Section 895.402 - Revision of financing from State revenue sources; General Municipal Pension System State Aid Program(a)Establishment of program.--There is hereby established a General Municipal Pension System State Aid Program. Notwithstanding any applicable provision of the act of June 28, 1895 (P.L. 408, No. 289), referred to as the Foreign Fire Insurance Premium Tax Allocation Law, the act of May 12, 1943 (P.L. 259, No. 120), referred to as the Foreign Casualty Insurance Premium Tax Allocation Law, or the act of March 4, 1971 (P.L. 6, No. 2), known as the Tax Reform Code of 1971, to the contrary, the provisions of this section and sections 607 and 706 shall govern with respect to the insurance premium taxes on foreign fire insurance companies and foreign casualty insurance companies for allocation pursuant to the General Municipal Pension System State Aid Program.(b)Financing of the General Municipal Pension System State Aid Program.--Except as otherwise provided in this section, the General Municipal Pension System State Aid Program shall allocate the entire proceeds of the insurance premium tax on foreign casualty insurance companies, which shall be placed into a revenue account, and any investment income earned on those proceeds, and the portion of the proceeds of the insurance premium tax on foreign fire insurance companies which represents the amount of the distributions applicable to paid firefighters pursuant to section 706 and any investment income earned on the amount of those distributions.(c)Amount of aid available for allocation.--During the period July 1, 1985 to December 31, 1988, a portion of the total amount specified as payable to the State Employees' Retirement Fund pursuant to section 1 of the act of May 12, 1943 (P.L. 259, No. 120), referred to as the Foreign Casualty Insurance Premium Tax Allocation Law, shall be deposited for subsequent distribution in the Supplemental Assistance Account of the Supplemental State Assistance Fund pursuant to section 608 instead of deposited for subsequent distribution in the General Municipal Pension System State Aid Program, as follows: Calendar Year | Deposited in General Municipal Pension System State Aid Program | Deposited in Supplemental State Assistance Fund |
1985 | 25% | 75% |
1986 | 50% | 50% |
1987 | 75% | 25% |
1988 | 100% | 0% |
(d)Eligible recipients of general municipal pension system State aid.--Any county of the second class which, prior to the effective date of this chapter, received allocations for its police pension fund pursuant to the act of May 12, 1943 (P.L. 259, No. 120), or any city, borough, incorporated town or township or any home rule municipality formerly classified as a city, borough, incorporated town or township which employs one or more full-time municipal employees and provides pension coverage for that employee or those employees by a pension plan which was established and maintained on the effective date of this act or which was established subsequent to the effective date of this act and has been maintained for at least three plan years, shall be entitled to receive general municipal pension system State aid.(e)Allocation of general municipal pension system State aid.--(1) General municipal pension system State aid shall be distributed annually to each eligible recipient municipality no later than the first business day occurring in the month of October. For the period ending with the distribution made during calendar year 1995, the allocation of aid for distribution shall be pursuant to paragraph (4). For the period commencing with the distribution made during calendar year 1996, the allocation of aid for distribution shall be pursuant to paragraph (5). Any allocation of aid per unit shall be based on the number of units pursuant to paragraph (2) as certified by the applicable eligible municipalities. Any allocation of aid shall be pursuant to the maximums specified in subsection (f).(2) The applicable number of units shall be attributable to each active employee who was employed on a full-time basis for a minimum of six consecutive months prior to December 31 preceding the date of certification and who was participating in a pension plan maintained by that municipality, provided that the municipality maintains a generally applicable pension plan for that type of employee which was either established on or prior to December 31, 1984, or, if established after December 31, 1984, has been maintained by that municipality for at least three plan years. For the purpose of computing and reporting the applicable number of units, a DROP participant shall not be reported to the Auditor General as an active employee. The applicable number of units per employee attributable to each eligible recipient county of the second class shall be two units for each police officer. The applicable number of units attributable to each eligible recipient city, borough, incorporated town and township shall be as follows: (i) Police officer - two units.(ii) Firefighter - two units.(iii) Employee other than police officer or firefighter - one unit.