Legislation
Under sections 4301
through 4308 of Act 317 of 1931, known as The Third Class City Code (53
P.S. §§ 39301-39308), a city of the third class must establish, by
ordinance, a retirement system for its police officers.
Administration and
Financing
The retirement system
and police pension trust fund are under the direction and control of the
city council, and council may designate city officers, citizens, or
corporations located in the city to have custody and manage the pension
trust fund. Any compensation paid to a corporate custodian is paid
from the city's general fund. The main sources of revenue for the
fund are contributions by police officers, contributions by the city,
General Municipal Pension System State Aid, and earnings from the
investment of the fund assets.
Membership
All members of the
city police force must be members of the retirement system.
City Contributions
The city annually must
contribute an amount at least equal to the minimum city obligation
under the Municipal Pension Plan Funding Standard and Recovery Act.
Member
Contributions
A police officer
monthly pays into the pension trust fund an amount of up to four percent
of pay. An officer or the city may contribute an additional amount
of up to one percent of pay to provide for survivors' benefits. An
officer also makes a service increment contribution of not more than one
dollar a month until reaching age 65.
Superannuation
Retirement
A police officer may
retire after 20 years of service on superannuation retirement. The
ordinance does not have to prescribe a minimum age, but if one is
prescribed, it must be age 50. A retiree's retirement pay is
computed at one-half the final rate of pay or one-half of the monthly
average pay of the police officer during the five highest years;
whichever is greater.
Service Increment
The city also must pay
a retiree a service increment of 1/40 of the retirement pay for each
year of service, in excess of 20 years, before the retiree reaches age
65. This service increment cannot be for than $100 per month.
Death Benefits
The city must pay a
pension to the surviving spouse of a superannuation retiree, or of a
member who dies or is killed in service, during that surviving spouse's
lifetime or as long as the spouse does not remarry. If the
surviving spouse dies, the pension is paid to any child until the child
is age 18. The survivors' benefit is 50 percent of the pension the
retiree was receiving, or the member would have been receiving, had the
member been retired at the time of death. At the city's option,
the survivor's benefit may be doubled.
If a police officer
with less than ten years service dies due to injuries not in the line of
duty, the officer's survivors may be entitled to a pension of 25 percent
of the annual pay of the officer. If a police officer with ten or
more years service dies before being eligible for superannuation
retirement, the officer's survivors may be entitled to a pension of 50
percent of the annual pay of the officer.
Disability Benefits
If a police officer
with less than ten years service becomes totally disabled due to
injuries not in the line of duty, the officer may be entitled to a
pension of 25 percent of the officer's annual pay. If a police
officer with ten or more years service is totally disabled, the officer
may be entitled to a pension of 50 percent of the officer's annual
pay. If a police officer becomes totally disabled due to injuries
sustained in the line of duty, the officer is deemed to be fully vested,
regardless of the actual number of years of service, and is eligible for
immediate retirement benefits. A disability pension continues for
the retiree's lifetime and may be paid to the disability retiree's
surviving spouse during that surviving spouse's lifetime. If the
surviving spouse dies, the pension may be paid to any child until the
child is age 18.
Cost of Living
Increase
At any time, a city
may increase the retirement pay of retirees. The increase must be
in conformity with a uniform scale and be based on the increase in the
cost of living. The total retirement pay after the cost-of-living
increase cannot be more than one half of the current salary being
paid police officers of the highest pay grade.
Vesting
In the ordinance that
creates the police pension plan, the city may provide for a vesting
benefit. This vesting benefit provides that if a police officer
who has completed 12 years of full-time service ceases to be a full-time
police officer of the city before reaching the required superannuation
retirement age and service, the officer is entitled to vest that
officer's retirement system benefits by filing a written notice of
intention to vest with the management board of the system. When
the vestee reaches what would have been the superannuation retirement
date, had the vestee continued in full-time police service with
the city, the retirement system pays the vestee a partial superannuation
retirement allowance. The partial superannuation allowance is
proportional to the number of years actually worked, as compared to the
superannuation retirement years, and is calculated using the monthly
average salary during the appropriate period prior to termination of
employment.
Other Features
Other features of a
police retirement system in a city of the third class are:
-
Receipt, with the
approval of city council, of credit for up to five years of
nonintervening military service, if the police officer arranges to
pay both the member's contributions and the city's contributions for
the period of military service,
-
Provisions for the
refund of contributions paid into the pension trust fund, without
interest, to a member or the member's survivors, or estate, in cases
where an officer discontinues employment or dies without being
eligible to receive a pension,
-
Provisions for the
restoration of retirement system rights of a former member who
returns to the police force and restores the accumulated
contributions.
