PRINTER'S NO. 114
No. 121 Session of 1999
INTRODUCED BY MOWERY, HELFRICK, MUSTO, SALVATORE, LEMMOND, GREENLEAF, COSTA AND WAUGH, JANUARY 12, 1999
REFERRED TO FINANCE, JANUARY 12, 1999
AN ACT 1 Amending the act of June 11, 1968 (P.L.149, No.84), entitled, as 2 amended, "An act relating to volunteer firefighters' relief 3 associations, clarifying their purposes and objectives, 4 establishing criteria and standards for the conduct of their 5 affairs, providing for their formation, recognition, 6 continuing operation, and for their dissolution in 7 appropriate circumstances and the distribution of their 8 funds," providing for volunteer firefighters' money purchase 9 deferred benefit plans. 10 WHEREAS, In the tragic event of death due to participation in 11 the volunteer fire service, a death benefit is paid to the 12 survivors of a volunteer firefighter in the amount of $50,000 13 under the Public Safety Officers' Benefit Act of 1976 (Public 14 Law 94-430, 42 U.S.C. § 3701 et seq.) and the death benefit in 15 the amount of $50,000 is paid under the act of June 24, 1976 16 (P.L.424, No.101), referred to as the Emergency and Law 17 Enforcement Personnel Death Benefits Act. A statutory percentage 18 of at least the average weekly wage in the Commonwealth is 19 provided for under the act of June 2, 1915 (P.L.736, No.338), 20 known as the Workers' Compensation Act. A death benefit also may 21 be paid either directly or through insurance bought by the
1 volunteer firefighters' relief association under the act of June 2 11, 1968 (P.L.149, No.84), known as the Volunteer Firefighters' 3 Relief Association Act; and 4 WHEREAS, In the tragic event of injury due to participation 5 in the volunteer fire service, benefits are payable to the 6 injured volunteer firefighter under the Workers' Compensation 7 Act, and benefits may be paid to the injured volunteer 8 firefighter, or the firefighter's family, or both, either 9 directly or through insurance bought by the volunteer 10 firefighters' relief association under the Volunteer 11 Firefighters' Relief Association Act; and 12 WHEREAS, In order to reduce the frequency of death and the 13 frequency and severity of injury to volunteer firefighters, 14 volunteer firefighters' relief associations are permitted to pay 15 for both safeguards and training under the Volunteer 16 Firefighters' Relief Association Act; and 17 WHEREAS, The General Assembly finds that there is a need to 18 preserve the invaluable service provided by the volunteer fire 19 service by increasing its ability to attract and retain 20 volunteer firefighters by providing for a money purchase 21 deferred benefit. 22 The General Assembly of the Commonwealth of Pennsylvania 23 hereby enacts as follows: 24 Section 1. Section 3 of the act of June 11, 1968 (P.L.149, 25 No.84), known as the Volunteer Firefighters' Relief Association 26 Act, amended December 22, 1993 (P.L.547, No.78), is amended to 27 read: 28 Section 3. Statement of Purpose.--The purpose of the 29 Legislature in enacting this statute is to encourage individuals 30 to take part in the fire service as volunteer firefighters, by 19990S0121B0114 - 2 -
1 establishing criteria and standards for the orderly 2 administration and conduct of the affairs of firefighters' 3 relief associations, so as to ensure, as far as circumstances 4 will reasonably permit, that funds shall be available for the 5 protection of volunteer firefighters and their heirs: 6 (1) To provide financial assistance to volunteer 7 firefighters who may suffer injury or misfortune by reason of 8 their participation in the fire service; 9 (2) To provide financial assistance to the widow, children, 10 and/or other dependents of volunteer firefighters who lose their 11 lives as a result of their participation in the fire service; 12 (3) To provide, either by insurance or by the operation of a 13 beneficial fund, for the payment of a sum certain to the 14 designated beneficiaries of a participating member in such fund 15 following the death of such member for any cause, and to 16 establish criteria which members must meet in order to qualify 17 as participants in such death benefit fund; 18 (4) To provide safeguards for preserving life, health and 19 safety of volunteer firefighters, so as to ensure their 20 availability to participate in the fire service; 21 (5) To provide financial assistance to volunteer 22 firefighters who, after having actively participated in the fire 23 service for a specified minimum term, are no longer physically 24 able to continue such participation and are in need of financial 25 assistance; 26 (6) To provide funds to aid the rehabilitation of volunteer 27 firefighters who have suffered an impairment of their physical 28 capacity to continue to perform their normal occupations; [and] 29 (6.1) To provide money purchase deferred benefits to current 30 and future active volunteer firefighters upon their separation 19990S0121B0114 - 3 -
