(A)   Pension annuity contracts. The township hereby enacts and ordains as follows.
      (1)   Any funds received by the township from the Commonwealth arising from the tax on premiums paid by foreign casualty insurance companies shall be expended to secure pension annuity contracts, as herein defined, for the benefit of township police officers; provided, however, that any surplus funds not so expended shall be invested in securities authorized by law as investments for fiduciaries and registered in the name of “Springfield Township Police Pension Fund” , which securities may later be liquidated to secure additional pension annuity contracts; and, provided, further, that all funds thus received from the Commonwealth shall be utilized either for the securing of pension annuity contracts or invested as above set forth within two years of the receipt thereof.
      (2)   PENSION ANNUITY CONTRACT is defined as any contract made by the township with an insurance or other authorized company to provide pension, retirement or disability benefits to the police officers employed by the township, or death benefits to the beneficiary designated by such police officer. The township shall be the owner of all rights under the contract, except the rights to designate the beneficiary, to change the beneficiary, and to receive the death, pension and retirement benefits thereunder. When the employment of any police officer is terminated other than by death or retirement, the township shall apply the value of such contract to provide for the police officer, death, pension, retirement or disability benefits in accordance with the terms and conditions of the contract.
      (3)   The pension annuity contracts shall be secured from such companies and pursuant to such terms, consistent with this division (A), as the Board of Supervisors shall from time to time determine.
      (4)   POLICE OFFICER is defined as a full-time paid police officer working not less than 40 hours per week at a definite salary.
      (5)   Pending expenditure or investment of the funds received from the Commonwealth referred to in division (A)(1) above, said funds shall be deposited with a banking institution authorized to do business in the state in the name of “Springfield Township Police Pension Fund”. All checks on said account shall be signed by both the Chairperson and the Secretary of the Township Board of Supervisors.
      (6)   All pension annuity contracts and securities shall be placed in a safe deposit box in a banking institution authorized to do business in the state. The box shall be registered in the name of “Springfield Township Police Pension Fund”, and in all instances, access to the box shall require both the Chairperson and the Secretary of the Township Board of Supervisors.
      (7)   A separate fidelity bond shall be maintained to cover both the Chairperson and the Secretary of the Township Board of Supervisors, said bond to be in an amount equal to at least 25% of the monies on deposit at any time in the checking account plus 15% of the cash surrender value of all pension annuity contracts (including prepaid premiums) plus 15% of the value of all registered securities. Such bond must contain a clause stating that the insurance company issuing the same cannot cancel the bond as issued unless it shall first have given to the Office of the Auditor General of the Commonwealth, 30- days’ notice in writing of its intention so to cancel.
   (B)   DROP pension.
      (1)   Title. This division (B) shall be known and referred to as the “DROP Pension Division of Springfield Township”.
      (2)   Definitions. For the purpose of this division (B), the following definitions shall apply unless the context clearly indicates or requires a different meaning.
         DROP. The Deferred Retirement Option Plan created as an option form of benefit under the existing Springfield Township Pension Plan.
         DROP ACCOUNT. A bookkeeping account created to accept DROP participant’s monthly pension payments. The pension payments may be credited with interest in an amount to be determined from time to time by the Investment Manager.
         MEMBER. A full-time township police officer covered by the Springfield Township Pension Plan.
         PARTICIPANT. A member who is eligible for normal retirement and who has elected to participate in the DROP program, within the window of time set forth in division (B)(3) below.
         PLAN. The Springfield Township Pension Plan adopted pursuant to Act 600, being 65 P.S. §§ 767 et seq.
      (3)   Eligibility. Any police officer who is a member and has fulfilled the age and service requirements for retirement as set forth in the collective bargaining agreement shall be eligible to participate in DROP at his or her option in conformance with this division (B) and after providing at least 30 days’ written notice to the township.
      (4)   Procedures.
         (a)   Entry into DROP. Election to participate by an eligible police officer shall be made on any date within the length of the collective bargaining agreement terms and following the date on which the police officer fulfills the minimum age and service requirements for normal retirement under the pension plan. Once a police officer commences participation in DROP, he or she may not choose to end participation in DROP and resume contributions to the pension plan.
         (b)   Request to enter and enrollment forms. Election to participate shall be made by completing the required request and enrollment forms, which shall show the entry date into DROP and the deferred retirement date for the term chosen by the police officer. The deferred retirement date shall not exceed 60 months from the date of enrollment and entry into DROP.
         (c)   The length of DROP. The DROP term shall be for a period of no more than 60 months from the date of entry. Termination of participation in DROP shall take place:
            1.   At the end of the 60-month period or at any other time (earlier than 60 months) the police officer chooses to end his or her participation; or
            2.   If the participant is terminated from employment for reasons set forth under applicable state law.
         (d)   Retirement status and pension contribution. Once enrolled in DROP, the DROP participant shall be retired under the pension plan for the purpose of calculating pension benefits, but not for the purpose of employment with the Township Police Department. Once a police officer enters DROP, he or she shall no longer be required to make contributions to the pension plan, nor shall he or she be eligible for any further pension benefits other than the pension benefit determined in division (B)(4)(e) below.
         (e)   Retirement rate. Payments to DROP will be made at the participant’s normal retirement monthly benefit amount, determined by the collective bargaining agreement at the date the police officer enters DROP. Payments shall be sent to the DROP participant’s account with the Investment Manager.
         (f)   Administration. DROP accounts shall be administered by Investment Manager(s) who shall be selected and agreed upon, by both the township and the Union. The DROP participant shall be responsible for all administrative costs and risks associated with his or her account with the Investment Manager. If more than one Investment Manager is available for administration of DROP participant’s account, the participant shall be responsible to designate which Investment Manager is to receive monthly benefit amounts. The township shall not be responsible for the performance of an officer’s funds while invested in DROP.
         (g)   Disability issues. If, while a police officer is enrolled in DROP, he or she is injured while on duty, to the extent that he or she is permanently disabled from performing police work for the township, the police officer shall be retired. Participation in DROP shall terminate and distribution of accumulated pension benefits shall be disbursed to retiree in accordance with IRS regulations as well as applicable state and federal laws. The retiree shall not be eligible for disability pension benefits, since his or her pension benefits have been finalized as per divisions (B)(4)(d) and (B)(4)(e) above.
         (h)   Survivorship options. If a DROP participant dies during his or her participation period, all funds in that participant’s account shall be disbursed to the participant’s beneficiary or beneficiaries listed in the DROP contract. Upon death of a DROP participant, either during or following his or her DROP terms, the death and survivor benefits will be payable by the pension plan in accordance with the collective bargaining agreement with the stipulation that the monthly pension benefit upon which survivorship calculations are determined shall be that amount determined by division (B)(4)(e) above.
      (5)   Pending legislation. In the event of the passage of legislation governing DROPs in the Commonwealth, this division (B) shall be amended to comply with any new legal requirements set forth in such legislation. The application of any amendments to police officers actively employed as of the effective date of any such legislation shall be governed by and consistent with constitutional principles applicable to the pension and retirement benefits.
   (C)   Killed in service death benefit. The killed in service death benefit is hereby restated in its entirety to read as follows. If a member is killed in service, the killed in service death benefit shall be funded for and provided by the Commonwealth as defined in Act 51 of 2009, being 53 P.S. § 891. No killed in service death benefit shall be provided by the Township Police Pension Plan.
(Ord. 8, passed 12-12-1967; Ord. 140, passed 10-23-2007; Ord. 157, passed - -2010)