HB 1289 — An Act amending the act of December 14, 1988 (P.L.1192, No.147), known as the Special Ad Hoc Municipal Police and Firefighter Postretirement Adjustment Act, providing for 2026 special ad hoc municipal police and firefighter postretirement adjustment; in financing of special ad hoc adjustment, providing for reimbursement by Commonwealth for 2026 special ad hoc adjustment; in administrative provisions, further providing for municipal retirement system certification of adjustments paid and of reimbursable amounts and for municipal receipt of reimbursement payment; and making an editorial change.

PRINTER'S NO.   1470

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 1289
                                               Session of
                                                 2025

     INTRODUCED BY MALAGARI, DOUGHERTY, VENKAT, WARREN, PIELLI, KHAN,
        SANCHEZ, GIRAL, K.HARRIS, BOROWSKI, HILL-EVANS, McNEILL,
        PROKOPIAK, SCHLOSSBERG, HANBIDGE, DONAHUE, BOYD, D. WILLIAMS,
        SIEGEL, RUSNOCK, O'MARA, NEILSON, STEELE, PROBST, OTTEN,
        CEPEDA-FREYTIZ, McANDREW, SCHWEYER, RIVERA, GUENST, DALEY AND
        SHUSTERMAN, APRIL 23, 2025

     REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, APRIL 23, 2025


                                    AN ACT
 1   Amending the act of December 14, 1988 (P.L.1192, No.147),
 2      entitled "An act requiring municipal retirement systems to
 3      pay special ad hoc postretirement adjustments to certain
 4      retired police officers and firefighters; providing for the
 5      financing of these adjustments; providing for the
 6      administration of the Commonwealth's reimbursements for these
 7      adjustments; and making repeals," providing for 2026 special
 8      ad hoc municipal police and firefighter postretirement
 9      adjustment; in financing of special ad hoc adjustment,
10      providing for reimbursement by Commonwealth for 2026 special
11      ad hoc adjustment; in administrative provisions, further
12      providing for municipal retirement system certification of
13      adjustments paid and of reimbursable amounts and for
14      municipal receipt of reimbursement payment; and making an
15      editorial change.
16      The General Assembly of the Commonwealth of Pennsylvania
17   hereby enacts as follows:
18      Section 1.    The act of December 14, 1988 (P.L.1192, No.147),
19   known as the Special Ad Hoc Municipal Police and Firefighter
20   Postretirement Adjustment Act, is amended by adding a chapter to
21   read:
22                               CHAPTER 4-A
 1                   2026 SPECIAL AD HOC MUNICIPAL POLICE AND
 2                    FIREFIGHTER POSTRETIREMENT ADJUSTMENT
 3   Section 401-A.     Entitlement to 2026 special ad hoc
 4                  postretirement adjustment.
 5      A municipal retirement system shall pay a retired police
 6   officer or firefighter a special ad hoc postretirement
 7   adjustment under this chapter if all of the following apply:
 8            (1)   The retiree has terminated active employment with
 9      the municipality as a police officer or firefighter.
10            (2)   The retiree is receiving a retirement benefit from a
11      municipal retirement system on the basis of active employment
12      with the municipality as a police officer or firefighter.
13            (3)   The retiree began receiving the retirement benefit
14      before January 1, 2016.
15   Section 402-A.     Amount of 2026 special ad hoc postretirement
16                  adjustment.
17      (a)     General rule.--Except as provided in subsections (b) and
18   (c), a municipal retirement system shall pay a retired police
19   officer or firefighter a monthly special ad hoc postretirement
20   adjustment under section 401-A that shall be calculated as
21   follows:
22            (1)   The sum of $250 a month, if on January 1, 2026, the
23      retiree has been retired at least 10 years but less than 15
24      years.
25            (2)   The sum of $375 a month, if on January 1, 2026, the
26      retiree has been retired at least 15 years but less than 20
27      years.
28            (3)   The sum of $500 a month, if on January 1, 2026, the
29      retiree has been retired at least 20 years.
30      (b)     Limitation.--If, under section 401-A, a retiree is

