1Amending the act of February 1, 1974 (P.L.34, No.15), entitled
2"An act creating a Pennsylvania Municipal Retirement System
3for the payment of retirement allowances to officers,
4employes, firemen and police of political subdivisions and
5municipal authorities and of institutions supported and
6maintained by political subdivisions and municipal government
7associations and providing for the administration of the same
8by a board composed of the State Treasurer and others
9appointed by the Governor; imposing certain duties on the
10Pennsylvania Municipal Retirement Board and the actuary
11thereof; providing the procedure whereby political
12subdivisions and municipal authorities may join such system,
13and imposing certain liabilities and obligations on such
14political subdivisions and municipal authorities in
15connection therewith, and as to certain existing retirement
16and pension systems, and upon officers, employes, firemen and
17police of such political subdivisions, institutions supported
18and maintained by political subdivisions, and upon municipal
19authorities; providing for the continuation of certain
20municipal retirement systems now administered by the
21Commonwealth; providing certain exemptions from taxation,
22execution, attachment, levy and sale and providing for the
23repeal of certain related acts," in general provisions,
24further providing for definitions, for general powers of
25board, for retirement funds and accounts and for management
26and investment of fund and interest credits; and providing
27for Statewide Municipal Police Officers Pension Plan.

28The General Assembly of the Commonwealth of Pennsylvania
29hereby enacts as follows:

30Section 1. The definitions of "compensation," "final

1salary," "municipal account," "Municipal Pension Funding
2Standard and Recovery Act" and "superannuation retirement age"
3in section 102 of the act of February 1, 1974 (P.L.34, No.15),
4known as the Pennsylvania Municipal Retirement Law, amended
5December 19, 1975 (P.L.520, No.153) and July 9, 2010 (P.L.434,
6No.56), are amended and the section is amended by adding
7definitions to read:

8Section 102. Definitions.--As used in this act:

9* * *

10"Article IV-A annuitant" means an annuitant under Article
11IV-A of this act.

12"Article IV-A member" means a member under Article IV-A of
13this act.

14* * *

15"Compensation" means remuneration actually received for
16services rendered as a municipal employee, municipal fire
17fighter or municipal police officer, excluding reimbursement for
18expenses incidental to employment. For Article IV-A members, the 
19term shall also exclude lump sum accrued leave payments and 
20overtime pay in excess of thirty percent of base salary, but 
21shall include all payments made under the act of June 28, 1935 
22(P.L.477, No.193), referred to as the Enforcement Officer 
23Disability Benefits Law. The following apply:

24(1) Compensation shall be adjusted as appropriate to comply
25with the terms of any contract entered into between the board
26and the applicable municipality under Article IV.

27(2) For members who are enrolled in a plan that has adopted
28the provisions of section 414(h) of the Internal Revenue Code
29(26 U.S.C. § 414(h)), the term includes a contribution
30designated as a pickup contribution.

1(3) Notwithstanding any provision of this act to the
2contrary, a member's compensation shall not exceed the
3limitations under section 401(a)(17) of the Internal Revenue
4Code (26 U.S.C. § 401(a)(17)), as adjusted in accordance with
5section 401(a)(17)(B) of the Internal Revenue Code (26 U.S.C. §
6401(a)(17)(B)).

7(i) The adjustment in effect for a calendar year applies to
8a period:

9(A) which begins in the calender year;

10(B) which does not exceed twelve months; and

11(C) over which compensation is determined.

12(ii) If a determination period consists of fewer than twelve
13months, the compensation limit shall be multiplied by a
14fraction:

15(A) the numerator of which is the number of months in the
16determination period; and

17(B) the denominator of which is twelve.

18* * *

19"Employers' account" means the account to which are credited
20all contributions made by municipalities required under Article
21IV-A of this act.

