The opinion of the court was delivered by: SNYDER
This matter comes before the Court by agreement of counsel to determine prior to pretrial a question of law on which we have found little precedent. A brief statement of the facts is necessary.
On March 1, 1970, Stowe Township, a political subdivision of the Commonwealth of Pennsylvania, entered into an agreement with Standard Life Insurance Company of Indiana (hereinafter called Company) to fund and implement a Pension Plan for their Police Department, Service and Police Department employees and the Township Board of Commissioners.
Under this contract, the plaintiff was to deposit with the Company such amounts as were recommended by an actuary to fund the benefits provided by the plan. The amounts designated were augmented by a guaranteed rate of interest. Should an employee become eligible for his pension, withdrawals from the Purchase Payment Fund were to be made upon written authorization of the employer and deposited to a group annuity account from which guaranteed monthly pensions were payable.
Effective June 30, 1972 the Stowe Township Board of Commissioners acting under the provisions of the First Class Township Code of the Commonwealth of Pennsylvania (applicable to Stowe Township, Act of May 29, 1956 P.L. 1804, as amended, 53 Pur. Stat. Section 767, providing that any such police pension funds shall be "under the direction of the governing body of the . . . township") and in accordance with the termination provision of the contract with the Company, terminated the Agreement.
By letter dated August 17, 1972 (Exhibit C to the Complaint) the Township gave notice that they were demanding payment. In their demand they stated:
"Having reviewed section 12 (sic) of the contract and existing paid-up annuity contracts previously issued by Standard Life Insurance Company of Indiana, namely policy Numbers AN-111513 and AN-116667, as referred to in said section, we are willing to accept the following as full and complete settlement under the contracts;
"95% of the Purchase Payment Fund applied toward purchase of paid-up annuities, these same annuities being liquidated immediately for their full cash surrender value of at least 93.1% of the single premiums paid thereon and the proceeds of these automatic liquidations are to be sent to the following address;
"Stowe Township Municipal Building
McKees Rocks, Pennsylvania 15136"
When the defendant refused to "liquidate" the contract in the manner demanded by the plaintiff, complaint was filed in the Court of Common Pleas of Allegheny County, Pennsylvania. The relief sought was a money judgment for the aggregate amounts deposited in the Deposit Administration Fund less certain deductions. On January 11, 1973, the action was removed to this Court pursuant to 28 U.S.C. Section 1332. The plaintiff filed in this Court a Petition for a Mandatory Injunction to require the Company to pay to the plaintiff the balance of the Purchase Payment Fund in accordance with its demand.