Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1983, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1983
CHAPTER 219--S.F.No. 160
An act relating to retirement; volunteer firefighters'
relief associations; adding definitions; providing for
distribution of assets upon dissolution; clarifying
ambiguous language; amending Minnesota Statutes 1982,
sections 69.772, subdivisions 1, 2, and 3; 424A.01;
424A.02; 424A.03, subdivision 1; 424A.04; 424A.05; and
424A.08; proposing new law coded in Minnesota
Statutes, chapter 424A; repealing Minnesota Statutes
1982, section 424.26.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1982, section 69.772,
subdivision 1, is amended to read:
Subdivision 1. [APPLICATION.] This section shall apply to
any firefighter's relief association specified in section
69.771, subdivision 1, which pays a lump sum service pension,
but which does not pay a monthly service pension, to a retiring
firefighter when at least the minimum requirements for
entitlement to a service pension specified in section 424A.02,
or any applicable special legislation and the articles of
incorporation or bylaws of the relief association have been
met. Each firefighter's relief association to which this
section applies shall determine the accrued liability of the
special fund of the relief association in accordance with the
applicable accrued liability table set forth in subdivision 2
and the financial requirements of the relief association and the
minimum obligation of the municipality in accordance with the
procedure set forth in subdivision 3.
Sec. 2. Minnesota Statutes 1982, section 69.772,
subdivision 2, is amended to read:
Subd. 2. [DETERMINATION OF ACCRUED LIABILITY.] Each
firefighters' relief association which pays a service pension
when a retiring firefighter meets the minimum requirements for
entitlement to a service pension specified in section 424A.02
and which in its articles of incorporation or bylaws requires
service credit for a period of service less than 20 years of
active service for a totally nonforfeitable service pension as
provided in section 424A.09 shall determine the accrued
liability of the special fund of the firefighters' relief
association relative to each active or deferred member of the
relief association, calculated individually using the following
table:
Cumulative Accrued
Year Liability
............. ............
1 $35
2 71
3 110
4 150
5 192
6 236
7 283
8 332
9 383
10 437
11 494
12 553
13 616
14 681
15 750
16 and thereafter 50 additional per
year
Each firefighters' relief association which pays a service
pension when a retiring firefighter meets the minimum
requirements for entitlement to a service pension specified in
section 424A.02 and which in its articles of incorporation or
bylaws requires service credit for a period of service of at
least 20 years of active service for a totally nonforfeitable
service pension shall determine the accrued liability of the
special fund of the firefighters' relief association relative to
each active or deferred member of the relief association,
calculated individually using the following table:
Cumulative Accrued
Year Liability
............. .............
1 $30 60
2 62 124
3 95 190
4 130 260
5 167 334
6 205 410
7 246 492
8 288 576
9 333 666
10 380 760
11 429 858
12 481 962
13 535 1070
14 592 1184
15 652 1304
16 714 1428
17 780 1560
18 849 1698
19 922 1844
20 1000 2000
21 and thereafter 50 100 additional
per year
The accrued liability of the special fund for each active
or deferred member of the relief association shall be determined
as the multiple or portion of the accrued liability amounts
corresponding to the cumulative years of active service with the
fire department to which the relief association is affiliated to
the credit of the member as set forth in the applicable table
that the lump sum service pension amount currently provided for
in the articles of incorporation or the bylaws of the relief
association bears to a lump sum service pension of $50 per year
of service As set forth in the table the accrued liability for
each member or deferred member of the relief association
corresponds to the cumulative years of active service to the
credit of the member. The accrued liability of the special fund
for each active or deferred member is determined by multiplying
the accrued liability from the chart by the ratio of the lump
sum service pension amount currently provided for in the bylaws
of the relief association to a service pension of $100 per year
of service. If a member has fractional service as of December
31, the figure for service credit to be used for the
determination of accrued liability pursuant to this section
shall be rounded up to the nearest full year of service credit.
The total accrued liability of the special fund of the relief
association as of December 31 shall be the sum of the accrued
liability attributable to each active or deferred member of the
relief association.
Sec. 3. Minnesota Statutes 1982, section 69.772,
subdivision 3, is amended to read:
Subd. 3. [FINANCIAL REQUIREMENTS OF THE RELIEF
ASSOCIATION; MINIMUM OBLIGATION OF THE MUNICIPALITY.] During the
month of July, the officers of the relief association shall
determine the overall funding balance of the special fund of the
relief association for the current calendar year, the financial
requirements of the special fund of the relief association for
the following calendar year and the minimum obligation of the
municipality with respect to the special fund of the relief
association for the following calendar year in accordance with
the requirements of this subdivision.
(1) The overall funding balance of the special fund of the
relief association for the current calendar year shall be
determined in the following manner:
(a) The total accrued liability of the special fund of the
relief association for all active and deferred members of the
relief association as of December 31 of the current year shall
be calculated pursuant to subdivisions 2 and 2a, if applicable.
(b) The total present assets of the special fund of the
relief association projected to December 31 of the current year,
including receipts by and disbursements from the special fund
anticipated to occur on or before December 31 shall be
calculated.
