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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 a full-time member of the Police Department of the Employer hired prior to January 1, 2008. Any member of the Police Department of the Employer who is classified as a part-time, per diem, or seasonal employee shall not be an Employee for the purposes of this Plan and is ineligible to participate in this Plan.
(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; Ord. 10-23. Passed 11-19-23.)
Any employee who was a participant as of the effective date of this amendment and restatement of the Plan shall continue to participate in the Plan. Thereafter, any employee upon his or her employment will become a participant provided that such employee contributes to this Plan pursuant to Section 286.03.
(Ord. 01-02. Passed 4-8-02.)
(a) Contributions by Employer.
(1) The employer shall contribute to the Plan for investment at least such amounts as are necessary to satisfy the minimum funding standards of Act 205. The employer contribution shall include funds received by the employer through Act 205 of the laws of the Commonwealth of Pennsylvania (these funds must be contributed to the Plan by the employer within 31 days after receipt).
(2) The expenses of administering the Plan may be paid directly by the employer if it so elects. Otherwise such expenses shall be paid out of the Pension Fund.
(b) Contributions by Participants.
(1) Monthly contributions. Except as may be modified through collective bargaining, participants shall contribute monthly an amount equal to:
A. Four percent of monthly compensation; plus
B. One percent of monthly compensation for the widow's benefit; plus
C. Up to one-half percent of monthly compensation not to exceed twelve dollars ($12.00) per year for the service increment which shall be contributed until a participant reaches age 65.
(2) No participant shall have the option of choosing to receive these contributions in cash instead of having them paid by the employer to the Plan.
(3) Commencement of contributions. Contributions commence with the employer pay period coincident with or next following the entry date upon which an employee completes the forms necessary to authorize the employer to deduct the contributions required by this section from the pay of the participant. The employer shall deposit these contributions to the Plan as they are contributed.
(4) Termination of contributions. Contributions shall terminate at retirement, disability, death or termination of employment. The contribution described in division (b)(1)C. of this section shall be payable until the participant reaches age 65.
(5) Return of contributions: If a participant terminates employment prior to achieving a vested interest in the Plan, he or she shall be entitled to the return of his or her contributions in accordance with the provisions of Section 286.08(b).
(6) Pick-up contributions. The employer may, by Resolution, designate employer contributions as pick-up contributions pursuant to Section 414(h)(2) of the Code.
(Ord. 01-02. Passed 4-8-02; Ord. 01-15. Passed 2-19-15.)
(a) Normal Retirement Benefit.
(1) The amount of monthly retirement benefit to be provided far each participant who retires on his or her normal retirement date (which benefit is herein called his or her normal retirement benefit) shall be equal to:
A. Fifty percent of the final monthly average salary at retirement; plus
B. One-fortieth of the above pension amount multiplied by each full year of service after 20 years of service but earned prior to age 65 (not to exceed three hundred dollars ($300.00) per month) ("service increment").
(b) Normal Form of Benefit. The normal retirement benefit payable to a retired participant pursuant to division (a) of this section shall be a monthly pension commencing on his or her retirement date and continuing after his or her death to the survivor as set forth in Section 286.07(c).
(c) Relationship to Social Security. No change in the Social Security Act after the date of a participant's separation from service shall affect the benefits as described under this Plan.
(d) Maximum Benefits.
(1) Subject to exceptions below, the maximum annual benefit payable to a participant under this Plan in any limitation year shall equal ninety thousand dollars ($90,000).
(2) For purposes of this Plan, "annual benefit" means the benefit which would be payable in the form of a straight life annuity with no ancillary benefit or a qualified joint and survivor annuity.
(3) Preservation of current accrued benefit under the Plan.
A. In general, this division (d)(3) shall apply to defined benefit plans that were in existence on May 6, 1986, and that met the applicable requirements of Code Section 415 as in effect for all limitation years.
B. If the current accrued benefit of an individual who is a participant as of the first day of the limitation year beginning on or after January 1, 1987, exceeds the benefit limitations under Code Section 415(6)9 then for purposes of Code Section 415(6) and (e), the defined benefit dollar limitation with respect to such individual shall be equal to such current accrued benefit.