22* * *

23"Final salary" means the average annual salary or
24compensation earned by a member and paid by the municipality
25during the highest three, four, or five non-overlapping periods
26of twelve consecutive months as stipulated by the municipality,
27or if not so long employed, then the average annual salary or
28compensation earned and paid during the whole period of such
29employment; or, if applicable, the amount or formula stipulated
30between the municipality and the board in a contract for an

1optional retirement plan entered into under the provisions of
2clause (11) of section 104 of this act. Notwithstanding any 
3other provisions of this act to the contrary, "final salary" 
4under Article IV-A shall mean the average annual compensation 
5earned by an Article IV-A member and paid by the municipality 
6during the final three consecutive non-overlapping years of 
7credited service or, if not so long enrolled with credited 
8service, the average annual compensation earned and paid during 
9the whole period of such credited service.

10* * *

11"Municipal account" means the account maintained for each
12municipality that establishes a retirement plan under Article 
13II, III or IV of this act, to which shall be credited the
14contributions made by it toward the superannuation retirement
15and death benefits of members.

16* * *

17"Municipal Pension Plan Funding Standard and Recovery Act" 
18means the act of December 18, 1984 (P.L.1005, No.205), known as 
19the Municipal Pension Plan Funding Standard and Recovery Act.

20* * *

21"Superannuation retirement age" means sixty-five years of age
22for municipal employes, fifty-five years of age for municipal
23firemen and municipal police or such other age as may be
24stipulated between the municipality and the board in a contract
25for an optional retirement plan entered into under the
26provisions of clause (11) of section 104 of this act and for 
27Article IV-A members, fifty years of age.

28* * *

29Section 2. Sections 104(12.1) and (12.2), 108 and 110 of the
30act, amended July 9, 2010 (P.L.434, No.56), are amended to read:

1Section 104. General Powers of the Board.--The board shall:

2* * *

3(12.1) In accordance with the plan contract, provide cost-
4of-living increases from a plan's share of excess investment
5earnings to those members of such municipalities who have
6already retired under the provisions of Article II, III or IV of 
7this act. Such allocations shall be made, with the advice of the
8actuary, on a fully funded basis employing actuarial assumptions
9which reflect the nature of the liability. An award of excess 
10interest shall not be made under this paragraph if the plan is 
11less than 95% funded as of the plan's most recent filing of the 
12actuarial report required under the Municipal Pension Funding 
13Standard and Recovery Act.

14(12.2) In accordance with the plan contract, the board shall
15allocate excess investment earnings for active members [of such
16municipalities] enrolled under the provisions of Article II, III 
17or IV of this act by applying such allocation to [member] the 
18members' contributions. To the extent that additional
19liabilities may accrue as a result of such allocation, the
20actuary shall employ actuarial assumptions, on a fully funded
21basis, to accurately reflect the nature of the liability
22generated therefrom. An award of excess interest shall not be 
23made under this paragraph if the plan is less than 95% funded as 
24of the plan's most recent filing of the actuarial report 
25required under the Municipal Pension Funding Standard and 
26Recovery Act.

27* * *

28Section 108. Retirement Funds and Accounts.--(a) The
29Pennsylvania Municipal Retirement Fund shall consist of the
30money received from municipalities arising from contributions by

1municipalities, from payroll deductions from salary or
2compensation of members, and other contributions made by members
3through the municipality to the system, from DROP participants 
4and from transfers made from municipal retirement or pension
5systems and credited as provided in this act, and investment
6earnings thereon.

7(b) The fund shall be a trust and the assets of the system
8shall be held in trust. No part of the assets of the system
9shall be used for or diverted to purposes other than for the
10exclusive benefit of the members, their spouses or the members'
11beneficiaries prior to the satisfaction of all liabilities of
12the system with respect to them. The assets of the fund shall
13only be used to pay:

14(1) Benefits to members in accordance with this act.

15(2) Necessary expenses of the system as established in this
16act.

17(c) Contributions made by municipalities for plans 
18established under the provisions of Article II, III or IV of 
19this act toward superannuation retirement and death benefits of
20members shall be credited to the municipal account of [said] the
21fund, contributions made by the same municipalities toward
22disability retirement of Article II, III or IV members shall be
23credited to the total disability reserve account of [said fund,
24retirement] the fund. Contributions made by municipalities for 
25Article IV-A members shall be billed by the board on a quarterly 
26calendar basis, expressed as a percentage of the compensation 
27paid to the municipalities' plan members during the quarter and 
28credited to the employers' account. Actuarial gains and losses 
29associated with Article IV-A members shall be calculated in 
30accordance with the Municipal Pension Plan Funding Standard and
 

1Recovery Act but shall be expressed as a percentage of 
2compensation and shall be incorporated in the plan's employer 
3cost percentage. Retirement benefits paid to DROP participants 
4shall be credited to the subsidiary DROP reserve account and
5payroll deductions and other contributions of members shall be
6credited to the member's account of [said] the fund. Transfers
7made from existing municipal retirement or pension systems shall
8be credited as provided in this act.

