Pennsylvania Act 2002-64 — SPECIAL AD HOC MUNICIPAL POLICE AND FIREFIGHTER POSTRETIREMENT ADJUSTMENT ACT - AMEND AD HOC POSTRETIREMENT ADJUSTMENTS AND REIMBURSEMENT ADJUSTMENT ADMINISTRATION

Act text

SPECIAL AD HOC MUNICIPAL POLICE AND FIREFIGHTER POSTRETIREMENT ADJUSTMENT
     ACT - AMEND AD HOC POSTRETIREMENT ADJUSTMENTS AND REIMBURSEMENT
                        ADJUSTMENT ADMINISTRATION
                  Act of Jun. 19, 2002, P.L. 434, No. 64              Cl. 53
                             Session of 2002
                               No. 2002-64

     HB 1360

                                  AN ACT

     Amending the act of December 14, 1988 (P.L.1192, No.147),
        entitled "An act requiring municipal retirement systems to
        pay special ad hoc postretirement adjustments to certain
        retired police officers and firefighters; providing for the
        financing of these adjustments; providing for the
        administration of the Commonwealth's reimbursements for these
        adjustments; and making repeals," further providing for
        definitions, for special ad hoc postretirement adjustments
        and for the administration of the Commonwealth's
        reimbursements for these adjustments; and making editorial
        changes.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Section 1.  The definitions of "special ad hoc adjustment"
     and "special ad hoc municipal police and firefighter
     postretirement adjustment" in section 102 of the act of December
     14, 1988 (P.L.1192, No.147), known as the Special Ad Hoc
     Municipal Police and Firefighter Postretirement Adjustment Act,
     are amended and the section is amended by adding definitions to
     read:
      Section 102.  Definitions.
        The following words and phrases when used in this act shall
     have the meanings given to them in this section unless the
     context clearly indicates otherwise:
        * * *
        "Retirement benefit."  The amount paid on a regular basis to
     a retired or disabled police officer or firefighter by a
     municipal retirement system established for police officers or
     firefighters.
        * * *
        ["Special ad hoc adjustment."  A special ad hoc municipal
     police and firefighter postretirement adjustment.]
        "Special ad hoc municipal police and firefighter
     postretirement adjustment[."]," "special ad hoc adjustment" or
     "special ad hoc postretirement adjustment."  An increase in [or
     change in] the amount of a [retirement annuity, retirement
     benefit, service pension or disability pension benefit granted
     or effective after active employment ceases,] retirement benefit
     as provided for [on a one-time basis] under this [statute.] act.
        "Years of service."  The number of whole years of active,
     full-time employment as a police officer or firefighter credited
     under the retirement system.
        "Years on retirement."  The number of whole years that a
     police officer or firefighter has been retired as of January 1,
     2001.
        Section 2.  Chapter 3 heading of the act is amended to read:
                                CHAPTER 3
                 1989 SPECIAL AD HOC MUNICIPAL POLICE AND
                  FIREFIGHTER POSTRETIREMENT ADJUSTMENT
        Section 3.  Section 301 of the act is amended to read:
      Section 301.  Entitlement to 1989 special ad hoc adjustment.
        A municipal retirement system shall pay a retired police
     officer or firefighter a special ad hoc municipal police and
     firefighter postretirement adjustment under this chapter if all
     of the following apply:
            (1)  The retiree has terminated active employment with
        the municipality as a police officer or firefighter.
            (2)  The retiree is receiving a retirement annuity,
        retirement benefit, service pension or disability pension
        benefit from a municipal retirement system on the basis of
        active employment with a municipality as a police officer or
        firefighter.
            (3)  The retiree began receiving the retirement annuity,
        retirement benefit, service pension or disability pension
        benefit before January 1, 1985.
        Section 4.  Section 302 of the act, amended December 18, 1996
     (P.L.993, No.152), is amended to read:
      Section 302.  Amount of 1989 special ad hoc adjustment.
        (a)  General rule.--Except as provided in [subsections (b)
     and (c)] subsection (b), a municipal retirement system shall pay
     a retired police officer or firefighter a special ad hoc
     municipal police and firefighter postretirement adjustment under
     section 301, as follows:
            (1)  The sum of $25 a month, if on January 1, 1989, the
        retiree has been retired at least five years but less than
        ten years.
            (2)  The sum of $50 a month, if on January 1, 1989, the
        retiree is totally disabled and has been retired less than
        ten years.
            (3)  The sum of $75 a month, if on January 1, 1989, the
        retiree has been retired at least ten years but less than 20
        years.
            (4)  The sum of $150 a month, if on January 1, 1989, the
        retiree has been retired at least 20 years.
        (b)  Limitation.--If, under section 301, a retiree is
     entitled to be paid a special ad hoc municipal police and
     firefighter postretirement adjustment by more than one municipal
     retirement system, the amount of the special ad hoc adjustment
     under subsection (a) shall be reduced so that the total of all
     these adjustments paid to the retiree does not exceed the amount
     specified in subsection (a).
        [(c)  Modification in amount of postretirement adjustment.--
     In a municipality where, as of the most recent actuarial