(3) The amount of general municipal pension system State aid per unit shall be initially determined by dividing the total amount of the general municipal pension system State aid available by the total number of units certified by all eligible municipalities. If the maximum specified in subsection (f)(1) is applicable, the amount of general municipal pension system State aid per unit applicable to all municipalities other than the municipality or municipalities subject to the maximum aid amount specified in subsection (f)(1) shall be adjusted. The adjusted amount of general municipal pension system State aid per unit attributable to municipalities unaffected by the aid maximum specified in subsection (f)(1) shall be determined by dividing the total amount of the general municipal pension system State aid available, after excluding 25% of the total for each municipality to which the maximum aid amount is applicable, by the total number of units certified by all eligible municipalities unaffected by the aid maximum specified in subsection (f)(1).(4) For the period ending with the distribution made during calendar year 1995, each eligible municipality shall be entitled to receive as general municipal pension system State aid the greater of the following amounts: (i) The adjusted amount of general municipal pension system State aid per unit multiplied by the number of units certified by that municipality and an additional amount necessary for the total to equal the lesser of the total amount of any foreign casualty insurance premium tax allocation and any foreign fire insurance premium tax allocation attributable to paid firefighters which the municipality was entitled to receive during the regular allocation occurring in calendar year 1982, or the aggregate actual financial requirement of any police or paid fire pension plans maintained by the municipality less the amount of aggregate annual member or employee contributions during the plan year as reported in the most recent complete actuarial report filed with the commission.(ii) The revised amount of general municipal pension system State aid per unit multiplied by the number of units certified by that municipality, which revised amount shall be determined pursuant to paragraph (6).(5) For the period commencing with the distribution made during calendar year 1996, each eligible municipality shall be entitled to receive as general municipal pension system State aid the greater of the following amounts: (i) the adjusted amount of general municipal pension system State aid per unit multiplied by the number of units certified by that municipality less any amount by which the adjusted amount exceeds the maximum aid amount applicable to the municipality pursuant to subsection (f)(2); or(ii) the revised amount of general municipal pension system State aid per unit multiplied by the number of units certified by that municipality, which revised amount shall be determined pursuant to paragraph (6).(6) The revised amount of general municipal pension system State aid per unit shall be determined by the following procedure:(i) The amount of the total distribution made pursuant to paragraph (4)(i) or (5)(i), whichever is applicable, the amount of the general municipal pension system State aid payable to any municipality or municipalities to which the limitation provided in subsection (f)(1) is applicable and the amount of the total potential distribution pursuant to paragraph (7) shall be totaled.(ii) The total calculated pursuant to subparagraph (i) shall be subtracted from the total amount of the general municipal pension system State aid available.(iii) The number of units attributable to the municipalities which are entitled to receive an aid amount calculated pursuant to paragraph (4)(i) or (5)(i), whichever is applicable, the number of units attributable to the municipalities or municipality to which the limitation provided in subsection (f)(1) applies and the number of units attributable to the municipalities included in the potential distribution pursuant to paragraph (7) shall be totaled.(iv) The total calculated pursuant to subparagraph (iii) shall be subtracted from the total number of units certified by all eligible municipalities.(v) The number resulting from the calculation pursuant to subparagraph (ii) shall be divided by the number resulting from the calculation pursuant to subparagraph (iv), which shall be the revised amount of general municipal pension system State aid per unit.(7) Any municipality which has not filed with the commission on a timely basis, pursuant to the applicable municipal pension plan actuarial reporting law, an actuarial report for each of the municipal pension plans which it has established or maintains shall be entitled to receive as general municipal pension system State aid, at such time as compliance with the actuarial reporting requirement occurs, the adjusted amount of general municipal pension system State aid per unit pursuant to paragraph (3) multiplied by the number of units certified by that municipality, but not to exceed the maximum aid amount applicable to the municipality pursuant to subsection (f). The amount of any difference between the adjusted amount of general municipal pension system State aid per unit multiplied by the number of units certified by a municipality and the maximum aid amount applicable to the municipality pursuant to subsection (f) for that municipality shall be added to the amount of the general municipal pension system State aid available for distribution in the succeeding calendar year.