53 Pa. Stat. § 895.102
Except as provided in Chapter 7, the following words and phrases when used in this act shall have the meanings given to them in this section unless the context clearly indicates otherwise:
"Actuarial accrued liability." That portion of the actuarial present value of the pension plans benefits and expenses which is allocated to the period ending at the beginning day of the current plan year by the actuarial cost method.
"Actuarial assumptions." The demographic actuarial assumptions and the economic actuarial assumptions when considered together.
"Actuarial cost method." The procedure for determining the actuarial present value of the benefits and expenses of the pension plan and for developing an actuarially equivalent allocation of that value to various time periods, usually in the form of a normal cost and an actuarial accrued liability.
"Actuarial present value." The value of an amount or series of amounts payable or receivable at various times, determined as of a given date by the application of a particular set of actuarial assumptions.
"Actuarial valuation report." A report which summarizes the calculations used to determine the normal cost and actuarial accrued liabilities of a benefit plan according to a stated actuarial cost method and based upon stated demographic and economic actuarial assumptions, the payment necessary to amortize over a stated period any unfunded actuarial accrued liability disclosed, the payment necessary to prevent any increase in any disclosed unfunded actuarial accrued liability, the actuarial balance sheet of the pension plan and any other relevant financial and demographic data.
"Actuarial value of assets." The value of cash, investments and other property belonging to a pension plan, as used by an approved actuary for the purpose of preparing an actuarial valuation report.
"Alternative funding mechanism." A method adopted by a city of the first class to fund all or a portion of an unfunded actuarial accrued liability calculated as of the date of an actuarial valuation report prepared under Chapter 3, which method shall include either the entering into a service agreement between the city and an authority established under the act of August 23, 1967 (P.L. 251, No. 102), known as the Economic Development Financing Law, in which the authority agrees to provide financial services to the city, including the funding in whole or in part of an unfunded actuarial accrued liability of the city's pension system, or the sale to such an authority by the board of pensions and retirement established pursuant to the city's Home Rule Charter of the board's right, title and interest in and to any payments due to the board of pensions and retirement from the city pursuant to this or any other statute, including general municipal pension system State aid or supplemental State assistance that the city is entitled to receive under this act.
"Approved actuary." A person who has at least five years of actuarial experience with public pension plans and who is either enrolled as a member of the American Academy of Actuaries or enrolled as an actuary pursuant to the Federal Employee Retirement Income Security Act of 1974.
"Benefit plan." That portion of a pension plan which deals specifically with the retirement annuity and benefit coverage provided by the pension plan, including, but not limited to, the types of coverage, the eligibility for and entitlement to retirement annuities and benefits, and the amount of retirement annuities and benefits.
"Benefit plan study." A study of an individual benefit plan conducted to identify the effectiveness of the plan that includes an analysis of all of the following:
"Chief administrative officer." The person who has primary responsibility for the execution of the administrative affairs of the municipality in the case of a municipality, or of the pension plan in the case of a pension plan, or the designee of that person.
"Commission." The Public Employee Retirement Study Commission established pursuant to the act of July 9, 1981 (P.L. 208, No. 66), known as the Public Employee Retirement Study Commission Act.
"Defined benefit pension plan." A type of pension benefit plan which provides for periodic benefit payments at retirement which are predeterminable and which have a variable financing requirement dependent upon the actuarial calculation of actuarial present value requirements for projected benefits.
"Defined contribution pension plan." A type of pension benefit plan which provides for a fixed contribution rate or amount and which provides for periodic benefit payments calculable at retirement dependent on the accumulated contributions, investment income, experience gains and losses credited to the member and the expected mortality of the member.
"Demographic actuarial assumptions." Estimates of rates of future occurrences concerning, but not necessarily limited to, mortality, terminations, disablements and ages at retirement used in the preparation of actuarial valuations of the pension plan and other actuarial calculations.
"DROP." A deferred retirement option plan created and operated by a local government or the Pennsylvania Municipal Retirement System under Chapter 11 or any deferred retirement option plan or similar program established by a local government that provides for the commencement and accumulation of retirement benefit payments for active employees with disbursement of the accumulated payments and interest earnings as a lump sum upon termination of employment.
