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Ellwood City, PA Code of Ordinances
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292.01   DEFINITIONS.
   (a)   As used herein, the masculine gender shall include the feminine gender, and the singular shall include the plural, in all cases where such meaning would be appropriate. Headings of sections and subsections are inserted only for convenience of reference and are not to be considered in the construction of the Plan.
   (b)   The following words and phrases, as used herein, shall have the meanings set forth in this subsection, unless a different meaning is plainly required by the context:
      (1)   "Accrued benefit" means, as of any given computation date, a participant's monthly normal retirement benefit determined in accordance with Section 292.04(a), which amount shall be based upon the participant's final monthly average compensation and credited service determined as of such computation date and which shall represent the monthly benefit which would be payable in the normal form as of the participant's attainment of normal retirement age, provided that the participant shall satisfy all requirements pursuant to the terms of the Plan for entitlement to receive such benefit.
   In no event, however, shall the accrued benefit exceed the maximum limitation, determined as of the date of computation, provided under Section 292.04(j). All accrued benefits are subject to all applicable limitations, reductions, offsets and actuarial adjustments provided by the Plan prior to the actual payment thereof.
      (2)   "Accumulated contributions" means the total amount contributed by a participant to this Plan or its predecessor by way of payroll deduction or otherwise, plus simple interest credited at the rate of three and one-half percent per annum, from the midpoint of the Plan year when paid into the Pension Fund until the first day of the month in which a distribution of accumulated contributions occurs or the payment of retirement benefits commences.
      (3)   "Act" means the Municipal Pension Plan Funding Standard and Recovery Act, which was enacted as Act 205 of 1984, as amended, 53 P.S. 895.101 et seq.
      (4)   "Actuarial equivalent" means two forms of payment of equal actuarial present value on a specified date. The actuarial present value shall be determined by use of the 1984 Group Annuity Mortality Table and seven percent interest, unless otherwise expressly provided herein.
      (5)   "Actuary" means the person, partnership, association or corporation which, at any given time, is serving as actuary, provided that such actuary must be an "approved actuary," as defined in the Act.
      (6)   "Anniversary date" means January 1 of a given Plan year.
      (7)   "Authorized leave of absence" means any leave of absence granted in writing by the employer for reasons, including, but not limited to, accident, sickness, pregnancy or temporary disability, education, training, jury duty or such other reasons as may necessitate authorized leave from active employment. "Authorized leave of absence" shall also include a period of time for active service with the Armed Forces of the United States of America, provided that such service shall commence after the participant has completed at least six months of credited service and the participant returns to employment within the applicable time prescribed by law following separation from such military service.
      (8)   "Beneficiary" means the person or persons validly designated in writing by a participant to receive such benefits as may be due hereunder upon the participant's death. A designation shall become effective only upon the participant's death and shall be valid only if delivered prior to such participant's death to the Plan Administrator in such form as the Plan Administrator shall specify. If there is no validly designated beneficiary that survives the participant or that is legally able to take the benefits provided as beneficiary, then the beneficiary shall be the surviving spouse, or, if there is no surviving spouse, the issue, per stirpes, or, if there is no surviving issue, the estate of the participant. If no personal representative has been appointed, the beneficiary shall be those persons who would be entitled to the estate under the intestacy laws of the Commonwealth if the participant had died intestate and a resident of the Commonwealth.
      (9)   "Chief Administrative Officer" means the person, designated by the Municipality, who has the primary responsibility for the execution of the administrative affairs for the Plan.
      (10)   "Code" means the Internal Revenue Code of 1986, as amended.
      (11)   "Commonwealth" means the Commonwealth of Pennsylvania.
      (12)   "Compensation" means the total salary or wages paid to an employee by the employer for active services rendered in employment and shall exclude extra or additional forms of remuneration, including, but not necessarily limited to, amounts paid as allowance or reimbursement for expenses or payments made to an employee welfare or benefit plan on behalf of the employee. Compensation shall be limited on an annual basis, for the purposes of this Plan, to the amount specified in accordance with Code Section 401(a)(17), as adjusted under Code Section 415(d).
      (13)   "Council" means the Council of the Borough.
      (14)   "Credited service" means a participant's total years of service accumulated as an employee in employment. "Credited service" shall include each period of active employment and each period of time during which an employee is on an authorized leave of absence. "Credited service" shall not include any period of time during which an employee failed or refused to make required employee contributions pursuant to Section 292.03(a).