     valuation prepared under the act of December 18, 1984 (P.L.1005,
     No.205), known as the Municipal Pension Plan Funding Standard
     and Recovery Act, the actuarial value of aggregated assets as a
     percentage of the aggregated actuarial accrued liabilities of
     the municipality's retirement systems is less than 50%, if a
     retiree entitled to receive a special ad hoc municipal police
     and firefighters postretirement adjustment will receive a
     postretirement adjustment from the applicable municipal police
     or paid firefighters retirement system after the effective date
     of this act, the amount of the special ad hoc postretirement
     adjustment under subsection (a) shall be reduced by the total
     amount of any municipal postretirement adjustment.]
        (d)  Construction.--[Subsections (b) and (c)] Subsection (b)
     shall not be construed to reduce the amount of any retirement
     [annuity, retirement benefit, service pension or disability
     pension] benefit payable to a retiree immediately prior to [the
     effective date of this act] February 12, 1989.
        Section 5.  Section 303 of the act is amended to read:
      Section 303.  Payment of 1989 special ad hoc adjustment.
        The special ad hoc adjustment is effective on the date of the
     first payment of the retiree's retirement annuity, retirement
     benefit, service pension or disability pension benefit due after
     December 31, 1988. The municipal retirement system shall pay
     this as soon as practicable after that and shall include in the
     first payment any omitted amount payable between the effective
     date of the adjustment and the date of the first payment.
        Section 6.  The act is amended by adding a chapter to read:
                                CHAPTER 4
                 2002 SPECIAL AD HOC MUNICIPAL POLICE AND
                  FIREFIGHTER POSTRETIREMENT ADJUSTMENT
      Section 401.  Entitlement to 2002 special ad hoc postretirement
                    adjustment.
        A municipal retirement system shall pay a retired police
     officer or firefighter a special ad hoc postretirement
     adjustment under this chapter if all of the following apply:
            (1)  The retiree has terminated active employment with
        the municipality as a police officer or firefighter.
            (2)  The retiree is receiving a retirement benefit from a
        municipal retirement system on the basis of active employment
        with the municipality as a police officer or firefighter.
            (3)  The retiree began receiving the retirement benefit
        before January 1, 1996.
      Section 402.  Amount of 2002 special ad hoc postretirement
                    adjustment.
        (a)  General rule.--Except as provided in subsections (b) and
     (c), a municipal retirement system shall pay a retired police
     officer or firefighter a monthly special ad hoc postretirement
     adjustment under section 401 that shall be calculated as
     follows:
            (1)  The base adjustment shall be determined by
        multiplying 15¢ by the years of service and then multiplying
        that product by the years on retirement.
            (2)  The longevity factor shall be determined as the sum
        of the products calculated by multiplying 0.025 by the years
        on retirement and 0.05 by the years on retirement in excess
        of 25, if any.
            (3)  The longevity adjustment shall be determined by
        multiplying the base adjustment calculated under paragraph
        (1) by the longevity factor calculated under paragraph (2).
            (4)  The special ad hoc postretirement adjustment payable
        under section 401 shall be the sum of the base adjustment
        calculated under paragraph (1) and the longevity adjustment
        calculated under paragraph (3).
        (b)  Limitation.--If, under section 401, a retiree is
     entitled to be paid a special ad hoc postretirement adjustment
     by more than one municipal retirement system, the amount of the
     special ad hoc postretirement adjustment under subsection (a)
     shall be reduced so that the total of all these adjustments paid
     to the retiree does not exceed the amount specified in
     subsection (a).
        (c)  Modification in amount of 2002 special ad hoc
     postretirement adjustment.--The amount of the special ad hoc
     postretirement adjustment calculated under subsection (a) shall
     be reduced annually by 65% of the total amount of any
     postretirement adjustments provided to the retiree under the
     municipal retirement plan after December 31, 1988, and before
     January 1, 2002, and paid in the immediately preceding year.
        Section 7.  Section 502 of the act is amended to read:
      Section 502.  Reimbursement by Commonwealth for special 1989 ad
                    hoc adjustment.
        (a)  General rule.--Except as provided in subsection (b),
     beginning January 1, 1990, the Commonwealth shall reimburse a
     municipality, from the special account established under section
     701, for the actual special ad hoc adjustment under Chapter 3
     paid during the previous calendar year.
        (b)  Limitation of eligibility.--
            (1)  The Commonwealth shall not reimburse any
        municipality if the information required under section [901]
        901(a)(1) either was not certified to the Auditor General or
        was certified after April 1 of the year the certification was
        due.
            (2)  Beginning January 1, 2002, the Commonwealth shall
        not make any payment under subsection (a) to a municipality
        that in the immediately preceding year received an allocation
        of general municipal pension system State aid that was
        limited to the pension cost of the municipality under section