9(d) The board shall keep separate accounts of each
10municipality and for each separate class of employes enrolled by
11that municipality under [the several articles] Articles II, III 
12and IV of this act, except the total disability reserve account
13[and], the retired member's reserve account and the employers' 
14account which shall be maintained as pooled accounts. Each
15municipality and the members thereof shall be liable to the
16board for the amount of contributions required to cover the cost
17of the retirement allowance and other benefits payable to such
18members.

19(e) Upon the granting of a superannuation or voluntary or
20involuntary withdrawal retirement allowance to any contributor,
21the amount of such contributor's accumulated deductions in the
22member's account shall lose their status as accumulated
23deductions and shall be transferred to the retired member's
24reserve account and the actuarial equivalent of the municipal
25annuity shall be similarly transferred from the municipal
26account or the employers' account as applicable to the retired
27member's reserve account.

28(f) Upon the granting of a superannuation retirement
29allowance to any DROP participant, the full amount of the DROP
30participant's monthly retirement benefit shall be deposited

1monthly to a subsidiary DROP participant account in the
2subsidiary DROP participant reserve account until the DROP
3participant terminates employment.

4(g) Upon the granting of a disability retirement allowance
5to any contributor under Article II, III or IV of this act,
6there shall be transferred to the retired member's reserve
7account the amount of the contributor's accumulated deductions
8in the member's account, the amount of the equivalent actuarial
9value to the municipal annuity, and such additional amount from
10the total disability reserve account as is needed in addition
11thereto to provide the actuarial equivalent of the total
12disability allowance to which the contributor is entitled.

13(h) Upon the granting of a disability retirement allowance
14to an Article IV-A member, there shall be transferred to the
15retired member's reserve account the amount of the member's
16accumulated deductions in the member's account and such
17additional amount from the employers' account as is needed to
18provide the actuarial equivalent of the total disability
19allowance to which the Article IV-A member is entitled.

20Section 110. Management and Investment of Fund; Interest
21Credits.--(a) The members of the board shall be trustees of the
22fund, and shall have the exclusive management of said fund, with
23full power to invest the moneys therein, subject to the terms,
24conditions, limitations and restrictions imposed by law upon
25fiduciaries. The said trustees shall have power to hold,
26purchase, sell, assign, transfer and dispose of any securities
27and investments in said fund, as well as the proceeds of such
28investments, and of the money belonging to such fund.

29(b) The board shall annually allow regular interest to the
30credit on each [contributor's] member's account, municipal

1account, employers' account, the retired members reserve account
2and the total disability reserve account. The board shall 
3monthly credit DROP interest to the subsidiary DROP participant 
4accounts in accordance with established procedures.

5(c) The board shall, after deducting money to pay for the
6appropriate expenses, allow excess interest as each contract
7provides to the credit of the municipal accounts, member's
8accounts for members enrolled under Article II, III or IV of 
9this act, the member's excess investment accounts and retired
10members reserve accounts. Except as provided in a contract, the
11board shall credit the excess interest to the [plan's] municipal
12account[.] for plans established under the provisions of Article 
13II, III or IV of this act. Excess interest attributable to 
14Article IV-A accounts shall be credited to the employers' 
15account.

16Section 3. The act is amended by adding an article to read:

17ARTICLE IV-A

18STATEWIDE MUNICIPAL POLICE OFFICERS PENSION PLAN

19Section 401-A. Statewide Municipal Police Officers Pension
20Plan.

21(a) Establishment.--The Statewide Municipal Police Officers
22Pension Plan is established to provide for the mandatory
23enrollment of municipal policemen at the contribution rates and
24benefit rates outlined in this article.

