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Council hears presentation on Act 49 police service buyback; staff recommends cost study and negotiation timing
Summary
Council discussed Act 49 of 2024, which would allow buyback of out-of-municipality police service credits; staff cautioned the change is not cost neutral, estimated it could raise the borough's minimum municipal obligation three to six times, and recommended a cost study this summer and addressing the measure in upcoming police negotiations.
Millersville Borough Council received an informational presentation about Act 49 of 2024 and its potential application to the borough's police pension plan; the council did not take formal action.
Rebecca (borough manager) said the request for the borough to adopt Act 49 provisions came from the police association. She explained that Act 49 allows police officers to buy service credits for qualifying service performed at other municipal employers in Pennsylvania, which increases pension-service years for retirement calculations. "For our current pension plan, our police officers are vested after 12 years of service. The normal retirement age is 50 with a completion of 25 years of service," Rebecca said.
Rebecca said state law requires a cost study before a municipality may change pension program provisions. She reported the borough's actuary, Thomas J. Anderson and Associates, expects a study could be completed in summer after the firm's biannual report is available and said the firm estimates the change could raise the borough's minimum municipal obligation (MMO) by approximately three to six times, though the precise figure would require the formal study. "That is slightly a scary number because of the fact that our MMO is already very high," Rebecca said, adding the borough is small and may not have large reserves.
Council members asked procedural questions. Rebecca said no other Lancaster County municipalities had adopted the Act 49 buyback provisions yet and that, because this is a bargaining year for the police association, it would be sensible to address the proposal in collective-bargaining negotiations after the cost study is complete. She recommended waiting for the actuary's formal study and negotiating timing rather than adopting the change immediately.
Council did not vote on the matter and no side agreement was approved; Rebecca recommended that, if council wishes to proceed, the borough must first commission the required cost study and then consider any agreement as part of collective bargaining.
