Pennsylvania Act 2004-200 — MUNICIPAL PENSION PLAN FUNDING STANDARD AND RECOVERY ACT - AUTHORIZATION FOR ALTERNATE AMORTIZATION SCHEDULES TO ACCOMMODATE EXTRAORDINARY EVENTS

Act text

MUNICIPAL PENSION PLAN FUNDING STANDARD AND RECOVERY ACT - AUTHORIZATION
 FOR ALTERNATE AMORTIZATION SCHEDULES TO ACCOMMODATE EXTRAORDINARY EVENTS
                 Act of Nov. 30, 2004, P.L. 1577, No. 200             Cl. 72
                             Session of 2004
                               No. 2004-200

     HB 2865

                                  AN ACT

     Amending the act of December 18, 1984 (P.L.1005, No.205),
        entitled "An act mandating actuarial funding standards for
        all municipal pension systems; establishing a recovery
        program for municipal pension systems determined to be
        financially distressed; providing for the distribution of the
        tax on the premiums of foreign fire insurance companies; and
        making repeals," providing authorization for alternate
        amortization schedules to accommodate extraordinary events.

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

        Section 1.  The act of December 18, 1984 (P.L.1005, No.205),
     known as the Municipal Pension Plan Funding Standard and
     Recovery Act, is amended by adding a section to read:
      Section 209.  Authorization for alternate amortization
                    schedules to accommodate extraordinary events.
        In the preparation of an actuarial valuation report as of the
     beginning of the plan year occurring in 2005 or thereafter, a
     municipality may adopt an alternate amortization schedule rather
     than the amortization schedule specified in section 202(b)(4)
     for any increment of unfunded actuarial accrued liability that
     exceeds $9,000,000, causes at least a 30% increase in the
     aggregate actuarial accrued liability of the pension plan and is
     attributable to a single benefit enhancement granted prior to
     January 1, 2004, and being newly recognized in the actuarial
     valuation report. The alternate amortization schedule shall be
     formally adopted by the governing body of the municipality and
     shall provide for an amortization target date that results in an
     amortization period of 30 years, level percentage amortization
     payments increasing by no more than 5% annually if adopted in an
     actuarial valuation report with a valuation date in 2005 and
     level dollar amortization payments if adopted in an actuarial
     valuation report with a valuation date occurring after December
     31, 2005. The initial and all subsequent actuarial valuation
     reports filed with the commission during the operation of the
     alternate amortization schedule shall separately disclose the
     initial amount of the increment of unfunded actuarial accrued
     liability, the date that the alternate amortization schedule was
     established, the amortization target date, the original
     amortization period, the remaining balance of the increment of
     unfunded actuarial accrued liability and the amortization
     payment for the year following the valuation date of the
     actuarial valuation report.
        Section 2.  This act shall take effect immediately.

     APPROVED--The 30th day of November, A. D. 2004.

     EDWARD G. RENDELL