HomeMy WebLinkAbout08-036806-34.8 C,.iL7inL*n
SHIPPENSBURG POLICE IN THE COURT OF COMMON PLEAS
ASSOCIATION OF CUMBERLAND COUNTY,
PENNSYLVANIA
APPEAL OF
V. ACT 111 GRIEIVANCE ARBITRATION
AAA-14 390 00052 07 CNN
BOROUGH OF SHIPPENSBURG
PETITION TO VACATE
ARBITRATION AWARD
Petitioner, Borough of Shippensburg, by its attorneys, Salzmann Hughes, P.C. , files this
Petition to Vacate the Arbitration Award entered by an Arbitrator, William E. Caldwell in
this matter and in support thereof avers as follows:
Petitioner, Borough of Shippensburg, hereby petitions this Honorable Court to
vacate the arbitration award entered against it in this matter and in favor of
respondent David Lively by William E. Caldwell in a grievance arbitration
conducted under the provisions of Act 111, arising out of the Collective
Bargaining Agreement between the Shippensburg Police Association and the
Borough of Shippensburg.
2. On December 7, 2006 Officer David Lively of the Shippensburg Borough Police
Department submitted to Shippensburg Borough Police Department Chief Fred
Scott a letter declaring his intention to retire from the police force and that his last
scheduled work day would be January 14, 2007. The letter included a request for
payment for his 400 hours of unused vacation leave and that 5% retirement
contribution be deducted from the payment by the close of business on January
15, 2007. Officer Lively, on January 17, 2007, was paid in the amount of Nine
Thousand One Hundred and Sixty Three Dollars and Sixty Eight Cents
($9,163.68) for his unused vacation time. In accordance with past practice and
judicial precedent, no pension contributions were deducted from the payment. The
lump sum payment for vacation had never previously been a part of the pension
plan calculation and there had been no change in the pension plan's restated
definition of "compensation."
Shortly after receiving the payment Officer Lively initiated the Grievance
process, which resulted in the Grievance being heard on May 17, 2007 before
Arbitrator William E. Caldwell.
3. The award, a true and correct copy of which is attached hereto and incorporated
herein as Exhibit "A", was received by petitioner by first class mail on December
23, 2007, should be vacated for the following reasons:
(a) The arbitrator lacked jurisdiction to hear the matter because a valid and final
judgment, rendered in Worthington v. Borough of Shippensburg, 785 A.2d 180
(Pa. Cmwlth. Ct. 2001) appeal denied 808 A.2d 575 (Pa. 2002), was conclusive
between the parties, which bars the grievant from re-litigating the issue under the
doctrine of collateral estoppel. A true and correct copy of the Worthington
decision is attached hereto and incorporated herein as Exhibit "B"
(b) The arbitrator lacked jurisdiction to hear the matter because the pension plan,
which was incorporated into the collective bargaining agreement, provides that a
final judgment entered in any such action or proceeding shall be binding and
conclusive on all persons having or claiming to have an interest in the plan. As the
grievant was a participant in the pension plan at the time of the Worthington case,
the Worthington decision was binding and conclusive on the grievant and
precludes re-litigating the matter. True and correct copies of the Pension Plans as
restated in 1997 and as restated in 2003 are attached hereto and incorporated
herein as Exhibits "C" and "D" respectively.
(c) The arbitrator lacked jurisdiction to hear the matter because the Collective
Bargaining Agreement expressly provided that it was subject to judicial
determinations which may specifically affect the provisions of the Agreement.
As the Worthington case was a judicial determination that affected the
Agreement, and neither party bargained for a change in the agreement regarding
the pension calculation subsequent to the Worthington decision, the matter is one
which is outside of the jurisdiction of the arbitrator. True and correct copies of the
Collective Bargaining Agreements as effective on January 1, 1997, January 1,
2001, and January 1, 2003 are attached hereto and incorporated herein as Exhibits
"E", "F", and "G" respectively.
(d) The arbitrator mandated an illegal act and exceeded his power in altering the
definition of "salary" as defined in Act 600 (53 P.S. 751 et.seq.) although, as
stipulated to by the grievant, there was no past practice of including the lump sum
payment for unused vacation in the pension calculation, there was no pension
contribution deducted from the lump sum payment, and there was no agreement
to include the lump sum payment for unused vacation in the pension calculation,
in contravention of Act 600 and the Pennsylvania Supreme Court's definition of
"salary" there under.
(e) The arbitrator mandated an illegal act and exceeded his power in requiring a
modification to the pension plan without complying with the requirements of Act
205 (53 P.S. §§ 895.101 et. seq.), as the pension plan cannot be modified by
bargaining or arbitration without receiving a cost estimate of the effect of the
proposed benefit plan modification which guarantees the actuarial soundness of
the plan.
4. Petitioner reserves the right to raise additional theories of relief up to and
including the time of the hearing.
WHEREFORE, for all the reasons set forth above, petitioner prays that this Honorable
Court vacate the Arbitration Award and award to the petitioner the costs of this action
and grant such other relief as the court may deem appropriate.
Respectfully Submitted,
HUGHES, P
Date: January /-5- , 2008 By:
G. Oryan Salzmann, Esq ire
A?forney ID#61935
Samuel E. Wiser Jr., Esq
Attorney: ID# 203665
455 Phoenix Drive; Suite A
Chambersburg, PA 17201
(717) 263-2121
Solicitor of Shippensburg Borough
VERIFICATION
I verify that all the statements made in the foregoing Petition are true and
correct to the best of my knowledge, information and belief and that any false statements
made are subject to the penalties of 18 Pa.C.S. Section 4904 relating to unworn
falsification to authorities.
E,-Vl, ,
Earl Parshall
President, Borough Council
CERTIFICATE OF SERVICE
I hereby certify that on this AP0,day of January, 2008, I served a true and
correct copy of the foregoing Petition to Vacate Arbitration Award by first class mail,
postage pre-paid to the following:
Sean T. Welby
2705 N Front St
Harrisburg, PA 17110
Shippensburg Police Association
Post Office Box 26
Shippensburg, PA 17257
Respectfully Submitted,
P.C.
Date: January / rG , 2008 By;
G. ryan Salann, Esquire
A orney ID 61935
duel E. Wiser, Esquire v
Attorney: ID# 203665
455 Phoenix Drive, Suite A
Chambersburg, PA 17201
(717) 263-2121
Solicitor of Shippensburg Borough
EXHIBIT A
in the matter of arbitration between
Shippensburg Police Association
and
Borough of Shippensburg
RE: AAA 14 390 00052 07 CNN
Hearing Date: May 17, 2007
Date of Briefs: November 9, 2007
For the Association For the Boroui
Sean T. Welby, Esquire G. Bryan Salzmann, Esquire
William E. Caldwell
Arbitrator
Background
Pursuant to the provisions of the collective bargaining agreement, hereinafter
cited as the CBA, between the parties, the procedures of the American Arbitration
Association and applicable law, the undersigned was duly selected and appointed to
serve as arbitrator of a dispute arising under the terms of the current agreement
between the parties.
A hearing was conducted on May 17, 2007 and held in Shippensburg, Pa. The
parties were given full opportunity to present testimony, evidence and argument at the
hearing. The grievant was present throughout the hearing. Sean T. Welby, Esquire,
represented the Police Association and G. Bryan Salzmann, Esquire, represented the
Borough. Briefs were submitted on or before November 9, 2007 and received by the
arbitrator on November 20, 2007. The record was then closed.
A brief summary of the dispute is presented. On December 7, 2006 the grievant
submitted a letter of resignation from the police force indicating his last scheduled
workday would be January 14, 2007. The letter requested payment for his unused
vacation leave be paid in combination with has last pay period check. He further
requested that a 5% retirement contribution be deducted from that payment. He
requested that the payment for unused vacation leave be utilized in the calculation of his
retirement. While the employer paid for the unused leave as requested, no deduction
was made for retirement nor was that amount utilized in the calculation of the grievant's
retirement. The employer argues that such payment for unused vacation leave
cannot be utilized for the calculation of a retirement benefit.
The parties have not resolved the dispute within the grievance procedure hence
the grievance is properly before the arbitrator. Further, the employer argues that the
grievance is not arbitrable because the same exact issue has been previously litigated
and decided by the Commonwealth Court.
because of collateral estoppel.
Issues: 1, Is the grievance arbitrable?
Therefore, the grievance is not arbitrable
2. Did the employer violate the CBA when it failed to include payment for
unused vacation leave in the calculation for retirement pay? And if so,
what is the proper remedy?
Pertinent Provisions of the Agreement
Article III " .. This Agreement is also subject to future enactments of the
Commonwealth of Pennsylvania or judicial decisions which may specifically affect
the provisions of this Agreement... "
Article V " For the purpose of this Agreement the term "grievance" means a
difference between an Individual Police Officer ... and the Borough with respect to
the interpretation, application, claims or breach or violation of any provision of this
Agreement ... The arbitrator shall neither add to subtract from nor modify the
provisions of this agreement. The arbitrator shall confine himself or herself to the
precise issues submitted for arbitration. The arbitrator has no authority to
determine any other issues not submitted to him or her "
Article XIV " ... the Pension Plan shall provide for a computation base for
calculating pensions based upon the prior three years of service ... "
Borough of Shippensburg Police Pension Plan, Section 1.02 Definitions,
" Compensation means the total earnings except as modified in this definition paid
to an employee by the employer or during any specified period. Earnings as used in
this definition includes salary, court pay, holiday pay, overtime pay, and other
remuneration."
Position of the Police Association
With regard to arbitrability, the grievant argues that the standards are clearly set
forth in Article V of the CBA. Such provision is clear in defining a grievance as a
difference between an individual police officer and the Borough with respect to the
interpretation, application, or violation of any provisions of the Agreement. Further, the
CBA specifically provides a basis for the grievance in Article XIV, which incorporates the
police pension plan into the CBA. The pension plan defines compensation for the
purposes of calculating plan benefits and is based on total earnings. The issue then
is whether pay for unused vacation earned and paid in the last 36 months of
employment is a matter governed solely by the terms of the CBA and is a dispute which
is arbitrable under the definition of a grievance found in the Agreement.
In dealing with the issue on its merits, the prior Court decision does not apply,
since the payment for unused leave was not made in conjunction with the final pay.
Here, by specific request, it was. Further, rulings by the Courts and the Auditor General
have now supported the use of accumulated unused leave in pension calculations when
the provisions are in the CBA. There can be no question that the unused vacation leave
is properly included in the pension. Total compensation, by definition, mandates that the
calculation of final average salary for pension shall be based on a thirty-six month
period. In addition, the plan mandates that the final average salary be computed to
include total earnings. The employer was contractually obligated to include that sum in
the calculation of final average salary. Because it failed to do so, it violated the terms of
the CBA and the grievance should be sustained.
Accordingly, for the reasons discussed above, the grievance should be
sustained and an appropriate remedy awarded.
Position of the Employer
Collateral estoppel or issue preclusion is a bar to arbitration in this matter. The
elements needed for collateral estoppel are, that the issue has been determined in a
prior action is the same as that appearing in a subsequent action, and that the party
against whom the defense is invoked is identical to the party in the first action. In this
matter, the issue is the same as the issue in Worthington versus Borough of
Shippensburg. The Commonwealth Court held that to determine whether lump sum
postretirement payment for unused sick and vacation time is determined by this Court's
decision in Kosey, (459 A 2d 434.) The Worthington decision is binding and conclusive
on the express terms of the pension plan and therefore any attempt to deviate from the
terms of that decision is not arbitrable. Further, Article III of the CBA indicates that a
judicial determination may specifically affect the provisions of the CBA. Further, in the
interest of labor stability and predictability, consistency should be followed as upheld in
Danville Area School District and In the School District of Philadelphia versus
Philadelphia Federation of Teachers. Finally, the parties have jointly stipulated that
over the past 25 years lump-sum payment for vacation time has never been part of the
pension calculation, there has been no change in the language of the CBA or pension
plan and the Worthington decision was known to the Association. For all of the above
reasons the grievance is not arbitrable and if arbitrable the finding should be for the
employer.
Therefore, for the reasons above, the grievance should be denied.
Discussion
The first issue before the arbitrator is a procedural one concerning arbitrability.
The employer argues that the grievance is not arbitrable due to collateral estoppel. The
grievant argues that the grievance is arbitrable based on the clear language of the CBA.
Article V of the CBA is clear in indicating that the definition of a grievance is a dispute
between an individual officer and the employer concerning an interpretation of the
provisions of the agreement. It is clear that the provisions of the CBA contain references
to the pension plan. In reading the provisions of the CBA and grievance definition it is
clear that the matter at issue involves a dispute regarding a contract clause and therefore
the matter is found to be arbitrable.
"Because of the presumption of arbitrability set forth in the
Steelworkers Trilogy, a grievance should not be dismissed based on arbitrability
unless it may be said with positive assurance that an arbitration clause is not
susceptible of an interpretation that covers the asserted dispute."
The definition of compensation in the pension plan is the total earnings including
salary, court pay, holiday pay, overtime pay and any other remuneration. While the
employer argues that the matter is settled based on a prior Commonwealth Court
decision, the arbitrator disagrees. In reviewing the Court decisions between the parties
concerning this issue, it is noted that the common pleas decision in October of 2000 was
partially based on the same definition as in the current plan. In that case, the Court
allowed the inclusion of vacation and sick leave. The Commonwealth Court later ruled
that the post retirement payment could not be included in the retiree's average
compensation. Based on Kosey, the Court found that unused vacation and sick time paid
for after retirement simply falls outside of the computation period. In addition, the
Court stated that vacation or sick time that was used and paid for before the date of
retirement has been properly included in average compensation. Therefore the arbitrator
understands a clear difference between payments for unused leave before retirement as
opposed to the Court decision concerning payment for unused leave after retirement.
The grievant presents evidence concerning labor board decisions, Attorney
General opinions and prior arbitration awards. The Attorney General opinion submitted
contains the following information. "Certainly we do not seek to have municipalities
disregard collective bargaining agreements or ordinances that grant such benefits." In
clarifying the policy the Attorney General acknowledges situations that do not fall
squarely within the policy. "For example, a municipality that paid a retiree for unused
leave during each year of a three year averaging period could, depending on how the note
is applied, include those payments in the pension calculation without running afoul
of the bulletin." "Accordingly, please be advised that we have no objection to a
municipality's including accumulated unused leave in pension calculations as long as the
leave was earned during the applicable pension computation period." The arbitration
awards submitted are supportive of the grievant's contentions in the definition of
compensation but not similar regarding past practice.
Therefore in arriving at a decision on the issue the following elements are
important.
1. The issue in this case is not identical to the issue in Worthington and is arbitrable
under the clear language of the CBA.
2. The clear language of the pension plan includes all earnings paid to an employee
during any specified period. This is the same language, which was approved in the
arbitration awards. It is the same language upheld by the Court of common pleas in
October of 2000. The employer had an opportunity following the Worthington decision
to attempt to bargain new CBA language and pension plan language, which was modified
in 2003. This decision is not based on past practice but on the clear language of the
pension plan.
3. While the Attorney General opinions and Court rulings encourage a denial of
lump-sum benefits, such are permitted when required by a collective bargaining
agreement. In fact, the Attorney General opinion in evidence contains examples of
proper inclusions of lump-sum benefits. In the Borough of Nazareth, 680A.2d 830, "the
term salary as embodied in Act 600 denotes base salary and excludes other forms of
compensation unless the parties through past practice or agreement had expanded this
definition."
4. While Section 10.09 of the Pension Plan binds the parties to a final
judgment, the instant case is not identical. In addition, Section 10.08 requires that any
conflict between the Pension Plan and the CBA be controlled by the CBA.
Finally, the grievant in his letter of December 5, 2006 requested only pay for his
unused vacation leave minus taxes and a retirement contribution. There was no mention
of other unused leave.
Therefore after consideration of all testimony, evidence, and argument, and in
light of but not limited to the discussion above, the arbitrator finds that the employer has
violated the Agreement.
Finding
1. The grievance is sustained in part. The employer is directed to recalculate
the grievant's monthly pension benefit including the lump sum payment for his unused
vaetion pay.
2. The arbitrator retains jurisdiction until the terms of this award are satisfied
illiam aldwell Date
EXHIBIT B
Feb. 9. 2007 3:06PM Shippensburg School District No. 9261 P. 4
PIS-1 0999 E9Z ZTL:WO'id 0Hft99N2dd1H9 .a0 1111MOU09;0Z 62:69 T9-ST-eT
IN THE COMMONWEALTH COURT OF PENNSYLVA.NVIA
Gerald Worthington and
Terry Lee Kennedy, Sr.
V.
Borough of Shippensburg,
Appellant
NO. 82 C.D. 2001
ARGUED: September 10, 2001
BEFORE: HONORABLE JAMES GAR.DNER COLDS, Judge
HONORABLE BONNIE BRIGANCE LEADBE7TER, Judge
HONORABLE CHARLES P. NnRARCHI, JR,, Senior Judge
OPINION NOT REPORTED
AIEMOFU DLM OPINION BY
JUDGE LEADBETTER
FILED: oc*_ooer 3, 2001
The Borough of Shippensburg (Borough) appeals from the final
decree entered by the Court of Common Pleas of Cumberland County in favor of
plaintiffs, Terry Lee Kennedy, Sr, and Gerald Worthington. Common pleas held
that the Borough's calculation of the pension benefit due to retirees Kennedy and
Worthington. must include the amount each received in a lump sum post-retirement
payment for unused vacation and sick days. We reverse.
Kennedy and Worthington each served as police officers' for more
than twenty-five years as employees of the Borough.' In 11998, they each retired -
i At the time of their retirement, plaintiffs were employed by the Mid-Cumberland Valley
Regional Police Department, covering the Borough and Franklin and Cumberland Counties. The
regional department was dissolved in 20010. Following dissolution, the Borough succeeded to the
rights and obligations of the regional department, The caption in the present action, which was
(Footnote continued on next page...)
??T 1. - ?Olll
6•01 E99D E90 LIL e9a:0T TO $T too
.Feb. 9 . 2007 3:07PM Sh 4pensbu rg School Dist r i ct No. 9261 P. 5
t0d E996 293 474;NOHJ JHn99N3dd1H9 AO HOnoHOS:OZ 63:69 T9-8T-91
Kennedy effective on April I and Worthington effective on November 1. As of the
date of retirement, they each became entitled to pension benefits pursuant to the
Pension Platt (Plan) then in effect. The Plan provides for payment of a benefit
based on 50% of Average Compensation. The Plan defines the term "Average
Compensation," in pertinent part, as follows:
Average Compensation means, on any given date, the
average of an Employee's monthly pay on the 36 latest
Compensation Dates (all Compensation Dates, if less
than this number) occurring before such given date.
Pay as used in this definition means the total earnings
paid to an Employee by the Employer. Earnings as used
in this definition includes salary, courtpay, holiday pay,
overtime pay and any other remuneration.
(emphasis added). The Borough determined each retiree's Average Compensation
without including therein the lump sum payment for unused vacation and sick days
each received about one-week after he had retired. Kennedy received 514.826.70
on April 8. 1998 and Worthington received $15,718.69 on November 4, 1998; the
Borough did not withhold the 5% employee pension contribution from these lump
sum payments. Kennedy and Worthington filed a complaint for declaratory
judgment seeking a determination that under the terms of the Plan the lump sum
post-retirement payments must be included in their Average Compensation for the
purpose of calculating the amount of their monthly pension benefit.
The parties entered into stipulations and then filed cross motions for
summary- judgment. Following consideration of briefs and oral argument, common
(contwued...)
originally filed in 1999 against the regional department and its chief of police was subsequently
amended to name only the Borough as defendant/appellant.
2
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Feb. 9. 2007 3:07PM S h I p p e n s b u r g School District No. 9261 P. 6
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pleas entered a decree nisi declaring that the post-retirement lump sum payments
must be included in calculating the monthly pension benefit and directing that each
plaintiff contribute 5% of the lump sum payment to the pension plan. The Borough
filed exceptions to the decree, contending that common pleas erred as a matter of
law in interpreting Kosi7 1'. Washington Police Pension Board, 459 A.2d 432 (Pa.
Crnwlth. 19$3) as allowing for the inclusion of the lump sum payments in Average
Compensation. In addition, the Borough contended that common pleas erred in
including the entire amount of the lump sum payments in plaintiffs' Average
Compensation without fm conducting an evidentiary hearing to determine the
amount of unused vacation and sick: time that had accrued during the thirty-six
months before retirement. Common pleas overruled the exceptions, rejecting the
Borough's legal argument. Common pleas also concluded that the Borough was
judicially estopped from demanding an evidentiary hearing because at argument on
the cross-motions for summary judgment the Borough agreed that all material facts
were stipulated and the matter could be adjudicated. Common pleas made its
decree absolute and the Borough filed the present appeal.
On appeal, the Borough continues to argue that this court's decision in
Kosey and in Tfallaesa v. Police Pension Commission, 517 A.2d 1022 (Pa.
Cmwlth. 1986) establish that the lump sum payment for unused vacation/sick time
can not form part of plaintiffs' Average Compensation. Alternatively, the Borough
asserts that common pleas erred in finding that all of the unused vacation/sick time
paid for in the lump sum payment had accrued during the relevant thirty-six month
period. The Borough contends that this fact was neither stipulated nor proven
during a hearing at which plaintiff/retirees would bear the burden of proof.
3
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Feb. 9. 2907 3:08PM Shippensburg School District No. 9261 P. 7
'30d 0990 99Z LTL:WOHA ONIIgSR2ddIHS .30 HOnOU09:01 9E:60 T6-81-OT
The first issue, as to whether lump sum post-retirement payment for
unused vacation and sick time shall be part of Average Compensation, is
determined by this court's decision in Kosey. Pursuant thereto, we hold that
common pleas erred in directing that the extra payment be included in retirees'
Average Compensation. In light of our holding, it is unnecessary to reach the
second issue.
In Kosey, a retiree from the police force of a third class city sought to
have a post-retirement payment for tmuscd vacation and holiday time accruing in
the year of retirement included in the computation of his pension benefit. The
terms of the pension plant enacted by ordinance pursuant to the Third Class City
Code' directed that "[t]he basis of the apportionment of the pension shall be
determined by the rate of the monthly pay of the member at the date of .. .
retirement ...." The court held that the extra post-retirement payment could not be
factored into the pension computation because:
[A] pension is determined in relation to two major items:
time and money - time served and pay for that service; in
this case, the pension year and the pension salary for that
year.... When the pensioner fixes his date of retirement,
he has also defined the retirement period, the prior year,
for purposes of calculating his "annual pay." The time
eleznerlt has been determined. He could as well have
fixed the date when his unused vacation time would have
expired adding the vacation time to his actual date of
leaving work. Certainly, he is not free to add the money
to the now fixed retirement year without including the
time involved that is represented by that money. To
[include the pay for unused vacation] would allow more
than an "annual" period, since [retiree] would then have a
time factor that exceeded a year by the period of his
Act of June 3, 193I, P.L. 932, as amended, 53 P.S. §§ 35101 - 39701.
4
9'd E990 Esa LTL Q92:0T TO 91 aQG
Feb. 9. 2007 3:09PM Shippensburg School District No. 9261 P. 8
.:8d 2990 £9Z, 4&TL•HOV41 DHf199N3ddIHS AO HOLIOU09:01 00:59 T8-8T-@T
vacation time. Such a procedure, also. would permit an
unacceptable disparity in pension benefits between the
one who took off for his vacation during the retirement
year and one who saved his vacation time and pay until
after the retirement date fixed by him.
Kosey, 459 A.2d at 434.
In the present case, as in .Korey, when retirees selected their retirement
dates, they set the thirty-six month time fi-ame in which their Average
Compensation shall be ascertained for purposes of computing their pension benefit.
By the terms of their collective bargaining agreement (C'BA), the amount of their
Average Compensation is the amount they received in earnings during the thirty-
six months prior to retirement. The unused vacation and sick time paid for after
retirement simply falls outside of the relevant thirty-six month period. It can not be
otherwise inasmuch as the time can not become "unused time" until the period in
which it can be used has passed. Vacation or sick time that was used and paid for
before the date of retirement has been properly included in Average Compensation.
Retirees did not become entitled to the lump sum payments at issue in the present
case until after retirement, and thus these payments necessarily fell outside the time
period specified for calculating Average Compensation. Common pleas erred in
concluding otherwise.
Accordingly, we reverse.
BONNIE BRIGANCE LEADBETTER, Judge
5
1. -d E99D ESE LIG e40=0I ID 81 zoo
Feb, 9. 2007 3:09PM Shippensburg School District No. 9261 P. 9
98d 10999 S9 z L T L : H0HA lDUA99N34d 1 Hs 3o HOAOV09 : Off. 810:69 TO-ST-OT
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Gerald `Worthington and
Terry Lee Kennedy, Sr.
Borough of, Shippensburg,
Appellant
NO. 82 C.D. 2001
ORDF ER
AND NOW, this 3rd day of October, 2001, the
order of the Court of Common Pleas of Cumberland County in the above captioned
matter is hereby REti'ERSED.
BONNIE BRIGANI CE LEADBETTE& Judge
CoWd from the Recoird
OCT 0 3 2001
and Of der EYA
13 'd 10990 E9Z LTG ULZ=oT 10 BT '430
EXHIBIT C
BOROUGH OF SHIPPENSBURG
POLICE
PENSION PLAN
Defined Benefit Plan 8.0
Restated January 1, 1997
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I FORMAT AND DEFINITIONS
Section 1.01 ----- Format
Section 1.02 ----- Definitions
ARTICLE II PARTICIPATION
Section 2.01 ----- Active Participant
Section 2.02 ----- Inactive Participant
Section 2.03 ----- Cessation of Participation
ARTICLE III CONTRIBUTIONS
Section 3.01 ----- Employer Contributions
Section 3.01A ----- Required Contributions by Participants
Section 3.02 ----- Investment of Contributions
Section 3.03 ----- Funding Policy
ARTICLE IV RETIREMENT BENEFITS
Section 4.01 ----- Accrued Benefit
Section 4.02 ----- Benefit Limitation
Section 4.03 ----- Amount of Benefit at Retirement
Section 4.04 ----- Increase to Retirement Benefits
ARTICLE IVA COST-OF-LIVING ADJUSTMENT
Section 4A.01 ----- Important Terms
Section 4A.02 ----- Change in Monthly Retirement Benefit
ARTICLE V OTHER BENEFITS
Section 5.01 ----- Death Benefits
Section 5.02 ----- Vested Benefits
Section 5.03 ----- Disability Benefits
ARTICLE VI WHEN BENEFITS START AND DISTRIBUTION OF BENEFITS
Section 6.01 ----- When Benefits Start
Section 6.02 ----- Form of Distribution
ARTICLE VII TERMINATION OF PLAN
EFFECTIVE JANUARY 1, 1997 3 TABLE OF CONTENTS (4-35028)
ARTICLE VIII ADMINISTRATION OF PLAN
Section 8.01 ----- Administration
Section 8.02 ----- Expenses
Section 8.03 ----- Records
Section 8.04 ----- Information Available
Section 8.05 ----- Delegation of Authority
Section 8.06 ----- Exercise of Discretionary Authority
ARTICLE IX
Section 9.01
Section 9.02
Section 9.03
Section 9.04
Section 9.05
Section 9.06
Section 9.07
Section 9.08
Section 9.09
Section 9.10
Section 9.11
PLAN EXECUTION
GENERAL PROVISIONS
----- Amendments
----- Direct Rollovers
----- Provisions Relating to the Insurer and Other Parties
----- Employment Status
----- Rights to Plan Assets
----- Beneficiary
----- Nonalienation of Benefits
----- Construction
----- Legal Actions
----- Word Usage
----- Military Service
EFFECTIVE JANUARY 1, 1997 4 TABLE OF CONTENTS (4-35028)
INTRODUCTION
The Employer agrees to operate the plan according to the terms, provisions and conditions set forth in this
document.
The Employer previously established a defined benefit retirement plan on September 13, 1960.
The Employer is of the opinion that the retirement plan should be changed. It is believed that the best
means to accomplish these changes is to completely restate the plan's terms, provisions and conditions. The
restatement, effective January 1, 1997, is set forth in this document and is substituted in lieu of the prior
document.
The restated defined benefit retirement plan continues to be for the exclusive benefit of employees of the
Employer. All persons covered under the plan on December 31, 1996, shall be covered under the restated plan
with no loss of benefits.
It is intended that the retirement plan, as restated, shall continue to meet the requirements for a
governmental plan under the Internal Revenue Code of 1986, including any later amendments to the Code, as
such Code pertains to governmental plans. The plan is intended to meet the requirements of Act 600 governing
police pension plans of Pennsylvania for Townships and Boroughs.
EFFECTIVE JANUARY 1, 1997 5 INTRODUCTION (4-35028)
ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01-FORMAT.
Words and phrases defined in the DEFINITIONS SECTION of Article I shall have that defined meaning
when used in this Plan, unless the context clearly indicates otherwise.
These words and phrases will have an initial capital letter to aid in identifying them as defined terms.
SECTION 1.02-DEFINITIONS.
Accrual Service means the total of an Employee's Service with the Employer. This total is expressed in
whole years and fractional parts of a year (counting a complete month as a fractional part of a year).
However, Accrual Service is modified as follows:
Service excluded:
Service while an Employee was not an Eligible Employee is excluded.
Rule of parity service excluded:
An Employee's Accrual Service, accumulated before the date he quits, retires, dies or is absent from
work for one year (with or without pay), shall be excluded if
(a) his vested benefit is zero, and
(b) his latest period of consecutive one-year breaks in service equals or exceeds the greater of
(i) five years, or (ii) his prior Accrual Service (disregarding any Accrual Service that was
excluded because of a previous period of one-year breaks in service).
Period of Military Duty included:
A Period of Military Duty shall be included as service with the Employer if an Employee was an
Eligible Employee for six months preceding his Period of Military Duty and if such Employee again
becomes an Eligible Employee within six months following his Period of Military Duty.
A Period of Military Duty (not to exceed five years) which precedes an Employee's first date of
employment with the Employer shall be included as service with the Employer if the following
conditions are met:
(a) The Employee makes an election to include such Military Duty.
(b) The Employee pays the cost of crediting such Military Duty.
Accrued Benefit means the amount of monthly retirement benefit on the Normal Form accrued by an
Active Participant as of any date. See the ACCRUED BENEFIT SECTION of Article IV.
RESTATEMENT JANUARY 1, 1997 6 ARTICLE 1 (4-35028)
Accrued Benefit Adjustment means the adjustment which shall be applied to determine a Participant's
benefit. The Accrued Benefit Adjustment on any date shall be equal to the quotient (to four decimal places)
of (a) divided by (b):
(a) The Participant's Accrual Service, converted to complete months, as of such date.
(b) The number of months in (a) above plus the number of complete months between such date and his
Normal Retirement Date.
The Accrued Benefit Adjustment shall not exceed 1.00.
Act 600 means Act of May 29, 1956 P.L. (1955) 1804, as amended, 53 P.S. Section 767, et seq, governing
police pension plans of Pennsylvania.
Active Participant means an Eligible Employee who is actively participating in the Plan according to the
provisions in the ACTIVE PARTICIPANT SECTION of Article 11.
Annuity Contract means the annuity contract or contracts into which the Trustee enters with the Insurer
for guaranteed benefits, for the investment of Contributions in separate accounts and for the payment of
benefits provided under this Plan. The term Annuity Contract as it is used in this Plan shall include the
plural unless the context clearly indicates the singular is meant.
Annuity Starting Date means, for a Participant, the first day of the first period for which an amount is paid
as an annuity, or any other form.
The Annuity Starting Date for disability benefits shall be the date such benefits commence if the disability
benefit is not an auxiliary benefit. An auxiliary benefit is a disability benefit which does not reduce the
benefit payable at Normal Retirement Date.
Average Compensation means, on any given date, the average of an Employee's monthly pay on the 36
latest Compensation Dates (all Compensation Dates, if less than this number) occurring before such given
date.
Pay as used in this definition means the total earnings paid to an Employee by the Employer. Earnings as
used in this definition includes salary, court pay, holiday pay, overtime pay and any other remuneration.
However, if the Plan defined compensation as the pay reported on Form W-2 and an Employee was
employed by the Employer before August 30, 1983 and was covered under the Plan, pay for such
Employee as used in this definition will be the type of compensation subject to tax for Social Security
Benefits without regard to the dollar limitation on such compensation subject to FICA taxes.
Beneficiary means the person or persons named by a Participant to receive any benefits under this Plan
upon the Participant's death. See the BENEFICIARY SECTION of Article IX.
Code means the Internal Revenue Code of 1986, as amended.
RESTATEMENT JANUARY 1, 1997 7 ARTICLE 1 (4-35028)
Compensation means the total earnings paid to an Employee by the Employer. Compensation as used in
this definition includes salary, court pay, holiday pay, overtime pay and any other remuneration.
For years beginning after December 31, 1988, the annual Compensation of each Participant taken into
account for determining all benefits provided under the Plan for any year shall not exceed $200,000, as
adjusted by the Secretary in accordance with Code Section 415(d). For Plan Years beginning on or after
January 1, 1996, the annual Compensation taken into account for determining all benefits provided under
the Plan for any Plan Year for any individual who first becomes a Participant in the Plan during a Plan Year
beginning after the first Yearly Date in 1996, shall not exceed $150,000.
Provided, however, with respect to an eligible Participant, the reduced dollar limitation in the preceding
paragraph does not apply to the extent that the amount of Compensation allowed to be taken into account
under the Plan is reduced below the amount that was allowed to be taken into account under the Plan as in
effect on July 1, 1993. For this purpose, "eligible Participant" means an individual who first became a
Participant in the Plan during a Plan Year beginning before the first Yearly Date in 1996.
The $150,000 limit shall be adjusted by the Commissioner for increases in the cost of living in accordance
with Code Section 401 (a)(1 7)(B). The cost of living adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which pay is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12 months, the annual compensation limit
will be multiplied by a fraction, the numerator of which is the number of months in the determination period,
and the denominator of which is 12.
If Compensation for any prior period is taken into account in determining a Participant's contributions or
benefits for the current period, the Compensation for such prior year is subject to the applicable annual
compensation limit in effect for that prior year. For this purpose, for years beginning before January 1,
1990, the applicable annual compensation limit is $200,000 for an Employee who became.a Participant
before the first Yearly Date in 1996. For years beginning on and after January 1, 1996, the annual
compensation limit is $150,000 for an Employee who became a Participant on or after the first Yearly Date
in 1996.
Compensation Date means the first day of each month immediately before an Employee's Entry Date and
the same date of each following month on which he is an Active Participant.
If an Employee is not an Employee on the Compensation Date, his pay on his latest Entry or Reentry Date,
whichever applies, shall be treated as his pay on the Compensation Date.
Contributions means
Employer Contributions
Required Contributions
as set out in Article III, unless the context clearly indicates only specific contributions are meant.
RESTATEMENT JANUARY 1, 1997 8 ARTICLE 1 (4-35028)
Dependent Child means, as to a Participant, any natural born child, legally adopted child, stepchild or
foster child of such Participant, which child is unmarried, is not in the Armed Forces of any country, has not
attained age 18 or older and, prior to the Employee's death, is dependent upon such Participant for his
principal support and maintenance and, if a stepchild or foster child, resides in such Participant's
household. Dependent child shall include any child born after the Participant's death, provided that
conception occurred while such Participant was an Active Participant under this Plan.
Direct Rollover means a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.
Distributee means an Employee or former Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternative
payee under a qualified domestic relations order, as defined in Code Section 414(p), are Distributees with
regard to the interest of the spouse or former spouse.
Eligible Employee means any Employee whose employment with the Employer is for not less than 40
hours per week at a definite salary and whose employment classification is the following:
Police Officer
Eligible Retirement Plan means an individual retirement account described in Code Section 408(a), an
individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section
403(a) or a qualified trust described in Code Section 401(a), that accepts the Distributee's Eligible Rollover
Distribution.
However, in the case of an Eligible Rollover Distribution to the surviving spouse, an Eligible Retirement
Plan is an individual retirement account or individual retirement annuity.
Eligible Rollover Distribution means any distribution of all or any portion of the balance to the credit of
the Distributee, except that an Eligible Rollover Distribution does not include: (i) any distribution that is one
of a series of substantially equal periodic payments (not less frequently than annually) made for the fife (or
life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the
Distributee's designated Beneficiary, or for a specified period of ten years or more; (ii) any distribution to the
extent such distribution is required under Code Section 401(a)(9); (iii) the portion of any distribution that is
not includible in gross income (determined without regard to the exclusion for net unrealized appreciation
with respect to employer securities); and (iv) any other distribution(s) that is reasonably expected to total
less than $200 during a year.
Employee means an individual who is employed by the Employer.
Employer means BOROUGH OF SHIPPENSBURG.
Employer Contributions means contributions made by the Employer to fund this Plan. See the
EMPLOYER CONTRIBUTIONS SECTION of Article 111.
Entry Date means the date an Employee first enters the Plan as an Active Participant. See the ACTIVE
PARTICIPANT SECTION of Article 11.
Fiscal Year means the Employer's accounting year. The last day of the Fiscal Year is December 31.
Inactive Participant means a former Active Participant who has an Accrued Benefit. See the INACTIVE
PARTICIPANT SECTION of Article II.
RESTATEMENT JANUARY 1, 1997 9 ARTICLE 1 (4-35028)
Insurer means Principal Life Insurance Company and any other insurance company or companies named
by the Trustee or Employer.
Investment Manager means any fiduciary (other than a trustee)
(a) who has the power to manage, acquire, or dispose of any assets of the Plan; and
(b) who (i) is registered as an investment adviser under the Investment Advisers Act of 1940; (ii) is not
registered as an investment adviser under such Act by reason of paragraph (1) of section 203A(a) of
such Act, is registered as an investment adviser under the laws of the state (referred to in such
paragraph (1)) in which it maintains its principal office and place of business, and, at the time it last
filed the registration form most recently filed by it with such state in order to maintain its registration
under the laws of such state, also filed a copy of such form with the Secretary of Labor, (iii) is a
bank, as defined in that Act; or (iv) is an insurance company qualified to perform services described
in subparagraph (a) above under the laws of more than one state; and
(c) who has acknowledged in writing being a fiduciary with respect to the Plan.
Late Retirement Date means, for a Participant who continues working for the Employer after his Normal
Retirement Date, the first day of the month after a Participant ceases to be an Employee (the date he
ceases to be an Employee, if he ceases to be an Employee on the first day of the month).
If he has not ceased to be an Employee on his Normal Retirement Date, his Late Retirement Date shall be
the date his retirement benefit begins.
Monthly Date means each Yearly Date and the same day of each following month during the Plan Year
beginning on such Yearly Date.
Normal Form means:
(a) For an unmarried Participant, a straight life annuity.
(b) For a married Participant, a 50 percent survivorship life annuity.
Normal Retirement Date means the date a Participant meets the following requirements:
(a) He has attained age 50.
(b) He has completed 25 years of Accrual Service.
His Normal Retirement Date shall be the date his retirement benefit begins if he has ceased to be an
Employee on such date.
Participant means either an Active Participant or an Inactive Participant.
Participant Contributions means Required Contributions as set out in Article III.
Period of Military Duty means, for an Employee who served as a member of the armed forces of the
United States, the period of time from the date the Employee was first absent from active work for the
Employer because of such military duty to the date the Employee was reemployed.
RESTATEMENT JANUARY 1, 1997 10 ARTICLE 1 (4-35028)
A Period of Military Duty shall only be credited for an Employee who is not entitled to receive, now or in the
future, retirement benefits for such service under a retirement system administered and wholly or partially
paid for by any other governmental agency with the exception of pay earned by a combination of active
duty and nonactive duty with a reserve or national guard component of the armed forces, which retirement
pay is payable only upon reaching a specified age and completion of a period of service (relating to retired
pay for non-regular service).
Plan means the retirement plan of the Employer set forth in this document, including any later amendments
to it.
Plan Administrator means the person or persons who administer the Plan. The Plan Administrator is the
Employer.
Plan Year means a period beginning on a Yearly Date and ending on the day before the next Yearly Date.
Reentry Date means the date a former Active Participant reenters the Plan. See the ACTIVE
PARTICIPANT SECTION of Article II.
Required Contribution Account means, on any date, the total of a Participant's Required Contributions
with interest. Contributions previously paid to the Participant or applied for him, and any interest that would
have been credited on those contributions, shall be excluded.
Interest shall be credited in each Plan Year at the rate of five percent per annum compounded annually.
Interest shall be credited on each Required Contribution from the end of the Plan Year for which it was
made until the Monthly Date on or before the date of determination.
Required Contributions means nondeductible Contributions which may be required from a Participant in
order to participate in this Plan. See the REQUIRED CONTRIBUTIONS BY PARTICIPANTS SECTION of
Article III.
Retirement Date means the date a retirement benefit will begin and is a Participant's Normal or Late
Retirement Date, as the case may be.
Service means any service for which an Employee is either (i) directly or indirectly paid by the Employer or
(ii) performing duties for the Employer. No interruption in Service (based on the regular work week for his
job without overtime) will be deemed to have occurred during any approved period of absence by reason of
temporary lay-off, leave of absence (not to exceed two years), a temporary absence on account of
disability, illness or injury, pregnancy, or labor-management dispute.