C. "Current accrued benefit" shall mean a participant's accrued benefit under the Plan, determined as if the participant had separated from service as of the close of the last limitation year beginning before January 1, 1987, when expressed as an annual benefit within the meaning of Code Section 415(6)(2). In determining the amount of a participant's current accrued benefit, the following shall be disregarded:
1. Any change in the terms and conditions of the Plan after May 5, 1986; and
2. Any cost-of-living adjustment occurring after May 5, 1986.
(4) The dollar limitation under Code Section 415(b)(1)(A) stated in division (a)(1) of this section shall be adjusted annually as provided in Code Section 415(d) pursuant to the Regulations and IRS Pronouncements. The adjusted limitation is effective as of January 1 of each calendar year and is applicable to limitation years ending with or within that calendar year.
(5) Applicable limitations above for participants who have separated from service with a nonforfeitable right to an accrued benefit shall be adjusted annually as provided in Code Section 415(d) pursuant to the Regulations prescribed by the Secretary of the Treasury.
(6) For purposes of divisions (d) and (e) of this section, all defined benefit plans of the employer, whether or not terminated, are to be treated as one defined benefit plan and all defined contribution plans of the employer, whether or not terminated, are to be treated as one defined contribution plan of the employer.
(7) In the case of a group of related employers, all such employers shall be considered a single employer for purposes of applying the limitation of Section 415 of the Code.
(8) To the extent applicable, the above provisions and limitations shall be governed by Code Section 415(b)(2)(F) and Code Section 415(b)(2)(G).
(e) Adjustments to Annual Benefit and Limitations.
(1) If the annual benefit begins before the participant's and new Plan participant's Social Security retirement age, then the ninety thousand dollar ($90,000) limitation shall be reduced in such manner as the Secretary of the Treasury shall prescribe which is consistent with the reduction for old-age insurance benefits commencing before the Social Security retirement age.
(2) Notwithstanding division (a) of this section, for limitation years beginning prior to January 1, 1987, the ninety thousand dollar ($90,000) limit shall not be reduced if the annual benefit begins on or after age 62. If the annual benefit begins before age 62, the ninety thousand dollar ($90,000) limitation (but not the 100 percent of compensation limitation) shall be reduced so that it is the actuarial equivalent of the ninety thousand dollar ($90,000) limitation beginning at age 62. However, the ninety thousand dollar ($90,000) limitation shall not be reduced to less than:
A Seventy-five thousand dollars ($75,000) if the annual benefit commences on or after age 55; or
B. The amount which is the actuarial equivalent of seventy-five thousand dollars ($75,000) at age 55 if the annual benefit commences prior to age 55.
For purposes of adjusting the ninety thousand dollar ($90,000) limitation applicable prior to age 62 or the seventy-five thousand dollar ($75,000) limitation prior to age 55, the adjustment shall be based on an interest rate assumption of five percent and no mortality decrement. The above adjustment shall not apply in the case of a survivor benefit or a disability benefit.
(3) If the annual benefit begins after the participant's and new Plan participant's Social Security retirement age (or for limitation years beginning prior to January 1, 1987, age 65), the ninety thousand dollar ($90,000) limitation shall be increased so that it is the actuarial equivalent of the ninety thousand dollar ($90,000) limitation at the participant's and new Plan participant's Social Security retirement age (or for limitation years beginning prior to January 1, 1987, age 65). For purposes of adjusting the ninety thousand dollar ($90,000) limitation applicable after the participant's Social Security retirement age (or for limitation years beginning prior to January 1, 1987, age 65), the adjustment shall be based upon an interest rate assumption of five percent and no mortality decrement. In no event, however, shall the aforesaid dollar limitation be reduced to an amount less than that required by the Code and the above limitations shall not apply to survivor or disability pensions paid pursuant to the Plan.
(4) For purposes of adjusting any annual benefit under divisions (d)(2), (e)(1), (e)(2) and/or (e)(3) of this section, no adjustments shall be taken into account before the limitation year for which such adjustment first takes effect. For purposes of employing any limitation, a separate limitation may apply to police and firefighters.