25(b) Pension rights.--Regardless of any other provision of
26law, pension rights of Article IV-A members shall be determined
27solely by this article and no collective bargaining agreement
28nor any arbitration award between the municipality and its
29employees or their collective bargaining representatives shall
30be construed to change any of the provisions of this article, to

1require the board to administer pension benefits not set forth
2in this article or otherwise require action by any other
3government body pertaining to pension benefits or rights of
4Article IV-A members.

5Section 402-A. Mandatory and optional membership.

6(a) Mandatory membership.--Membership under this article
7shall be mandatory as of the effective date of employment for
8any municipal policeman hired on or after January 1, 2014,
9provided the municipal policeman is scheduled to work an average
10of at least 35 hours per week during a period of at least six
11consecutive months and is not employed by a city of the first or
12second class. Municipalities shall comply with the enrolling
13procedures established by the board.

14(b) Optional membership.--Membership under this article
15shall be optional for municipal policemen hired on or prior to
16December 31, 2013, and who are scheduled to work an average of
17at least 35 hours per week during a period of at least six
18consecutive months and who are not employed by a city of the
19first or second class subject to the following:

20(1) Municipal policemen eligible for optional membership
21under this section may be enrolled under this article
22provided an affirmative vote electing to be enrolled under
23this article is obtained from 100% of all the municipal
24policemen eligible for optional membership.

25(2) Upon the satisfaction of paragraph (1), the
26employing municipality shall pass an ordinance or resolution,
27as appropriate, enrolling all of its municipal policemen
28eligible for optional membership under the provisions of this
29article.

30(3) Provisions shall be made between the board and the

1municipality for the transfer of moneys and securities from
2any preexisting pension fund being maintained by the
3municipality covering such municipal policemen, in whole or
4in part, to fund the accrued benefits of all the municipal
5policemen being enrolled under this article. Securities to be
6transferred shall be only those acceptable to the board.
7Securities not acceptable shall be converted into cash and
8the cash shall be transferred to the fund. In any transfer,
9provision shall be made to credit the accumulated deductions
10of each Article IV-A member at least the amount the member
11has paid into the preexisting retirement or pension system of
12the municipality.

13(4) Enrollment shall be approved by the board only if
14the municipality transfers assets in an amount sufficient to
15completely satisfy the municipality's liability, as
16determined by the board's actuary, for the prior service
17credits of the municipal policemen to be enrolled.

18(5) No liability, on account of retirement allowances or
19pensions being paid from any existing retirement or pension
20fund of a municipality enrolling under this section, shall
21attach against the fund, except as may be agreed upon by the
22municipality and the board making a transfer of an existing
23system. The liability to continue payment of pensions not
24transferred shall attach against the municipality.

25(6) In cases where municipal policemen eligible for
26optional membership under this section elect to join the
27system created by this article in accordance with paragraph
28(1) and the employing municipality complies with paragraph
29(2), the election to join shall be irrevocable.

30Section 403-A. Service credit.

1(a) Credited service.--In computing the length of service of
2an Article IV-A member, full credit shall be given to each
3Article IV-A member for each full or partial year of service
4rendered to the municipality as a municipal policeman for which
5the required member contributions have been made or for which
6contributions otherwise required for such service were not made
7solely by reason of any provision of this act relating to the
8limitations under sections 401(a)(17) or 415(b) of the Internal
9Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §§ 401(a)(17)
10and 415(b)). Except as otherwise required by applicable law, in
11no event shall an Article IV-A member receive service credit for
12any period during which the Article IV-A member is on leave of
13absence without pay.

14(b) Purchase of service.--

15(1) If a former Article IV-A member returns to service
16and becomes an active Article IV-A member, the member may
17restore to the fund any amounts refunded under section 407-A
18that represent that member's previous service and continue
19accruing credited service for service rendered subsequent to
20the return to service.

21(2) The Article IV-A member's annuity rights shall be
22restored as they existed at the time of separation from
23service provided the member pays the amount due plus regular
24interest up to the date of purchase in a lump sum within 30
25days after billing or through salary deductions amortized
26with regular interest through a repayment period of not more
27than five years.

