Is our pension plan eligible for state aid reimbursement?
Cities, boroughs, towns and townships who establish a pension plan and fund it for three calendar years are eligible for state pension aid. State aid is paid by the Auditor General's Office to cities, boroughs, towns and townships. Authorities and counties are not eligible for state pension aid.
How does a municipality apply for state pension aid?
In January of each year, the Auditor General's Office mails a Certification for Foreign Fire Insurance Tax Distribution and General Municipal Pension System State Aid form to each municipality eligible to participate in the state aid program. Completing this form and returning it to the Auditor General's Office will make a municipality eligible for state pension aid. Information from the Act 205 actuarial valuation that is submitted to the Public Employee Retirement Commission (usually every two years) also is used to calculate state aid.
How is the state pension aid program financed?
The state pension aid program is financed by a 2% tax on out-of-state insurance companies. Presently, the Commonwealth collects approximately $150 million each year and these monies then are allocated by the Auditor General's Office by the last business day of September each year to help defray pension expenses in that calendar year.