Pennsylvania Statutes Title 53 P.S. Municipal and Quasi-Municipal Corporations § 881.205. Determination of municipal liability

The board shall as soon as may be, determine the present value of the liability of each municipality for the prior service credits to its original members, and shall establish an amount payable annually over a period not exceeding thirty years, through which payments such prior service liability may be funded.  Each municipality shall have the option to spread the payment of such prior service liability over such period of years.

The municipal liability shall be based upon credit for all years of prior service toward the municipal annuity of each original member, subject to such of the following options as the municipality may elect:

The board shall also determine, from time to time, the amount which shall be contributed annually by each municipality for service credits of original and new members subsequent to the time the municipality joined the system, and the additional amount which shall be contributed annually by each municipality toward a reserve account for disability allowances payable to original or new members, in order that all future service liability may be fully funded on an actuarial basis.

The amounts so determined by the board may be expressed in a percentage of the payroll of the municipality covering its contributing members.

The cost of making the valuations required by this section and in the transfer of any existing pension system of any municipality, shall be part of the costs of administration of this act.