28(c) Military service.--

29(1) An active Article IV-A member who enters the
30uniformed services as defined by 38 U.S.C. § 4303 (relating

1to definitions) and returns to the municipality as an Article
2IV-A member within the time period prescribed by law shall
3have the time spent in uniformed service credited to the
4Article IV-A member's account for retirement purposes if the
5Article IV-A member makes the required employee
6contributions.

7(2) An active Article IV-A member may also purchase
8credit for nonintervening military service for a period not
9to exceed five years. The member may file an application with
10the board to purchase credit for periods of nonintervening
11military service upon completion of five years of credited
12service. The amount due from the member shall be computed by
13applying the applicable member and municipal contribution
14rate which was in effect on the date of the member's
15enrollment under this article times the member's average
16annual rate of compensation over the first five years of the
17member's subsequent employment and multiplying the result by
18the number of years and fractional part of a year of
19creditable nonintervening military service being purchased,
20plus regular interest from the date of enrollment under this
21article to date of purchase.

22(3) The amount due from the member for the purchase of
23military service credit shall be certified by the board in
24accordance with methods approved by the actuary and may be
25paid in a lump sum within 30 days or may be amortized with
26additional interest through deductions in amounts agreed upon
27by the member and the board. The rate of interest to be
28charged to the member on account of the purchase of credit
29for nonintervening military service shall be the regular
30interest rate.

1(4) An Article IV-A member may purchase credit for
2intervening or nonintervening military service only if the
3member's discharge or separation from the service was granted
4under other than dishonorable conditions. An Article IV-A
5member may not purchase credit for any military service for
6which the member is entitled to receive, eligible to receive
7now or in the future or is receiving retirement benefits for
8the service under a retirement system administered and wholly
9or partially paid for by an other governmental agency or
10private employer. Applications to purchase credit for
11military service must be accompanied by proof of the nature
12of discharge or separation from military service.

13Section 404-A. Determination of municipal liability.

14(a) Municipal contribution rate.--

15(1) The municipal contribution rate shall be computed by
16the actuary for each municipality as a percentage of the
17municipality's payroll attributable to active Article IV-A
18members during the period for which the amount is determined
19and shall be certified by the board.

20(2) The municipal contributions shall be equal to the
21amount necessary to fund the liability for any benefit
22payable to Article IV-A members, provided that the municipal
23contribution rate shall be no less than 7.5%.

24(b) Eligibility for general State aid.--

25(1) A municipality shall be immediately eligible for
26participation in the General Municipal Pension System
27established under the act of December 18, 1984 (P.L.1005,
28No.205), known as the Municipal Pension Plan Funding Standard
29and Recovery Act, if the municipality employs an active
30Article IV-A member.

1(2) The three-year waiting period for eligibility for
2State aid for new plans stated in section 402(d) of the
3Municipal Pension Plan Funding Standard and Recovery Act
4shall not be applicable to municipalities that employ active
5Article IV-A members.

6Section 405-A. Contributions by members.

7(a) Required contributions.--

8(1) Article IV-A members shall contribute 7.5% of
9compensation. The contributions shall be deemed "pickup"
10contributions and shall be treated as contributions made by
11the municipality for purposes of section 414(h) of the
12Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
13414(h)) relating to pickup contributions.

14(2) Each municipality shall certify and deduct from
15payroll the required contributions and shall send all
16contributions to the system in a manner and at a time that
17the board determines.

18(b) Limits.--The municipality shall immediately notify the
19board of the compensation of any Article IV-A member to whom the
20limitation under section 401(a)(17) of the Internal Revenue Code
21of 1986 either applies or is expected to apply and shall cause
22the Article IV-A member's contributions deducted from payroll to
23cease upon reaching the limitation under section 401(a)(17) of
24the Internal Revenue Code of 1986.

25Section 406-A. Superannuation retirement.

26(a) Eligibility for superannuation retirement.--An active
27Article IV-A member who attains superannuation retirement age
28shall be entitled to receive a superannuation retirement benefit
29upon termination of service and filing of a proper application
30under subsection (c) provided the Article IV-A member has

1completed 20 years of credited service.