20250HB1289PN1470                     - 2 -
 1   entitled to be paid a special ad hoc postretirement adjustment
 2   by more than one municipal retirement system, the amount of the
 3   special ad hoc postretirement adjustment under subsection (a)
 4   shall be reduced so that the total of all these adjustments paid
 5   to the retiree does not exceed the amount specified in
 6   subsection (a).
 7      (c)   Modification in amount of 2026 special ad hoc
 8   postretirement adjustment.--The amount of the special ad hoc
 9   postretirement adjustment calculated under subsection (a) shall
10   be reduced annually by 65% of the total amount of any
11   postretirement adjustments provided to the retiree under the
12   municipal retirement plan after January 1, 2002, and before
13   December 31, 2025, and paid in the immediately preceding year.
14      Section 2.     Section 502.1(a)(2) of the act is amended to
15   read:
16   Section 502.1.     Reimbursement by Commonwealth for 2002 special
17                  ad hoc adjustment.
18      (a)   General rule.--
19            * * *
20            (2)   The determination of the reimbursable amount of the
21      amortization contribution requirement attributable to the
22      special ad hoc postretirement adjustment under Chapter 4 in
23      any year shall be calculated as the amortization contribution
24      requirement attributable to the special ad hoc postretirement
25      adjustments under Chapter 4 and reflected in the
26      determination of the financial requirements of the pension
27      plan under Chapter 3 of the Municipal Pension Plan Funding
28      Standard and Recovery Act for the immediate prior year less
29      the product of that amortization contribution requirement
30      multiplied by the ratio of the amount of general municipal

20250HB1289PN1470                        - 3 -
 1      pension system State aid allocated to the retirement system
 2      in the immediate prior year to the total amount of municipal
 3      contributions made to the retirement system from all sources
 4      other than employee contributions in the immediate prior
 5      year. Where a municipality has issued bonds or notes to fund
 6      an unfunded actuarial accrued liability under 53 Pa.C.S. Pt.
 7      [V] VII Subpt. B (relating to indebtedness and borrowing) or
 8      under other laws applicable to the municipality, the general
 9      municipal pension system State aid and municipal
10      contributions used by the municipality to make debt service
11      payments on the bonds or notes, or both, issued to fund an
12      unfunded actuarial accrued liability shall be included in the
13      calculation of the ratio applied to the amortization
14      contribution requirement.
15            * * *
16      Section 3.     The act is amended by adding a section to read:
17   Section 502.2.     Reimbursement by Commonwealth for 2026 special
18                  ad hoc adjustment.
19      (a)   General rule.--
20            (1)   Except as provided in subsection (b), beginning in
21      the year following the year in which the amortization
22      contribution requirement attributable to a special ad hoc
23      postretirement adjustment under Chapter 4-A is first
24      reflected in the financial requirements of the retirement
25      system determined under Chapter 3 of the act of December 18,
26      1984 (P.L.1005, No.205), known as the Municipal Pension Plan
27      Funding Standard and Recovery Act, the Auditor General shall
28      determine the Commonwealth reimbursement payable to the
29      municipality representing the amortization contribution
30      requirement attributable to the special ad hoc postretirement

20250HB1289PN1470                        - 4 -
 1    adjustment under Chapter 4-A that was paid with revenues of
 2    the municipality other than general municipal pension system
 3    State aid provided under the Municipal Pension Plan Funding
 4    Standard and Recovery Act.
 5        (2)   The determination of the reimbursable amount of the
 6    amortization contribution requirement attributable to the
 7    special ad hoc postretirement adjustment under Chapter 4-A in
 8    any year shall be calculated as the amortization contribution
 9    requirement attributable to the special ad hoc postretirement
10    adjustments under Chapter 4-A and reflected in the
11    determination of the financial requirements of the pension
12    plan under Chapter 3 of the Municipal Pension Plan Funding
13    Standard and Recovery Act for the immediate prior year less
14    the product of that amortization contribution requirement
15    multiplied by the ratio of the amount of general municipal
16    pension system State aid allocated to the retirement system
17    in the immediate prior year to the total amount of municipal
18    contributions made to the retirement system from all sources
19    other than employee contributions in the immediate prior
20    year. Where a municipality has issued bonds or notes to fund
21    an unfunded actuarial accrued liability under 53 Pa.C.S. Pt.
22    VII Subpt. B (relating to indebtedness and borrowing) or
23    under other laws applicable to the municipality, the general
24    municipal pension system State aid and municipal
25    contributions used by the municipality to make debt service
26    payments on the bonds or notes, or both, issued to fund an
27    unfunded actuarial accrued liability shall be included in the
28    calculation of the ratio applied to the amortization
29    contribution requirement.
30        (3)   The Commonwealth shall reimburse a municipality,