1 from active participation in the fire service and attainment of 2 a designated minimum age through the establishment and 3 maintenance of a volunteer firefighters' money purchase deferred 4 benefit plan; and 5 (7) In any event, to provide sufficient funds to ensure the 6 efficient and economical handling of the business of the 7 association in accomplishing the objectives hereinabove set 8 forth. 9 Section 2. Section 6(e) of the act is amended by adding a 10 clause to read: 11 Section 6. Funds.--* * * 12 (e) The funds of any volunteer firefighters' relief 13 association may be spent: 14 * * * 15 (17) To establish and maintain a money purchase deferred 16 benefit plan as provided in section 9. 17 Section 3. Section 7(a) of the act, amended December 22, 18 1993 (P.L.547, No.78), is amended to read: 19 Section 7. Audits.--(a) The Department of the Auditor 20 General shall have the power, and its duty shall be, to audit 21 the accounts and records of every volunteer firefighters' relief 22 association receiving any money under Chapter 7 of the act of 23 December 18, 1984 (P.L.1005, No.205), known as the "Municipal 24 Pension Plan Funding Standard and Recovery Act," as amended, as 25 far as may be necessary to satisfy the department that the money 26 received was expended or is being expended for no purpose other 27 than that authorized by this act. Copies of all such audits 28 shall be furnished to the Governor. These audits shall include 29 revenues and expenditures relating to money purchase deferred 30 benefit plans either solely or partially paid for with money 19990S0121B0114 - 4 -
1 obtained under the "Municipal Pension Plan Funding Standard and 2 Recovery Act." 3 * * * 4 Section 4. The act is amended by adding a section to read: 5 Section 9. Money Purchase Deferred Benefit Plan.--(a) (1) 6 A volunteer firefighters' relief association may establish a 7 money purchase deferred benefit plan beginning on January 1 of 8 any year commencing after December 31, 1999, for its current and 9 future active members. 10 (2) If the relief association establishes a money purchase 11 deferred benefit plan, the relief association also shall adopt a 12 plan document specifying all aspects of the arrangement between 13 the relief association and its members concerning the money 14 purchase deferred benefit provided. 15 (3) If the relief association establishes a money purchase 16 deferred benefit plan, the relief association also shall 17 establish a fund that shall be a fiscal and accounting entity 18 with a self-balancing set of accounts recording cash and other 19 financial resources, together with all related liabilities, and 20 residual equities or balances, and changes therein, that is 21 segregated for the purpose of accounting for assets held by the 22 relief association in a trustee capacity for the members and 23 beneficiaries of the money purchase deferred benefit plan. 24 (b) (1) A volunteer firefighters' relief association 25 annually shall determine how much money, if any, to contribute 26 to its money purchase deferred benefit fund. In any calendar 27 year, a relief association shall not contribute to its money 28 purchase deferred benefit fund more than one-half of the money 29 it received during the previous calendar year under Chapter 7 of 30 the act of December 18, 1984 (P.L.1005, No.205), known as the 19990S0121B0114 - 5 -
1 "Municipal Pension Plan Funding Standard and Recovery Act." 2 (2) The relief association may match its contribution to the 3 money purchase deferred benefit plan under clause (1) up to and 4 including a dollar-for-dollar basis by using any of the balance 5 obtained by adding together the balances in the unrestricted 6 cash, cash equivalent and investment accounts of the relief 7 association at the close of business on December 31 of the 8 previous year and subtracting from that both the balances in all 9 liability accounts of the relief association on that December 31 10 and the money it received during that previous calendar year 11 under Chapter 7 of the "Municipal Pension Plan Funding Standard 12 and Recovery Act." The assets, liabilities and equities of any 13 money purchase deferred benefit fund existing on that December 14 31 shall be excluded from this calculation. 