARES THAT:
(1) LOCAL GOVERNMENTS ARE FACING SEVERE CHALLENGES THAT
THREATEN THE FINANCIAL SECURITY AND STABILITY OF OUR
COMMUNITIES.
(2) OUR PUBLIC SAFETY EMPLOYEES ARE FOUNDATIONAL IN
HAVING A STRONG AND SECURE COMMUNITY.
(3) OUR COMMUNITIES ARE MOST VIABLE WHEN OUR PUBLIC
SAFETY DEPARTMENTS ARE STRONG.
(4) THIS COMMONWEALTH HAS SEEN A STARTLING DECREASE
RECENTLY IN LOCAL PUBLIC SAFETY EMPLOYEES THAT HAS DAMAGED
THE SECURITY OF OUR COMMUNITIES.
(5) A MAIN REASON FOR THE DECREASE IN OUR PUBLIC SAFETY
EMPLOYEES IS THE RISING COSTS OUR TAXPAYERS ARE FORCED TO
PAY.
(6) THE INCREASE IN COSTS FOR MUNICIPALITIES IS LARGELY
DRIVEN BY GROWING PENSION LIABILITIES.
(7) THIS GROWTH IN PENSION LIABILITIES IS DEMONSTRATED
BY THE AUDITOR GENERAL'S REPORT FROM JANUARY 2015 WHICH
SHOWED THAT 562 MUNICIPALITIES ADMINISTERED DISTRESSED
PENSION PLANS AMOUNTING TO AN UNFUNDED LIABILITY OF $7.7
BILLION. THIS REPORT REVEALED A $1 BILLION GROWTH IN THE
UNFUNDED LIABILITY OF PENNSYLVANIA'S MUNICIPAL PENSIONS IN
TWO SHORT YEARS.
(8) IN ORDER TO ADDRESS THE PROBLEM OF UNFUNDED
LIABILITIES, THE GOVERNOR CREATED A TASK FORCE ON MUNICIPAL
PENSIONS, WHICH WAS CHAIRED BY THE AUDITOR GENERAL.
(9) ON JUNE 30, 2015, THE AUDITOR GENERAL RELEASED A
SERIES OF RECOMMENDATIONS FROM THE GOVERNOR'S TASK FORCE ON
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MUNICIPAL PENSIONS TO REFORM OUR MUNICIPAL PENSION SYSTEM,
WHICH ARE CONTAINED WITHIN THIS SUBCHAPTER.
(10) BY ADOPTING A MAJORITY OF THE RECOMMENDATIONS, THE
GENERAL ASSEMBLY WILL HELP SUSTAIN MUNICIPALITIES FACING
DIFFICULT FINANCIAL CHOICES BECAUSE OF THEIR GROWING PENSION
COSTS.
(11) INCREASING THE SUSTAINABILITY OF OUR MUNICIPAL
FINANCES IN TURN WOULD LEAD TO INCREASED HIRING OF MORE
PUBLIC SAFETY EMPLOYEES THAT MAKE OUR COMMUNITIES STRONGER
AND SAFER.
(12) THEREFORE, BY PROVIDING PENSION REFORM, OUR
MUNICIPALITIES CAN GROW THEIR MIDDLE CLASS AND INCREASE THEIR
PUBLIC SAFETY OFFICIALS WHILE HAVING SUSTAINABLE FINANCES.
SECTION 1202. DEFINITIONS.
THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS CHAPTER
SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
CONTEXT CLEARLY INDICATES OTHERWISE:
"BOARD." THE PENNSYLVANIA MUNICIPAL RETIREMENT BOARD
ESTABLISHED BY THE PENNSYLVANIA MUNICIPAL RETIREMENT LAW.
"CASH BALANCE PENSION PLAN." THE DEFINED BENEFIT PLAN
ESTABLISHED IN SUBCHAPTER C.
"DEFINED CONTRIBUTION RETIREMENT PLAN." THE DEFINED
CONTRIBUTION RETIREMENT PLAN ESTABLISHED IN SUBCHAPTER D.
"EMPLOYER." A CITY, BOROUGH, INCORPORATED TOWN, TOWNSHIP,
HOME RULE MUNICIPALITY OR AN ASSOCIATION OF MUNICIPALITIES
COOPERATING TO FORM A REGIONAL POLICE OR REGIONAL FIRE
DEPARTMENT UNDER THE FORMER ACT OF JULY 12, 1972 (P.L.762,
NO.180), REFERRED TO AS THE INTERGOVERNMENTAL COOPERATION LAW,
OR 53 PA.C.S. CH. 23 SUBCH. A (RELATING TO INTERGOVERNMENTAL
COOPERATION).
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"FIRST CLASS CITY PENSION PLAN." A RETIREMENT PLAN
ESTABLISHED BY A CITY OF THE FIRST CLASS UNDER THE ACT OF MAY
20, 1915 (P.L.566, NO.242), ENTITLED "AN ACT REQUIRING CITIES OF
THE FIRST CLASS TO ESTABLISH A PENSION FUND FOR EMPLOYES OF SAID
CITIES, AND ALL COUNTY OR OTHER PUBLIC EMPLOYES, IF ANY, PAID BY
APPROPRIATION OF THE CITY COUNCILS THEREOF, AND OUT OF THE
TREASURY OF SAID CITIES; AND REGULATING THE ADMINISTRATION AND
THE PAYMENT OF SUCH PENSIONS," OR OTHERWISE SUBJECT TO SECTION
1002.
"IRC." THE INTERNAL REVENUE CODE OF 1986 (PUBLIC LAW 99-514,
26 U.S.C. § 1 ET SEQ.).
"MUNICIPAL PENSION PLAN." A FIRST CLASS CITY PENSION PLAN OR
A RETIREMENT PLAN CREATED BY A MUNICIPALITY FOR ITS POLICE
OFFICERS OR FIREFIGHTERS UNDER ANY OF THE FOLLOWING:
(1) THE ACT OF MAY 28, 1915 (P.L.596, NO.259), REFERRED
TO AS THE SECOND CLASS CITY EMPLOYE PENSION LAW .
(2) THE ACT OF JUNE 23, 1931 (P.L.932, NO.317), KNOWN AS
THE THIRD CLASS CITY CODE.
(3) THE ACT OF MAY 29, 1956 (1955 P.L.1804, NO.600),
REFERRED TO AS THE MUNICIPAL POLICE PENSION LAW.
(4) THE ACT OF SEPTEMBER 23, 1959 (P.L.970, NO.400),
REFERRED TO AS THE SECOND CLASS A CITY EMPLOYE PENSION LAW .
(5) OTHER LEGAL AUTHORITY, EXCLUDING THE PENNSYLVANIA
MUNICIPAL RETIREMENT LAW.
"MUNICIPAL POLICE PENSION LAW." THE ACT OF MAY 29, 1956
(1955 P.L.1804, NO.600), REFERRED TO AS THE MUNICIPAL POLICE
PENSION LAW.
"MUNICIPALITY." A CITY, BOROUGH, INCORPORATED TOWN, TOWNSHIP
OR REGIONAL POLICE OR FIRE DEPARTMENT.
"PENNSYLVANIA MUNICIPAL RETIREMENT LAW." THE ACT OF FEBRUARY
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1, 1974 (P.L.34, NO.15), KNOWN AS THE PENNSYLVANIA MUNICIPAL
RETIREMENT LAW.
"PLAN DOCUMENT." THE LAW, ORDINANCE, RESOLUTION OR RELATED
DOCUMENTS THAT GOVERN THE RETIREMENT COVERAGE PROVIDED BY AN
EMPLOYER TO ITS EMPLOYEES, INCLUDING RETIREMENT PAYMENTS AND
BENEFITS, ADMINISTRATION AND FUNDING.
"REGULAR FULL-TIME POLICE OFFICER OR FIREFIGHTER." A POLICE
OFFICER OR FIREFIGHTER EMPLOYED BY A MUNICIPALITY AND SCHEDULED
TO WORK AN AVERAGE OF AT LEAST 1,000 HOURS PER CALENDAR YEAR.
"SECOND CLASS A CITY EMPLOYE PENSION LAW." THE ACT OF
SEPTEMBER 23, 1959 (P.L.970, NO.400), REFERRED TO AS THE SECOND
CLASS A CITY EMPLOYE PENSION LAW.
"THIRD CLASS CITY CODE." THE ACT OF JUNE 23, 1931 (P.L.932,
NO.317), KNOWN AS THE THIRD CLASS CITY CODE AND ITS SUCCESSOR.
SUBCHAPTER B
STANDARDS REQUIRED FOR STABILIZATION
SECTION 1211. SCOPE OF SUBCHAPTER.
(A) SCOPE.--T HE PROVISIONS OF THIS SUBCHAPTER SHALL APPLY TO
ALL MUNICIPAL PENSION PLANS EXCEPT AS OTHERWISE PROVIDED IN THIS
ACT.
(B) ALTERATION OF PROVISIONS.--NO ACTION BY A MUNICIPALITY
OR COLLECTIVE BARGAINING AGREEMENT NOR ANY ARBITRATION AWARD OR
SETTLEMENT BETWEEN THE MUNICIPALITY AND ITS EMPLOYEES MAY ALTER
ANY OF THE PROVISIONS OF THIS SUBCHAPTER NOR REQUIRE THE
MUNICIPALITY TO ADMINISTER PENSION BENEFITS NOT SET FORTH IN
THIS CHAPTER.
SECTION 1212. DEFINITIONS.
THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS SUBCHAPTER
SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
CONTEXT CLEARLY INDICATES OTHERWISE:
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"FUNDING RATIO." THE RATIO OF THE ACTUARIAL VALUE OF ASSETS
TO THE ACTUARIAL ACCRUED LIABILITY, EXPRESSED AS A PERCENTAGE,
AS CALCULATED BY THE COMMISSION UNDER SECTION 503(B).
"STATE AID." MONEY PROVIDED TO A MUNICIPALITY UNDER THE
GENERAL MUNICIPAL PENSION SYSTEM STATE AID PROGRAM ESTABLISHED
UNDER SECTION 402.