Any discretion of the Employer under the provisions of this definition will be exercised without discrimination
in accordance with definitely established rules uniformly applicable to Participants whose approved periods
of absence were occasioned by similar circumstances.
Superannuation Retirement Date means the date a Participant would have met the requirements for
Normal Retirement Date had he remained an Eligible Employee until such date.
Totally And Permanently Disabled means a Participant is disabled as a result of performing police
work, to the extent that he is prevented from engaging in his normal duties as a police officer as
determined by a physician chosen by the Borough.
RESTATEMENT JANUARY 1, 1997 11 ARTICLE 1 (4-35028)
Trust Agreement means an agreement of trust between the Employer and Trustee established for the
purpose of holding and distributing the Trust Fund under the provisions of the Plan. The Trust Agreement
will provide for the investment of all or any portion of the Trust Fund in the Annuity Contract.
Trust Fund means the total funds held under the Trust Agreement. The Trust Fund shall be valued
annually at current fair market value on the date used for computing plan costs for minimum funding
purposes and, at the discretion of the Trustee, may be valued more frequently. The valuation shall take into
consideration investment earnings credited, expenses charged, payments made and changes in the value
of the assets held in the Trust Fund.
Trustee means the party or parties named in the Trust Agreement. The term Trustee as it is used in this
Plan is deemed to include the plural unless the context clearly indicates the singular is meant.
Yearly Date means January 1, 1986, and the same day of each following year. Yearly Dates before
January 1, 1986, shall be determined under the provisions of the prior document.
RESTATEMENT JANUARY 1, 1997 12 ARTICLE 1 (4-35028)
ARTICLE 11
PARTICIPATION
SECTION 2.01--ACTIVE PARTICIPANT.
(a) An Employee shall first become an Active Participant (begin active participation in the Plan) on the
earliest date on which he is an Eligible Employee. This date is his Entry Date.
Each Employee who was an Active Participant under the Plan on December 31, 1996, shall
continue to be an Active Participant if he is still an Eligible Employee January 1, 1997, and his Entry
Date will not change.
(b) An Inactive Participant shall again become an Active Participant (resume active participation in the
Plan) on the date he again becomes an Eligible Employee. This date is his Reentry Date.
Upon again becoming an Active Participant, he shall cease to be an Inactive Participant.
(c) A former Participant shall again become an Active Participant (resume active participation in the
Plan) on the date he again becomes an Eligible Employee. This date is his Reentry Date.
There shall be no duplication of benefits for a Participant under this Plan because of more than one period
as an Active Participant.
SECTION 2.02-INACTIVE PARTICIPANT.
An Active Participant shall become an Inactive Participant (stop accruing benefits under the Plan) on the
earliest of the following:
(a) The date the Participant ceases to be an Eligible Employee.
(b) The effective date of complete termination of the Plan under Article VII.
An Employee or former Employee who was an Inactive Participant under the Plan on December 1, 1996,
shall continue to be an Inactive Participant on January 1, 1997. Eligibility for any benefits payable to him or on his
behalf and the amount of the benefits shall be determined according to the provisions of the prior document,
unless otherwise stated in this Plan.
SECTION 2.03--CESSATION OF PARTICIPATION.
A Participant, whether active or inactive, shall cease to be a Participant on the earlier of the following:
(a) The date of his death.
(b) The date he receives a single sum distribution which is in lieu of all of his benefits under the Plan.
An Inactive Participant shall also cease to be a Participant on the earliest date on which he is not entitled to
a deferred monthly income under the VESTED BENEFITS SECTION OF Article V.
RESTATEMENT JANUARY 1, 1997 13 ARTICLE 11 (4-35028)
ARTICLE III
CONTRIBUTIONS
SECTION 3.01--EMPLOYER CONTRIBUTIONS.
The amount of Employer Contributions shall meet or exceed the minimum funding standards of Act 205.
The amount and time of Employer Contributions shall be determined based on actuarial valuations and
recommendations as to the amounts required to fund benefits under this Plan. Dividends declared under the
Annuity Contract and forfeitures shall be applied to reduce future Employer Contributions.
A portion of the Plan assets resulting from Employer Contributions (but not more than the original amount
of those Contributions) may be returned if the Employer Contributions are made because of a mistake of fact. The
amount involved must be returned to the Employer within one year after the date the Employer Contributions are
made by mistake of fact. Except as provided under this paragraph and in Article VII, the assets of the Plan shall
never be used for the benefit of the Employer and are held for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and for defraying reasonable expenses of administering the Plan as allowed
under Act 205.
SECTION 3.01A--REQUIRED CONTRIBUTIONS BY PARTICIPANTS.
If determined by the Employer, each Active Participant shall make Required Contributions. If such
Contributions are to be made, they shall be made for each month in which he is an Active Participant.
The amount of each Contribution will be equal to 5% of his Compensation for the month.
A Participant shall not make Required Contributions during any period he is receiving disability payments
under the DISABILITY BENEFITS SECTION of Article V.
The Participant's Required Contribution Account is fully (100%) vested and nonforfeitable at all times.
However, if an actuarial study shows that the condition of the Plan is such that payments to the Plan by
Active Participants may be reduced or eliminated, the Employer may, on an annual basis, by resolution, reduce or
eliminate Required Contributions. If such payments are reduced or eliminated, Contributions by the Employer will
not be required to keep the Plan actuarially sound.
SECTION 3.02--INVESTMENT OF CONTRIBUTIONS.
All Contributions are forwarded by the Employer to the Trustee to be deposited in the Trust Fund or to the
Insurer to be deposited under the Annuity Contract, as applicable. The handling of Contributions is governed by
the provisions of the Trust Agreement, Annuity Contract, and any other funding arrangement in which the Trust is
or may be invested.
The Plan Administrator may delegate to the Investment Manager investment discretion for Plan assets.
Prior plan assets, consisting of reserves of either annuities in the course of payment or paid -up annuities
held under a group annuity contract that was issued before January 1, 1986, to hold assets of the prior plan, may,
with the Insurer's consent be transferred to the Annuity Contract at the Employer's discretion.
RESTATEMENT JANUARY 1, 1997 14 ARTICLE 111 (4-35028)
SECTION 3.03--FUNDING POLICY
At least annually, the Plan Administrator shall review all pertinent Employee information and Plan data to
establish the Plan's funding policy and to determine appropriate methods to carry out the Plan's objectives. The
Plan Administrator shall annually the Trustee and any Investment Manager of the Plan's short-term and long-term
financial needs so the investment policy can be coordinated with the Plan's financial requirements.
The Plan Administrator's funding policy is to make contributions under this Plan that do not exceed
payments made by the State Treasurer to the Employer from monies received from taxes paid upon premiums
collected by foreign casualty insurance companies, for the purpose of pension retirement for police officers, and
by gifts, grants, devises or bequests granted to the Plan pursuant to law. The payments made by the State
Treasurer to the Employer from the monies received from taxes paid upon premiums collected by foreign casualty
insurance companies for the purposes of pension retirement and disability benefits for Employees shall be used
as follows:
(a) to reduce the unfunded liability, or after such liability has been funded,
(b) to apply against the annual obligation of the Employer for future service cost, or to the extent that the
payment may be in excess of such obligations,
(c) to reduce Required Contributions.
RESTATEMENT JANUARY 1, 1997 15 ARTICLE 111 (4-35028)
ARTICLE IV
RETIREMENT BENEFITS
SECTION 4.01--ACCRUED BENEFIT.
An Active Participant's monthly Accrued Benefit as of any date, subject to the modifications below, will be
equal to the product of (a) and (b) plus (c) below:
(a) An amount equal to 50% of his Average Compensation.
(b) His Accrued Benefit Adjustment.
(c) An amount equal to $20.00 multiplied by his complete years of Accrual Service in excess of 25 on
such date.
However, Accrued Benefit is modified as follows:
Maximum Accrued Benefit:
The portion of an Active Participant's monthly Accrued Benefit determined in (c) above shall not be more
than $100.00.
Adjusted Accrued Benefit:
After all other modifications have been applied, an Active Participant's monthly Accrued Benefit shall be
reduced by the amount of deferred monthly retirement benefit on the Normal Form beginning on his Normal
Retirement Date in lieu of which he has received a single sum payment under the Plan.
SECTION 4.02--BENEFIT LIMITATION.
(a) Definitions. For purposes of determining the benefit limitation set forth in this section, the following
terms are defined:
Annual Additions means the sum of the following amounts credited to a Participant's account for
the Limitation Year:
(1) employer contributions;
(2) employee contributions;
(3) forfeitures; and
(4) allocations under a simplified employee pension.
Annual Benefit means a retirement benefit under the plan which is payable annually in the form
of a Straight Life Annuity. Except as provided- below, -a benefit payable in a form other than a
Straight Life Annuity must be adjusted to an actuarially equivalent Straight Life Annuity before
applying the limitations of this section. Effective for Limitation Years beginning on or after
January 1, 1995, where a Participant's benefit must be adjusted to an actuarially equivalent
Straight Life Annuity, the actuarially equivalent Straight Life Annuity is equal to the greater of the
RESTATEMENT JANUARY 1, 1997 16 ARTICLE IV (4-35028)
annuity benefit computed using the interest rate and mortality table (or other tabular factor)
specified in the Plan for adjusting benefits in the same form, and the annuity benefit computed
using a 5 percent interest rate assumption and the Applicable Mortality Table.
No actuarial adjustment to the benefit is required for (i) the value of a qualified joint and survivor
annuity, (ii) benefits that are not directly related to retirement benefits (such as a qualified disability
benefit, pre-retirement death benefits, and post-retirement medical benefits), and (iii) the value of
post-retirement cost-of-living increases made in accordance with Code Section 415(d) and section
1.415-3(c)(2)(iii) of the Income Tax Regulations. The Annual Benefit does not include any benefits
attributable to employee contributions or rollover contributions, or assets transferred from a
qualified plan that was not maintained by the Employer.
Applicable Mortality Table means, on any date, the table according to the method set forth in
Code Section 417(e).
Compensation means wages, salaries, and fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for personal services
actually rendered in the course of employment with the Employer maintaining the plan to the
extent that the amounts are includible in gross income (including, but not limited to, commissions
paid salesmen, compensation for services on the basis of a percentage of profits, commissions on
insurance premiums, tips, bonuses, fringe benefits, and reimbursements, or other expense
allowances under a nonaccountable plan (as described in section 1.62-2(c) of the regulations)),
and excluding the following:
(1) employer contributions to a plan of deferred compensation which are not includible in the
Employee's gross income for the taxable year in which contributed, or employer
contributions under a simplified employee pension to the extent such contributions are
deductible by the Employee, or any distributions from a plan of deferred compensation;
(2) amounts realized from the exercise of a non-qualified stock option, or when restricted stock
(or property) held by the Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(3) amounts realized from the sale, exchange or other disposition of stock acquired under a
qualified stock option; and
(4) other amounts which received special tax benefits, or contributions made by the Employer
(whether or not under a salary reduction agreement) towards the purchase of an annuity
contract described in Code Section 403(b) (whether or not the contributions are actually
excludible from the gross income of the Employee).
Compensation for a Limitation Year is the Compensation actually paid or made available during
such Limitation Year.
For Limitation Years beginning after December 31, 1997, Compensation paid or made available
during such Limitation Year shall include any elective deferral (as defined in Code Section
402(g)(3)), and any amount which is contributed or deferred by the Employer at the election of the
Employee and which is not includible in the gross income of the Employee by reason of Code
Section 125 or 457. For Limitation Years beginning on and after January 1, 2001, Compensation
paid or made available during such Limitation Year shall include elective amounts that are not
includible in the gross income of the Employee by reason of Code Section 132(f)(4).
RESTATEMENT JANUARY 1, 1997 17 ARTICLE IV (4-35028)
Defined Benefit Dollar Limitation means $90,000, automatically adjusted, effective January 1 of
each year, under Code Section 415(d) in such manner as the Secretary shall prescribe, and
payable in the form of a Straight Life Annuity. The new limitation shall apply to Limitation Years
ending with or within the calendar year of the date of the adjustment.
Defined Benefit Plan Fraction means a fraction, the numerator of which is the sum of the
Participant's Projected Annual Benefits under all the defined benefit plans (whether or not
terminated) maintained by the Employer, and the denominator of which is 125 percent of the
Defined Benefit Dollar Limitation applicable to the Participant, adjusted as necessary in
accordance with the definition of Maximum Permissible Benefit.
Defined Contribution Dollar Limitation means, for Limitation Years beginning after
December 31, 1994, $30,000, as adjusted under Code Section 415(d).
Defined Contribution Plan Fraction means a fraction, the numerator of which is the sum of the
Annual Additions to the Participant's account under all the defined contribution plans (whether or
not terminated) maintained by the Employer for the current and all prior Limitation Years,
(including the Annual Additions attributable to the Participant's voluntary employee contributions,
or mandatory employee contributions as defined in Code Section 411(c)(2)(C), to this and all other
defined benefit plans (whether or not terminated) maintained by the Employer, and the Annual
Additions attributable to all simplified employee pensions maintained by the Employer), and the
denominator of which is the sum of the maximum aggregate amounts for the current and all prior
Limitation Years of the Participant's service with the Employer (regardless of whether a defined
contribution plan was maintained by the Employer).
The maximum aggregate amount for any Limitation Year is the lesser of (i) 125 percent of the
Defined Contribution Dollar Limitation, or (ii) 35 percent (1.4 x 25 percent) of the Participant's
Compensation for such year.
The Annual Addition for any Limitation Year beginning before January 1, 1987, shall not be
recomputed to treat all employee contributions as Annual Additions.
If the Employee was a participant as of the end of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined contributions plans maintained by the
Employer which were in existence on May 6, 1986, the numerator of this fraction will be adjusted if
the sum of this fraction and the Defined Benefit Plan Fraction would otherwise exceed 1.0 under
the terms of this Plan. Under the adjustment, an amount equal to the product of (i) the excess of
the sum of the fractions over 1.0 times (ii) the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The adjustment is calculated using the fractions as
they would be computed as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the plans made after May 5,
1986, but using the Code Section 415 limitation applicable to the first Limitation Year beginning on
or after January 1, 1987.
Employer means the employer that adopts this Plan.
Limitation Year means the 12-consecutive month period ending on the last day of each Plan
Year, including corresponding 12-consecutive month periods before September 13, 1960. If the
Limitation Year is other than a calendar year, execution of this Plan (or any amendment to this
Plan changing the Limitation Year) constitutes the Employer's adoption of a written resolution
electing the Limitation Year. If the Limitation Year is amended to a different 12-consecutive month
period, the new Limitation Year must begin on a date within the Limitation Year in which the
amendment is made.
RESTATEMENT JANUARY 1, 1997 18 ARTICLE IV (4-35028)
Maximum Permissible Benefit means the Defined Benefit Dollar Limitation (adjusted where
required, as provided below).
(1) If the Participant has less than ten Years of Participation in the Plan, the Defined Benefit
Dollar Limitation shall be multiplied by a fraction the numerator of which is the number of
Years of Participation (or part thereof) in the Plan, and the denominator of which is ten.
Where a Defined Benefit Plan Fraction is calculated, the adjustments of this (1) shall be
applied in the denominator of the Defined Benefit Plan Fraction based upon years of
Service. For purposes of computing the Defined Benefit Fraction only, years of Service
shall include future years of Service (or part thereof) commencing before the Participant's
Normal Retirement Date. Such future years of Service shall include the year that contains
the earlier of (i) the date the Participant reaches Normal Retirement Date, only if it can be
reasonably anticipated that the Participant will receive a year of Service for such year, or (ii)
the year in which the Participant terminates employment.
For Limitation Years beginning on or after January 1, 1995, the adjustments of this (1) shall
not apply to survivor and disability benefits as provided in Code Section 415(b)(2)(1).
(2) If the Annual Benefit of the Participant commences prior to age 62, the Defined Benefit Dollar
Limitation applicable to the Participant at such earlier age is an Annual Benefit payable in the
form of a Straight Life Annuity that is the actuarial equivalent of the Defined Benefit Dollar
Limitation (as reduced in (1) above, if necessary) reduced for each month by which the
benefits commence before the month in which the Participant attains age 62. Effective for
Limitation Years beginning on or after January 1, 1995, the Defined Benefit Dollar Limitation
applicable at an age prior to age 62 is determined as the lesser of the actuarial equivalent of
the Defined Benefit Dollar Limitation (as reduced in (1) above, if necessary) computed using
the interest rate and mortality table (or other tabular factor) specified in the Plan for purposes
of determining actuarial equivalence for early retirement benefits, and the actuarial equivalent
of the Defined Benefit Dollar Limitation (as reduced in (1) above, if necessary) computed
using a 5 percent interest rate and the Applicable Mortality Table. To the extent that the Plan
does not specify an interest rate and mortality table (or other tabular factor) or for ages for
which no tabular factor is specified, a 5 percent interest rate and the Applicable Mortality
Table shall be used to determine actuarial equivalence.
The reduction under this (2) shall not reduce the Defined Benefit Dollar Limitation below
$75,000 if the benefit commences at or after age 55. The reduction under this (2) shall not
reduce the Defined Benefit Dollar Limitation below the actuarial equivalent of the $75,000
limitation for age 55 if the benefit commences before age 55. Effective for Limitation Years
beginning on or after January 1, 1995, the minimum Defined Benefit Dollar Limitation
applicable at an age prior to age 55 is determined as the lesser of the actuarial equivalent of
the $75,000 limitation at age 55 computed using the interest rate and mortality table (or other
tabular factor) specified in the Plan for purposes of determining actuarial equivalence for early
retirement benefits, and the actuarial equivalent of the $75,000 limitation at age 55 computed
using a 5 percent interest rate and the Applicable Mortality Table. To the extent that the Plan
does not specify an interest rate and mortality table (or other tabular factor) or for ages for
which no tabular factor is specified, a 5 percent interest rate and the Applicable Mortality
Table shall be used to determine actuarial equivalence.
RESTATEMENT JANUARY 1, 1997 19 ARTICLE IV (4-35028)
Any decrease in the Defined Benefit Dollar Limitation determined in accordance with this (2)
shall not reflect a mortality decrement if the benefits are not forfeited upon the death of the
Participant. If any benefits are forfeited upon death, the full mortality decrement is taken into
account.
For Limitation Years beginning on or after January 1, 1997, the adjustments in this (2) do not
apply in the case of a Participant who is a qualified participant (as defined in Code Section
415(b)(2)(H)). For Limitation Years beginning on or after January 1, 1995, the adjustments in
this (2) do not apply to survivor and disability benefits as provided in Code Section
415(b)(2)(1).
(3) If the Annual Benefit of the Participant commences after age 62, the Defined Benefit Dollar
Limitation applicable to the Participant at the later age is the Annual Benefit payable in the
form of a Straight Life Annuity commencing at the later age that is actuarially equivalent to the
Defined Benefit Dollar Limitation applicable to the Participant (adjusted under (1) above, if
necessary) at age 62. Effective for Limitation Years beginning on or after January 1, 1995,
the actuarial equivalent of the Defined Benefit Dollar Limitation at age 62 is determined as the
lesser of the actuarial equivalent of the Defined Benefit Dollar Limitation at age 62 computed
using the interest rate and mortality table (or other tabular factor) specified in the Plan for
purposes of determining actuarial equivalence for delayed retirement benefits, and the
actuarial equivalent of the Defined Benefit Dollar Limitation at age 62 computed using a 5
percent interest rate assumption and the Applicable Mortality Table. For these purposes,
mortality between age 62 and the age at which benefits commence must be ignored.
(4) Minimum benefits permitted: Notwithstanding anything else in this definition to the contrary,
the benefit otherwise accrued or payable to a Participant under this Plan shall be deemed not
to exceed the Maximum Permissible Benefit if:
(i) the retirement benefits payable for a Plan Year under any form of benefit with respect
to such Participant under this Plan and under all other defined benefit plans
(regardless of whether terminated) ever maintained by the Employer do not exceed
$1,000 multiplied by the Participant's number of years of Service or parts thereof (not
to exceed ten); and
(ii) the Employer has not at any time maintained a defined contribution plan, a welfare
benefit fund, under which amounts attributable to post-retirement medical benefits are
allocated to separate accounts of key employees (as defined in Code Section
419(A)(d)(3)), or an individual medical account in which the Participant participated (for
these purposes, employee contributions, whether voluntary or involuntary, under a
defined benefit plan are not treated as a separate defined contribution plan).
For Limitation Years beginning on or after January 1, 1995, the amount in (i) above shall be
equal to $10,000 when determining the minimum benefit permitted for survivor and disability
benefits as provided in Code Section 415(b)(2)(1).
(5) For Limitation Years beginning on or after January 1, 1995, the 100 percent of high three-
year average compensation limitation provided in Code Section 415(b)(1)(B) shall not apply.
RESTATEMENT JANUARY 1, 1997 20 ARTICLE IV (4-35028)
Projected Annual Benefit means the Annual Benefit to which the Participant would be entitled
under the terms of the Plan assuming:
(1) the Participant will continue employment until Normal Retirement Age under the Plan (current
age, if later), and
(2) all relevant factors used to determine benefits under the Plan will remain constant for all
future Limitation Years.
Straight Life Annuity means an annuity payable in equal installments for the life of the Participant
that terminates upon the Participant's death.
Year of Participation means one year (computed to fractional parts of a year) for each Plan Year
for which the following conditions are met:
(1) The Participant is credited with Service for benefit accrual purposes, and
(2) the Participant is included as a Participant under the eligibility provisions of the Plan for at
least one day of the Plan Year.
If these two conditions are met, the portion of a Year of Participation credited to the Participant shall
equal the amount of Accrual Service credited to the Participant for such Plan Year. A Participant
who is totally and permanently disabled within the meaning of Code Section 415(c)(3)(C)(i) for a
Plan Year shall receive a Year of Participation with respect to that period. In addition, for a
Participant to receive a Year of Participation (or part thereof) for a Plan Year, the Plan must be
established no later than the last day of such Plan Year. In no event will more than one Year of
Participation be credited for any 12-month period.
(b) This (b) applies regardless of whether any Participant is or has ever been a participant in another
qualified plan maintained by the adopting Employer. If any Participant is or has ever been a
participant in another qualified plan maintained by the Employer or a simplified employee pension
(as defined in Code Section 408(k)) maintained by the Employer, that provides an Annual Addition,
(c) below is also applicable to that Participant's benefits.
(1) The Annual Benefit otherwise payable to a Participant at any time will not exceed the
Maximum Permissible Benefit. If the benefits the Participant would otherwise accrue in a
Limitation Year would produce an Annual Benefit in excess of the Maximum Permissible
Benefit, the benefit must be limited (or the rate of accrual reduced) to a benefit that does not
exceed the Maximum Permissible Benefit.
(2) If a Participant has made voluntary employee contributions, or mandatory employee
contributions as defined in Code Section 411(c)(2)(C), under the terms of this Plan, the
amount of such contributions is treated as an Annual Addition to a qualified defined
contribution plan for purposes of (b)(1) and (c)(2) of this section. Such amounts shall be
limited to meet the requirements of Code Section 415(c)(1).
(c) This (c) applies if any Participant is also a participant, or has ever participated, in another plan
maintained by the Employer, including a qualified plan or a simplified employee pension that
provides an Annual Addition.
(1) If a Participant is, or has ever been, a participant in more than one defined benefit plan
maintained by the Employer, the sum of the Participant's Annual Benefits from all such
plans may not exceed the Maximum Permissible Benefit. Where the Participant's employer-
RESTATEMENT JANUARY 1, 1997 21 ARTICLE IV (4-35028)
provided benefits under all defined benefit plans ever maintained by the Employer
(determined as of the same age) would exceed the Maximum Permissible Benefit
applicable at that age, the benefit shall be limited (or the rate of accrual reduced) in the
plan most recently established to the extent necessary so that the sum of the Participant's
Annual Benefits from all such plan(s) does not exceed the Maximum Permissible Benefit.
(2) For Limitation Years beginning before January 1, 2000, if the Employer maintains, or ever
maintained, one or more qualified defined contribution plans in which any Participant in this
Plan participated, including a simplified employee pension, the sum of the Participant's
Defined Contribution Plan Fraction and Defined Benefit Plan Fraction will not exceed 1.0 in
any Limitation Year and, where the sum exceeds 1.0 for a Participant for a Limitation Year,
the Projected Annual Benefit shall be limited first. If the Participant's Annual Benefits equal
his Projected Annual Benefit, as limited, then Annual Additions to the defined contribution
plan(s) shall be limited to amounts that will reduce the sum to 1.0 in the same manner in
which the Annual Additions are limited to meet the requirements of Code Section 415(c)(1).
Benefit increases resulting from the repeal of Code Section 415(e) will be provided to all
Employees participating in the Plan (with benefits limited by Code Section 415(e)) who have an
Accrued Benefit under the Plan immediately before the first day of the first Limitation Year
beginning in 2000 and have one hour-of-service with the Employer after such date.
SECTION 4.03--AMOUNT OF BENEFIT AT RETIREMENT.
The amount of retirement benefit to be provided on the Normal Form for an Active Participant on his
Retirement Date shall be determined according to the provisions of this section.
Normal Retirement Date. An Active Participant's retirement benefit on his Normal Retirement Date shall
be equal to his Accrued Benefit on such date.
Late Retirement Date. An Active Participant's retirement benefit on his Late Retirement Date shall be
equal to his Accrued Benefit on his Late Retirement Date.
Benefits shall be payable on the Normal Form.
SECTION 4.04--INCREASE TO RETIREMENT BENEFITS.
An additional amount of monthly retirement benefit will be payable beginning with the first retirement benefit
due after December 31, 1988. Such additional retirement benefit will be payable to a Participant who began
receiving a retirement or disability benefit prior to January 1, 1985.
This amount of such additional retirement benefit shall be as follows:
(a) For a Participant who has been retired for at least 5 years but less than 10 years, a monthly amount
equal to $25.
(b) For a Participant who has been retired for less than 10 years, but is Totally and Permanently
Disabled, a monthly amount equal to $50.
(c) For a Participant who has been retired for at least 10 years but less than 20 years, a monthly
amount equal to $75.
(d) For a Participant who has been retired for 20 years or more, a monthly amount equal to $150.
RESTATEMENT JANUARY 1, 1997 22 ARTICLE IV (4-35028)
ARTICLE IVA
COST-OF-LIVING ADJUSTMENT
SECTION 4A.01--IMPORTANT TERMS.
For the purpose of determining the cost-of-living adjustment of benefits, the following terms are defined
here:
Adjustment Date means, for an Annuitant, each Yearly Date occurring on and after January 1, 1992, on
which the Price Index has changed by at least 1 % from the Price Index on the last preceding Yearly Date
as of which monthly retirement benefit payments under this Plan were changed in accordance with this
Article IVA (on January 1, 1992, if no prior changes have been made).
Adjustment Factor means, as of any Adjustment Date, the quotient of (a) divided by (b):
(a) The Price Index as of such Adjustment Date.
(b) The Price Index as of the last previous Adjustment Date.
In no event, however, will the Adjustment Factor exceed 1.03.
Annuitant means an Inactive Participant whose Retirement Date has occurred and who is entitled to
monthly retirement benefit payments under this Plan.
Price Index means, as of any date, the Consumer Price Index (U.S. city average for all urban consumers,
all items) for the fourth month immediately prior to such date, as published by the United States
Department of Labor.
SECTION 4A.02--CHANGE IN MONTHLY RETIREMENT BENEFIT.
As of each Adjustment Date as to an Annuitant, the amount of monthly retirement benefit payments
payable to such Annuitant will be increased by an amount determined by multiplying such payments by the
Adjustment Factor as of such Adjustment Date, subject to the following provisions:
(a) If such change results in an increase in the amount of monthly retirement benefit payments to an
Annuitant, an amount of monthly retirement benefit will be provided for him under the Annuity
Contract in the amount of such increase with payments consistent with the payments being made as
to the monthly retirement annuity provided under the Annuity Contract on the Participant's
Retirement Date.
Any cost-of-living increase will not exceed the percentage increase in the Price Index from the year
in which the Annuitant last worked, will the amount of monthly retirement benefit payments for an
Annuitant after the date of the.increase be more than 130% of the amount he would have received
had the provisions of this Article IVA not been in effect.
RESTATEMENT JANUARY 1, 1997 23 ARTICLE IVA (4-35028)
(b) No cost of living increase will result in a monthly retirement benefit which exceeds 75% of the
Annuitant's Average Compensation as determined on the date his monthly retirement benefit was
first calculated.
(c) No cost-of-living increase will be made if such increase would impair the actuarial soundness of the
Plan.
(d) On and after the effective date of termination of the Plan pursuant to Article VII, no further changes
in monthly retirement benefit payments will be made in accordance with this Article IVA.
RESTATEMENT JANUARY 1, 1997 24 ARTICLE IVA (4-35028)
ARTICLE V
OTHER BENEFITS
SECTION 5.01--DEATH BENEFITS.
If a Participant dies before his Annuity Starting Date, death benefits shall be determined under subsections
(a) and (b) below.
(a) Survivor annuity death benefit:
(1) A survivor annuity death benefit shall be payable if the following requirements are met:
(i) The Participant is survived by a spouse on the date he dies or he has a Dependent
Child on the date he dies.
(ii) The Participant dies while he is an Employee of the Employer and his death is a result
of performing police work.
If the requirements above are met on the date the Participant dies, the death benefit payable to the
Participant's spouse or the person who has assumed principal support of such Dependent Child
shall be a monthly benefit equal to one-half the retirement benefit derived from his Accrued Benefit
that would have been payable to the Participant as if his Retirement Date had occurred on the date
he died.
Payment of the spouse's or Dependent Child benefit shall begin on the first day of the month on or
after the date of the Participant's death and continue until the later of
(A) The date of the surviving spouse's death.
(B) The date there is no longer a surviving Dependent Child.
However, monthly death benefit payments will stop on the date of the surviving spouse's remarriage.
(b) Single sum death benefit:
If the requirements of subsection (a) above have not been met on the date a Participant dies, a
single sum death benefit equal to his Required Contribution Account on the date of his death shall
be payable to his Beneficiary.
All or any part of the single sum death benefit may be paid for the benefit of the Beneficiary under
the Normal Form.
If a Participant dies on or after his Normal Retirement Date and before his Annuity Starting Date, the death
benefit shall be payable in like manner as provided under (a) and (b) above.
Any death benefit after Annuity Starting Date will be determined by the Normal Form.
RESTATEMENT JANUARY 1, 1997 25 ARTICLE V (4-35028)
SECTION 5.02--VESTED BENEFITS.
A Participant who becomes an Inactive Participant before retirement, death or before the date a disability
payment begins under the DISABILITY BENEFITS SECTION of Article V will be entitled to a deferred monthly
retirement benefit on the Normal Form to begin on his Superannuation Retirement Date. The deferred retirement
benefit will be equal to the sum of (a) and (b) below:
(a) The amount of monthly benefit which could be provided on his Normal Retirement Date on the
Normal Form by his Required Contribution Account, based on the current method specified under
the Annuity Contract.
(b) The excess of a Participant's Accrued Benefit on the day before the date he became an Inactive
Participant over the amount determined under (a) above if he has completed 12 years of Accrual
Service and ceases to be an Eligible Employee before the date he completes the age and service
requirements for Normal Retirement Date.
The vested benefit in (b) above will only be provided for a Participant who files written notification with the
Borough Council of his intention to vest within 90 days of the date* he ceases to be an Eligible Employee.
Payment of the deferred monthly retirement benefit shall be on the Normal Form.
On and after the first Yearly Date in 1995, if the Participant has ceased to be an Employee and he has not
completed 12 years of Accrual Service, he will receive his Required Contribution Account, if any, in a single sum
payment. Such payment will result in all of his Accrued Benefit being disregarded and will be in full settlement of
any and all benefits provided under this Plan.
SECTION 5.03--DISABILITY BENEFITS.
If an Active Participant becomes Totally and Permanently Disabled before his Retirement Date (Normal
Retirement Date, if earlier), a disability benefit shall be payable to him.
The disability benefit payable to a Participant who meets the requirement above is an immediate monthly
benefit equal to 50% of his Average Compensation as of the last day he was actively at work for the Employer
reduced by any disability insurance benefit payable which was funded by the Plan.
Monthly disability benefit payments shall begin on the earliest first day of the month on or after the date the
Participant meets the requirements under this section. Such payments shall continue through the first day of the
month before the earliest of his Retirement Date (Normal Retirement Date, if earlier), the date of his death or the
day following the date he is no longer Totally and Permanently Disabled.
If the payments continue through the first day of the month before the Participant's Superannuation
Retirement Date, retirement benefits shall be provided for him on his Superannuation Retirement Date under the
provisions of Article IV as if he were an Active Participant. His Accrued Benefit shall be equal to the Accrued
Benefit as of the day before the disability benefit began. However, such Accrued Benefit shall not be less than the
amount of monthly disability payment paid to him under this section. If, before the Participant's Superannuation
Retirement Date, he recovers and returns to active work for the Employer within one month of his recovery, the
payments shall stop and he shall again become an Active Participant under the ACTIVE PARTICIPANT SECTION
of Article Il. If, before the Participant's Superannuation Retirement Date, he recovers and does not return to active
work for the Employer within one month of his recovery, the payments shall stop and his benefits shall be
redetermined, on the date he ceased to be an Employee, under the VESTED BENEFITS SECTION of Article V.
RESTATEMENT JANUARY 1, 1997 26 ARTICLE V (4-35028)
ARTICLE VI
WHEN BENEFITS START AND DISTRIBUTION OF BENEFITS
SECTION 6.01--WHEN BENEFITS START.
Benefits under the Plan begin when a Participant retires, dies, ceases to be an Employee, or becomes
Totally and Permanently Disabled, whichever applies, as provided in Article IV and Article V.
SECTION 6.02--FORM OF DISTRIBUTION.
The form of distribution for or on behalf of the Participant shall be the Normal Form.
li
RESTATEMENT JANUARY 1, 1997 27 ARTICLE VI (4-35028)
ARTICLE VII
TERMINATION OF PLAN
The Employer expects to continue the Plan indefinitely but by resolution of its Borough Council reserves the
right to terminate the Plan in whole or in part at any time upon giving written notice to all parties concerned.
Complete discontinuation of Contributions under the Plan constitutes complete termination of Plan.
An Employee who is included in the group of Employees deemed to be affected by complete or partial
termination of the Plan shall be fully (100%) vested in his Accrued Benefit as of the date of such complete or
partial termination. Upon complete termination of the Plan, no further Employees shall become. Participants, and
no further Contributions shall be made except as required by any governmental agency to which the Plan's
termination is subject.
A Participant's recourse towards satisfaction of his right to his nonforfeitable Accrued Benefit will be limited
to the Plan assets.
The assets of the Plan that are available to provide benefits shall be allocated and applied as of the
effective date of termination of the Plan according to any equitable method determined by the Plan Administrator
and agreed upon by the Insurer.
No part of the Plan assets shall be paid to the Employer at any time, except that, after the satisfaction of all
liabilities under the Plan, any assets remaining will be paid to the Employer. The payment may not be made if it
would contravene any provision of law.
RESTATEMENT JANUARY 1, 1997 28 ARTICLE VII (4-35028)
ARTICLE VIII
ADMINISTRATION OF PLAN
SECTION 8.01--ADMINISTRATION.
Subject to the provisions of this article, the Plan Administrator has complete control of the administration of
the Plan. The Plan Administrator has all the powers necessary for it to properly carry out its administrative duties.
Not in limitation, but in amplification of the foregoing, the Plan Administrator has the power to construe the Plan,
including ambiguous provisions, and to determine all questions that may arise under the Plan, including all
questions relating to the eligibility of Employees to participate in the Plan and the amount of benefit to which any
Participant, Beneficiary, or spouse may become entitled. The Plan Administrator's decisions upon all matters
within the scope of its authority shall be final.
Unless otherwise set out in the Plan or Annuity Contract, the Plan Administrator may delegate
recordkeeping and other duties which are necessary to assist it with the administration of the Plan to any person
or firm which agrees to accept such duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by the consultant or actuary appointed by the Plan Administrator and
upon all opinions given by any counsel selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by Participants, former Participants,
Beneficiaries, and spouses. The Plan Administrator shall determine all facts necessary to establish the right of any
claimant to benefits and the amount of those benefits under the provisions of the Plan. The Plan Administrator
may establish rules and procedures to be followed by claimants in filing claims for benefits, in furnishing and
verifying proofs necessary to determine age, and in any other matters required to administer the Plan.
SECTION 8.02--EXPENSES.
Expenses of the Plan may be paid out of the assets of the Plan provided such payment is consistent with
Act 205. Such expenses include, but are not limited to, expenses for recordkeeping and other administrative
services; fees and expenses of the Trustee or Annuity Contract; and direct costs that the Employer incurs with
respect to the Plan.
SECTION 8.03--RECORDS.
All acts and determinations of the Plan Administrator shall be duly recorded. All these records, together
with other documents necessary for the administration of the Plan, shall be preserved in the Plan Administrator's
custody.
Writing (handwriting, typing, printing) photostating, photographing, microfilming, magnetic impulse,
mechanical or electrical recording or other forms of data compilation shall be acceptable means of keeping
records.
SECTION 8.04--INFORMATION AVAILABLE.
Any Participant in the Plan or any Beneficiary may examine copies of the Plan description, latest annual
report, any bargaining agreement, this Plan, the Annuity Contract or any other instrument under which the Plan
was established or is operated. The Plan Administrator shall maintain all of the items listed in this section in its
office, or in such other place or places as it may designate in order to comply with governmental regulations.
These items may be examined during reasonable business hours. Upon the written request of a Participant or
RESTATEMENT JANUARY 1, 1997 29 ARTICLE VIII (4-35028)
Beneficiary receiving benefits under the Plan, the Plan Administrator will furnish him with a copy of any of these
items. The Plan Administrator may make a reasonable charge to the requesting person for the copy.
SECTION 8.05--DELEGATION OF AUTHORITY.
All or any part of the administrative duties and responsibilities under this article may be delegated by the
Plan Administrator to a retirement committee. The duties and responsibilities of the retirement committee shall be
set out in a separate written agreement.
SECTION 8.06--EXERCISE OF DISCRETIONARY AUTHORITY.
The Employer, Plan Administrator and any other person or entity with authority with respect to the
management, administration or investment of the Plan may exercise that authority in its full discretion, subject only
to the duties imposed under the applicable laws of the state of Pennsylvania. This discretionary authority includes,
but is not limited to, the authority to make any and all factional determinations and interpret all terms and
provisions of the Plan documents relevant to the issue under consideration. The exercise of authority will be
binding upon all persons; will be given deference in all courts of law to the greatest extent allowed under law; and
will not be overturned or set aside by any court of law unless found to be arbitrary and capricious or made in bad
faith.
RESTATEMENT JANUARY 1, 1997 30 ARTICLE VIII (4-35028)
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01--AMENDMENTS.
The Employer may amend this Plan at any time, including any remedial retroactive changes (within the
specified period of time as may be determined by Internal Revenue Service regulations) to comply with the
requirements of any law or regulation issued by any governmental agency to which the Plan is subject. An
amendment (including a change in the actuarial basis for determining optional retirement benefits) may not
diminish or adversely affect any accrued interest or benefit of Participants or their beneficiaries nor allow reversion
or diversion of Plan assets to the Employer at any time, except as may be necessary to comply with the
requirements of any law or regulation issued by any governmental agency to which the Plan is subject.
SECTION 9.02--DIRECT ROLLOVERS.
Notwithstanding any provision of the Plan to the contrary- that would otherwise limit a Distributee's election
under this section, a Distributee may elect, at the time and in the manner prescribed by the Plan Administrator, to
have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover.
SECTION 9.03--PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.
The obligations of the Insurer shall be governed solely by the provisions of the Annuity Contract. The
Insurer shall not be required to perform any act not provided in or contrary to the provisions of the Annuity
Contract. See the CONSTRUCTION SECTION of this article.
Any issuer or distributor of investment contracts or securities is governed solely by the terms of its policies,
written investment contract, prospectuses, security instruments, and any other written agreements entered into
with the Trustee with regard to such investment contracts or securities.
Such Insurer, issuer or distributor is not a party to the Plan or Trust, nor bound in any way by the Plan or
Trust provisions. Such parties shall not be required to look to the terms of this Plan or Trust, nor to determine
whether the Employer, Plan Administrator, or the Trustee have the authority to act in any particular manner or to
make any contract or agreement.
Until notice of any amendment or termination of this Plan or a change in Trustee has been received by the
Insurer at its home office or an issuer or distributor at their principal address, they are and shall be fully protected
in assuming that the Plan has not been amended or terminated and in dealing with any party acting as Trustee
according to the latest information which they have received at their home office or principal address.
SECTION 9.04--EMPLOYMENT STATUS.
Nothing contained in this Plan gives an Employee the right to be retained in the Employer's employ or to
interfere with the Employer's right to discharge any Employee.
RESTATEMENT JANUARY 1, 1997 31 ARTICLE IX (4-35028)
SECTION 9.05--RIGHTS TO PLAN ASSETS.
No Employee shall have any right to or interest in any assets of the Plan upon termination of his
employment or otherwise except as specifically provided under this Plan, and then only to the extent of the
benefits payable to such Employee in accordance with Plan provisions.