        402(f)(2) of the act of December 18, 1984 (P.L.1005, No.205),
        known as the Municipal Pension Plan Funding Standard and
        Recovery Act.
        Section 8.  The act is amended by adding a section to read:
      Section 502.1.  Reimbursement by Commonwealth for 2002 special
                        ad hoc adjustment.
        (a)  General rule.--
            (1)  Except as provided in subsection (b), beginning in
        the year following the year in which the amortization
        contribution requirement attributable to a special ad hoc
        postretirement adjustment under Chapter 4 is first reflected
        in the financial requirements of the retirement system
        determined under Chapter 3 of the act of December 18, 1984
        (P.L.1005, No.205), known as the Municipal Pension Plan
        Funding Standard and Recovery Act, the Auditor General shall
        determine the Commonwealth reimbursement payable to the
        municipality representing the amortization contribution
        requirement attributable to the special ad hoc postretirement
        adjustment under Chapter 4 that was paid with revenues of the
        municipality other than general municipal pension system
        State aid provided under the Municipal Pension Plan Funding
        Standard and Recovery Act.
            (2)  The determination of the reimbursable amount of the
        amortization contribution requirement attributable to the
        special ad hoc postretirement adjustment under Chapter 4 in
        any year shall be calculated as the amortization contribution
        requirement attributable to the special ad hoc postretirement
        adjustments under Chapter 4 and reflected in the
        determination of the financial requirements of the pension
        plan under Chapter 3 of the Municipal Pension Plan Funding
        Standard and Recovery Act for the immediate prior year less
        the product of that amortization contribution requirement
        multiplied by the ratio of the amount of general municipal
        pension system State aid allocated to the retirement system
        in the immediate prior year to the total amount of municipal
        contributions made to the retirement system from all sources
        other than employee contributions in the immediate prior
        year. Where a municipality has issued bonds or notes to fund
        an unfunded actuarial accrued liability under 53 Pa.C.S. Pt.
        V Subpt. B (relating to indebtedness and borrowing) or under
        other laws applicable to the municipality, the general
        municipal pension system State aid and municipal
        contributions used by the municipality to make debt service
        payments on the bonds or notes, or both, issued to fund an
        unfunded actuarial accrued liability shall be included in the
        calculation of the ratio applied to the amortization
        contribution requirement.
            (3)  The Commonwealth shall reimburse a municipality,
        from the special account established under section 701, for
        the reimbursable amount determined for each year under this
        paragraph.
        (b)  Limitation of eligibility.--
            (1)  The Commonwealth shall not reimburse any
        municipality for a special ad hoc adjustment paid under
        Chapter 4 if the information required under section 901(a)(2)
        either was not certified to the Auditor General or was
        certified after April 1 of the year the certification was
        due.
            (2)  The Commonwealth shall not reimburse a municipality
        for the reimbursable amount of the amortization contribution
        requirement attributable to the special ad hoc postretirement
        adjustment under Chapter 4 if the municipality fails to
        submit a complete certification of the reimbursable amount of
        the amortization contribution requirement determined under
        subsection (a) to the Auditor General before April 1 of the
        year in which the reimbursement is payable.
        (c)  Variable definition of amortization contribution
     requirement.--For purposes of this section, the term
     "amortization contribution requirement" shall have the meaning
     specified in this subsection as follows:
            (1)  In a municipal pension plan with defined benefits
        for which the municipality determines the financial
        requirements of the pension plan under section 302 of the
        Municipal Pension Plan Funding Standard and Recovery Act, the
        term "amortization contribution requirement" shall mean the
        amortization contribution requirement attributable to the
        special ad hoc postretirement adjustments under Chapter 4
        that was reflected in the financial requirements of the
        pension plan determined for the immediate prior year.
            (2)  In a municipal pension plan without defined benefits
        for which the municipality determines the financial
        requirements of the pension plan under section 303 of the
        Municipal Pension Plan Funding Standard and Recovery Act, the
        term "amortization contribution requirement" shall mean the
        sum of the payments made to the retirement system in the
        immediate prior year in order to provide the special ad hoc
        postretirement adjustments under Chapter 4 in that year.
        Section 9.  Sections 702, 901, 902, 903 and 1101 of the act
     are amended to read:
      Section 702.  Deposits into special account.
        Notwithstanding any applicable provision of the act of May
     12, 1943 (P.L.259, No.120), referred to as the Foreign Casualty
     Insurance Premium Tax Allocation Law, or any applicable
     provisions of the act of March 4, 1971 (P.L.6, No.2), known as