(c) The amount of the total present assets of the special
fund of the relief association calculated pursuant to clause (b)
shall be subtracted from the amount of the total accrued
liability of the special fund of the relief association
calculated pursuant to clause (a). If the amount of total
present assets exceeds the amount of the total accrued
liability, then the special fund shall be considered to have a
surplus over full funding. If the amount of the total present
assets is less than the amount of the total accrued liability,
then the special fund shall be considered to have a deficit from
full funding. If the amount of total present assets is equal to
the amount of the total accrued liability, then the special fund
shall be considered to be fully funded.
(2) The financial requirements of the special fund of the
relief association for the following calendar year shall be
determined in the following manner:
(a) The total accrued liability of the special fund of the
relief association for all active and deferred members of the
relief association as of December 31 of the calendar year next
following the current calendar year shall be calculated pursuant
to subdivisions 2 and 2a, if applicable.
(b) The increase or decrease in the total accrued liability
of the special fund of the relief association for the following
calendar year over the total accrued liability of the special
fund of the relief association for the current year shall be
calculated.
(c) If the special fund of the relief association is fully
funded, the financial requirement of the special fund for the
following calendar year shall be either the positive or the
negative figure which represents the increase or the decrease in
the total accrued liability of the special fund respectively as
calculated pursuant to subclause (b).
(d) If the special fund of the relief association has a
deficit from full funding, the financial requirements of the
special fund for the following calendar year shall be the
financial requirements of the special fund calculated as though
the special fund were fully funded pursuant to subclause (c)
plus an amount equal to one-tenth of the amount of the deficit
from full funding of the special fund as determined pursuant to
this section for the calendar year 1971 until that deficit is
fully retired, and plus an amount equal to one-tenth of the
increase in the deficit from full funding of the special fund
resulting from an increase in the amount of the service pension
accruing subsequent to December 31, 1971 until each increase in
the deficit is fully retired.
(e) If the special fund of the relief association has a
surplus over full funding, the financial requirements of the
special fund for the following calendar year shall be the
financial requirements of the special fund calculated as though
the special fund were fully funded pursuant to subclause (c)
reduced by an amount equal to one-tenth of the amount of the
surplus over full funding of the special fund.
(3) The minimum obligation of the municipality with respect
to the special fund of the relief association shall be the
financial requirements of the special fund of the relief
association reduced by the amount of any fire state aid payable
pursuant to sections 69.011 to 69.051 anticipated to be received
by the municipality for transmittal to the special fund of the
relief association during the following calendar year, an amount
of interest on the assets of the special fund projected to the
end of the current beginning of the following calendar year
calculated at the rate of five percent per annum, and the amount
of any anticipated contributions to the special fund by the
members of the relief association during the following calendar
year.
Sec. 4. [424A.001] [DEFINITIONS.]
Subdivision 1. [TERMS DEFINED.] As used in chapter 424A,
the terms defined in this section have the meanings given.
Subd. 2. [FIRE DEPARTMENT.] "Fire department" includes
municipal fire department and independent nonprofit firefighting
corporation.
Subd. 3. [MUNICIPALITY.] "Municipality" means a
municipality which has a fire department with which the relief
association is directly associated, or the municipalities which
contract with the independent nonprofit firefighting corporation
of which the relief association is a subsidiary.
Subd. 4. [RELIEF ASSOCIATION.] "Relief association" means
(a) a volunteer firefighters' relief association or volunteer
firefighters' division or account of a partially salaried and
partially volunteer firefighters' relief association organized
and incorporated under chapter 317 and any laws of the state,
governed by chapters 69 and 424A, and directly associated with a
fire department established by municipal ordinance; or (b) any
separate incorporated volunteer firefighters' relief association
subsidiary to and providing service pension and retirement
benefit coverage for members of an independent nonprofit
firefighting corporation organized under the provisions of
chapter 317, governed by chapter 424A, and operating exclusively
for firefighting purposes.
Subd. 5. [SPECIAL FUND.] "Special fund" means special fund
of a volunteer firefighters' relief association or the account
for volunteer firefighters within the special fund of a
partially salaried and partially volunteer firefighters' relief
association.
Subd. 6. [SURVIVING SPOUSE.] For purposes of this chapter,
and the governing bylaws of any relief association to which this
chapter applies, the term "surviving spouse" means any person
who was the dependent spouse of a deceased active member or
retired former member living with the member at the time of the
death of the active member or retired former member for at least
one year prior to the date on which the member terminated active
service and membership.
Sec. 5. Minnesota Statutes 1982, section 424A.01, is
amended to read:
424A.01 [MEMBERSHIP IN A VOLUNTEER FIREFIGHTERS' RELIEF
ASSOCIATION.]
Subdivision 1. [MINORS.] It is unlawful for any
municipality or independent nonprofit firefighting corporation
to employ a minor as a volunteer firefighter or to permit a
minor to serve in any capacity performing any firefighting
duties with a volunteer fire department.
Subd. 2. [STATUS OF SUBSTITUTE OR PROBATIONARY VOLUNTEER
FIREFIGHTERS.] No person who is serving as a substitute or a
probationary volunteer firefighter shall be deemed to be a
firefighter for purposes of chapter 69 or this chapter nor shall
be authorized to be a member of any volunteer firefighters'
relief association governed by chapter 69 or this chapter.
Subd. 3. [STATUS OF NONMEMBER VOLUNTEER FIREFIGHTERS.] No
person who is serving as a firefighter in a municipal fire
department or an independent nonprofit firefighting corporation
but who is not a member of the applicable firefighters' relief
association shall be entitled to any service pension, retirement
or ancillary benefits or pension or retirement benefit coverage
from the relief association.