         A.   The Plan shall provide, to participants retiring on/after January 1, 2003, full service credit for each year of military service or fraction thereof, not to exceed five years, to any member of the Plan who was not employed by the political subdivision prior to such military service. The amount due for the purchase of credit for military service other than intervening military service shall be computed by applying five per centum (5%), to the member's average annual rate of compensation over the first three years of municipal service and multiplying the result by the number of years and fractional part of a year of creditable nonintervening military service being purchased together with interest at the rate of four and three-quarters per centum (4.75%) compounded annually from the date of payment.
         B.   The Plan shall provide, to participants retiring on/after October 1, 2019, the option to purchase full service credit for the period(s) when a participant is on an authorized leave of absence. The amount due for the purchase of such time shall be computed by using the participant's base hourly rate, and an 8 hour day (40 hour work week). The result will then be divided by the rate of employee contributions times the number of days/weeks the participant was on such authorized leave of absence.
(Ord. 2138. Passed 3-15-93; Ord. 2318. Passed 2-17-03; Ord. 2565. Passed 9-17-19.)
      (15)   "Early retirement age" means the date a participant completes at least twenty years of credited service.
(Ord. 2224. Passed 12-29-97.)
      (16)   "Employee" means any individual employed by the employer as a regular, full-time employee who is entitled to receive a regular stated salary or wage, excluding any pension, retainer or fee under contract. Any police officer, fire-fighter or individual covered under another retirement plan or program sponsored by the employer shall be excluded as an employee under this Plan.
      (17)   "Employer" means the Borough.
      (18)   "Employment" means any period of time in which an employee renders services for the employer for which the employee is entitled to receive compensation. "Employment" shall exclude any period of time in which services are performed as an independent contractor paid on a contractual or fee basis.
(Ord. 2138. Passed 3-15-93.)
      (19)   "Final monthly average compensation" means for participants retiring after December 29, 2001,the average monthly compensation earned by the participant during the highest 36-month period of employment. Only full months of active service shall be included in the averaging period. Payments made to the participant which are directly attributable to active employment during the averaging period (i.e., payment of unused/earned vacation, longevity, and unused personal days), shall be included for the purpose of determining the participant’s final monthly average compensation.
(Ord. 2253. Passed 9-2-99; Ord. 2290. Passed 12-29-01; Ord. 2321. Passed 3-17-03; Ord. 2356. Passed 9-20-04; Ord. 2538. Passed 8-21-17.)
      (20)   "Minimum Municipal obligation" means the minimum obligation of the Municipality as determined by the actuary pursuant to the provisions of the Act.
      (21)   "Non-union member" means an employee whose terms and conditions of employment are not subject to the provisions of a collective bargaining agreement.
      (22)   "Normal form" means the usual and customary form of payment of a normal retirement benefit, as further described in Section 292.05(a).
(Ord. 2138. Passed 3-15-93.)
      (23)   "Normal retirement age" means, for any employee hired after December 29, 1997, age sixty-five or completion of twenty years of credited service. For any employee hired prior to December 29, 1997, "normal retirement age" shall mean either age sixty-five or the completion of twenty years, or, in the case of a non-Union employee, the date a participant obtains sixty years of age and completes at least fifteen years of credited service. In the case of a Union employee, the date a participant obtains sixty-five years of age or completes at least twenty years of credited service shall be deemed to be "normal retirement age." Those employees employed prior to December 29, 1997, shall have the option of these definitions for normal retirement age. In the case of a Union employee, during the period January 31, 2009 through March 31, 2009 the date a participant obtains either sixty-five years of age or completes at least seventeen years of credited service shall be deemed to be "normal retirement age". (Ord. 2246. Passed 11-16-98; Ord. 2438. Passed 2-16-09.)
      (24)   "Notice" or "election" means a written document prepared in the form specified by the Plan Administrator and delivered as follows: if such notice or election is to be provided by the employer or the Plan Administrator, it shall be mailed in a properly addressed envelope, postage prepaid, to the last known address of the person entitled thereto, on or before the last day of the specified notice or election period, or, if such notice or election is to be provided to the employer or the Plan Administrator, it must be received by the recipient on or before the last day of the specified notice or election period.
      (25)   "Participant" means any employee who has commenced participation in the Plan in accordance with Section 292.02 and who has not, for any reason, ceased to participate hereunder.
      (26)   "Pension Fund" means the assets of the Plan, which shall be accounted for separately from the assets of any other plans maintained by the employer, whether actually held separately or commingled with the assets of another plan, and which shall be administered under the supervision of the employer in accordance with the terms of the Plan and applicable law.