Any final payment or distribution to a Participant or his legal representative or to any Beneficiaries or
spouse of such Participant under the Plan provisions shall be in full satisfaction of all claims against the Plan, the
Plan Administrator, the Insurer the Trustee, and the Employer arising under or by virtue of the Plan.
SECTION 9.06--BENEFICIARY.
Each Participant may name a Beneficiary to receive any death benefit that may arise out of his participation
in the Plan. He may change his Beneficiary from time to time. It is the responsibility of the Participant to give
written notice to the Insurer of the name of his Beneficiary on a form furnished for that purpose.
With the Employer's consent, the Plan Administrator may maintain records of Beneficiary designations for
Participants before their Retirement Dates. In that event, the written designations made by Participants shall be
filed with the Plan Administrator. If a Participant dies before his Retirement Date, the Plan Administrator shall
certify to the Insurer the Beneficiary designation on its records for the Participant.
If there is no Beneficiary named or surviving when a Participant dies, the Participant's Beneficiary shall be
the Participant's surviving spouse or where there is no surviving spouse, the executor or administrator of the
Participant's estate.
SECTION 9.07-NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any creditor of any Participant, Beneficiary
or spouse. A Participant, Beneficiary or spouse does not have any rights to alienate, anticipate, commute, pledge,
encumber or assign any of such benefits. The Trustee may comply with a court order requiring deduction from the
benefits of a Participant in pay status for alimony or support payments.
SECTION 9.08--CONSTRUCTION.
The validity of the Plan or any of its provisions is determined under and construed according to Federal law
and, to the extent permissible, according to the laws of the state in which the Employer has its principal office. In
case any provision of this Plan is held illegal or invalid for any reason, such determination shall not affect the
remaining provisions of this Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision
had never been included.
In the event of any conflict between the provisions of the Plan and the terms of any contract or policy
issued hereunder, the provisions of the Plan control the operation and administration of the Plan.
SECTION 9.09--LEGAL ACTIONS.
No person employed by the Employer; no Participant, former Participant or their Beneficiaries; nor any
other person having or claiming to have an interest in the Plan is entitled to any notice of process. A final judgment
entered in any such action or proceeding shall be binding and conclusive on all persons having or claiming to have
an interest in the Plan.
RESTATEMENT JANUARY 1, 1997 32 ARTICLE IX (4-35028)
SECTION 9.10--WORD USAGE.
The masculine gender, where used in this Plan, shall include the feminine gender and the singular words
as used in this Plan may include the plural, unless the context indicates otherwise.
The words "in writing" and "written," where used in this Plan, shall include any other forms, such as voice
response or other electronic system, as permitted by any governmental agency to which the Plan is subject.
SECTION 9.11-MILITARY SERVICE.
Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with
respect to qualified military service will be provided in accordance with Code Section 414(u).
RESTATEMENT JANUARY 1, 1997 33 ARTICLE IX (4-35028)
By executing this Plan, the Employer acknowledges having counseled to the extent necessary with
selected legal and tax advisors regarding the ?Pllan's legal and tax implications.
' ,& t4 j- .20(5a
Executed this ?- day of fC
BOROUGH OF SHIPPENSBURG
By:
00?iP?
Title
Defined Benefit Plan 8.0
RESTATEMENT JANUARY 1, 1997 34 PLAN EXECUTION (4-35028)
EXHIBIT D
4 Filmncia/
Group
November 21, 2003
GRACE M KEITER
BOROUGH OF SHIPPENSBURG
111 N FAYETTE STREET
P O BOX 129
SHIPPENS13URG PA 17257-0129
Borough Of Shippensburg Police Pension Plan
Annuity Contract No: 4-35028
Dear Ms. Keiter
Documents are an important part of your retirement plan. The enclosed plan document is designed
to bring your plan into compliance with recent law changes. These law changes, passed by the
General Assembly of Pennsylvania are based on the following state laws:
• Senate-Bill -16 (Act 30). Act 30 amends the Municipal Police Pension Law of May 29,
1956, known as Act 600.
• House Bill 1360 (Act 64). Act 64 provides mandatory special ad hoc post-retirement cost
of living adjustments for retired police officers and firefighters.
We've included a Document Review Checklist and a summary of the law changes titled Plan
Document Changes. We suggest you review the documents with your legal and tax advisors to
make sure these changes will meet your plan's needs.
It's important to make this review as soon as possible. After reviewing the document review
checklist and plan document, if the plan document meets your needs, sign and date the plan
document signature page and send us a copy.
Please contact me at the phone number below if you have any questions.
Since -
tana Br-0
Client Service Associate
Retirement and Investor Services
Phone (515) 235-6067
Fax (515) 248-3194
®Insurance products and plan administrate ve services are provided by Principal Life Insurance Company. Securities
offered through Princor Financial Services Corporation, 800-547-7754, member SIPC Princor and Principal Life are
members of the Principal Financial Group, Des Moines, fA 50392.
RIS DRS01
200402071045DM4O66247750207038-002D042-1
P ::1
up
DOCUMENT REVIEW CHECKLIST
PLAN
Review - The following plan document is enclosed:
A draft of your plan restatement effective January 1, 2003. This draft was prepared based on the changes needed to
comply with recent laws that effect your plan. These changes include the following:
• Act 30
• Act 64
Sign and Return - Instructions for signing and returning your plan document signature page:
According to our records, your plan year ends December 31, 2003.
If the plan document meets your needs, return a copy of the signed signature page to me. Please file the original signed
signature page with your plats.
If the plan document does not meet your needs, indicate the changes needed and return it to me. We'll review the changes
and send you a revised draft.
200402071045DM40662477$0207038-002D042-1
Act 30 and Act 64 Restatement - Revised October 9, 2003
PLAN DOCUMENT CHANGES
The following table contains plan document changes that are
required so your plan complies with the Act 30 and Act 64
legislation changes and lists other enhancements made to the
document.
• Please read it carefully.
• Make note of any administrative procedure changes you may
need to make to operate your plan according to these changes.
• Please take any action indicated, if needed.
200402071045DM40662477$0207038-002D042-1
Act 30 and Act 64 Restatement - Revised October 9, 2003
SUBJECT CHANGE EFFECTIVE DATE
Dependent The definition was updated to reflect a participant attending January 1, 2003
Child college under or attaining age 23 would be covered for
purposes of a dependent child.
Act 30
Salary This is new definition that is utilized in the calculation for January 1, 2003
participants killed or disabled in the line of duty.
Act 30
Required The plan is no longer required to be actuarially sound prior to January 1, 2003
Contributions eliminating required contributions.
Act 30
2002 Special This article was added to cover the mandatory special ad-hoc July 1, 2002
Ad Hoc post - retirement cost of living adjustment for retired police
Adjustment officers and firefighters who began receiving retirement
benef is before January 1, 1996.
Act 64
Death Benefits A survivor death benefit no longer stops on remarriage. January 1, 2003
The death benefit payable to a survivor will be in the amount
of 100% of a participant's salary at the time of death if killed
in the line of duty.
The death benefit payable to a survivor will be in the amount
of 50% of the pension that the participant was receiving or
was entitled to receive if retirement had occurred on the date
of death if the participant is not killed in the line of duty.
The benefit will be payable to a survivor at a participants
retirement
Act 30
Disability The disability benefit payable to the participant will be in the January 1, 2003
Benefit amount of 50.1/0 of the participant's salary at the time of
disability.
Act 30
200402071045DM4066247750207038-002D042-1
Your plan is an important legal document. This sample plan has been prepared based on our understanding of
the desired provisions. It may not fit your situation. You should consult with your lawyer on the plan's legal
and tax implications. Neither Principal Life Insurance Company nor its agents can be responsible for the legal
or tax aspects of the plan nor its appropriateness for your situation. If you wish to change the provisions of
this sample plan, you may ask us to prepare new sample wording for you and your lawyer to review.
200402071045DM4o66247750207038-002D042-1
BOROUGH OF SHIPPENSBURG
POLICE
PENSION PLAN
Defined Benefit Plan 8.1
Restated January 1, 2003
200402071045DM40662477.50207038-002D042-1
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I FORMAT AND DEFINITIONS
Section 1.01 ---- Format
Section 1.02 ----- Definitions
ARTICLE II PARTICIPATION
Section 2.01 ----- Active Participant
Section 2.02 --- Inactive Participant
Section 2.03 ----- Cessation of Participation
ARTICLE III CONTRIBUTIONS
Section 3.01 ---- Employer Contributions
Section 3.01A ----- Required Contributions by Participants
Section 3.02 -- -- Investment of Contributions
Section 3.03 ----- Funding of Employer Contributions
ARTICLE IV RETIREMENT BENEFITS
Section 4.01 --- Accrued Benefit
Section 4.02 --- Benefit Limitation
Section 4.03 -- Amount of Benefit at Retirement
ARTICLE IVA 2002 SPECIAL AD HOC ADJUSTMENT
Section 4A.01 ----- Important Terms
Section 4A.02 ---- Eligibility
Section 4A.03 -•- 2002 Special Ad Hoc Adjustment
ARTICLE IVB COST-OF-LIVING ADJUSTMENT
Section 4B.01 --- Important Terms
Section 413.02 ----- Change in Monthly Retirement Benefit
ARTICLE V OTHER BENEFITS
Section 5.01 ----- Death Benefits
Section 5.02 - -- Vested Benefits
Section 5.03 --- Disability Benefits
RESTATEMENT JANUARY 1, 2003 3 TABLE OF CONTENTS 14-350281-1
200402071045DM4066247740207038-002D042-1
ARTICLE VI WHEN BENEFITS START AND DISTRIBUTION OF BENEFITS
Section 6.01 ----- When Benefits Start
Section 6.02 ---- Form of Distribution
ARTICLE VII DISTRIBUTION REQUIREMENTS
Section 7.01 ----- Application
Section 7.02 --- Definitions
Section 7.03 ----- Distribution Requirements
ARTICLE VIII TERMINATION OF PLAN
ARTICLE IX ADMINISTRATION OF PLAN
Section 9.01 -••• Administration
Section 9.02 ---- Expenses
Section 9.03 ---- Records
Section 9.04 ---- Information Available
Section 9.05 ---- Delegation of Authority
Section 9.06 -- Exercise of Discretionary Authority
ARTICLE X GENERAL PROVISIONS
Section 10.01 ---- Amendments
Section 10.02 -- Direct Rollovers
Section 10.03 ----- Provisions Relating to the Insurer
Section 10.04 ----- Employment Status
Section 10.05 ----- Rights to Plan Assets
Section 10.06 ----- Beneficiary
Section 10.07 ----- Nonalienation of Benefits
Section 10.08 ---- Construction
Section 10.09 --- Legal Actions
Section 10.10 -- Word Usage
Section 10.11 - - Military Service
PLAN EXECUTION
RESTATEMENT JANUARY 1, 2003 4 TABLE OF CONTENTS 44-350281-1
1200402071045DM4066247730207038-002D042-1
INTRODUCTION
The Employer previously established a defined benefit retirement plan on September 13, 1960.
The Employer is of the opinion that the retirement plan should be changed. It is believed that the best
means to accomplish these changes is to completely restate the plan's terms, provisions and conditions. The
restatement, effective January 1, 2003, is set forth in this document and is substituted in lieu of the prior
document with the exception of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA)
good faith compliance amendment and any model amendment. Such amendment(s) shall continue to apply to
this restated plan until such provisions are integrated into the plan or such amendment(s) are superseded by
another amendment.
The Employer agrees to operate the plan according to the terms, provisions and conditions set forth in
this document.
The restated defined benefit retirement plan continues to be for the exclusive benefit of employees of
the Employer. All persons covered under the plan on December 31, 2002, shall continue to be covered
under the restated plan with no loss of benefits.
It is intended that the retirement plan, as restated, shall continue to meet the requirements for a
governmental plan under the Internal Revenue Code of 1986, including any later amendments to the Code.
The plan is intended to meet the requirements of Act 600 and any other laws governing police pension plans of
Pennsylvania for boroughs, towns and townships.
RESTATEMENT JANUARY 1, 2003 5 INTRODUCTION (4-35028)-1
200402071045DM4066247750207038-002D042--1
ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01--FORMAT.
Words and phrases defined in the DEFINITIONS SECTION of Article 1 shall have that defined meaning
when used in this Plan, unless the context clearly indicates otherwise.
These words and phrases will have an initial capital letter to aid in identifying them as defined terms.
SECTION 1.02--DEFINITIONS.
Accrual Service means the total of an Employee's Service. This total is expressed in whole years and
fractional parts of a year (counting a complete month as a fractional part of a year).
However, Accrual Service is modified as follows:
Service excluded:
Service while an Employee was not an Eligible Employee is excluded.
If a Participant has previously received his Required Contribution Account in a single-sum
payment, service before the date of such payment shall be excluded.
Military service included:
Military service with the armed forces of the United States shall be included as Service if the
Employee (i) has been a regularly appointed member of the Employer's police force for a period of
at least six months when he enters into such military service and (ii) returns to employment as a
regularly appointed member of the Employer's police force within six months after his separation
from the service. To the extent such military service is also required to be included as Service in
accordance with Code Section 414(u), such military service shall not be included more than once.
Military service with the armed forces of the United States shall also be included as Service (not
to exceed five years) if the Employee (i) was not employed by the Employer prior to such military
service, (ii) makes an election to include such military service and (iii) pays the cost of crediting
such military service. Such cost shall be determined by the Employer in accordance with the
provisions of 53 P.S. 770 of Act 600.
The military service included as Service under the preceding provisions shall only be included if the
Employee is not entitled to receive, now or in the future, retirement benefits for such service
under a retirement system administered and wholly or partially paid for by any other governmental
agency with the exception of retirement pay earned by a combination of active duty and
nonactive duty with a reserve or national guard component of the armed forces, which retirement
RESTATEMENT JANUARY 1, 2003 6 ARTICLE 1 (4-35028)-1
200402071045DM4066247750207038-002D042-1
pay is payable only upon reaching a specified age and completion of a period of service under 10
U.S.C. Ch. 67 (relating to retired pay for non-regular service).
Accrued Benefit means on any date, the amount of monthly retirement benefit on the Normal Form
accrued by an Active Participant. See the ACCRUED BENEFIT SECTION of Article IV.
Accrued Benefit Adjustment means the adjustment which shall be applied to determine a Participant's
benefit. The Accrued Benefit Adjustment on any date shall be equal to the quotient (to four decimal
places) of (a) divided by (b):
(a) The Participant's Accrual Service as of such date.
(b) The Participant's potential Accrual Service as of his Superannuation Retirement Date, if he
remains an Eligible Employee between the date of determination and his Superannuation
Retirement Date.
The Accrued Benefit Adjustment shall not exceed 1.00 and shall be 1.00 on his Normal Retirement Date.
Act 205 means the act of December 18, 1984 P.L. 1005 No. 205, as amended, 53 P.S. 895.101, et.
seq., known as the Municipal Pension Plan Funding Standard and Recovery Act, governing state aid to
municipalities of Pennsylvania to offset employee pension costs.
Act 600 means the act of May 29, 1956 P.L. (1955) 1804 No. 600, as amended, 53 P.S. 767, at. seq.,
known as the Police Pension Fund Act, requiring the establishment of police pension plans for boroughs,
towns, and townships in Pennsylvania with three or more full-time police officers in accordance with
such act and permitting those with less than three full-time police officers to establish their plans in
accordance with such act.
Active Participant means an Eligible Employee who is actively participating in the Plan according to the
provisions in the ACTIVE PARTICIPANT SECTION of Article 11.
Annuity Contract means the annuity contract or contracts into which the Employer enters with the
Insurer for guaranteed benefits, for the investment of Contributions in separate accounts and for the
payment of benefits under this Plan. The term Annuity Contract as it is used in this Plan shall include
the plural unless the context clearly indicates the singular is meant.
Annuity Starting Date means, for a Participant, the first day of the first period for which an amount is
payable as an annuity or any other form.
The Annuity Starting Date for disability benefits shall be the date such benefits commence if the
disability benefit is not an auxiliary benefit. An auxiliary benefit is a disability benefit which does not
reduce the benefit payable at Normal Retirement Date.
Average Compensation means, on any given date, the average of an Employee's monthly Compensation
for the latest 36 months of employment with the Employer.
Beneficiary means the person or persons named by a Participant to receive any benefits under this Plan
upon the Participant's death. See the BENEFICIARY SECTION of Article X.
RESTATEMENT JANUARY 1, 2003 7 ARTICLE 1 (4-35028)-1
200402071045DM4066247750207038-002D042-1
Code means the Internal Revenue Code of 1986, as amended.
Compensation means the total earnings, except as modified in this definition, paid to an Employee by
the Employer during any specified period. Earnings as used in this definition includes salary, court
pay, holiday pay, overtime pay and other remuneration.
For years beginning after December 31, 1988, the annual Compensation of each Participant taken into
account for determining all benefits provided under the Plan for any year shall not exceed $200,000, as
adjusted by the Secretary in accordance with Code Section 415(d). For Plan Years beginning on or after
January 1, 1996, the annual Compensation taken into account for determining all benefits provided
under the Plan for any Plan Year for any individual who first becomes a Participant in the Plan during a
Plan Year beginning after the first Yearly Date in 1996, shall not exceed $150,000.
Provided, however, with respect to an eligible Participant, the reduced dollar limitation in the preceding
paragraph does not apply to the extent that the amount of Compensation allowed to be taken into
account under the Plan is reduced below the amount that was allowed to be taken into account under
the Plan as in effect on July 1, 1993. For this purpose, "eligible Participant' means an individual who
first became a Participant in the plan during a Plan Year beginning before the first Yearly Date in 1996.
The $150,000 limit shall be adjusted by the Commissioner for increases in the cost of living in
accordance with Code Section 401 WO 7)(B). The cost of living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which pay is determined (determination period)
beginning in such calendar year. If a determination period consists of fewer than 12 months, the annual
compensation limit will be multiplied by a fraction, the numerator of which is the number of months in
the determination period, and the denominator of which is 12.
If Compensation for any prior period is taken into account in determining a Participant's contributions or
benefits for the current period, the Compensation for such prior year is subject to the applicable annual
compensation limit in effect for that prior year. For this purpose, for years beginning before January 1,
1990, the applicable annual compensation limit is $200,000 for an Employee who became a Participant
before the first Yearly Date in 1996. For years beginning on and after January 1, 1996, the annual
compensation limit is $150,000 for an Employee who became a Participant on and after the first Yearly
Date in 1996.
Contributions means
Employer Contributions
Required Contributions
as set out in Article III, unless the context clearly indicates only specific contributions are meant.
Dependent Child means, as to a Participant, any child of such Participant under age 18, or if attending
college, under or attaining age 23. For purposes of this definition, 'attending college' means registered
at an accredited institution of higher learning and carrying a minimum course load of seven hours per
semester.
Direct Rollover means a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.
RESTATEMENT JANUARY 1, 2003
ARTICLE 1 (4-350281-1
200402071045DM4066247750207038-002DO42-1
Distributee means an Employee or former Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Code Section 414(p), are Distributees
with regard to the interest of the spouse or former spouse.
Eligible Employee means any Employee of the Employer who is a member of the Employer's police
force and whose employment is for not less than 40 hours per week at a definite salary.
Eligible Retirement Plan means an individual retirement account described in Code Section 408(a), an
individual retirement annuity described in Code Section 408(b), an annuity plan described in Code
Section 403(a) or a qualified trust described in Code Section 401(a), that accepts the Distributee's
Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the surviving spouse, an Eligible Retirement
Plan is an individual retirement account or individual retirement annuity.
Eligible Rollover Distribution means any distribution of all or any portion of the balance to the credit of
the Distributee, except that an Eligible Rollover Distribution does not include: (i) any distribution that is
one of a series of substantially equal periodic payments (not less frequently than annually) made for the
life (or life expectancy) of the Dis_tributee or the joint lives (or joint life expectancies) of the Distributee
and the Distributee's designated Beneficiary, or for a specified period of ten years or more; (ii) any
distribution to the extent such distribution is required under Code Section 401(a)(9); (iii) the portion of
any distribution that is not includible in gross income Idetermined without regard to the exclusion for net
unrealized appreciation with respect to employer securities); and (iv) any other distribution(s) that is
reasonably expected to total less than $200 during a year.
Employee means an individual who is employed by the Employer or any other employer required to be
aggregated with the Employer under Code Sections 414(b), (c), (m) or (o).
The term Employee shall also include any Leased Employee deemed to be an employee of any employer
described in the preceding paragraph as provided in Code Section 414(n) or (o).
Employer means, except for purposes of the BENEFIT LIMITATION SECTION of Article IV, BOROUGH
OF SHIPPENSBURG.
Employer Contributions means contributions made by the Employer to fund this Plan. See the
EMPLOYER CONTRIBUTIONS SECTION of Article 111.
Entry Date means the date an Employee first enters the Plan as an Active Participant. See the ACTIVE
PARTICIPANT SECTION of Article It.
Fiscal Year means the Employer's accounting year. The last day of the Fiscal Year is December 31.
Inactive Participant means a former Active Participant who has an Accrued Benefit. See the INACTIVE
PARTICIPANT SECTION of Article 11.
Insurer means Principal Life Insurance Company and any other insurance company or companies named
by the Employer.
RESTATEMENT JANUARY 1, 2003
9
ARTICLE 1 (4-35028)-1
200402071045DM4066247750207038-002D042-1
Investment Manager means any fiduciary (other than a trustee)
Ia) who has the power to manage, acquire, or dispose of any assets of the Plan;
(b) who (i) is registered as an investment adviser under the Investment Advisers Act of 1940; (ii) is
not registered as an investment adviser under such Act by reason of paragraph (1) of Section
203A(a) of such Act, is registered as an investment adviser under the laws of the state (referred
to in such paragraph 11)) in which it maintains its principal office and place of business, and, at
the time it last filed the registration form most recently filed it with such state in order to maintain
its registration under the laws of such state, also filed a copy of such form with the Secretary of
Labor; (iii) is a bank, as defined in that Act; or (iv) is an insurance company qualified to perform
services described in subparagraph (a) above under the laws of more than one state; and
(c) who has acknowledged in writing being a fiduciary with respect to the Plan.
Late Retirement Date means the first day of any month which is after a Participant's Normal Retirement
Date and on which retirement benefits begin. If a Participant continues to work for the Employer after
his Normal Retirement Date, his Late Retirement Date shall be the earliest first day of the month on or
after he ceases to be an Employee.
Monthly Date means each Yearly Date and the same day of each following month during the Plan Year
beginning on such Yearly Date.
Normal Form means a straight life annuity.
Normal Retirement Date means the earliest first day of the month on or after the later of the date the
Participant reaches his 50th birthday or the date the Participant completes 25 years of Accrual
Service. A Participant's retirement benefits shall begin on a Participant's Normal Retirement Date if he
has ceased to be an Employee on such date.
Participant means either an Active Participant or an Inactive Participant.
Participant Contributions means Required Contributions as set out in Article III.
Plan means the defined benefit retirement plan of the Employer set forth in this document, including any
later amendments to it.
Plan Administrator means the person or persons who administer the Plan.
The Plan Administrator is the Employer.
Plan Year means a period beginning on a Yearly Date and ending on the day before the next Yearly Date.
Reentry Date means the date a former Active Participant reenters the Plan. See the ACTIVE
PARTICIPANT SECTION of Article 11.
RESTATEMENT JANUARY 1, 2003 10 ARTICLE 1 (4-35028)-1
200402071045Dm4066247750207038-002D042-1
Required Contribution Account means, on any date, the total of a Participant's Required Contributions
with interest. Contributions previously paid to the Participant or applied for him, and any interest that
would have been credited on those contributions, shall be excluded.
Interest shall be credited in each Plan Year at the rate of five percent per annum compounded annually.
Interest shall be credited on each Required Contribution from the end of the Plan Year for which it was
made until the Monthly Date on or before the date of determination.
Required Contributions means nondeductible contributions which may be required from a Participant in
order to participate in this Plan. See the REQUIRED CONTRIBUTIONS BY PARTICIPANTS SECTION of
Article Ill.
Retirement Date means the date a retirement benefit will begin and is a Participant's Superannuation,
Normal or Late Retirement Date, as the case may be.
Salary means, on any given date, an Employee's monthly Compensation for the latest month of
employment with the Employer.
Service means an Employee's period of employment as a full-time police officer of the Employer.
Superannuation Retirement Date means, for a Participant who ceases to be an Eligible Employee before
he meets the age and service requirements for Normal Retirement Date, the date that would have been
his Normal Retirement Date had he remained an Eligible Employee until such date.
Totally and Permanently Disabled means a Participant is disabled as a result of performing police work,
to the extent that he is prevented from engaging in his normal duties as a police officer as determined
by a physician chosen by the Employer.
Vesting Percentage means the percentage used to determine that portion of a Participant's Accrued
Benefit resulting from Employer Contributions which is nonforfeitable (cannot be lost since it is vested).
A Participant's Vesting Percentage is shown in the following schedule opposite the number of whole
years of his Accrual Service.
ACCRUAL SERVICE VESTING
(whole years) PERCENTAGE
Less than 12 0
12 or more 100
Yearly Date means January 1, 1986, and the same day of each following year. Yearly Dates before
January 1, 1986, shall be determined under the provisions of the prior document.
RESTATEMENT JANUARY 1, 2003 11 ARTICLE 1 (4-35028)-1
200402071045DM4066247750207038-002D042-1
ARTICLE 11
PARTICIPATION
SECTION 2.01--ACTIVE PARTICIPANT.
(a) An Employee shall first become an Active Participant (begin active participation in the Plan) on the
earliest date on which he is an Eligible Employee. This date is his Entry Date.
Each Employee who was an Active Participant under the Plan on December 31, 2002, shall
continue to be an Active Participant if he is still an Eligible Employee on January 1, 2003, and his
Entry Date will not change.
(b) An Inactive Participant shall again become an Active Participant (resume active participation in the
Plan) on the date he again becomes an Eligible Employee. This date is his Reentry Date.
Upon again becoming an Active Participant, he shall cease to be an Inactive Participant.
(c) A former Participant shall again become an Active Participant (resume active participation in the
Plan) on the date he again becomes an Eligible Employee. This date is his Reentry Date.
There shall be no duplication of benefits for a Participant under this Plan because of more than one
period as an Active Participant.
SECTION 2.02--INACTIVE PARTICIPANT.
An Active Participant shall become an Inactive Participant (stop accruing benefits under the Plan) on the
earlier of the following:
(a) The date on which he ceases to be an Eligible Employee.
(b) The effective date of complete termination of the Plan under Article Vlll.
An Employee or former Employee who was an Inactive Participant under the Plan on December 31,
2002, shall continue to be an Inactive Participant on January 1, 2003. Eligibility for any benefits payable to
the Participant or on his behalf and the amount of the benefits shall be determined according to the provisions
of the prior document, unless otherwise stated in this Plan.
SECTION 2.03--CESSATION OF PARTICIPATION.
A Participant, whether active or inactive, shall cease to be a Participant on the date of his death.
An Inactive Participant shall also cease to be a Participant on the earliest date on which he is not entitled
to a deferred monthly income under the VESTED BENEFITS SECTION of Article V.
RESTATEMENT JANUARY 1, 2003 12 ARTICLE II (4-35028)-1
200402071045DM4066247750207038-002D042-1
ARTICLE III
CONTRIBUTIONS
SECTION 3.01--EMPLOYER CONTRIBUTIONS.
The amount of Employer Contributions shall meet or exceed the minimum funding standards of Act 205.
The amount and time of Employer Contributions shall be determined based on actuarial valuations and
recommendations as to the amounts required to fund benefits under this Plan.
A portion of the Plan assets resulting from Employer Contributions (but not more than the original
amount of those Contributions) may be returned if the Employer Contributions are made because of a mistake
of fact, unless such Contribution is needed to meet the minimum funding standards of Act 205. The amount
involved must be returned to the Employer within one year after the date the Employer Contributions are made
by mistake of fact. Except as provided under this paragraph and in Article VIII, the assets of the Plan shall
never be used for the benefit of the Employer and are held for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and for defraying reasonable expenses of administering the Plan as allowed
under Act 205.
SECTION 3.01A--REQUIRED CONTRIBUTIONS BY PARTICIPANTS.
If determined by the Employer, each Active Participant shall make Required Contributions. These
Contributions shall be made for each month in which he is an Active Participant.
The amount of each Contribution will be equal to 5% of his Compensation for the month.
A Participant shall not make Required Contributions during the period he is receiving disability payments
under the DISABILITY BENEFITS SECTION of Article V.
The Participant's Required Contribution Account is fully (100%) vested and nonforfeitable at all times.
The Employer may, on an annual basis, by resolution, reduce or eliminate Required Contributions.
SECTION 3.02-4NVESTMENT OF CONTRIBUTIONS.
The handling of Contributions which are directed to the Annuity Contract is govemed by the provisions
of the Annuity Contract.
The Plan Administrator may delegate to the Investment Manager investment discretion for Plan assets.
All Contributions are forwarded by the Employer to the Insurer to be deposited under the Annuity
Contract.
RESTATEMENT JANUARY 1, 2003 13 ARTICLE III (4-35028)-1
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Prior plan assets, consisting of reserves of either annuities in the course of payment or paid-up
annuities held under a group annuity contract that was issued before January 1, 1886, to hold assets of the
prior plan, may, with the Insurer's consent be transferred to the Annuity. Contract at the Employer's
discretion.
SECTION 3.03--FUNDING OF EMPLOYER CONTRIBUTIONS.
Employer Contributions will be funded by annual appropriations made by the Employer, by payments
made by the State Treasurer to the municipal treasurer from the money received from taxes paid upon
premiums by foreign casualty insurance companies for purposes of pension retirement for policemen, and by
gifts, grants, devises or bequests granted to the Plan pursuant to P.S. 768 of Act 600. Payments made by
the State Treasurer shall be used as follows:
(a) to reduce the unfunded liability, or after such liability has been funded,
(b) to apply against the annual obligation of the Employer for future service cost, or to the extent
that the payment may be in excess of such obligations,
(c) to reduce Required Contributions.
RESTATEMENT JANUARY 1, 2003 14 ARTICLE III (4-35028)-1
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ARTICLE IV
RETIREMENT BENEFITS
SECTION 4.01--ACCRUED BENEFIT.
An Active Participant's monthly Accrued Benefit as of any date, subject to the modifications below, will
be equal to the product of (a) and (b) plus (c) below:
(a) An amount equal to 50% of his Average Compensation.
(b) His Accrued Benefit Adjustment.
(c) An amount equal to $20.00 multiplied by his complete years of Accrual Service in excess of 25
on such date, not to exceed $100.00.
SECTION 4.02--BENEFIT LIMITATION.
(a) Definitions. For purposes of determining the benefit limitation set forth in this section, the
following terms are defined:
Annual Additions means the sum of the following amounts credited to a Participant's account
for the Limitation Year:
(1) employer contributions;
(2) employee contributions;
(3) forfeitures; and
(4) allocations under a simplified employee pension.
Annual Benefit means a retirement benefit under the plan which is payable annually in the form
of a Straight Life Annuity. Except as provided below, a benefit payable in a form other than a
Straight Life Annuity must be adjusted to an actuarially equivalent Straight Life Annuity before
applying the limitations of this section. Effective for Limitation Years beginning on or after
January 1, 1995, where a Participant's benefit must be adjusted to an actuarially equivalent
Straight Life Annuity, the actuarially equivalent Straight Life Annuity is equal to the greater of
the annuity benefit computed using the interest fate and mortality table (or other tabular factor)
specified in the Plan for adjusting benefits in the same form, and the annuity benefit computed
using a 5 percent interest rate assumption and the Applicable Mortality Table.
No actuarial adjustment to the benefit is required for (i) the value of a qualified joint and survivor
annuity, (ii) benefits that are not directly related to retirement benefits (such as a qualified
disability benefit, pre-retirement death benefits, and post-retirement medical benefits), and (iii)
the value of post-retirement cost-of-living increases made in accordance with Code Section
RESTATEMENT JANUARY 1, 2003 15 ARTICLE IV (4-35028)-1
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415(d) and section 1.415-3(c){2)tiii) of the Income Tax Regulations. The Annual Benefit does
not include any benefits attributable to employee contributions or rollover contributions, or
assets transferred from a qualified plan that was not maintained by the Employer.
Applicable Mortality Table means, on any date, the table according to the method set forth in
Code Section 417(e).
Defined Benefit Dollar Limitation means $90,000, automatically adjusted, effective January 1 of
each year, under Code Section 415(d) in such manner as the Secretary shall prescribe, and
payable in the form of a Straight Life Annuity. The new limitation shall apply to Limitation
Years ending with or within the calendar year of the date of the adjustment.
Employer means the employer that adopts this Plan, and all members of a controlled group of
corporations (as defined in Code Section 414(b), as modified by Code Section 415(h)), all
commonly controlled trades or businesses (as defined in Code Section 414(c), as modified by
Code Section 415(h)), or affiliated service groups (as defined in Code Section 414(m)) of which
the adopting employer is a part, and any other entity required to be aggregated with the employer
under Code Section 414(0).
Limitation Year means the 12-consecutive month period ending on the last day of each Plan
Year, including corresponding 12-consecutive month periods before September 13, 1960. If the
Limitation Year is other than a calendar year, execution of this Plan (or any amendment to this
Plan changing the Limitation Year) constitutes the Employer's adoption of a written resolution
electing the Limitation Year. If the Limitation Year is amended to a different 12-consecutive
month period, the new Limitation Year must begin on a date within the Limitation Year in which
the amendment is made.
Maximum Permissible Benefit means the Defined Benefit Dollar Limitation (adjusted where
required, as provided below).
(1) If the Participant has less than ten Years of Participation in the Plan, the Defined Benefit
Dollar Limitation shall be multiplied by a fraction the numerator of which is the number of
Years of Participation (or part thereof) in the Plan, and the denominator of which is ten.
For Limitation Years beginning on or after January 1, 1995, the adjustments of this (1) shall
not apply to survivor and disability benefits as provided in Code Section 415(b)(2)(1).
(2) If the Annual Benefit of the Participant commences prior to age 62, the Defined Benefit
Dollar Limitation applicable to the Participant at such earlier age is an Annual Benefit
payable in the form of a Straight Life Annuity that is the actuarial equivalent of the Defined
Benefit Dollar Limitation (as reduced in (1) above, if necessary) reduced for each month by
which the benefits commence before the month in which the Participant attains age 62.
Effective for Limitation Years beginning on or after January 1, 1995, the Defined Benefit
Dollar Limitation applicable at an age prior to age 62 is determined as the lesser of the
actuarial equivalent of the Defined Benefit Dollar Limitation (as reduced in (1) above, if
necessary) computed using the interest rate and mortality table (or other tabular factor)
specified in the Plan for purposes of determining actuarial equivalence for early retirement
benefits, and the actuarial equivalent of the Defined Benefit Dollar Limitation (as reduced in
RESTATEMENT JANUARY 1, 2003 16 ARTICLE IV 14-3502811-1
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(1) above, if necessary) computed using a 5 percent interest rate and the Applicable
Mortality Table. To the extent that the Plan does not specify an interest rate and mortality
table (or other tabular factor) or for ages for which no tabular factor is specified, a 5
percent interest rate and the Applicable Mortality Table shall be used to determine actuarial
equivalence.
The reduction under this (2) shall not reduce the Defined Benefit Dollar Limitation below
$75,000 if the benefit commences at or after age 55. The reduction under this (2) shall
not reduce the Defined Benefit Dollar Limitation below the actuarial equivalent of the
$75,000 limitation for age 55 if the benefit commences before age 55. Effective for
Limitation Years beginning on or after January 1, 1995, the minimum Defined Benefit Dollar
Limitation applicable at an age prior to age 55 is determined as the lesser of the actuarial
equivalent of the $75,000 limitation at age 55 computed using the interest rate and
mortality table (or other tabular factor) specified in the Plan for purposes of determining
actuarial equivalence for early retirement benefits, and the actuarial equivalent of the
$75,000 limitation at age 55 computed using a 5 percent interest rate and the Applicable
Mortality Table. To the extent that the Plan does not specify an interest rate and mortality
table (or other tabular factor) or for ages for which no tabular factor is specified, a 5
percent interest rate and the Applicable Mortality Table shall be used to determine actuarial
equivalence.
Any decrease in the Defined Benefit Dollar Limitation determined in accordance with this (2)
shall not reflect a mortality decrement if the benefits are not forfeited upon the death of the
Participant. It any benefits are forfeited upon death, the full mortality decrement is taken
into account.
For Limitation Years beginning on or after January 1, 1997, the adjustments in this (2) do
not apply in the case of a Participant who is a qualified participant (as defined in Code
Section 415(b)(2)(H)). For Limitation Years beginning on or after January 1, 1995, the
adjustments in this (2) do not apply to survivor and disability benefits as provided in Code
Section 4151b)(2)(1).
(3) If the Annual Benefit of the Participant commences after age 65, the Defined Benefit Dollar
Limitation applicable to the Participant at the later age is the Annual Benefit payable in the
form of a Straight Life Annuity commencing at the later age that is actuarially equivalent to
the Defined Benefit Dollar Limitation applicable to the Participant (adjusted under (1) above,
if necessary) at age 65. Effective for Limitation Years beginning on or after January 1,
1995, the actuarial equivalent of the Defined Benefit Dollar Limitation at age 65 is
determined as the lesser of the actuarial equivalent of the Defined Benefit Dollar Limitation
at age 65 computed using the interest rate and mortality table (or other tabular factor)
specified in the Plan for purposes of determining actuarial equivalence for delayed
retirement benefits, and the actuarial equivalent of the Defined Benefit Dollar Limitation at
age 65 computed using a 5 percent interest rate assumption and the Applicable Mortality
Table. For these purposes, mortality between age 65 and the age at which benefits
commence must be ignored.
RESTATEMENT JANUARY 1, 2003 17 ARTICLE IV (4-35028)-1
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(4) Minimum benefits permitted: Notwithstanding anything else in this definition to the
contrary, the benefit otherwise accrued or payable to a Participant under this Plan shall be
deemed not to exceed the Maximum Permissible Benefit if:
W the retirement benefits payable for a Plan Year under any form of benefit with
respect to such Participant under this Plan and under all other defined benefit plans
(regardless of whether terminated) ever maintained by the Employer do not exceed
$1,000 multiplied by the Participant's number of Years of Service or parts thereof
Inot to exceed ten); and
(ii) the Employer has not at any time maintained a defined contribution plan (for these
purposes, employee contributions, whether voluntary or involuntary, under a defined
benefit plan are not treated as a separate defined contribution plan).
For Limitation Years beginning on or after January 1, 1995, the amount in (i) above shall be
equal to $10,000 when determining the minimum benefit permitted for survivor and
disability benefits as provided in Code Section 415(b)(2)(1).
Projected Annual Benefit means the Annual Benefit to which the Participant would be entitled
under the terms of the Plan assuming:
11) the Participant will continue employment until normal retirement age under the Plan (current
age, if later), and
(2) all relevant factors used to determine benefits under the Plan will remain constant for all
future Limitation Years.
Straight Life Annuity means an annuity payable in equal installments for the life of the Participant
that terminates upon the Participant's death.
Year of Participation means one year (computed to fractional parts of a year) for each Plan Year
for which the following conditions are met:
(1) The Participant is credited with Service for benefit accrual purposes, and
(2) the Participant is included as a Participant under the eligibility provisions of the Plan for at
least one day of the Plan Year.
If these two conditions are met, the portion of a Year of Participation credited to the Participant
shall equal the amount of Accrual Service credited to the Participant for such Plan Year. A
Participant who is totally and permanently disabled within the meaning of Code Section
415(c)(3)(CHO for a Plan Year shall receive a Year of Participation with respect to that period. In
addition, for a Participant to receive a Year of Participation (or part thereof) for a Plan Year, the
Plan must be established no later than the last day of such Plan Year. In no event will more than
one Year of Participation be credited for any 12-month period.
(b) This (b) applies regardless of whether any Participant is or has ever been a participant in another
qualified plan maintained by the adopting Employer.
RESTATEMENT JANUARY 1, 2003 18 ARTICLE IV (4-35028)-1
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(1) The Annual Benefit otherwise payable to a Participant at any time will not exceed the
Maximum Permissible Benefit. If the benefits the Participant would otherwise accrue in a
Limitation Year would produce an Annual Benefit in excess of the Maximum Permissible
Benefit, the benefit must be limited for the rate of accrual reduced) to a benefit that does
not exceed the Maximum Permissible Benefit.
(2) If a Participant has made voluntary employee contributions, or mandatory employee
contributions as defined in Code Section 411(c)(2)(C), under the terms of this Plan, the
amount of such contributions Is treated as an Annual Addition to a qualified defined
contribution plan for purposes of (b)(1) of this section. Such amounts shall be limited to
meet the requirements of Code Section 415(c)(1).
(c) This (c) applies if a Participant is, or has ever been, a participant in more than one defined
benefit plan maintained by the Employer. The sum of the Participant's Annual Benefits from all
such plans may not exceed the Maximum Permissible Benefit. Where the Participant's
employer-provided benefits under all defined benefit plans ever maintained by the Employer
(determined as of the same age) would exceed the Maximum Permissible Benefit applicable at
that age, the benefit shall be limited (or the rate of accrual reduced) in the plan most recently
established to the extent necessary so that the sum of the Participant's Annual Benefits from all
such plan(s) does not exceed the Maximum Permissible Benefit.
