No. 185 March Term 1978, Appeal from the Order of the Commonwealth Court of Pennsylvania at No. 1990 C.D. 1976, reversing the Order of the Court of Common Pleas of Allegheny County at No. 1785 January Term 1975.
Ronald P. Koerner, Gatz, Cohen, Segal & Koerner, Pittsburgh, for appellant.
Phillip D. Paull, Sol. for Borough of Dormont, Pittsburgh, for appellees.
Eagen, C. J., and O'Brien, Roberts, Nix, Manderino and Flaherty, JJ. Larsen, J., did not participate in the consideration or decision of this case. Manderino, J., did not participate in the decision of this case.
In this action of mandamus, the Court of Common Pleas of Allegheny County ordered the Borough of Dormant (Borough) to deliver to the complainant, one of its retired police officers, a paid-up life insurance policy in the amount of $5,000.00. On appeal the Commonwealth Court reversed the order of the Court of Common Pleas. We granted allocatur and now affirm the order of the Commonwealth Court.
The Act of May 29, 1956, P.L. (1955) 1804, as amended, 53 P.S. §§ 767 et seq. (1974) [hereinafter cited as the Act] requires certain municipal subdivisions, including boroughs, to establish a police pension fund or pension annuity. The pension fund is to be maintained by charges against member police officers, annual appropriations by the municipal subdivision and payments made by the State Treasurer of monies received from taxes paid upon premiums by foreign casualty insurance companies. The Act permits provision of pension benefits for widows and minor children of police officers under certain circumstances. The Act does not explicitly permit the purchase of paid-up life insurance policies on the lives of member police officers from pension fund monies.
In September, 1957, in order to implement the Act, the Borough enacted Ordinance No. 949 which established an Insured Police Pension Fund. The fund provided for monthly retirement benefits to eligible members or to their designated beneficiaries should members die prior to retirement. The ordinance did not provide for any death benefit nor specify an insurance carrier.
On January 4, 1965, Borough Council adopted a resolution which expressed council's decision to continue the Pacific Mutual Life Insurance Company as carrier and actuary for the pension plan "and [to continue] increased Death and Disability benefits in accordance with the recommendations of the Pacific Mutual Life Insurance Company." In pertinent part the resolution provided:
"Upon retirement the death benefit [otherwise $27,000] shall be reduced in amount to $5000 and shall be kept in force by the Police Pension Fund so long as the retired policeman lives. After retirement the retired policeman cannot cash in the $5000 policy."
In 1971, a police officer retired and a $5,000 paid-up life insurance policy was purchased in accordance with the amending resolution of January 4, 1965 with monies from the Insured Police Pension Fund. In a report by the Auditor General concerning an audit of the Borough's Insured Police Pension Fund, the Auditor General stated that the purchase of the $5,000 paid-up life insurance policy was not authorized by the Act. This statement was supported by an opinion from the Attorney General's office in a letter to the Auditor General. ...