"UNFUNDED LIABILITY." THE EXCESS OF THE ACTUARIAL ACCRUED
LIABILITY OVER THE ACTUARIAL VALUE OF ASSETS.
SECTION 1213. USE OF STATE AID.
NO MUNICIPAL PENSION PLAN THAT IS SUBJECT TO THE PROVISIONS
OF THIS SUBCHAPTER MAY USE STATE AID FOR ANY PURPOSE OTHER THAN
ITS REQUIRED OBLIGATION TOWARDS THE MUNICIPAL PENSION PLAN AS
SPECIFIED IN SECTION 302. THE FUNDS MAY NOT BE USED FOR
ADMINISTRATIVE EXPENSES OR COSTS.
SECTION 1214. ACTUARIAL ASSUMPTIONS.
(A) ASSUMED RATE OF RETURN.--IN ALL MUNICIPAL PENSION PLANS
SUBJECT TO THIS SUBCHAPTER, THE ASSUMED RATE OF RETURN ON
INVESTMENTS SHALL NOT EXCEED THE REGULAR INTEREST RATE AS SET BY
THE BOARD TO DETERMINE THE ALLOCATION TO MEMBER ACCOUNTS OF
EARNINGS ON INVESTMENTS UNDER THE PENNSYLVANIA MUNICIPAL
RETIREMENT LAW, PLUS ONE PERCENTAGE POINT.
(B) DECREASING ASSUMED RATE OF RETURN.--IN A PLAN WHERE THE
ASSUMED RATE OF RETURN EXCEEDS THE REGULAR INTEREST RATE SET BY
THE BOARD PLUS ONE PERCENTAGE POINT, A MUNICIPALITY SHALL
DECREASE ITS ASSUMED RATE OF RETURN TO COMPLY WITH SUBSECTION
(A). A MUNICIPALITY MAY DECREASE ITS ASSUMED RATE OF RETURN IN
SUCH INCREMENTS AS IT DETERMINES NECESSARY SO LONG AS COMPLIANCE
WITH SUBSECTION (A) IS ACHIEVED WITHIN 10 YEARS OR LESS FROM THE
EFFECTIVE DATE OF THIS SECTION.
SECTION 1215. CONSIDERATION OF OVERTIME COMPENSATION AND
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ACCUMULATED LEAVE.
(A) DETERMINATION OF COMPENSATION.--FOR PURPOSES OF
DETERMINING MEMBER COMPENSATION IN A MUNICIPAL PENSION PLAN
SUBJECT TO THIS SUBCHAPTER, COMPENSATION SHALL INCLUDE NO MORE
THAN THE FOLLOWING:
(1) A MEMBER'S BASE SALARY OR WAGES PAID BY THE
EMPLOYING MUNICIPALITY, INCLUDING OVERTIME PAYMENTS TO A
MEMBER UP TO AN AMOUNT NO GREATER THAN 10% OF THE MEMBER'S
BASE SALARY; AND
(2) DISABILITY PAY PAID BY THE EMPLOYING MUNICIPALITY AS
A RESULT OF A SERVICE-BASED DISABILITY.
(B) EXCLUSIONS.--OVERTIME PAID IN THE FORM OF COMPENSATORY
TIME MAY NOT BE CONSIDERED SALARY, REGARDLESS OF WHETHER THE 10%
CAP ON THE INCLUSION OF OVERTIME IS MET. COMPENSATION ALSO MAY
NOT INCLUDE REIMBURSEMENTS, BONUSES OR PAYOUTS OF ACCRUED SICK
OR VACATION PAY, NOR ANY OTHER FORM OF USED OR UNUSED PAID TIME
OFF. IN NO EVENT MAY A MEMBER'S COMPENSATION FOR A CALENDAR YEAR
EXCEED THE LIMIT PRESCRIBED BY SECTION 401(A)(17) OF THE IRC.
SECTION 1215.1. FINAL AVERAGE SALARY.
(A) COMPUTATION.--NOTWITHSTANDING SECTION 5(C) OF THE
MUNICIPAL POLICE PENSION LAW OR ANY OTHER LAW TO THE CONTRARY,
IN ALL MUNICIPAL PENSION PLANS THE MONTHLY AVERAGE SALARY OR
FINAL AVERAGE SALARY TO COMPUTE RETIREMENT BENEFITS SHALL
CONSIST OF THE HIGHEST AVERAGE MONTHLY COMPENSATION RECEIVED
DURING THE 60-MONTH PERIOD IMMEDIATELY PRECEDING RETIREMENT, OR
IN THE EVENT A MEMBER HAS NOT SERVED 60 MONTHS, THE TOTAL SALARY
RECEIVED DIVIDED BY THE NUMBER OF MONTHS SERVED.
(B) APPLICABILITY.-THE PROVISIONS OF SUBSECTION (A) SHALL
APPLY TO ALL MEMBERS OF A MUNICIPAL PENSION PLAN WHO ARE HIRED
ON OR AFTER THE EFFECTIVE DATE OF THIS SECTION.
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SECTION 1216. DROP OPTIONS.
NOTWITHSTANDING ANY OTHER LAW, AFTER THE EFFECTIVE DATE OF
THIS SECTION NO MUNICIPAL PENSION PLAN SUBJECT TO THE PROVISIONS
OF THIS SUBCHAPTER MAY IMPLEMENT A DROP OR OTHER SIMILAR
DEFERRED RETIREMENT OPTION PLAN.
SECTION 1217. FUTURE PLAN DESIGNS.
(A) GENERAL RULE.--
(1) EXCEPT AS PROVIDED UNDER PARAGRAPH (2), NO ORDINANCE
OR RESOLUTION ENACTED BY A MUNICIPALITY SHALL ALTER THE
PROVISIONS OF A MUNICIPAL PENSION PLAN AND THE BENEFITS TO BE
PROVIDED BY A MUNICIPAL PENSION PLAN MAY NOT BE ALTERED BY
ANY SUBSEQUENT COLLECTIVE BARGAINING AGREEMENT, SETTLEMENT OR
AWARD OF AN ARBITRATOR UNDER THE ACT OF JUNE 24, 1968
(P.L.237, NO.111), REFERRED TO AS THE POLICEMEN AND FIREMEN
COLLECTIVE BARGAINING ACT.
(2) A PLAN ADMINISTRATOR MAY AMEND A MUNICIPAL PENSION
PLAN AS NECESSARY TO MAINTAIN THE QUALIFIED STATUS OF THE
PLAN UNDER SECTION 401(A) OF THE IRC (26 U.S.C. § 401(A)) OR
TO FACILITATE THE ADMINISTRATION OR OPERATION OF THE
MUNICIPAL PENSION PLAN TO THE EXTENT THE AMENDMENT WOULD NOT
MATERIALLY INCREASE THE COST OF THE MUNICIPAL PENSION PLAN OR
SIGNIFICANTLY ALTER THE BENEFITS PAYABLE UNDER THE MUNICIPAL
PENSION PLAN.
(B) PLANS WITH FUNDING RATIO OF NO MORE THAN 50%.--
(1) A MUNICIPALITY THAT MAINTAINS A MUNICIPAL PENSION
PLAN, AS TO WHICH THE RATIO OF ACTUARIAL VALUE OF ASSETS TO
ACTUARIAL ACCRUED LIABILITY IS NO MORE THAN 50% AS CALCULATED
BY THE COMMISSION UNDER SECTION 503(B) FOR THE PRECEDING TWO-
YEAR PERIOD, SHALL COMPLY WITH ALL OF THE FOLLOWING:
(I) THE MUNICIPALITY SHALL ENTER INTO A CONTRACT
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WITH THE BOARD, SUBJECT TO THE PROVISIONS OF ARTICLE IV
OF THE ACT OF FEBRUARY 1, 1974 (P.L.34, NO.15), KNOWN AS
THE PENNSYLVANIA MUNICIPAL RETIREMENT LAW, WHICH
EXPRESSES THE PROVISIONS OF THE MUNICIPAL PENSION PLAN
AND TRANSFERS THE RESPONSIBILITY TO ADMINISTER THE
MUNICIPAL PENSION PLAN TO THE BOARD. A MUNICIPALITY SHALL
HAVE 180 DAYS FROM THE DATE OF THE MOST RECENT COMMISSION
REPORT EVIDENCING ACTUARIAL VALUE OF ASSETS TO ACTUARIAL
ACCRUED LIABILITY OF NO MORE THAN 50% TO COMPLETE THE
TRANSFER REQUIRED UNDER THIS PARAGRAPH.
(II) THE CONTRACT SHALL COMPLY WITH THE EXISTING
PROVISIONS OF THE MUNICIPAL PENSION PLAN AS MAY BE
EVIDENCED BY STATUTORY PROVISIONS, MUNICIPAL CHARTERS,
ORDINANCES OR RESOLUTIONS, COLLECTIVE BARGAINING
AGREEMENTS, ARBITRATION AWARDS AND OTHER WRITTEN
DOCUMENTATION IN FULL FORCE AND EFFECT AS OF THE DATE OF
TRANSFER TO THE BOARD. ALL EXISTING PLAN DOCUMENTS SHALL
BE PROVIDED TO THE BOARD WITHIN 30 DAYS OF THE DATE OF
THE MOST RECENT CALCULATION BY THE COMMISSION. THE BOARD
SHALL THEN PREPARE AND PROVIDE TO THE MUNICIPALITY A
CONTRACT THAT CONTAINS ALL RETIREMENT BENEFITS AND
OBLIGATIONS TO BE ADMINISTERED BY THE BOARD.
(III) IF A MUNICIPALITY FAILS TO PROVIDE THE
NECESSARY PLAN DOCUMENTS WITHIN THE 30-DAY PERIOD
REQUIRED UNDER PARAGRAPH (2), THE BOARD SHALL PREPARE A
CONTRACT IN ACCORDANCE WITH THE BENEFITS STATED IN THE
MOST RECENTLY FILED VALUATION REPORT UNDER THIS ACT.
