The following words and phrases as used in this Plan shall have the meaning set below unless a different meaning is otherwise clearly required by the context:
(a) (1) "Accrued benefit" means the amount of retirement benefit credited to the participant determined in accordance with Section 286.04 calculated on the basis of the participant's final monthly average salary determined as of such date and multiplied by a fraction, the numerator of which shall be the participant's completed years of service as of such date and the denominator of which shall be the number of years of service which are required to be completed by the participant to attain normal retirement age under the Plan. Notwithstanding anything contained herein to the contrary, in no event shall the fraction exceed one.
(2) In no event, however, shall the "accrued benefit" exceed the maximum limitation, determined as of the date of computation, provided under Section 286.04(d). All accrued benefits are subject to all applicable limitations, reductions, offsets, and actuarial adjustments provided by the Plan prior to the actual payment thereof and no accrued benefits shall be paid unless the participant satisfies all requirements hereunder for entitlement to receive such benefit.
(b) "Act" means the Municipal Pension Plan Funding Standard and Recovery Act, enacted as P.L. 1005 (Act 205 of 1984), as the same may be amended from time to time.
(c) "Actuarial equivalent" shall mean a form of benefit differing in time, period, or manner of payment from a specific benefit provided under the Plan, but having the same value when computed using the applicable mortality table with interest computed at 7.5 percent. The applicable mortality table is the mortality table described in Revenue Ruling 95-6, 1955-1 C.B. 80.
(d) "Actuarially sound" means a plan which is being funded annually at a level not lower than the financial requirements of the Plan pursuant to the Act.
(e) "Actuary" means the person, partnership, association or corporation which at any given time services as actuary to the Plan; provided that such actuary must be an "approved actuary" as defined in the Act.
(f) "Age" means the age of a participant computed as of his or her last birthday.
(g) "Anniversary Date" means January 1 of each year following the effective date of the Plan.
(i) "Chief Administrative Officer" means the person who has primary responsibility for the execution of the administrative affairs of the Plan, subject to the limitations and qualifications of Act 205.
(j) "City Council" or "Council" means the governing body of the employer.
(k) "Code" means the Internal Revenue Code of 1986, as amended or replaced from time to time.
(l) "Commission" means the Police Pension Fund Commission which shall be composed of the Mayor, the Director of Accounts and Finance, the City Treasurer and three members of the Police Force (one of whom shall be the Chief of Police and the others shall be selected by the Police Force) and one citizen selected by Council.
(m) "Compensation" means:
(1) A. The fixed monthly rate of remuneration paid at regular, periodic intervals to an employee by the employer with respect to his or her personal services as an employee and from which pension contributions have been deducted which includes base pay and longevity pay but excludes court pay, overtime and any other remunerations. Pursuant to Appendix A, certain retirement eligible participants may include accumulated sick days in compensation. See Appendix A for conditions and limitations.
B. In addition to other applicable limitations set forth in the Plan, and notwithstanding any other provision of the Plan to the contrary, for plan years beginning on or after January 1, 1994, the annual compensation of each employee taken into account under the Plan shall not exceed the OBRA'93 annual compensation limit. The OBRA'93 annual compensation limit is one hundred fifty thousand dollars ($150,000), as adjusted by the Commissioner for increases in the cost- of-living in accordance with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which compensation is determined (determination period) beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA'93 annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12.
C. For Plan years beginning on or after January 1, 1994, any reference in this Plan to the limitation under Section 401(a)(17) of the Code shall mean the 401(a)(17) limit as adjusted by law.
D. If compensation for any prior determination period is taken into account in determining an employee's benefits accruing in the current Plan year, the compensation for that prior determination period is subject to the OBRA'93 annual compensation limit in effect for that prior determination period. For this purpose, for determination periods beginning before the first day of the first Plan year beginning on or after January 1, 1994, the OBRA'93 annual compensation limit is one hundred fifty thousand dollars ($150,000).