     the Tax Reform Code of 1971, or the provisions of sections
     402(b) and 803(c) of the act of December 18, 1984 (P.L.1005,
     No.205), known as the Municipal Pension Plan Funding Standard
     and Recovery Act, beginning on January 1, 1990, prior to the
     deposit of the proceeds of the insurance premium tax on foreign
     casualty insurance premiums into the General Municipal Pension
     System State Aid Program revenue account, an amount sufficient
     to provide for the Commonwealth's reimbursement payments and
     reimbursable amounts to municipalities for special ad hoc
     adjustments under this act shall be deposited in the separate
     account created under section 701.
      Section 901.  Municipal retirement system certification of
                    adjustments paid and of reimbursable amounts.
        (a)  Certification.--
            (1)  Beginning January 1, 1989, the chief administrative
        officer of a municipal retirement system that pays a special
        ad hoc adjustment under Chapter 3 in that year shall certify
        the total of all adjustments under Chapter 3 paid during that
        year to the Auditor General not later than April 1 of the
        following year.
            (2)  Beginning in the year 2002, a municipality with a
        retirement system that pays a special ad hoc postretirement
        adjustment under Chapter 4 in a year shall certify its
        reimbursable amount under section 502.1(a) to the Auditor
        General not later than April 1 of the following year.
        (b)  [Form] Certification form.--
            (1)  Not later than February 1 of the year in which the
        form is due, the Auditor General shall send the retirement
        system the proper form on which to make the certification
        under subsection [(a)] (a)(1).
            (2)  Not later than February 1 of each year, the Auditor
        General shall send each municipality maintaining a retirement
        system for police officers or firefighters a notice of the
        filing requirement for the certification of the reimbursable
        amount under section 502.1(a), which shall include a detailed
        description of the formula for determining the reimbursable
        amount and the proper form on which to make the
        certifications under subsection (a)(2).
      Section 902.  Commonwealth disbursement of reimbursement
                    payment.
        (a)  Payment to account.--Not later than June 1 of the year
     in which the form is due, the Auditor General shall certify to
     the State Treasurer the amount to be deposited into the special
     account created in section 701 and shall draw a warrant, payable
     to the treasurer of the municipality, on the State Treasurer
     from the special account created in section 701 for the amount
     certified under section 901(a).
        (b)  [Disbursement] Disbursements.--
            (1)  Not later than September 1 of the year in which the
        form is due, the State Treasurer shall disburse the
        reimbursement payment for the special ad hoc postretirement
        adjustments under Chapter 3 out of the special account
        created in section 701.
            (2)  Not later than the first business day of October of
        the year in which the certification form is due, the State
        Treasurer shall disburse the reimbursement payment for the
        postretirement adjustments under Chapter 4 out of the special
        account created in section 701.
      Section 903.  Municipal receipt of reimbursement payment.
        (a)  1989 postretirement adjustment reimbursement.--Upon
     receipt of the reimbursement payment from the Commonwealth for
     the postretirement adjustments under Chapter 3, the treasurer of
     the municipality shall deposit the reimbursement payment into
     the municipality's general fund.
        (b)  2002 postretirement adjustment reimbursement.--Upon
     receipt of the reimbursement payment from the Commonwealth for
     the postretirement adjustments under Chapter 4, the treasurer of
     the municipality shall deposit the reimbursement payment into
     the municipality's general fund.
      Section 1101.  Limitation of prior act.
        [The provisions of section 7 of the act of July 9, 1981
     (P.L.208, No.66), known as the Public Employee Retirement Study
     Commission Act, shall not be applied to this act.] To the extent
     that a special ad hoc municipal police postretirement adjustment
     granted by the Commonwealth causes the calculation of total
     benefits to be paid to a member of a police force receiving
     retirement benefit to exceed the limitations contained in the
     act of May 29, 1956 (1955 P.L.1804, No.600), referred to as the
     Municipal Police Pension Law, the police pension fund may exceed
     the limitations therein provided to pay the adjustment to the
     retired or disabled member.
        Section 10.  The special ad hoc postretirement adjustment
     under section 401 of the act is effective on the date of the
     first retirement benefit made after June 30, 2002. If the
     special ad hoc postretirement adjustment under section 401 of
     the act is not included in the initial retirement benefit
     payment occurring after June 30, 2002, the special ad hoc
     postretirement adjustment shall be included as soon as
     practicable in the retirement benefit payment of the retiree,
     and the initial retirement benefit payment that includes the
     special ad hoc postretirement adjustment also shall include the
     total amount of the special ad hoc postretirement adjustments
     previously omitted from the retirement benefit payments made
     after June 30, 2002.
        Section 11.  This act shall take effect immediately.

     APPROVED--The 19th day of June, A. D. 2002.

     MARK S. SCHWEIKER