Section 895.607 - Remedies applicable to various recovery program levels(a)Generally.--Notwithstanding any provision of law, municipal charter, municipal ordinance, municipal resolution, or pension plan agreement, document or instrument to the contrary, the remedies specified in this section shall be available to the applicable municipalities.(b)Aggregation of trust funds.--If the municipality has established and maintained more than one pension plan for its employees and there are pension funds associated with those pension plans, the municipality may aggregate the assets to the credit of the various pension funds into a single pension trust fund. Subsequent to the aggregation, the pension trust fund shall be the funding mechanism for all pension plans connected with the aggregation. (1) Each pension plan subject to the aggregation shall have an undivided participation in the assets of the combined pension trust fund. For accounting purposes, the value of the participation by each plan shall be calculated annually. The value for the initial year following aggregation shall be that portion of the total value of the pension trust fund which bears the same relationship that the value of the assets of the pension plan, as of the date of the aggregation plus the contributions received by the pension trust fund with respect to that pension plan since the date of aggregation and reduced by the amount of retirement annuities and benefits paid from the pension trust fund for annuitants and benefit recipients of that pension plan since the date of aggregation, bears to the total value of all assets transferred to the pension trust fund as of the date of aggregation plus the total contributions received by the pension trust fund since the date of aggregation and reduced by the total amount of retirement annuities and benefits paid for all annuitants and benefit recipients since the date of aggregation. The value of the participation for each year subsequent to the initial year following aggregation shall be that portion of the total value of the pension trust fund which bears the same relationship that the value of the participation of the pension plan, as of the close of the preceding year plus the contributions received by the pension trust fund with respect to that pension plan during the year and reduced by the amount of retirement annuities and benefits paid from the pension trust fund for annuitants and benefit recipients of that pension plan during the year, bears to the total value of all participation in the pension trust fund as of the close of the preceding year plus the total contributions received by the pension trust fund during the year and reduced by the total amount of retirement annuities and benefits paid for all annuitants and benefit recipients during the year.(2) Legal title to assets in the aggregated pension trust fund shall be in the municipality as trustee, or its nominees as trustees, for any person having a beneficial interest in a particular pension plan which is associated with the pension trust fund.(3) The assets of the aggregated pension trust fund shall be invested in investment securities which are authorized investments pursuant to any applicable law for any of the associated pension plans.(4) Investment earnings shall be allocated to each associated pension plan in proportion to the most recently determined participation value.(5) Valuation of assets shall be pursuant to the provisions of section 202(e)(1) and any applicable rules and regulations issued by the commission.(6) The aggregated pension trust fund shall be managed by a board of trustees. The board of trustees shall include at least one representative of the active membership of each pension plan included in the aggregated pension trust fund, who shall be elected by the active membership of the applicable pension plan. The remaining members of the board of trustees shall be drawn from the managing boards or entities of the associated pension plans, in a number equal to the members elected by the employees. If there is a deadlock, the members of the managing boards or entities shall mutually agree upon a member of the general public to cast the deciding vote.(c)Total member contribution.--(1) The municipality may specify total member contributions to the pension plan. The member contributions shall be specified as a percentage of covered salary.(2) For a defined benefit plan in existence on the effective date of this subsection, the total member contribution shall not exceed 50% of the normal cost of the pension plan, expressed as a percentage of covered payroll, as reported in the most recent actuarial valuation report of the pension plan or the applicable maximum percentage rate of covered salary specified in paragraph (4), whichever is less.(3) For a defined benefit plan which is improved subsequent to the effective date of this subsection and which benefit plan improvement causes an increase in the normal cost of the benefit plan of an amount equal to or greater than 1% of covered payroll as reported in the most recent actuarial valuation report of the improved pension plan, the member contribution shall also be increased. The increased total member contribution shall not be less than 30% of the normal cost or more than the lesser of 50% of the normal cost or the applicable maximum percentage rate of covered salary specified in paragraph (4). The normal cost for use in establishing the increased total member contribution shall be the normal cost of the improved benefit plan, expressed as a percentage of covered payroll, as reported in the most recent actuarial valuation report of the improved pension plan.(4) The maximum percentage of covered salary total contributions shall be equal to the greater of the total employee contribution rate to the Federal old age, survivors, disability and health insurance program pursuant to the applicable Federal law in effect on January 1, 1984 applied to total covered salary or the employee contribution then in effect or subsequently negotiated in conjunction with a benefit increase.(5) If any increase in member contributions equal to or greater than 1% of covered salary is required pursuant to the operation of this subsection, the increase shall be implemented over a period of four years through an annual increase equal to one fourth of the total required increase, which successive increases shall be effective on the first day of the first pay period occurring on or after January 1 on each of the succeeding four years.