(f)Maximum general municipal pension system State aid amount.--(1) No municipality shall be entitled to receive an allocation of general municipal pension system State aid in an amount greater than 25% of the total amount of the general municipal pension system State aid available.(2) No municipality shall be entitled to receive an allocation of general municipal pension system State aid in an amount which exceeds the aggregate actual financial requirements of any municipal pension plans for police officers, paid firefighters or employees other than police officers or paid firefighters maintained by that municipality, less the amount of any aggregate annual member or employee contributions during the next succeeding plan year, as reported in the most recent complete actuarial report filed with the commission.(3) In the case of any municipal pension plan which is not a defined benefit plan in whole or in part and for which no provision of law, municipal ordinance or municipal resolution requires a particular annual contribution on the part of the municipality of a specific identifiable per employee dollar or percentage amount which is or will be applicable for a period longer than 12 calendar months, the aggregate financial requirement of the plan shall be equal to the average normal cost requirement for all police and paid firefighters pension plans of the same class of municipality if the municipal pension plan is either a police or a paid firefighters pension plan or for all pension plans for employees other than police officers and paid firefighters of the same class of municipality if the municipal pension plan is other than a police or a paid firefighters pension plan. The average normal cost requirement shall be determined by the commission, expressed as a percentage of payroll and applied to the covered payroll applicable to the municipal pension plan.(g)Authorized expenditures of general municipal pension system State aid.--Any general municipal pension system State aid received by a municipality shall only be used to defray the cost of the pension plan or pension plans maintained by the municipality. If only one pension plan is maintained by the municipality, then the total amount of the general municipal pension system State aid received by the municipality shall, within 30 days of receipt by the treasurer of the municipality, be deposited in the pension fund or the alternate funding mechanism applicable to the pension plan. If more than one pension plan is maintained by the municipality, then the governing body of the municipality shall annually determine the proportion of the total amount of the general municipal pension system State aid received by the municipality which shall be credited to each pension plan and the total amount of the general municipal pension system State aid received by the municipality shall, within 30 days of receipt by the treasurer of the municipality, be deposited in the pension funds or alternate funding mechanisms applicable to the respective pension plans in accordance with that determination.(h)Certification of employees by eligible recipient municipalities.--Each eligible recipient county of the second class shall certify annually to the Auditor General the number of police officers and each other eligible recipient municipality shall certify annually to the Auditor General the number of police officers, firefighters and municipal employees other than police officers and firefighters who meet the qualification requirements specified in subsection (e)(2), and whatever additional information the Auditor General requires to verify the number of units attributable to the municipality. No unit or units shall be attributable to any municipal employee who is not certified to the Auditor General in a timely manner.(i)Warrants.--Warrants for purposes of making the allocation of general municipal pension system State aid shall be drawn by the Auditor General, payable to the treasurers of the eligible recipient municipalities in accordance with this section.(j)Administration.--The Auditor General shall have the duty of administering the General Municipal Pension System State Aid Program. The Auditor General may promulgate rules and regulations necessary for the efficient administration of this program and may specify the form and content of any forms applicable to the program. The Auditor General, as deemed necessary, shall make an audit of every municipality which receives general municipal pension system State aid and of every municipal pension plan and fund in which general municipal pension system State aid is deposited. 1984, Dec. 18, P.L. 1005, No. 205, § 402. Amended 1990, July 11, P.L. 505, No. 119, § 1, imd. effective; 2009, Sept. 18, P.L. 396, No. 44, § 6, imd. effective.