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PENNSYLVANIA STATUTES
TITLE 53. MUNICIPAL AND QUASI-MUNICIPAL CORPORATIONS
PART I. GENERAL MUNICIPAL LAW
CHAPTER 8C. MUNICIPAL PENSION PLAN FUNDING STANDARD AND RECOVERY ACT
CHAPTER 10. PROVISIONS RELATING TO CITIES OF THE FIRST CLASS
Date:
08/31/2009
Document:
§ 895.1002. Cities of the first class
(a) GENERAL RULE; BENEFIT PLAN STUDY. --
(1) A city of the first class may elect to use the deferrals of
required payments authorized under this section in lieu of the
mandatory provisions of the financially distressed municipal pension
system recovery program contained in section 606 until January 1,
2016. Notwithstanding any other provision of this act or other law,
the provisions of Chapters 5 and 6 in effect on July 1, 2009, shall
continue in effect for, shall apply to and shall be utilized with
respect to cities of the first class until January 1, 2016.
(2) Benefit plan studies of each benefit plan maintained or to be
established by a city of the first class shall be conducted by a
special commission comprised of the members of the city's pension and
retirement board, the mayor of the city, the chair of the commission
and the chair of the governing board of the Pennsylvania
Intergovernmental Cooperation Authority. The chair of the governing
board of the Pennsylvania Intergovernmental Cooperation Authority shall
serve as chair of the special commission. The city's pension and
retirement board shall provide and pay for actuarial and administrative
support to the special commission. The first study shall be completed
within two years following the effective date of this section.
Subsequent reports shall be completed every two years thereafter until
January 1, 2016. Copies of the reports shall be submitted to the chair
and minority chair of the Appropriations Committee of the Senate, the
chair and minority chair of the Finance Committee of the Senate, the
chair and minority chair of the Appropriations Committee of the House
of Representatives and the chair and minority chair of the Finance
Committee of the House of Representatives and shall be available for
inspection by the public.
(b) AMORTIZATION. --Notwithstanding any other law to the contrary, the city may amortize its entire unfunded actuarial accrued liability, as measured on a valuation date selected by the city that occurs in the plan year commencing July 1, 2009, as a level dollar amount with the amortization target date being the end of the plan year occurring 30 years after the plan year commencing July 1, 2009, with payments to commence in the next plan year. In order to extend the amortization schedule provided under this subsection, the city must comply with the following:
(1) File a revised actuarial valuation report reflecting the
amortization period extension and the actuarial assumed rate in effect
on the valuation date with the commission no later than March 31, 2010.
(2) The revised actuarial valuation under paragraph (1) may not be
filed in lieu of the actuarial valuation report required under section
202(b)(4)(v)(A) to be filed March 31, 2010, and may be used only for
the purposes of recalculating the minimum municipal obligation of the
city for the plan year commencing July 1, 2009, and calculating the
minimum municipal obligation of the city for the plan year commencing
July 1, 2010, to reflect the amortization period extension. The
revisions in the revised report shall supersede comparable information
in the original report.
(3) A revised actuarial valuation report under this subsection shall
not affect distributions under the General Municipal Pension System
State Aid Program under Chapter 4.
(c) REVISED OBLIGATION. --Notwithstanding any other provision of law to the contrary, the city is authorized to defer a portion of the minimum municipal funding obligation required under section 302 in accordance with the following:
(1) For the plan year ending June 30, 2010, deferral may be in an
amount not to exceed $ 155,000,000.
(2) For the plan year ending June 30, 2011, deferral may be in an
amount not to exceed $ 80,000,000.
(d) INTEREST. --Amounts deferred under subsection(c) shall bear interest at the rate of 8.25% which shall be calculated from the beginning of the plan year in which the deferral was made. Accrued interest on amounts deferred shall be paid annually on or before June 30th of the years 2010, 2011 and 2012.
(e) REPAYMENT. --On or before June 30, 2013, the city shall repay the following:
(1) If the amount deferred is equal to or greater than $ 90,000,000, at
least $ 90,000,000, plus interest accrued on all amounts deferred.
(2) If the total amount deferred is less than $ 90,000,000, the total
amount deferred, plus interest accrued on that amount.
(f) BALANCE. --The balance of all amounts deferred, including interest accrued and unpaid on amounts deferred, shall be repaid by June 30, 2014.
(g) UNPAID AMOUNTS. --Amounts deferred and interest under subsections (c) and (d) which are not repaid under subsection (f) shall be added to the minimum municipal obligation of the city for the following plan year, with interest calculated and due until the date the amounts due are paid.
(h) REQUIREMENTS. --In order to retain the authority to utilize the deferrals under this section, the city must repay the deferred amount required under subsection (e) by June 30, 2013, and the deferred amount required under subsection (f) by June 30, 2014.
(i) WITHHOLDING. --If the city fails to meet any of the requirements of subsection(h), the following apply:
(1) The commission shall notify the Secretary of the Budget and the
State Treasurer of the city's failure to comply with subsection (h) and
send a copy of the notice to the chair and minority chair of the
Appropriations Committee and the Finance Committee of the Senate and
the Appropriations Committee and the Finance Committee of the House of
Representatives.
(2) The secretary shall assist the State Treasurer in the
identification of grants, loans, entitlements and payments made to the
city by the Commonwealth.
(3) Except as set forth in paragraph (4), within 30 days of receipt of
the notice, the State Treasurer shall withhold any grant, loan,
entitlement, payment or combination of grants, loans, entitlements and
payments to the city by the Commonwealth, or any of its agencies, in an
amount equal to deferral amounts not repaid under subsections (e) and
(f). The amount withheld shall be deposited into the city's pension
fund.
(4) The State Treasurer shall not withhold the following:
(i) Funds for capital projects under contract.
(ii) Funds granted from the Federal Government or the Commonwealth
relating to a declaration of disaster.
(iii) Pension fund payments.
(iv) Funds administered by the city's department of human services or
department of health.
(v) Funds pledged to repay bonds or notes issued under the act of
October 18, 1972 (P.L. 955, No. 234), known as The First Class City
Revenue Bond Act.
(j) REPORTS. --During a period in which deferrals of the minimum municipal obligation or interest on the obligation are outstanding, the city shall file actuarial valuation reports annually with the commission.
(k) CALCULATION. --The calculation of the unfunded actuarial accrued liability made and certified by an approved actuary under section 202 shall not include any amounts deferred under this subsection so long as the city is paying interest accrued on the deferred amounts and repaying the deferred amounts in accordance with the terms of this subsection.
(l) BINDING OBLIGATION. --The repayment of amounts deferred, including interest accrued on deferred amounts, as and when required under this subsection shall constitute a binding and absolute commitment on the city. The city shall include all amounts due to be paid under this subsection in the budget of the city and all amounts due to be paid shall be appropriated and paid in order to make timely repayment of any amounts deferred, including interest accrued on deferred amounts. Payment shall be unconditional and without setoff.
(m) STANDING. --A person who is beneficially interested in the city paying its minimum municipal obligation, including amounts deferred, under this subsection shall have standing to institute a legal proceeding for mandamus to enforce the obligation of the city to make required repayments in the same manner as a proceeding to enforce payment requirements of an alternative funding mechanism under section 1001. A beneficially interested person is a person who meets the qualifications set forth in section 1001(f) .
(n) PAYMENT. --The city shall be required to pay the balance of its minimum municipal obligation in full when due in each plan year.
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