Subd. 3a. [SERVICE CREDIT FOR CERTAIN PROBATIONARY
VOLUNTEER FIREFIGHTERS.] Unless the bylaws of the volunteer
firefighters relief association clearly provide to the contrary,
any person:
(a) who has served as a probationary volunteer firefighter
with a municipal fire department to with which a volunteer
firefighters relief association governed by chapter 69 and this
chapter is directly associated or with an independent nonprofit
firefighting corporation to which a volunteer firefighters
relief association governed by chapter 69 and this chapter is
subsidiary; and
(b) who is a member of that volunteer firefighters relief
association;
shall be is entitled to have the period of service as a
probationary volunteer firefighter credited as a period of
active service as an active member of the municipal fire
department or the independent nonprofit firefighting
corporation, whichever is applicable, for purposes of
calculating a service pension or other retirement ancillary
benefits.
Subd. 4. [EXCLUSION OF PERSONS CONSTITUTING AN UNWARRANTED
HEALTH RISK.] The board of trustees of every volunteer
firefighters' relief association governed by chapter 69 or this
chapter shall have the right to may exclude from membership in
the relief association all applicants who, due to some medically
determinable physical or mental impairment or condition, would
constitute for the relief association a predictable and
unwarranted risk of the commencement of a retirement imposing
liability for an ancillary benefit at any age earlier than the
minimum age specified for receipt of a service pension.
Notwithstanding any provision of section 363.02, subdivision 5,
it shall be a good and valid defense to a complaint or action
brought under chapter 363 that the board of trustees of the
relief association made a good faith determination that the
applicant suffers from an impairment or condition constituting a
predictable and unwarranted risk for the relief association if
the determination was made following consideration of: (a) the
person's medical history; and (b) the report of the physician
completing a physical examination of the applicant completed at
the expense of the relief association and of the person's
medical history.
Sec. 6. Minnesota Statutes 1982, section 424A.02, is
amended to read:
424A.02 [VOLUNTEER FIREFIGHTERS; SERVICE PENSIONS.]
Subdivision 1. [AUTHORIZATION.] Any volunteer
firefighters' relief association or volunteer firefighters'
division or account of a partially salaried and partially
volunteer firefighters' relief association organized and
incorporated under chapter 317 and any laws of the state and
directly associated with a fire department established by
municipal ordinance or any separate incorporated volunteer
firefighters' relief association subsidiary to and providing
service pension and retirement benefit coverage for members of
an independent nonprofit firefighting corporation organized
under the provisions of chapter 317 and operating exclusively
for fire fighting purposes, whether or not the nonprofit
firefighting corporation qualifies for fire state aid pursuant
to chapter 69, when its articles of incorporation or bylaws so
provide, may pay out of the assets of the its special fund of
the volunteer firefighters' relief association or volunteer
firefighters' account, a service pension to each of its members
who: (1) separates from active service with the fire department
or the independent nonprofit firefighting corporation, who; (2)
reaches the age of 50 years and who; (3) completes at least ten
years of active service as an active member of the municipal
fire department to which the relief association is associated or
of the independent nonprofit firefighting corporation to which
the relief association is subsidiary, and who; (4) completes at
least ten years of active membership with the volunteer
firefighters' relief association or volunteer firefighters'
account prior to separation from active service; and who (5)
complies with any additional conditions as to age, service and
membership which are prescribed by the bylaws of the relief
association. The service pension may be paid whether or not the
municipality or nonprofit firefighting corporation to which the
relief association is associated qualifies for fire state aid
under chapter 69. In the case of a member who has completed at
least ten years of active service as an active member of the
municipal fire department to which the relief association is
associated or of the independent nonprofit firefighting
corporation to which the relief association is subsidiary on the
date that the volunteer firefighters' relief association is
established and incorporated, the requirement that the member
complete at least ten years of active membership with the
volunteer firefighters' relief association or volunteer
firefighters' account prior to separation from active service
may be waived by the board of trustees of the relief association
if the member completes at least ten years of inactive
membership with the volunteer firefighters' relief association
or volunteer firefighters' account prior to the payment of the
service pension. During the period of inactive membership, the
member shall not be entitled to receive any disability benefit
coverage, shall not be entitled to receive any additional
service credit towards computation of a service pension, and
shall be deemed to have the status of a person entitled to a
deferred service pension pursuant to subdivision 7.
No municipality or nonprofit firefighting corporation is
authorized to delegate the power to take final action in setting
a service pension or retirement ancillary benefit amount or
level to the board of trustees of the volunteer firefighters
relief association or to approve in advance a service pension or
retirement ancillary benefit amount or level equal to the
maximum amount or level which this chapter would allow rather
than a specific dollar amount or level.
No volunteer firefighters' relief association or volunteer
firefighters' division or account of a partially salaried and
partially volunteer firefighters' relief association is
authorized to as defined in section 424A.001, subdivision 4,
shall pay a service pension or disability benefit to any former
member of the relief association if that person has not
separated from active service with the fire department to which
the volunteer firefighters' relief association is directly
associated or with the independent nonprofit firefighting
corporation to which the volunteer firefighters' relief
association is subsidiary.