Benefit increases resulting from the repeal of Code Section 415(e) will be provided to all
Employees participating in the Plan (with benefits limited by Code Section 415(e)) who have an
Accrued Benefit under the Plan immediately before the first day of the first Limitation Year
beginning in 2000 and have one hour-of-service with the Employer after such date.
SECTION 4.03--AMOUNT OF BENEFIT AT RETIREMENT.
The amount of retirement benefit to be provided on the Normal Form for an Active Participant on his
Retirement Date shall be determined according to the provisions of this section.
Normal Retirement Date. An Active Participant's retirement benefit on his Normal Retirement Date shall
be equal to his Accrued Benefit on such date.
Late Retirement Date. An Active Participant's retirement benefit on his Late Retirement Date shall be
equal to his Accrued Benefit on his Late Retirement Date.
The Participant's retirement benefits shall be distributed to the Participant according to the distribution of
benefits provisions of Article VI.
RESTATEMENT JANUARY 1, 2003 19 ARTICLE IV (4-35028)-1
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ARTICLE IVA
2002 SPECIAL AD HOC ADJUSTMENT
SECTION 4A.01 —IMPORTANT TERMS.
For purposes of determining the special ad hoc adjustment set forth in this article, the following terms
are defined:
Base Adjustment means, for a Participant, the product of $.15 multiplied by his Years of Service
multiplied by his Years on Retirement.
Longevity Adjustment means, for a Participant, the product of his Base Adjustment multiplied by his
Longevity Factor.
Longevity Factor means, for a Participant, the sum of (i) the product of -025 multiplied by his Years on
Retirement and (ii) the product of .05 multiplied by his Years on Retirement in excess of 25, if any.
Years of Service means, for a Participant, the number of whole years of active, full-time employment as
a police officer credited under the Plan.
Years on Retirement means, for a Participant, the number of whole years that he has been retired as of
January 1, 2001.
2002 Specie Ad Hoc Adjustment means, for a Participant, the sum of his Base Adjustment and his
Longevity Adjustment.
SECTION 4A.02--EUGIBILITY.
An additional amount of monthly retirement benefit will be payable to a retired Participant who began
receiving a retirement benefit before January 1, 1996, has terminated active employment with the Employer as
a police officer, and is receiving such retirement benefit based on active employment as a police officer.
SECTION 4A.03--2002 SPECIAL AD HOC ADJUSTMENT.
The monthly retirement benefit of a Participant who has met the requirements in the ELIGIBILITY
SECTION of this article shall be increased by the amount of his 2002 Special Ad Hoc Adjustment as of July 1,
2002, subject to the following provisions:
la) If the retired Participant is entitled to be paid his 2002 Special Ad Hoc Adjustment by more than
one municipal retirement plan, his 2002 Special Ad Hoc Adjustment under this Plan shall be
reduced so that the total of all these adjustments paid to the retiree does not exceed his 2002
Special Ad Hoc Adjustment.
RESTATEMENT JANUARY 1, 2003 20 ARTICLE IVA (4-35028)-1
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(b) The amount of the 2002 Special Ad Hoc Adjustment shall be reduced annually by 65% of the
total amount of any postretirement adjustments provided to the retiree under this Plan after
December 31, 1988, and before January 1, 2002, and paid in the immediately preceding year.
(c) To the extent that the 2002 Special Ad Hoc Adjustment causes the calculation of total benefits to
be paid to exceed the limitations under Act 600, such limitations may be exceeded to pay the
adjustment to the retired Participant.
RESTATEMENT JANUARY 1, 2003 21 ARTICLE IVA (4-35028)-1
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ARTICLE IVB
COST-OF-LIVING ADJUSTMENT
SECTION 48.01--IMPORTANT TERMS.
For the purpose of determining the cost-of-living adjustment of benefits, the following terms are defined
hen::
Adjustment Date means each Yearly Date occurring on and after January 1, 1992 on which the Price
Index has changed by at least 1 % from the Price Index on the last preceding Yearly Date as of which
monthly retirement benefit payments under this Plan were changed in accordance with this article (on
January 1, 1992 if no prior changes have been made).
Adjustment Factor means, as of any Adjustment Date, the quotient of (a) divided by (b):
(a) The Price Index as of such Adjustment Date.
lb) The Price Index as of the last previous Adjustment Date.
In no event, however, will the Adjustment Factor exceed 1.03.
Annuitant means an Inactive Participant whose Retirement Date has occurred and who is entitled to
monthly retirement benefit payments under this Plan.
Price Index means, as of any date, the Consumer Price Index (U.S. city average for all urban consumers,
all items) for the sixth month immediately prior to such date, as published by the United States
Department of Labor.
SECTION 4B.02--CHANGE IN MONTHLY RETIREMENT BENEFIT.
As of each Adjustment Date as to an Annuitant, the amount of monthly retirement benefit payments
payable to such Annuitant will be increased by an amount determined by multiplying such payments by the
Adjustment Factor as of such Adjustment Date, subject to the following provisions:
(a) If such change results in an increase in the amount of monthly retirement benefit payments to an
Annuitant, an amount of monthly retirement benefit will be provided for him under the Annuity
Contract in the amount of such increase with payments consistent with the payments being made
as to the monthly retirement annuity provided under the Annuity Contract on the Participant's
Retirement Date.
Any cost-of-living increase will not exceed the percentage increase in the Price Index from the
year in which the Annuitant last worked and in no event, will the amount of monthly retirement
benefit payments for an Annuitant after the date of the increase be more than 130% of the
amount he would have received had the provisions of this article not been in effect.
RESTATEMENT JANUARY 1, 2003 22 ARTICLE IVB (4-35028)-1
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(b) No cost of living increase will result in a monthly retirement benefit which exceeds 75% of the
Annuitant's Average Compensation as determined on the date his monthly retirement benefit was
first calculated.
(c) No cost-of-living increase will be made if such increase would impair the actuarial soundness of
the Plan.
(d) On and after the effective date of termination of the Plan pursuant to Article VIII, no further
changes in monthly retirement benefit payments will be made in accordance with this article.
RESTATEMENT JANUARY 1, 2003 23 ARTICLE IVB (4-35028)-1
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ARTICLE V
OTHER BENEFITS
SECTION 5.01--DEATH BENEFITS.
If a Participant dies, death benefits, if any, shall be determined under subsections (a) and (b) below:
(a) Survivor annuity death benefit:
A survivor annuity shall be payable if the following requirements are met:
(1) The Participant is survived by a spouse on the date he dies or he has a Dependent Child on
the date he dies who will still be a Dependent Child on the date the survivor annuity begins.
(2) The Participant (i) is a member of the Employer's police force and dies in the line of duty,
(ii) dies on or after date on which his Vesting Percentage is 100%, or (iii) has met the
requirements to receive.a disability benefit- in accordance with the DISABILITY BENEFITS
SECTION of this article on the date of his death.
The survivor annuity shall be paid to the Participant's spouse until the date of the spouse's death.
If the Participant is not survived by a spouse or the spouse dies and there is still a surviving
Dependent Child, payments will be paid to the person who has assumed the principal support of
any Dependent Child for as long as there is a Dependent Child. Each Dependent Child shall share
equally in the survivor annuity. Upon the death of a Dependent Child any survivors shall share
equally. When a Dependent Child ceases to be a Dependent Child, any children who continue to
be a Dependent Child shall share equally.
If the Participant dies in the line of duty, the survivor annuity shall begin on the first day of the
month on or after the date of the Participant's death. The survivor annuity shall be equal to
100% of the Participant's Salary as of the date of his death.
If the Participant does not die in the line of duty and the Participant dies on or after his Annuity
Starting Date or the date he has met the requirements to receive a disability benefit in accordance
with the DISABILITY BENEFITS SECTION of this article, the survivor annuity shall begin on the
first day of the month after the date of the Participant's death. The survivor annuity shall be
equal to 50% of the amount that was payable to the Participant.
If the Participant does not die in the line of duty and the Participant dies before his Annuity
Starting Date and before the date he has met the requirements to receive a disability benefit in
accordance with the DISABILITY BENEFITS SECTION of this article, the survivor annuity shall
begin on his Superannuation Retirement Date. The survivor annuity shall be equal to 50% of
the amount that would have been payable to the Participant on his Superannuation Retirement
Date. If he had not ceased to be an Employee prior to the date of his death, such amount shall
be determined as if he had ceased to be an Employee on the date of his death and survived to
retire.
RESTATEMENT JANUARY 1, 2003 24 ARTICLE V (4-35028)-1
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(b) Single sum death benefit:
If the requirements of subsection (a) above have not been met on the date a Participant dies, and
he dies before his Annuity Starting Date, a single sum death benefit equal to his Required
Contribution Account on the date of his death shall be payable to his Beneficiary. If the
Participant has not designated a Beneficiary, such amount shall be paid to his surviving spouse, if
any, and if there is no surviving spouse, equally to any Dependent Children.
If the requirements in subsection (a) above have been met on the date a Participant dies and
payments to his surviving spouse or Dependent Children do not begin until his Superannuation
Retirement Date, the single sum death benefit shall be paid on the earliest date it is determined
that the survivor annuity death benefit will not be paid. Such amount shall be paid on the date his
surviving spouse dies if it is determined that there will be no Dependent Children on his
Superannuation Retirement Date. The single sum death benefit shall be determined as of the date
of the surviving spouse's death and shall be paid to the spouse's Beneficiary. Otherwise, such
payment shall be made on the date it is first determined that there will be no Dependent Children
on his Superannuation Retirement Date. Such amount shall be determined as of such date and
paid equally to the children who were Dependent Children on the date of the Participant's death.
If such child has died, his share shall be paid to his Beneficiary.
SECTION 5.02-VESTED BENEFITS.
A Participant who became an Inactive Participant before retirement or death (and, if applicable, before
the date a disability payment begins under the DISABILITY BENEFITS SECTION of this article) will be entitled to
a deferred monthly retirement benefit on the Normal Form to begin on his Superannuation Retirement Date.
The deferred retirement benefit will be equal to the product of (a) and (b):
(a) The Participant's Accrued Benefit on the day before he became an Inactive Participant.
(b) The Participant's Vesting Percentage on the date he ceases to be an Eligible Employee.
This vested benefit will only be provided for a Participant who files written notification with the
governing body of the Employer of his intention to vest within 90 days of the date he ceases to be an Eligible
Employee.
The deferred monthly retirement benefit shall be distributed to the Participant according to the
distribution of benefit provisions of Article VI.
If a Participant has ceased to be an Employee and his Vesting Percentage is zero or he failed to file the
written notification provided above, the Participant will receive his Required Contribution Account in a
single-sum payment. Such Participant will no longer be entitled to a deferred monthly retirement benefit under
this section and such payment will be in full settlement of any and all benefits provided under this Plan.
SECTION 5.03--DISABILITY BENEFITS.
If an Active Participant becomes Totally and Permanently Disabled before his Retirement Date (Normal
Retirement Date, if earlier), a disability benefit shall be payable to him.
RESTATEMENT JANUARY 1, 2003 25 ARTICLE V (4-35028)-1
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The disability benefit payable to a Participant who meets the requirements above is an immediate
monthly benefit equal to 50% of the Participant's Salary as of the date of his disability reduced by any
disability benefits he receives for the same injuries under the Social Security Act and any disability insurance
benefit payable which is funded by the Plan.
Monthly disability benefit payments shall begin on the earliest first day of the month on or after the date
the Participant meets the requirements under this section. Such payments shall continue through the first day
of the month before his Superannuation Retirement Date, the date of his death or the day following the date he
is no longer Totally and Permanently Disabled.
If the payments continue through the first day of the month before the Participant's Superannuation
Retirement Date retirement benefits shall be provided for him on his Superannuation Retirement Date under the
provisions of Article IV as if he were an Active Participant. His Accrued Benefit shall be equal to his Accrued
Benefit as of the day before the disability benefit began. However, such Accrued Benefit shall not be less than
the amount of monthly disability payment paid to him under this section. If, before the Participant's
Superannuation Retirement Date, he recovers and returns to active' work for the Employer within one month of
his recovery, the payments shall stop and he shall again become an Active Participant under the ACTIVE
PARTICIPANT SECTION of Article II. If, before the Participant's Superannuation Retirement Date, he recovers
and does not return to active work for the Employer within one month of his recovery, the payments shall stop
and his benefits shall be redetermined, on the date he ceased to be an Employee, under the VESTED BENEFITS
SECTION of this article.
RESTATEMENT JANUARY 1, 2003 26 ARTICLE V (4-35028)-1
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ARTICLE VI
WHEN BENEFITS START AND DISTRIBUTION OF
BENEFITS
SECTION 6.01--WHEN BENEFITS START.
Benefits under the Plan begin when a Participant retires, dies, or ceases to be an Employee or becomes
Totally and Permanently Disabled, whichever applies, as provided in Article IV and Article V.
Benefits shall begin by the Participant's Required Beginning Date, as defined in the DEFINITIONS
SECTION of Article VII.
SECTION 6.02-- FORM OF DISTRIBUTION.
The form of benefit payable to or on behalf of a Participant is determined as follows:
(a) Retirement -Benefits. The form of retirement benefit for a Participant shall be the Normal Form.
(b) Death Benefits. The form of death benefit for a Participant is determined according to the
provisions of the DEATH BENEFITS SECTION of Article V.
RESTATEMENT JANUARY 1, 2003 27 ARTICLE VI (4-35028)-1
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ARTICLE VII
DISTRIBUTION REQUIREMENTS
SECTION 7.01--APPLICATION.
The timing of any distribution must meet the requirements of this article.
SECTION 7.02--DEFINITIONS.
For purposes of this article, the following term is defined:
Required Beginning Date means, for a Participant, the April 1 of the calendar year following the later of
the calendar year in which he attains age 70 1/2 or the calendar year in which he retires.
SECTION 7.03--DISTRIBUTION REQUIREMENTS.
The entire interest of a Participant must be distributed or begin -to be distributed no later than the
Participant's Required Beginning Date.
RESTATEMENT JANUARY 1, 2003 28 ARTICLE VII (4-35028)-1
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ARTICLE VIII
TERMINATION OF PLAN
The Employer expects to continue the Plan indefinitely but by resolution of its governing body reserves
the right to terminate the Plan in whole or in part at any time upon giving written notice to all parties
concerned.
An Employee who is included in the group of Employees deemed to be affected by complete or partial
termination of the Plan shall be fully (100%) vested in his Accrued Benefit as of the date of such complete or
partial termination. Upon complete termination of the Plan, no further Employees shall become Participants,
and no further Contributions shall be made except as required by any governmental agency to which the Plan's
termination is subject.
A Participant's recourse towards satisfaction of his right to his nonforfeitable Accrued Benefit will be
limited to the Plan assets.
The assets of the Plan that are available to provide benefits shall be allocated and applied as of the
effective date of termination of the Plan according to any equitable -method- as determined by the Plan
Administrator and agreed upon by the Insurer.
No part of the Plan assets shall be paid to the Employer at any time, except that, after the satisfaction of
all liabilities under the Plan, any assets remaining shall be paid to the Employer. No payment shall be made to
the Employer if it would contravene any provision of law.
RESTATEMENT JANUARY 1, 2003 29 ARTICLE Vlll (4-35028)-1
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ARTICLE IX
ADMINISTRATION OF PLAN
SECTION 9.01-ADMINISTRATION
Subject to the provisions of this article, the Plan Administrator has complete control of the administration
of the Plan. The Plan Administrator has all the powers necessary for it to properly carry out its administrative
duties. Not in limitation, but in amplification of the foregoing, the Plan Administrator has the power to
construe the Plan, including ambiguous provisions, and to determine all questions that may arise under the
Plan, including all questions relating to the eligibility of Employees to participate in the Plan and the amount of
benefit to which any Participant, Beneficiary, spouse or Contingent Annuitant may become entitled. The Plan
Administrator's decisions upon all matters within the scope of its authority shall be final.
Unless otherwise set out in the Plan or Annuity Contract, the Plan Administrator may delegate
recordkeeping and other duties which are necessary for the administration of the Plan to any person or firm
which agrees to accept such duties. The Plan Administrator shall be entitled to rely upon all tables, valuations,
certificates and reports furnished by the consultant or actuary appointed by the Plan Administrator and upon all
opinions given by any counsel selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by Participants, former Participants,
Beneficiaries, and spouses. The Plan Administrator shall determine all facts necessary to establish the right of
any claimant to benefits and the amount of those benefits under the provisions of the Plan. The Plan
Administrator may establish rules and procedures to be followed by claimants in filing claims for benefits, in
furnishing and verifying proofs necessary to determine age, and in any other matters required to administer the
Plan.
SECTION 9.02--EXPENSES.
Expenses of the Plan may be paid out of the assets of the Plan provided such payment is consistent with
Act 205. Such expenses include, but are not limited to, expenses for recordkeeping and other administrative
services; fees and expenses of the Annuity Contract; and direct costs that the Employer incurs with respect
to the Plan.
SECTION 9.03--RECORDS.
All acts and determinations of the Plan Administrator shall be duly recorded. All these records, together
with other documents necessary for the administration of the Plan, shall be preserved in the Plan
Administrator's custody.
Writing (handwriting, typing, printing), photostating, photographing, microfilming, magnetic impulse,
mechanical or electrical recording or other forms of data compilation shall be acceptable means of keeping
records.
RESTATEMENT JANUARY 1, 2003 30 ARTICLE IX (4-35028)-1
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SECTION 9.04--INFORMATION AVAILABLE.
Any Participant in the Plan or any Beneficiary may examine copies of the Plan description, latest annual
report, any bargaining agreement, this Plan, the Annuity Contract or any other instrument under which the Plan
was established or is operated. The Plan Administrator shall maintain all of the items listed in this section in its
office, or in such other place or places as it may designate in order to comply with governmental regulations.
These items may be examined during reasonable business hours. Upon the written request of a Participant or
Beneficiary receiving benefits under the Plan, the Plan Administrator will furnish him with a copy of any of
these items. The Plan Administrator may make a reasonable charge to the requesting person for the copy.
SECTION 9.05--DELEGATION OF AUTHORITY
All or any part of the administrative duties and responsibilities under this article may be delegated by the
Plan Administrator to a retirement committee. The duties and responsibilities of the retirement committee shall
be set out in a separate written agreement.
SECTION 9.06--EXERCISE OF DISCRETIONARY AUTHORITY.
The Employer, Plan Administrator and any other person or entity who has authority with respect to the
management, administration or investment of the Plan may exercise that authority in its full discretion, subject
only to the duties imposed under the applicable laws of the state of Pennsylvania. This discretionary authority
includes, but is not limited to, the authority to make any and all factual determinations and interpret all terms
and provisions of the Plan documents relevant to the issue under consideration. The exercise of authority will
be binding upon all persons; will be given deference in all courts of law to the greatest extent allowed under
law; and will not be overturned or set aside by any court of law unless found to be arbitrary and capricious or
made in bad faith.
RESTATEMENT JANUARY 1, 2003 31 ARTICLE IX (4-35028)-1
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ARTICLE X
GENERAL PROVISIONS
SECTION 10.01--AMENDMENTS.
The Employer may amend this Plan at any time, including any remedial retroactive changes (within the
time specified by Internal Revenue Service regulations) to comply with any law or regulation issued by any
governmental agency to which the Plan is subject. An amendment (including a change in the actuarial basis for
determining optional or early retirement benefits) may not diminish or adversely affect any accrued interest or
benefit of Participants or their Beneficiaries nor allow reversion or diversion of Plan assets to the Employer at
any time, except as may be required to comply with any law or regulation issued by any governmental agency
to which the Plan is subject.
SECTION 10.02--DIRECT ROLLOVERS.
Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributes's
election under this section, a Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution paid in a Direct Rollover directly to an
Eligible Retirement Plan specified by the Distributee.
SECTION 10.03--PROVISIONS RELATING TO THE INSURER.
The obligations of an Insurer shall be governed solely by the provisions of the Annuity Contract. The
Insurer shall not be required to perform any act not provided in or contrary to the provisions of the Annuity
Contract. Each Annuity Contract when purchased shall comply with the Plan. See the CONSTRUCTION
SECTION of this article.
The Insurer is not a party to the Plan, nor bound in any way by the Plan provisions. It shall not be
required to look to the terms of this Plan, nor to determine whether the Employer or the Plan Administrator
have the authority to act in any particular manner or to make any contract or agreement.
Until notice of any amendment or termination of this Plan has been received by the Insurer at its home
office, the Insurer is and shall be fully protected in assuming that the Plan has not been amended or terminated
according to the latest information which it has received at its home office.
SECTION 10.04--EMPLOYMENT STATUS.
Nothing contained in this Plan gives an Employee the right to be retained in the Employer's employ or to
interfere with the Employer's right to discharge any Employee.
RESTATEMENT JANUARY 1, 2003 32 ARTICLE X (4-35028)-1
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SECTION 10.05-RIGHTS TO PLAN ASSETS
An Employee shall not have any right to or interest in any assets of the Plan upon termination of his
employment or otherwise except as specifically provided under this Plan, and then only to the extent of the
benefits payable to such Employee according to the Plan provisions.
Any final payment or distribution to a Participant or his legal representative or to any Beneficiaries or
spouse of such Participant under the Plan provisions shall be in full satisfaction of all claims against the Plan,
the Plan Administrator, the Insurer, and the Employer arising under or by virtue of the Plan.
SECTION 10.06--BENEFICIARY
Each Participant may name a Beneficiary to receive any death benefit that may arise out of his
participation in the Plan. He may change his Beneficiary from time to time. It is the responsibility of the
Participant to give written notice to the Insurer of the name of the Beneficiary on a form furnished for that
purpose.
With the Employer's consent, the Plan Administrator may maintain records of Beneficiary designations
for Participants before their Retirement Dates. In that event, the written designations made by Participants
shall be filed with the Plan Administrator- of a Participant dies before his Retirement Date, the Plan
Administrator shall certify to the Insurer the Beneficiary designation on its records for the Participant.
If there is no Beneficiary named or surviving when a Participant dies, the Participant's Beneficiary shall
be the Participant's surviving spouse or where there is no surviving spouse, the executor or administrator of
the Participant's estate.
SECTION 10.07--NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any creditor of any Participant,
Beneficiary or spouse. A Participant, Beneficiary or spouse does not have any rights to alienate, anticipate,
commute, pledge, encumber or assign any of such benefits. The Plan Administrator may comply with a court
order requiring deduction from the benefits of a Participant in pay status for alimony or support payments.
SECTION 10.08--CONSTRUCTION.
The validity of the Plan or any of its provisions is determined under and construed according to Federal
taw and, to the extent permissible, according to the laws of the state of Pennsylvania. In case any provision of
this Plan is held illegal or invalid for any reason, such determination shall not affect the remaining provisions of
this Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had never been
included.
In the event of any conflict between the provisions of the Plan and the terms of any contract or policy
issued hereunder, the provisions of the Plan control the operation and administration of the Plan. However, in
the event of any conflict between the provisions of the Plan and any ordinance, resolution, or police contract,
the provisions of such ordinance, resolution, and contract shall control the operation and administration of
the Plan.
RESTATEMENT JANUARY 1, 2003 33 ARTICLE X (4-35028)-1
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SECTION 10.09--LEGAL ACTIONS.
No person employed by the Employer; no Participant, former Participant nor their Beneficiaries; nor any
other person having or claiming to have an interest in the Plan is entitled to any notice of process. A final
judgment entered in any such action or proceeding shall be binding and conclusive on all persons having or
claiming to have an interest in the Plan.
SECTION 10.10--WORD USAGE.
The masculine gender, where used in this Plan, shall include the feminine gender and the singular words,
as used in this Plan, may include the plural, unless the context indicates otherwise.
The words "in writing" and 'written," where used in this Plan, shall include any other forms, such as
voice response or other electronic system, as permitted by any governmental agency to which the Plan is
subject.
SECTION 10.11--MILITARY SERVICE.
Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with
respect to qualified military service will be provided in accordance with Code Section 414(u).
RESTATEMENT JANUARY 1, 2003 34 ARTICLE X (4-35028)-1
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By executing this Plan, the Employer acknowledges having counseled to the extent necessary with
selected legal and tax advisors regarding the Plan's legal and tax implications.
Executed this 3/S? day of l p NUct } Zoos
BOROUGH OF SHIPPENSBURG
RESTATEMENT JANUARY 1, 2003
By:
rt
Defined Benefit Plan 8.1
35 PLAN EXECUTION (435028)-1
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EXHIBIT E
COLLECTIVE BARGAINING AGREEMENT
BETWEEN
THE MID-CUMBERLAND VALLEY
REGIONAL POLICE COMMISSION
AND THE
SHIPPENSBURG POLICE ASSOCIATION
DURATION
JANUARY 1, 1997 THROUGH DECEMBER 31, 1999
TABLE OF CONTENTS
ARTICLE I - RECOGNITION . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II - EFFECT OF THE AGREEMENT . . . . . . . . . . . . . 2
ARTICLE III - PRECEDENCE OF LAWS AND REGULATIONS . . . . . . . 3
ARTICLE IV - MANAGEMENT RESPONSIBILITIES . . . . . 3
ARTICLE V - GRIEVANCES . . . .
ARTICLE VI - STRIKES . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE VII - EQUIPMENT AND UNIFORMS . . . . . . . . . . . . . 5
ARTICLE VIII - TRAINING . . . . . . . . . . . . . . . . . . . . 6
ARTICLE IX - SCHOOLING . . . . . . . . . . . . . . . . . . . . 7
ARTICLE X - VACATION . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE XI - SICK LEAVE . . . . . . . . . . . . . . . . . . . 9
ARTICLE XII - LEAVE . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE XIII - INSURANCE . . . . . . . . . . . . . . . . . . . 10
ARTICLE XIV - PENSION PLAN . . . . . . . . . . . . . . . . . . 12
ARTICLE XV - PERSONAL LEAVE . . . . . . . . . . . . . . . . . . 15
ARTICLE XV I - SALARY . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE XVII - OFF-DUTY COURT APPEARANCES AND MEETINGS . . . . 17
ARTICLE XVIII - HOURS OF WORK . . . . . . . . . . . . . . . . . 19
ARTICLE XIX - LONGEVITY . . . . . . . . . . . . . . . . . . . . 19
ARTICLE XX - CALL TIME . . . . . . . . . . . . . . . . . . . . 20
ARTICLE XXI - SHIFT DIFFERENTIAL PAY . . . . . . . . . . . . . 20
ARTICLE XXII - STANDBY COMPENSATION . . . . . . . . . . . . . . 21
ARTICLE XXIII - MEMBERSHIP AT A LOCAL FITNESS CENTER . . . . . 21
ARTICLE XXIV - RATIFICATION OF THE AGREEMENT . . . . . . . . . 22
ARTICLE XXV - DURATION OF AGREEMENT . . . . . . . . . . . . . . 22
ARTICLE XXIV - SIGNING AND RATIFICATION . . . . . . . . . . . . 23
SIGNATURE PAGE .... . . . . . . . . . . . . . . . . . . . . . 24
i
AGREEMENT
THIS AGREEMENT, made this <;_(? f-P- ' day of
C.w..?L1c.-? ,
1996, BY AND BETWEEN the Mid-Cumberland Valley Regional Police
Commission, serving the citizens of Shippensburg Borough and
Shippensburg Township, Cumberland and Franklin Counties, State of
Pennsylvania, hereinafter referred to as MCVRPC, and the
Shippensburg Police Association, a non-profit corporation
incorporated under the laws of the Commonwealth of Pennsylvania,
with corporate offices in Shippensburg, Pennsylvania, hereinafter
referred to as Police Officers, through their duly appointed
bargaining representatives, pursuant to Act No. 111 of the
Legislature of the Commonwealth of Pennsylvania, 1968, June 24,
p.l. 237, duly approved by the Governor of Pennsylvania.
WITNESSETH
THAT WHEREAS subsequent to the passage of the Act hereinabove
referred to, an agreement was entered into by Police officers
requiring a secret ballot election for a bargaining agent for
Police Officers for a contract for the year 1997;
WHEREAS, such secret ballot was held and count made and more
than fifty percent (50%) of the regular Police Officers voted to
designate Officer Jerry Worthington and Sergeant Terry Kennedy, as
bargaining representatives for the year 1997;
WHEREAS, Commissioner Jack Sease and Solicitor Salzmann were
duly notified of said election;
WHEREAS, Commissioner Jack Sease and Solicitor Salzmann were
duly appointed bargaining agents on behalf of the MCVRPC;
WHEREAS, said bargaining agents met and referred proposals to
the groups which they represent, the same having been approved by
the majority of each group;
NOW, THEREFORE, KNOW YE, that in consideration of the mutual
promises and covenants herein set forth; and with due regard to the
mutual understanding and harmony among Police Officers and the
MCVRPC, the parties hereto agree as follows:
1
ARTICLE I
RECOGNITION
The MCVRPC hereby recognizes the Shippensburg Police
Association as the sole representative of all full-time Police
Officers employed by the MCVRPC for collective bargaininc purposes.
ARTICLE II
EFFECT OF THE AGREEMENT
This instrument constitutes the entire Agreement between the
Police Officers and the MCVRPC and has been arrived at as a result
of collective bargaininc negotiations.
T`-e parties acknowledge that during the negotiations which
resulted in ?his Agreement, each had the unlimited right and
epport;:nity to make demands with respect to any subject or matter
not removed by law from the area c= bargaining, and t__-at the
understandi^g and agreements arrived at by the parties after the
exercise of treat rich-- and olocorturi_y are set forth this
Agreement. Therefore, the MCVRPC and the Police Officers for the
life o this Agreement, each voluntarily and unqualifiedly waives
the right, and each agrees that the other shall not be obligated,
to bargain collectively with respect. to any subject or matter
referred to or covered by this Agreement. This provision also
maintains the right of both parties as set forth in the grievance
provisions of Article V.
The waiver of any breach or condition of this Agreement by
either party shall not constitute a precedent with respect to the
future enforcement of all the terms and conditions of this
Agreement.
No provisions of this Agreement shall be retroactive prior to
the effective date of this Agreement, which is January 1997,
unless otherwise specifically stated herein.
This Agreement shall in no way eliminate, remove or deprive a
Police Officer of any benefits previously enjoyed under prior
resolutions, ordinances and employment policies of the MCVRPC
effecting terms and conditions of said Police Officer's employment.
2
ARTICLE III
PRECEDENCE OF LAWS AND REGULATIONS
The public interest in the accomplishment of the purpose of
the Police Department is paramount.
In the administration of all matters covered by this
Agreement, all parties are governed by the provisions of any
existing laws, regulations, ordinances, personnel rules and
regulations and policies, which are not changed or eliminated by
the provisions of this Agreement. This Agreement is also subject
to future enactments of the commonwealth of Pennsylvania or
judicial determination which may specifically affect the provisions
of this Agreement, or the provisions of Act No. 111 of June 24,
1968. Except as set forth in Article T_I paragraph 5, where such
regulations, ordinances or policies are not affected or chanced by
the provisions of this Agreement, the same may in the future be
amended and changed from time to time without any restraint by this
Agreement.
ARTICLE IV
MANAGEMENT RESPONSIBILITIES
The parties agree that except for the limitations or other
provisions of this Agreement, there are functions, powers,
responsibilities, and authority belonging solely to the MCVRPC.
Some of these as pertain to the MCVRPC are the hiring of Police
Officers, the advancement of Police Officers to be employed or
retained in employment, the suspension, demotion, or discharge of
Police Officers; the establishment and maintenance of standards of
quality and performance; the establishment of a budget or long
range plans for the police activities consistent with other
provisions of this Agreement.
ARTICLE V
GRIEVANCES
For the purpose of this Agreement, the term "grievance" means
a difference between an individual Police Officer of the
Shippensburg Polio Association and the MCVRPC with respect to the
interpretation, application, claims of breach or violation of any
provisions of this Agreement, or as the term "grievance" may be
otherwise intended by Act 111 of June 24, 1968. Grievances are
limited to matters involving interpretation of this agreement. Any
-.such "grievance", as aforesaid, shall be adjusted as follows:
Step 1 - The Police Officer, either alone or accompanied
by a representative of the bargaining unit, or the
bargaining unit itself, shall present the grievance in
writing to the Chief of Police within seven (7) days of
its occurrence or knowledge of its occurrence. The Chief
of Police shall report his decision in writing to the
Police Officer and the bargaining unit representative
within five (5) days of its presentation.
Step 2 - In the event that the grievance is no c settled
at Step 1, an appeal must be presented in writing by the
Police Of= i cer or the bargaining unit representative to
the Chai nan of the Mid-Cumberland Valley Regional Police
Commission within five (5) days after the response at
Step 1 is due. The Chairman shall respond in writing to
the Police Officer or the bargaining unit representative
within five (5) days after receipt of the appeal.
Step 3 - in the event that the grievance has not been
satisfactorily resolved in Step 2, the Police Officer or
bargaining unit representative may initiate an appeal by
serving upon the Chairman of the Mid-Cumberland valley
Regional Commission a notice in writing of his incept to
proceed cc arbitration within seven (7) days after
receipt cf the Step 2 decision is due.
Step 4 - The arbitrator is to be selected by the parties
jointly within seven (7) days after notice has been
given. If the parties fail to agree on an arbitrator,
either party may request the American. Arbitration
Association to submit a list of three (3) possible
arbitrators. `
Step 5 - The parties shall meet within seven (7) days of
the receipt of said list for the purpose of selecting the
arbi tra for by al terna Ling s triking one (2) name from the
list, until only one (I) name remains. The employer
strikes first.
The arbitrator shall neither add to, subtract from, nor modify
the provisions of this agreement. The arbitrator shall confine
himself to the precise issues submitted for arbitration. The
arbitrator has no authority to determine any other issues not
submitted to him.
The decision of the arbitrator shall be final and binding on
both parties. The arbitrator shall be requested to issue his
4
decision within thirty (30) days after the hearing.
All of the time limits in this article may be extended by
mutual agreement.
All fees and expenses of the arbitrator shall be divided
evenly between the parties. Each party shall bear the costs of
preparing and presenting its own case.
The bargaining unit representative has the right to appear
with the grievant at all steps of the grievance procedure. It is
up the grievant to notify the bargaining unit when a grievance has
been filed.
ARTICLE VI
STRIKES
The Police Officers agree that they shall not authorize,
ratify, or participate in any strikes (in the accepted
interpretation of the term), nor work slowdown or similar practices
in connection with their duties as MCVRPD Police Officers
If a Police Officer engages in such conduct, he shall be
deemed to have neglected or violated his official duties as defined
in the Police Policy Manual.
ARTICLE VII
EQUIPMENT AND UNIFORMS
The MCVRPC shall provide Police Officers with guns,
ammunition, and other necessary police accessories. The MCVRPC
shall also provide appropriate police uniforms.
The term "appropriate police uniforms", shall include approved
shoes, appropriate leather gear for police uniforms, cold weather
head gear, winter overshoe boots, one (1) waist-length jacket for
spring and fall use, one (1) topcoat for cold weather use, summer
campaign hat, winter campaign hat, rain hat cover, and rain coat.
Appropriate initial police uniforms shall be issued to Police
Officers in a basic issue of three (3) winter uniforms and five (5)
summer uniforms.
Uniform items shall be supplied to each Police Officer when
5
necessary. All shoes purchased by the MCVRPC shall be used solely
when a Police Officer is on duty. The MCVRPD may, in lieu of
replacing a set of shoes, resole and reheel said shoes, if, in the
opinion of the MCVRPC, the condition of the shoes warrants such
resoling.
A plain clothes officer shall receive the sum of Three Hundred
Dollars ($300.00), per year, as a clothing allowance.
Uniforms shall be the property of the MCVRPC and shall be
returned to the MCVRPC when any officer leaves the service of the
MCVRPC, whether by retirement, termination of employment by the
MCVRPC, layoff, or death.
Each Police Officer shall be provided a dry cleaning allowance
of One Hundred Dollars ($100.00) per annum on January 1 of each
year.
ARTICLE VIII
TRAINING
The Chief of Police shall post available information on
training and educational programs in an appropriate location in the
department. The MCVRPD encourages the participation of the
employees in any such training and educational programs which
relate to a Police Officer's job and responsibilities. Any Police
Officer may submit an application for attendance at educational and
training programs in this regard. However, the decision as to
whether or not such application is approved by the MCVRPC shall be
at its sole discretion and its decision shall be final and binding.
The granting or refusal of any application shall not be deemed to
be precedent in the granting or refusal to grant any subsequent
applications.
It shall be the responsibility of the Chief of Police to
determine what training will be given, who will administer the
training, who will participate in the training, and what the
schedule for said training will be. Training which is authorized
and approved by the MCVRPC, shall be paid for at the appropriate
rate.
The compensation for training shall be provided as follows:
0 - 8 hours In a Day Officer's Regular Hourly Base
After 8 hours In a Day Officer's Time and a Half
Hourly Base
6
ARTICLE IX
SCHOOLING
If a Police officer enrolls in a college level course leading
to a Bachelor's Degree in the Administration of Criminal Justice,
the MCVRPC shall pay to each Police Officer so enrolled, as
additional compensation, a portion of the basic fee charged for
-such courses, such percentage of compensation to be paid according
to the following schedule:
0 - 30 credit hours No compensation
31 - 60 credit hours 50V of basic fee
61 - 90 credit hours 75% of basic fee
91 -120 credit hours 100% of basic fee
The above compensation shall be paid by the MCVRPC to Police
Officers upon the Police Officer furnishing to the MCVRPC
satisfactory proof in the form of grade statements from the
educational institution showing satisfactory completion of the
courses in which the Police Officer has enrolled.
No compensation shall be paid to any Police Officer for any
course that is failed, from which the officer withdraws or received
a grade of 'ID" or "Incomplete".
The costs paid by the MCVRPC for each course taken shall be
reduced by the amount, to which an officer is eligible to receive
either by veterans benefits, grants, scholarships or any other
source, of money received for educational enrichment.
Enrollment in college level courses leading to the degree in
the Administration of Criminal Justice shall be subject to prior
scheduling approval by the Chief of Police.
ARTICLE X
VACATION
Each full-time regular Police Officer shall be eligible for
vacation with pay after one (1) year of service in each calendar
year employed. Leave shall be earned according to the following
schedule:
7
FOR OFFICERS HIRED PRIOR TO DECEMBER 31, 1993:
SERVICE VACATION ALLOWANCES
Up to 5 years 2 weeks
After 5 years 3 weeks
After 15 years 4 weeks
After 20 years 5 weeks
FOR OFFICERS HIRED AFTER JANUARY 1, 1994:
SERVICE
After 1 year to 5 years
After 5 years
After 15 years
26 years and up
VACATION ALLOWANCES
2 weeks
3 weeks
4 weeks
5 weeks
Vacation leave entitlement shall be calculated at the
beginning of each calendar year when a Police Officer's first,
fifth, fifteenth or twentieth service anniversary occurs during the
calendar year. A Police Officer shall earn additional leave for
each calendar month after such anniversary date according to the
following schedule:
After 1 year
After 5 years
After 15 years
After 20 years
1 day per month
1/2 day per month
1/2 day per month
1/2 day per month
In no event shall the total vacation leave entitlement exceed
the appropriate annual entitlement.
Full-time Police officers may accumulate up to one (1) year's
annual vacation leave entitlement.
ARTICLE XI
SICK LEAVE
All full time Police Officers shall be granted paid sick leave
upon notice of illness or off-duty injury of such nature and
severity as to make a Police Officer unable to satisfactorily
perform his duties. No paid sick leave, in excess of three (3)
successive working, days, shall be granted unless a suitable
statement from a qualified physician, attesting to the disability
of the Police officer is furnished to the MCVRPC. For absences of
less than three (3) days, a doctor's certificate may be required
where the MCVRPC has substantial reason to believe the Police
8
Officer has been abusing his sick leave privileges.
Full-time Police Officers may also use up to five (5) days
leave for the purpose of attending to a sick child or spouse who
has a life threatening illness or catastrophic injury.
Pay shall be at regular straight time rate.
After ninety (90) days of continuous service, sick leave shall
be granted to the extent earned under the following schedule:
1. One and one-fourth (1-1/4) days of sick
leave earned for each month service.
2. Sick leave not used in any calendar year
may be accumulated from year to year. Such
accumulated sick leave shall not exceed 200
days.
Except in an emergency situation, a shift change cannot be
made less than four (4) hours prior to the beginning of the
scheduled shift. Police Officers shall notify the Chief at least
five (5) hours prior to the beginning of their shift if they will
not be able to report to work due to illness or other emergency
conditions, when practical. Failure to do so may be cause for
losing sick leave benefits for the period of illness.
At either the death or geti ent of a Police Officer, the
MCVRPC shall pay for earn , but unuse accumulated sick leave, at
the rate of thirty-five (35t) pe"rccen of said unused accumulated
sick leave, according to the following formula:
The Formula for calculating this payment is P
= S X .35 X B, where "P" is the payment in
full, 'S', is the total accumulated sick leave
(not to exceed 200 days) , and 11211 is the
hourly prorated base salary. Maximum
accumulation for officers hired after January
1, 1994 shall not exceed 100 days.
The payment for accumulated sick leave shall be paid to the
Police Officer within thirty (30) days of his retirement or death.
If no personal representative has been appointed on the 31st day
following a Police officer's death, then payment shall be made to
the person the Police Officer designated as beneficiary of his
group life insurance policies referred to hereinafter.
