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Borough of Ellwood City v. Ellwood City Police Department

Arbitrator exceeded authority by eliminating police officer contributions to pension fund, thus violating Act 600 by requiring municipal contributions to keep fund actuarily sound.

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Argued: October 9, 2001

The Borough of Ellwood City (Borough) appeals from the December 21, 2000 order of the Court of Common Pleas of Lawrence County (trial court) that denied the Borough’s petition to vacate an arbitration award, thereby affirming Arbitrator Edward J. O’Connell’s August 5, 1999 grievance arbitration award (O’Connell Award). That award ordered the termination of all contributions by the Borough’s police officers to the Borough’s Police Pension Plan (Plan) and required the refund of all such contributions made since January 14, 1999.

The Borough contends that Arbitrator O’Connell exceeded his authority by requiring the performance of an illegal act under what is commonly referred to as Act 600 *fn1 by eliminating employee contributions to the Plan, thereby requiring the Borough to make contributions to the Plan as required by Act 600 in order to keep it actuarially sound. The Borough also contends that the trial court’s decision upholding the O’Connell Award was based on the erroneous assumption that a police pension plan with a surplus of assets over liabilities would require no annual contribution to that fund to keep it actuarially sound for purposes of Act 600. For the reasons that follow, we reverse and vacate the arbitration award.

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