Firefighter
Retirement Systems
Legislation
Under
article 43(b), relating to a retirement system for firefighters, of Act
317 of 1931, known as The Third Class City Code (53 P.S. §§ 39320-39327),
a city of the third class must provide annuity contracts or establish,
by ordinance, a retirement system for it's firefighters.
Administration
and Financing
The
firefighters' pension trust fund is under the direction of a board of
managers consisting of the mayor, the director of accounts and finance,
the director of the department in charge of the fire department (or the
director of public safety where the mayor is the director of the
department in charge of the fire department), the city controller, the
chief of the bureau of fire (ex officio), and two members chosen by the
system members. The main sources of revenue for the fund are
contributions by firefighters, by the city, General Municipal Pension
System State Aid, and earnings from the investment of the fund assets.
Membership
A
full-time paid firefighter must be a member of the retirement system.
City
Contributions
The city
annually must contribute an amount at least equal to the minimum city
obligation under the Municipal Pension Plan Funding Standard and
Recovery Act.
Member
Contributions
A
firefighter monthly pays into the pension trust fund an amount of up to
four percent of pay. If deemed necessary by the city council, the
firefighter may contribute an additional amount of up to one-percent of
pay to provide for survivor benefits. A firefighter also makes a
service increment contribution of not more than one dollar a month until
reaching age 65.
Superannuation
Retirement
A
firefighter may retire after 20 years of service on superannuation
retirement. The ordinance does not have to prescribe a minimum
age, but if one is prescribed, it must be age 50. A retiree's
retirement pay is computed at one-half the final rate of pay or one-half
of the monthly average pay of the firefighter during the five highest
years; whichever is greater.
Service
Increment
The city
also must pay a retiree a service increment of 1/40 of the retirement
pay for each year of service in excess of 20 years before the retiree
reaches age 65. This service increment cannot be more than $100
per month.
Death
Benefits
The
surviving spouse or child under age 18 of a retiree, or a member who
dies while still in service, is entitled to receive the pension payment
the retiree was receiving or the member would have been receiving had
the member been retired at the time of death. The pension is
payable during the lifetime of the surviving spouse. If the
surviving spouse dies, the pension is payable to a child under age 18.
Disability
Benefits
By
regulation, the board of managers fixes the amount and commencement of
the payment of disability pensions for permanent injuries incurred in
the fire service. The regulations cannot take into consideration
the amount and duration of workers' compensation allowed by law.
Cost-of-Living
Increases
At any
time, a city may increase the retirement pay of retirees. The
increase must be in conformity with a uniform scale and be based on the
increase in the cost of living. The total retirement pay after the
cost-of-living increase cannot be more than one-half of the current
salary being paid firefighters of the highest pay grade.
Other
Features
Other
features of the firefighters retirement system under The Third Class
City Code are:
-
Provisions
for the forfeiture of retirement system rights upon conviction of a
felony or misdemeanor, becoming a habitual drunkard, or failing to
comply with a regulation of the board of managers,
-
Receipt,
with the approval of the city council, of credit for up to five
years of nonintervening military service if the firefighter arranges
to pay both the firefighter's contributions and the city's
contributions for the period of military service,
-
Provisions
for the refund of monies paid into the pension trust fund, without
interest, to a firefighter or to the firefighter's survivors, or
estate, in cases where a firefighter discontinues employment or dies
without being eligible to receive a pension,
-
Provisions
for the restoration of retirement system rights of a former member
who returns to the city's fire service and restores accumulated
contributions.
Non-Uniformed
Employee Retirement Systems Under The Third Class City Code
Legislation
Under
Article 43(c), relating to a retirement system for nonuniformed
employees, of Act 317 of 1931, known as The Third Class City Code (53
P.S. §§ 39340-39353), a city of the third class may establish a
retirement system for elected and appointed city employees other than
police officers and city paid firefighters.
Administration
and Financing
The
retirement system is administered by the pension board consisting of the
mayor, the city controller, the director of finance, and two employees
chosen by employees contributing to the system. If members of
council are members of the system, a member of council, chosen by
council, also is a member of the board.
The
pension trust fund is under the direction of the board. The main
sources of revenue for the fund are contributions by the employees, by
the city, General Municipal Pension System State Aid, and earnings from
the investment of the fund assets.
Membership
In a
city that creates a retirement system under this article, the retirement
benefit applies to an individual employed in any capacity by the city
with the exception of police officers, city paid firefighters, and per
diem laborers.
An
individual holding a position as a laborer at per diem wages is not
required to contribute toward the retirement system but may elect to do
so and become entitled to the retirement benefit.