Subd. 2. [NONFORFEITABLE PORTION OF SERVICE PENSION.] Any
volunteer firefighters' relief association or volunteer
firefighters' account to which this section applies, when its
articles of incorporation or bylaws so provide and when a
retiring member meets the minimum age and service requirements
set forth in subdivision 1 but has not completed 20 years of
service may pay a portion of the service pension amount earned
to date as specified in the bylaws, but not to exceed the
percentage applicable for each full year of service completed as
follows:
Completed Years of Service Nonforfeitable Portion of
Annual or Prorata Service
Pension Amount
If the articles of incorporation or bylaws of a relief
association so provide, a relief association may pay a reduced
service pension to a retiring member who has completed fewer
than 20 years of service. The reduced service pension may be
paid when the retiring member meets the minimum age and service
requirements of subdivision 1.
The amount of the reduced service pension shall not exceed
the amount calculated by multiplying the service pension
appropriate for the completed years of service as specified in
the bylaws times the applicable nonforfeitable percentage of
pension. The applicable nonforfeitable percentage of pension
amounts are as follows:
Completed Years of Service Nonforfeitable Percentage
of Pension Amount
10 60 percent
11 64 percent
12 68 percent
13 72 percent
14 76 percent
15 80 percent
16 84 percent
17 88 percent
18 92 percent
19 96 percent
20 and thereafter 100 percent
Subd. 3. [FLEXIBLE SERVICE PENSION MAXIMUMS.] On or before
August 1 of each year as part of the certification of the
financial requirements and minimum municipal obligation made
pursuant to section 69.772, subdivision 4, or 69.773,
subdivision 5, the secretary or some other official of the
relief association designated in the bylaws of each volunteer
firefighters' relief association or volunteer firefighters'
account, other than a relief association or account which in its
bylaws provides solely for the payment of a defined contribution
service pension as authorized pursuant to subdivision 4, shall
calculate and certify to the governing body of the applicable
qualified municipality the average amount of available financing
per active covered firefighter for the most recent three-year
period. The amount of available financing shall include any
amounts of fire state aid received or receivable by the relief
association or account, any amounts of municipal contributions
to the relief association or account raised from levies on real
estate or from other available revenue sources exclusive of fire
state aid, and one-tenth of the amount of assets in excess of
the accrued liabilities of the relief association or account
calculated pursuant to sections 69.772, subdivision 2; 69.773,
subdivisions 2 and 4; or 69.774, subdivision 2, if any. The
maximum service pension which the relief association may provide
for in its bylaws for payment to a member retiring after the
calculation date when the minimum age and service requirements
specified in subdivision 1 are met shall be determined using the
applicable following table.
For a relief association or account where the governing
bylaws provide for a monthly service pension to a retiring
member, if the average amount of available financing per active
covered firefighter does not exceed the minimum average amount
specified below, then the maximum monthly service pension amount
per month for each year of service credited which may be
provided for in the bylaws shall be the greater of: (1) the
service pension amount provided for in the bylaws on the date of
calculation; or (2) the maximum service pension figure
corresponding to the average amount of available financing per
active covered firefighter:
Minimum Average Amount of Maximum Service Pension
Available Financing per Amount Payable per Month
Firefighter for Each Year of Service
$... $ .25
37 .50
75 1.00
112 1.50
149 2.00
186 2.50
224 3.00
261 3.50
298 4.00
336 4.50
373 5.00
447 6.00
522 7.00
597 8.00
671 9.00
746 10.00
820 11.00
895 12.00
969 13.00
1044 14.00
1119 15.00
1193 16.00
1268 17.00
1342 18.00
1417 19.00
1491 20.00
1566 21.00
1640 22.00
1678 or more 22.50
For a relief association or account in which the governing
bylaws provide for a lump sum service pension to a retiring
member, if the average amount of available financing per active
covered firefighter does not exceed the minimum average amount
specified below, then the maximum lump sum service pension
amount for each year of service credited which may be provided
for in the bylaws shall be the greater of: (1) the service
pension amount provided for in the bylaws on the date of the
calculation; or (2) the maximum service pension figure
corresponding to the average amount of available financing per
active covered firefighter:
Minimum Average Amount Maximum Lump Sum Service
of Available Financing Pension Amount Payable
per Firefighter for Each Year of Service
$.. $10
10 20
14 30
20 40
24 50
28 60
38 80
48 100
58 120
68 140
76 160
86 180
96 200
116 240
134 280
154 320
172 360
192 400
212 440
230 480
250 520
268 560
288 600
308 640
326 680
346 720
364 760
384 800
432 900
480 1000
528 1100
576 1200
624 1300
672 1400
720 1500
768 1600
816 1700
864 1800
912 1900
960 2000
1008 2100
1056 2200
1104 2300
1152 2400
1200 2500
1248 2600
1296 2700
1344 2800
1392 2900
1440 or more 3000
For a relief association or account in which the governing
bylaws provide for a monthly benefit service pension as an
alternative form of service pension payment to a lump sum
service pension at the option of the retiring member, the
maximum service pension amount shall be determined using the
applicable table contained in this subdivision.
Subd. 4. [DEFINED CONTRIBUTION LUMP SUM SERVICE PENSIONS.]