       (27)   "Pension Plan Committee" or "Committee" means the Committee appointed by Council, pursuant to the provisions of Section 292.08(b), which shall be responsible for the administration of the Plan.
      (28)   "Plan" means the Borough of Ellwood City Municipal Employees' Pension Plan, as set forth in this chapter and as may be amended from time to time hereafter.
      (29)   "Plan Administrator" means the person or persons appointed by Council for the purpose of supervising and administering the Plan. If no person is so appointed, the Plan Administrator shall be Council.
      (30)   "Plan year" means the consecutive twelve-month period beginning on January 1 and ending on December 31 of each year.
      (31)   "Restatement date" means January 1, 1993, the effective date of the Plan, as hereby amended and restated.
      (32)   "Total and permanent disability" means a condition of physical or mental impairment which renders a participant unable to perform a duty of gainful employment for which the participant is suited by training, education or experience, which is expected to last until the death of the participant and which occurs after the participant has attained age fifty and completed at least fifteen years of credited service. Total and permanent disability shall be determined by the Plan Administrator, based upon such evidence as the Plan Administrator shall deem appropriate in his or her or its sole discretion.
      (33)   "Union member" means an employee whose terms and conditions of employment are governed by the provisions of a collective bargaining agreement.
      (34)   "Year of service" means each completed twelve-month period of employment as calculated from the employee's anniversary date and pro-rated for each completed full month from anniversary date of service thereafter. (Ord. 2138. Passed 3-15-93; Ord. 2296. Passed 3-18-02.)
292.02   ELIGIBILITY REQUIREMENTS.
   (a)   In General. Each employee who was a participant in the Plan on the day prior to the restatement date shall continue to be a participant on and after the restatement date, subject to the terms and conditions of the Plan as set forth herein. All other persons shall become participants on the first day of employment, provided that the participant completes all necessary forms authorizing payroll deduction of employee contributions.
   (b)   Participation Requirements. Each participant hereunder shall be required to make contributions to the Plan, as provided in Section 292.03(a), and shall execute and complete any enrollment or application forms as required by the Plan Administrator authorizing payroll deduction of such contributions. No employee shall be eligible to participate hereunder until any and all such forms are completed and delivered to the Plan Administrator.
   (c)   Re-Entry. Each person who had previously been an active participant in the Plan and who had ceased being an active participant, for any reason, shall be eligible to participate pursuant to subsection (a) hereof as of the date such eligibility requirements are met.
   (d)   Change in Status. If a participant who remains in the service of the employer ceases to be an employee eligible for participation hereunder, or ceases or fails to make any contributions which are required as a condition of participation hereunder, no further benefit accruals shall occur until the participant again qualifies under such participation requirements.
   (e)   Leave of Absence. During any leave of absence that is not an authorized leave of absence, a participant shall be deemed an inactive participant and shall not be given credit for years of service for vesting, nor shall any benefits accrue hereunder. If the employee is not re-employed by the expiration of the leave of absence, participation in the Plan shall cease on the date on which the leave of absence commenced.
   (f)   Furnishing of Information. The employer shall furnish the Plan Administrator with such information as will aid the Administrator in the administration of the Plan. Such information shall include all pertinent data on employees for purposes of determining their eligibility to participate in this Plan initially and subsequently.
(Ord. 2138. Passed 3-15-93.)
292.03   CONTRIBUTIONS.
   (a)   Employee Contributions. As a condition of participation in the Plan, each employee shall contribute to the Plan by payroll deduction. Each member shall contribute an amount equal to one percent of the member's compensation. Each employee must have executed the appropriate documents authorizing the employer to deduct the contributions from the pay of the employee. Such contributions shall be required until such time as the employer, consistent with any provisions of applicable law, shall reduce or eliminate the requirement. A participant who is on an authorized leave of absence shall have the obligation to contribute hereunder waived during the period of such authorized leave of absence.
(Ord. 2224. Passed 12-29-97.)
   (b)   Employer Contributions. The employer shall contribute to the Plan the amount determined by the Plan's actuary and certified by the Chief Administrative Officer as the amount which is necessary to adequately fund the benefits hereunder, in accordance with the requirements of the Act, as provided in Section 292.12(b). The contributions of the employer for a given year may be reduced by other contributions to the Plan, including, but not limited to, employee contributions, State aid contributions or gifts.