9
ARTICLE XII
LEAVE
A Police Officer may apply for an unpaid leave of absence,
providing such request is for good cause. A determination,
however, as to whether the leave shall be granted shall be at the
sole discretion of the MCVRPC, and that decision shall be final and
binding. The granting or refusal to grant leave shall not be
precedent in the granting or refusal to grant leave any subsequent
request by the same Police Officer or other Police Officers.
Full-time Police Officers shall receive up to five (5) days
paid leave for the purpose of attending the funeral or attending to
the affairs of a deceased spouse, parent or child. Police Officers
shall receive up to three (3) days paid leave for the purpose of
attending the funeral of a brother, sister, grandparent, grand-
child, son- or daughter-in-law, brother- or sister-in-law, parent-
in-law, grandparent-in-law, or any relatives residing in the Police
Officer's household. The Police officer shall be eligible for
bereavement leave after one (1) year of service. For a paid leave
of absence the Police Officer shall be paid his normal salary for
hours in his regularly scheduled shift not to include shift
differential.
ARTICLE XIII
INSURANCE
The MCVRPC shall provide each Police Officer and his/her
dependents with Blue Cross/Blue Shield Major Medical Insurance.
when a Police Officer is eligible for coverage as a dependent
or additional party under his or her spouse's medical plan, the
Police Officer shall have the option to accept such coverage and
not be covered by the MCVRPC Plan. The Police officer shall notify
the Chief of Police of his or her election, in writing, not less
than thirty (30) days prior to the effective date. In the event
the Police Officer or his or her spouse becomes ineligible for
coverage under his/her spouses' medical plan, upon timely notice to
the Chief of Police of such event, the Police officer and/or spouse
will immediately become eligible for coverage under the MCVRPC
Plan. Nothing contained in this paragraph shall in any way make
the MCVRPC liable for the failure of the medical carrier to include
said Police officer or his or her spouse under the MCVRPC's medical
plan.
when a Police officer shall have elected to decline coverage
under the MCVRPC's medical plan, the cost savings to the MCVRPC
10
shall be computed by the Chief of Police. On the thirtieth (30th)
day of the months of March, June, September and December, each
Police Officer, who has elected to decline such coverage, shall be
paid an amount equal to one-half of the cost of such medical
coverage for the months which coverage was declined, said amount
shall be net of taxes, but shall not be included in calculations
for base pay, longevity, unemployment compensation, worker's
compensation and so forth. A Police Officer may not elect to
decline coverage or to be included under such coverage more often
than one time in each calendar year, except where he/she is
ineligible under his/her spouse's medical coverage.
Group life insurance in an amount equal to $30, 000.00 shall be
provided to each Police Officer.
The MCVRPC shall provide and maintain false arrest insurance
coverage for every Police Officer regularly employed by the MCVRPC
The MCVRPC shall provide and maintain a group prescription
insurance program for each Police Officer and his/her dependents.
The MCVRPC shall provide and maintain a basic dental program
for each Police Officer, with the Delta Dental of Pennsylvania
Company, or a similar plan with a reputable insurance company. The
plan provided shall be known as the Blue Plan as provided by the
Delta Dental of Pennsylvania Company. The MCVRPC shall provide
dental coverage for each Police Officer's dependents; provided,
however, that in the event that the spouse of a Police officer has
a dental plan equal to or better than plan offered by the MCVRPC,
then the spouse of the Police Officer shall not be covered by the
MCVRPC plan, unless the plan of the spouse requires the spouse to
pay for the said dental plan.
The MCVRPC shall make available to all retired Police
Officers, the option of remaining a member of the MCVRPC's Blue
Cross/Blue Shield medical program and group life insurance. The
Police Officer shall pay the full cost of any such premium,
quarterly, in advance. In the event the Police officer fails to
pay such premium within thirty (30) days of the due date of the
said premium, the coverage shall be discontinued. The MCVRPC shall
not be liable for the discontinuance of said coverage or for
payment of any premiums.
For purposes of determining the MCVRPC's obligation to provide
coverage for dependents under this Article, the term
"Dependents" shall be defined as the Police Officer's spouse not
legally separated, and for unmarried natural or legally adopted
children under the '•age of nineteen (19), who are members of the
Police Officer's household; in the event that the MCVRPC obtains a
policy which defines the term "Dependent" more broadly, the terms
of the policy under which a claim is made shall be used to
11
determine eligibility for coverage.
The terms of the policy, however, shall not add to, or
subtract from the MCVRPC's obligation as stated above.
INJURY IN THE LINE OF DITTY:
If a Police Officer is injured in the line of duty, which
injury results in temporary disability, the MCVRPC shall
continue to pay the injured Police Officer his regular pay
from the date of injury until the termination of temporary
disability without deduction of sick leave. The Police
officer so injured and receiving compensation from the MCVRPC
shall be required to endorse and deliver to the MCVRPC his
workmen's Compensation Insurance check.
Temporary disability shall be defined as follows:
1. A period of up to four (4) weeks;
2. Payment for periods longer than four (4) weeks
shall be at the option of the MCVRPC and shall
require the approval of the MCVRPC;
3. The Police Officer's sick leave allowance shall
not be reduced while receiving compensation
herein provided.
NON-OCCUPATIONAL INJURY, SICKNESS AND DISABILITY:
If a Police Officer is unable to work because of a non-
occupational accident or illness which results in disability
in excess of thirty (30) days, the Police Officer shall
receive a monthly payment in accordance with the terms of this
contract set forth immediately below as provided by a
Disability Income Policy issued by Educators Mutual Life
Insurance Policy (assumed by United Teachers Associates
Insurance Company) the insurer, or an equivalent insurer.
Payments shall 1* not be made for the first thirty (30) days
of disability, and shall commence with the second month of
disability, and shall continue thereafter for a maximum period
of five (5) years.
ARTICLE XIV
PENSION PLAN
Eligible Police Officers covered by the Police Pension Plan
shall be entitled to retire upon attaining the age of fifty
(50) years, provided he/she has not less than twenty-five (25)
12
years of credited service with the Borough of Shippensburg
Police Force and/or MCVRPD. Provided, however, the provisions
hereof shall be subject to actuarial review pursuant to the
Municipal Pension Plan Funding Standard and Recovery Act, Act
of December 18, 1984, P.L. 1005, No. 205, 53 P.S. Section
895.101, et. seq.
The Pension Plan shall provide for a computation base for
calculating pensions based upon the prior three (3) years of
service.
The Pension Plan shall include a disability provision.
The MCVRPC Pension Plan shall provide for spousal benefits.
The MCVRPC Pension Plan shall provide for no Social Security
offset.
Police Officers shall be entitled to receive, in addition to
the pension benefit, an amount equal to $20.00 multiplied by
his/her complete years of service in excess of twenty-five
(25) years on the date of retirement. In no event shall this
amount exceed $100.00, per month.
For the purpose of determining the cost-of-living adjustment
of benefits, the following terms are defined here:
ADJUSTMENT DATE means each Yearly Date on and after
January 1, 1992 on which the Price Index has
changed by at least 1% from the Price Index on the
last preceding Yearly Date as of which monthly
retirement benefit payments under this Plan were
changed (on January 1, 1992 if no prior changes
have been made).
ADJUSTMENT FACTOR means, as of any Adjustment Date,
the quotient of (a) divided by (b):
1. The Price Index as of such Adjustment Date.
2. The Price Index as of the last previous
adjustment Date. In no event, however, will
the Adjustment Factor exceed 1.03.
ANNUITANT means an Inactive Participant whose
Retirement Date has occurred and who is entitled to
monthly retirement benefit payments under this
13
Plan.
PRICE INDEX means, as any Yearly Date, the Consumer
Price Index (U.S. city average for all urban
consumers, all items) for the fourth month
immediately prior to such Yearly Date, as published
by the United States Department of Labor.
As of each Adjustment Date, the amount of monthly retirement
.benefit payments payable to an Annuitant will be changed to the
amount determined by multiplying such payments by the adjustment
factor as of such Adjustment. Date, subject to the following
provisions:
1. If such change results in an increase in the amount
of monthly retirement benefit payments to an
Annuitant, an amount of monthly retirement benefit
will be provided for him under the Group Contract
in the amount of such increase with payment
consistent with the payments being made as to the
monthly retirement annuity provided under the Group
Contract on the Participant's Retirement date.
2. Any cost-of-living increase will not exceed the
percentage increase in the Price Index from the
last year in which the Annuitant was an Employee
and in no event, will the amount of monthly
retirement benefit payments for an Annuitant after
the date of the increase be more than 130a of the
amount he would have received had the provisions of
this Article not been in effect.
3. If such change results in a decrease in the amount
of the monthly retirement benefit payments to an
Annuitant, an amount or amounts of monthly
retirement benefit previously provided for him or
her under the Group Contract will be canceled as of
such Adjustment Date so that the total amount of
monthly retirement benefit remaining will be only
the reduced amount to which he is then entitled.
4. In no event will any decrease become effective
which would reduce the monthly retirement benefit
payments for an Annuitant to an amount which would
be less than the amount he would have received had
the provisions of this Article not been in effect.
5. No cost-of-living increase will be made if such
increase would impair the actuarial soundness of
the Plan.
14
6. On and after the effective date of termination of
the Plan, no further changes in monthly retirement
benefit payments will be made in accordance with
this Article.
7. Each Police Officer shall be permitted to purchase
his or her years of service in the military service
of the United States, prior to employment with the
MCVRPC, for credit to their service. The cost to
purchase such service shall be computed according
to the formula set forth in the Police Pension
Fund, Section 5, Act of December 19, 1990, P.L.
1238, No. 205 §1, 53 P.S. 770.
8. The Pension Plan shall provide to the Shippensburg
Police Association a copy of the current Police
Pension Plan.
9. The MCVRPC shall, as soon as practical, adopt the
necessary measures to effect such changes, subject
to the certification of the actuarial soundness of
the plan by the MCVRPC'S pension advisors.
ARTICLE XV
PERSONAL LEAVE
All full time Police Officers shall be eligible for sixteen
(16) paid personal leave days per calendar year in lieu of
holidays.
A Police Officer shall earn personal days at the rate of
6.15384% of all regular hours paid, with the maximum entitlement
being sixteen (16) personal days. Regular hours paid shall include
hours worked, including vacation, personal leave, and sick leave,
but shall not include call time, court time, standby time, unpaid
leaves of absence, bereavement leave, or meetings.
Unless an emergency exists, the Chief of Police shall be
notified at least two (2) weeks in advance of the dates selected by
a Police Officer for personal leave. Personal leave shall be
scheduled and granted for days requested by the Police Officers,
subject to management's responsibility to maintain efficient
operations. If the nature of the work makes it necessary to limit
the number of Police Officers on personal leave at the same time,
the Police Officer'wi.th the greatest seniority, as it relates to
total years of continuous service with the MCVRPC, shall be given
his/her choice of personal leave in the event of any conflict in
selection.
15
Personal leave. may be anticipated during a calendar year, but
are non-accumulative. If a Police Officer, because of the demands
of his/her work, is denied personal leave days when requested, then
the MCVRPC, at its option, shall make payments to the Police
officer at time and one-half during the following January for
unused personal leave requested, but not approved, or may grant
compensatory leave to the Police Officer. If compensatory leave is
granted in the following year, it shall be used within the first
six (6) months of the next calendar year.
ARTICLE XVI
SALARY
The following chart indicates the salaries of Police Officers
effective as of January 1, 1997 through December 31, 1999.
Salaries reflect an increase of 3.5% for contract year 1997, 4.0%
for contract year 1998, and 4.01k for contract year 1999.
Length of Service 1997 1998 1999
A. 24-48 months $ 30,371.83 N/A N/A
B. After 48 months $ 33,795.04 $ 35,146.84 $ 36,552.71
The following chart indicates the salaries of the Police
Sergeants to be effective during this Agreement:
1997 1998 1999
BASE SALARY $ 35,905.67 $ 37,341.90 $ 38,835.58
The following chart indicates the salaries of Police Officers
hired after January 1, 1994 to be effective during this Agreement:
Length of Service
1997 1998
1999
A. 0-12 months
B. 13-24 months
C. 25-36 month
D. 37-48 months
$ 22,713.08 $ 23,621.60
$ 24,508.49
$ 26,303.90
$ 28,099.32
$ 25,488.83
$ 27,356.06
$ 29,213.29
$ 24,566.46
$ 26,508.38
$ 28,450.30
$ 30,392.22
16
B. 49-60 months $ 29,894.73 $ 31,090.52 $ 32,334.14
F. 61-72 months $ 31,699.15 $ 32,957.76 $ 34,276.07
ARTICLE XVII
OFF-DUTY COURT APPEARANCES AND MEETINGS
MCVRPC agrees that in addition to other increases in Police
Officer's compensation hereinafter set forth, Police Officers shall
be compensated for all off-duty court appearances before any Court
or District Justice or for any police meetings a Police Officer is
required to attend as follows:
1. District Justice:
Any Police Officer who is required to appear before
a District Justice to attend a hearing or to file
charges at a time when he/she is not regularly on
duty shall be paid at the appropriate rate for all
said time, subject to a minimum time of two (2)
hours at straight time, if the hearing is before
the District Justice whose district encompasses
that part of the Borough of Shippensburg lying in
Cumberland County and three (3) hours of straight
time if the hearing is before a District Justice
whose district lies outside the Borough of
Shippensburg. Police officers shall log the start
and stop of all time involved in such appearances
at the Police Department Office.
2. Court Appearances:
Any Police Officer who is required to appear before
any court of record at a time when he/she is not
regularly on duty shall be paid at the appropriate
rate for all said time, subject to a minimum
payment of the equivalent of five (5) hours
straight time. Police Officers shall log the start
and stop of all time involved in such appearances
at the Police Department Office.
If a court case or hearing is cancelled within 12
hours of the scheduled time for the commencement of
such case or hearing, the Police officer shall be
paid the minimum guaranteed hours at the straight
time rate for such scheduled appearance.
17
3. Meetings:
Any Police Officer who is required by the MCVRPC to
attend police meetings at a time when he/she is not
on regularly scheduled duty shall be paid for hours
in attendance at such meetings at the appropriate
rate.
4. Method of Compensation:
All witness fees received from any Court by a
Police Officer for such attendance, plus mileage,
when testifying in a court of law at the minor
judiciary or the Court of Common Pleas where said
testimony relates to facts or occurrences resulting
from his/her employment in the MCVRPC, received by
the Police Officer shall be remitted to the MCVRPC.
Each Police Officer shall, when feasible, notify
the Chief of Police in advance of such off-duty
appearances and police meetings, and in all cases
notify the Chief of Police of his off-duty
appearance and police meetings within ten (10) days
after such appearance, and shall at such time
requisition for payment.
Payments for the aforesaid appearances by Police
officers shall be made monthly by MCVRPC or may, at
the option of the MCVRPC, be added to the Police
officer's next regular pay.
The MCVRPC shall provide a maximum payment of $5.00
for breakfast, $10.00 for lunch and dinner to any
Police Officer who is required to be away from the
jurisdiction at a training seminar or court
appearance for a period of greater than four (4)
hours and over such a meal period. The Police
officer shall provide the MCVRPC with a
reimbursement request, accompanied by the actual
receipt for such meals.
Nothing contained in this Article XV shall in any
way limit the right of the MCVRPC or the Chief of
Police to change scheduling of any Police Officer.
18
ARTICLE XVIII
HOURS OF WORK
Each Police Officer shall be scheduled to work eighty (80)
hours per pay period. A pay period is defined as a period of
fourteen (14) consecutive calendar days commencing at 6:00 a.m.,
prevailing time, on the first day of the calendar week in which the
Police officer begins work and ending at 5:59 a.m., prevailing
time, on the fourteenth (14th) day thereafter. In the event that
the above work week conflicts with the payroll schedule of the
MCVRPC, the parties agree that they will meet and discuss any
proposed change to the defined work week.
All Police Officers who are required to work in excess of
eighty (80) hours, per pay period, shall be compensated at the rate
of time and one-half for all hours worked in excess of eighty (80)
hours; provided, however, that this shall in no way be construed to
give any Police officer an absolute right to demand and receive any
work to which he/she would be entitled to be compensated at the
said rate of time and one-half. Overtime shall be paid only for
hours actually worked in excess of eighty (80) hours in a pay
period or while the Police Officer is on vacation or personal leave
and shall not include sick leave, court time, call time, disability
leave, unpaid leave of absence, bereavement leave, off-duty court
appearance or meetings.
Except in an emergency situation, a shift change cannot be
made less than four (4) hours prior to the beginning of the
scheduled shift. Police Officers shall notify the Chief at least
five (5) hours prior to the beginning of their shift if they will
not be able to report to work due to illness or other emergency
conditions, when practical.
In calculating a Police Officer's base hourly rate for
overtime purposes, the payment of longevity compensation under
Article XVII shall not be included in the calculation, except in
the case of overtime is paid in accordance with the Fair Labor
Standards Act.
ARTICLE XIX
LONGEVITY
Every Police 'kO£ficer shall be entitled to an additional
longevity compensation upon the anniversary of the required number
of years of service as set forth below. Longevity payment shall be
paid according to the following schedule, upon the anniversary of
19
ARTICLE XXII
STANDBY COMPENSATION
whenever a Police Officer is ordered on standby by order of
the Chief of Police, that is to say, whenever a Police Officer is
ordered to be available for immediate duty, but not to include
those times when the Chief of Police designates another Police
Officer to serve as Acting Chief of Police in the Chief of Police's
absence, such Police officer shall be compensated for his hours on
standby as follows:
1. One Dollar Twenty-five Cents ($1.25) per hour for
each hour or fraction thereof while on standby,
provided the fraction exceeds thirty-one (31)
minutes.
2. If a Police Officer is on standby for more than two
(2) hours, a minimum of Five ($5.00) Dollars.
3. All standby in excess of five (5) hours shall be
compensated at One Dollar Twenty-five Cents ($1.25)
per hour as set forth in Item No. 1 above.
ARTICLE XXIII
MEMBERSHIP AT A LOCAL FITNESS CENTER
Any Full-Time Police Officer who wishes to join the local
fitness center, Shippensburg Fitness Center, is entitle to receive
a fifty (50) percent reimbursement of membership cost under the
following reasonable restrictions and exceptions agreed upon by the
MCVRPC and the Shippensburg Police Association:
1. Local Fitness membership program will be at the
Shippensburg Fitness Center;
2. Police Officers who choose to enroll in said Local
Fitness membership program shall pay one hundred
(100) percent of the costs of the enrollment and
submit monthly invoices to the MCVRPC for a fifty
(50)1
-.percent cost reimbursement;
3. Police officers who choose to utilize the Local
Fitness membership program shall be required to use
21
the facility two (2) times a week for one (1) hour
exercise workouts each time;
4. Police Officers will be required to render an
accounting of their exercise schedules via a card
system accounting to the MCVRPC monthly;
5. Police officers shall be excused from a mandatory
exercise schedule for court appearances, schooling,
sickness, or training;
6. If a Police Officer who has enrolled in said Local
Fitness membership program fails to maintain
required exercise schedule for two (2) consecutive
months without proper excuse as mentioned above or
is otherwise deemed to be abusing this benefit, the
MCVRPC has the discretion to refuse payment of its
portion of the costs of membership for the
remaining term of this contract.
7. Said privileges shall become effective on January
1, 1997, and shall remain effective until the end
of the contract on December 31, 1999.
ARTICLE XXIV
RATIFICATION OF THE AGREEMENT
The terms of this Agreement when agreed upon by the appointed
negotiating committee, shall be ratified by both the majority
members of the Police Department and the MCVRPC before the
Agreement can be considered final. Ratification shall be by the
Shippensburg Police Association and then followed by the MCVRPC.
ARTICLE XXV
DURATION OF AGREEMENT
The duration of this Agreement shall be three years in length,
and this Agreement shall become effective as of, and the effective
date of this Agreement shall be, January 1, 1997, and shall remain
in full force and effect through December 31, 1999. It shall
automatically be renewed from year to year thereafter, unless
either party shall give the other party notice of desire to
terminate, modify, or otherwise amend this Agreement; such notice
shall be given in accordance with the provisions of the Act of June
24, 1968, Act 111, of the Legislature of the Commonwealth of
Pennsylvania.
22
ARTICLE XXVI
SIGNING AND RATIFICATION
IN WITNESS WHEREOF, the MCVRPC and the Police Officers of the
Shippensburg Police Association, intending to be legally bound
hereby, have hereunto affixed their hands and seals the day and
year first written.
ATTEST:
MID-CUMBERLAND VALLEY REGIONAL
POLICE COMMISSION
M C Secretary
(SEAL)
WITNESS:
BY
hairm
Mid-C mberland Valley
Regional Police Commission
SHIPPENSBURG POLICE
ASSOCIATION
Bt
President
23
We, the undersigned members of the Shippensburg Police
Association, do hereby ratify and approve this contract duly
negotiated by our bargaining representatives as set forth above.
WITNESS:
24
EXHIBIT F
Mav,16. 2007 2:30PM Borough of Shippensburg No, 1566 P. 1
COLLECTIVE BARGAINING AGREEMENT
BETWEEN
THE BOROUGH OF SHIPPENSBURG
AND THE
SHIPPENSBURG POLICE ASSOCIATION
DURATION
JANUARY 1, 2001 THROUGH DECEMBER 31, 2002
1
May.16. 2007 2:30PM Borough of Shippensburg
TABLE OF CONTENTS
No. 1566 P. 2
ARTICLE I - RECOGNITION ..........................................................................4
ARTICLE II - EFFECT OF THE AGREEMENT .............................................. 4
ARTICLE III - PRECEDENCE OF LAWS AND REGULATIONS .................. 5
ARTICLE IV - MANAGEMENT RESPONSIBTLI MS ................................... 5
ARTICLE V - GRIEVANCES ...........................................................................5
ARTICLE VI - STRIMS .................................................................................7
ARTICLE VZI - EQUIPMENT AND UNIFORMS ............................................ 7
ARTICLE VIII - TRAINING ....................................................... . . . ............... 8
ARTICLE IX - SCHOOLING ............................................................................. 9
ARTICLE X - VACATION ...........................................................................10
ARTICLE XI - SICK LEAVE .........................................................................11
ARTICLE X31 - LEAVE ...................................................................................13
ARTICLE = - INSURANCE ........................................................................13
ARTICLE XIV - PENSION PLAN ...................................................................15
ARTICLE XV - PERSONAL LEAVE ............................................. ...........18
ARTICLE XVI - SALARY ..............................................................................19
ARTICLE XVII - OFF-DUTY COURT APPEARANCES AND MEETINGS .20
ARTICLE XVIII - HOURS OF WORK ............................................................ 21
ARTICLE XIX - LONGEVITY ........................................................................ 22
ARTICLE XX - CALL TIME .......................................................................... 23
ARTICLE 3M - SHIFT DIFFERENTIAL PAY .............................................. 23
ARTICLE XXII - STANDBY COMPENSATION ............................................23
ARTICLE (- MErYMERSHIP AT A LOCAL FITNESS CENTER ........... 24
ARTICLE XXIV -- SHIPPENSBURG BOROUGH POLICE ROSTER ............. 25
ARTICLE XXV - RATIFICATION OF THE AGREEMENT .......................... 26
ARTICLE XXVI - DURATION OF AGREEMENT ......................................... 26
ARTICLE XXVII - RIGHT TO REOPEN ......................................................... 26
ARTICLE )0= - SIGNING AND RATIFICATION .................................... 27
2
May-16. 2007 2:30PM Borough of Shippensburg No-11566 P. 3
AGREEMENT
THIS AGREEhUNT, made this I SP day of December, 2000, BY AND BETWEEN
the Borough of Shippensburg, a municipal corporation organized pursuant to the laws of the
Cornnonwealth of Pennsylvania with a business address of 111 North Fayette Street,
Shippensburg, Pennsylvania {hereinafter "Borough"} and the Shippensburg Police Association, a
non-profit corporation incorporated under the laws of the Commonwealth of Pennsylvania, with
corporate offices in Shippensburg, Pennsylvania, hereinafter referred to as Police Officers,
through their duly appointed bargaining representatives, pursuant to Act No. 111 of the
Legislature of the Commonwealth of Pennsylvania, 1968, rune 24, p.l. 237, duly approved by the
Governor of Pennsylvania.
WrMSSETH
THAT WHEREAS subsequent to the passage of the Act hereinabove referred to, an
agreement was entered into by Police Officers requiring a secret ballot election for a bargaining
agent for Police Officers for a contract for the year 2001 and 2002;
WHEREAS, such secret ballot was held and count made and more than fifty percent
(50'/0) of the regular Police Officers voted to designate Corporal Scott Wolfe and Corporal Jeff
Shubert and Richard Wagner, Esquire, as bargaining representatives for the year 2001 and 2002;
WHEREAS, Borough Council President Mark Buterbaugh and Solicitor Salzmann were
duly notified of said election;
WHEREAS, Borough Council Members, Jack Sease, Dr. Kim Fox, Mayor Tun Costanza
and Solicitor Salzmann were duly appointed bargaining agents on behalf of the Borough;
WHEREAS, said bargaining agents met and referred proposals fo the groups which they
represent, the same having been approved by the majority of each group;
NOW, THEREFORE, KNOW YE, that in consideration of the mutual promises and
covenants herein set forth; and with due regard to the mutual understanding and harmony among
Police Officers and the Borough, the parties hereto agree as follows:
ARTICLE I
May.16. 2007 2:31PM Borough of Shippensburg No-1566 P. 4
ARTICLE I
RECOGNITION
The Borough hereby recognizes the Shippensburg Police Association as the sole
representative of all fulltime Police Officers employed by the Borough for collective bargaining
purposes, except the Chief.
ARTICLE H
EFFECT aF THE AGREEMENT
This instrument constitutes the entire Agreement between the Police Officers and the
Borough and has been arrived at as a result of collective bargaining negotiations.
The parties admowledge that during the negotiations which resulted in this Agreement,
each, had the unlimited right and opportunity to make demands with respect to any subject or
matter not removed by law from the area of bargaining, and that the understanding and
agreements arrived at by the parties after the exercise of that right and opportunity are set forth in.
this Agreement. Therefore, the Borough and the Police Officers for the life of this Agreement,
each voluntarily and unqualifiedly waives the right, and each agrees that the other shall not be
obligated, to bargain collectively with respect to any subject or matter referred to or covered by
this Agreement. This provision also maintains the right of both parties as set forth in the
grievance provisions of Article V.
The waiver of any breach or condition of this Agreement by either party shall not
constitute a precedent with respect to the future enforcement of all the terms and conditions of
this Agreement.
No provisions of this Agreement shall be retroactive prior to the effective date of this
Agreement, which is January 1, 2001, unless otherwise specifically stated herein.
Except as set forth herein, this Agreement shall in no way eliminate, remove or deprive a
Police Officer of any benefits previously enjoyed under prior resolutions, ordinances and
employment policies of the Borough effecting terms and conditions of said Police Officer's
employment.
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May.16. 2007 2:32PM Borough of Shippensburg No.1566 P. 5
ARTICLE III
PRECEDENCE OF LAWS AND REGULATIONS
The public interest in the accomplishment of the purpose of the Police Department is
paramount.
In the administration of all matters covered by this Agreement, all parties are governed
by the provisions of any existing laws, regulations, ordinances, personnel rules and regulations
and policies, which are not changed or eliminated by the provisions of this Agreement. This
Agreement is also subject to future enactments of the Commonwealth of Pennsylvania or judicial
determination which may specifically affect the provisions of this Agreement, or the provisions
of Act No. 111 of June 24, 1968. Except as set forth in Article H paragraph S, where such
regulations, ordinances or policies are not affected or changed by the provisions of this
Agreement, the same may in the future be amended and changed from time to time without any
restraint by this Agreement,
ARTICLE IV
MANAGFAIENT MPONSIBILTTIES
The parties agree that except for the limitations or other provisions of this Agreement,
there are functions, powers, responsibilities, and authority belonging solely to the Borough.
Some of these as powers, responsibility, and authority as they pertain to the Borough are the
hiring of Police Officers, including the deWanination to hire a replacement for any police officer
who has left employment by reason of death, disability retirement, discharge or for any other
reason, the advancement of police Officers to be employed or retained in employment, the
suspension, demotion, or discharge of Police Officers; the establishment and maintenance of
standards of quality and performance; the establishment of a budget or long range plans for the
police activities consistent with other provisions of this Agreement.
ARTICLE V
GRIEVANCES
For the purpose of this Agreement, the term "grievance" means a difference between an
individual Police Officer of the Shippensburg Police Association and the Borough with respect
to the interpretation, application, claims of breach or violation of any provisions of this
Agreement, or as the tern "grievance" may be otherwise intended by Act 111 of June 24, 1968.
Grievances are limited to matters involving interpretation of this agreement. Any such
"grievance", as aforesaid, shall be adjusted as follows:
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May,16. 2007 2:33PM Borough of Shippensburg No,1566 P. 6
Step 1 - The Police Officer, either alone or accompanied by a representative of
the bargaining unit, or the bargaining unit itself, shall present the grievance in
writing to the Chief of Police within seven (7) days of its occurrence or knowledge
of its occurrence. The Chief of Police shall report his decision in writing to the
Police Officer and the bargaining unit representative within five (5) days of its
presentation.
Step 2 - In the event that the grievance is not settled at Step 1, an appeal mast be
presented in writing by the Police Officer or the bargaining unit.representative to
Borough Council within five (5) days after the response at Step 1 is due. The
Borough Council shall respond in writing to the Police Officer or the bargaining
unit representative within five (5) days after receipt of the appeal.
Step 3 - In the event that the grievance has not been satisfactorily resolved in Step 2, the
Police Officer or bargaining unit representative may initiate an appeal by serving upon
the Borough Council a notice in writing of his intent to proceed to arbitration within
seven (7) days after receipt of the Step 2 decision is due.
Step 4 - The arbitrator is to be selected by the parties jointly within seven (7) days
after notice has been given. If the parties fail to agree on an arbitrator, either
party may request the American Arbitration Association to submit a list of three
(3) possible arbitrators.
Step 5 - The parties shall meet within seven (7) days of the receipt of said list for
the purpose of selecting the arbitrator by alternating striking one (1) name from
the list, until only one (1) name remains. The employer strikes first.
The arbitrator shall neither add to, subtract from, nor modify the provisions of this
agreement, The arbitrator shah confine himself or herself to the precise issues submitted for
arbitration, The arbitrator has no authority to determine any other issues not submitted to him or
her.
The decision of the arbitrator shall be final artd binding on both parties. The arbitrator
shall be requested to issue his or her decision within thirty (30) days after the hearing.
All of the time limits in this article may be extended by mutual agreement.
All fees and expenses of the arbitrator shall be divided evenly between the parties. Each
party shall bear the costs of preparing and presenting its own case.
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May. 16, 2007 2:34PM . Borough of Sh'ippensburg No. 1566 P. 7
The bargaining unit representative has the right to appear with the grievant at all steps of
the grievance procedure. It is up the grievant to, notify the bargaining unit when a grievance has
been filed.
ARTICLE VI
STRIKES
The Police Officers agree that they shall not authorize, ratify, or participate in any strikes
(in the accepted interpretation of the term), nor work slowdown or similar practices in
connection with their duties as Borough Police Officers
If a Police officer engages in such conduct, he or she shall be deemed to have neglected
or violated his official duties as defined in the Police Policy Manual.
ARTICLE V11
EOITIP S
The Borough shall provide Police Officers with guns, ammunition, and other necessary
police accessories. The Borough shall also provide appropriate police uniforms.
The term "appropriate police uniforms", shall include approved shoes, appropriate leather
gear for police uniforms, cold weather bead gear, winter overshoe boots, one (1) waist-length
jacket for spring and fall use, one (1) topcoat for cold weather use, summer campaign hat, winter
campaign hat, rain hat cover, and rain coat.
Appropriate initial police uniforms shall be issued to Police Officers in a basic issue of
three (3) winter uniforms and five (5) summer uniforms.
Uniform items shall be supplied to each Police Officer when necessary. All shoes
purchased by the Borough shall be used solely when a Police Officer is on duty. The
Shippensburg Police Department may, in lieu of replacing a set of shoes, resole and reheel said
sloes, if, in the opinion of the Borough, the condition of the shoes warrants such resoling.
A plain clothes officer, if any, shall receive the sum of Three Hundred Dollars ($300.00),
per year, as a clothing allowance.
Uniforms shall be the property of the Borough and shall be returned to the Borough when
any officer leaves the service of the Borough, whether by retirement, termination of employment
by the Borough, layoff; or death.
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Nay, 16. 2007 2:34PM Borough of Shippensburg No. 1566 P. 8
Each Police Officer shall be provided a dry cleaning allowance of One Hundred Dollars
($100.00) per annum on January 1 of each year.
ARTICLE VM
TRAESING
The Chief of Police shall post available information on training and educational programs
in an appropriate location in the department. The Shippensburg Police Department encourages
the participation of the employees in any such training and educational programs which relate to
a Police Officer's job and responsibilities, Any Police Officer may submit an application for
attendance at educational and training programs in this regard. However, the decision as to
whether or not such application is approved by the Borough shall be at its sole discretion and its
decision shall -be final and binding. The granting or refusal of any application shall not be
deemed to be precedent in the granting or refusal to grant any subsequent applications.
. It shall be the responsibility of the Chief of Police to determine what training will be
given, who will administer the training, who will participate in the training, and what the
schedule for said training will be. Training which is 'authorized and approved by the Borough,
shall be paid for at the appropriate rate.
The compensation for training shall be provided as follows:
0 - 8 hours In a Day Officer's Regular Hourly Base
After 8 hours In a Day Officer's Time and a Half Hourly Base
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May. 16. 2007 2;35PM Borough of Shippensburg No. 1566 P. 9
ARTICLE IX
SCHOOLWG
If a Police Officer enrolls in a college level course leading to a Bachelor's Degree in the
Administration of Criminal Justice, the Borough shall pay to each Police Offim so enrolled, as
additional compensation, a portion of the basic fee charged for such courses, such percentage of
compensation to be paid according to the following schedule:
0 - 30 credit hours No compensation
31- 60 credit hours 500/o of basic fee
61- 90 credit hours 75% of basic fee
91-120 credit hours 100% of basic fee
The above compensation shall be paid by the Borough to Police Officers upon the Police
Officer fimrishing to the Borough. satisfactory proof in the form of grade statements from the
educational institution showing satisfactory completion of the courses in which the Police
Officer has enrolled.
No compensation sball be paid to any Police Officer for any course that is failed, from
which the officer withdraws or received a grade of "D" or "Incomplete".
The costs paid by the Borough for each course taken shall be reduced by the amount, to
which an officer is eligible to receive either by veterans benefits, grants, scholarships or any
other source, of money received for educational enrichment.
Enrollment in college level courses leading to the degree in the Administration of
Criminal Justice shall be subject to prior scheduling approval by the.Chief of Police.
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May. 16. 2001 2:36PM Borough of Shippensburg No. 1566 P, 10
ARTICLE X
VACATION
. Each full-time regular Police Officer shall be eligible for vacation with pay after one (1)
year of service in each calendar year employed. Leave shall be earned according to the following
schedule:
FOR OFFICERS HIRED PRIOR TO DECEMBER 31,1993:
SERVICE VACATION ALLOWANCES
Up to 5 years 10 Days
After 5 years 15 Days
Auer 15 years 20 Days
After 20 years 25 Days
FOR OFFICERS HIRED AFTER JANUARY 2,1994:
SERVICE
VACATION ALLOWANCES
After 1 year to 5 years
After 5 years
After 15 years
26 years and up
10 Days
15 Days
20 Days
25 Days
Vacation leave entitlement shall be calculated at the beginning of each calendar year
when a Police Officer's first, fifth, fifteenth or twentieth service anniversary occurs during the
calendar. year. A Police Officer shall earn additional leave for each calendar month after such
anniversary date according to the following schedule:
After 1 year 1 day per month
After 5 years 1/2 day per month
Af ter 15 years 1 /2 day per month
After 20 years 1/2 day per month
in no event shall the total vacation leave entitlement exceed the appropriate annual
entitlement.
Full-time Police Officers may accumulate up to one (1) year's annual vacation leave
entitlement.
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May.16. 2007 2:36PM Borough of Shippensburg No,1566 P. 11
ARTICLE XI
SICK LEAVE
All full time Police Officers shall be granted paid sick leave upon notice of illness or off-
duty injury of such nature and severity as to make a Police Officer unable to satisfactorily
perform his or her duties. No paid sick leave, in excess of three (3) successive working days,
shall be granted unless a suitable statement from a qualified physician, attesting to the disability
of the Police Officer is furnished to the Borough. For absences of less than tbree (3) days, a
doctor's .certificate may be required where the Borough has substantial reason to believe the
Police Officer has been abusing his or her sick leave privileges.
Full-time Police Officers may also use up to five (5) days leave for the purpose of
attending to a sick child or spouse who has a life threatening illness or catastrophic injury.
Pay shall be at regular straight time rate.
After ninety (90) days of continuous service, sick leave shall be granted to the extent
earned under the following schedule:
1. One and one-fourth (1-1/4) days of sick
leave earned for each month service.
2. Sick leave not used in any calendar year
may be accumulated from year to year. Such
accumulated sick leave shall not exceed 200
days.
Except in an emergency situation, a shift change cannot be made less than four (4) hours
prior to the beginning of the scheduled shift. Police Officers shall notify the Chief at least five
(5) hours prior to the beginning of their shift if they will not be able to report to work due to
illness or other emergency conditions, when practical. Failure to do so may be cause for losing
sick leave benefits for the period of illness.
At either the death or retirement of a Police Officer, the Borough shall pay for earned, but
unused accumulated sick leave, at the rate of thirty-five (35%) percent of said Wu-R;ff
cum ated RTc heave, according to the following formula:
The Formula for calculating this payment is P = S X .35 X B,
where "P" is the payment in full, "S" is the total accumulated sick
leave (not to exceed 200 days), and "B" is the hourly prorated base
salary. Maximum accumulation for officers hired after January
1, 1994 shall not exceed 100 days.
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May. 16, 2007 2:37PM Borough of Shippensburg No. 1566 P. 12
The payment for accumulated sick leave shall be paid to the Police Officer within thirty
(30) days of his or her retirement or death. If no personal representative has been appointed on
the 31 st day following a Police Officer's death, then payment sball be made to the person the
Police Officer designated as beneficiary of his or her group life insurance policies referred to
hereinafter.
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May.16. 2007 2:37PM Borough of Shippensburg No.1566 P. 13
ARTICLE X111
L___.V-7-
A Police Offim way apply for an unpaid leave of absence, providing such request is for
good cause. A determination, however, as to whether the leave shall be granted shall be at the
sole discretion of the Borough, and that decision shall be final and binding. The granting or
refusal to grant leave shall not be precedent in the granting or refusal to grant leave any
subsequent request by the same Police Officer or other Police Officers.
Full-time Police Officers shall receive up to five (5) days paid leave for the purpose of
attending the funeral or attending to the affairs of a deceased spouse, parent or child. Police
Officers shall receive up to three (3) days paid leave for the purpose of attending the funeral of a
brother, sister, grandparent, grand-child, son or daughter-in-law, brother- or sister-in-law,
parent-in-law, grandparent-in-law, or any relatives residing in the Police Officer's household.
The Police Officer shall be eligible for bereavement leave after one (1) year of service. For a
paid leave of absence the Police Officer shall be paid his or her normal salary for hours in his or
her regularly scheduled shift not to include shift differential.
ARTICLE XM
INSURANCE
The Borough shall provide each Police Officer and his or her dependents with Blue
Cross/Blue Shield Major Medical Insurance.
When a Police Officer is eligible for coverage as a dependent or additional party under
his or her spouse's medical plan, the Police Officer shall have the option to accept such coverage
and not be covered by the Borough Plan. The Police Officer shall notify the Chief of Police of
his or her election, in writing, not less than thirty (30) days prior to the effective date. In the
event the Police Officer or his or her spouse becomes ineligible for coverage under his/her
spouses' medical plan, upon timely notice to the Chief of Police of such event, the Police Officer
and/or spouse will immediately become eligible for coverage under the Borough Plan. Nothing
contained in this paragraph shall in any way make the Borough liable for the failure of the
medical carrier to include said Police Officer or his or her spouse under the Borough's medical
plan.
When a Police Officer shall have elected to decline. coverage under the Borough medical
plan, the cost savings to the Borough shall be computed by the Chief of Police. On the thirtieth
(30th) day of the months of Mardi, June, September and Decernber, each Police Officer, who
has elected to decline such coverage, shall be paid as amount equal to one-half of the cost of
such medical coverage for the months which coverage was declined, said amount shall be net of
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May.16. 2007 2:38PM Borough of Shippensburg No.1566 P. 14
taxes, but shall not be included in calculations for base pay, longevity, unemployment
compensation, worker's compensation and so forth. A Police officer may not elect to decline
coverage or to be included under such coverage more often than one time in each calendar year,
except where he or she is ineligible under his/her spouse's medical coverage.
Group life insurance in an amount equal to $30,000.00 shall be provided to each Police
Officer.
. The Borough shall provide and maintain false arrest insurance coverage for every Police
Officer regularly employed by the Borough.
The Borough shall provide and maintain a group prescription insurance program for each
Police Officer and his or her dependents.
