Who should be the chief administrative officer of the municipality and what are that person's duties?

The governing body of the municipality should designate, by ordinance, resolution, or by motion recorded in the minutes, the chief administrative officer (CAO) of the municipality.  That person should be the individual who has primary responsibility for the execution of the administrative affairs of the municipality.

Act 205 requires the CAO to supervise the preparation of the actuarial valuation reports.  The CAO must file questionnaire PC-200 and an actuarial valuation report with the Public Employee Retirement Commission.  The contents of the actuarial valuation report must be disclosed to the pension plan members.  The CAO must also file certification form AG-385 with the Department of the Auditor General.

The CAO may also serve as the CAO of the pension plan(s).

Who should be the chief administrative officer of the pension plan and what are this person's duties?

Because of the criticality of the pension plan CAO's responsibilities, the governing body of the municipality should designate, by ordinance, resolution, or by motion recorded in the minutes, the CAO of the pension plan.  That person should be the individual who has primary responsibility for the execution of the administrative affairs of the pension plan.  This person must annually, by the last business day in September, submit to the governing body of the municipality a report containing the financial requirements of the pension plan and the municipality's minimum obligation to the plan.  Also, the plan CAO must provide to the governing body of the municipality a cost estimate of any benefit modification prior to its adoption.

Which pension plans are eligible to receive General Municipal Pension System State Aid?

Pension plans which were established prior to December 18, 1984, or pension plans established after this date maintained by the municipality for three (3) calendar years.

Who should be counted as municipal employees on Certification Form AG-385?

Only employees who belong to a pension plan and have been employed full-time for any consecutive six (6) month period of a certification year.  Full-time police officers must work a minimum of 40 hours per week.  Full-time firefighters and non-uniformed employees must work a minimum of 35 hours per week.

How may a municipality divide its state aid among its pension plans?

If a municipality maintains more than one pension plan, the governing body shall annually determine the portion of the state aid to go to each plan.  However, a municipality may allocate all its state aid to only one of its pension plans.  The municipality is ultimately responsible for making up any deficiency which would be created by the distribution.

May the cost of a required actuarial valuation report be paid by the pension plan?

Yes.  Act 205 provides that the cost of a required actuarial valuation report is an allowable administrative expense.

May the pension plan pay other administrative expenses?

Yes.  Reasonable costs traditionally and directly associated with the management of a pension plan are now allowable pursuant to Act 205, unless prohibited by local ordinance or contract.

Should operating municipal authority employees be counted as non-uniformed employees on the Certification Form AG-385 for Act 205 State Aid?

No.  Operating municipal authority employees are not to be included in the unit count under Act 205.

Must municipal authorities file actuarial reports under Act 205?

Yes.  Act 205 requires municipal authorities which have pension plans for their employees to file actuarial reports.

What happens if a municipality fails to file Certification Form AG-385 with the Department of the Auditor General?

If the certification form is not filed by the municipality, the local community will not receive its state aid for the pension plan(s) or for their volunteer fire relief association.

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What pension laws govern the operation of the non-uniformed pension plans?

Each municipal code provides authority to establish a pension plan.  However, the codes do not establish criteria for the requirements of retirement eligibility or benefit structure.  In the absence of such requirements, the municipality should adopt regulations which clearly establish the structure of the plan which should also be in conformity with those generally authorized for pension plans.

How are the non-uniformed pension plans funded?

Act 205 authorizes the use of state aid to assist in the funding of municipal maintained pension plans.  The plans may also require municipal and employee contributions to maintain actuarial funding as required by Act 205.

May the non-uniformed pension plans pay disability or spousal benefits?

Yes.  If such benefits are actuarially feasible.

Are actuarial reports required?

Act 205 requires filing of actuarial reports for pension plans maintained by municipalities.  For most plans, the act requires actuarial reports every two (2) years.  The reports must be filed with the Public Employee Retirement Commission (PERC).

What type of funding vehicles can be used to fund pensions?

Municipalities may self-administer, use custodial accounts, purchase authorized investments, or use any combination of the above.  Whatever vehicle is used, the municipality must use care to ensure the safety of the assets.

May plans purchase whole life insurance policies?

No.  Purchase of new whole life policies is not permissible after January 1, 1986.

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Must the mandatory benefits as provided for in Act 600 be established by ordinance or resolution?

Yes.  In the event discretionary benefits are provided, they must also be authorized by ordinance or resolution.

Must both the age and service requirement be met during employment to qualify for normal retirement benefits?

Yes.  Both requirements must be met.

Must the municipality stipulate the rate of interest to be paid on the refund of members' contributions in an ordinance or resolution?

Either the rate or the method to calculate the rate must be established.

If a member is eligible for pension and dies in service without an insured death benefit or widow's pension, is his beneficiary entitled to a refund of his contributions?

Yes.  The member is ineligible for a pension due to death, and therefore a refund of his contributions plus interest is paid to his beneficiary or, in the absence thereof, his estate.

What steps are involved when determining a retirement benefit?

The municipality must maintain a copy of the pension determination (computation) which should include:

Pension plan committee approval of the retirement; Salary on which the pension has been based; Date of employment, birth, and retirement and if a spouse's pension is provided, the spouse's name and date of birth; Record of service time; Additional service credited, i.e., military service credit; Verification of age; Where social security offset is applicable, the amount, and  date of inception; For disability pensions, the municipality must have a certification of examination and/or re-examination by competent medical specialist(s) describing the nature of the physical or mental limitation(s).  The municipality is  responsible for establishing required standards for disability by ordinance within the framework of applicable commonwealth legislation.

May plans purchase whole life insurance policies?

No.  Purchase of whole life insurance policies is not permissible after January 1, 1986.

May an Act 600 police pension plan continue to eliminate employee contributions, if all of the state aid is deposited in the non-uniformed pension plan?

Act 600 provides that police pension plans can only eliminate employee contributions if contributions are not required by the municipality.  Therefore, if the police pension plan requires contributions and the state aid is not deposited in the police pension plan, then employees of the police pension plan must contribute.  This is true even if contributions for previous years were eliminated.  Officials should be aware that Act 600 requires that elimination of member contributions can be made only on a year-to-year basis.  The act requires the adoption of an annual ordinance or resolution to eliminate member contributions.

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