   (c)   State Aid Contributions. Payments of general Municipal pension system State aid, or any other amount of State aid payments in accordance with the Act, which are received by the employer and deposited into the Pension Fund, shall be used to the extent permitted pursuant to the Act to reduce the unfunded liability or, after such liability has been funded, to apply against the annual obligation of the employer for future service costs or, to the extent that the payment may be in excess of such obligation, to reduce employee contributions hereunder.
   (d)   Gifts. To the extent permitted by law, the Plan Administrator may accept gifts, outright or in trust, for deposit into the Pension Fund. The application of such gifts shall be governed by the rules of the Plan and such directions prescribed by the donor as are not inconsistent with the rules of the Plan and applicable law. Such gifts shall be applied in the same manner as State aid contributions.
   (e)   Use or Diversion of Assets. At no time shall it be possible for the Plan assets to be used for, or diverted to, any purpose other than for the exclusive benefit of the participants and their beneficiaries, except that contributions made by the employer may be returned to the employer if the contribution was made due to a mistake of fact and the contribution is returned within one year of the mistaken payment of the contribution, or the Plan is terminated, as provided in Section 292.11.
(Ord. 2138. Passed 3-15-93.)
292.04   RETIREMENT BENEFITS.
   (a)   Normal Retirement. A participant who retires upon attainment of normal retirement age shall be entitled to receive a monthly retirement benefit, in an amount equal to 1.3 percent of the participant's final monthly average compensation multiplied by the participant's credited service paid in the normal form, commencing on the first day of the month coincident with or next following the date of retirement.
(Ord. 2224. Passed 12-29-97.)
   (b)   Early Retirement. A participant who terminates employment after attaining early retirement age, but prior to attainment of normal retirement age, shall be entitled to a monthly retirement benefit, commencing on the first day of any month prior to the date on which attainment of normal retirement age would occur if the participant continued in employment until such date, in an amount equal to the participant's accrued benefit at the date of termination of employment, paid in the normal form actuarially reduced for early commencement. Such actuarial reduction for early commencement shall be in an amount equal to one-half of one percent for each month that the payment commencement date precedes the date the participant would attain normal retirement age.
   (c)   Late Retirement. A participant who retires after the first day of the month coincident with or next following the date on which normal retirement age has been attained shall receive a retirement benefit pursuant to subsection (a) hereof in an amount equal to the amount calculated as of the date on which actual retirement occurs.
   (d)   Disability Retirement. A participant who has incurred a total and permanent disability, which causes such participant to cease active employment with the employer before the attainment of normal or early retirement age, shall be eligible to receive a disability retirement benefit under this Plan. The disability retirement benefit shall be in an amount equal to the participant's accrued benefit determined as of the date of disability. The disability retirement benefit shall be paid monthly until the earliest of the death of the participant or cessation of total and permanent disability.
   The employer may require proof of continued disability, but not more frequently than once in any twelve-month period. Any participant who refuses to submit to a medical examination or furnish proof of continued disability upon the request of the employer shall cease to be eligible for receipt of a disability retirement benefit. A participant who does not resume employment upon cessation of total and permanent disability shall be deemed to have terminated employment as of the date the total and permanent disability commenced, and any benefits due pursuant to Section 292.06 shall be reduced by the value of the benefits received hereunder.
   (e)   Application for Benefit. A participant must complete and execute an application for benefit, on a form and in the manner prescribed by the Plan Administrator, and deliver the said application to the Plan Administrator at least thirty days prior to the date on which benefit payments are to commence. Notwithstanding anything contained herein to the contrary, no retirement benefit payments or any other benefit payments shall be due or payable on or before the first day of the month coincident with or next following the date that is thirty days after the date the Plan Administrator receives the application for benefit.
   (f)   Non-Duplication of Benefit. A participant who shall be receiving a monthly retirement benefit under this Plan, and who shall resume employment as an employee, shall have benefit payments suspended until the first day of the month coincident with or next following the date such employment shall cease. Such benefit payments shall be adjusted to reflect any additional years of credited service which may have accrued prior to the resumption of payment of benefits.
   (g)   Small Amounts. If the Plan Administrator determines that the value of a participant's accrued benefit is so small as to make monthly pension payments administratively impractical, the Plan Administrator may cause such payments to be made at such other periodic intervals as are administratively practical, but no less frequently than annually, or may make a single lump sum payment equal to the commuted value of such accrued benefit to the extent permitted under applicable law.
   (h)   Cessation of Benefit Payments. Any pension benefit payable hereunder shall be payable through and including the later of the month in which such participant's death occurs or the month in which any period certain payments due on or after the participant's death have been paid. Any survivor annuity payable on or after the participant's death, in accordance with the form of pension benefit elected, shall be paid through the month in which such surviving annuitant's death occurs.