(IV) THE ADMINISTRATION OF THE CONTRACT SHALL BE
SUBJECT TO THE APPLICABLE PROVISIONS OF THE PENNSYLVANIA
MUNICIPAL RETIREMENT LAW AND FEDERAL AND STATE LAWS
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RELATING TO TAX QUALIFIED PENSION PROGRAMS. IF ANY
PROVISION OF THE EXISTING MUNICIPAL PENSION PLAN IS NOT
IN COMPLIANCE WITH THE PENNSYLVANIA MUNICIPAL RETIREMENT
LAW AND FEDERAL AND STATE LAWS RELATING TO TAX QUALIFIED
PENSION PROGRAMS, THE BOARD MAY ELECT TO PURSUE ANY
REMEDIAL MEASURES IT DEEMS APPROPRIATE, THE COST OF WHICH
SHALL BE PAID BY THE MUNICIPALITY. UNTIL THE REMEDIAL
MEASURES CAN BE IMPLEMENTED OR IF REMEDIAL MEASURES
CANNOT BE IMPLEMENTED, THE PROVISION MAY NOT BE
ADMINISTERED BY THE BOARD AND SHALL REMAIN THE OBLIGATION
OF THE MUNICIPALITY.
(V) WITHIN 30 DAYS FROM THE DATE THE CONTRACT WAS
MAILED TO THE MUNICIPALITY, THE MUNICIPALITY SHALL
EXECUTE THE CONTRACT OR FILE AN APPEAL AND REQUEST FOR AN
ADMINISTRATIVE HEARING BEFORE THE BOARD. NOTWITHSTANDING
ANY OTHER PROVISION OF LAW, THE EXCLUSIVE REMEDY OF ANY
MUNICIPALITY AGGRIEVED BY FINALIZING THE TERMS OF THE
CONTRACT SHALL BE THE RIGHT TO AN ADJUDICATION BY THE
BOARD IN ACCORDANCE WITH 2 PA.C.S. CH. 5 (RELATING TO
PRACTICE AND PROCEDURE) AND AN APPEAL TO THE COMMONWEALTH
COURT UNDER 2 PA.C.S. CH. 7 (RELATING TO JUDICIAL REVIEW)
AND 42 PA.C.S. § 763(A)(1) (RELATING TO DIRECT APPEALS
FROM GOVERNMENT AGENCIES). IF AN APPEAL IS NOT FILED
WITHIN THE PRESCRIBED TIME, THE CONTRACT SHALL BE DEEMED
A FINAL AND BINDING CONTRACT BETWEEN THE BOARD AND THE
MUNICIPALITY FOR THE ADMINISTRATION OF THE BENEFIT
STRUCTURE PROVIDED IN THE CONTRACT.
(VI) NO STATUTE, ORDINANCE, CONTRACT, COLLECTIVE
BARGAINING AGREEMENT, SETTLEMENT OR ARBITRATION AWARD MAY
PERMIT OR AUTHORIZE ANY DEVIATION FROM, OR ALTERATION OF,
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THE TERMS OF THE CONTRACT BY WHICH THE MUNICIPAL PENSION
PLAN IS ADMINISTERED BY THE BOARD.
(2) A MUNICIPALITY THAT MAINTAINS A MUNICIPAL PENSION
PLAN, AS TO WHICH THE RATIO OF ACTUARIAL VALUE OF ASSETS TO
ACTUARIAL ACCRUED LIABILITY IS NO MORE THAN 50% AS CALCULATED
BY THE COMMISSION UNDER SECTION 503(B) FOR THE PRECEDING TWO-
YEAR PERIOD, SHALL ESTABLISH A CASH BALANCE PLAN UNDER THE
PENNSYLVANIA MUNICIPAL RETIREMENT LAW FOR REGULAR, FULL-TIME
MUNICIPAL POLICE OFFICERS OR FIREFIGHTERS HIRED ON OR AFTER
THE EFFECTIVE DATE OF THIS SUBCHAPTER IN WHICH ALL OR A
PORTION OF EXCESS INTEREST IS USED TO REDUCE UNFUNDED
LIABILITIES OF THE PLAN.
(C) PLANS WITH FUNDING RATIO OF MORE THAN 50% AND LESS THAN
90%.--A MUNICIPALITY THAT MAINTAINS A MUNICIPAL PENSION PLAN, AS
TO WHICH THE RATIO OF ACTUARIAL VALUE OF ASSETS TO ACTUARIAL
ACCRUED LIABILITY IS MORE THAN 50% BUT LESS THAN 90% AS
CALCULATED BY THE COMMISSION UNDER SECTION 503(B) FOR THE
PRECEDING TWO-YEAR PERIOD, SHALL ESTABLISH A PENSION PLAN UNDER
EITHER SUBCHAPTER C OR SUBCHAPTER D FOR REGULAR, FULL-TIME
MUNICIPAL POLICE OFFICERS OR FIREFIGHTERS HIRED ON OR AFTER THE
EFFECTIVE DATE OF THIS SUBCHAPTER.
(D) PLANS WITH FUNDING RATIO OF 90% OR MORE.--A MUNICIPALITY
THAT MAINTAINS A MUNICIPAL PENSION PLAN, AS TO WHICH THE RATIO
OF ACTUARIAL VALUE OF ASSETS TO ACTUARIAL ACCRUED LIABILITY IS
90% OR MORE AS CALCULATED BY THE COMMISSION UNDER SECTION 503(B)
FOR THE PRECEDING TWO-YEAR PERIOD, MAY ESTABLISH A PENSION PLAN
UNDER EITHER SUBCHAPTER C OR SUBCHAPTER D FOR REGULAR, FULL-TIME
MUNICIPAL POLICE OFFICERS OR FIREFIGHTERS HIRED ON OR AFTER THE
EFFECTIVE DATE OF THIS SUBCHAPTER.
SECTION 1218. REPORTING.
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(A) COMPLIANCE WITH SUBCHAPTER.--IN ADDITION TO THE
REQUIREMENTS OF CHAPTER 2, A MUNICIPAL PENSION PLAN SUBJECT TO
THIS CHAPTER SHALL PROVIDE INFORMATION IN ITS BIANNUAL REPORT TO
THE COMMISSION PERTAINING TO ITS COMPLIANCE WITH THE PROVISIONS
OF THIS CHAPTER. REPORTS FILED WITH THE COMMISSION SHALL FOLLOW
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND COMPLY WITH THE
STANDARDS ADOPTED BY THE GOVERNMENTAL ACCOUNTING STANDARDS
BOARD.
(B) ADDITIONAL INFORMATION.--A MUNICIPAL PENSION PLAN SHALL
INCLUDE IN ITS ANNUAL REPORT TO THE COMMISSION INFORMATION WITH
REGARD TO FEES PAID TO INVESTMENT MANAGERS, PERFORMANCE OF THE
FUNDS MANAGED BY THOSE INVESTMENT MANAGERS COMPARED TO AN
APPROPRIATE BENCHMARK, ADMINISTRATIVE EXPENSES OF THE PLAN AND
OUTSTANDING PENSION LIABILITIES.
(C) POWERS OF COMMISSION UPON RECEIPT OF REPORTS.--
(1) IF THE COMMISSION IS OF THE OPINION THAT A
MUNICIPALITY HAS NOT PERFORMED A DUTY IMPOSED UPON IT BY THE
PROVISIONS OF THIS SUBCHAPTER, THE COMMISSION SHALL HAVE THE
POWER TO ORDER COMPLIANCE BY THE MUNICIPALITY WITH THAT DUTY.
IF IN TWO CONSECUTIVE REPORTS THE COMMISSION FINDS THAT A
MUNICIPALITY HAS NOT COMPLIED WITH THE PROVISIONS OF THIS
SUBCHAPTER, THE EXECUTIVE DIRECTOR OF THE COMMISSION SHALL
NOTIFY THE MUNICIPALITY AND THE AUDITOR GENERAL OF THE
FAILURE TO COMPLY AND MAY RECOMMEND FUTURE ACTION TO BRING
THE MUNICIPAL PENSION PLAN INTO COMPLIANCE.
(2) THE COMMISSION SHALL NOTIFY THE AUDITOR GENERAL OF
ANY MUNICIPALITY THAT DOES NOT MAKE ITS MINIMUM MUNICIPAL
OBLIGATION UNDER SECTION 304.
(D) PUBLIC POSTING.--A MUNICIPALITY SHALL POST THE REPORT ON
ITS PUBLICLY ACCESSIBLE INTERNET WEBSITE, IF THE MUNICIPALITY
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MAINTAINS SUCH A WEBSITE.
SECTION 1219. ENFORCEMENT BY AUDITOR GENERAL.
(A) ACTIONS BY AUDITOR GENERAL.--UPON NOTIFICATION BY THE
COMMISSION OF A MUNICIPAL PLAN NOT IN COMPLIANCE WITH THIS
SUBCHAPTER, THE AUDITOR GENERAL MAY PETITION THE COMMONWEALTH
COURT TO ISSUE A WRIT OF MANDAMUS UPON ANY ELECTED OR APPOINTED
OFFICIAL OF THE MUNICIPALITY TO SECURE COMPLIANCE WITH THE
PROVISIONS OF THIS SUBCHAPTER. THE AUDITOR GENERAL SHALL BE
AUTHORIZED TO ENTER INTO A CONSENT AGREEMENT WITH THE
MUNICIPALITY TO STAY FURTHER LEGAL PROCEEDINGS. THE CONSENT
AGREEMENT SHALL CONSIST OF A PLAN DESIGNED TO BRING THE PENSION
PLAN INTO COMPLIANCE.
(B) LOSS OF STATE AID.--UPON NOTIFICATION BY THE COMMISSION
OF A MUNICIPALITY'S FAILURE TO PAY ITS MINIMUM MUNICIPAL
OBLIGATION FOR A PENSION PLAN UNDER SECTION 304, THE AUDITOR
GENERAL MAY DIRECT THE COMMONWEALTH TO SUSPEND ANY STATE AID
THAT THE MUNICIPALITY RECEIVES FOR THE PLAN.
SECTION 1220. PROCEEDINGS ON PETITION FILED BY AUDITOR GENERAL.
