Pennsylvania Code › Title 16 - COMMUNITY AFFAIRS › Part IV - Public Employee Retirement Commission › Chapter 205 - RECOVERY PROGRAM FOR MUNICIPAL PENSION SYSTEMS › Section 205.2 - Delayed implementation of funding standard

Current through Register Vol. 54, No. 28, July 13, 2024
(a)
Delayed implementation of funding
				standard over 10 years.
A municipality implementing section 607(g) of
				the act (53 P. S. §
										895.607(g)), authorizing
				delayed implementation of the funding standard over 10 years, is required to
				appropriate in the budget of the municipality prepared in 1985 and to
				contribute to each municipal pension plan in 1986, an amount equal to not less
				than the municipal contribution to the municipal pension plan made in 1985 and
				10% of the difference between that amount and the full minimum municipal
				obligation with respect to the pension plan under section 302 or 303 of the act
				(53
				P. S. §§
										895.302 or
				895.303), whichever is
				applicable. For a subsequent year during the delayed implementation period, the
				municipality shall appropriate and make a municipal contribution to each
				municipal pension plan of an amount equal to not less than the municipal
				contribution to the municipal pension plan made in the immediately preceding
				year and the following percentage of the difference between that amount and the
				full minimum municipal obligation with respect to the pension plan under
				section 302 or 303 of the act, whichever is applicable:
Year of budget
							 preparation
Year of
							 contribution
Percentage of difference
1986
1987
20%
1987
1988
30%
1988
1989
40%
1989
1990
50%
1990
1991
60%
1991
1992
70%
1992
1993
80%
1993
1994
90%
1994 and thereafter
1995 and thereafter
100%
(b)
Delayed implementation of funding standard over 15 years.
A
				municipality implementing section 607(h) of the act, authorizing delayed
				implementation of the funding standard over 15 years, is required to
				appropriate in the budget of the municipality prepared in 1985 and to
				contribute to each municipal pension plan in 1986, an amount equal to not less
				than the municipal contribution to the municipal pension plan made in 1985 and
				6.7% of the difference between that amount and the full minimum municipal
				obligation with respect to the pension plan under section 302 or 303 of the
				act, whichever is applicable. For a subsequent year during the delayed
				implementation period, the municipality shall appropriate and make a municipal
				contribution to each municipal pension plan of an amount equal to not less than
				the municipal contribution to the municipal pension plan made in the
				immediately preceding year and the following percentage of the difference
				between that amount and the full minimum municipal obligation with respect to
				the pension plan under section 302 or 303 of the act, whichever is applicable:
Year of budget
							 preparation
Year of
							 contribution
Percentage of difference
1986
1987
13.4%
1987
1988
20.1%
1988
1989
26.8%
1989
1990
33.5%
1990
1991
40.2%
1991
1992
46.9%
1992
1993
53.6%
1993
1994
60.3%
1994
1995
67.0%
1995
1996
73.7%
1996
1997
80.4%
1997
1998
87.1%
1998
1999
93.8%
1999 and thereafter
2000 and
							 thereafter
100%
(c)
Increase in unfunded accrued liability for municipalities that are
				financially distressed.
For a municipal pension plan of a municipality
				which has been determined to be financially distressed and to which a remedy of
				delayed implementation of the funding standard under section 607(g) or (h) of
				the act is applicable, increases in the unfunded accrued actuarial liability of
				the municipal pension plan attributable solely to the amortization of the
				unfunded accrued actuarial liability on a level percentage of payroll basis
				will not be deemed to be an actuarial experience loss within the meaning of
				section 202(b)(3)(V) or (4)(V) of the act (53 P. S. §
										895.202(b)(3)(V) or
				(4)(V)).
(d)
Continuation of amortization
				based on level percentage of payroll.
For a municipal pension plan for
				which the municipality has elected to calculate the annual amortization
				contribution for the unfunded liability existing as of the beginning of the
				1985 plan year on the basis of a level percentage of future increasing covered
				payroll, the portion of the amortization contribution attributable to that
				increment of unfunded actuarial accrued liability shall continue to be
				calculated on the same basis for each remaining year of the amortization
				period. If the municipality, by formal action of the governing body,
				permanently rescinds its prior election to use a level percentage of payroll
				basis for amortization of the applicable increment of unfunded actuarial
				accrued liability, the remaining balance of the applicable increment of
				unfunded actuarial accrued liability shall be amortized over the remaining
				years of the initial amortization period on a level dollar basis.
(e)
Reduction of amortization
				period
. For a municipal pension plan for which the municipality has
				elected to amortize the unfunded actuarial accrued liability existing as of the
				beginning of the 1985 plan year over a 40-year period under section 607(h) of
				the act, the municipality may, by formal action of the governing body,
				permanently rescind its prior election and amortize the remaining balance of
				the applicable increment of unfunded actuarial accrued liability by the end of
				the plan year occurring in calendar year 2015.
(f)
Definition of municipal
				contribution
. For the purpose of calculating the amount of the
				required contributions to the pension plan under section 607(g) or (h) of the
				act (53 P. S. §
										895.607(g) and
				(h)) for plan years commencing after December
				31, 1991, the term "municipal contribution" means the total contributions made
				by the municipality, including allocations of General Municipal Pension System
				State Aid.
(g)
Termination
				of delayed implementation of funding standard
. If a municipality
				provides aggregate funding to a municipal pension plan that satisfies the full
				minimum municipal obligation determined under section 302 or section 303 of the
				act (53 P. S. §§
										895.302
				and 895.303), the municipality
				may not subsequently delay implementation of the funding standard under section
				607(g) or (h) of the act in that municipal pension plan.