The Borough shall provide and maintain a basic dental program for each police Officer,
with the Delta Dental.of Pennsylvania Company, or a similar plan with a reputable insurance
company. The plan provided shall be known as the Blue Plan as provided by the Delta Dental of
Pennsylvania Company. The Borough shall provide dental coverage for each Police Officer's
dependents; provided, however, that in the event that the spouse of a Police Officer has a dental
plan equal to or better than plan offered by the Borough, then the spouse of the Police Officer
shall not be covered by the Borough plan, unless the plan of the spouse requires the spouse to
pay for the said dental plan.
The Borough shall make available to all retired Police Officers, the option of remaining a
member of the Borough's Blue Cross/Blue Shield medical program and group life insurance.
The Police Officer shall pay the full cost of any such premium, quarterly, in advance. In the
event the Police Officer fails to pay such premium within thirty (30) days of the due date of the
said premium, the coverage shall be discontinued. The Borough shall mot be liable for the
discontinuance of said coverage or for payment of any premiums.
For purposes of determining the Borough's obligation to provide coverage for dependents
under this Article, the term "Dependents" shall be defined as the Police Officer's
spouse not legally separated, and for unmarried natural or legally adopted children under the age
of nineteen (19), who are members of the Police Oicer's household; in the event that the
Borough obtains a policy which defines the term "Dependent" more broadly, the terms of the
policy under which a claim is made shall be used to determine eligibility for coverage.
The terms of the policy, however, shall not add to, or subtract from the Borough's
obligation as stated above. .
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May, 16. 2007 2:39PM Borough of Shippensburg No, 1566 P. 15
INJURY IN THE LINE OF DUTY:
If a Police Officer is injured in the line of duty, which injury results in temporary
disability, the Borough shall continue to pay the injured Police Officer his or her regular
pay from. the date of injury until the termination of temporary disability without
deduction of sick leave. The Police Officer so injured and receiving compensation from
the Borough shall be required to endorse and deliver to the Borough his or her
Workmen's Compensation Insurance check.
Temporary disability shall be defined as follows:
1. A period of up to four (4) weeks;
2. Payment for periods longer than four (4) weeks
shall be at the option of the Borough and shall
require the approval of the Borough;
3. The Police Officer`s sick leave allowance shall
not be reduced while receiving compensation
herein provided.
NON-OCCUPATIONAL INJURY, SICKNESS AND DISABILITY:
If a Police Officer is unable to work because of a non-occupational accident or illness
which results in disability in excess of thirty (30) days, the Police Officer shall receive a
monthly payment in accordance with the terms of this contract set forth immediately
below as provided by a Disability Income Policy issued by Educators Mutual Life
Insurance Policy (assumed by United Teachers Associates Insurance Company) the
insurer, or an equivalent insurer. Payments shall be not be made for the first thirty (30)
days of disability,. and shall commence with the second month of disability, and shall
continue thereafter for a maximum period of five (5) years.
ARTICLE X IV
PENSION PLAN
Eligible Police Officers covered by the Police Pension Plan shall be entitled to retire upon
attaining the age of fifty (50) years, provided he or she has not less than twenty-five (25)
years of credited service with the Borough of Shippensburg Police Force and/or Mid-
Cumberland Valley Regional Police Department. Provided, however, the provisions
hereof shall be subject to actuarial review pursuant to the Municipal Pension Plan
Funding Standard and Recovery Act, Act of December 18, 1984, P.L. 1005, No. 205, 53
P.S. Section 895.101, et. seq.
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May. 16. 2001 2:40 PM Borough of Shippensburg No. 1566 P. 16
The Pension Plan shall provide for a computation base for calculating pensions based
upon the prior three (3) years of service.
The Pension Plan shall include a disability provision.
The Borough Pension Plan shall provide for spousal benefits.
The Borough Pension Plan shall provide for no Social Security offset.
Police Officers shall be entitled to receive, in addition to the pension benefit, an amount
equal to $20.00 multiplied by his or her complete years of service in excess of twenty-
five (25) years on the date of retirement. In no event shall this amount, exceed $100.00,
per month.
For the purpose of determining the cost-of-living adjustment of benefits, the following
terms are defined here:
ADJUSTMENT DATE means each Yearly Date on and
after January 1, 1992 on which the Price Index has changed
by at least 1% from the Price Index on the last preceding
"Yearly Date as of which monthly retirement benefit
payments under this Plan were changed (on January 1,
1992 if no prior changes have been made).
ADJUSTMENT FACTOR means, as of any Adjustment
hate, the quotient of (a) divided by (b):
1. The Price Index as of such Adjustment Date.
2. The Price index as of the last previous adjustment Date. In no
event, however, will the Adjustment Factor exceed 1.03.
ANNUITANT means an Inactive Participant whose Retirement Date has
occurred and who is entitled to monthly retirement benefit payments under
this Plan.
PRICE INDEX means, as any Yearly Date, the Consumer Price Index
(U. S. city average for all urban consumers, all items) for the fourth month
immediately prior to such Yearly Date, as published by the United States
Department of Labor.
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May.16. 2007 2.40PM Borough of Shippensburg No-1566 P. 17
As of each Adjustment Date, the amount of monthly retirement benefit payments payable
to an Annuitant will be changed to the amount determined by multiplying such payments by the
adjustment factor as of such Adjustment Date, subject to the following provisions:
1. If such change results in an increase in the amount of monthly retirement
benefit payments to an Annuitant, an amount of monthly retirement benefit
will be provided for him or her under the Group Contract in the amount of
such increase with payment consistent with the payments being made as to the
monthly retirement annuity provided under the Group Contract on the
Participant's Retirement date.
2. Any cost-of-living increase will not exceed the percentage increase in the
Price index from the last year in which the Annuitant was an Employee and in
no event, will the amount of monthly retirement benefit payments for an
Annuitant after the date of the increase be more than 130% of the amount he
or she would have received had the provisions of this Article not been in
effect.
3. If such change results in a decrease in the. amount of the monthly retirement
benefit payments to an Annuitant, an amount or amounts of monthly
retirement benefit previously provided for him or her under the Group
contract will be canceled as of such Adjustment Date so that the total amount
of monthly retirement benefit remaining will be only the reduced amount to
which he or she is then entitled.
4. In no event will any decrease become effective which would reduce the
monthly retirement benefit payments for an Annuitant to an amount which
would be less than the amount he or she would have received had the
provisions of this Article not been in effect.
S. No cost-of-living increase will be made if such increase would impair the
actuarial soundness of the Plan.
6. On and after the effective date of termination of the Plan, no ftuther changes
in monthly retirement benefit payments will be made in accordance with this
Article.
7. Each Police Officer shall be permitted to purchase his or her years of service
in the military service of the United States, prior to employment with the
Borough, for credit to their service. The cost to purchase such service shall be
computed according to the formula set forth in the Police Pension Fund,
Section 5, Act of December 19, 1990, P.L. 1238, No. 205 § 1, 53 P.S. 770.
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May.16. 2007 2:41PM Borough of Shippensburg No.1566 P. 18
8. The Pension Plan shall provide to the Shippensburg Police Association a copy
of the carrent Police Pension Plan.
9. To the extent applicable by law, the distribution of the pension assets shall be
is accordance with Section 6 of Act 111 Interest Arbitration (AAA-55L 360
0323 99W) Award which is attached hereto as Exhibit "A" and incorporated
herein by reference thereto.
10. The Borough shall, as soon as practical, adopt the necessary measures to
effect such changes, subject to the certification of the actuarial soundness of
the plan by the Borough's pension advisors.
ARTICLE XV
PERSONAL LEAVE
All full time Police Officers shall be eligible for sixteen (16) paid personal leave days per
calendar year in lieu of holidays.
A Police Officer shall earn personal days at the rate of 6.15384% of all regular hours
paid, with the maximum entitlement being sixteen (16) personal days. Regular hours paid shall
include hours worked, including vacation, personal leave, and sick leave, but shall not include
call time, court time, standby time, unpaid leaves of absence, bereavement leave, or meetings.
Unless an emergency exists, the Chief of Police shall be notified at least two (2) weeks in
advance of the dates selected by a Police Officer for personal leave. Personal leave shall be
scheduled and granted for days requested by the Police Officers, subject to management's
responsibility to maintain efficient operations. If the mature of the work makes it necessary to
limit the number of Police Officers on personal leave at the same time, the Police Officer with
the greatest seniority, as it relates to total years of continuous service with the Borough, shall be
given his or her choice of personal leave in the event of any conflict in selection.
Personal leave may be anticipated during a calendar year, but are non-accumulative. If a .
Police officer, because of the demands of his/her work, is denied personal leave days when
requested, then the Borough, at its option, shall make payments to the Police Officer at time and
one-half during the following January for unused personal leave requested, but not approved, or
may grant compensatory leave to the Police Officer. If compensatory leave is granted in the
following year, it shall be used within the first six (6) months of the next calendar year.
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May.16, 2007 2:42PM Borough of Shippensburg No.1566 P, 19
ARTICLE M
ULARY
Salaries reflect an increase of 0% for contract year 2001, and 1.5% for contract year
2002.
(a) The following chart indicates the base salaries of Police Officers hired prior to
January 1, 1994 to be effective as of January 1, 2001 through, December 31, 2002.
2001 2002
$372832.05 $38,399.53
(b) The following chart indicates the base salaries of the police Sergeants to be effective
during this Agreement:
2001 2002
$40,194.83 $40,797.75
(c) The following chart indicates the base salaries of Police Officers hired after January
1, 1994 to be effective during this Agreement:
Y.eneth of Service 2001 2002
0-12 months $25,426.28 $25,807.67
13-24 months $27,436.17 $27,847.71
25-36 months $29,446.06 $29,887.75
37-48 months $31,455.95 $31,927.79
49 to 60 months $33,465.83 $33,967.82
61-72 months $35,475.73 $36,007.87
After 72 months $37,832.05 $38,399.53
(d) Sergeants shall receive an amount of Three Thousand Dollars ($3,000.00) annually
above the appropriate base salary set forth above.
(e) Corporals shall receive an amount of One Thousand Five Hundred Dollars
($1,500.00) annually above the appropriate base salary.
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May.16. 2007 2:43PM Borough of Shippensburg No.1566 P. 20
ARTICLE XVII
OFF-DUTY COURT APPEARANCES AND MEETINGS
Borough agrees that in addition to other increases in Police Officer's compensation
hereinafter set forth, Police Officers shall be compensated for all off-duty court appearances
before any Court or District Justice or for any police meetings a Police Officer is required to
attend as follows:
1. District Justice:
Any Police Officer who is required to appear before a District Justice to
attend a hearing or to file charges at a time when he or she is not regularly
on duty shall be paid at the appropriate rate for all said time, subject to a
minimum time of two (2) hours at straight time, if the hearing is before a
District Justice presiding in District Court 09-3-01 and minimum time of
tbree (3) hours of straight time if the hearing is before a District Justice
presiding in any other District Court.
2. Court Appearances:
Any Police Officer who is required to appear before any court of record at
a time when he or she is not regularly on duty shall be paid at the
appropriate rate for all said time, subject to a minimum payment of the
equivalent of five (5) hours straight time. Police Officers shall log the start
and stop of all time involved in such appearances at the Police Deparhment
Office.
If a court case or heating is cancelled within 12 hours of the scheduled
time for the commencement of such case or hearing, the Police Officer
shall be paid the minimum guaranteed hours at the straight time rate for
such scheduled appearance.
3. Meow:
Any Police Officer who is required by the Borough to attend police
meetings at a time when he or she is not on regularly scheduled duty shall
be paid for hours in attendance at such meetings at the appropriate rate.
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May.16, 2007 2:43PM Borough of Shippensburg No-1566 P. 21
4. Method of Compensation;
All witness fees received from any Court by a Police Officer for such
attendance, plus mileage, when testifying in a court of law at the minor
judiciary or the Court of Common Pleas where said testimony relates to
facts or occurrences resulting from his or her employment in the Borough,
received by the Police Officer shall be remitted to the Borough.
Each. Police Officer shall, when feasible, notify the Chief of Police in
advance of such off-fluty appearances and police meetings, and in all cases
notify the Chief of Police of his or her off-duty appearance and police
meetings within ten (10) days after such appearance, and shall at such time
requisition for payment.
Payments for the aforesaid appearances by Police Officers shall be made
monthly by Borough or may, at the option of the Borough, be added to the
Police Officer's next regular pay.
The Borough shall provide a maximum payment of $5.00 for breakfast,
$10.00 for lunch and dinner to any Police Officer who is required to be
away from the jurisdiction at a training seminar or court appearance for a
period of greater than four (4) hours and over such a meal period. The
Police Officer shall provide the Borough with a reimbursement request,
accompanied by the actual receipt for such meals.
Nothing contained in this Article XV shall in any way limit the right of the
Borough or the Chief of Police to change scheduling of any Police Officer.
.ARTICLIE XVM
HOURS OF WOYtK
Each Police officer shall be scheduled to work eighty (80) hours per pay period. A pay
period is defined as a period of fourteen (14) consecutive calendar days commencing at 6:00
a.m., prevailing time, on the first day of the calendar week in which the Police Officer begins
work and ending at 5:59 a.m., prevailing time, on the fourteenth (14th) day thereafter. In the
event that the above work week conflicts with the payroll schedule of the Borough, the parties
agree that they will meet and discuss any proposed change to the defined work week.
Alf Police Officers who are required to work in excess of eighty (80) hours, per pay
period, shall be compensated at the rate of time and one-half for all hours worked in excess of
eighty (80) hours; provided, however, that this shall in no way be construed to give any Police
Officer an absolute right to demand and receive any work to which he or she would be entitled to
21
May. 16. 2007 2:44PM Borough of Shippensburg No. 1566 P. 22
be compensated at the said rate of time and one-half. Overtime shall be paid only for hours
actually worked in excess of eighty (80) hours in a pay period or while the Police Officer is on
vacation or personal leave and shall not include sick leave, court time, call time, disability leave,
unpaid leave of absence, bereavement leave, off-duty court appearance or meetings.
Except in an emergency situation, a shift change cannot be made less than four (4) hours
prior to the beginning of the scheduled shift. Police Officers shall notify the Chief at least five
(5) hours prior to the beginning of their shift if they will not be able to report to work due to
illness or other emergency conditions, when practical.
in calculating a Police Officer's base hourly rate for overtime purposes, the payment of
longevity compensation under Article XV11 shall not be included in the calculation, except in the
case of overtime ls, paid in accordance with the Fair Labor Standards Act.
ARTICLE =
LONGEVI'T'Y
Every Police Officer shall be entitled to an additional longevity compensation upon the
anniversary of the required number of years of service as set forth below. Longevity payment
shall be paid according to the following schedule, upon the anniversary of the required number
of years of service, to be paid one-half on April 1 and the remaining one-half on October 1 of
each year, as follows:
Years of Service %of Salary
g years 2%
12 years 4%
16 years 5%
20 years 6%
Longevity payment shall be paid according to the following schedule, upon the
anniversary of the required number of years of service to Police Officers hired after January 1,
1994, to be paid one-half on April 1 and the remaining one-half on October 1 of each year, as
follows:
Years of Service % of Salary
g years 1%
12 years 2%
16 years 3%
20 years 4%
25 years 5%
22
May.16. 2007 2:45PM Borough of Shippensburg No-1566 P. 23
ARTICLE XX
CALL TBM
Whenever a Police officer is required to report for duty at a time when he or she is not
regularly on duty, and not being an extension; before or after the Police Officer's normally
scheduled tour of duty, such Police Offices shall be guaranteed a minimum of two (2) hours pay
at the appropriate rate.
ARTICLE MU
SHIFT DF"ERENTIAL PAY
Whenever a-Police Officer is assigned to, and works any hours between the hours of 2:00
p.m. and 6:00 am., such Police Offices shall be paid as compensation, in addition to the officer's
regular hourly base, an additional $0.75 for each of those shift differential hours worked for
contract year 2001, and contract year 2002
ARTICLE XXH
STANDBY COMPENSATION
Whenever a Police Officer is ordered on standby by order of the Chief of Police, that is to
say, whenever a Police Officer is ordered to be available for immediate duty, but not to include
those times when the Chief of Police designates another Police Officer to serve as Acting Chief
of Police in the Chief of Police's absence, such Police Officer shall be compensated for his or her
hours on standby as follows:
1. One Dollar Twenty--five Cents ($1.25) per hour for each hour or fraction
thereof while on standby, provided the fraction exceeds thirty-one (31)
minutes.
2. If a Police Officer is on standby for more than two (2) hours, a minimum
of Five ($5.00) Dollars.
23
May. 16. 2007 2:45PM Borough of Shippensburg No. 1566 P. 24
3. All standby in excess of five (5) hours shall be compensated at One Dollar
Twenty-five Cents ($1.25) per hour as set forth in Item No. 1 above.
ARTICLE IOIIII
N EMBERSEUP AT A LOCAL MNESS CENTER
Any Full-Time Police Officer who wishes to join the local fitness center, Shippensburg
Fitness Center, is entitle to receive a fifty (50) percent reimbursement of membership cost under
the following reasonable restrictions and exceptions agreed upon by the Borough and the
Shippensburg Police Association:
Local Fitness membership program will be at the Shippensburg Fitness
Center, 2. Police Officers who choose to enroll in said Local Fitness membership
program shall pay one hundred (100) percent of the costs of the enrollment
and submit monthly invoices to the Borough for a fifty (50) percent cost
reimbursement;
Police Officers who choose to utilize the Local Fitness membership
program shall be required to use the facility two (2) times a week for one
(1) hour exercise workouts each time;
4. Police Officers will be required to render an accounting of their exercise
schedules via a card system accounting to the Borough monthly;
5. Police Officers shall be excused from a mandatory exercise schedule for
court appearances, schooling, sickness, or training;
6. if a Police officer who has enrolled in said Local Fitness membership
program fails. to maintain required exercise schedule for two (2)
consecutive months without proper excuse as mentioned above or is
otherwise deemed to be abusing this benefit, the Borough has the
discretion to refuse payment of its portion of the cosh of membership for
the remaining term of this contract
7. Said privileges shall become effective on January 1, 2001, and shall
remain effective until the end of the contract on December 31, 2002.
24
May,16. 2007 2:46PM Borough of Shippensburg No-1566 P. 25
ARTICLE XXIV
SHIPPENSBURG BOROUGH POLIO ROSTER
a) Subject to the terms and provisions of this Agreement, the Borough agrees to hire the
following full time persons, currently mexnbers of the Mid-Cumberland Valley Police
Department, as officers of the Shippensburg Police Department:
Police Officer Position
Robert Van Syoc Sergeant
Jeffrey Shubert Corporal
Scott Wolfe Corporal
David Lively Officer
David Herb Officer
Eric Varner Officer
Michael Rinaldi Officer
b) The Shippensburg Police Association agrees that should any of the officers identified
above leave the employment of the Borough of Shippensburg Police Department by means of
retirement, voluntarily leaving employment, discharge, death or for any other reasons, the
Borough shall not be required to replace said officer's full-time position and/or shall not
otherwise be required to hire another full-time officer to replace the dull time position.
Notwithstanding the foregoing, the parties hereby recognize and affirm that the number of
officers employed by the Borough to provide police services to the community is solely in the
managerial discretion of the Borough.
c) During the term of this Agreement, no full time police officer as set forth above shall
for reasons of economy be furloughed unless all part-time officers' position are eliminated. 11e
parties hereby agree that this subsection shall not be an automatic carryover from the previous
contract for future contracts subject to negotiation.
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May,16. 2007 2:47PM Borough of Shippensburg No-1566 P. 26
ARTICLE XXV
RATIFICATION OF THE AGREEMENT
The terms of this Agreement when agreed upon by the appointed negotiating committee,
shall be ratified by both the majority members of the Police Department and the Borough before
the Agreement can be considered final. Ratification shall be by the Shippensburg Police
Association and then followed by the Borough.
ARTICLE 30M
DURATION OF AGREEMENT
The duration of this Agreement shall be two years in length, and this Agreement shall
become effective as of, and the effective date of this Agreement shall be, January 1, 2001, and
shall remain in full force and effect through December 31, 2002. It shall automatically be
renewed from year to year thereafter, unless either party shall give the other party notice of
desire to terminate, modify, or otherwise amend this Agreement; such notice shall be given in
accordance with the provisions of the Act of June 24, 1968, Act 111, of the Legislature of the
Commonwealth of Pennsylvania.
ARTICLE XXVII
RIGHT TO REOPEN
During the terra of this Agreement the Shippensburg Borough Police Association may
exercise the right to re=open this Agreement limited solely to Article XVI entitled Salaries only
in the event that the Borough of Shippensburg executes a contract for the provision of police
semces outside the corporate limits of the Borough with another municipality in an amount in
and provides compensation to the Borough in excess of Fifty Thousand Dollars ($50,000.00) in
any given contract year.
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May.16. 2007 2:47PM Borough of Shippensburg No-1566 P. 27
ARTICLE JAXVIII
SIGNING AND RATIFICATION
IN WITNESS WHEREOF, the Borough and the Police Officers of the Shippensburg
Police Association, intending to be legally bound hereby, have hereunto affixed their hands and
seals the day and year first written.
ATTEST:
Borough Secretary
APPROVE:
SHIPPENSBURG BOROUGH
By: X/ a
Co cil President
Mark Buterbaugh
-1 'it
Mayor
WITNESS:
SHIPPENSBURG POLICE
ASSOCIATION
By:
President
27
May.16. 2007 2:48PM Borough of Shippensburg No-1566 P. 28
EXHIBIT G
COLLECTIVE BARGAINING AGREEMENT
BETWEEN
THE BOROUGH OF SHIPPENSBURG
AND THE
SHIPPENSBURG POLICE ASSOCIATION
DURATION
JANUARY 1, 2003 THROUGH DECEMBER 31, 2007
TABLE OF CONTENTS
ARTICLE I - RECOGNITION ...............................................................................4
ARTICLE II - EFFECT OF THE AGREEMENT ............................................ .....4
ARTICLE III - PRECEDENCE OF LAWS AND REGULATIONS .............. .....5
ARTICLE IV - MANAGEMENT RESPONSIBILITIES ................................ .....5
ARTICLE V - GRIEVANCES ......................................................................... .....5
ARTICLE VI - STRIKES ................................................................................. .....7
ARTICLE VII - EQUIPMENT AND UNIFORMS ......................................... .....7
ARTICLE VIII - TRAINING ............................................................................ .....8
ARTICLE IX - SCHOOLING ........................................................................... .....9
ARTICLE X - VACATION .............................................................................. ...10
ARTICLE XI - SICK LEAVE ......................................................................... ...11
ARTICLE XII - LEAVE .................................................................................... ...12
ARTICLE XIII - INSURANCE ......................................................................... ...12
ARTICLE XTV - PENSION PLAN ................................................................... ...17
ARTICLE XV - PERSONAL LEAVE .............................................................. ...19
ARTICLE XVI - SALARY .............................................................................. ...20
ARTICLE XVII - OFF-DUTY COURT APPEARANCES AND MEETINGS .21
ARTICLE XVIII - HOURS OF WORK ............................................................ ...23
ARTICLE XIX - LONGEVITY ...........................................................................23
ARTICLE XX - CALL TIME .............................................................................24
ARTICLE XXI - SHIFT DIFFERENTIAL PAY ................................................24
ARTICLE XXII - STANDBY COMPENSATION ..............................................25
ARTICLE XXIII - MEMBERSHIP AT A LOCAL FITNESS CENTER ............25
ARTICLE XXIV - SHIPPENSBURG BOROUGH POLICE ROSTER ..............26
ARTICLE XXV - RATIFICATION OF THE AGREEMENT ...........................27
ARTICLE XXVI - DURATION OF AGREEMENT ...........................................27
ARTICLE XXVII - RIGHT TO REOPEN ...........................................................27
ARTICLE XXVIII - SIGNING AND RATIFICATION .................................... ..28
SIGNATURE PAGE ..................................................................................... 28-29
2
T
AGREEMENT
THIS AGREEMENT, made this ?,01*day off -, u s ? , 2002, BY AND BETWEEN
the BOROUGH OF SHIPPENSBURG, a municipal corporation organized pursuant to the laws
of the Commonwealth of Pennsylvania with a business address of 111 North Fayette Street,
Shippensburg, Pennsylvania (hereinafter `Borough") and the SHIPPENSBURG POLICE
ASSOCIATION, a non-profit corporation incorporated under the laws of the Commonwealth of
Pennsylvania, with corporate offices in Shippensburg, Pennsylvania, (hereinafter referred to as
"Police Officers'), through their duly appointed bargaining representatives, pursuant to Act No.
111 of the Legislature of the Commonwealth of Pennsylvania, 1968, June 24, p.l. 237, duly
approved by the Governor of Pennsylvania.
WITNESSETH
THAT WHEREAS, subsequent to the passage of the Act hereinabove referred to, an
Agreement was entered into by Police Officers requiring a secret ballot election for a bargaining
agent for Police Officers for a contract for the years 2003 through 2007;
WHEREAS, such secret ballot was held and count made and more than fifty percent
(50%) of the regular Police Officers voted to designate Corporal Scott Wolfe, Corporal Jeff
Shubert. and Sean Welby, Esquire, as bargaining representatives for the years 2003 through 2007;
WHEREAS, Borough Council was duly notified of said election;
WHEREAS, Borough Council Members, Dr. Gino Torri, Councilman Joseph
Hockersmith, Councilman Earl Parshall, and Solicitor Salzmann were duly appointed bargaining
agents on behalf of the Borough;
WHEREAS, said bargaining agents met and referred proposals to the groups which they
represent, the same having been approved by the majority of each group;
NOW THEREFORE, KNOW YE, that in consideration of the mutual promises and
covenants herein set forth; and with due regard to the mutual understanding and harmony among
Police Officers and the Borough, the parties hereto agree as follows:
3
ARTICLE I
RECOGNITION
The Borough hereby recognizes the Shippensburg Police Association as the sole
representative of all full-time Police Officers employed by the Borough for collective bargaining
purposes, except the Chief.
ARTICLE II
EFFECT OF THE AGREEMENT
This instrument constitutes the entire Agreement between the Police Officers and the
Borough and has been arrived at as a result of collective bargaining negotiations.
The parties acknowledge that during the negotiations which resulted in this Agreement,
each had the. unlimited right and opportunity to make demands with respect to any subject or
matter not removed by law from the area of bargaining, and that the understanding and
agreements arrived at by the parties after the exercise of that right and opportunity are set forth in
this Agreement. Therefore, the Borough and the Police Officers for the life of this Agreement,
each voluntarily and unqualifiedly waives the right, and each agrees that the other shall not be
obligated, to bargain collectively with respect to any subject or matter referred to or covered by
this Agreement. This provision also maintains the right of both parties as set forth in the
grievance provisions of Article V.
The waiver of any breach or condition of this Agreement by either party shall not
constitute a precedent with respect to the future enforcement of all the terms and conditions of
this Agreement.
No provisions of this Agreement shall be retroactive prior to the effective date of this
Agreement, which is January 1, 2003, unless otherwise specifically stated herein.
Except as set forth herein, this Agreement shall in no way eliminate, remove or deprive a
Police Officer of any benefits previously enjoyed under prior resolutions, ordinances and
employment policies of the Borough effecting terms and conditions of said Police Officer's
employment.
4
ARTICLE III
PRECEDENCE OF LAWS AND REGULATIONS
The public interest in the accomplishment of the purpose of the Police Department is
paramount.
In the administration of all matters covered by this Agreement, all parties are governed
by the provisions of any existing laws, regulations, ordinances, personnel rules and regulations
and policies, which are not changed or eliminated by the provisions of this Agreement. This
Agreement is also subject to future enactments of the Commonwealth of Pennsylvania or judicial
determination which may specifically affect the provisions of this Agreement, or the provisions
of Act No. 111 of June 24, 1968. Except as set forth in Article II paragraph 5, where such
regulations, ordinances or policies are not affected or changed by the provisions of this
Agreement, the same may in the future be amended and changed from time to time without any
restraint by this Agreement.
ARTICLE IV
MANAGEMENT RESPONSIBILITIES
The parties agree that except for the limitations or other provisions of this Agreement,
there are functions, powers, responsibilities, and authorities belonging solely to the Borough.
Some of these as powers, responsibilities, and authorities, as they pertain to the Borough, are the
hiring of Police Officers, including the determination to hire a replacement for any police officer
who has left employment by reason of death, disability retirement, discharge or for any other
reason, the advancement of Police Officers to be employed or retained in employment, the
suspension, demotion, or discharge of Police Officers; the establishment and maintenance of
standards of quality and performance; the establishment of a budget or long range plans for the
police activities consistent with other provisions of this Agreement.
ARTICLE V
GRIEVANCES
For the purpose of this Agreement, the term "grievance" means a difference between an
individual Police Officer of the Shippensburg Police Association and the Borough with respect
to the interpretation, application, claims of breach or violation of any provisions of this
Agreement, or as the term "grievance" may be otherwise intended by Act 111 of June 24, 1968.
Grievances are limited to matters involving interpretation of this agreement. Any such
"grievance", as aforesaid, shall be adjusted as follows:
5
Step 1 - The Police Officer, either alone or accompanied by a representative of
the bargaining unit, or the bargaining unit itself, shall present the grievance in
writing to the Chief of Police within seven (7) days of its occurrence or knowledge
of its occurrence. The Chief of Police shall report his decision in writing to the
Police Officer and the bargaining unit representative within five (5) days of its
presentation.
Step 2 - In the event that the grievance is not settled at Step 1, an appeal must be
presented in writing by the Police Officer or the bargaining unit representative to
Borough Council within five (5) days after the response at Step I is due. The
Borough Council shall respond in writing to the Police Officer or the bargaining
unit representative within five (5) days after receipt of the appeal.
Step 3 - In the event that the grievance has not been satisfactorily resolved in Step 2, the
Police Officer or bargaining unit representative may initiate an appeal by serving upon
the Borough Council a notice in writing of his intent to proceed to arbitration within
seven (7) days after receipt of the Step 2 decision.
Step 4 - The arbitrator is to be selected by the parties jointly within seven (7) days
after notice has been given. If the parties fail to agree on an arbitrator, either
party may request the American Arbitration Association to submit a list of three
(3) possible arbitrators.
Step 5 - The parties shall meet within seven (7) days of the receipt of said list for
the purpose of selecting the arbitrator by alternating striking one(]) name from
the list, until only one (1) name remains. The employer strikes first.
The arbitrator shall neither add to, subtract from, nor modify the provisions of this
agreement. The arbitrator shall confine himself or herself to the precise issues submitted for
arbitration. The arbitrator has no authority to determine any other issues not submitted to him or
her.
The decision of the arbitrator shall be final and binding on both parties. The arbitrator
shall be requested to issue his or her decision within thirty (30) days after the hearing.
All of the time limits in this article may be extended by mutual agreement.
All fees and expenses of the arbitrator shall be divided evenly between the parties. Each
party shall bear the costs of preparing and presenting its own case.
The bargaining unit representative has the right to appear with the grievant at all steps of
the grievance procedure. It is the sole responsibility of the grievant to notify the bargaining unit
when a grievance has been filed.
6
ARTICLE VI
STRIKES
The Police Officers agree that they shall not authorize, ratify, or participate in any strikes
(in the accepted interpretation of the term), nor work slowdown or similar practices in
connection with their duties as Borough Police Officers
If a Police Officer engages in such conduct, he or she shall be deemed to have neglected
or violated his official duties as defined in the Police Policy Manual.
ARTICLE VII
EQUIPMENT AND UNIFORMS
The Borough shall provide Police Officers with guns, ammunition, and other necessary
police accessories. The Borough shall also provide appropriate police uniforms.
The term "appropriate police uniforms", shall include approved shoes, appropriate leather
gear for police uniforms, cold weather head gear, winter overshoe boots, one (1) waist-length
jacket for spring and fall use, one (1) topcoat for cold weather use, summer campaign hat, winter
campaign hat, rain hat cover, and rain coat.
Appropriate initial police uniforms shall be issued to Police Officers in a basic issue of
three (3) winter uniforms and five (5) summer uniforms.
Uniform items shall be supplied to each Police Officer when necessary. All shoes
purchased by the Borough shall be used solely when a Police Officer is on duty. The
Shippensburg Police Department may, in lieu of replacing a set of shoes, resole and reheel said
shoes, if, in the opinion of the Borough, the condition of the shoes warrants such resoling.
A plain clothes officer, if any, shall receive the sum of Three Hundred Dollars ($300.00),
per year, as a clothing allowance.
Uniforms shall be the property of the Borough and shall be returned to the Borough when
any officer leaves the service of the Borough, whether by retirement, termination of employment
by the Borough, layoff, or death.
Each Police Officer shall be provided a dry cleaning allowance of One Hundred Dollars
($100.00) per annum on January 1 of each year.
7
ARTICLE VIII
TRAINING
The Chief of Police shall post available information on training and educational programs
in an appropriate location in the department. The Shippensburg Police Department encourages
the participation of the employees in any such training and educational programs which relate to
a Police Officer's job and responsibilities. Any Police Officer may submit an application for
attendance at educational and training programs in this regard. However, the decision as to
whether or not such application is approved by the Borough shall be at its sole discretion and its
decision shall be final and binding. The granting or refusal of any application shall not be
deemed to be precedent in the granting or refusal to grant any subsequent applications.
It shall be the responsibility of the Chief of Police to determine what training will be
given, who will administer the training, who will participate in the training, and what the
schedule for said training will be. Training which is authorized and approved by the Borough,
shall be paid for at the appropriate rate.
The compensation for training shall be provided as follows:
0 - 8 hours In a Day Officer's Regular Hourly Base
After 8 hours In a Day Officer's Time and a Half Hourly Base
8
ARTICLE IX
SCHOOLING
If a Police Officer enrolls in a college level course leading to a Bachelor's Degree in the
Administration of Criminal Justice, the Borough shall pay to each Police Officer so enrolled, as
additional compensation, a portion of the basic fee charged for such courses, such percentage of
compensation to be paid according to the following schedule:
0 - 30 credit hours No compensation
31 - 60 credit hours 50% of basic fee
61 - 90 credit hours 75% of basic fee
91 -120 credit hours 100% of basic fee
The above compensation shall be paid by the Borough to Police Officers upon the Police
Officer furnishing to the Borough satisfactory proof in the form of grade statements from the
educational institution showing satisfactory completion of the courses in which the Police
Officer has enrolled.
No compensation shall be paid to any Police Officer for any course that is failed, from
which the officer withdraws or received a grade of "D" or "Incomplete".
The costs paid by the Borough for each course taken shall be reduced by the amount, to
which an officer is eligible to receive either by veterans benefits, grants, scholarships or any
other source, of money received for educational enrichment.
Enrollment in college level courses leading to the degree in the Administration of
Criminal Justice shall be subject to prior scheduling approval by the Chief of Police.
9
ARTICLE X
VACATION
Each full-time regular Police Officer shall be eligible for vacation with pay after one (1)
year of service in each calendar year employed. Leave shall be earned according to the following
schedule:
FOR OFFICERS HIRED PRIOR TO DECEMBER 31,1993:
SERVICE VACATION ALLOWANCES
Up to 5 years 10 Days
After 5 years 15 Days
After 15 years 20 Days
After 20 years 25 Days
FOR OFFICERS HIRED AFTER JANUARY 1,1994:
SERVICE
After 1 year to 5 years
After 5 years
After 15 years
25 years and up
VACATION ALLOWANCES
10 Days
15 Days
20 Days
25 Days
Vacation leave entitlement shall be calculated at the beginning of each calendar year
when a Police Officer's first, fifth, fifteenth or twentieth service anniversary occurs during the
calendar year. A Police Officer shall earn additional leave for each calendar month after such
anniversary date according to the following schedule:
After 1 year
After 5 years
After 15 years
After 20 years
1 day per month
1/2 day per month
1/2 day per month
1/2 day per month
In no event shall the total vacation leave entitlement exceed the appropriate annual
entitlement.
Full-time Police Officers may accumulate up to one (1) year's annual vacation leave
entitlement.
10
ARTICLE XI
SICK LEAVE
All full time Police Officers shall be granted paid sick leave upon notice of illness or off-
duty injury of such nature and severity as to make a Police Officer unable to satisfactorily
perform his or her duties. No paid sick leave, in excess of three (3) successive working days,
shall be granted unless a suitable statement from a qualified physician, attesting to the disability
of the Police Officer is furnished to the Borough. For absences of less than three (3) days, a
doctor's certificate may be required where the Borough has substantial reason to believe the
Police Officer has been abusing his or her sick leave privileges.
Full-time Police Officers may also use up to five (5) days leave for the purpose of
attending to a sick child or spouse who has a life threatening illness or catastrophic injury.
Pay shall be at regular straight time rate.
After ninety (90) days of continuous service, sick leave shall be granted to the extent
earned under the following schedule:
1. One and one-fourth (1-1/4) days of sick
leave earned for each month service.
2. Sick leave not used in any calendar year
may be accumulated from year to year. Such
accumulated sick leave shall not exceed 200
days.
Except in an emergency situation, a shift change cannot be made less than four (4) hours
prior to the beginning of the scheduled shift. Police Officers shall notify the Chief at least five
(5) hours prior to the beginning of their shift if they will not be able to report to work due to
illness or other emergency conditions, when practical. Failure to do so may be cause for losing
sick leave benefits for the period of illness.
At either the death or retirement of a Police Officer, the Borough shall pay for earned, but
unused accumulated sick leave, at the rate of thirty-five (35%) percent of said unused
accumulated sick leave, according to the following formula:
The Formula for calculating this payment is P = S X .35 X B,
where "P" is the payment in full, "S" is the total accumulated sick
leave (not to exceed 200 days), and "B" is the hourly prorated base
salary. Maximum accumulation for officers hired after January
1, 1994 shall not exceed 100 days. J
11
The payment for accumulated sick leave shall be paid to the Police Officer within thirty
(30) days of his or her retirement or death. If no personal representative has been appointed on
the 31st day following a Police Officer's death, then payment shall be made to the person the
Police Officer designated as beneficiary of his or her group life insurance policies referred to
hereinafter.
ARTICLE XII
LEAVE
A Police Officer may apply for an unpaid leave of absence, providing such request is for
good cause. A determination, however, as to whether the leave shall be granted shall be at the
sole discretion of the Borough, and that decision shall be final and binding. The granting or
refusal to grant leave shall not be precedent in the granting or refusal to grant leave for any
subsequent request by the same Police Officer or other Police Officers.
Full-time Police Officers shall receive up to five (5) days paid leave for the purpose of
attending the funeral or attending to the affairs of a deceased spouse, parent or child. Police
Officers shall receive up to three (3) days paid leave for the purpose of attending the funeral of a
brother, sister, grandparent, grand-child, son- or daughter-in-law, brother- or sister-in-law,
parent-in-law, grandparent-in-law, or any relatives residing in the Police Officer's household.
The Police Officer shall be eligible for bereavement leave after one (1) year of service. For a
paid leave of absence the Police Officer shall be paid his or her normal salary for hours in his or
her regularly scheduled shift not to include shift differential. However, a Police Officer who has
less than one (1) year of service may substitute his or her personal leave for the purposes of
bereavement in accordance with the provisions relating to bereavement as set forth herein.
ARTICLE XIII
INSURANCE
The Borough shall provide. each Police Officer and his or her dependents with Blue
Shield, PPO High Option Insurance.
When a Police Officer is eligible for coverage as a dependent or additional party under
his or her spouse's medical plan, the Police Officer shall have the option to accept such coverage
and not be covered by the Borough Plan. The Police Officer shall notify the Chief of Police of
his or her election, in writing, not less than thirty (30) days prior to the effective date. In the
event the Police Officer or his or her spouse becomes . ineligible for coverage under his/her
spouses' medical plan, upon timely notice to the Chief of Police of such event, the Police Officer
and/or spouse will immediately become eligible for coverage under the Borough Plan. Nothing
contained in this paragraph shall in any way make the Borough liable for the failure of the
12
contained in this paragraph shall in any way make the Borough liable for the failure of the
medical carrier to include said. Police Officer or his or her spouse under the Borough's medical
plan.
When a Police Officer shall have elected to decline coverage under the Borough medical
plan, the cost savings to the Borough shall be computed by the Chief of Police. On the thirtieth
(30th) day of the months of March, June, September and December, each Police Officer who has
elected to decline such coverage shall be paid an amount equal to one-half of the cost of such
medical coverage for the months which coverage was declined, said amount shall be net of taxes,
but shall not be included in calculations for base pay, longevity, unemployment compensation,
worker's compensation and so forth. A Police Officer may not elect to decline coverage or to be
included under such coverage more often than one time in each calendar year, except where he
or she is ineligible under his/her spouse's medical coverage.
