The monies that an active member personally contributes to your retirement plan plus the interest your retirement account earns.
A person currently employed by a Pennsylvania Municipal Retirement System (PMRS) member municipality.
A group of assumptions set by the Pennsylvania Municipal Retirement Board about future inflation, rates of return, salary growth, probable death rates and probable disability. As a whole, these form a basis for the actuary to determine the liability of the pension fund and the amount of money that needs to be paid into the plan.
The actual cost of the municipality’s pension plan based on the plan’s demographics. The cost study is based on the plan’s determined retirement age, benefit level, years of credited service, and the individual demographics of the employees. The actuary calculates how much money is needed to fund the pension in accordance with Act 205 of 1984.
A person who determines the amount of money that needs to be deposited in a defined benefit plan to ensure adequate assets accumulate to pay the promised benefit.
The document or contract between the employing municipality and PMRS that details the retirement benefits and eligibility requirements for plan members.
A retiree or a survivor or beneficiary of a retiree who receives a monthly retirement payment from PMRS.
A payment of a fixed sum of money issued to an annuitant.
The joint annuitant or any other person, estate, or trust fund you last designated in writing to receive any benefits which may be payable upon your death.
Benefit Accrual Rate
A percentage determined by a plan’s retirement formula (usually between 1% and 2%) and years of service that is applied to the person’s final average compensation to determine the person’s retirement allowance.
The Pennsylvania Municipal Retirement Board created by the Pennsylvania Municipal Retirement Law, Act of 1974, P.L. 34, No. 15.
Cash Balance Plan
Employees’ benefits are based on the accumulated value of the members’ accounts. Employees may make mandatory or optional contributions to the plan to increase the basic benefit. The municipality makes a required contribution based on its agreement or contract with PMRS and the benefit is dependent upon the individual’s accumulated member and municipal contributions at retirement. The money is divided by a life expectancy factor based on age to determine the monthly benefit.
[Example: Accumulated account value divided by unisex factor based on age at retirement equals annual benefit. Assume account value $60,000 and retirement age 60; unisex factor is currently 11.2383 (obtainable from PMRS offices)...$60/11.2383=$5,338.89 annual benefit]
Member account interest set by the Board (currently 6.0% per year) plus any excess interest that may be allocated to the members’ accounts. (also see excess interest)
Service you earn by being paid for work in a regularly-established position with an employer that is a PMRS member plus any additional service you may be eligible to purchase, e.g., military time.
Defined Benefit Plan
The municipality guarantees a benefit based on the employee’s years of service and the salary of the employee. The employees’ retirement benefit is based on a formula. For example if the benefit accrual rate is 1% and employees work for 25 years, they will receive 25% of their final average salary. [Example: 25 years of service x 1% benefit accrual rate x $30,000 final average salary = $7,500 annual benefit]
An inability to be gainfully employed by reason of physical or mental impairment.
Disability Reserve Account
The account to which shall be credited the contributions made by municipalities toward the disability retirement of members.
Early Retirement Date
The date when you become eligible and choose to receive a reduced retirement benefit because you have not reached normal retirement age. As a broad general rule, benefits are reduced approximately 6% for each year an individual retires early.
The investment earning on the Pennsylvania Municipal Retirement Fund in excess of that required for allocation for regular interest plus maintaining adequate reserves if the System does not earn its regular interest and administrative expenses.
Final Average Salary
The average of the highest or final years of compensation earned during covered employment. The number of years used in the average will depend on the employer’s retirement plan.
The Pennsylvania Municipal Retirement Fund created by the Pennsylvania Municipal Retirement Law, Act of 1974, P.L. 34, No. 15.
A municipal employee, municipal firefighter, or municipal police officer who is enrolled in PMRS but is no longer earning credited service in a PMRS pension plan due to separation or leave from employment.
A beneficiary eligible to receive continuing benefits upon your death.
The account that is credited with the payroll deductions from active members plus interest earned.
The various firms which invest the assets of the Pennsylvania Municipal Retirement System under investment guidelines set forth by the Pennsylvania Municipal Retirement Board.
The account maintained for each municipality to which shall be credited the contributions made by it toward the retirement and death benefits of members.
A city, borough, town, township, county, institution district, any newly-created governmental unit, an authority, an institution supported and maintained by a municipality or municipal government association, or an industrial government association which has adopted bylaws and the governing body of which is organized and holds regular public meetings.
Municipal Plan Member
A municipality or authority that contracts with PMRS to provide for certain retirement benefits for eligible employees.
A municipal officer, employee, firefighter, police officer or an employee of a municipal government association who first becomes a member after the effective date the municipality joins PMRS.
Normal Retirement Age/Date
The age or date when you first become eligible to retire without a reduction in benefits.
A municipal officer, employee, firefighter, police officer or an employee of a municipal government association who was employed by the municipality at the date the municipality joined PMRS.
The acronym for the Pennsylvania Municipal Retirement System.
When a member leaves a PMRS-administered plan and within one year of the date of termination enters into employment with another PMRS-administered plan, the member can transfer previously accrued credits to the new employer, subject to provisions of the municipalities’ contracts.
Includes service to the municipality prior to the effective date of the plan.
The rate of interest fixed by the Pennsylvania Municipal Retirement Board from time to time, on the basis of earnings on investments. The rate has been set at 6.0% as of January 1, 2005.
A former municipal employee, municipal fire fighter, or municipal police officer or the beneficiary or survivor annuitant of same who is entitled to a monthly benefit payment from the System’s retired reserve account.
Retired Members’ Reserve Account
The account from which all retirement allowances are paid for superannuation and disability retirement.
State Pension Aid
State aid is available for municipalities to help fund their pension plans according to the Municipal Pension Plan Funding Standard & Recovery Act (Act 205 of 1984). Only cities, boroughs and townships are eligible to receive state aid; authorities and counties are not eligible. The source of state pension aid is a 2% tax on out-of-state (foreign) casualty insurance companies doing business in Pennsylvania.
A dependent eligible to receive an allowance upon a member’s death.
The Pennsylvania Municipal Retirement System created by the Pennsylvania Municipal Retirement Law, Act of 1974, P.L. 34, No. 15.
Termination of Employment
Occurs when you end employment with your employer.
A member who after sufficient years of service (based on the plan in which the member is enrolled) elects to terminate municipal employment and leave total accumulated deductions in the fund, and defer receipt of an annuity until achieving normal retirement age. The election to vest must be made within 90 days after the effective date of termination of service.
Allows a member to terminate employment before being eligible for a normal retirement benefit and defer receipt of a monthly benefit until the individual is eligible to receive a normal retirement benefit.
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