(A) HEARING.--THE COMMONWEALTH COURT SHALL CONDUCT A HEARING
WITHIN 15 DAYS OF RECEIPT OF THE AUDITOR GENERAL'S PETITION FOR
A WRIT OF MANDAMUS.
(B) DETERMINATION.--NO LATER THAN 60 DAYS FOLLOWING THE
FILING OF A PETITION UNDER THIS SECTION, THE COMMONWEALTH COURT
MAY ISSUE AN ORDER IF IT FINDS BY A PREPONDERANCE OF THE
EVIDENCE THAT THERE HAS BEEN A FAILURE BY THE MUNICIPALITY TO
COMPLY WITH THIS SUBCHAPTER OR TO IMPLEMENT A CONSENT AGREEMENT
ENTERED INTO WITH THE AUDITOR GENERAL.
SUBCHAPTER C
CASH BALANCE PLAN
SECTION 1221. DEFINITIONS.
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THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS SUBCHAPTER
SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
CONTEXT CLEARLY INDICATES OTHERWISE:
"COMPENSATION." A MEMBER'S BASE SALARY OR WAGES AS
DETERMINED UNDER SECTION 1224.
"EMPLOYER CREDIT." THE PRODUCT OF THE EMPLOYER CREDITING
RATE TIMES THE ANNUAL COMPENSATION OF A MEMBER, WHICH AMOUNT
SHALL BE CREDITED TO THE MEMBER'S SAVINGS ACCOUNT.
"EMPLOYER CREDITING RATE." THE EMPLOYER CREDITING RATE
ESTABLISHED UNDER THIS SUBCHAPTER.
"INTEREST CREDIT." THE PRODUCT OF THE INTEREST CREDITING
RATE TIMES THE BALANCE OF A MEMBER SAVINGS ACCOUNT AT THE END OF
THE IMMEDIATELY PRECEDING CALENDAR MONTH, WHICH AMOUNT SHALL BE
CREDITED TO THE MEMBER'S SAVINGS ACCOUNT.
"INTEREST CREDITING RATE." THE INTEREST CREDITING RATE
ESTABLISHED UNDER THIS SUBCHAPTER.
"MEMBER." A PERSON WHO IS EMPLOYED BY AN EMPLOYER AND
ELIGIBLE TO PARTICIPATE IN A CASH BALANCE PENSION PLAN.
"MEMBER ACCUMULATED CONTRIBUTIONS." THE SUM OF THE MEMBER
CREDITS TOGETHER WITH INTEREST CREDITED THEREON, AT THE INTEREST
CREDITING RATE, UNTIL THE DATE OF TERMINATION OF SERVICE WITH
THE EMPLOYER. IN THE CASE OF A VESTED MEMBER, INTEREST SHALL BE
CREDITED UNTIL THE LATER OF SUPERANNUATION AGE OR THE
DETERMINATION DATE.
"MEMBER CONTRIBUTION RATE." THE MANDATORY MEMBER
CONTRIBUTION RATE ESTABLISHED UNDER THIS SUBCHAPTER.
"MEMBER CREDIT." THE PRODUCT OF THE MEMBER CONTRIBUTION RATE
TIMES THE ANNUAL COMPENSATION OF A MEMBER, WHICH AMOUNT SHALL BE
CREDITED TO THE MEMBER'S SAVINGS ACCOUNT.
"MEMBER SAVINGS ACCOUNT." THE INDIVIDUAL LEDGER ACCOUNT
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ESTABLISHED AND MAINTAINED FOR A MEMBER SOLELY FOR PURPOSES OF
REFLECTING THE ACCUMULATION OF HIS MEMBER CREDITS, EMPLOYER
CREDITS AND INTEREST CREDITS.
"PENSION FUND." THE ENTITY THAT IS THE REPOSITORY FOR THE
ASSETS OF A CASH BALANCE PENSION PLAN AND RESERVED FOR PRESENT
AND FUTURE RETIREMENT PAYMENTS AND BENEFITS OF ACTIVE AND
RETIRED MEMBERS OF THE CASH BALANCE PENSION PLAN.
"SUPERANNUATION AGE." THE DATE ON WHICH A MEMBER WITH A
VESTED BENEFIT UNDER A CASH BALANCE PENSION PLAN ATTAINS AGE 55
AND HAS OR WOULD HAVE COMPLETED 25 YEARS OF SERVICE WITH THE
EMPLOYER.
SECTION 1222. ESTABLISHMENT OF CASH BALANCE PENSION PLAN.
A MUNICIPALITY MAY BY ORDINANCE ESTABLISH A CASH BALANCE
PENSION PLAN. THE CASH BALANCE PENSION PLAN SHALL BE
ADMINISTERED AS AN ADDITIONAL BENEFIT TIER WITHIN A
MUNICIPALITY'S EXISTING DEFINED BENEFIT PLAN STRUCTURE.
SECTION 1223. ELIGIBILITY TO PARTICIPATE IN CASH BALANCE
PENSION PLAN.
IF A MUNICIPALITY ELECTS TO ESTABLISH A CASH BALANCE PENSION
PLAN, THE FOLLOWING EMPLOYEES SHALL BE ELIGIBLE FOR AND SHALL
PARTICIPATE IN THE CASH BALANCE PENSION PLAN ADMINISTERED BY THE
PENSION FUND:
(1) A REGULAR, FULL-TIME POLICE OFFICER WHO IS EMPLOYED
BY A BOROUGH, TOWN, TOWNSHIP OR REGIONAL POLICE DEPARTMENT
MAINTAINING A POLICE FORCE OF THREE OR MORE FULL-TIME MEMBERS
AND WHO WAS FIRST HIRED ON OR AFTER THE EFFECTIVE DATE OF THE
CASH BALANCE PENSION PLAN ESTABLISHED UNDER SECTION 1222.
(2) A REGULAR, FULL-TIME POLICE OFFICER WHO IS EMPLOYED
BY A CITY OF THE FIRST CLASS, SECOND CLASS, SECOND CLASS A OR
THIRD CLASS AND WHO WAS FIRST HIRED ON OR AFTER THE EFFECTIVE
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DATE OF THE CASH BALANCE PENSION PLAN ESTABLISHED UNDER
SECTION 1222.
(3) A REGULAR, FULL-TIME FIREFIGHTER WHO IS EMPLOYED BY
A BOROUGH, TOWN, TOWNSHIP OR REGIONAL FIRE DEPARTMENT
MAINTAINING A FORCE OF THREE OR MORE FULL-TIME MEMBERS AND
WHO WAS FIRST HIRED ON OR AFTER THE EFFECTIVE DATE OF THE
CASH BALANCE PENSION PLAN ESTABLISHED UNDER SECTION 1222.
(4) A REGULAR, FULL-TIME FIREFIGHTER WHO IS EMPLOYED BY
A CITY OF THE FIRST CLASS, SECOND CLASS, SECOND CLASS A OR
THIRD CLASS AND WHO WAS FIRST HIRED ON OR AFTER THE EFFECTIVE
DATE OF THE CASH BALANCE PENSION PLAN ESTABLISHED UNDER
SECTION 1222.
SECTION 1224. APPLICABLE CREDITING RATES AND DETERMINATION OF
COMPENSATION.
(A) MEMBER CONTRIBUTION RATE.--THE MANDATORY MEMBER
CONTRIBUTION RATE SHALL BE 6% FOR A MEMBER WHO PARTICIPATES IN
SOCIAL SECURITY AND 9% FOR A MEMBER WHO DOES NOT PARTICIPATE IN
SOCIAL SECURITY.
(B) EMPLOYER CREDITING RATE.--THE EMPLOYER CREDITING RATE
SHALL BE 4.5%.
(C) INTEREST CREDITING RATE.--
(1) THE INTEREST CREDITING RATE FOR ANY CALENDAR MONTH
WITHIN A GIVEN CALENDAR YEAR SHALL BE ONE-TWELFTH OF THE 30-
YEAR YIELD ON UNITED STATES TREASURY SECURITIES FOR THE LAST
BUSINESS DAY OF THE PRECEDING CALENDAR YEAR.
(2) THE MINIMUM INTEREST CREDITING RATE FOR ANY CALENDAR
MONTH SHALL BE 0%, AND THE MAXIMUM INTEREST CREDITING RATE
FOR ANY CALENDAR MONTH SHALL BE 0.375%.
(3) INTEREST CREDITS CONTINUE UNTIL BENEFITS COMMENCE TO
BE PAID FROM THE CASH BALANCE PENSION PLAN.
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(D) COMPENSATION.--
(1) FOR PURPOSES OF DETERMINING MEMBER CREDITS AND
EMPLOYER CREDITS UNDER A CASH BALANCE PENSION PLAN,
COMPENSATION SHALL INCLUDE ONLY THE FOLLOWING:
(I) A MEMBER'S BASE SALARY OR WAGES PAID BY AN
EMPLOYER, INCLUDING OVERTIME PAYMENTS TO A MEMBER UP TO
AN AMOUNT NO GREATER THAN 10% OF THE MEMBER'S BASE
SALARY.
(II) DISABILITY PAY PAID BY AN EMPLOYER AS A RESULT
OF A SERVICE-BASED DISABILITY.
(2) COMPENSATION DOES NOT INCLUDE THE FOLLOWING:
(I) OVERTIME PAID IN THE FORM OF COMPENSATORY TIME,
REGARDLESS OF WHETHER THE 10% CAP ON THE INCLUSION OF
OVERTIME, IS MET.
(II) REIMBURSEMENTS, BONUSES, OVERTIME PAYMENTS IN
EXCESS OF 10% OF BASE SALARY, PAYOUTS OF ACCRUED SICK OR
VACATION PAY OR ANY OTHER FORM OF USED OR UNUSED PAID
TIME OFF.
(3) A MEMBER'S COMPENSATION FOR A CALENDAR YEAR SHALL
NOT EXCEED THE LIMIT PRESCRIBED BY SECTION 401(A)(17) OF THE
IRC.
SECTION 1225. MEMBER SAVINGS ACCOUNT.