An
individual regularly employed as a driver of firefighting apparatus or
ambulances by a volunteer fire company that renders services recognized
and accepted by the city, may become a member if the employing fire
company makes the employer's contributions to the system.
Employer
Contributions
The
employer annually must contribute an amount at least equal to the
minimum city obligation under the Municipal Pension Funding Standard and
Recovery Act.
Member
Contributions
A member
without social security coverage (single coverage member) monthly pays
two percent of pay into the pension trust fund. If deemed
necessary by the city council to provide for survivor's benefits, a
member monthly pays an additional amount of up to one percent of pay
into the fund.
A member
with social security coverage (joint coverage member) monthly pays three
and one-half percent of pay, on which social security contributions are
payable and, five percent of any pay in excess of that on which social
security allowances are payable.
Superannuation
Retirement
A member
may retire at age 60 after 20 years of service. The annual
retirement pay is computed as 50 percent of the highest annual salary or
wages during any five years of employment with the city and is paid
semimonthly.
After
the age at which social security benefits become payable, the retirement
pay of a retiree, who was a joint coverage member, is reduced by 40
percent of the primary social security benefit payable to the retiree
except that the total sum, including social security benefits, received
by the retiree cannot be less than the retirement pay the retiree would
receive in the absence of social security coverage.
The
board may authorize a joint coverage member to elect to receive
retirement pay without the social security reduction. A member
electing this option is required to make a lump sum payment or
installment payments equal to the amount that would have been paid into
the retirement system, if member contributions had been made on that
portion of the member's salary or wages on which social security
contributions are payable, at the same rate made on the portion of the
member's salary or wages in excess of the amount on which social
security contributions are payable. A member electing this option
before retirement also must pay the system contributions on the member's
entire salary or wages at the rate required on salaries or wages in
excess of the amount on which social security contributions are payable.
Early
Retirement
A member
with at least 20 years of service, but younger than 60 who is dismissed,
voluntarily retires, or is in any manner deprived of city employment may
continue to make monthly payments into the pension trust fund and be
entitled to receive retirement pay upon reaching the age of 60.
Disability
Retirement
A member
with at least ten years of service, but younger that 60 who becomes
totally and permanently disabled, is entitled to retirement pay.
The disability must be certified by three practicing physicians
designated by the board.
Death
Benefits
The city
council may elect, by ordinance, to make payments to the surviving
spouse of a retiree, or of a member who dies or is killed in service,
during that surviving spouse's lifetime, or as long as the spouse does
not remarry. The surviving spouse's benefit is 50 percent of the
pension the retiree was receiving or the member would have been
receiving had the member been retired at the time of death.
Other
Features
Other
features of a nonuniformed employees retirement system under The Third
Class City Code are:
-
Provisions
for the refund of monies paid into the pension trust fund, without
interest, to a member or the member's survivors, or estate, in cases
where a member discontinues employment or dies without being
eligible to receive a pension,
-
Provisions
for the restoration of retirement system rights of a former member
who returns to city employment and restores the accumulated
deductions,
-
Provisions
against beneficiaries being employed by the city, except in an
elective office, and provisions for the benefit to cease during the
elected term of a beneficiary.
Nonuniformed
Employees Retirement Systems Under The Optional Retirement System Law
for Third Class Cities
Legislation
Under
the provisions of Act 362 of 1945, relating to an optional retirement
system for nonuniformed employees (53 P.S. §§ 39371-39384), a city of
the third class may establish a retirement system for its officers and
employees independently of any existing retirement system in the city.
Administration
and Financing
The
retirement system is administered by the Officers and Employees
Retirement Board consisting of the mayor, the city controller, the
director of finance, and two employees chosen by employees contributing
to the system and a retiree chosen by the retiree association. If
members of council participate in the retirement system and are members
of the system, a member of council chosen by council also is a member of
the board.
The
pension trust fund is under the direction of the board. The main
sources of revenue for the fund are contributions by employees,
contributions by the city, General Municipal Pension System State Aid,
and earnings from the investment of the fund assets.
Membership
In a
city that creates a retirement system under the statute, the retirement
benefit applies to an individual employed by the city, with certain
exceptions.
An
individual holding a position as a laborer, at per diem wages, is not
required to contribute toward the retirement system but may elect to do
so and become entitled to the retirement benefit.
Where
the city already has a retirement system, when a retirement system is
created under this statute, the members of the existing system may vote
whether to be covered by the new system. If 75% of the members of
the existing system approve, the existing system's assets and
liabilities are transferred to the new system. If the members do
not accept the new system, the former retirement system remains in
effect for its members, and an individual covered by the preexisting
retirement system remains a member of the old retirement system and does
not become a member of the new one.