If the bylaws governing the volunteer firefighters' relief
association or volunteer firefighters' account of a
firefighters' relief association so provide exclusively, the
relief association or account may pay a defined contribution
lump sum service pension in lieu of any defined benefit service
pension governed by subdivision 2. An individual account for
each firefighter who is a member of the relief association shall
be established. To each individual member account shall be
credited a right to an equal share of: (a) any amounts of fire
state aid received by the relief association or account,; (b)
any amounts of municipal contributions to the relief association
or account raised from levies on real estate or from other
available revenue sources exclusive of fire state aid,; and (c)
any amounts equal to the share of the assets of the special fund
to the credit of: (1) any former member who terminated active
service with the fire department of the municipality to which
the relief association is associated or the independent
nonprofit firefighting corporation to which the relief
association is a subsidiary prior to meeting the minimum service
requirement provided for in subdivision 1 and has not returned
to active service with the fire department or independent
nonprofit firefighting corporation for a period no shorter than
five years; or to the credit of (2) any retired member who
retired prior to obtaining a full nonforfeitable interest in the
amounts credited to the individual member account pursuant to
subdivision 2 and any applicable provision of the bylaws of the
relief association. In addition, any interest or investment
income earned on the assets of the special fund shall be
credited in proportion to the share of the assets of the special
fund to the credit of each individual member account. At the
time of retirement pursuant to subdivision 1 and any applicable
provision of the bylaws of the relief association, a retiring
member shall be entitled to that portion of the assets of the
special fund to the credit of the member in the individual
member account which is nonforfeitable pursuant to subdivision 2
and any applicable provision of the bylaws of the relief
association based on the number of years of service to the
credit of the retiring member.
Subd. 5. [SERVICE CREDIT MAXIMUM.] No relief association
or account to which this chapter applies and where for which the
governing bylaws provide for a monthly service pension to a
retiring member shall credit any member with service in excess
of 30 years; provided, however, that for any. For a member of a
relief association or account who, as of July 1, 1979, has
received credit for service in excess of 30 years, the
limitation on the crediting of further service credit provided
for in this subdivision shall apply applies to any additional
years of service occurring after July 1, 1979.
Subd. 6. [PAYMENT OF SERVICE PENSIONS; NONASSIGNABILITY.]
The method of calculating service pensions shall be applied
uniformly, except as otherwise provided in this section. No
service pension shall be paid to any person while the person
remains an active member of the respective municipal fire
department or nonprofit firefighting corporation, and no person
who is receiving a service pension shall be entitled to receive
any other benefits from the special fund of the relief
association or account. No service pension or retirement
ancillary benefits paid or payable from the special fund of a
relief association or account to any person receiving or
entitled to receive a service pension or other ancillary
benefits shall be subject to garnishment, judgment, execution or
other legal process and. No person entitled to a service
pension or other retirement ancillary benefits from the special
fund of a relief association or account shall have the right to
may assign any service pension or retirement ancillary benefit
payments, nor shall the association have the authority to
recognize any assignment or pay over any sum which has been
assigned.
Subd. 7. [DEFERRED SERVICE PENSIONS.] A member of a relief
association or account to which this section applies who is
entitled to a deferred service pension if the member:
(1) has completed the lesser of the minimum period of
active service with the municipal fire department or independent
nonprofit firefighting corporation specified in the bylaws or 20
years of active service with the municipal fire department to
which the relief association or account is directly associated
with or the independent nonprofit firefighting corporation of
which the relief association is a subsidiary, who;
(2) has completed at least ten years of active membership
in the relief association or account; and who
(3) separates from active service and membership prior to
reaching the age of 50 years or the minimum age for retirement
and commencement of a service pension specified in the bylaws
governing the relief association or account if that age is
greater than the age of 50 years shall be entitled to a deferred
service pension to. The deferred service pension shall commence
upon when the former member reaching reaches the age of 50 years
or the minimum age specified in the bylaws governing the relief
association or account if that age is greater than the age of 50
years and upon when the former member making makes a valid
written application. Any relief association or account which
provides a lump sum service pension may, when its governing
bylaws so provide, pay interest on the deferred lump sum service
pension during the period of deferral. If provided for,
interest shall be paid at the rate actually earned by the relief
association or account, but not to exceed the interest rate
specified in section 356.215, subdivision 4, clause (4), and
shall be compounded annually based on calendar year balances.
The deferred service pension shall be governed by and shall be
calculated pursuant to any general statute, special law, relief
association articles of incorporation or relief association
bylaw provisions applicable as of the date on which the member
separated from active service with the fire department or the
nonprofit firefighting corporation and active membership in the
relief association or account.
Subd. 8. [LUMP SUM SERVICE PENSIONS; INSTALLMENT
PAYMENTS.] Any relief association or account, if the governing
bylaws so provide, may pay, at the option of the retiring member
and in lieu of a single payment of a lump sum service pension,
pay a lump sum service pension in installments.
The election of installment payments shall be irrevocable
and shall be made by the retiring member in writing and filed
with the secretary of the relief association no later than 30
days prior to the commencement of payment of the service
pension. The amount of the installment payments shall be
determined so that the present value of the aggregate
installment payments computed at an interest rate of five
percent, compounded annually, is equal to the amount of the
single lump sum payment which would have been made had the
installment payments option not been elected. The payment of
each installment shall include interest at the rate of five
percent, compounded annually on the reserve supporting the
remaining installment payments as of the date on which the
previous installment payment was paid and computed from the date
on which the previous installment payment was paid to the date
of payment for the current installment payment.
To the extent that the commissioner of insurance deems it
to be necessary or practical, the commissioner may specify and
issue procedures, forms or mathematical tables for use in
performing the calculations required pursuant to this
subdivision.
