(a) Allowance.--A payment for an allowance shall only be a charge on the police pension fund and may not be a charge on another fund under the control of or in the city treasury.

(b) Apportionment of the pension.--The basis of the apportionment of the pension:

(1) Shall be determined by the rate of the monthly pay of the member at the date of injury, death, honorable discharge, vesting under section 14302.1 (relating to limited vested benefit) or retirement, or the highest average annual salary that the member received during any five years of service preceding injury, death, honorable discharge, vesting under section 14302.1 or retirement, whichever is higher.

(2) Except as to service increments provided for in subsection (d), may not exceed in a year one-half the annual pay of the member computed at the monthly or average annual rate, whichever is higher.

(c) Limitation.--

(1) The provisions of subsection (b)(2) may not apply to a city operating under:

(i) an optional charter adopted in accordance with the act of July 15, 1957 (P.L.901, No.399), known as the Optional Third Class City Charter Law; or

(ii) a home rule charter adopted in accordance with 53 Pa.C.S. Pt. III Subpt. E (relating to home rule and optional plan government).

(2) This subsection is applicable only to a city that had a pension plan in effect prior to July 1, 1931, that provided pensions in an amount greater than 50% of salary.

(d) Conditions.--In addition to the retirement allowance authorized to be paid from the police pension fund by this chapter and notwithstanding the limitations placed upon the retirement allowances and upon contributions, a contributor who becomes entitled to the retirement allowance shall be entitled to the payment of a service increment in accordance with and subject to the following conditions:

(1) The following shall apply:

(i) Service increment shall be the sum obtained by computing:

(A) the number of whole years after having served the minimum required by this chapter during which a contributor has been employed by the city and paid out of the city treasury, including credit for military service as provided in section 14302 (relating to retirement and final discharge); and

(B) multiplying the number of years computed under clause (A) by an amount equal to 0.025% of the retirement allowance that has become payable to the contributor in accordance with the provisions of this chapter.

(ii) In computing the service increment, employment after the contributor has reached 65 years of age may not be included and a service increment may not be paid in excess of $100 per month.

(2) From and after January 1, 1952, a contributor shall pay into the retirement fund a monthly sum in addition to the contributor's retirement contribution that shall be equal to one-half of 1% of the contributor's salary, provided that:

(i) the payment may not exceed the sum of $1 per month; and

(ii) the service increment contribution may not be paid after a contributor has reached 65 years of age.

(3) An individual who is a contributor on January 1, 1952, and has reached 65 years of age shall have the contributor's service increment computed on the years of employment prior to the date the contributor reached 65 years of age.

(4) A service increment contribution shall be paid at the same time and in the same manner as a retirement contribution. A service increment contribution may be withdrawn in full without interest by an individual who:

(i) left the employment of the city, subject to the same conditions by which a retirement contribution may be withdrawn; or

(ii) retires before becoming entitled to a service increment.

(5) The members of the police force who are now contributors to the retirement fund and the members employed by the city after January 1, 1952, if required to become contributors to the retirement fund, shall be subject to the provisions of this part.

(6) After June 19, 2002, a city may agree to make service increment payments in excess of $100 per month as long as the payments do not exceed $500 per month. In computing the service increments, employment after the contributor has reached 65 years of age may not be included, provided that an agreement to provide an increase in service increment payments shall include a proportionate increase in the amount a contributor shall pay into the retirement fund under paragraph (2), not to exceed $5 per month.

(e) Spouse and children.--The spouse of a member of the police force or a member who retires on pension who dies or, if no spouse survives or if the spouse survives and subsequently dies or remarries, the child or children under 18 years of age of a member of the police force or a member who retires on pension who dies on or after August 1, 1963, shall, during the lifetime of the surviving spouse, even if the surviving spouse remarries, or until reaching 18 years of age in the case of a child or children, be entitled to receive a pension calculated at the rate of 50% of the pension the member was receiving or would have been receiving if the member was retired at the time of the member's death and may receive the pension the member was receiving or would have been receiving had the member been retired at the time of the member's death.

(f) Certain police officers.--A police officer who has less than 10 years of service and who dies or is totally disabled due to injuries or mental incapacities not in the line of duty and is unable to perform the duties of a police officer may be entitled to a pension of 25% of the police officer's annual compensation. For death or injuries received after 10 years of service, the compensation may be 50% of the police officer's annual compensation.

(g) Disability pension.--The disability pension may be payable to the police officer during the police officer's lifetime, and, if the police officer dies, the pension payment that the police officer was receiving may be continued to be paid to:

(1) the police officer's spouse if the spouse survives; or

(2) if the spouse subsequently dies or remarries, the child or children under 18 years of age of the police officer.

Cross References. Section 14303 is referred to in section 14301 of this title.