(5) A. If a participant who is not receiving a disability benefit under the Plan has less than ten years of participation in the Plan at the time he or she begins to receive benefits under the Plan, the ninety thousand dollar ($90,000) limitation shall be reduced by multiplying such limitation by a fraction:
1. The numerator of which is the number of years of participation (or part thereof) in the Plan; and
2. The denominator of which is ten, provided that said fraction shall in no event be less than one-tenth.
B. Notwithstanding the foregoing, for limitation years beginning prior to January 1, 1987, if a participant has fewer than ten years of service with the employer at the time he or she begins to receive benefits under the Plan, the maximum annual benefit payable to the retired participant shall be reduced by multiplying such maximum annual benefit by a fraction:
1. The numerator of which is the number of years of service, or part thereof, with the employer; and
2. The denominator of which is ten.
(6) Notwithstanding other limitations of this section with respect to a participant included under the prior provisions of this Plan, the maximum benefit computed under this section shall be a participant's accrued benefit payable under the Plan provisions in effect at the close of the last Plan year beginning before January 1, 1983, if such accrued benefit is greater than the maximum annual benefit provided for in Section 286.04 based upon his or her rate of compensation under the Plan in effect as of such date and based on the years of service to the date his or her employment is terminated. For purposes of calculating a participant's accrued benefit under this division, no changes in the terms and conditions of the plan after July 1, 1982, and no cost-of-living adjustments after July 1, 1982, shall be taken into account.
(f) Multiple Plan Reduction The provisions contained in this division (f) shall not apply to Plan limitation years after 1999.
(1) A. If a participant has at any time participated in one or more defined benefit plans and one or more defined contributions plans maintained by the employer, the sum of the defined benefit plan fraction and the defined contribution plan fraction for any limitation year may not exceed 1.0. In the case of an individual who was a participant in one or more defined benefit plans of the employer as of the first day of the first limitation year beginning after December 31, 1986, the application of the limitations of this section shall not cause the maximum permissible amount for such individual under all such defined benefit plans to be less than the individual's current accrued benefit. The preceding sentence applies only if such defined benefit plans met the requirements of Code Section 415, for all limitation years beginning before January 1, 1987.
B. The defined benefit plan fraction for any limitation year is a fraction, the numerator of which is the participant's projected annual benefit under the Plan (determined as of the close of the limitation year pursuant to Regulations 1.415-7(b)(3)), and the denominator of which is the lesser of:
1. The product of 1.25 multiplied by the maximum dollar limitation in effect under Code Section 415(b)(1)(A) for such limitation year; or
2. The product of 1.4 multiplied by the amount which may be taken into account under Code Section 415(b)(1)(B) for such limitation year.
C. The defined contribution plan fraction for any limitation year is a fraction, the numerator of which is the sum of the annual additions to the participant's accounts for such limitation year and for all prior limitation years, and the denominator of which is the sum of the lesser of the following amounts determined for such year and each prior year of service with the employer:
1. The product of 1.25 multiplied by the dollar limitation in effect under Code Section 415(c)(1)(A) for such year (determined without regard to Code Section 415(c)(6)); or
2. The product of 1.4 multiplied by the amount which may be taken into account under Code Section 415(c)(1)(B) for such year.
D. For the purpose of this division, the term "participant's account" shall mean the account established and maintained for each participant with respect to his or her total interest in the defined contribution plan maintained by the employer resulting from annual additions.
E. The annual addition allocated to pay any participant's account under this Plan in a limitation year, plus all annual additions allocated to such participant under any other defined contribution plan of the employer for such limitation year, shall not exceed the lesser of (i) thirty thousand dollars ($30,000) (or such greater amount as may be determined by the Commissioner of Internal Revenue Service for Limitation Years ending on or after January 1, 1988, as a cost-of-living adjustment), or (ii) twenty-five percent of such participant's compensation.
F. "Annual additions" means the sum credited to a participant's account for any limitation year of:
1. Employer contributions;
2. Employee contributions;
3. Forfeitures;
4. Amounts allocated after March 31, 1984, to any individual medical account, as defined in Code Section 4150)(2) which is part of a pension of annuity plan maintained by the employer; and
5. Amounts derived from contributions paid or accrued after December 31, 1985, in taxable years ending after such date, which are attributable to post-retirement medical benefits allocated to a separate account of a key employee (as defined in Code Section 419A(d)(3)) under a welfare benefit plan (as defined in Code Section 419(e)) maintained by the employer.