(6) The establishment of total member contributions pursuant to this subsection shall be within the scope of collective bargaining pursuant to the applicable law with representatives of the collective bargaining unit for the affected type of municipal employee, if any.(d)Deviation from municipal contribution limitations.--The municipality may exceed any limitations on municipal contributions to municipal pension plans otherwise applicable to the municipality.(e)Establishment of a revised benefit plan for newly hired municipal employees.--The municipality may establish a revised benefit plan of the pension plan applicable to any employee first hired on or after the effective date of the instrument establishing the revised benefit plan. At the option of the municipality, the revised benefit plan may be extended to include an employee first hired prior to the effective date of the instrument establishing the revised benefit who elects the coverage. Member contributions with respect to the revised benefit plan of the pension plan shall at a minimum be equal to or exceed 30% and at a maximum not to exceed 50%, of the normal cost of the pension plan, expressed as a percentage of covered payroll, as reported in the most recent actuarial valuation report of the pension plan. A revised benefit plan for newly hired municipal employees shall be developed with consultation with representatives of the collective bargaining unit applicable to the affected type of municipal employee, if any, and shall be within the scope of collective bargaining pursuant to the applicable law subsequent to the establishment of the revised benefit plan.(e.1)Construction.--Nothing in this act shall be construed to permit or deny the right of a municipality which has, prior to the effective date of this subsection, adopted a benefit plan under section 606 to adopt or implement an additional or successor, revised pension benefit plan affecting future employees of the municipality.(f)Special municipal taxing authority.--(1) If the tax rates set by the municipality on earned income or on real property are at the maximum provided by applicable law, the municipality may increase its tax on either earned income or real property above those maximum rates. The proceeds of this special municipal tax increase shall be used solely to defray the additional costs required to be paid pursuant to this act which are directly related to the pension plans of the municipality. The municipality utilizing this special municipal taxing authority shall not reduce the level of municipal contributions to the pension plans prior to the implementation of the special municipal taxing authority.(2) The average level of municipal contributions to the pension plans from all revenue sources for the three years immediately prior to the implementation of the special municipal taxing authority shall be expressed as a percentage of the average covered payroll for that same three-year period: Provided, however, That any supplemental contributions made to the plans pursuant to any pension recovery legislation enacted by the municipalities shall be excluded for purposes of determining the level of municipal contribution to the pension plans prior to the implementation of the special municipal taxing authority. In each year subsequent to the implementation of the special municipal taxing authority, the municipal contributions to the pension plan from all revenue sources existing prior to the implementation of the special existing municipal taxing authority, reduced by any supplemental pension recovery contributions, shall equal or exceed this average percentage of the current covered payroll. A municipality utilizing the provisions of section 404 may levy or continue to levy the special municipal tax increase under this subsection provided that the municipality does not reduce the level of municipal contributions to the pension plans prior to the implementation of the special municipal taxing authority. In executing the procedure prescribed in this subsection to determine the level of municipal contributions, the debt service payments for bonds or notes issued under section 404 shall be considered municipal contributions.(f.1)Limitation on special municipal taxing authority.--Beginning January 1, 2010, and continuing for each year thereafter, the special municipal tax authorized in subsection (f) may no longer be assessed or used for any purpose other than to defray the additional costs required to be paid pursuant to this act and which are directly related to the pension plans of the municipality and which are included in the calculation of the financial requirements of the pension plan and the minimum municipal obligation. If the municipality assesses or utilizes the special municipal tax increase to fund other post-employment benefits, the cost of those benefits shall be subject to the actuarial funding and reporting standards of this act.(g), (h) Deleted by 2009, Sept. 18, P.L. 396, No. 44, § 11, imd. effective(h.1)Reduced minimum municipal obligation.--(1) The time period for use of the reduced minimum municipal obligation and reduced amortization payment shall be limited to the period applicable to the municipality's level of distress as last determined by the commission. (2) If a municipality's distress level becomes worse as of a future filing period, the reduced amortization and minimum municipal obligation remedy shall be extended by the difference between:(i) the period allowed for the previous distress level; and(ii) the period applicable to the new level of distress.(3) If a municipality's distress level improves, the reduced minimum municipal obligation and reduced amortization period shall continue for the duration of the period applicable to the previous distress level determination.(i)Plan for administrative improvement.--The municipality shall prepare and submit to the commission a comprehensive plan for administrative improvements in the pension plans, including, but not limited to, an improvement in investment performance, an increase in the liquidity of invested assets, an improved projection of future cash flow requirements, a reduction in any time delays for the deposit of member deductions and municipal contributions in the funding mechanism for the pension plan or an improvement in the collection of any other accounts receivable. Upon approval of the commission, the municipality shall implement the plan for administrative improvements. 1984, Dec. 18, P.L. 1005, No. 205, § 607. Amended 1986, Feb. 14, P.L. 23, No. 9, § 1, retroactive effective Sept. 30, 1985; 1996, Dec. 10, P.L. 934, No. 150, § 4, imd. effective; 1998, June 18, P.L. 626, No. 82, § 3, imd. effective; 2009, Sept. 18, P.L. 396, No. 44, § 11, imd. effective.