2(b) Superannuation retirement benefit.--Upon termination of
3service, an Article IV-A member who is eligible for a
4superannuation retirement shall be entitled to receive an annual
5retirement allowance throughout the member's life, which shall
6be calculated by multiplying the member's years of credited
7service times the member's final salary times 2.5% not to exceed
865% of the member's final salary.

9(c) Application.--

10(1) Each active Article IV-A member who terminates
11service and who is not then a disability annuitant shall
12execute and file with the board a written statement, duly
13attested by the member or his legally constituted
14representative, electing to receive an immediate annuity and
15stating on what date the member desires to be retired.

16(2) The application shall make the superannuation
17retirement benefit effective on the date so specified if the
18application was filed in the office of the board or deposited
19in the United States mail addressed to the board before the
20date specified in the application and before the death of the
21member, but the date stated in the application shall not be
22more than 90 days after the date of filing or the date the
23application was deposited in the mail.

24(d) Initial payment.--The board shall make the first payment
25to an Article IV-A member who is eligible for an annuity within
2660 days of the filing of an application for an annuity or within
2760 days of the effective date of retirement, whichever is later,
28and receipt of the required data from the employer.

29Section 407-A. Refund.

30(a) Eligibility.--Upon termination of service, an Article

1IV-A member, regardless of eligibility for benefits, may elect
2to receive his accumulated deductions in lieu of any benefit to
3which he is entitled.

4(b) Required refund.--Upon termination of service, an
5Article IV-A member who is not eligible for any benefits under
6this article shall be paid the full amount of the accumulated
7deduction standing to the member's credit in the member's
8account.

9Section 408-A. Vesting.

10(a) Eligibility.--An Article IV-A member who terminates
11service with 12 or more years of credited service shall be
12entitled to vest his retirement benefits until the date upon
13which the Article IV-A member would have become eligible for a
14superannuation retirement benefit under section 406-A(a) if such
15Article IV-A member had continued to be employed and eligible
16for membership under section 402-A.

17(b) Notification following termination of service.--

18(1) The municipality shall immediately notify the board
19in a manner prescribed by the board of the date of
20termination of service for any Article IV-A member.

21(2) As soon as practicable after receiving notice from a
22municipality that an Article IV-A member who is eligible to
23vest is terminating service, the board shall notify the
24Article IV-A member in writing that the member must file with
25the board an application to vest within 90 days of the date
26of notice to vest. If the Article IV-A member fails to file
27an application to vest within 90 days of the date of notice
28to vest, the member shall be deemed to have elected to
29receive the accumulated deductions in lieu of any benefit to
30which the member may be entitled.

1(c) Failure to elect.--In the event that an Article IV-A
2member fails to file an application to vest within 90 days of
3the date of notice to vest, he shall be ineligible to vest and
4shall be deemed to have elected to receive his accumulated
5deductions in lieu of any benefit to which he may be entitled.
6The amount payable to the member shall be determined in
7accordance with section 407-A.

8(d) Interest.--Regular interest will continue to be credited
9on a vested Article IV-A member's accumulated deductions from
10date of termination of service until the earlier of the date of
11the commencement of the annuity or the date of payment of member
12contributions.

13(e) Application for benefits.--

14(1) A vested Article IV-A member may submit an
15application in accordance with section 406-A within 90 days
16of the date upon which the member would have become eligible
17for a superannuation retirement benefit under section
18406-A(a) if the member had continued to be employed and
19eligible for membership under section 402-A.

20(2) If a vested Article IV-A member applies for an
21annuity within 90 days of the date, the effective date of
22retirement will be the date the member would have attained
23eligibility for a superannuation retirement benefit.

24(3) If an Article IV-A member does not apply within 90
25days, the effective date of retirement will be the date the
26application was filed or the date specified on the
27application, whichever is later.

28Section 409-A. Deferred Retirement Option Program.

29An Article IV-A member may elect to receive a retirement
30benefit under the terms of the Deferred Retirement Option

1Program as adopted by the board.

2Section 410-A. Return to service.