Subd. 9. [LIMITATION ON RETIREMENT ANCILLARY BENEFITS
OTHER THAN SERVICE PENSION.] Any relief association or account
to which this section applies, if the governing bylaws so
provide, may provide retirement coverage for and may pay any one
or any combination death, disability, funeral and survivorship
ancillary benefits which would constitute an authorized
disbursement as specified in section 424A.05 subject to the
following limitations:
(1) (a) With respect to a relief association or account
where the in which governing bylaws provide for a lump sum
service pension to a retiring member, no retirement ancillary
benefit may be paid to any former member or paid to any person
on behalf of any former member subsequent to after the former
member terminating (1) terminates active service with the
municipal fire department to which the relief association or
account is directly associated or the independent nonprofit
firefighting corporation of which the relief association is a
subsidiary, whichever is applicable, and active membership in
the relief association or account,; and commencing (2) commences
receipt of a service pension as authorized pursuant to this
section; and
(2) (b) With respect to any relief association or account,
no retirement ancillary benefit paid or payable to any member,
to any former member, or to any person on behalf of any member
or former member, may exceed in amount the total earned service
pension of the member or former member. The total earned
service pension is calculated using the service pension amount
specified in the governing bylaws of the relief association and
the years of service credited to the member or former member.
The years of service are determined as of (1) the date the
member or former member became entitled to the retirement
ancillary benefit; or (2) the date the member or former member
died entitling a survivor or the estate of the member or former
member to a retirement an ancillary benefit on behalf of the
member or former member,. The survivor benefit may be
calculated (1) without regard to whether the member or former
member had attained the minimum amount of service and membership
credit specified in the governing bylaws or not; and (2) without
regard to the percentage amounts specified in subdivision 2;
except that the bylaws of any relief association may provide for
the payment of a survivor benefit equivalent of in an amount not
to exceed five times the yearly service pension amount specified
in the bylaws on behalf of any member who dies before having
performed five years of active service in the fire department
with which the relief association is affiliated.
Subd. 9a. [POST RETIREMENT INCREASES.] Notwithstanding any
provision of general or special law to the contrary, a volunteer
firefighters' relief association paying a monthly service
pension may, from time to time, with municipal approval pursuant
to subdivision 10 and section 69.772, subdivision 6, or section
69.773, subdivision 6, whichever is applicable, provide a post
retirement increase to retired members and other retirement
ancillary benefit recipients of the relief association if (1)
the relief association adopts an appropriate bylaw amendment;
and (2) the bylaw amendment is approved by the municipality
pursuant to subdivision 10 and section 69.773, subdivision 6.
The post retirement increase may only be granted pursuant to an
amendment to the bylaws of the relief association and shall be
applicable only to retired members and other retirement
ancillary benefit recipients receiving a service pension or
retirement ancillary benefit as of the effective date of the
bylaw amendment. The authority to provide a post retirement
increase to retired members and other retirement ancillary
benefit recipients of a relief association contained in this
subdivision shall supersede any prior special law authorization
relating to the provision of post retirement increases.
Subd. 10. [LOCAL APPROVAL OF BYLAW AMENDMENTS; FILING
REQUIREMENTS.] Each relief association or account to which this
section applies shall file a complete current copy of its
governing bylaws with the commissioner of insurance on or before
July 1, 1980 and shall immediately file a revised copy of its
governing bylaws with the commissioner of insurance upon the
adoption of any amendment to its governing bylaws by the relief
association or upon the approval of any amendment to its
governing bylaws granted by the governing body of the each
municipality in which served by the fire department to which the
relief association or account is directly associated or by the
governing bodies of all municipalities with which the
independent nonprofit firefighting corporation of which the
relief association is a subsidiary has contracted whichever is
applicable. Failure of the relief association to file a copy of
the bylaws or any bylaw amendments with the commissioner of
insurance shall disqualify the municipality from the
distribution of any future fire state aid until this filing
requirement has been completed.
If the special fund of the relief association does not have
a surplus over full funding pursuant to section 69.772,
subdivision 3, clause (2), subclause (e), or 69.773, subdivision
4, and if the municipality is required to provide financial
support to the special fund of the relief association pursuant
to section 69.772 or 69.773 in the event that the fire
department to which the relief association or account is
directly associated is a municipal fire department, or if the
relief association is a subsidiary of a nonprofit firefighting
corporation, no bylaw amendment which would affect the amount
of, the manner of payment of, or the conditions for
qualification for service pensions or other retirement ancillary
benefits or disbursements other than administrative expenses
authorized pursuant to section 69.80 payable from the special
fund of the relief association or account shall be effective
until it has been ratified by the governing body or bodies of
the municipality in which the fire department to which the
relief association or account is directly associated or by the
governing bodies of all appropriate municipalities with which
the independent nonprofit firefighting corporation of which the
relief association is a subsidiary has contracted, whichever is
applicable. If the fire department with which the relief
association is directly associated is a municipal fire
department and the municipality is not required to provide
financial support to the special fund of the relief association
pursuant to this section, the relief association may adopt or
amend without municipal ratification its articles of
incorporation or bylaws which increase or otherwise affect the
retirement coverage provided by or the service pensions or
retirement ancillary benefits payable from the special fund of
the relief association shall be effective without municipal
ratification so long as this does the changes do not cause the
amount of the resulting increase in the accrued liability of the
special fund of the relief association to exceed 90 percent of
the amount of the prior surplus over full funding and this does
the changes do not result in the financial requirements of the
special fund of the relief association exceeding the expected
amount of the future fire state aid to be received by the relief
association as.