(A) CREDITS TO ACCOUNT.--
(1) THE MEMBER SAVINGS ACCOUNT SHALL BE THE LEDGER
ACCOUNT TO WHICH SHALL BE CREDITED MEMBER CREDITS, EMPLOYER
CREDITS AND INTEREST CREDITS.
(2) MEMBER CREDITS AND EMPLOYER CREDITS SHALL BE
ALLOCATED TO THE MEMBER SAVINGS ACCOUNTS EACH PAYROLL PERIOD,
OR ON SUCH OTHER FREQUENCY AS THE EMPLOYER SHALL DETERMINE
WITH THE APPROVAL OF THE PENSION FUND, BUT NOT LESS
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FREQUENTLY THAN ANNUALLY.
(3) INTEREST CREDITS SHALL BE ALLOCATED TO MEMBER
SAVINGS ACCOUNTS ON A MONTHLY BASIS.
(B) CHARGES TO ACCOUNT.--
(1) UPON THE PAYMENT TO A MEMBER, OR HIS DESIGNATED
BENEFICIARY, OF A BENEFIT FROM THE CASH BALANCE PENSION PLAN,
THE PAYMENT SHALL BE CHARGED TO THE MEMBER'S SAVINGS ACCOUNT.
(2) UPON THE ELECTION OF A MEMBER TO WITHDRAW HIS MEMBER
ACCUMULATED CONTRIBUTIONS IN LIEU OF RECEIVING A PENSION FROM
THE CASH BALANCE PENSION PLAN, THE ENTIRE BALANCE OF THE
MEMBER'S SAVINGS ACCOUNT SHALL BE DEEMED FORFEITED AND
CHARGED TO THE MEMBER'S SAVINGS ACCOUNT.
SECTION 1226. EXCESS INTEREST CREDIT.
(A) USE TOWARD UNFUNDED LIABILITY.--ANY EXCESS INTEREST
CREDIT EARNED IN THE CASH BALANCE PORTION SHALL BE USED TO PAY
DOWN THE UNFUNDED LIABILITY OF THE PENSION PLAN UNTIL THE PLAN
ACHIEVES A FUNDING RATIO OF 100% FOR TWO CONSECUTIVE ACTUARIAL
VALUATIONS.
(B) CREDITED BACK TO MEMBERS.--AT SUCH TIME AS THE PENSION
PLAN ACHIEVES A FUNDING RATIO OF 100% FOR TWO CONSECUTIVE
ACTUARIAL VALUATIONS UNDER SUBSECTION (A), ANY EXCESS INTEREST
CREDIT EARNED ON THE CASH BALANCE PORTION SHALL BE CREDITED TO
MEMBER CASH BALANCE SAVINGS ACCOUNTS.
SECTION 1227. RETURN OF MEMBER ACCUMULATED CONTRIBUTIONS.
(A) GENERAL RULE.--A MEMBER WHOSE EMPLOYMENT TERMINATES WITH
LESS THAN EIGHT YEARS OF CREDITED SERVICE SHALL RECEIVE HIS
MEMBER ACCUMULATED CONTRIBUTIONS IN A LUMP SUM.
(B) MEMBERS WHO MAY ELECT.--A MEMBER MAY ELECT TO RECEIVE
HIS MEMBER ACCUMULATED CONTRIBUTIONS UPON TERMINATION OF SERVICE
IN LIEU OF ANY BENEFIT TO WHICH THE MEMBER IS ENTITLED UNDER THE
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CASH BALANCE PENSION PLAN.
SECTION 1228. VESTING.
(A) GENERAL RULE.--A MEMBER WITH 12 OR MORE YEARS OF
CREDITED SERVICE SHALL HAVE A 100% VESTED INTEREST IN HIS MEMBER
SAVINGS ACCOUNT.
(B) PARTIAL VESTING.--A MEMBER WITH EIGHT OR MORE, BUT LESS
THAN 12, YEARS OF CREDITED SERVICE SHALL HAVE A 50% VESTED
INTEREST IN HIS MEMBER SAVINGS ACCOUNT.
(C) MEMBER ACCUMULATED CONTRIBUTIONS.--NOTWITHSTANDING
SUBSECTIONS (A) AND (B), A MEMBER SHALL ALWAYS BE 100% VESTED IN
HIS MEMBER ACCUMULATED CONTRIBUTIONS.
SECTION 1229. BENEFIT OPTIONS.
(A) GENERAL RULE.--VESTED BENEFITS UNDER THE CASH BALANCE
PENSION PLAN SHALL BE PAYABLE TO A MEMBER WHO HAS TERMINATED
SERVICE WITH THE EMPLOYER AS OF THE FIRST DAY OF THE MONTH
COINCIDENT WITH OR NEXT FOLLOWING THE MEMBER'S ATTAINMENT OF
SUPERANNUATION AGE OR, IF LATER, THE DATE OF HIS TERMINATION OF
SERVICE WITH THE EMPLOYER, IN AN ANNUITY THAT IS ACTUARIALLY
EQUIVALENT TO THE BALANCE OF THE MEMBER'S SAVINGS ACCOUNT.
(B) ANNUITY OPTIONS.--ANNUITY OPTIONS SHALL BE ESTABLISHED
BY THE CASH BALANCE PENSION PLAN AND SHALL INCLUDE SINGLE AND
JOINT AND SURVIVOR LIFE ANNUITY FORMS.
(C) ACTUARIAL FACTORS TO BE PUBLISHED.--ACTUARIAL FACTORS TO
BE USED TO CONVERT ACCRUED BENEFITS UNDER THE CASH BALANCE
PENSION PLAN INTO ANNUITY AND OTHER OPTIONAL FORMS OF BENEFITS
SHALL BE PUBLISHED BY THE PENSION FUND.
(D) LUMP SUM PAYMENTS.--IN LIEU OF AN ANNUITY FORM OF
BENEFIT, A MEMBER MAY ELECT TO RECEIVE HIS BENEFIT UNDER THE
CASH BALANCE PENSION PLAN AS A LUMP SUM PAYMENT EQUAL TO THE
BALANCE OF THE MEMBER'S SAVINGS ACCOUNT.
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SECTION 1230. ELECTION UPON TERMINATION OF SERVICE.
(A) GENERAL RULE.--A MEMBER WHO TERMINATES SERVICE WITH THE
EMPLOYER PRIOR TO ATTAINMENT OF SUPERANNUATION AGE MAY ELECT, ON
THE FORM PRESCRIBED BY THE PENSION FUND AND DULY ATTESTED BY THE
MEMBER OR THE MEMBER'S LEGALLY CONSTITUTED REPRESENTATIVE, TO:
(1) WITHDRAW HIS MEMBER ACCUMULATED CONTRIBUTIONS IN
ACCORDANCE WITH SECTION 305; OR
(2) IF VESTED, RECEIVE A BENEFIT IN THE FORM OF A LUMP
SUM PAYMENT OR AN ANNUITY.
(B) TIMING OF PAYMENT.--THE WITHDRAWAL, LUMP SUM BENEFIT OR
ANNUITY SHALL BE PAID, OR COMMENCE TO BE PAID, AS SOON AS
PRACTICABLE AFTER THE PENSION FUND'S RECEIPT OF THE ELECTION,
BUT IN NO EVENT LATER THAN THE FIRST DAY OF THE MONTH COINCIDENT
WITH OR NEXT FOLLOWING THE MEMBER'S ATTAINMENT OF SUPERANNUATION
AGE.
(C) PORTABILITY.--WHEN A MEMBER WITHDRAWS THE MEMBER'S
ACCUMULATED CONTRIBUTIONS OR RECEIVES A BENEFIT IN THE FORM OF A
LUMP SUM PAYMENT, THE MEMBER SHALL BE PERMITTED TO DIRECTLY
ROLLOVER THE AMOUNT DISTRIBUTED TO AN ELIGIBLE RETIREMENT PLAN,
INCLUDING ANOTHER CASH BALANCE PENSION PLAN ESTABLISHED UNDER
SECTION 1222. DIRECT ROLLOVERS SHALL BE IN CONFORMANCE WITH
SECTION 901 AND THE APPLICABLE PROVISIONS OF THE IRC.
SECTION 1231. PRERETIREMENT SURVIVING SPOUSE BENEFITS.
(A) GENERAL RULE.--IN THE EVENT THAT A MEMBER WHO IS MARRIED
AND HAS A VESTED BENEFIT UNDER THE CASH BALANCE PLAN DIES PRIOR
TO RECEIVING, OR COMMENCING TO RECEIVE, HIS BENEFIT OR HIS
MEMBER ACCUMULATED CONTRIBUTIONS, THE VESTED PORTION OF THE
MEMBER'S SAVINGS ACCOUNT SHALL BE PAID TO THE MEMBER'S SURVIVING
SPOUSE IN AN ACTUARIALLY EQUIVALENT ANNUITY FOR THE LIFE OF THE
SURVIVING SPOUSE OR, AT THE SPOUSE'S ELECTION ON A FORM
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PRESCRIBED BY THE PENSION FUND, IN A LUMP SUM.
(B) TIMING OF PAYMENT.--THE PRERETIREMENT SURVIVING SPOUSE
BENEFIT SHALL BE PAID, OR COMMENCE TO BE PAID, AT THE SPOUSE'S
ELECTION ON THE FIRST DAY OF THE MONTH FOLLOWING THE MEMBER'S
DEATH OR THE FIRST DAY OF ANY MONTH THEREAFTER, BUT NOT LATER
THAN THE FIRST DAY OF THE MONTH COINCIDENT WITH OR NEXT
FOLLOWING THE MEMBER'S SUPERANNUATION AGE, UNLESS THE MEMBER
DIES AFTER SUPERANNUATION AGE.
SECTION 1232. INELIGIBILITY FOR OTHER DEFINED BENEFIT PENSION
PLAN BENEFITS.
(A) GENERAL RULE.--A MEMBER OF A CASH BALANCE PENSION PLAN
SHALL BE INELIGIBLE FOR THE PENSION BENEFITS PROVIDED TO
EMPLOYEES OF THE EMPLOYER WHO WERE HIRED BEFORE JANUARY 1, 2016,
UNDER ANY OTHER DEFINED BENEFIT PENSION PLAN MAINTAINED BY THE
EMPLOYER.