G. Notwithstanding the foregoing, for Plan years beginning prior to January 1, 1987, only that portion of employee contributions equal to the lesser of employee contributions in excess of six percent of compensation or one-half of employee contributions shall be considered an annual addition.
H. The annual addition for any limitation year beginning before January 1, 1987, shall not be recomputed to treat all employee contributions as an annual addition.
I. If the Plan satisfied Code Section 415 as in effect for all limitation years beginning before January 1, 1987, an amount shall be subtracted from the numerator of the defined contribution plan fraction (not exceeding such numerator) as prescribed by the Secretary of the Treasury so that the sum of the defined benefit plan fraction and defined contribution plan fraction computed under Section 415(e)(1), as amended by the Tax Reform Act of 1986, does not exceed 1.0 for such limitation year.
J. For years beginning after December 31, 2001, annual additions shall be calculated in conformance with the Economic Growth and Tax Reconciliation Act of 2001.
(2) Except as specifically permitted in the Regulations of the Secretary of the Treasury under Section 415 of the Code, the benefits paid or payable at any time shall not exceed the limitations of division (a) of this section.
(3) Special rule for defined contribution fraction for defined contribution plan in effect on or before July 1, 1982. Council may elect, for any limitation year ending after December 31, 1982, that the amount taken into account in the denominator for every participant and new Plan participant for all limitation years ending before January 1, 1983, shall be an amount equal to the product of:
A. The denominator for the limitation year ending in 1982 determined under the law in effect for the limitation year ending in 1982, multiplied by,
B. The "transition fraction". The term "transition fraction" shall mean a fraction:
1. The numerator of which is the lesser of:
a. Fifty-one thousand eight hundred seventy-five dollars ($51,875); or
b. 1.4 multiplied by twenty-five percent of the participant's compensation for the limitation year ending in 1981; and
2. The denominator of which is the lesser of:
a. Forty-one thousand five hundred dollars ($41,500); or
b. Twenty-five percent of the participant's compensation for the limitation year ending in 1981.
C. Notwithstanding the foregoing, for any limitation year in which the Plan is a top heavy Plan, forty-one thousand five hundred dollars ($41,500) shall be substituted for fifty-one thousand eight hundred seventy-five dollars ($51,875) in determining the "transition fraction" unless the extra minimum benefit is provided pursuant to the Internal Revenue Code. However, for any limitation year in which this Plan is a top heavy plan, forty-one thousand five hundred dollars ($41,500) shall be substituted for fifty-one thousand eight hundred seventy-five dollars ($51,875) in any event.
(4) If the sum of the defined benefit plan fraction and the defined contribution plan fraction shall exceed 1.0 in any limitation year for any participant in the Plan, for reasons other than those described in division (f)(5) of this section, Council shall adjust the numerator of the defined benefit plan fraction so that the sum of both fractions shall not exceed 1.0 in any limitation year for such participant.
(5) If the substitution of 1.00 for 1.25 and forty-one thousand five hundred dollars ($41,500) for fifty-one thousand eight hundred seventy-five dollars ($51,875) above or the excess benefit accruals or annual additions provided for in Internal Revenue Service Notice 82-19 cause the 1.0 limitation to be exceeded for any participant in any limitation year, such participant shall be subject to the following restrictions for each future limitation year until the 1.0 limitation is satisfied:
A. The participant's accrued benefit shall not increase;
B. No annual additions may be credited to a participant's account; and
C. No employee contributions (voluntary or mandatory) shall be made under any defined benefit plan or any defined contribution plan of the employer.
(g) Incorporation of Code Section 415 by Reference. Notwithstanding anything contained in this chapter to the contrary, the limitations, adjustments, and other requirements prescribed in this chapter shall at all times comply with the provisions of Code Section 415 (as such apply to governmental plans) and the Regulations thereunder, the terms of which are specifically incorporated herein by reference. Thus, for the first 415 limitation year beginning after December 31, 1994, the applicable mortality table described in Rev. Ruling 956, 1995-1 C.B. 80 shall be utilized, and effective for Plan years beginning after December 31, 1997, the term compensation for Code Section 415 purposes, in accordance with Section 415(c)(3)(D) of the Code and Treasury Regulation Section 1.415-2(d), shall include (i) an elective deferral (as defined in Code Section 402(g)(3)), and (ii) any amount which is contributed or deferred by the employer at the election of the employee and which is includable in gross income of the employee by reason of Code Sections 125 or 457.