3(a) General rule.--Should an Article IV-A annuitant, other
4than a disability annuitant, be reemployed in a position that is
5subject to mandatory enrollment as an Article IV-A member or be
6subsequently employed with a municipality that has enrolled its
7employees under Article II, III or IV, his retirement allowance
8shall continue to be paid through the period of reemployment,
9provided the Article IV-A annuitant is otherwise eligible to
10receive an in-service distribution of his retirement benefit by
11attainment of normal retirement age as defined in section 411(a)
12(8) of the Internal Revenue Code of 1986 (Public Law 99-514, 26
13U.S.C. § 411(a)(8)), operation of section 401(a)(36) of the
14Internal Revenue Code of 1986 or operation of any other
15provision as may be adopted by the board and consistent with the
16tax qualification provisions of the Internal Revenue Code of
171986.

18(b) Credited service during in-service distribution.--An
19Article IV-A annuitant who is eligible for an in-service
20distribution shall not be entitled to earn any credited service
21during the period of reemployment and no contribution may be
22made by the Article IV-A annuitant or the municipality on
23account of such employment.

24(c) Notification by municipality.--The municipality shall
25immediately notify the board of the reemployment status of any
26Article IV-A annuitant.

27Section 411-A. Death benefits.

28(a) Options.--The current spouse or eligible dependent of a
29vested Article IV-A member who has terminated service and dies
30before filing an application for benefits under section 408-A(a)

1may elect to receive payment according to one of the following
2options:

3(1) A monthly benefit equal to 50% of the benefit the
4vested Article IV-A member would have received had he
5submitted an application under section 408-A(e). The monthly
6benefit will begin on the date upon which the vested Article
7IV-A member would have become eligible for a superannuation
8retirement benefit under section 406-A(a) if the Article IV-A
9member had continued to be employed and eligible for
10membership under section 402-A.

11(2) All of the moneys credited to the member's account
12as of the date of his death.

13(b) Withdrawal of moneys by survivor.--The current spouse or
14eligible dependent of an active Article IV-A member who dies and
15has less than 12 years of credited service at the time of death
16shall receive all of the money credited to the member's account
17as of the date of death.

18(c) Survivor annuity.--

19(1) The current spouse or eligible dependent of an
20active Article IV-A member who dies and has at least 12 years
21of credited service at the time of death but less than 20
22years of credited service shall receive a monthly benefit
23equal to 50% of the benefit the active Article IV-A member
24would have received had he retired the day before his death
25actuarially reduced from the member's superannuation date.

26(2) The current spouse or eligible dependent of an
27active Article IV-A member who dies and has at least 20 years
28of credited service at the time of death shall receive a
29monthly benefit equal to 50% of the benefit the active
30Article IV-A member would have received had he retired the

1day before his death.

2(3) The current spouse or eligible dependent of an
3Article IV-A annuitant shall receive a monthly benefit equal
4to 50% of the benefit the Article IV-A annuitant was
5receiving at the time of his death.

6(d) Determination of current spouse.--For purposes of this
7article, the "current spouse" shall be determined as of the date
8of death of the member. In the event there is no current spouse,
9an "eligible dependent" shall be the child or children of the
10deceased Article IV-A member, provided the dependent is under 18
11years of age or, if attending college, under 23 years of age.

12(e) Duration of survivor annuity.--

13(1) If the current spouse is entitled to receive a
14benefit, the benefit shall be paid for the life of the
15spouse.

16(2) If an eligible dependent is receiving a benefit, the
17benefit shall be paid until the child attains 18 years of age
18or, if attending college, 23 years of age.

19(3) If there is more than one eligible dependent, the
20benefit shall be equally divided among the dependents.

21(4) If the current spouse is receiving a benefit under
22the provisions of this section and the current spouse dies
23and there is a surviving eligible dependent of the Article
24IV-A member, the eligible dependent shall receive the benefit
25as long as the eligible dependent is entitled.

26(f) Default provision.--In the event there is no current
27spouse or eligible dependents, the member's accumulated
28deductions, less any moneys paid out as a benefit, shall be paid
29to the beneficiary or, if one is not designated, the estate or
30next of kin under 20 Pa.C.S. § 3101 (relating to payments to

1family and funeral directors).