"DROP participant." A retired member of a local government- defined benefit pension plan who is eligible to participate in a DROP under section 1112, who has elected to participate in a DROP under section 1113 and who is not an elected official.
"DROP participant account." A pension trust fund ledger account established under section 1121(a).
"Economic actuarial assumptions." Estimates of rates of future occurrences concerning, but not necessarily limited to, increases in salary, postretirement adjustments, increases in benefits payable from the Federal old age, survivors, disability and health insurance program and investment earnings, asset appreciation or depreciation and procedures to determine the actuarial value of assets used in the preparation of actuarial valuations of the pension plan and other actuarial calculations.
"Establishment and maintenance of pension plan." Any of the following relationships between a municipality and a public employee pension plan:
"Experience investigation." A report which furnishes data on the experience of the pension plan and an analysis which substantiates the actuarial assumptions on which actuarial valuations are based.
"Firefighter." A municipal employee who holds a position or an office in the fire department of the municipality and has retirement coverage provided by the firefighters pension plan.
"Foreign Fire Insurance Tax Distribution Law." Chapter 7 of this act, known as the Foreign Fire Insurance Tax Distribution Law, relating to the distribution to municipalities of the tax on the premises of foreign fire insurance companies.
"Fully insured pension plan." A pension plan for which an insurance carrier has, or a number of insurance carriers have, underwritten the total actuarial accrued liability of the benefit plan.
"General Municipal Pension System State Aid Program." The State aid program established pursuant to section 402.
"Insurance carrier." Any company which is in the business of assuming the risk of various types of occurrences pursuant to contract or agreement and which is licensed to do business by the Commonwealth.
"Local government." A municipality or any county.
"Multiemployer pension plan or system." A pension plan which provides retirement coverage for employees of more than one municipality.
"Municipal employee." Any person who provides regular services for a municipality in return for compensation from the municipality. The term does not include an independent contractor or a DROP participant.
"Municipality." Any city, borough, incorporated town, township, home rule municipality, association of municipalities cooperating pursuant to the act of July 12, 1972 (P.L. 762, No. 180), referred to as the Intergovernmental Cooperation Law, or authority established by the actions of any county, city, borough, town or township or jointly by any such political subdivisions.
"Normal cost." That portion of the actuarial present value of the pension plan benefits and expenses which is allocated to the plan year by the actuarial cost method.
"Partially insured pension plan." A pension plan for which an insurance carrier has, or a number of insurance carriers have, underwritten a portion of the actuarial accrued liability of the benefit plan, but less than the total actuarial accrued liability.
"Pension fund." The entity which is the repository for the assets amassed by a pension plan as reserved for present and future periodic retirement payments and benefits of active and retired members of the pension plan.
"Pension plan or system." The various aspects of the relationship between a municipality and its employees with respect to the retirement coverage provided by a municipality to the employees.
"Plan document." The law, ordinance, resolution or related document or documents which governs the various aspect of the retirement coverage provided by a municipality to its employees, including periodic retirement payments and benefits, administration and funding.
"Plan year." The 12 consecutive month period applicable to pension plan which is utilized for various actuarial and financial purposes and which, unless otherwise specified in the plan document prior to December 31, 1982, shall be a calendar year commencing on January 1 and ending on December 31.
"Police officer." A municipal employee who holds a position or an office in the police department of the municipality and has retirement coverage provided by the police pension plan.
"Proceeds of bonds, notes or an alternative funding mechanism." The amount of funding obtained by a municipality for the purpose of reducing or eliminating the unfunded actuarial accrued liability of its pension system through the issuance of debt instruments under the applicable laws of this Commonwealth or through the use of an alternative funding mechanism authorized under Chapter 10.
"Self-insured pension plan." A pension plan for which all or a portion of the accrued actuarial liability of the benefit plan is underwritten by current or future accumulations of pension plan assets.
"Unfunded actuarial accrued liability." The excess of the actuarial accrued liability over the actuarial value of assets.
53 P.S. § 895.102