(h) Credit for Qualified Military Service. Notwithstanding any provisions of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code.
(Ord. 01-02. Passed 4-8-02; Ord. 01-15. Passed 2-19-15.)
(a) Normal Retirement. Each participant who retires from the employ of the employer on the first day of the calendar month coincident with or next following his or her normal retirement age ("normal retirement date") shall be entitled to receive the benefits provided for in Section 286.06(a).
(b) Late Retirement. A participant who remains in the employ of the employer after his or her normal retirement date shall continue to be a participant in the Plan until his or her actual retirement date ("late retirement date") and shall be entitled to receive the benefit provided for in Section 286.06(b).
(d) Vesting. A participant who terminates employment after at least ten years of service may be entitled to the vested retirement benefit set forth in Section 286.06
(c).
(e) Re-employment After Retirement. A participant who retires and who is receiving benefits hereunder and who returns to the employment of the employer after 1/1/2023, his or her compensation shall not be adjusted or reduced for the pension he or she is receiving.
(Ord 01-02. Passed 4-8-02; Ord. 10-23. Passed 11-15-23.)
(a) Normal Retirement Pension. Upon retirement at his or her normal retirement date, each participant shall be entitled to receive the benefit provided in Section 286.04
(a) (normal retirement benefit). At such time Council shall take any necessary action so that the participant shall receive such benefit from the Plan or directly from an insurer, as Council shall direct.
(b) Late Retirement Pension. A participant who remains in the employ of the employer beyond his or her normal retirement date shall be entitled to receive, commencing on his or her late retirement date, his or her benefit calculated pursuant to Section 286.04
(a) considering his or her final monthly average salary as of his or her late retirement date and crediting of service rendered through his or her late retirement date.
(c) Limited Vested Benefit.
(1) If a participant terminates his or her employment as a result of lay-off, voluntary quit or disability due to illness, prior to eligibility for retirement pension, and if such participant has, prior to the effective date of such termination, completed not less than ten full years of eligible service, then the participant's pension shall vest as follows:
Percentage of Final
Years of Service Monthly Average Salary
After 10 25%
After 11 27.5%
After 12 30%
After 13 32.5%
After 14 35%
After 15 37.5%
After 16 40%
After 17 42.5%
After 18 45%
After 19 47.5%
After 20 50%
(2) No benefit pursuant to this division (c) shall be under any circumstances payable prior to the police officer's attaining 55 years of age.
(3) Benefits payable pursuant to this division (c) are optional with the participant upon his or her termination. If the participant does not elect to vest pursuant to the provisions of this section, then amounts paid by the participant into the pension fund prior to the date of termination shall be refunded, in whole, to that participant without interest. The election to vest shall be made within 30 days of termination and shall be final and binding upon all parties.
(d) Disability Retirement Pension.
(1) Service-connected disability. A participant who becomes permanently and totally disabled as a result of a service-connected disability shall be entitled to a lifetime permanent disability pension equal to the normal retirement benefit including service increment.
(2) Non-service connected disability. A participant who dies or is totally disabled due to injuries or mental incapacity not in the line of duty who is unable to perform the duties of a police officer may be entitled to the following:
A. Less than ten years of service - 25% of final monthly average salary;
B. Ten years or more of service - 50% of final monthly average salary.
(3) Disability survivor benefit. Regardless of any contrary provision in Chapters 286
and 287
and in conformance with the bargained for agreement, the disability pension may be payable to the police officer during his lifetime and if he/she shall die, for families a continuation of the disability benefit payment to the spouse until death or remarriage, then to the child or children under age eighteen.
(e) Retirement Incentive Window. See Appendix A for the terms of a retirement incentive window.
(f) Increased Pension Allowance/Additional Increases. This Plan specifically recognizes the increased pension allowance and additional increases that were set forth in division (g) and (h) of the City of Sharon Code, Section 286.10
.
(g) Distribution of Benefits.