City
Contributions
The city
annually must contribute an amount at least equal to the minimum city
obligation under the Municipal Pension Funding Standard and Recovery
Act.
Member
Contributions
A member
without social security coverage (single coverage member) monthly pays
three-percent of pay into the pension trust fund. If deemed
necessary by the city council to provide for survivor's benefits, a
member monthly pays an additional amount of up to one percent of pay
into the fund. If authorized by the city council, a member may
contribute an additional one-half percent in order to be eligible for a
service increment.
A member
with social security coverage (joint coverage member) monthly pays three
and one-half percent of pay on which social security contributions are
payable and five-percent of any pay in excess of that on which social
security allowances are payable.
Where a
retiree who made contributions to the retirement system for a total of
less than 20 years retires and receives retirement pay from the system,
the retiree must pay the system three percent of that retiree's
retirement pay until a total of 20 years of contributions have been
made.
Superannuation
Retirement
A member
may retire at age 60 after 20 years of service. The annual
retirement pay is computed as 50 percent of the highest average annual
salary, or wages, during any five years of employment with the city or
50 percent of the annual salary that would be determined by the rate of
monthly pay at the date of retirement; whichever is higher.
The
provisions relating to the retirement pay for a joint coverage member
are the same as for a nonuniformed retirement system under The Third
Class City Code, including the option to buy out of the 40 percent
social security offset.
Early
Retirement
A member
who is involuntarily retired after 12 or more years of service is
entitled to receive, beginning at age 60 (or, immediately, if the
involuntary retirement occurs after age 60), a portion of a full pension
based on the ratio that the member's period of service up to the date of
termination bears to the full 20 year period of service. A member
who is involuntarily retired after 20 or more years of service is
entitled to receive a full pension after age 55 if the member continues
paying contributions to the retirement system until the member is 55 at
the same rate the member was paying when the member was involuntarily
retired.
A member
who retires voluntarily, after at least 20 years of service but before
reaching age 60, is entitled to a full pension at age 60, if the member
continues to pay into the retirement system until the member is age 55.
Cost-of-Living
Adjustment
Upon the
recommendation of the retirement board, after receiving an actuarial
cost estimate, the city council, subject to the approval of the mayor,
may increase retirees' retirement pay based upon the increase in the
Consumer Price Index for all urban consumers.
Disability
Benefits
A member
who becomes permanently disabled with at least 15 years of service, but
before reaching age 55, is entitled to a pension during the
disability. The disability must be certified by three physicians
designated by the board.
Death
Benefits
The city
council may elect, by ordinance, to make payments to the surviving
spouse of a retiree, or of a member who dies or is killed in service,
during that surviving spouse's lifetime or as long as the spouse does
not remarry. The surviving spouse's benefit is 50 percent of the
pension the retiree was receiving or the member would have been
receiving had the member been retired at the time of death.
Service
Increments
The city
council may authorize, by ordinance, the payment to a retiree of an
optional service increment of 1/40 of the retirement pay for each year
of service in excess of 20 years until the retiree reaches age 65.
A member who wishes to become entitled to the service increment must
make, in addition to the regular member's contribution, a service
increment contribution equal to one-half percent of salary. The
service increment contribution is not paid after the member reaches age
65.
Vesting
In the
ordinance that creates the optional retirement plan for nonuniformed
employees, the city may provide for a vesting benefit. This
vesting benefit provides that, if a nonuniformed employee who has
completed 12 years of full-time service ceases to be a full-time
nonuniformed employee of the city before reaching the required
superannuation retirement age and service, the employee is entitled to
vest that employee's retirement system benefits by filing a written
notice of intent to vest with the retirement board of the system.
When the vestee reaches what would have been the superannuation
retirement date, had the vestee continued in full-time nonuniformed
service with the city, the retirement system pays the vestee a partial
superannuation retirement pay. The partial superannuation
retirement pay is proportional to the number of years actually worked,
as compared to the superannuation retirement years, and is calculated
using the monthly average salary during the appropriate period prior to
termination of employment.
Other
Features
Other
features of this statute are:
-
Provisions
for the refund of contributions paid into the pension trust fund,
without interest, to a member who ceases to be employed by the city
before becoming entitled to any benefits,
-
Provisions
for the restoration of retirement system rights of a former member
who reenters the service of the city and restores withdrawn
contributions,
-
Receipt
of credit for up to six years of honorable intervening military
service; if the member pays an amount equal to three-percent of the
member's last monthly pay prior to entering military service for
each month the member was on active duty with the armed forces.
