WHAT IS THE MMO
From
Hatboro
Sent
Wed, Oct 7 @ 6pm
Description
Understanding the Police Pension Minimum Municipal Obligation (MMO)
A few questions have recently arisen regarding the Borough's Police Pension Minimum Municipal Obligation (MMO). In the interest of transparency and helping our residents better understand the process, the Borough would like to provide the following information.
The MMO, or Minimum Municipal Obligation, is the minimum amount a municipality must contribute each year to fund its pension plan in accordance with Pennsylvania law. The MMO is calculated by the pension plan's actuary and is reviewed and approved annually by Borough Council.
Many residents have asked about the relationship between the MMO and the state aid received by the Borough for pension funding.
In Pennsylvania, municipal pension state aid is distributed under Act 205 of 1984 and is funded primarily through taxes levied on foreign casualty and fire insurance companies operating within the Commonwealth. The amount of aid a municipality receives is based primarily on pension payroll and member data reported annually to the Commonwealth, rather than directly on the MMO itself.
Each year, the Borough submits required pension information to the Pennsylvania Department of the Auditor General through the AG-385 reporting process. The Department uses this information to calculate the Borough's annual state aid allocation.
These funds are anticipated and budgeted as part of the Borough's annual budget process. Once the Borough receives the state aid payment, Pennsylvania law requires the funds to be deposited into the appropriate pension fund within 30 days.
To ensure transparency, the receipt and transfer of pension state aid is always included as a public agenda item and reflected in Borough Council meeting records. Borough Council also annually reviews and approves the MMO for each pension plan as part of the budget process.
The Borough remains committed to providing accurate information about municipal finances and encourages residents to attend budget meetings and Council meetings to learn more about how public funds are managed and invested for the long-term benefit of our community.
This notification was posted by Hatboro. Hatboro is solely responsible for this notification and unless specifically indicated, no other community or individual utilizing Savvy Citizen is sponsoring, responsible for, or endorsing this notification.