(1) Notwithstanding any provision in this Plan to the contrary, the distribution of a participant's benefits shall be made in accordance with the following requirements and shall otherwise comply with Code Section 401(a)(9) and the Regulations thereunder (including Regulation Section (1.401 (a) (9)-2):
A. A participant's benefits shall be distributed to him or her not later than April 1 of the calendar year following the later of:
1. The calendar year in which the participant attains age 70½; or
2. The calendar year in which the participant retires.
B. Alternatively, distributions to a participant must begin no later than the applicable April 1 as determined under the preceding sentence and must be made over a period not exceeding the life of the participant's or the life expectancy of the participant in accordance with Regulations. The above division (g)(1)A. shall not impact the benefit of any survivor or beneficiary.
(2) Distributions to a participant and his or her beneficiaries shall only be made in accordance with the incidental death benefit requirements of Code Section 401(a)(9)(G) and the Regulations thereunder.
(h) Time of Payment of Benefits.
(1) Unless elected otherwise as provided in division (b) of this section, payment of benefits must begin no later than 60 days after the close of the Plan year which the latest of the following events occurs:
A. The attainment of normal retirement age;
B. The termination of a participant's service with the employer.
(2) Payment of benefits shall begin on the date elected by the participant (subject to the restrictions of Subsection 286.06(f)). The election shall be made in writing, signed by the participant and submitted to the Commission, and shall describe the date on which payments are to begin.
(i) Minimum Monthly Pension Benefit. The minimum monthly pension benefit payable to a participant or his or her surviving spouse who is otherwise entitled to a monthly pension benefit under the terms of this Plan, shall be $1,000.00 per month. Upon the death of a surviving spouse or if no spouse survives the death of the participant, 50% of the minimum monthly pension (100% in the case of disability pensions) that would otherwise be payable to the participant or surviving spouse under this subsection, shall be paid to the surviving children of the participant in equal shares until the death or attainment of age 18 by each child. In the event that no spouse or children under the age of 18 survive the participant, no minimum benefit shall be payable under this section. The minimum monthly pension benefit payable under this subsection does not apply where there is a return of participant contributions pursuant to the terms of this Plan. There is no minimum monthly pension benefit payable under this section to a beneficiary who is not the surviving spouse or a child of the participant under the age of 18.
(Ord. 01-04. Passed 3-25-04; Ord. 01-19. Passed 3-27-19.)
(a) Death Benefits. Upon a participant's death prior to his or her retirement date, his or her beneficiary will be entitled to receive a death benefit equal to a refund of the participant's contributions (without interest) including any pick-up contributions pursuant to Section 286.03(b)(6).
(b) Beneficiary Designation. "Beneficiary" shall mean the person or entity designated by the participant to receive a refund of the participant's contributions (without interest) should the participant die prior to becoming entitled to a retirement benefit. In the event that a participant does not designate a beneficiary or the beneficiary does not survive the participant, the beneficiary shall be the surviving spouse, or if there is no surviving spouse, the participant's children, or if there are no surviving children, the estate; but if no personal representative has been appointed, to those persons who would be entitled to the estate under the intestacy laws of the Commonwealth of Pennsylvania if the participant had died intestate and a resident of Pennsylvania.
(c) Survivor Benefit. The survivor benefit paid pursuant to Sections 286.04(a), 286.04(b), 286.06(b), 288.06(c), (when the participant would have reached 55 years of age) or 286.06(d) shall be a pension equal to the pension the participant was receiving or would have received had he been retired at the time of his or her death and shall be paid to the surviving spouse until the date of death of the surviving spouse. Upon the death of the surviving spouse of a participant, 50 percent (100 percent in the case of disability pensions) of the pension the participant was receiving or would have been eligible to receive had he or she been retired at the time of his or her death shall be paid monthly in equal shares to the surviving children of the deceased participant until the death or attainment of age 18 of each child. The shares payable to the surviving children shall be adjusted as each child ceases to be eligible to receive a share of the benefit hereunder due to death or attainment of age 18. The payee above, whether the spouse or the children shall be defined herein as the survivor.
(d) Distribution of Minor Beneficiary. In the event a distribution is to be made to a minor, then the Commission shall direct that such distribution be paid to the legal guardian, or if none, to a parent of such minor or a responsible adult with whom the minor maintains his or her residence, or to the custodian for such minor under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted by the laws of the state in which said minor resides. Such a payment to the legal guardian or parent of a minor shall fully discharge the Commission, employer and Plan from liability on account thereof.
(Ord. 01-02. Passed 4-8-02.)
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