2Section 412-A. Disability retirement.

3(a) Eligibility.--

4(1) An active Article IV-A member who is permanently
5unable to perform the full duties of a municipal policeman as
6a result of a service-connected disability shall receive a
7disability pension equal to 50% of the Article IV-A member's
8final salary, regardless of age or credited service, provided
9the physician designated by the board, after medical review,
10certifies that the member is unable to perform the full
11duties of a municipal policeman.

12(2) An active Article IV-A member who is permanently
13unable to perform substantial, gainful employment,
14considering the member's age, education and work experience
15as a result of a service-connected disability, shall receive
16a disability pension equal to 75% of the member's final
17salary, regardless of age or credited service, provided the
18physician designated by the board, after medical review,
19certifies that the member is unable to perform substantial,
20gainful employment.

21(3) For purposes of this section only, a "service-
22connected disability" shall mean the disability of a member
23resulting from:

24(i) an injury arising out of and incurred in the
25course of his employment as determined under the
26applicable provisions of the act of June 2, 1915
27(P.L.736, No.338), known as the Workers' Compensation
28Act, or the act of June 21, 1939 (P.L.566, No.284), known
29as The Pennsylvania Occupational Disease Act; or

30(ii) an injury in the performance of his duties

1under the applicable provisions of the act of June 28,
21935 (P.L.477, No.193), referred to as the Enforcement
3Officer Disability Benefits Law, which has been
4determined to be permanent.

5(b) Offset not authorized.--A disability benefit shall not
6be offset by the amount of any payment made to the Article IV-A
7member under the provisions of the Workers' Compensation Act,
8The Pennsylvania Occupational Disease Act or the Social Security
9Act (49 Stat. 620, 42 U.S.C. § 301 et seq.).

10(c) Effective date of disability retirement.--The effective
11date of a disability retirement shall be the first day of the
12month following the earlier of:

13(1) the granting of a disability retirement by the
14board; or

15(2) the date following the termination of benefits under
16the Enforcement Officer Disability Benefits Law.

17(d) Permanency of disability benefits.--Once granted by the
18board, the disability benefit shall be a permanent benefit and
19shall not be subject to subsequent reviews by the board.

20(e) Return to service.--

21(1) Notwithstanding any other provision of this article
22to the contrary, should a disability annuitant return to
23employment and become eligible to enroll as an Article IV-A
24member, any annuity payable to the annuitant shall cease
25effective upon the date of return to service.

26(2) If an annuitant is receiving a disability under
27subsection (a)(2) and is subsequently employed by a
28municipality that has enrolled its employees under Article
29II, III or IV and is otherwise subject to mandatory
30enrollment under the plan, the disability annuity shall cease

1effective upon the date of return to service.

2(3) Should a disability annuity cease in accordance with
3paragraph (1) or (2), the disability annuitant shall be
4restored to active service and the actuarial equivalent of
5the total disability allowance calculated as of the date of
6retirement less the amount of disability payments paid to the
7disability annuitant shall be transferred from the retired
8member's reserve account and credited to the member's account
9and the employers' account as follows:

10(i) The present value of the member's annuity to
11which the disability annuitant was receiving less the
12total payments received on account of the member's
13annuity as of the time of reentry into Article IV-A shall
14be credited to the member's account.

15(ii) The remainder shall be credited to the
16employers' account.

17Section 413-A. Portability.

18When a member terminates service, within one year of
19separation becomes employed by a municipality and is enrolled as
20a member under Article II, III or IV or this article, the
21member's service credits shall remain unimpaired. In such a
22case, the municipal liability for past service shall be prorated
23by the system between the municipalities and the applicable plan
24on an equitable basis.

25Section 414-A. Municipal guarantee.

26Regular interest charges payable, the maintenance of reserves
27in the fund on account of benefits under this article, the
28payment of all annuities and other benefits granted under this
29article are hereby made obligations of each municipality
30employing Article IV-A members. All income, interest and

1dividends derived from deposits and investments attributable
2under this article shall be used for the payment of the
3obligations of the municipalities.

4Section 4. This act shall take effect in 60 days.