(B) CONSTRUCTION.--NOTHING IN THIS SECTION MAY BE CONSTRUED
AS PREVENTING OR LIMITING AN EMPLOYER'S ABILITY TO ESTABLISH OR
PARTICIPATE IN PROGRAMS THAT PROVIDE LONG-TERM DISABILITY
BENEFITS.
SECTION 1233. ELIGIBILITY FOR OTHER BENEFITS.
(A) GENERAL RULE.--A MEMBER SHALL BE ELIGIBLE FOR ALL
PRERETIREMENT BENEFITS FOR EMPLOYEES AS OTHERWISE PROVIDED BY
LAW, INCLUDING, BUT NOT LIMITED TO, BENEFITS UNDER:
(1) THE ACT OF JUNE 2, 1915 (P.L.736, NO.338), KNOWN AS
THE WORKERS' COMPENSATION ACT;
(2) THE ACT OF JUNE 28, 1935 (P.L.477, NO.193), REFERRED
TO AS THE ENFORCEMENT OFFICER DISABILITY BENEFITS LAW;
(3) THE ACT OF DECEMBER 5, 1936 (2ND SP.SESS., 1937
P.L.2897, NO.1), KNOWN AS THE UNEMPLOYMENT COMPENSATION LAW;
(4) THE ACT OF JUNE 24, 1976 (P.L.424, NO.101), REFERRED
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TO AS THE EMERGENCY AND LAW ENFORCEMENT PERSONNEL DEATH
BENEFITS ACT; AND
(5) THE PUBLIC SAFETY OFFICERS' BENEFIT ACT OF 1976
(PUBLIC LAW 94-430, 42 U.S.C. § 3796).
(B) SUPPLEMENTAL DEFERRED COMPENSATION PLANS.--EACH EMPLOYER
AUTHORIZED TO ESTABLISH A CASH BALANCE PENSION PLAN DESCRIBED IN
THIS SUBCHAPTER MAY ESTABLISH A SUPPLEMENTAL DEFERRED
COMPENSATION PLAN THAT SATISFIES THE REQUIREMENTS OF SECTION
457(B) OF THE IRC, PROVIDED THAT THE EMPLOYER SHALL NOT BE
REQUIRED TO MAKE EMPLOYER CONTRIBUTIONS TO THE SUPPLEMENTAL
DEFERRED COMPENSATION PLAN.
SECTION 1234. NO INCREASE OR DIMINISHMENT IN BENEFITS UNDER
EXISTING DEFINED BENEFIT PLANS.
(A) EMPLOYEES COVERED.--NOTHING IN THIS SUBCHAPTER MAY BE
CONSTRUED TO DIMINISH THE ESTABLISHED BENEFITS OF EMPLOYEES WHO
ARE MEMBERS OF AN EXISTING DEFINED BENEFIT PLAN ON THE EFFECTIVE
DATE OF THIS CHAPTER.
(B) INCREASED BENEFITS PROHIBITED.--THE BENEFITS ESTABLISHED
THROUGH THE EXISTING DEFINED BENEFIT PENSION PLANS APPLICABLE TO
EXISTING EMPLOYEES SHALL NOT BE INCREASED ON OR AFTER THE
EFFECTIVE DATE OF THIS SECTION.
(C) CONSTRUCTION.--NO PROVISION IN A DEFINED BENEFIT PLAN OR
CASH BALANCE PLAN OR AN ENABLING STATUTE FOR EITHER PLAN MAY BE
CONSTRUED AS IMPLYING AN OBLIGATION BY THE EMPLOYER TO MAINTAIN
OR PROVIDE THE KILLED IN SERVICE BENEFITS REQUIRED UNDER THE ACT
OF JUNE 24, 1976 (P.L.424, NO.101), REFERRED TO AS THE EMERGENCY
AND LAW ENFORCEMENT PERSONNEL DEATH BENEFITS ACT.
SECTION 1235. WORK-RELATED DISABILITY.
(A) BENEFITS.--A VESTED MEMBER WHO TERMINATES SERVICE WITH
THE EMPLOYER PRIOR TO ATTAINING SUPERANNUATION AGE DUE TO
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BECOMING UNABLE TO PERFORM THE DUTIES OF A POLICE OFFICER OR
FIREFIGHTER AS A DIRECT RESULT OF AN INJURY SUFFERED WHILE
PERFORMING THE DUTIES PRIOR TO THE MEMBER'S SUPERANNUATION DATE
SHALL ELECT TO RECEIVE A BENEFIT UNDER THE CASH BALANCE PENSION
PLAN IN ACCORDANCE WITH SECTION 1229, EXCEPT THAT THE DISABILITY
BENEFIT SHALL BECOME PAYABLE ON THE FIRST DAY OF THE MONTH NEXT
FOLLOWING THE DETERMINATION OF THE MEMBER'S PERMANENT DISABILITY
STATUS.
(B) OFFSETS.--THE DISABILITY BENEFIT UNDER SUBSECTION (A)
SHALL BE OFFSET BY A WORKERS' COMPENSATION OR SOCIAL SECURITY
DISABILITY BENEFIT FOR WHICH THE MEMBER MAY BE ELIGIBLE FOR THE
SAME INJURY AND BY ANOTHER DISABILITY BENEFIT OR INCOME
REPLACEMENT BENEFIT FOR WHICH THE MEMBER IS ELIGIBLE THAT WAS
FUNDED, IN WHOLE OR IN PART, BY THE EMPLOYER THAT IS PAID FOR
THE SAME INJURY. IF THE OTHER DISABILITY BENEFIT OR INCOME
REPLACEMENT BENEFIT IS PAID FOR ONLY IN PART BY THE EMPLOYER,
THE OFFSET TAKEN BY THE EMPLOYER SHALL BE PRORATED ACCORDING TO
THE EMPLOYER'S CONTRIBUTION. THE OFFSET SHALL CONTINUE UNTIL THE
MEMBER REACHES THE MEMBER'S SUPERANNUATION DATE, AT WHICH POINT
THE DISABILITY BENEFIT SHALL CEASE AND THE MEMBER SHALL BE
ENTITLED TO RECEIVE A VESTED BENEFIT IN ACCORDANCE WITH SECTION
1229 IN AN ANNUITY THAT IS ACTUARIALLY EQUIVALENT TO THE
REMAINING BALANCE OF THE MEMBER'S SAVINGS ACCOUNT AT THE TIME
WITHOUT THE OFFSETS UNDER THIS SUBSECTION.
SECTION 1236. DISABILITY INSURANCE.
(A) ELIGIBLE MEMBERS.--AN EMPLOYER MAY PROVIDE DISABILITY
INSURANCE FOR A MEMBER WHO TERMINATES SERVICE WITH THE EMPLOYER
PRIOR TO VESTING OR THE ATTAINMENT OF SUPERANNUATION AGE DUE TO
BECOMING UNABLE TO PERFORM THE DUTIES OF A POLICE OFFICER OR
FIREFIGHTER AS A DIRECT RESULT OF AN INJURY SUFFERED WHILE
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PERFORMING THE MEMBER'S DUTIES AS A POLICE OFFICER OR
FIREFIGHTER THAT PERMANENTLY PRECLUDE THE MEMBER FROM WORKING AS
A POLICE OFFICER OR FIREFIGHTER.
(B) INSURANCE CARRIER.--IF AN EMPLOYER OFFERS DISABILITY
INSURANCE UNDER SUBSECTION (A), THE BENEFIT SHALL BE PROVIDED
THROUGH THE DISABILITY INSURANCE CARRIER.
(C) DEFINITION OF DISABILITY.--THE DEFINITION OF DISABILITY
SHALL BE PROVIDED BY THE INSURANCE CARRIER.
(D) DURATION.--THE BENEFIT MAY BE PAID BY THE INSURANCE
CARRIER AND UNDER THE POLICY UNTIL THE MEMBER IS ABLE TO BE
GAINFULLY EMPLOYED IN ANOTHER OCCUPATION OR, IF THE MEMBER IS
NOT ABLE TO BE EMPLOYED IN OTHER GAINFUL EMPLOYMENT, UNTIL THE
MEMBER'S SUPERANNUATION DATE.
(E) CONDITIONS.--THE BENEFIT MAY ONLY BE PROVIDED BY THE
EMPLOYER SUBJECT TO THE FOLLOWING CONDITIONS:
(1) THE INCOME PROVIDED BY THE INSURANCE IS NOT GREATER
THAN 66.6% OF THE MEMBER'S BASE WAGE AS A POLICE OFFICER OR
FIREFIGHTER AT THE TIME OF THE INJURY.
(2) THE WORK-RELATED DISABILITY INSURANCE BENEFIT SHALL
BE SUBJECT TO THE FOLLOWING CONDITIONS AND OFFSETS THAT SHALL
BE NOTED IN THE APPLICABLE POLICY:
(I) AN OFFSET NEGOTIATED INTO THE DISABILITY
INSURANCE POLICY.
(II) ANOTHER DISABILITY BENEFIT OR INCOME
REPLACEMENT BENEFIT RECEIVED BY THE DISABLED MEMBER THAT
WAS PAID FOR, IN WHOLE OR IN PART, BY THE EMPLOYER OR
THAT THE MEMBER RECEIVED WITHOUT A FINANCIAL CONTRIBUTION
AS A RESULT OF THE MEMBER'S EMPLOYMENT OR DUE TO THE
INJURY OCCURRING IN THE PERFORMANCE OF THE MEMBER'S
DUTIES AS A POLICE OFFICER OR FIREFIGHTER, INCLUDING, BUT
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NOT LIMITED TO, SOCIAL SECURITY DISABILITY BENEFITS,
WORKERS' COMPENSATION BENEFITS AND A BENEFIT TO WHICH THE
DISABLED MEMBER MAY BE ELIGIBLE TO RECEIVE IN ACCORDANCE
WITH SECTION 1235 REGARDLESS OF WHETHER THE DISABLED
MEMBER IS RECEIVING THE BENEFIT. THE OFFSETS SHALL BE
REQUIRED REGARDLESS OF WHETHER SET FORTH IN THE
DISABILITY INSURANCE POLICY. IF THE OTHER DISABILITY
BENEFIT OR INCOME REPLACEMENT BENEFIT IS PAID FOR ONLY IN
PART BY THE EMPLOYER, THE OFFSET TAKEN BY THE EMPLOYER OR
INSURANCE CARRIER SHALL BE PRORATED ACCORDING TO THE
EMPLOYER'S CONTRIBUTION.