(2) For purposes of the maximum benefit limitations of Code Section 415 (Sections 286.04(d), 286.04(e) and 286.04(f)), compensation shall include the participant's wages, salaries, fees for professional services and other amounts received for personal services actually rendered in the course of employment with an employer maintaining the Plan (including, but not limited to, compensation for services on the basis of a percentage of profits, commissions, tips and bonuses) paid during the limitation year. Compensation does not include: employer contributions to a qualified retirement plan, pick-up contributions under Code Section 414(h)(2), a nonqualified deferred compensation plan or a simplified employee pension plan; income received from the disposition of stock pursuant to the exercise of a qualified stock option; income realized upon the exercise of a nonqualified stock option or upon the lapse of substantial forfeiture provisions or nontransferability provisions on previously restricted property (as defined under Code Section 83); premiums paid by the employer for group life insurance to the extent not includable in the participant's gross income; and employer contributions (whether or not under a salary reduction agreement), towards the purchase of a tax-sheltered annuity contract (as described in Code Section 403(b)). Compensation shall commence as of an employee's effective date of participation pursuant to Section 286.02(a).
(n) "Effective date" means the date of this amendment and restatement of the Plan which is January 1, 2001.
(o) "Employee" means any full time member of the Police Department of the employer.
(p) "Employer" means the City of Sharon.
(q) "Entry date" means the date on which an employee first completes an hour of service.
(r) "Fiduciary" or "named fiduciary" means any person who, with respect to this Plan:
(1) Exercises any discretionary authority or discretionary control respecting management of such Plan or exercises any authority or control respecting management or disposition of its assets;
(2) Renders investment advice for a fee or other compensation direct or indirect, with respect to any monies or other property of such Plan, or has any authority or responsibility to do so; or
(3) Has any discretionary authority or discretionary responsibility in the administration of the Plan.
(s) "Final monthly average salary" means the greater of:
(1) The rate of the participant's monthly compensation as of the date of retirement, death or termination of employment; or
(2) The sum of the compensation received by a participant during the five highest years as an active participant prior to his or her retirement date, death, or termination of employment with the employer divided by 60.
(t) "Former participant" means a person who has been a participant, but has ceased to be a participant for any reason. Any participant with a vested interest who is no longer employed by the employer shall also be considered a former participant.
(u) "Married participant" means a participant who is married when a benefit is payable.
(v) "Normal retirement age" means the later of 20 years of continuous service and age 50. A participant shall have a 100 percent nonforfeitable vested interest in his or her accrued benefit upon attainment of his or her normal retirement age. Normal retirement date shall mean retirement after reaching normal retirement age.
(w) "Participant" means any employee who has met any eligibility requirements to participate in the Plan and who has not for any reason ceased to be a participant hereunder.
(x) "Pension fund" shall mean the assets of this Plan administered under the terms, rules and regulations of the Commission as set forth in Section 286.09 and Act 205, and which shall include all money, property, investments, policies and contracts that are a part of the Plan.
(y) "Pick-up contribution account" means an account established pursuant to Section 286.03(b) of the Plan. Pick-up contributions shall be made pursuant to Section 414(h)(2) of the Code and shall be made on a pre-tax basis for Federal Income Tax purposes.
(z) "Plan" means the defined benefit pension plan set forth herein (including any trust forming a part hereof), as amended and supplemented from time to time, all of which shall be known as the City of Sharon Police Pension Plan.
(aa) "Plan year" means each 12-month period beginning on January 1 and ending on the following December 31 (also applicable prior to the effective date of the Plan).
(bb) "Regulations" means U.S. Treasury Regulations issued pursuant to the Code.
(cc) "Retirement date" means the date of actual retirement of a participant which may be his or her normal, late or disability retirement date, whichever is applicable to him pursuant to Section 286.05 of the Plan.
(dd) "Service" means the total period or periods the participant is an employee of employer excluding any leave of absence granted by Council, but including time spent in any state or Federal government agency pursuant to legislative regulations requiring said police officer's service. Any participant who actively served in the Armed Forces of the United States subsequent to September 1, 1940, and who was not a participant prior to such military service, may be entitled to have full credit for each year or fraction thereof, not to exceed five years of such service upon his or her payment to the pension fund of an amount equal to that which he would have paid had he or she been a participant during the period for which he or she desires credit, and his or her payment to the pension fund of an additional amount as the equivalent of the contributions of the employer on account of such military service.
(ee) "Vested interest" means a member of the association who has attained ten or more years of service shall obtain a vested interest in the Plan.
(Ord. 01-02. Passed 4-8-02.)