If the relief association pays only a lump sum pension, the
financial requirements are to be determined by the board of
trustees following the preparation of an estimate of the
expected increase in the accrued liability and annual accruing
liability of the relief association attributable to the change,
if the relief association pays only a lump sum service pension
or. If the relief association pays a monthly benefit service
pension, the financial requirements are to be determined by the
board of trustees following either an updated actuarial
valuation including the proposed change or an estimate of the
expected actuarial impact of the proposed change prepared by the
actuary of the relief association if the relief association pays
a monthly benefit service pension. If a relief association
adopts or amends its articles of incorporation or bylaws without
municipal ratification pursuant to this subdivision, and,
subsequent to the amendment or adoption, the financial
requirements of the special fund of the relief association
pursuant to this section are such so as to require financial
support from the municipality, the provision which was
implemented without municipal ratification shall no longer be
effective without municipal ratification, and any service
pensions or retirement ancillary benefits payable after that
date shall be paid only in accordance with the articles of
incorporation or bylaws as amended or adopted with municipal
ratification.
Subd. 11. [DISTRIBUTION OF ASSETS UPON DISSOLUTION IN
CERTAIN CASES.] If the fire department which is associated with
a relief association is dissolved or eliminated by action of the
governing body of the municipality in which the fire department
is located, the relief association shall distribute its assets
and be dissolved in the following manner:
(1) Within six months after the dissolution of the fire
department, the board of trustees of the relief association
shall convert all of the assets of the relief association to
cash or negotiable instruments.
(2) The board shall then determine and pay all of the legal
obligations of the association, including the costs related to
dissolution of the corporate existence of the association, but
excluding pension obligations to members.
(3) After payment of the legal obligations of the
association, the board shall determine the pro rata share of
each member of the association. The pro rata share shall be
that portion of the remaining assets of the association based on
the proportion which the months of active service performed in
the associated fire department bears to the total number of
months of active service which have been performed in the
associated fire department by all of the persons who are then
members of the relief association. At the time of dissolution
of the corporation, each member shall be paid the member's pro
rata share.
Sec. 7. Minnesota Statutes 1982, section 424A.03,
subdivision 1, is amended to read:
Subdivision 1. [LIMITATION ON NONUNIFORMITY OF PENSIONS.]
No Every partially salaried and partially volunteer
firefighters' relief association shall provide service pensions
to volunteer firefighter members which differ in nature or
amount if the difference is based on compensation paid for
firefighting services rendered by any firefighter member nor
base the service pensions and retirement benefits it provides
upon any rate or amount of compensation which is paid for
firefighting services based on the years of service of the
members not on the compensation paid to the members for
firefighting services. Each relief association shall provide
service pensions to salaried members as set forth in chapter 424
and applicable special laws.
Sec. 8. Minnesota Statutes 1982, section 424A.04, is
amended to read:
424A.04 [VOLUNTEER RELIEF ASSOCIATIONS; BOARD OF TRUSTEES.]
Subdivision 1. [MEMBERSHIP.] Every volunteer firefighters'
relief association directly associated with a municipal fire
department shall be managed by a board of trustees consisting of
nine members. Six trustees shall be elected from the membership
of the relief association and three trustees shall be drawn from
the officials of the municipality which has a municipalities
served by the fire department to which the relief association is
directly associated or the municipality which contracts or the
municipalities which contract with the independent nonprofit
firefighting corporation of which the relief association is a
subsidiary. The bylaws of a volunteer firefighters' relief
association may provide that one of the six trustees required to
be elected from the membership of the relief association may be
a retired member of the relief association receiving a monthly
pension who is elected by the membership of the fire department
relief association. The three ex officio trustees, if the
relief association is directly associated with the fire
department of a municipality, shall be the mayor, the clerk,
clerk-treasurer or finance director, and the chief of the
municipal fire department. The three ex officio trustees, if
the
Every relief association that is a subsidiary of an
independent nonprofit firefighting relief corporation, shall be
managed by a board of trustees consisting of ten members. Six
trustees shall be elected from the membership of the relief
association, three trustees shall be drawn from the officials of
the municipalities served by the fire department to which the
relief association is directly associated, and one trustee shall
be the fire chief. The bylaws of a relief association may
provide that one of the six trustees elected from the relief
association may be a retired member receiving a monthly pension
who is elected by the membership of the relief association. The
three ex officio trustees who are the elected officials shall be
selected as follows:
(1) if only one municipality contracts with the independent
nonprofit firefighting corporation, the ex officio trustees
shall be three elected officials of the contracting municipality
who are designated by the governing body of the municipality if
only one municipality contracts with the independent nonprofit
firefighting corporation,;
(2) if two municipalities contract with the independent
nonprofit firefighting corporation, the ex officio trustees
shall be two elected officials of the largest municipality in
population and one elected official of the next largest
municipality in population who are designated by the governing
bodies of the applicable municipalities if two municipalities
contract with the independent nonprofit firefighting
corporation,; or
(3) if three or more municipalities contract with the
independent nonprofit corporation, the ex officio trustees shall
be one elected official of each of the three largest
municipalities in population who are designated by the governing
bodies of the applicable municipalities if three or more
municipalities contract with the independent nonprofit
firefighting corporation. An ex officio trustee shall have all
of the rights and duties accorded to any other trustee except
the right to be an officer of the board of trustees. A board
shall have at least three officers, which shall be a president,
a secretary and a treasurer. These officers shall be elected
from among the elected trustees by either the full board of
trustees or by the membership, as specified in the bylaws, and
in no event shall any trustee hold more than one officer
position at any one time. The terms of the elected trustees and
of the officers of the board shall be specified in the bylaws of
the relief association, but shall not exceed three years. If
the term of the elected trustees exceeds one year, the election
of the various trustees elected from the membership shall
initially and shall thereafter continue to be staggered on as
equal a basis as is practicable.