(III) THERE SHALL BE AN ELIMINATION PERIOD OF 180
DAYS THAT COMMENCES THE DAY FOLLOWING THE MEMBER
TERMINATING EMPLOYMENT DUE TO THE DISABILITY.
SUBCHAPTER D
DEFINED CONTRIBUTION RETIREMENT PLAN
SECTION 1241. DEFINITIONS.
THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS SUBCHAPTER
SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
CONTEXT CLEARLY INDICATES OTHERWISE:
"ACCOUNT." THE ENTRIES MAINTAINED IN THE RECORDS OF THE
TRUSTEE WHICH REPRESENT THE MEMBER'S INTEREST IN THE TRUST.
"ALTERNATE PAYEE." A SPOUSE, FORMER SPOUSE, CHILD OR OTHER
DEPENDENT OF A MEMBER WHO IS RECOGNIZED BY A QUALIFIED DOMESTIC
RELATIONS ORDER AS HAVING A RIGHT TO RECEIVE ALL OR A PORTION OF
THE MEMBER'S VESTED ACCOUNT BALANCE.
"ANNUAL ADDITIONS." FOR ANY LIMITATION YEAR, THE SUM OF THE
FOLLOWING:
(1) THE AGGREGATE AFTER-TAX EMPLOYEE CONTRIBUTIONS THAT
THE MEMBER CONTRIBUTES DURING THE YEAR TO ALL QUALIFIED
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RETIREMENT PLANS MAINTAINED BY THE MUNICIPALITY;
(2) THE AMOUNT OF MUNICIPALITY CONTRIBUTIONS ALLOCATED
TO THE MEMBER'S MUNICIPALITY CONTRIBUTION ACCOUNT UNDER THIS
PLAN AS OF ANY DATE WITHIN THE YEAR; AND
(3) THE AMOUNT OF MUNICIPALITY CONTRIBUTIONS AND
FORFEITURES ALLOCATED TO THE MEMBER UNDER ANY QUALIFIED
DEFINED CONTRIBUTION PLAN THAT MAY BE MAINTAINED BY THE
MUNICIPALITY, OTHER THAN THIS PLAN, AS OF ANY DATE WITHIN THE
YEAR.
"BENEFIT COMMENCEMENT DATE." FOR ANY MEMBER OR DESIGNATED
BENEFICIARY, THE DATE THE FIRST BENEFIT PAYMENT, INCLUDING A
SINGLE SUM FROM THE MEMBER'S ACCOUNT, IS DUE, OTHER THAN
PURSUANT TO A WITHDRAWAL UNDER SECTION 1280.
"BREAK IN SERVICE." SHALL BE AS FOLLOWS:
(1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OR (3), A PLAN
YEAR IN WHICH AN EMPLOYEE IS NOT CREDITED WITH MORE THAN 500
HOURS OF SERVICE.
(2) FOR THE PURPOSE OF CALCULATING A BREAK IN SERVICE,
AN EMPLOYEE SHALL RECEIVE CREDIT FOR AN HOUR OF SERVICE FOR
EACH HOUR OF SERVICE THAT THE EMPLOYEE WOULD HAVE EARNED HAD
THE EMPLOYEE CONTINUED TO BE ACTIVELY EMPLOYED DURING THE
PERIOD OF ABSENCE IF THE EMPLOYEE IS ABSENT FOR ONE OR MORE
OF THE FOLLOWING REASONS:
(I) LAYOFF FOR A PERIOD OF NOT MORE THAN ONE YEAR;
(II) LEAVE OF ABSENCE THAT IS PROTECTED UNDER THE
FAMILY AND MEDICAL LEAVE ACT OF 1993 (PUBLIC LAW 103-3,
29 U.S.C. § 2601 ET SEQ.); OR
(III) LEAVE OF ABSENCE FOR ANY OTHER REASON WITH THE
APPROVAL OF THE PLAN ADMINISTRATOR FOR A PERIOD OF NOT
MORE THAN ONE YEAR.
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(3) IF AN EMPLOYEE IS ABSENT FROM WORK BY REASON OF
PREGNANCY, CHILDBIRTH OR PLACEMENT IN CONNECTION WITH AN
ADOPTION, THE EMPLOYEE SHALL BE CREDITED WITH THE HOURS OF
SERVICE THAT THE EMPLOYEE WOULD HAVE RECEIVED BUT FOR THE
ABSENCE. IF THE HOURS OF SERVICE CANNOT BE DETERMINED, THE
EMPLOYEE SHALL RECEIVE EIGHT HOURS OF SERVICE PER NORMAL
WORKDAY. THE TOTAL NUMBER OF HOURS TO BE TREATED AS HOURS OF
SERVICE UNDER THIS PROVISION SHALL NOT EXCEED 501. THE HOURS
OF SERVICE DESCRIBED IN THIS PROVISION SHALL BE CREDITED TO
THE PLAN YEAR IN WHICH THE HOURS OF SERVICE WOULD HAVE
OTHERWISE OCCURRED.
"COMPENSATION." SHALL BE AS FOLLOWS:
(1) FOR ANY PLAN YEAR, SUBJECT TO THE LIMITATIONS SET
FORTH BELOW, THE TOTAL WAGES AS REPORTED ON AN EMPLOYEE'S
FORM W-2 FROM THE MUNICIPALITY FOR THE PLAN YEAR, INCLUDING:
(I) BASIC CONTRIBUTIONS AND ELECTIVE CONTRIBUTIONS
THAT ARE NOT INCLUDED IN GROSS INCOME PURSUANT TO SECTION
125, 132(F), 402(E)(3), 402(H)(1)(B) OR 402(K) OF THE IRC
(26 U.S.C. § 125, 132(F), 402(E)(3), 402(H)(1)(B) OR
402(K)); AND
(II) COMPENSATION DEFERRED UNDER AN ELIGIBLE
DEFERRED COMPENSATION PLAN WITHIN THE MEANING OF SECTION
457(B) OF THE IRC (26 U.S.C. § 457(B)).
(2) IF AN EMPLOYEE IS SEVERED FROM EMPLOYMENT,
COMPENSATION MUST BE PAID OR MADE AVAILABLE TO AN EMPLOYEE
WITHIN THE LIMITATION YEAR AND MUST BE PAID OR TREATED AS
PAID TO THE EMPLOYEE PRIOR TO HIS OR HER SEVERANCE FROM
EMPLOYMENT. FOR PURPOSES OF CONTRIBUTIONS, COMPENSATION SHALL
ALSO INCLUDE COMPENSATION PAID BY THE LATER OF TWO AND ONE-
HALF MONTHS AFTER THE EMPLOYEE'S SEVERANCE FROM EMPLOYMENT OR
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THE END OF THE LIMITATION YEAR IN WHICH THE EMPLOYEE HAS A
SEVERANCE FROM EMPLOYMENT IF PAYMENT IS REGULAR COMPENSATION
FOR SERVICES DURING THE EMPLOYEE'S REGULAR WORKING HOURS, OR
COMPENSATION FOR SERVICES OUTSIDE THE EMPLOYEE'S REGULAR
WORKING HOURS, COMMISSIONS, BONUSES OR SIMILAR PAYMENTS, AND
THE PAYMENT WOULD HAVE BEEN MADE TO THE EMPLOYEE IF THE
EMPLOYEE HAD CONTINUED IN EMPLOYMENT WITH THE MUNICIPALITY,
OR THE PAYMENT IS FOR UNUSED ACCRUED BONA FIDE SICK, VACATION
OR OTHER LEAVE THAT THE EMPLOYEE WOULD HAVE BEEN ABLE TO USE
IF THE EMPLOYEE HAD CONTINUED IN EMPLOYMENT WITH THE
MUNICIPALITY.
(3) WITH RESPECT TO ANY PLAN YEAR, ONLY COMPENSATION NOT
IN EXCESS OF THE AMOUNT TO WHICH THE LIMIT OF SECTION 401(A)
(17) OF THE IRC (26 U.S.C. § 401(A)(17)) HAS BEEN INDEXED
SHALL BE TAKEN INTO ACCOUNT.
(4) FOR PURPOSES OF THIS DEFINITION, AMOUNTS UNDER
SECTION 125 OF THE IRC (26 U.S.C. § 125) SHALL INCLUDE ANY
AMOUNTS NOT AVAILABLE TO A MEMBER IN CASH IN LIEU OF HEALTH
COVERAGE BECAUSE THE MEMBER IS UNABLE TO CERTIFY THAT HE OR
SHE HAS OTHER HEALTH COVERAGE. AN AMOUNT WILL BE TREATED AS
AN AMOUNT UNDER SECTION 125 OF THE IRC ONLY IF THE
MUNICIPALITY DOES NOT OTHERWISE REQUEST OR COLLECT
INFORMATION REGARDING THE MEMBER'S OTHER HEALTH COVERAGE AS
PART OF THE ENROLLMENT PROCESS FOR THE HEALTH PLAN.