The Borough and the Police Association hereby establish a fund entitled the Post-
Retirement Health Care Fund for the exclusive and restricted purposes of providing a supplement
to offset a portion of the costs of health care coverage for police officers who retire after January
1St, 2003 who were employed by the Borough (including years of employment with the former
Mid-Cumberland Valley Regional Police Department) for a period of at least twenty-five (25)
years until the officer reaches the age of Medicare eligibility or the age of eligibility for some
other form of federal and/or state provided health care coverage. The parties recognize that
contributions to the fund are to be shared by all employed full-time officers who are members of
the Police Association equally with the Borough. The fund shall require contributions in equal
amounts from the Borough and all employed full-time police officers as set forth below. The
parties agree that the amount of contribution was established based upon a potential calculated
benefit of up to Five Hundred Dollars ($500.00) a month for police officers who retire with
twenty-five (25) years of employment with the Borough after January 1", 2003, until the present
Medicare eligibility age of sixty-five (65) and seven full-time police officers who are members
of the Police Association. However, the parties recognize that there have been certain
assumptions built into the potential calculated benefit (such as rate of return on invested fund
assets, number of full-time officers, etc.) that may or may not occur which could negatively
impact the potential calculated benefit. The parties agree that this fund is to serve as only a
supplement to assist a retired officer to offset a portion of his or her costs of health care coverage
and will not and is not intended to fully cover the costs of health care coverage. The parties also
recognize that health care costs are anticipated to continue to rise in the future and the fund is not
designed to nor is intended to keep pace with or cover rises in health care coverage in the future.
Furthermore, the parties agree that any changes to the contribution rate and/or potential
calculated benefit of the fund could cause an exponential effect which would have serious long-
term adverse effects which the parties agree would be disadvantageous and would not be
consistent with the purpose for which the fund was established.
After the effective date of this Agreement, the parties agree to allow a police officer who
has been employed by the Borough of Shippensburg for at least twenty-five (25) years to receive
assistance in maintaining health care coverage from the time of his or her retirement until the
police officer reaches the age upon which he or she is eligible for Medicare or some other similar
13
form of federal and/or state provided health care coverage. Any and all benefits paid from the
fund shall automatically cease for the retired officer upon the date of his or her eligibility for
Medicare health care coverage or some other form of federal and/or state provided health care
coverage. This supplement shall be provided from funds placed in an interest-bearing account
established solely for the purpose of post-retirement health care coverage and for no other
purpose whatsoever. The contributions to the fund and any and all disbursements made from the
fund shall be borne by each and every Police Officer who is a member of the Shippensburg
Police Association and the Borough contingent upon the following:
a. Each and every Police Officer shall contribute to the fund in an amount of Thirty-
Two Dollars ($32.00) per pay throughout each and every contract year. The
Police Association reserves the right to unilaterally require its members to
increase their contribution amount per pay to the fund. However, an increase in
police officer contributions shall not require the Borough to increase its fixed
amount of contribution as set forth below in any manner whatsoever.
b. The Borough shall make a fixed contribution each contract year of Five Thousand
Eight Hundred and Twenty-four Dollars ($5,824.00) based upon an amount equal
to the collective contributions of seven full-time officers payable to the fund in
two (2) semi-annual payments each in the amount of Two Thousand Nine
Hundred and Twelve Dollars ($2,912.00) with the first payment being made on or
before July l' of each contract year and the second payment being made on or
before December 31" of each contract year. In the event that the number of full-
time officers employed by the Borough should either be increased or decreased,
the amount of contribution by the police officers and the amount of contribution
by the Borough shall be increased or decreased in corresponding fashion. For
example, if the number of full time officers decreased to 6 full-time officers, the
officers' contributions to the fund would be decreased by the amount which
would have been contributed by one officer (1 officer's contribution = $832.00
($32.00 per pay x 26 pays in a contract year)) and the Borough's contribution
would be decreased by the equal amount. No withdrawals may be made from the
fund except for the specific purposes of providing a supplement to health care
coverage to a retired officer who has served as an officer with the Borough for
twenty-five (25) years or for administrative costs associated with the
administration of the fund. All payments for health care coverage benefits for a
retired police officer from the fund shall be made directly to the health care
insurance company and shall not be provided directly to the police officer.
The fund shall be administered by a committee entitled the Post-Retirement
Health Care Fund Committee comprised of the Borough Manager, at least One (1)
but no more than three (3) Borough Council Members including the Mayor, the
Borough Solicitor, the Borough Treasurer, and at least two (2) but no more than
three (3) police officers who are contributing to the fund. The committee will
review at least annually decisions regarding the investment of the contributed
funds, retaining the services of an outside professional administrator or financial
advisor, and decisions regarding disbursements to retired police officers from the
14
fund in accordance with this Agreement. Any and all disbursements from the
fund including but not limited to administrative costs and payment of benefits to
health care insurance companies shall be subject to review and approval by the
Post-Retirement Health Care Fund Committee.
In the event that the parties mutually agree to dissolve the fund or in the event the
fund is required to be dissolved by law, all contributions made to the fund by the
police officers and the Borough shall be rolled into the Police Pension Fund
established by this Agreement in order to reduce unfunded liability. In the event
that the parties mutually agree to dissolve the fund, the parties agree to keep
sufficient assets in the fund to continue the benefit for a portion of health care
coverage for eligible officers who have retired after the effective date of this
Agreement and before the time of dissolution by mutual agreement if said eligible
officers are already receiving the health care coverage benefits from the fund in a
potential calculated benefit amount up to Five Hundred Dollars ($500.00) a
month. In the event that such a rollover is determined to be precluded by law or
in the event that it is determined that the pension fund at the time of planned
rollover is financially sound, the contributions made collectively by the Police
Officers shall be returned to the Shippensburg Police Association excepting tax
deductions which may be applicable or legally required before distribution, and
the contributions made by the Borough shall be returned to the general fund of the
Borough."
Group life insurance in an amount equal to $30,000.00 shall be provided to each Police
Officer.
The Borough shall provide and maintain false arrest insurance coverage for every Police
Officer regularly employed by the Borough.
The Borough shall provide and maintain a group prescription insurance program for each
Police Officer and his or her dependents.
The Borough shall provide and maintain a basic dental program for each Police Officer,
with the Delta Dental of Pennsylvania Company, or a similar plan with a reputable insurance
company. The plan provided shall be known as the Blue Plan as provided by the Delta Dental of
Pennsylvania Company. The Borough shall provide dental coverage for each Police Officer's
dependents; provided, however, that in the event that the spouse of a Police Officer has a dental
plan equal to or better than plan offered by the Borough, then the spouse of the Police Officer
shall not be covered by the Borough plan, unless the plan of the spouse requires the spouse to
pay for the said dental plan.
The Borough shall make available to all retired Police Officers, the option of remaining a
member of the Borough's Blue Cross/Blue Shield medical program group life insurance. The
Police Officer shall pay the full cost of any such premium, quarterly, in advance. In the event
the Police Officer fails to pay such premium within thirty (30) days of the due date of the said
15
premium, the coverage shall be discontinued. The Borough shall not be liable for the
discontinuance of said coverage or for payment of any premiums.
For purposes of determining the Borough's obligation to provide coverage for dependents
under this Article, the term "Dependents" shall be defined as the Police Officer's
spouse not legally separated, and for unmarried natural or legally adopted children under the age
of nineteen (19), who are members of the Police Officer's household; in the event that the
Borough obtains a policy which defines the term "Dependent" more broadly, the terms of the
policy under which a claim is made shall be used to determine eligibility for coverage.
The terms of the policy, however, shall not add to, or subtract from the Borough's
obligation as stated above.
INJURY IN THE LINE OF DUTY:
If a Police Officer is injured in the line of duty, which injury results in temporary
disability, the Borough shall continue to pay the injured Police Officer his or her regular
pay from the date of injury until the termination of temporary disability without
deduction of sick leave. The Police Officer so injured and receiving compensation from
the Borough shall be required to endorse and deliver to the Borough his or her
Workmen's Compensation Insurance check.
Temporary disability shall be defined as follows:
1. A period of up to four (4) weeks;
2. Payment for periods longer than four (4) weeks
shall be at the option of the Borough and shall
require the approval of the Borough;
3. The Police Officer's sick leave allowance shall
not be reduced while receiving compensation
herein provided.
NON-OCCUPATIONAL INJURY, SICKNESS AND DISABILITY:
If a Police Officer is unable to work because of a non-occupational accident or illness
which results in disability in excess of thirty (30) days, the Police Officer shall receive a
monthly payment in accordance with the terms of this contract set forth immediately
below as provided by a Disability Income Policy issued by Educators Mutual Life
Insurance Policy (assumed by United Teachers Associates Insurance Company) the
insurer, or an equivalent insurer. Payments shall not be made for the first thirty (30) days
16
of disability, and shall commence with the second month of disability, and shall continue
thereafter for a maximum period of five (5) years.
ARTICLE XIV
PENSION PLAN
Eligible Police Officers covered by the Police Pension Plan shall be entitled to retire upon
attaining the age of fifty (50) years, provided he or she has not less than twenty-five (25)
years of credited service with the Borough of Shippensburg Police Force and/or Mid-
Cumberland Valley Regional Police Department. Provided, however, the provisions
hereof shall be subject to actuarial review pursuant to the Municipal Pension Plan
Funding Standard and Recovery Act, Act of December 18, 1984, P.L. 1005, No. 205, 53
P.S. Section 895.101, et. seq.
The Pension Plan shall provide for a computation base for calculating pensions based
upon the prior three (3) years of service.
The Pension Plan shall include a disability provision.
The Borough Pension Plan shall provide for spousal benefits.
The Borough Pension Plan shall provide for no Social Security offset.
Police Officers shall be entitled to receive, in addition to the pension benefit, an amount
equal to $20.00 multiplied by his or her complete years of service in excess of twenty-
five (25) years on the date of retirement. In no event shall this amount exceed $100.00,
per month.
For the purpose of determining the cost-of-living adjustment of benefits, the following
terms are defined here:
ADJUSTMENT DATE means each Yearly Date on and
after January 1, 1992 on which the Price Index has changed
by at least 1% from the Price Index on the last preceding
Yearly Date as of which monthly retirement benefit
payments under this Plan were changed (on January 1,
1992 if no prior changes have been made).
ADJUSTMENT FACTOR means, as of any Adjustment
Date, the quotient of (a) divided by (b):
17
1. The Price Index as of such Adjustment Date.
2. The Price Index as of the last previous adjustment Date. In no
event, however, will the Adjustment Factor exceed 1.03.
ANNUITANT means an Inactive Participant whose Retirement Date has
occurred and who is entitled to monthly retirement benefit payments under
this Plan.
PRICE INDEX means, as of any Yearly Date, the Consumer Price Index
(U.S. city average for all urban consumers, all items) for the fourth month
immediately prior to such Yearly Date, as published by the United States
Department of Labor.
As of each Adjustment Date, the amount of monthly retirement benefit payments payable
to an Annuitant will be changed to the amount determined by multiplying such payments by the
adjustment factor as of such Adjustment Date, subject to the following provisions:
If such change results in an increase in the amount of monthly retirement
benefit payments to an Annuitant, an amount of monthly retirement benefit
will be provided for him or her under the Group Contract in the amount of
such increase with payment consistent with the payments being made as to the
monthly retirement annuity provided under the Group Contract on the
Participant's Retirement date.
2. Any cost-of-living increase will not exceed the percentage increase in the
Price Index from the last year in which the Annuitant was an Employee and in
no event, will the amount of monthly retirement benefit payments for an
Annuitant after the date of the increase be more than 130% of the amount he
or she would have received had the provisions of this Article not been in
effect.
3. If such change results in a decrease in the amount of the monthly retirement
benefit payments to an Annuitant, an amount or amounts of monthly
retirement benefit previously provided for him or her under the Group
Contract will be canceled as of such Adjustment Date so that the total amount
of monthly retirement benefit remaining will be only the reduced amount to
which he or she is then entitled.
4. In no event will any decrease become effective which would reduce the
monthly retirement benefit payments for an Annuitant to an amount which
18
110
would be less than the amount he or . she would have received had the
provisions of this Article not been in effect.
5. No cost-of-living increase will be made if such increase would impair the
actuarial soundness of the Plan.
6. On and after the effective date of termination of the Plan, no further changes
in monthly retirement benefit payments will be made in accordance with this
Article.
7. Each Police Officer shall be permitted to purchase his or her years of service
in the military service of the United States, prior to employment with the
Borough, for credit to their service. The cost to purchase such service shall be
computed according to the formula set forth in the Police Pension Fund,
Section 5, Act of December 19, 1990, P.L. 1238, No. 205 §1, 53 P.S. 770.
8. The Pension Plan shall provide to the Shippensburg Police Association a copy
of the current Police Pension Plan.
9. To the extent applicable by law, the distribution of the pension assets shall be
in accordance with Section 6 of Act 111 Interest Arbitration (AAA-551, 360
0323 99W) Award which is attached hereto as Exhibit "A" and incorporated
herein by reference thereto
10. The Borough shall, as soon as practical, adopt the necessary measures to
effect such changes, subject to the certification of the actuarial soundness of
the plan by the Borough's pension advisors.
ARTICLE XV
PERSONAL LEAVE
All full time Police Officers shall be eligible for sixteen (16) paid personal leave days per
calendar year in lieu of holidays.
A Police Officer shall earn personal days at the rate of 6.15384% of all regular hours
paid, with the maximum entitlement being sixteen (16) personal days. Regular hours paid shall
include hours worked, including vacation, personal leave, and sick leave, but shall not include
call time, court time, standby time, unpaid leaves of absence, bereavement leave, or meetings.
Unless an emergency exists, the Chief of Police shall be notified at least two (2) weeks in
advance of the dates selected by a Police Officer for personal leave. Personal leave shall be
scheduled and granted for days requested by the Police Officers, subject to management's
19
responsibility to maintain efficient operations. If the nature of the work makes it necessary to
limit the number of Police Officers on personal leave at the same time, the Police Officer with
the greatest seniority, as it relates to total years of continuous service with the Borough, shall be
given his or her choice of personal leave in the event of any conflict in selection.
Personal leave may be anticipated during a calendar year, but are non-accumulative. If a
Police Officer, because of the demands of his/her work, is denied personal leave days when
requested, then the Borough, at its option, shall make payments to the Police Officer at time and
one-half during the following January for unused personal leave requested, but not approved, or
may grant compensatory leave to the Police Officer. If compensatory leave is granted in the
following year, it shall be used within the first six (6) months of the next calendar year.
ARTICLE XVI
SALARY
Salaries shall reflect a 4% increase on January I't, 2003, a 4% increase on January 1St,
2004, a 4% increase on January 1St, 2005, a 4% increase on January 1 St, 2006, and a 4% increase
on January 1St, 2007
(a) The following chart indicates the base salaries of Police Officers hired prior to
January 1, 1996 to be effective as of January 1, 2003.
CONTRACT YEAR 2003
$39,935.51
(b) The following chart indicates the base salaries of the Police Sergeants to be
effective as of January 1, 2003:
CONTRACT YEAR 2003
$42,429.66
(c) The following chart indicates the base salaries of Police Officers hired after
January 1, 1996 to be effective during this Agreement:
Length of Service 2003
0-12 months $26,839.98
13-24 months $28,961.62
25-36 months $31,083.26
20
37-48 months $33,204.90
49 to 60 months $35,326.53
61-72 months $37,448.18
After 72 months $39,935.51
(d) Sergeants shall receive an amount of Three Thousand Dollars ($3,000.00) annually
above the appropriate base salary set forth above.
(e) Corporals shall receive an amount of One Thousand Five Hundred Dollars
($1,500.00) annually above the appropriate base salary set forth above.
ARTICLE XVII
OFF-DUTY COURT APPEARANCES AND MEETINGS
Borough agrees that in addition to other increases in Police Officer's compensation
hereinafter set forth, Police Officers shall be compensated for all off-duty court appearances
before any Court or District Justice or for any police meetings a Police Officer is required to
attend as follows:
1. District Justice:
Any Police Officer who is required to appear before a District Justice to
attend a hearing or to file charges at a time when he or she is not regularly
on duty shall be paid at the appropriate rate for all said time, subject to a
minimum time of two (2) hours at straight time, if the hearing is before a
District Justice presiding in District Court 09-3-01 and minimum time of
three (3) hours of straight time if the hearing is before a District Justice
presiding in any other District Court.
2. Court Appearances:
Any Police Officer who is required to appear before any court of record at
a time when he or she is not regularly on duty shall be paid at the
appropriate rate for all said time, subject to a minimum payment of the
equivalent of five (5) hours straight time. Police Officers shall log the start
and stop of all time involved in such appearances at the Police Department
Office.
21
If a court case or hearing is cancelled within 12 hours of the scheduled
time for the commencement of such case or hearing, the Police Officer
shall be paid the minimum guaranteed hours at the straight time rate for
such scheduled appearance.
3. Meetings:
Any Police Officer who is required by the Borough to attend police
meetings at a time when he or she is not on regularly scheduled duty shall
be paid for hours in attendance at such meetings at the appropriate rate.
4. Method of Compensation:
All witness fees received from any Court by a Police Officer for such
attendance, plus mileage, when testifying in a court of law at the minor
judiciary or the Court of Common Pleas where said testimony relates to
facts or occurrences resulting from his or her employment in the Borough,
received by the Police Officer shall be remitted to the Borough.
Each Police Officer shall, when feasible, notify the Chief of Police in
advance of such off-duty appearances and police meetings, and in all cases
notify the Chief of Police of his or her off-duty appearance and police
meetings within ten (10) days after such appearance, and shall at such time
requisition for payment.
Payments for the aforesaid appearances by Police Officers shall be made
monthly by the Borough or may, at the option of the Borough, be added to
the Police Officer's next regular pay.
The Borough shall provide a maximum payment of $5.00 for breakfast,
$10.00 for lunch and dinner to any Police Officer who is required to be
away from the jurisdiction at a training seminar or court appearance for a
period of greater than four (4) hours and over such a meal period. The
Police Officer shall provide the Borough with a reimbursement request,
accompanied by the actual receipt for such meals.
Nothing contained in this Article XVII shall in any way limit the right of
the Borough or the Chief of Police to change scheduling of any Police
Officer.
22
ARTICLE XVIII
HOURS OF WORK
Each Police Officer shall be scheduled to work eighty (80) hours per pay period. A pay
period is defined as a period of fourteen (14) consecutive calendar days commencing at 6:00
a.m., prevailing time, on the first day of the calendar week in which the Police Officer begins
work and ending at 5:59 a.m., prevailing time, on the fourteenth (14th) day thereafter. In the
event that the above work week conflicts with the payroll schedule of the Borough, the parties
agree that they will meet and discuss any proposed change to the defined work week.
All Police Officers who are required to work in excess of eighty (80) hours, per pay
period, shall be compensated at the rate of time and one-half for all hours worked in excess of
eighty (80) hours; provided, however, that this shall in no way be construed to give any Police
Officer an absolute right to demand and receive any work to which he or she would be entitled to
be compensated at the said rate of time and one-half. Overtime shall be paid only for hours
actually worked in excess of eighty (80) hours in a pay period or while the Police Officer is on
vacation or personal leave and shall not include sick leave, court time, call time, disability leave,
unpaid leave of absence, bereavement leave, off-duty court appearance or meetings.
Except in an emergency situation, a shift change cannot be made less than four (4) hours
prior to the beginning of the scheduled shift. Police Officers shall notify the Chief at least five
(5) hours prior to the beginning of their shift if they will not be able to report to work due to
illness or other emergency conditions, when practical.
In calculating a Police Off'icer's base hourly rate for overtime purposes, the payment of
longevity compensation under Article XIX shall not be included in the calculation, except in the
case where overtime is paid in accordance with the Fair Labor Standards Act.
ARTICLE XIX
LONGEVITY
Every Police Officer shall be entitled to an additional longevity compensation upon the
anniversary of the required number of years of service as set forth below. Longevity payment
shall be paid according to the following schedule, upon the anniversary of the required number
of years of service, to be paid one-half on April 1 and the remaining one-half on October 1 of
each year, as follows:
23
Years of Service % of Salary
8 years 2%
12 years 4%
16 years 5%
20 years 6%
Longevity payment shall be paid according to the following schedule, upon the
anniversary of the required number of years of service to Police Officers hired after January 1,
1994, to be paid one-half on April 1 and the remaining one-half on October 1 of each year, as
follows:
Years of Service % of Salary
8 years 1%
12 years 2%
16 years 3%
20 years 4%
25 years 5%
ARTICLE XX
CALL TIME
Whenever a Police Officer is required to report for duty at a time when he or she is not
regularly on duty, and not being an extension before or after the Police Officer's normally
scheduled tour of duty, such Police Officer shall be guaranteed a minimum of two (2) hours pay
at the appropriate rate.
ARTICLE XXI
SHIFT DIFFERENTIAL PAY
Whenever a Police Officer is assigned to, and works any hours between the hours of 2:00
p.m. and 6:00 a.m., such Police Officer shall be paid as compensation, in addition to the officer's
regular hourly base, an additional $0.75 for each of those shift differential hours worked for
contract years 2003 through 2007.
24
ARTICLE XXII
STANDBY COMPENSATION
Whenever a Police Officer is ordered on standby by order of the Chief of Police, that is to
say, whenever a Police Officer is ordered to be available for immediate duty, but not to include
those times when the Chief of Police designates another Police Officer to serve as Acting Chief
of Police in the Chief of Police's absence, such Police Officer shall be compensated for his or her
hours on standby as follows:
1. One Dollar and Twenty-five Cents ($1.25) per hour for each hour or
fraction thereof while on standby, provided the fraction exceeds thirty-one
(31) minutes.
2. If a Police Officer is on standby for more than two (2) hours, a minimum
of Five ($5.00) Dollars.
3. All standby in excess of five (5) hours shall be compensated at One Dollar
and Twenty-five Cents ($1.25) per hour as set forth in Item No. 1 above.
ARTICLE X H
MEMBERSHIP AT A LOCAL FITNESS CENTER
Any Full-Time Police Officer who wishes to join the local fitness center, Shippensburg
Fitness Center, is entitled to receive a fifty (50) percent reimbursement of membership cost
under the following reasonable restrictions and exceptions agreed upon by the Borough and the
Shippensburg Police Association:
1. Local Fitness membership program will be at the Shippensburg Fitness
Center,
2. Police Officers who choose to enroll in said Local Fitness membership
program shall pay one hundred (100) percent of the costs of the enrollment
and submit monthly invoices to the Borough for a fifty (50) percent cost
reimbursement;
3. Police Officers who choose to utilize the Local Fitness membership
program shall be required to use the facility two (2) times a week for one
(1) hour exercise workouts each time;
25
4. Police Officers will be required to render an accounting of their exercise
schedules via a card system accounting to the Borough monthly;
5. Police Officers shall be excused from a mandatory exercise schedule for
court appearances, schooling, sickness, or training;
6. If a Police Officer who has enrolled in said Local Fitness membership
program fails to maintain required exercise schedule for two (2)
consecutive months without proper excuse as mentioned above or is
otherwise deemed to be abusing this benefit, the Borough has the
discretion to refuse payment of its portion of the costs of membership for
the remaining term of this contract.
7. Said privileges shall become effective on January 1, 2003, and shall
remain effective until the end of the contract on December 31, 2007.
ARTICLE XXIV
SHIPPENSBURG BOROUGH POLICE ROSTER
a) Subject to the terms and provisions of this Agreement, the Borough agrees to hire the
following full time persons, previously members of the Mid-Cumberland Valley Police
Department, as officers of the Shippensburg Police Department:
Police Officer Position
Jeffrey Shubert Corporal
Scott Wolfe Corporal
David Lively Officer
David Herb Officer
Eric Varner Officer
Michael Rinaldi Officer
b) The Shippensburg Police Association agrees that should any of the officers identified
above leave the employment of the Borough of Shippensburg Police Department by means of
retirement, voluntarily leaving employment, discharge, death or for any other reasons, the
Borough shall not be required to replace said officer's full-time position and/or shall not
otherwise be required to hire another full-time officer to replace the full-time position.
Notwithstanding the foregoing, the parties hereby recognize and affirm that the number of
26
officers employed by the Borough to provide police services to the community is solely in the
managerial discretion of the Borough.
c) During the term of this Agreement, no full time police officer as set forth above shall
for reasons of economy be furloughed unless all part-time officers' position are eliminated. The
parties hereby agree that this subsection shall not be an automatic carryover from the previous
contract for future contracts subject to negotiation.
d) All police officers hired on or before January 1 St 2001 shall be required to reside
within a fifteen (15) mile radius of the Borough of Shippensburg Police Station as set forth in the
attached Residency Requirement Map. All police officers hired after January 1St, 2001 shall be
required to live within a seven and one-half (7.5) mile radius of the Borough of Shippensburg
Police Station as set forth in the attached Residency Requirement Map.
ARTICLE XXV
RATIFICATION OF THE AGREEMENT
The terms of this Agreement when agreed upon. by the appointed negotiating committee,
shall be ratified by both the majority members of the Police Department and the Borough before
the Agreement can be considered final. Ratification shall be by the Shippensburg Police
Association and then followed by the Borough.
ARTICLE XXVI
DURATION OF AGREEMENT
The duration of this Agreement shall be five years in length, and this Agreement shall
become effective as of, and the effective date of this Agreement shall be, January 1, 2003, and
shall remain in full force and effect through December 31, 2007. It shall automatically be
renewed from year to year thereafter, unless either party shall give the other party notice of
desire to terminate, modify, or otherwise amend this Agreement; such notice shall be given in
accordance with the provisions of the Act of June 24, 1968, Act 111, of the Legislature of the
Commonwealth of Pennsylvania.
ARTICLE XXVH
RIGHT TO REOPEN
During the term of this Agreement the Shippensburg Borough Police Association may
exercise the right to re-open this Agreement limited solely to Article XVI entitled Salaries only
in the event that the Borough of Shippensburg executes a contract for the provision of police
services outside the corporate limits of the Borough with another municipality in an amount in
27
633-1 ? 04 11:05 BOROUGH OF SHIPPENSBURG
ID=7175326948
LIVELY- OFF-DUTY INJURY 8/16/03-1/23/04 BACK TO WORK ON THE 24TH
OF JAN 2004
TEACHER'S PROTECTIVE MUTUAL POLICY PAYS OFFICER LIVELY
$1 MGR OR $50/DAY ($1,500 DIVIDE BY 30 DAYS). PAT YOHN LTCP
MAIMS IMS MGR FOR TEACHERS PROTECT IN LANCASTER PA, GAVE
MORMATION TO
DISTRICT CONTACT T OF THE LANCASTER OFFICE IS THE BOROUGH'S
DISTRICT CONTACT
OFFICER LIVELY'S BASE SALARY BY CONTRACT FOR 2003 $39,935.51
OFFICER LIVELY'S BASE SALARY BY CONTRACT FOR 2004 $41,533.00
WHME OFF FOR HLS OFF-DUTY IN-T RY OFFICER LIVELY WAS PAID AS
FOLLOWS:
2003 - THE BOROUGH PAID OFFICER LIVELY FOR 99 DAYS (ate $19.20/HR
2004 - TJ?M BOROUGH PAID OFFICER LIVELY FOR 17 DA'Y'S
TOTAL PAYMENT TO OFi~'ICER
OFF-DUTY INJURY BY THE BOROUGH WI,E OFF FOR
CRY'' $17,922.32
TEACHER'S HAS R" MBURSED T'M BOROUGH TO DATE $2,300 FOR 8/16-
9/30/2003.
DUE TO THE BOROUGH FROM TEACHERS AS FOLLOWS:
OCTOBER 2003 $1,500
NOVEMBER 2003 $1,500
DECEMBER 2003 $1,500
JANUARY 2004 $ 850
zol
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'09-17-04 11:06 BOROUGH OF SHIPPENSBURG
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and provides compensation to the Borough in excess of Fifty Thousand Dollars ($50,000.00) in
any given contract year.
ARTICLE XXVIII
SIGNING AND RATIFICATION
IN WITNESS WHEREOF, the Borough and the Police Officers of the Shippensburg
Police Association, intending to be legally bound hereby, have hereunto affixed their hands and
seals the day and year first written.
ATTEST:
Borough Secret
APPROVE:
SHIPPENSBURG BOROUGH
By: ?,,...
ci President
t7
Mayor
SHIPPENSBURG POLICE
ASSOCIATION
By:
President
28
V:rrvAn+e e .
iL QD
ca W p 4
JAN 18 2008
SHIPPENSBURG POLICE
ASSOCIATION,
Respondent
V.
BOROUGH OF SHIPPENSBURG,
Petitioner
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
APPEAL OF
ACT 111 GRIEIVANCE ARBITRATION
AAA-14 390 00052 07 CNN
RULE TO SHOW CAUSE
AND NOW, this -2--2-- day of U , 2008 upon consideration of the
foregoing Petition to, it ' ereby ordered that
(1) a rule is issued upon the respondent to show cause why the petitioner is not
itled to the relief requested;
(2) the respondent shall file an answer to the petition within twenty days of
service upon the respondent;
(3) the petition shall be decided under Pa.R.C.P. No. 206.7;
(4)_]Zdepositions shall be completed within days of this date;
, jvt 1 L( zVM Ov4- Cl yam')9-4---,
(5)_?argument shall be held on ,. ( in Courtroom
of the Cumberland County Courthouse; and
(6) ? notice of the entry of this order shall be provided to all parties by the
Petitioner. lam`
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43
SHIPPENSBURG POLICE : IN THE COURT OF COMMON PLEAS
ASSOCIATION : CUMBERLAND COUNTY, PENNSYLVANIA
Respondent
: No: 08-368 Civil Term
APPEAL OF
V. ACT 111 GRIEIVANCE ARBITRATION
AAA-14 390 00052 07 CNN
BOROUGH OF SHIPPENSBURG
Petitioner
CERTIFICATE OF SERVICE
???4
I hereby certify that on this de day of January 2008, I served a true and correct
copy of the Rule to Show Cause, dated January 22, 2008 by first class mail, postage
pre-paid to the following:
Shippensburg Police Association
346 Airport Road
Shippensburg, PA 17257
Sean T. Welby, Esquire
2705 North Front Street
Harrisburg, PA 17108
Respectfully
GHES, P.
By:
S uel E` Wiser, Esquire
A orney ID#203665
55 Phoenix Drive; Suite A
Chambersburg, PA 17201
(717) 263-2121
`i F-o
?4a
' s 1 i
SHIPPENSBURG POLICE IN THE COURT OF COMMON PLEAS
ASSOCIATION CUMBERLAND COUNTY, PENNSYLVANIA
Respondent
No: 08-368 Civil Term
APPEAL OF
V. ACT 111 GRIEIVANCE ARBITRATION
AAA-14 390 00052 07 CNN
BOROUGH OF SHIPPENSBURG
Petitioner
CERTIFICATE OF SERVICE
I hereby certify that on this day of January 2008,1 served a true and correct
copy of the foregoing Petition to Vacate Arbitration Award by first class mail, postage
pre-paid to the following:
Shippensburg Police Association
346 Airport Road
Shippensburg, PA 17257
Respectfully Submitted,
GHES, P.C
By:
S ,Anuel E. Wiser, Esquire/
,Attorney ID#203665
455 Phoenix Drive; Suite A
Chambersburg, PA 17201
(717) 263-2121
`-.a
-,
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_, ,
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BOROUGH OF SHIPPENSBURG,
V.
Petitioner
IN THE COURT COMMON PLEAS
OF CUMBERLAND COUNTY
: No. 08 - 368 Civil Term
SHIPPENSBURG POLICE,
ASSOCIATION
Respondent
Appeal of Act 11 I Grievance
Arbitration Award
RESPONSE TO PETITION TO VACATE ARBITRATION AWARD
AND NOW, comes the Respondent, Shippensburg Police Association, by and through its
Attorneys, Sean T. Welby and Lightman, Welby, Stoltenberg and Caputo, with the following
Response to a Petition to Vacate an Act 111 Grievance Arbitration Award, and in support thereof
does aver as follows:
1. ADMITTED. It is Admitted that the Borough of Shippensburg has, in this action,
sought review of the Award of an Act 111 Grievance Arbitrator, and that Exhibit "A" attached to
that Petition is the Award. The remainder of the averments of Paragraph 1 constitutes conclusions
of law to which no response is required.
2. ADMITTED IN PART, DENIED IN PART. It is Admitted that on December 7,
2006, Officer David Lively of the Shippensburg Borough Police Association submitted a notice of
retirement to be effective January 14, 2007. It is Admitted that the letter included a request that he
be paid the 400 hours of accumulated, but unused vacation leave in accordance with the collective
bargaining agreement, and that 5% pension contributions be deducted from that payment. It is
Admitted that on January 17, 2007, Officer Lively was paid the amount of nine thousand one
hundred and sixty three dollars and sixty eight cents ($9,169.68). It is Admitted that Respondent
refused to deduct pension contributions. The remaining averments of Paragraph 2 constitute
conclusions of law to which no response is required. Said averments are therefore deemed denied.
3. ADMITTED IN PART, DENIED IN PART. It is admitted that a grievance
arbitration award was received on December 27, 2007, and that said award is attached to the
Petition as Exhibit "A". The remaining averments of Paragraph 3 constitute a conclusion of law to
which no response is required. Said averments are therefore deemed denied.
(a) DENIED. The averments of Paragraph 3 (a) constitute conclusions of law to
which no response is required. Said averments are therefore deemed denied. To the extent that the
averments of Paragraph 3 (a) are construed as factual in nature, the findings of fact made by the
arbitrator are conclusive, and any characterization thereof is specifically denied.
(b) DENIED. The averments of Paragraph 3 (b) constitute conclusions of law to
which no response is required. Said averments are therefore deemed denied. To the extent that the
averments of Paragraph 3 (b) are construed as factual in nature, the findings of fact made by the
arbitrator are conclusive, and any characterization thereof is specifically denied.
2
(c) DENIED. The averments of Paragraph 3 (c) constitute conclusions of law to
which no response is required. Said averments are therefore deemed denied. To the extent that the
averments of Paragraph 3 (c) are construed as factual in nature, the findings of fact made by the
arbitrator are conclusive, and any characterization thereof is specifically denied.
(d) DENIED. The averments of Paragraph 3 (d) constitute conclusions of law to
which no response is required. Said averments are therefore deemed denied. To the extent that the
averments of Paragraph 3 (d) are construed as factual in nature, the findings of fact made by the
arbitrator are conclusive, and any characterization thereof is specifically denied.
(e) DENIED. The averments of Paragraph 3 (e) constitute conclusions of law to
which no response is required. Said averments are therefore deemed denied. To the extent that the
averments of Paragraph 3 (e) are construed as factual in nature, the findings of fact made by the
arbitrator are conclusive, and any characterization thereof is specifically denied.
4. DENIED. The averments of Paragraph 4 constitute a conclusion of law to which
no response is required. To the extent that such averments are deemed to be factual in nature,
said averments are specifically denied.
3
WHEREFORE, based upon the forgoing, the Petition to Vacate should be dismissed.
Respectfully Submitted,
Lightman, Welby, Stoltenberg and Caputo
By:
Sean T. Welby, Esqu'
Attorney I.D. No. 66516
2705 North Front Street
Harrisburg, PA 17110
(717) 234-0111
Attorneys for Shippensburg Police Association
Dated: February 4, 2008
4
CERTIFICATE OF SERVICE
I hereby certify that a copy of the forgoing Response to Petition to Vacate Arbitration
Award was served upon the person(s) and in the manner indicated below, which service satisfies
the requirements of the Pennsylvania Rules of Civil Procedure, by depositing same in the United
States mail, with first class postage, prepaid, from Harrisburg, Pennsylvania, as follows:
G. Bryan Salzmann, Esquire
Samuel E. Wiser Jr., Esquire
Salzmann Hughes, P.C.
455 Phoenix Drive, Suite A
Chambersburg, PA 17201
Lightman, Welby, Stoltenberg and Caputo
Cl\
By:
Sean T. Welby, Esquire
Attorney I.D. No. 6651
2705 North Front Street
Harrisburg, PA 17110
(717) 234-0111
Attorneys for Shippensburg Police Association
Dated: February 4, 2008
a'
r l .?
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f cn P,7
SHIPPENSBURG POLICE
ASSOCIATION,
APPELLEE
V.
BOROUGH OF SHIPPENSBURG,
APPELLANT
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
08-0368 CIVIL TERM
IN RE: PETITION TO VACATE AN ARBITRATION AWARD
ORDER OF COURT
AND NOW, this day of April, 2008, the petition of the Borough of
Shippensburg to vacate an arbitration award, IS DENIED.
By the
,Anthony M. Caputo, Esquire
X
Sean T. Welby, Esquire
For Shippensburg Police Association
G. Bryan Salzmann, Esquire
Samuel E. Wiser, Jr., Esquire
For the Borough of Shippensburg
sal
caps ES ?ytt; t LL
??« dos
?- C
Edgar B.
LLB _t
N
Mr. Curtis R. Long
Prothonotary
Cumberland County Courthouse
1 Courthouse Square
Carlisle, PA 17013
10/1/99
5012 - 10/99
Commonwealth Court of Pennsylvania
www.aopc.org
May 19, 2008
RE: Shippensburg Pol. Assoc. v. Bor. of Shippensburg
No.: 901 CD 2008
Agency Docket Number: 08-0368 Civil Term
Filed Date: May 16, 2008
Notice of Docketing Appeal
A Notice of Appeal from an order of your court has been docketed in the Commonwealth
Court of Pennsylvania. The Commonwealth Court docket number must be on all
correspondence and documents filed with the court.
Under Chapter 19 of the Pennsylvania Rules of Appellate Procedure, the Notice of
Appeal has the effect of directing the Court to transmit the certified record in the matter to
the Prothonotary of the Commonwealth Court.
The complete record, including the opinion of the trial judge, should be forwarded to the
Commonwealth Court within sixty (60) days of the date of filing of the Notice of Appeal. Do
not transmit a partial record.
Pa.R.A.P. 1921 to 1933 provides the standards for preparation, certification and
transmission of the record.
The address to which the Court is to transmit the record is set forth on Page 2 of this
notice.
Notice to Counsel
A copy of this notice is being sent to all parties or their counsel indicated on the proof of
service accompanying the Notice of Appeal. The appearance of all counsel has been
entered on the record in the Commonwealth Court. Counsel has thirty (30) days from the
date of filing of the Notice of Appeal to file a praecipe to withdraw their appearance pursuant
to Pa. R.A.P. 907 (b).
Appellant or Appellant's attorney should review the record of the trial court, in order to
insure that it is complete, prior to certification to this Court. (Note: A copy of the Zoning
Ordinance must accompany records in Zoning Appeal cases).
The addresses to which you are to transmit documents to this Court are set forth on
Page 2 of this Notice.
If you have special needs, please contact this court in writing as soon as possible.
Attorney Name Party Name Party Type
Anthony M. Caputo, Esq. Shippensburg Police Association Appellee
George Bryan Salzmann, Esq. Borough of Shippensburg Appellant
Sean T. Welby, Esq. Shippensburg Police Association Appellee
Samuel Eugene Wiser, Jr., Esq. Borough of Shippensburg Appellant
Address all written communications to:
Office of the Chief Clerk
Commonwealth Court of Pennsylvania
Room 624
Irvis Office Building
Harrisburg, PA 17120
(717) 255-1650
Filings may be made in person at the following address (except on Saturdays, Sundays
and holidays observed by Pennsylvania Courts) between 9:00 a.m. and 4:00 p.m.
Office of the Chief Clerk
Commonwealth Court of Pennsylvania
Room 624
Sixth Floor
Irvis Office Building
Harrisburg, PA 17120
(717) 255-1650
Pleadings and similar papers (but not paperbooks or certified records) may also be filed
in person only at:
Office of the Chief Clerk
Commonwealth Court of Pennsylvania
Filing Office
Suite 990
The Widener Building
One South Penn Square
Philadelphia, PA 19107
(215) 560-5742
The hours of the Philadelphia Filing Office are 9:00 a.m. to 4:00 p.m.
Under Pa.R.A.P. 3702, writs or other process issuing out of the Comonwealth Court
shall exit only from the Harrisburg Office.
c_?
.17
C
CERTIFICATE AND TRANSMITTAL OF RECORDS UNDER
PENNSYLVANIA RULE OF APPELLATE PROCEDURE 1931 (C)
To the Prothonotary of the Apellate Court to which the within matter has been appealed:
Commonwealth Court of PA
The undersigned, Prothonotary of the Court of Common Pleas of Cumberland County,
the said court being a court of record, do hereby certify that annexed hereto is a true and
correct copy of the whole and entire record, including an opinion of the court as required
by PA R.A.P. 1925, the original papers and exhibits, if any on file, the transcript of the
proceedings, if any, and the docket entries in the following matter:
Shippensburg Police Association
VS.
Borough of Shippensburg
2008-368 Civil Term
901 CD 2008
The documents comprising the record have been numbered from No.1 to 190, and
attached hereto as Exhibit A is a list of the documents correspondingly numbered and
identified with reasonable definiteness, including with respect to each document, the
number of pages comprising the document.
The date on which the record has been transmitted to the Appellate Court is 05/ 27/2008 .
Curtis l. Long, Pr n taryRegina Lebo
An additional cony of this certificate is enclosed. Please sign and date copy, thereby
acknowledgine receipt of this record.
Date
Signature & Title
_? ,_. Q _
Among the Records and Proceedings enrolled in the court of Common Pleas in and for the
county of Cumberland in the Commonwealth of Pennsylvania
901 CD 2008
to No. 2008-368 Civil Term, 19 is contained the following:
COPY OF Amearance DOCKET ENTRY
Shippensburg Police
Association
VS.