15 (c) (1) A volunteer firefighters' relief association may 16 make an annual contribution to a money purchase deferred benefit 17 plan only for a volunteer firefighter who in the previous year 18 accumulated at least fifty eligibility points. 19 (2) A volunteer fire company covered by a money purchase 20 deferred benefit plan established by a volunteer firefighters' 21 relief association shall adopt an eligibility point system that 22 grants points for activities that the volunteer fire company 23 designates from among the activities specified below. The 24 volunteer fire company may designate less than all the 25 activities specified below as activities for which the 26 eligibility points specified in clause (3) may be earned. 27 (3) Notwithstanding any other provision of this subsection, 28 a volunteer firefighter shall not accumulate eligibility points 29 with respect to activities described in subclause (ii), (iv) or 30 (v) with respect to more than one volunteer fire company in one 19990S0121B0114 - 6 -
1 year. Activities shall be selected from the following: (i) 2 Training courses, a maximum of twenty-five eligibility points 3 shall be awarded as follows: (A) courses under twenty hours' 4 duration, one eligibility point per hour, with a maximum of five 5 eligibility points; (B) courses of twenty to forty-five hours' 6 duration, one eligibility point per hour for each hour over the 7 initial twenty hours, with a maximum of ten eligibility points; 8 and (C) courses over forty-five hours' duration, fifteen 9 eligibility points per course. (ii) Drills of at least two 10 hours, a maximum of twenty eligibility points shall be awarded, 11 one eligibility point per drill (minimum two-hour drill). (iii) 12 Sleep-in or standby, a maximum of twenty eligibility points 13 shall be awarded for (A) sleep-in, one eligibility point each 14 full night; and (B) standby, which is line-of-duty activity of 15 the volunteer fire company, lasting for four hours, not falling 16 under one of the other categories in this subsection, one 17 eligibility point for each four hours. (iv) Elected or 18 appointed position, a maximum of twenty-five eligibility points 19 shall be awarded for (A) completion of one-year term in an 20 elected or appointed position, and (B) being elected, as an 21 active volunteer firefighter, to serve as a delegate to a 22 firefighters' convention. (v) Attendance at meetings, a maximum 23 of twenty eligibility points shall be awarded for attendance at 24 an official meeting of the volunteer fire company, at the rate 25 of one eligibility point per meeting. (vi) Participation in 26 department responses, fifteen eligibility points for responding 27 on the minimum number of calls shall be awarded as outlined 28 below: 29 Total number of calls Minimum number of calls 30 volunteer fire company volunteer firefighter 19990S0121B0114 - 7 -
1 responds to annually must run annually in 2 other than emergency order to receive fifteen 3 rescue and first aid eligibility points 4 squad calls (ambulance 5 calls) 6 0 to 500 10% 7 500 to 1000 7.5% 8 1000 to 1500 5% 9 1500 and up 2.5% 10 Total number of calls Minimum number of calls 11 emergency rescue and volunteer firefighter 12 first aid squad must run annually in 13 (ambulance) responds order to receive fifteen 14 to annually eligibility points 15 0 to 500 10% 16 500 to 1000 7.5% 17 1000 to 1500 5% 18 1500 and up 2.5% 19 (vii) Miscellaneous activities, a maximum of fifteen 20 eligibility points shall be awarded for participation in 21 inspections or other activities described in section 1 of the 22 act of June 24, 1976 (P.L.424, No.101), referred to as the 23 Emergency and Law Enforcement Personnel Death Benefits Act, and 24 not otherwise listed at the rate of one eligibility point per 25 activity. 26 (d) (1) A volunteer firefighters' relief association shall 27 allocate its annual contribution to its money purchase deferred 28 benefit fund as provided in this subsection. Each eligible 29 volunteer firefighter shall be given one hundred service 30 credits. As provided in clause (2), an eligible volunteer 19990S0121B0114 - 8 -