"DESIGNATED BENEFICIARY." THE PERSON OR PERSONS DESIGNATED
BY A MEMBER AS THE BENEFICIARY TO RECEIVE ANY DISTRIBUTION
PAYABLE UNDER THE PLAN IN THE EVENT OF THE MEMBER'S DEATH. THE
MEMBER MAY CHANGE THE DESIGNATION OF A BENEFICIARY FROM TIME TO
TIME IN ACCORDANCE WITH PROCEDURES ESTABLISHED BY THE PLAN
ADMINISTRATOR. ANY DESIGNATION OF A BENEFICIARY SHALL ONLY BE
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EFFECTIVE IF IT IS MADE IN WRITING ON THE FORM PRESCRIBED BY THE
PLAN ADMINISTRATOR AND IS RECEIVED BY THE PLAN ADMINISTRATOR
PRIOR TO THE MEMBER'S DEATH. IF THE MEMBER HAS NOT NAMED A
BENEFICIARY OR IF NONE OF THE NAMED BENEFICIARIES IS LIVING WHEN
A PAYMENT IS TO BE MADE, ONE OF THE FOLLOWING SHALL APPLY:
(1) THE SPOUSE OF THE DECEASED MEMBER SHALL BE THE
BENEFICIARY;
(2) IF THE MEMBER HAS NO SPOUSE LIVING AT THE TIME OF
THE PAYMENT, THE THEN-LIVING CHILDREN OF THE MEMBER SHALL BE
THE BENEFICIARIES IN EQUAL SHARES; OR
(3) IF THE MEMBER HAS NEITHER SPOUSE NOR CHILDREN LIVING
AT THE TIME OF THE PAYMENT, THE ESTATE OF THE MEMBER SHALL BE
THE BENEFICIARY.
"ELIGIBLE EMPLOYEE." EMPLOYEES OF A MUNICIPALITY WHO MEET
THE REQUIREMENTS OF SECTION 1249.
"ELIGIBLE MEMBER." A MEMBER, MEMBER'S SURVIVING SPOUSE,
MEMBER'S SPOUSE OR FORMER SPOUSE WHO IS AN ALTERNATE PAYEE UNDER
A QUALIFIED DOMESTIC RELATIONS ORDER OR MEMBER'S DESIGNATED
BENEFICIARY WHO IS NOT THE MEMBER'S SPOUSE.
"ELIGIBLE RETIREMENT PLAN." THE TERM INCLUDES:
(1) ANY OF THE FOLLOWING:
(I) AN INDIVIDUAL RETIREMENT ACCOUNT DESCRIBED IN
SECTION 408(A) OF THE IRC (26 U.S.C. § 408(A)).
(II) AN INDIVIDUAL RETIREMENT ANNUITY DESCRIBED IN
SECTION 408(B) OF THE IRC (26 U.S.C. § 408(B)).
(III) AN ANNUITY PLAN DESCRIBED IN SECTION 403(A) OF
THE IRC (26 U.S.C. § 403(A)).
(IV) A QUALIFIED TRUST DESCRIBED IN SECTION 401(A)
OF THE IRC (26 U.S.C. § 401(A)).
(V) AN ANNUITY CONTRACT DESCRIBED IN SECTION 403(B)
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OF THE IRC (26 U.S.C. § 403(B)).
(VI) A GOVERNMENTAL DEFERRED COMPENSATION PLAN UNDER
SECTION 457(B) OF THE IRC (26 U.S.C. § 457(B)).
(VII) A ROTH INDIVIDUAL RETIREMENT ACCOUNT DESCRIBED
IN SECTION 408A OF THE IRC (26 U.S.C. § 408A).
(2) WITH RESPECT TO A DESIGNATED BENEFICIARY WHO IS NOT
THE MEMBER'S SPOUSE, ANY OF THE FOLLOWING:
(I) AN INDIVIDUAL RETIREMENT ACCOUNT DESCRIBED IN
SECTION 408(A) OF THE IRC.
(II) A ROTH INDIVIDUAL RETIREMENT ACCOUNT DESCRIBED
IN SECTION 408A OF THE IRC.
(III) AN INDIVIDUAL RETIREMENT ANNUITY DESCRIBED IN
SECTION 408(B) OF THE IRC, OTHER THAN AN ENDOWMENT
CONTRACT, ESTABLISHED ON BEHALF OF THE DESIGNATED
BENEFICIARY AND TREATED AS AN INHERITED INDIVIDUAL
RETIREMENT ACCOUNT OR ANNUITY IN ACCORDANCE WITH SECTION
401(C)(11) OF THE IRC (26 U.S.C. § 401(C)(11)).
"ELIGIBLE ROLLOVER DISTRIBUTION." A DISTRIBUTION OF ALL OR
ANY PORTION OF A MEMBER'S ACCOUNT IF THE AMOUNT WAS NOT ROLLED
OVER TO AN ELIGIBLE RETIREMENT PLAN, EXCEPT THAT AN ELIGIBLE
ROLLOVER DISTRIBUTION DOES NOT INCLUDE:
(1) A DISTRIBUTION THAT IS ONE OF A SERIES OF
SUBSTANTIALLY EQUAL PERIODIC PAYMENTS, BUT NOT LESS
FREQUENTLY THAN ANNUALLY, MADE FOR THE LIFE OR LIFE
EXPECTANCY OF AN ELIGIBLE MEMBER OR THE JOINT LIVES OR JOINT
LIFE EXPECTANCIES OF THE ELIGIBLE MEMBER AND THE MEMBER'S
BENEFICIARY, OR FOR A SPECIFIED PERIOD OF 10 YEARS OR MORE.
(2) A DISTRIBUTION TO THE EXTENT SUCH DISTRIBUTION IS
REQUIRED UNDER SECTION 401(A)(9) OF THE IRC (26 U.S.C. §
401(A)(9)).
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"EMPLOYMENT COMMENCEMENT DATE." THE DATE ON WHICH AN
EMPLOYEE IS FIRST ENTITLED TO BE CREDITED WITH AN HOUR OF
SERVICE.
"HOUR OF SERVICE." SHALL BE AS FOLLOWS:
(1) IN ACCORDANCE WITH 29 CFR 2530.200B-2 (RELATING TO
HOUR OF SERVICE), AN HOUR OF SERVICE SHALL BE DEFINED AS:
(I) EACH HOUR THAT THE EMPLOYEE IS DIRECTLY OR
INDIRECTLY PAID OR ENTITLED TO PAYMENT BY THE
MUNICIPALITY FOR THE PERFORMANCE OF EMPLOYMENT DUTIES;
(II) EACH HOUR THE EMPLOYEE IS ENTITLED, EITHER BY
AWARD OR AGREEMENT, TO BACK PAY FROM THE MUNICIPALITY,
IRRESPECTIVE OF MITIGATION OF DAMAGES; AND
(III) EACH HOUR THE EMPLOYEE IS DIRECTLY OR
INDIRECTLY PAID OR ENTITLED TO PAYMENT BY THE
MUNICIPALITY ON ACCOUNT OF A PERIOD OF TIME DURING WHICH
NO DUTIES ARE PERFORMED DUE TO VACATION, HOLIDAY,
ILLNESS, INCAPACITY, INCLUDING DISABILITY, JURY DUTY,
LAYOFF, LEAVE OF ABSENCE OR MILITARY DUTY.
(2) THE FOLLOWING SHALL APPLY:
(I) NO HOURS OF SERVICE MAY BE CREDITED TO AN
EMPLOYEE FOR PAYMENTS MADE UNDER A PLAN MAINTAINED SOLELY
FOR THE PURPOSE OF COMPLYING WITH APPLICABLE WORKERS'
COMPENSATION, UNEMPLOYMENT COMPENSATION OR DISABILITY
INSURANCE LAWS.
(II) NO MORE THAN 501 HOURS OF SERVICE MAY BE
CREDITED TO AN EMPLOYEE UNDER PARAGRAPH (1)(III) FOR ANY
SINGLE CONTINUOUS PERIOD DURING WHICH NO DUTIES ARE
PERFORMED BY THE EMPLOYEE, EXCEPT TO THE EXTENT OTHERWISE
PROVIDED IN THE PLAN.
(III) NO HOUR OF SERVICE MAY BE CREDITED TO AN
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EMPLOYEE FOR PAYMENTS FOR MEDICAL OR MEDICAL-RELATED
EXPENSE REIMBURSEMENT.
(IV) NO HOUR OF SERVICE MAY BE CREDITED TWICE.
(V) HOURS OF SERVICE SHALL BE CREDITED AT LEAST AS
LIBERALLY AS SET FORTH BY THE PROVISIONS OF 29 CFR
2530.200B-2.
"INVESTMENT OPTION." AN INVESTMENT VEHICLE DESIGNATED BY A
PLAN ADMINISTRATOR.
"LIMITATION YEAR." THE 12-CONSECUTIVE-MONTH PERIOD THAT
BEGINS JANUARY 1 AND ENDS THE FOLLOWING DECEMBER 31 OF EACH
YEAR.
"MANDATORY MEMBER CONTRIBUTION ACCOUNT." THE INDIVIDUAL
INVESTMENT ACCOUNT ESTABLISHED BY THE MUNICIPALITY FOR EMPLOYEE
CONTRIBUTIONS MADE UNDER SECTION 1255, AS ADJUSTED FOR
WITHDRAWALS, DISTRIBUTIONS, EARNINGS, LOSSES AND EXPENSES.
"MANDATORY MEMBER CONTRIBUTIONS." FOR ANY MEMBER, THE
CONTRIBUTIONS MADE ON HIS OR HER BEHALF AS PROVIDED IN SECTION
1255.
"MEMBER." AN INDIVIDUAL WHO BECOMES A MEMBER UNDER THIS
CHAPTER AND FOR WHOM ONE OR MORE ACCOUNTS ARE MAINTAINED UNDER
THE PLAN.
"MUNICIPALITY CONTRIBUTION ACCOUNT." AN ACCOUNT ESTABLISHED
BY A MUNICIPALITY UNDER SECTION 1254.
"MUNICIPALITY CONTRIBUTIONS." A MUNICIPALITY CONTRIBUTION TO
A MEMBER UNDER SECTION 1256.
"NONUNIFORMED EMPLOYEE." AN EMPLOYEE OF A MUNICIPALITY WHO
DOES NOT MEET THE REQUIREMENTS OF SECTION 1249.
"NORMAL RETIREMENT AGE." THE DATE THAT AN EMPLOYEE BECOMES
55 YEARS OF AGE.
"PLAN." THE DEFINED CONTRIBUTION PLAN ADOPTED BY A
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