Subd. 2. [FIDUCIARY DUTY.] It shall be the duty of the
board of trustees to faithfully administer any provisions of
statute or special law applicable to the relief association
without prejudice and consistent with the expressed intent of
the legislature. The members of the board shall act as trustees
with a fiduciary obligation to the state of Minnesota which
authorized the creation of the relief association, to the
taxpayers who aid in its financing, and to the firefighters who
are its beneficiaries.
Sec. 9. Minnesota Statutes 1982, section 424A.05, is
amended to read:
424A.05 [RELIEF ASSOCIATION SPECIAL FUND.]
Subdivision 1. [ESTABLISHMENT OF SPECIAL FUND.] Every
volunteer firefighters' relief association shall establish and
maintain a special fund within the relief association.
Subd. 2. [SPECIAL FUND ASSETS AND REVENUES.] The special
fund shall be credited with all fire state aid moneys received
pursuant to sections 69.011 to 69.051, all taxes levied by or
other revenues received from the municipality pursuant to
sections 69.771 to 69.776 or any applicable special law
requiring municipal support for the relief association, any
moneys or property donated, given, granted or devised by any
person which is specified for use for the support of the special
fund of the relief association and any interest earned upon the
assets of the special fund. The treasurer of the relief
association shall be the custodian of the assets of the special
fund and shall be the recipient on behalf of the special fund of
all revenues payable to the special fund. The treasurer shall
maintain adequate records documenting any transaction involving
the assets or the revenues of the special fund. These records
and the bylaws of the relief association shall be public and
shall be open for inspection by any member of the relief
association, any officer or employee of the state or the
municipality, or any member of the public, at reasonable times
and places.
Subd. 3. [AUTHORIZED DISBURSEMENTS FROM THE SPECIAL FUND.]
Disbursements from the special fund shall not be made for any
purpose other than one of the following:
(1) For the payment of service pensions to retired members
of the relief association if authorized and paid pursuant to law
and the bylaws governing the relief association;
(2) For the payment of temporary or permanent disability
retirement benefits to disabled members of the relief
association if authorized and paid pursuant to law and specified
in amount in the bylaws governing the relief association;
(3) For the payment of survivor retirement benefits to
surviving spouses and surviving children of deceased members of
the relief association if authorized by and paid pursuant to law
and specified in amount in the bylaws governing the relief
association;
(4) For the payment of any funeral benefits to the
surviving spouse, or if no surviving spouse, the estate, of the
deceased member of the relief association if authorized by law
and specified in amount in the bylaws governing the relief
association;
(5) For the payment of the fees, dues and assessments to
the Minnesota state fire department association and to the state
volunteer firefighters' benefit association in order to entitle
relief association members to membership in and the benefits of
these state associations; and
(6) For the payment of administrative expenses of the
relief association as authorized pursuant to section 69.80.
Subd. 4. [INVESTMENTS OF ASSETS OF THE SPECIAL FUND.] The
assets of the special fund shall be invested only in securities
authorized by section 69.775.
Subd. 5. [DEFINITION OF SURVIVING SPOUSE.] For purposes of
this section, section 424A.02, and the governing bylaws of any
relief association to which this chapter applies, the term
"surviving spouse" means any person who was the dependent spouse
of a deceased active member or retired former member living with
the member at the time of the death of the active member or
retired former member for at least one year prior to the date on
which the member terminated active service and membership.
Sec. 10. Minnesota Statutes 1982, section 424A.08, is
amended to read:
424A.08 [MUNICIPALITY WITHOUT RELIEF ASSOCIATION;
AUTHORIZED DISBURSEMENTS.]
Any qualified municipality which is entitled to receive
fire state aid but which has no volunteer firefighters' relief
association directly associated with its municipal fire
department and does not contract with an independent nonprofit
firefighting corporation which has a subsidiary volunteer
firefighters' relief association, shall deposit the fire state
aid in a special account in the municipal treasury.
Disbursement from the special account shall not be made for any
purpose except:
(1) Payment of the fees, dues and assessments to the
Minnesota state fire department association and to the state
volunteer firefighters' benefit association in order to entitle
its firefighters to membership in and the benefits of these
state associations;
(2) Payment of the cost of purchasing and maintaining
needed equipment for the fire department; and
(3) Payment of the cost for construction, acquisition,
repair and maintenance of buildings or other premises to house
the fire department.
Sec. 11. [REPEALER.]
Minnesota Statutes 1982, section 424.26, is repealed.
Sec. 12. [EFFECTIVE DATE.]
This act is effective the day following final enactment.
Approved June 1, 1983
Official Publication of the State of Minnesota
Revisor of Statutes