Section 42004 - Right to retire and pension upon retirement(a) That every person now or hereafter elected or appointed to an office, of or employed by, any city which has created such retirement system and such board, as hereinafter provided, of the age of sixty (60) years and upwards who shall have so served as an officer or employe for a period of twenty (20) years, or more, shall, upon application to the board, be retired from service, and shall during the remainder of his life receive the compensation fixed by this act, subject to such qualifications as are hereinafter contained. If any person shall have served twenty (20) years and voluntarily retires he shall, by continuing his contributions until the age of fifty-five (55), be entitled to the above compensation.
During the lifetime of any such person he shall be entitled to receive as compensation annually from the fund set aside for the purpose, fifty (50) per centum of the amount which would constitute the highest average annual salary or wages which he earned during any five (5) years of his service for the city, or which would be determined by the rate of the monthly pay of such person at the date of retirement, whichever is the higher. Said compensation to be paid in semi-monthly payments.
(b)(1) Except as otherwise provided under clause (3), where an officer or employe shall have served for twelve (12) years, or more, and shall have attained the age of sixty (60) years and his tenure of office or employment shall be terminated without his voluntary action before the expiration of twenty (20) years of service, he shall, in such event, during the remainder of his life, be entitled to receive such portion of the full compensation as the period of his service up to date of its termination bears to the full twenty-year period of service; where an officer or employe shall have served for twelve (12) years, or more, and shall not have attained the age of sixty (60) years, and his tenure of office or employment shall be terminated without his voluntary action before the expiration of twenty (20) years of service, he shall, in such event, during the remainder of his life, after attaining the age of sixty (60) years, be entitled to receive such portion of the full compensation as the period of his service up to date of its termination bears to the full twenty-year period of service; where an officer or employe who has served for twenty (20) years, or more, and his tenure of office or employment shall be terminated without his voluntary action, then he shall be entitled to full compensation for the remainder of his life, after attaining age fifty-five, and conditioned upon his continuing his contributions into the fund at the same rate as when he was dismissed until he attains age fifty-five.(2) Should an officer or employe, however, become so permanently disabled as to render him unable to perform the duties of his position or office after fifteen (15) years of service, and before attaining the age of fifty-five (55) years, he shall be entitled to full compensation during such disability. Proof of such disability shall consist of the sworn statement of three (3) practicing physicians, designated by the board, that the employe is in a condition of health which would permanently disable him from performing the duties of his position or office. Such person shall thereafter be subject to physical examination at any reasonable time or times, upon order of the board, and upon his refusal to submit to any such examination, his compensation shall cease.(3)(i) Any pension ordinance may provide for a limited vested benefit if it would conform to section 305 of the act of December 18, 1984 (P.L. 1005, No. 205), known as the "Municipal Pension Plan Funding Standard and Recovery Act." Under the provisions of the benefit, a member who has completed twelve (12) years or more of full-time continuous service but shall not have attained the minimum age and minimum period of continuous service may be entitled to vest his retirement benefits subject to all of the following conditions: (A) the member must file with the management board of the fund a written notice of his intention to vest;(B) the member must include in the notice the date the member intends to terminate his service;(C) the termination date shall be at least thirty (30) days later than the date of notice to vest;(D) the member must be in good standing with the city on the date of notice to vest; and(E) the board shall indicate on the notice to vest the rate of the monthly pay of the member as of the date of the notice to vest or the highest average annual salary which the member received during any five (5) years of service preceding that date, whichever is higher.(ii) Upon reaching the date which would have been the member's retirement date had the member continued employment with the city, the member shall notify the board in writing that the member desires to collect his pension. The amount of retirement benefits the member is entitled to receive under this section shall be computed as follows: (A) the initial determination of the member's base retirement benefits shall be computed on the salary indicated on the notice to vest; and(B) the portion of the base retirement due the member shall be determined by applying to the base amounts the percentage that his years of service actually rendered bears to the years of service which would have been rendered had the member continued to be employed by the city until his minimum retirement date. As used in this section, the term "salary" means the fixed amount of compensation paid at regular, periodic intervals by the city to the member and from which pension contributions have been deducted.(c) Where a city has entered into an agreement with the Commonwealth to place certain employes under the Federal Social Security Act, the compensation to be paid joint coverage members according to the provisions of subsections (a) and (b) of this section payable after the age and upon that portion of annual compensation on which social security benefits are payable, shall be reduced by an amount equal to forty (40) per centum of the primary insurance amount of social security paid or payable to the member. Such reduction shall be subject to the following provisions:(i) Upon attainment of the age at which social security benefits are payable by a beneficiary receiving compensation according to provisions of subsections (a) and (b) of this section or upon retirement of a contributor after attaining that age, his eligibility to the old age insurance benefit and the primary insurance amount of social security, upon which the reduction in the compensation shall be based, shall be computed by the board in the manner specified in the Federal Social Security Act, except that in determining such eligibility and such amount only wages or compensation for services performed in the employ of the city shall be included.