Borough of Shippensburg
**SEE CERTIFIED COPY OF THE DOCKET ENTRIES **
Commonwealth of Pennsylvania
County of Cumberland ss:
In TESTIMONY WHEREOF, 1 have hereunto
this 27th
1, Curtis R. Long , Prothonotary
of the Court of Common Pleas in and for said
County, do hereby certify that the foregoing is a
full, true and correct copy of the whole record of the
case therein stated, wherein
Shippensburg Police
Association
Plaintiff, and Borough of Shippensburq
Defendant , as the same remains of record
before the said Court at No. 08-368 of
civil Term, A. D. 19 .
set my hand and affixed the seal of said Court
day of May -,M A. VJX2008
rolnotary
1, Edgar B. Bavl ey President Judge of the Ninth
Judicial District, composed of the County of Cumberland, do certify that
Corti. R Long , by whom the annexed record, certificate and
attestation were made and given, and who, in his own proper handwriting, thereunto subscribed his name
and affixed the seal of the Court of Common Pleas of said County, was, at the time of so doing, and now is
Prothonotary in and for said County of t timhPrland in
the Commonwealth of Pennsylvania, duly commissioned and qualifie f whose acts as such full faith
and credit are and ought to be given as well in Courts of judicat as elsew a said record,
certificate and attestation are in due form of law and made y e prope ffic
Commonwealth of Pennsylvania
County of Cumberland ss:
President Jud
I, Curtis R. Long Prothonotary bf the Court of Common Pleas in
and for the said County, do certify that the Honorable EAgar R Ram 1 P
by whom the foregoing attestation was made, and who has thereunto subscribed his name, was, at the time
of making thereof, and still is President Judge of the Court of Common Pleas, Orphan' Court and Court of
Quarter Sessions of the Peace in and for said County, duly Commissioned and qualified; to all whose acts
as such full faith and credit are and ought to be given, as well in Courts of judicature as elsewhere.
IN TESTIMONY WHEREOF, I have hereunto
set my hand and affixed the seal of s id Court this
27th day y D. X22008_.
rothonotary
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Mr. Curtis R. Long
Prothonotary
Cumberland County Courthouse
1 Courthouse Square
Carlisle, PA 17013
-------------------------------------------- --------------------------------------------------------------------- -----------------------------------------------------
08/07 W231
a
I
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Shippensburg Police Association
V.
Borough of Shippensburg,
Appellant
C?1009 -369- C4,0;
No. 901 C.D. 2008
Argued: December 8, 2008
BEFORE: HONORABLE ROBERT SIMPSON, Judge'
HONORABLE JOHNNY J. BUTLER, Judge
HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
OPINION BY
JUDGE SIMPSON
FILED: March 24, 2009
The issue we decide is whether a grievance arbitration award violates
the Municipal Pension Plan Funding Standard and Recovery Act (Act 205),2 by
requiring inclusion of a lump sum payment for unused vacation leave in the
computation of a retiring police officer's monthly pension benefit without proof of
the award's effect on the applicable pension plan. The Borough of Shippensburg
(Borough) appeals an order of the Court of Common Pleas of Cumberland County
(trial court) denying its motion to vacate an arbitration award. The award required
the Borough to include a post-retirement payment for unused vacation pay in the
computation of a retired officer's monthly pension benefit. On appeal, the
Borough urges the arbitrator lacked jurisdiction to hear the grievance and the
arbitrator's award compels an illegal act. Concluding the arbitration award
violates Act 205, we reverse.
1 This case was reassigned to the author on January 27, 2009.
2 Act of December 18, 1984, P.L. 1005, 53 P.S. §§895.101-895.803.
B
On December 7, 2006, Borough police officer David Lively (Officer)
notified the Borough in writing of his intention to retire after his last scheduled
workday, January 14, 2007. Officer requested the Borough pay hire for his unused
vacation leave in combination with his last paycheck, deduct a 5% o retirement
contribution from the payment, and include the payment in calculating his monthly
pension benefit. On January 17, 2007, the Borough issued Officer his last regular
paycheck as well as a separate check. for his unused vacation time. It did not
deduct any amount as a retirement contribution, and it did not include the unused
vacation pay in the calculation of Officer's monthly pension benefit.
Officer instituted a grievance seeking inclusion of the unused vacation
pay in the calculation of his monthly pension benefit. The matter subsequently
proceeded to arbitration on two issues. The first issue was whether the grievance
was subject to arbitration in light of this Court's memorandum opinion in
Worthington v. Borou hoof S_hippens!u, (Pa. Cmwlth., No. 82 C.D. 2001, filed
October 3, 2001), W Mal denied, 570 Pa. 692, 808 A.2d 575 (2002), a case dealing
with the same issue in the same pension plan. In Worthington, we held the
retiree's receipt of unused vacation pay after retirement fell outside the time period
specified in the police pension plan for calculating average compensation upon
which the pension benefit was based. The second issue before the arbitrator was
whether the Borough violated a collective bargaining agreement (CBA) with the
Shippensburg Police Association (Association) by failing to include the unused
vacation pay in computing Officer's monthly pension benefit.
2
I
After consideration, the arbitrator found the grievance arbitrable
because the parties sought an interpretation of the CBA, which incorporated the
Borough's police pension plan. The arbitrator further determined our Worthington
decision did not control because the issues were not identical. On the merits, the
arbitrator concluded the language of the CBA and police pension plan require all
earnings paid to an employee during the computation period to be included in the
pension benefit calculation. By implication, the arbitrator determined the Borough
paid Officer for his unused vacation leave during the benefit computation period.
On appeal to the trial court, the Borough maintained the arbitrator
lacked jurisdiction because the Borough police pension plan provides that judicial
decisions affecting its provisions are binding, and our decision in Worthington
already determined the unused vacation payment issue. The Borough also
contended that the arbitrator exceeded his authority by mandating an illegal act. It
asserted the arbitrator's award violated the act known as the Police Pension Fund
Act (Act 600)3 as well as Act 205.
The respected trial court rejected the Borough's position the arbitrator
lacked jurisdiction to hear Officer's grievance. It recognized the CBA did not
remove from the arbitrator's jurisdiction the authority to determine the preclusive
effect of prior judicial decisions on the present controversy. On the merits, the trial
judge affirmed the arbitrator's award but opined the arbitrator wrongly decided the
issue before him. Specifically, the trial court recognized all elements of collateral
estoppel were present. Of particular note, the court determined the issues in the
3 Act of May 29, 1956, P.L. (1955) 1804, as amended, 53 P.S. §761-778.
3
0
present case and WoFthinAden are identical. In doing so, the trial court rejected
Officer's assertims that the arbitrator found the Borough included the lump sum
payment for unused vacation leave in Officer's final pay. The court correctly
observed the arbitrator did not make such a finding nor did he find the Borough
tendered payment before Officer retired. The court then cited decisional law
holding that payment for unused vacation leave tendered after retirement should
not be included in the calcul ' of monWy pension befits.'
Notwithstanding these factual and legal errors, the trial court felt
constrained by its limited scope of review to affirm the arbitration award on the
basis the award did not compel the Borough to commit an illegal act. The trial
court therefore denied the Borough's petition to vaeate. The Borough appeals.'
Initially, we note, our review of a grievance arbitration award under
the act known as Act i l l6 is a very constricted one and is in the nature of narrow
certiorari. N illcreek Twp. Police Ass'n v. Nillc Twp., 960 A.2d 904 (Pa.
4 See Kosey v. City of Washu?aton Police Pension Bd., 459 A.2d 432 (Pa. Cmwlth. 1983)
(payment for unused vacation time made to retiring officer should not be considered part of the
officer's annual pay for purposes of.computing pension benefits).
' The Pennsylvania State Association of Township Supervisors, the Pennsylvania State
Association of Township Commissioners, the Pennsylvania League of Cities and Municipalities,
and the Pennsylvania State Association of Boroughs appear as amici curiae in support of the
Borough. In their brief, amid ggdK seek a clarification of the scope of review licable where
the arbitrator's determination of jurisdiction is not dependent on findings of fact. The matter
here involves a contract interpretation over which.the arbitrator had jurisdiction pursuant to the
parties' CBA. We therefore need not engage in this academic exercise.
6 Act of June 24, 1968, P.L. 237, as gWended, 43 P.S. §§217.1-217.10. Act 111 governs
employer-employee relationships for police and fire personnel.
4
I
Cmwlth. 2008). Narrow certiorari allows us to inquire into only four aspects of an
Act 111 arbitration award: the jurisdiction of the arbitrator; the regularity of the
arbitration proceedings; whether the arbitrator exceeded his authority; and, whether
the arbitrator deprived one of the parties of constitutional rights. Id. In addition,
we may not disregard the arbitrator's findings or contract interpretation if the
arbitrator is even arguably construing or applying the contract and acting within
the scope of his authority. City of Pittsburgh v Fraternal Order of Police Fort Pitt
Lodge No. 1, 764 A.2d 101 (Pa. Cmwlth. 2000).
The Borough raises three issues on appeal. The Borough first assigns
error in the trial court's conclusion the arbitrator had jurisdiction to hear Officer's
grievance. It further asserts the arbitration award violates Section 5(c) of Act 600,
53 P.S. §771(c), by requiring the payment of a pension benefit not based on
"salary." As a final assignment of error, the Borough argues the arbitration award
violates Act 205 because it requires a modification of the police pension fund
without proof of actuarial soundness.
_ , At the, outset, we agree with the trial court's conclusions the arbitrator
had jurisdiction over Officer's grievance and the arbitration award does not violate
Act 600. We discern nothing in the CBA depriving the arbitrator of jurisdiction
over this contract dispute, nor does our scope of review permit disregard of the
7 See Borough of Nazareth v. Nazareth Borough Police Association, 545 Pa. 85, 680
A.2d 830 (1996) (the term salary as embodied in Act 600 denotes base salary and excludes other
forms of compensation unless the parties expanded the definition by past practice or agreement).
5
arbitrator's interpretation of the method of cadlcul ing monthly pension benefits
under the CBA and Borough ,police p ion plan.
However, we respectfully di ee with the trial court that the
arbitration award does not compel the Borough to commit an illegal act. The
Borough maintains the arbitaW's award compels an illegal - act because it requires
a modification of the pension fund without proof of its actuarial soundness, in
violation of Act 205. Defending the arbitrator's award, the Association contends
the award merely requires the Borough to comply with the pension plan's method
of calculating benefits and does not constitute a modification of the plan. We
agree with the Borough.
Pursuant to Section 301(a) of Act 205, the provisions of Act 205
apply to any municipality which has established and maintains a pension plan for
the benefit of its employees. 53 P.S. §895.301(a). In addition, Act 205 applies
regardless of any pension plan or contract. Id.; Borough of Ellw d City v.
Ellwood City Police Dep't, Wage & Policy Unit, 573 Pa. 353, 825 A.2d 617
(2003).. Section 306(x) of Act 205 declares "that any actual or potential failure by
a municipality to comply with the applicable funding standard established by this
act threatens serious injury to the affected municipal pension plan, the entire
system of public employee plans in the Commonwealth and to the Commonwealth
itself." 53 P.S. §895.306(a) (emphasis added).
Prior to adoption of any benefit playa modification by a municipality,
Section 305 of Act 205 requires a cost estimate of the effect of the proposed
6
4
benefit plan modification. 53 P.S. §895.305(a). The contents of the cost estimate
must be complete and accurate, and must disclose "the impact of the proposed
benefit plan, the modification of the future financial requirements of the pension
plan and the future minimum obligation of the municipality with respect to the
pension plan." 53 P.S. §895.305(e).
On this issue, our recent decision in Upper Merion Township v. Upper
Merion Township Police Officers, 915 A.2d 174 (Pa. Cmwlth. 2006), appeal
denied, 593 Pa. 736, 929 A.2d 647 (2007), is instructive. There, the parties' 1982
CBA conferred a monthly pension benefit for the surviving spouse and dependent
children of a deceased member amounting to 50% of what the member received or
would have received had the member been retired at the time of death. In 2002,
the General Assembly retroactively amended Act 6008 to grant a surviving spouse
of a retired police force member at least 50% of the pension the deceased member
either received or would have received if retired at the time of death.
After the 2002 amendments to Act 600, the parties executed a new
CBA for the years 2003 through 2008, which increased the survivor's benefit to
100%. The police union subsequently filed a grievance alleging the township
violated the CBA when it refused to increase the survivor's benefit for members
who retired before the CBA's effective date.
A grievance arbitrator found in favor of the police union, but the court
of common pleas vacated the arbitrator's award. Failing to find an Act 205
8 Act of April 17, 2002, P.L. 239.
7
actuarial report in the record, the court determined the arbi or ex4eeded his
authority by requiring the township to commit an illegal act, that is, to modify its
pension plan widmt the mandated actuarial report.
This Court also affirmed. Reviewing prior precedent establishing, the
prevailing mandate of Act 205 over CBAs,9 we recognized the retroactive effect of
the survivor's benefit clearly impacud the: township's administration of the
pension plan, regardless of whether the parties intended the CBA to apply
retroactively.
Pursuant to U erica ToMM.W, a grievance arbitrator who
awards a modification of a poke pension plan in the absence of an Act 205 cost
estimate requires an illegal act necessitating vacation. The same result obtains
here.
We reject the Association's position the arbitrator's award does not
modify the pension plan. By joint stipulation, the parties agreed for the last 25
years the police pension plan. hM not included unused vacation pay in the
9 See NoMMnton TM I N n Twn Niff BeM nt Ass' n, 8,85 A.2d 81
(Pa.. Cmwlth. 2005) (Act 111 awards modifying police pension plans must comply with Act
205); City of Erie v. Int'1 Ass'n of Fires Local 293, 836 A.2d 1047 (Pa. Cmwlth. 2003)
(arbitration award of Deferred Retirement Option Program illegal where record lacked cost
estimate demonstrating pension plan's actuarial soundness); City of Butler v. City of Butler
Police I?gp't., Fraternal Omer of Paige Ludim #3 , 780 A.2d 847 (Pa. Cmwlth. 2001)
(arbitration panel exceeded its authority by eliminating pension contributions without Act 205
costs estimate); Borough of Doylestown v Ikati own Borough Police Assn, 732 A.2d 701
(Pa. Cmwlth. 1999) (arbitrator exceeded authority by reducing member contributions where
actuarial report found borough's pension plan underfunded).
8
calculation of pension benefits. Borough's Br. at Ex. B. The arbitrator's award
changes this. This change unsettles the Borough's once predictable pension
liability. Also, the change has the potential to modify the rules of the game for
computing all Borough police employee pensions.
However, there was no cost estimate to quantify the change. Because
the record lacks proof of the affect of this change on the pension plan's actuarial
soundness, the arbitrator exceeded his authority.
Moreover, an arbitration award may only require a public employer
do that which it could voluntarily. City of Scranton v. Fire Fighters Local Union
of Int'1 Ass'n of Fire Fighters, AFL-CIO, _ A.2d _ (Pa. Cmwlth., Nos. 2314
C.D. 2007, 213 C.D. 2008, filed January 23, 2009). We do not believe the
Borough could voluntarily include Officer's post-retirement unused vacation
payment in the calculation of his monthly pension benefit without an Act 205 cost
estimate.
If the Borough voluntarily included the lump sum payment in the
calculation of Officer's monthly pension benefit, despite a long history of treating
all other officers less advantageously, it could be a violation of the Pennsylvania
Employe Relations Act.` See Millcreek Township School District v. Pennsylvania
Labor Relations Board, 631 A.2d 734 (Pa. Cmwlth. 1993) (grant of longer contract
term to incoming employee, which longer term was not available to bargaining unit
members, was unfair labor practice). See also Jefferson-Morgan Sch. Dist., 9 Pa.
10 Act of July 23, 1970, P.L. 563, as amended, 43 P.S. §§1101.101-1101.2301.
9
Pub. Emp. R. T9056 (1978) (unfair labor practice found where school district hired
incoming teacher at wages r than maximum scary for unit members);
IEW d Sewer & Water 4 Pa. Pub. Emp. R. 116 (1974) (unfair labor
practice found where public employer unilaterally increased wages for one
employee during contract negotiations); Gen. Braddock Area Sch. Dist., 4 Pa. Pub.
Emp. R. 86 (1974) (unfair labor practice found where school district unilaterally
increased basketball coaches' wages). At the very least, such voluntary
munificence toward Officer would result in a chorus demanding the same benefit;
Under either of th sce s the Borough would need to treat all
bargaining unit members the same, Thus, the Borough would need to roll back the
voluntary favorable treatment of Officer, or to obtain an Act 205 cost estimate to
quantify the costs of offering an identical benefit to all officers. The same
considerations are present in this case as a rem of the arbitrator's award.
Because there is no cost estimate here to support a de to charge in
the manner of computing a retiring police -officer's monthly pension benefit, we
reverse.
10
i
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Shippensburg Police Association
V. No. 901 C.D. 2008
Borough of Shippensburg,
Appellant
ORDER
AND NOW, this 24"' day of March, 2009, the order of the Court of
Common Pleas of Cumberland County is hereby REVERSED.
ROBERT SIM ON, Judge
Certified from the Record
MAR 2 4 2009
and Orderrtit
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Shippensburg Police Association
V. : No. 901 C.D. 2008
: Argued: December 8, 2008
Borough of Shippensburg,
Appellant
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE JOHNNY J. BUTLER, Judge
HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
CONCURRING AND DISSENTING OPINION
BY SENIOR JUDGE FRIEDMAN FILED: March 24, 2009
I agree with the majority that the arbitrator in this case had jurisdiction
over police officer David Lively's (the Officer) grievance and that the arbitration
award does not mandate that the Borough of Shippensburg (Borough) violate the
Police Pension Fund Act (Act 600).1 However, I disagree that the arbitration award
compels the Borough to modify its pension plan in violation of section 305 of the
Municipal Pension Plan Funding Standard and Recovery Act (Act 205).2
1 Act of May 29, 1956, P.L. (1955) 1804, as amended, 53 P.S. §§767-778.
2 Act of December 18, 1984, P.L. 1005, 53 P.S. §895.305. Section 305(a) of Act 205
provides, in pertinent part, as follows:
(a) Presentation of cost estimate. - Prior to the adoption of any benefit
plan modification by the governing body of the municipality, the chief
administrative officer of each pension plan shall provide to the
governing body of the municipality a cost estimate of the effect of the
proposed benefit plan modification.
53 P.S. §895.305(a).
In this case, when the Officer retired, the Borough: gave the Officer a
check for unused vacation along wig his last payroll check. The Borough did not
include the unused vacation payment in calculating the Officer's pension benefits, as
the Officer requested. The Officer then filed a grievance, and the matter proceeded to
arbitration.
Under the Borough of Shippensburg Police Pension Plan (Pension Plan),
a police officer's pension benefits are based, in part, on "Average Con nssdon."
(R.K at 75a.) The Pension Plan defines "Average Compensation" as the average of
an officer's monthly "compensation" for the latest thirty-six months of employment.
(R.R. at 67a.) "Compensation" means the total "earnings" paid during a specified
period, and "earnings" includes salary and other remuneration. (R.R. at 68a.)
The arbitrator determined: that the unused vacation payment was part of
the Officer's "compensation" because it was "earnings" paid to the Officer during the
final period of his employment. Thus, the arbitrator ruled that the Borough was
required to include the pent in its calculation of the Officer's pension benefits.
The Court of Common Pleas of Cumberland County (trial noun) affirmed because the
trial court could not review the arbitrator's determination that the Borough's unused
vacation payment was,;rt of the Dicer's "con4misation."3
3 Crrievance arbitration rulings in Act l l1 cases are subject to a narrow certiorari scope of
review, which- allows inquiry into only feu' aspects of an award: (1) the jurisdiction of the
arbitrator; (2) the regularity of the proceedings; (3) whether the arbitrator each his powers; and
(4) whether there has been a deprivation of constitutional rights. Town of McCandless U..
McCandless Police Officers Association, 587 Pa. 525, 901 A.2d 991 (2006).
RSF-2-
The Borough argues before this court that the arbitrator exceeded his
powers because the arbitration award compels the Borough to modify the Pension
Plan in violation of Act 205.4 However, because the arbitrator determined that the
unused vacation payment to the Officer was part of his "compensation" and because
the Pension Plan requires that the Borough include "compensation" in the calculation
of pension benefits, the arbitration award does not compel the Borough to modify the
Pension Plan.
The majority states that the Borough must modify the Pension Plan by
including unused vacation pay in the calculation of pension benefits. (Majority op. at
8-9.) However, the majority ignores the arbitrator's determination that the Officer's
unused vacation payment was "compensation." The Pension Plan always required,
and still requires, inclusion of "compensation" in the calculation of pension benefits.
The arbitration award does not require that the Borough modify that requirement.
Indeed, the majority does not identify any provision of the Pension Plan that the
Borough must modify as a result of the arbitration award.
Accordingly, unlike the majority, I would affirm.
ROCHELLE S. FRIED AN, Senior Judge
4 An arbitrator exceeds his powers if he orders an illegal act. City of Pittsburgh v. Fraternal
Order of Police, 595 Pa. 47, 938 A.2d 225 (2007).
RSF-3-
7
Y
?_
j f=
_
S=
?3 ?.i
s
Commonwealth Court of Pennsylvania
Kristen W. Brown
Prothonotary
Michael Krimmel, Esq.
Chief Clerk of Commonwealth Court
May 15, 2009
Certificate of Remittal/Remand of Record
TO:
RE: Shippensburg Pol. Assoc. v. Bor. of Shippensburg
No.901 CD 2008
Trial Court/Agency Dkt. Number: 08-0368 Civil Term
Trial Court/Agency Name: Qwnbediiiind Cou* Court of Common Pleas
Intermediate Appellate Court Number:
File Copy
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Hanisbure. PA 17120
717-255-1650
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is the entire record for the above matter.
Contents of Original Record:
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Date of Remand of Record: 5/15/2009
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F t
? T
?U `E u''jP J 1 12:
y
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Shippensburg Police Association
V. No. 901 C.D. 2008
Argued: December 8, 2008
Borough of Shippensburg,
Appellant
BEFORE: HONORABLE ROBERT SIMPSON, Judge'
HONORABLE JOHNNY J. BUTLER, Judge
HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
OPINION BY
JUDGE SIMPSON
FILED: March 24, 2009
The issue we decide is whether a grievance arbitration award violates
the Municipal Pension Plan Funding Standard and Recovery Act (Act 205),2 by
requiring inclusion of a lump sum payment for unused vacation leave in the
computation of a retiring police officer's monthly pension benefit without proof of
the award's effect on the applicable pension plan. The Borough of Shippensburg
(Borough) appeals an order of the Court of Common Pleas of Cumberland County
(trial court) denying its motion to vacate an arbitration award. The award required
the Borough to include a post-retirement payment for unused vacation pay in the
computation of a retired officer's monthly pension benefit. On appeal, the
Borough urges the arbitrator lacked jurisdiction to hear the grievance and the
arbitrator's award compels an illegal act. Concluding the arbitration award
violates Act 205, we reverse.
' This case was reassigned to the author on January 27, 2009.
2 Act of December 18, 1984, P.L. 1005, 53 P.S. §§895.101-895.803.
On December 7, 2006, Borough police officer David Lively (Officer)
notified the Borough in writing of his intention to retire after his last scheduled
workday, January 14, 2007. Officer requested the Borough pay him for his unused
vacation leave in combination with his last paycheck, deduct a 5% retirement
contribution from the payment, and include the payment in calculating his monthly
pension benefit. On January 17, 2007, the Borough issued Officer his last regular
paycheck as well as a separate check for his unused vacation time. It did not
deduct any amount as a retirement contribution, and it did not include the unused
vacation pay in the calculation of Officer's monthly pension benefit.
Officer instituted a grievance seeking inclusion of the unused vacation
pay in the calculation of his monthly pension benefit. The matter subsequently
proceeded to arbitration on two issues. The first issue was whether the grievance
was subject to arbitration in light of this Court's memorandum opinion in
Worthington v. Borough of Shippensburg, (Pa. Cmwlth., No. 82 C.D. 2001, filed
October 3, 2001), appeal denied, 570 Pa. 692, 808 A.2d 575 (2002), a case dealing
with the same issue in the same pension plan. In Worthington, we held the
retiree's receipt of unused vacation pay after retirement fell outside the time period
specified in the police pension plan for calculating average compensation upon
which the pension benefit was based. The second issue before the arbitrator was
whether the Borough violated a collective bargaining agreement (CBA) with the
Shippensburg Police Association (Association) by failing to include the unused
vacation pay in computing Officer's monthly pension benefit.
2
After consideration, the arbitrator found the grievance arbitrable
because the parties sought an interpretation of the CBA, which incorporated the
Borough's police pension plan. The arbitrator further determined our Worthington
decision did not control because the issues were not identical. On the merits, the
arbitrator concluded the language of the CBA and police pension plan require all
earnings paid to an employee during the computation period to be included in the
pension benefit calculation. By implication, the arbitrator determined the Borough
paid Officer for his unused vacation leave during the benefit computation period.
On appeal to the trial court, the Borough maintained the arbitrator
lacked jurisdiction because the Borough police pension plan provides that judicial
decisions affecting its provisions are binding, and our decision in Worthington
already determined the unused vacation payment issue. The Borough also
contended that the arbitrator exceeded his authority by mandating an illegal act. It
asserted the arbitrator's award violated the act known as the Police Pension Fund
Act (Act 600)3 as well as Act 205.
The respected trial court rejected the Borough's position the arbitrator
lacked jurisdiction to hear Officer's grievance. It recognized the CBA did not
remove from the arbitrator's jurisdiction the authority to determine the preclusive
effect of prior judicial decisions on the present controversy. On the merits, the trial
judge affirmed the arbitrator's award but opined the arbitrator wrongly decided the
issue before him. Specifically, the trial court recognized all elements of collateral
estoppel were present. Of particular note, the court determined the issues in the
3 Act of May 29, 1956, P.L. (1955) 1804, as amended, 53 P.S. §761-778.
3
present case and Worthington are identical. In doing so, the trial court rejected
Officer's assertions that the arbitrator found the Borough included the lump sum
payment for unused vacation leave in Officer's final pay. The court correctly
observed the arbitrator did not make such a finding nor did he find the Borough
tendered payment before Officer retired. The court then cited decisional law
holding that payment for unused vacation leave tendered after retirement should
not be included in the calculation of monthly pension benefits.'
Notwithstanding these factual and legal errors, the trial court felt
constrained by its limited scope of review to affirm the arbitration award on the
basis the award did not compel the Borough to commit an illegal act. The trial
court therefore denied the Borough's petition to vacate. The Borough appeals.'
Initially, we note, our review of a grievance arbitration award under
the act known as Act 1116 is a very constricted one and is in the nature of narrow
certiorari. Millcreek Twp. Police Ass'n v. Millcreek Twp., 960 A.2d 904 (Pa.
a See Kosey v. City of Washington Police Pension Bd., 459 A.2d 432 (Pa. Cmwlth. 1983)
(payment for unused vacation time made to retiring officer should not be considered part of the
officer's annual pay for purposes of computing pension benefits).
s The Pennsylvania State Association of Township Supervisors, the Pennsylvania State
Association of Township Commissioners, the Pennsylvania League of Cities and Municipalities,
and the Pennsylvania State Association of Boroughs appear as amici curiae in support of the
Borough. In their brief, amici curiae seek a clarification of the scope of review applicable where
the arbitrator's determination of jurisdiction is not dependent on findings of fact. The matter
here involves a contract interpretation over which the arbitrator had jurisdiction pursuant to the
parties' CBA. We therefore need not engage in this academic exercise.
6 Act of June 24, 1968, P.L. 237, as amended, 43 P.S. §§217.1-217.10. Act 111 governs
employer-employee relationships for police and fire personnel.
4
Cmwlth. 2008). Narrow certiorari allows us to inquire into only four aspects of an
Act 111 arbitration award: the jurisdiction of the arbitrator; the regularity of the
arbitration proceedings; whether the arbitrator exceeded his authority; and, whether
the arbitrator deprived one of the parties of constitutional rights. Id. In addition,
we may not disregard the arbitrator's findings or contract interpretation if the
arbitrator is even arguably construing or applying the contract and acting within
the scope of his authority. City of Pittsburgh v. Fraternal Order of Police Fort Pitt
Lod eg_No. 1, 764 A.2d 101 (Pa. Cmwlth. 2000).
The Borough raises three issues on appeal. The Borough first assigns
error in the trial court's conclusion the arbitrator had jurisdiction to hear Officer's
grievance. It further asserts the arbitration award violates Section 5(c) of Act 600,
53 P.S. §771(c), by requiring the payment of a pension benefit not based on
"salary. ,7 As a final assignment of error, the Borough argues the arbitration award
violates Act 205 because it requires a modification of the police pension fund
without proof of actuarial soundness.
At the outset, we agree with the trial court's conclusions the arbitrator
had jurisdiction over Officer's grievance and the arbitration award does not violate
Act 600. We discern nothing in the CBA depriving the arbitrator of jurisdiction
over this contract dispute, nor does our scope of review permit disregard of the
7 See Borough of Nazareth v. Nazareth Borough Police Association, 545 Pa. 85, 680
A.2d 830 (1996) (the term salary as embodied in Act 600 denotes base salary and excludes other
forms of compensation unless the parties expanded the definition by past practice or agreement).
5
arbitrator's interpretation of the method of calculating monthly pension benefits
under the CBA and Borough police pension plan.
However, we respectfully disagree with the trial court that the
arbitration award does not compel the Borough to commit an illegal act. The
Borough maintains the arbitrator's award compels an illegal act because it requires
a modification of the pension fund without proof of its actuarial soundness, in
violation of Act 205. Defending the arbitrator's award, the Association contends
the award merely requires the Borough to comply with the pension plan's method
of calculating benefits and does not constitute a modification of the plan. We
agree with the Borough.
Pursuant to Section 301(a) of Act 205, the provisions of Act 205
apply to any municipality which has established and maintains a pension plan for
the benefit of its employees. 53 P.S. §895.301(a). In addition, Act 205 applies
regardless of any pension plan or contract. Id.; Borough of Ellwood Cit?v.
Ellwood City Police Dep't, Wage & Policy Unit, 573 Pa. 353, 825 A.2d 617
(2003). Section 306(a) of Act 205 declares "that any actual or potential failure by
a municipality to comply with the applicable funding standard established by this
act threatens serious injury to the affected municipal pension plan, the entire
system of public employee plans in the Commonwealth and to the Commonwealth
itself." 53 P.S. §895.306(a) (emphasis added).
Prior to adoption of any benefit plan modification by a municipality,
Section 305 of Act 205 requires a cost estimate of the effect of the proposed
6
benefit plan modification. 53 P.S. §895.305(a). The contents of the cost estimate
must be complete and accurate, and must disclose "the impact of the proposed
benefit plan, the modification of the future financial requirements of the pension
plan and the future minimum obligation of the municipality with respect to the
pension plan." 53 P.S. §895.305(e).
On this issue, our recent decision in Upper Merion Township v. Upper
Merion Township Police Officers, 915 A.2d 174 (Pa. Cmwlth. 2006), 2ppeal
denied, 593 Pa. 736, 929 A.2d 647 (2007), is instructive. There, the parties' 1982
CBA conferred a monthly pension benefit for the surviving spouse and dependent
children of a deceased member amounting to 50% of what the member received or
would have received had the member been retired at the time of death. In 2002,
the General Assembly retroactively amended Act 6008 to grant a surviving spouse
of a retired police force member at least 50% of the pension the deceased member
either received or would have received if retired at the time of death.
After the 2002 amendments to Act 600, the parties executed a new
CBA for the years 2003 through 2008, which increased the survivor's benefit to
100%. The police union subsequently filed a grievance alleging the township
violated the CBA when it refused to increase the survivor's benefit for members
who retired before the CBA's effective date.
A grievance arbitrator found in favor of the police union, but the court
of common pleas vacated the arbitrator's award. Failing to find an Act 205
8 Act of April 17, 2002, P.L. 239.
7
actuarial report in the record, the court determined the arbitrator exceeded his
authority by requiring the township to commit an illegal act, that is, to modify its
pension plan without the mandated actuarial report.
This Court also affirmed. Reviewing prior precedent establishing the
prevailing mandate of Act 205 over CBAs,9 we recognized the retroactive effect of
the survivor's benefit clearly impacted the township's administration of the
pension plan, regardless of whether the parties intended the CBA to apply
retroactively.
Pursuant to Upper Merion Township, a grievance arbitrator who
awards a modification of a police pension plan in the absence of an Act 205 cost
estimate requires an illegal act necessitating vacation. The same result obtains
here.
We reject the Association's position the arbitrator's award does not
modify the pension plan. By joint stipulation, the parties agreed for the last 25
years the police pension plan has not included unused vacation pay in the
9 See Northampton Tn. v. Northampton Twp. Police Benevolent Ass'n, 885 A.2d 81
(Pa. Cmwlth. 2005) (Act 111 awards modifying police pension plans must comply with Act
205); City of Erie v. Int'1 Ass'n of Firefighters Local 293, 836 A.2d 1047 (Pa. Cmwlth. 2003)
(arbitration award of Deferred Retirement Option Program illegal where record lacked cost
estimate demonstrating pension plan's actuarial soundness); City of Butler v. City of Butler
Police D p't, Fraternal Order of Police, Lodge #32, 780 A.2d 847 (Pa. Cmwlth. 2001)
(arbitration panel exceeded its authority by eliminating pension contributions without Act 205
costs estimate); Borough of Doylestown v. Doylestown Borough Police Ass'n, 732 A.2d 701
(Pa. Cmwlth. 1999) (arbitrator exceeded authority by reducing member contributions where
actuarial report found borough's pension plan underfunded).
8
d
calculation of pension benefits. Borough's Br. at Ex. B. The arbitrator's award
changes this. This change unsettles the Borough's once predictable pension
liability. Also, the change has the potential to modify the rules of the game for
computing all Borough police employee pensions.
However, there was no cost estimate to quantify the change. Because
the record lacks proof of the affect of this change on the pension plan's actuarial
soundness, the arbitrator exceeded his authority.
Moreover, an arbitration award may only require a public employer
do that which it could voluntarily. City of Scranton v. Fire Fighters Local Union
of Int'l Ass'n of Fire Fighters, AFL-CIO, _ A.2d _ (Pa. Cmwlth., Nos. 2314
C.D. 2007, 213 C.D. 2008, filed January 23, 2009). We do not believe the
Borough could voluntarily include Officer's post-retirement unused vacation
payment in the calculation of his monthly pension benefit without an Act 205 cost
estimate.
If the Borough voluntarily included the lump sum payment in the
calculation of Officer's monthly pension benefit, despite a long history of treating
all other officers less advantageously, it could be a violation of the Pennsylvania
Employe Relations Act.10 See Millcreek Township School District v. Pennsylvania
Labor Relations Board, 631 A.2d 734 (Pa. Cmwlth. 1993) (grant of longer contract
term to incoming employee, which longer term was not available to bargaining unit
members, was unfair labor practice). See also Jefferson-Morgan Sch. Dist., 9 Pa.
10 Act of July 23, 1970, P.L. 563, as amended, 43 P.S. §§1101.101-1101.2301.
9
Pub. Emp. R. ¶9056 (1978) (unfair labor practice found where school district hired
incoming teacher at wages higher than maximum salary for unit members);
Highland Sewer & Water Auth., 4 Pa. Pub. Emp. R. 116 (1974) (unfair labor
practice found where public employer unilaterally increased wages for one
employee during contract negotiations); Gen. Braddock Area Sch. Dist., 4 Pa. Pub.
Emp. R. 86 (1974) (unfair labor practice found where school district unilaterally
increased basketball coaches' wages). At the very least, such voluntary
munificence toward Officer would result in a chorus demanding the same benefit.
Under either of these scenarios, the Borough would need to treat all
bargaining unit members the same. Thus, the Borough would need to roll back the
voluntary favorable treatment of Officer, or to obtain an Act 205 cost estimate to
quantify the costs of offering an identical benefit to all officers. The same
considerations are present in this case as a result of the arbitrator's award.
Because there is no cost estimate here to support a de facto change in
the manner of computing a retiring police officer's monthly pension benefit, we
reverse.
10
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Shippensburg Police Association
V.
No. 901 C.D. 2008
Borough of Shippensburg,
Appellant
ORDER
AND NOW, this 20' day of March, 2009, the order of the Court of
Common Pleas of Cumberland County is hereby REVERSED.
ROBERT SIMMN, Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Shippensburg Police Association
V.
Borough of Shippensburg,
Appellant
No. 901 C.D. 2008
Argued: December 8, 2008
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE JOHNNY J. BUTLER, Judge
HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
CONCURRING AND DISSENTING OPINION
BY SENIOR JUDGE FRIEDMAN FILED: March 24, 2009
I agree with the majority that the arbitrator in this case had jurisdiction
over police officer David Lively's (the Officer) grievance and that the arbitration
award does not mandate that the Borough of Shippensburg (Borough) violate the
Police Pension Fund Act (Act 600).' However, I disagree that the arbitration award
compels the Borough to modify its pension plan in violation of section 305 of the
Municipal Pension Plan Funding Standard and Recovery Act (Act 205).2
1 Act of May 29, 1956, P.L. (1955) 1804, as amended, 53 P.S. §§767-778.
2 Act of December 18, 1984, P.L. 1005, 53 P.S. §895.305. Section 305(a) of Act 205
provides, in pertinent part, as follows:
(a) Presentation of cost estimate. - Prior to the adoption of any benefit
plan modification by the governing body of the municipality, the chief
administrative officer of each pension plan shall provide to the
governing body of the municipality a cost estimate of the effect of the
proposed benefit plan modification.
53 P.S. §895.305(a).
In this case, when the Officer retired, the Borough gave the Officer a
check for unused vacation along with his last payroll check. The Borough did not
include the unused vacation payment in calculating the Officer's pension benefits, as
the Officer requested. The Officer then filed a grievance, and the matter proceeded to
arbitration.
Under the Borough of Shippensburg Police Pension Plan (Pension Plan),
a police officer's pension benefits are based, in part, on "Average Compensation."
(R.R. at 75a.) The Pension Plan defines "Average Compensation" as the average of
an officer's monthly "compensation" for the latest thirty-six months of employment.
(R.R. at 67a.) "Compensation" means the total "earnings" paid during a specified
period, and "earnings" includes salary and other remuneration. (R.R. at 68a.)
The arbitrator determined that the unused vacation payment was part of
the Officer's "compensation" because it was "earnings" paid to the Officer during the
final period of his employment. Thus, the arbitrator ruled that the Borough was
required to include the payment in its calculation of the Officer's pension benefits.
The Court of Common Pleas of Cumberland County (trial court) affirmed because the
trial court could not review the arbitrator's determination that the Borough's unused
vacation payment was part of the Officer's "compensation."'
3 Grievance arbitration rulings in Act 111 cases are subject to a narrow certiorari scope of
review, which allows inquiry into only four aspects of an award: (1) the jurisdiction of the
arbitrator; (2) the regularity of the proceedings; (3) whether the arbitrator exceeded his powers; and
(4) whether there has been a deprivation of constitutional rights. Town of McCandless v.
McCandless Police Officers Association, 587 Pa. 525, 901 A.2d 991 (2006).
RSF-2-
The Borough argues before this court that the arbitrator exceeded his
powers because the arbitration award compels the Borough to modify the Pension
Plan in violation of Act 205.4 However, because the arbitrator determined that the
unused vacation payment to the Officer was part of his "compensation" and because
the Pension Plan requires that the Borough include "compensation" in the calculation
of pension benefits, the arbitration award does not compel the Borough to modify the
Pension Plan.
The majority states that the Borough must modify the Pension Plan by
including unused vacation pay in the calculation of pension benefits. (Majority op. at
8-9.) However, the majority ignores the arbitrator's determination that the Officer's
unused vacation payment was "compensation." The Pension Plan always required,
and still requires, inclusion of "compensation" in the calculation of pension benefits.
The arbitration award does not require that the Borough modify that requirement.
Indeed, the majority does not identify any provision of the Pension Plan that the
Borough must modify as a result of the arbitration award.
Accordingly, unlike the majority, I would affirm.
ROCHELLE S. FRIED AN, Senior Judge
4 An arbitrator exceeds his powers if he orders an illegal act. City of Pittsburgh v. Fraternal
Order of Police, 595 Pa. 47, 938 A.2d 225 (2007).
RSF - 3 -
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CERTIFICATE AND TRANSMITTAL OF RECORDS UNDER
PENNSYLVANIA RULE OF APPELLATE PROCEDURE 1.931 (C)
To the Prothonotary of the Apellate Court to which the within matter has been appealed:
Commonwealth Court of PA
The undersigned, Prothonotary of the Court of Common Pleas of Cumberland County,
the said court being a court of record, do hereby certify that annexed hereto is a true and
correct copy of the whole and entire record, including an opinion of the court as required
by PA R.A.P. 1925, the original papers and exhibits, if any on file, the transcript of the
proceedings, if any, and the docket entries in the following matter:
Shippensburg Police Association
vs.
Borough of Shippensburg
2008-368 Civil Term
901 CD 2008
The documents comprising the record have been numbered from No.l to 190, and
attached hereto as Exhibit A is a list of the documents correspondingly numbered and
identified with reasonable definiteness, including with respect to each document, the
number of pages comprising the document.
The date on which the record has been transmitted to the Appellate Court is O5/ 27/2008 .
C s R. Long, no ry
Regina Lebo
An additional copy of this certificate is enclosed. Please sien and date copy, thereby
acknowledeing receipt of this record.
Date
Signature & Title
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