Pennsylvania Act 1990-189 — MUNICIPAL PENSION PLAN FUNDING STANDARD & RECOVERY ACT - AMEND

Act text

MUNICIPAL PENSION PLAN FUNDING STANDARD & RECOVERY ACT - AMEND
                 Act of Dec. 18, 1990, P.L. 753, No. 189              Cl. 72
                             Session of 1990
                               No. 1990-189

                                  AN ACT

     SB 1307

     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," further providing for the financial
        requirements of the pension plan and the minimum obligation
        of the municipality.

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

        Section 1.  Sections 302(b)(2), (c) and (d) and 303(c) of the
     act of December 18, 1984 (P.L.1005, No.205), known as the
     Municipal Pension Plan Funding Standard and Recovery Act, are
     amended to read:
      Section 302.  Minimum funding standard; defined benefit plans
                            self-insured in whole or in part.
        * * *
        (b)  Financial requirements of the pension plan.--
            * * *
            (2)  The normal cost and administrative expense
        requirements for the following plan [years] year shall be
        expressed as a dollar amount and shall be determined by
        applying the normal cost of the benefit plan and the
        administrative expense payable from the assets attributable
        to the benefit plan, as reported in the actuarial valuation
        report of the pension plan and expressed as a percentage of
        [covered] payroll, to the [estimated covered] payroll of the
        active membership of the pension plan [including any pro-
        jected increase in active membership for the following year]
        as of the date the financial requirements of the pension plan
        are determined.
            * * *
        (c)  Minimum obligation of the municipality.--Annually, the
     chief administrative officer of the pension plan shall determine
     the minimum obligation of the municipality with respect to the
     pension plan for the following plan year. The minimum obligation
     of the municipality with respect to the pension plan shall be
     equal to the financial requirements of the pension plan reduced
     by the following amounts:
            [(1)  The amount of any general municipal pension plan
        State aid from the Commonwealth anticipated as receivable by
        the municipality pursuant to section 402 and to be allocated
        to the pension plan for the following plan year.
            (2)] (1)  The amount of any member contributions
        anticipated as receivable for the following year.
            [(3)] (2)  If the actuarial value of the assets of the
        pension plan exceed the actuarial accrued liability of the
        pension plan, an amount equal to one-tenth of the amount by
        which the actuarial value exceeds the actuarial accrued
        liability.
        (d)  Payment of minimum municipal obligation.--Annually the
     municipality shall provide for the full amount of the minimum
     obligation of the municipality in the budget of the
     municipality. The minimum obligation of the municipality shall
     be payable to the pension plan from the revenue of the
     municipality. Payment of the minimum obligation of the
     municipality shall be made by the municipality [and if made
     during the month of January, shall be payable without any
     interest, and if made subsequent to the month of January but]
     prior to December 31[, shall be payable with interest for the
     period since January 1 at a rate equal to the interest
     assumption used for the actuarial valuation report, expressed on
     a monthly basis].
        * * *
      Section 303.  Minimum funding standard; defined benefit plans
                            wholly insured or defined contribution
                            plans.
        * * *
        (c)  Minimum obligation of the municipality.--Annually, the
     chief administrative officer of the pension plan shall determine
     the minimum obligation of the municipality with respect to the
     pension plan for the following plan year. The minimum obligation
     of the municipality with respect to the pension plan shall be
     the employer contribution portion of financial requirements
     determined pursuant to the terms of the contract or policy with
     the insurance carrier or the plan document governing the pension
     plan, whichever is applicable[, reduced by the amount of any
     general municipal pension plan State aid from the Commonwealth
     anticipated as receivable by the municipality pursuant to
     section 402 and to be allocated to the pension plan for the
     following plan year].
        * * *
        Section 2.  This act shall take effect immediately.

     APPROVED--The 18th day of December, A. D. 1990.

     ROBERT P. CASEY