(ii) The reduction shall not apply to compensation for total and permanent disability payable under subsection (b) of this section.(iii) Whenever the amount of the reduction from the compensation shall have been once determined, it shall remain fixed for the duration of the compensation, except that any decrease in the primary insurance amount under the Social Security Act shall result in a corresponding decrease in the amount of the reduction from the compensation.(iv) The total sum, including social security benefits, to be received upon retirement by an employe who is a member of the system at the time of the agreement, shall not be less than the compensation that would be paid by the retirement system in the absence of the agreement.(c.1) Where a city has entered into an agreement with the Commonwealth to place certain employes under the Federal Social Security Act, the retirement board may authorize any joint coverage member of the retirement system to elect according to the provisions of this subsection to receive compensation without the reduction provided for in subsection (c) of this section, provided he shall make a lump-sum payment to the retirement board equal to the difference between the amount of the accumulated fund to his credit in the fund as of the last date for which salary or wages was paid and the amount which would have been to his credit in such fund if contributions had been made on that portion of his salary or wages on which social security allowances are payable at the same rate as made on that portion of his salary or wages in excess thereof from the time that such salary or wages became subject to social security coverage. Such election shall be made, in writing, in the form prescribed by the retirement board, and shall be accompanied by the lump-sum payment herein required. The retirement board may authorize any such member to make the election herein provided at any time, and if made prior to retirement, such member shall, in addition to any lump-sum payments required, pay to the board contributions on his entire salary or wages thereafter received at the rate provided in section 10.1 of this act for monthly salary or wages in excess of that on which social security allowances are payable.
(d) If council elects by ordinance to make such payments, the widow or widower of an employe who retires on pension or being eligible for pension but is still employed full time, dies or is killed in the service on or after January 1, 1960, shall, during her or his lifetime or so long as she or he does not remarry, be entitled to receive a pension calculated at the rate of fifty (50) per centum of the pension the employe was receiving or would have been receiving had he or she been retired at the time of his or her death. Any employe who is unmarried at the time council elects to make payments to widows or widowers of employes, may elect, within thirty (30) days after the adoption of the ordinance, not to have a widow or widower receive such payments, and the employe shall not be responsible for payments to secure such coverage.(e) In addition to the retirement allowance which is authorized to be paid from the pension fund by this act, notwithstanding the limitations therein placed upon such retirement allowances and upon contributions, every contributor who shall become entitled to the retirement allowance may also by ordinance be entitled to the payment of a "service increment" in accordance with and subject to the conditions hereinafter set forth.(1) Service increment shall be the sum obtained by computing the number of whole years after having served twenty (20) years, required by this act, during which a contributor has been employed by such city and paid out of the city treasury and multiplying the said number of years so computed by an amount equal to one-fortieth ( 1/40 ) of the retirement allowance which has become payable to such contributor in accordance with the provisions of this act. In computing the service increment, no employment after the contributor has reached the age of sixty-five (65) years shall be included.(2) Each contributor, who so chooses to become entitled to the service increments provided by this act, shall, from and after the effective date of this amendment, pay into the retirement fund a monthly sum in addition to his or her retirement contribution, which shall be equal to one-half of one per centum of his or her salary: Provided, That such service increment contribution shall not be paid after a contributor has reached the age of sixty-five (65) years.(3) Persons who are contributors on the effective date of this amendment who have already reached the age of sixty-five (65) years shall have his or her service increment computed on the years of employment prior to the date of reaching his or her sixty-fifth (65th) birthday.(4) Service increment contributions shall be paid at the same time and in the same manner as retirement contributions, and may be withdrawn in full, without interest, by persons who leave the employment of such city, subject to the same conditions by which retirement contributions may be withdrawn, or by persons who retire before becoming entitled to any service increment.(5) All persons who are now contributors to the retirement fund and all those employed by the city after the effective date of this amendment, if required to become contributors to the retirement fund, shall be subject to the provisions of this act.1945, May 23, P.L. 903, No. 362, § 4. Amended 1951, Sept. 29, P.L. 1614, § 1; 1956, June 1, P.L. (1955) 1971, § 1; 1957, June 14, P.L. 323, § 2; 1959, July 27, P.L. 568, § 1; 1961, May 9, P.L. 177, § 1; 1963, Aug. 13, P.L. 678, § 1; 1967, Oct. 19, P.L. 465, §§ 1, 2; 1969, June 30, P.L. 112, § 1; 1992, June 11, P.L. 297, No. 49, § 2, effective in 60 days.