20250HB1289PN1470                  - 5 -
 1      from the General Fund, for the reimbursable amount determined
 2      for each year under this paragraph.
 3      (b)    Limitation of eligibility.--
 4             (1)   The Commonwealth shall not reimburse any
 5      municipality for a special ad hoc adjustment paid under
 6      Chapter 4-A if the information required under section 901(a)
 7      (2) either was not certified to the Auditor General or was
 8      certified after April 1 of the year the certification was
 9      due.
10             (2)   The Commonwealth shall not reimburse a municipality
11      for the reimbursable amount of the amortization contribution
12      requirement attributable to the special ad hoc postretirement
13      adjustment under Chapter 4-A if the municipality fails to
14      submit a complete certification of the reimbursable amount of
15      the amortization contribution requirement determined under
16      subsection (a) to the Auditor General before April 1 of the
17      year in which the reimbursement is payable.
18      (c)    Variable definition of amortization contribution
19   requirement.--For purposes of this section, the term
20   "amortization contribution requirement" shall have the meaning
21   specified in this subsection as follows:
22             (1)   In a municipal pension plan with defined benefits
23      for which the municipality determines the financial
24      requirements of the pension plan under section 302 of the
25      Municipal Pension Plan Funding Standard and Recovery Act, the
26      term "amortization contribution requirement" shall mean the
27      amortization contribution requirement attributable to the
28      special ad hoc postretirement adjustments under Chapter 4-A
29      that was reflected in the financial requirements of the
30      pension plan determined for the immediate prior year.

20250HB1289PN1470                     - 6 -
 1            (2)   In a municipal pension plan without defined benefits
 2      for which the municipality determines the financial
 3      requirements of the pension plan under section 303 of the
 4      Municipal Pension Plan Funding Standard and Recovery Act, the
 5      term "amortization contribution requirement" shall mean the
 6      sum of the payments made to the retirement system in the
 7      immediate prior year in order to provide the special ad hoc
 8      postretirement adjustments under Chapter 4-A in that year.
 9      Section 4.     Section 901(a) of the act is amended by adding a
10   paragraph to read:
11   Section 901.     Municipal retirement system certification of
12                  adjustments paid and of reimbursable amounts.
13      (a)   Certification.--
14            * * *
15            (3)   Beginning in the year 2026, a municipality with a
16      retirement system that pays a special ad hoc postretirement
17      adjustment under Chapter 4-A in a year shall certify its
18      reimbursable amount under section 502.2(a) to the Auditor
19      General not later than April 1 of the following year.
20      * * *
21      Section 5.     Section 903 of the act is amended by adding a
22   subsection to read:
23   Section 903.     Municipal receipt of reimbursement payment.
24      * * *
25      (c)   2026 postretirement adjustment reimbursement.--Upon
26   receipt of the reimbursement payment from the Commonwealth for
27   the postretirement adjustments under Chapter 4-A, the treasurer
28   of the municipality shall deposit the reimbursement payment into
29   the municipality's general fund.
30      Section 6.     The following shall apply:

20250HB1289PN1470                     - 7 -
 1        (1)   The special ad hoc postretirement adjustment under
 2    section 401-A of the act shall be effective on the date of
 3    the first retirement benefit made after January 1, 2026.
 4        (2)   If the special ad hoc postretirement adjustment
 5    under section 401-A of the act is not included in the initial
 6    retirement benefit payment occurring after January 1, 2026,
 7    the special ad hoc postretirement adjustment shall be
 8    included as soon as practicable in the retirement benefit
 9    payment of the retiree, and the initial retirement benefit
10    payment that includes the special ad hoc postretirement
11    adjustment shall also include the total amount of the special
12    ad hoc postretirement adjustments previously omitted from the
13    retirement benefit payments made after January 1, 2026.
14    Section 7.    This act shall take effect immediately.




20250HB1289PN1470                 - 8 -