   (i)   Special Provision for Restated Plans. The benefit amount of any participant who may have retired prior to the restatement date shall not be in any way altered by the provisions of this Plan, except where otherwise expressly indicated herein, and shall continue to be determined on the basis of the terms of the Plan in effect on the day preceding the restatement date.
   (j)   Maximum Benefit Limitations.
      (1)   Notwithstanding any provision of this Plan to the contrary, no benefit provided under this Plan attributable to contributions of the employer shall exceed, as an annual amount, the lesser of:
         A.   The amount specified in Code Section 415(b)(1)(A), as adjusted pursuant to Code Section 415(d), assuming the form of benefit shall be a straight life annuity (with no ancillary benefits); or
         B.   One hundred percent of the participant's average compensation for the participant's high three years.
      (2)   The limitations described in paragraph (j)(1) hereof shall be governed by the following conditions and definitions:
         A.   "Compensation" shall include the participant's wages, salaries and fees for personal services actually rendered in employment, to the extent that the amounts are includable in gross income, and shall exclude contributions made by the employer to a plan of deferred compensation, to the extent that, before the application of Code Section 415 limitations to that plan, the contributions are not includable in the gross income of the employee for the taxable year in which contributed; exclude distributions from a qualified plan of deferred compensation; and exclude other amounts which receive special tax benefits, such as premiums for group term life insurance, to the extent not includable in the gross income of the employee, or contributions made by the employer (whether made under a salary reduction agreement or not) to the purchase of an annuity contract pursuant to Code Section 403(b).
         B.   Benefits paid or payable in a form other than a straight life annuity (with no ancillary benefits), or where the employee contributes to the Plan or makes rollover contributions, shall be adjusted on an actuarially equivalent basis to determine the limitation contained herein.
         C.   In the case of a benefit which commences prior to the attainment of age sixty-two by the participant, the limitation set forth in paragraph (j)(1)A. hereof shall be adjusted on an actuarially equivalent basis to the amount determined pursuant to paragraph (j)(1)A. hereof commencing at age sixty-two. However, the reduction shall not reduce the limitation below seventy-five thousand dollars ($75,000) for a benefit commencing at or after age fifty-five, or, if the benefit commences prior to the attainment of age fifty-five, the amount which is actuarially equivalent to a benefit of seventy-five thousand dollars ($75,000) commencing at age fifty-five.
         D.   In the case of a benefit which commences after the attainment of age sixty-five by the participant, the limitation set forth in paragraph (j)(1)A. hereof shall be adjusted on an actuarially equivalent basis to the amount determined pursuant to paragraph (j)(1)A. hereof commencing at age sixty-five.
         E.   Benefits paid to a participant which total less than ten thousand dollars ($10,000) from all defined benefit plans maintained by the employer, expressed as an annual benefit, shall be deemed not to exceed the limitation of this section, provided that the employer has not, at any time, maintained a defined contribution plan in which the participant has participated. However, in the case of a participant with fewer than ten years of participation, the limitation expressed in this paragraph shall be reduced by one-tenth for each year of participation less than ten, but in no event shall this limitation be less than one thousand dollars ($1,000).
         F.   The limitations expressed herein shall be based upon Plan years for calculation purposes, shall be applied to all defined benefit plans maintained by the employer as one defined benefit plan and to all defined contribution plans maintained by the employer as one defined contribution plan, and shall be applied and interpreted, consistent with Code Section 415 and regulations thereunder, as applicable to government plans in general and this Plan in particular.
(Ord. 2138. Passed 3-15-93.)
   (k)   Additional Benefits for Qualified Participants. A "participant" who attains a normal retirement, early retirement, late retirement, disability retirement or a payable death benefit, or terminates on or after January 1, 2000, shall be entitled to receive an additional monthly retirement benefit provided that they had contributed an extra one percent from gross earnings from their date of hire until January 5, 1998, at which time an ordinance was changed that authorized all members to contribute the same percentage and further granted retirement eligibility upon completion of twenty years of credited service. Furthermore, only those qualifying participants who retire after January 1, 2000, shall be entitled to an additional benefit to be determined by accumulating the excess employee contributions with interest until the date of retirement and calculating the actuarial equivalent annuity benefit in accordance with Section 292.01 of the Plan.
(Ord. 2323. Passed 3-17-03; Ord. 2336. Passed 10-20-03.)
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