1 firefighter also may be given not more than one hundred 2 additional service credits to recognize past service. The 3 service credits for all eligible volunteer firefighters shall be 4 added together to determine the grand total of the service 5 credits. The grand total of the service credits shall be divided 6 into the total volunteer firefighters' relief association 7 contribution to determine the contribution per service credit. 8 The contribution per service credit shall be multiplied by each 9 eligible volunteer firefighter's total service credits to 10 determine the contribution amounts to be allocated to member 11 accounts. 12 (2) During the first ten years that a money purchase 13 deferred benefit plan is in effect, a volunteer firefighters 14 company may implement a uniform procedure to give eligible 15 volunteer firefighters ten additional service credits for each 16 year of service prior to the effective date of the money 17 purchase deferred benefit plan. A volunteer fire company may not 18 give additional service credits to an eligible volunteer 19 firefighter for more than ten years of prior service. 20 (e) (1) The plan document shall specify that the ultimate 21 deferred benefit payable to a member shall be payable only from 22 the balance in the individual member's account. The plan 23 document may not define the relief association's contribution as 24 a dollar amount per member. 25 (2) A member's rights in the terms of entitlement to the 26 money purchase deferred benefit shall vest immediately upon the 27 volunteer firefighters' relief association making its 28 contribution, crediting the investment earnings, crediting gains 29 or debiting losses on the sale of investments, etc. At all 30 times, the amount owed to a member shall equal the assets of the 19990S0121B0114 - 9 -
1 member's money purchase deferred benefit account. 2 (3) A member shall receive payments from a money purchase 3 deferred benefit plan only after separation from active 4 participation in the fire service and attainment of a designated 5 minimum age of at least fifty-five as specified in the plan 6 document. 7 (4) The deferred benefit shall be paid only from the 8 accumulated assets in the member's account and shall not be the 9 liability of any other fund of the volunteer firefighters' 10 relief association or the contractual or other liability of the 11 volunteer fire company, the municipality or the Commonwealth. 12 (5) A money purchase deferred benefit payable from the plan 13 to an individual receiving or entitled to receive a deferred 14 benefit shall be exempt from any Commonwealth or municipal tax, 15 may not be assigned by the member, shall not be subject to 16 garnishment, judgment, execution, or other legal process other 17 than legally obligated support of minor children or a spouse or 18 any indebtedness due the relief association arising out of 19 embezzlement or fraudulent conversion by a member against the 20 relief association. 21 (f) (1) The governing body of a volunteer firefighters' 22 relief association and the designated plan administrator under 23 clause (4), if any, shall act solely in the interest of the 24 money purchase deferred benefit plan's participants and 25 beneficiaries. Subject only to the provisions of this act and 26 the plan document, the governing body may accept, hold, invest 27 in and retain an investment as long as the governing body 28 exercises the degree of judgment and care, under the 29 circumstances then prevailing, that persons of prudence and 30 intelligence exercise in the management of their own affairs, 19990S0121B0114 - 10 -
1 not in regard to speculation but in regard to permanent 2 disposition of their funds, considering the probable income to 3 be derived and the probable safety of the capital. Subject only 4 to the provisions of this act and the plan document, the 5 designated plan administrator under clause (4) may accept, hold, 6 invest in and retain an investment as long as the designated 7 plan administrator exercises that degree of judgment, prudence, 8 skill, diligence and care, under the circumstances then 9 prevailing, that persons of prudence, discretion and 10 intelligence acting in a similar capacity and familiar with that 11 activity would exercise in the conduct of an enterprise of a 12 similar character and with similar aims. 13 (2) The relief association or the designated plan 14 administrator under clause (4), whichever is applicable, shall 15 provide volunteer firefighters who participate in a money 16 purchase deferred benefit plan maintained under this act with a 17 summary of the plan document's provisions, including the plan 18 document's provisions relating to the participation 19 requirements, and the plan's contribution formula. This summary 20 shall be provided to each money purchase deferred benefit plan 21 participant within six months from the date on which plan 22 participation commences. In addition, a material modification to 23 the plan document provisions shall be provided in writing to 24 each participant within six months after the date the 25 modification is adopted or the date on which it is effective, 26 whichever is later. A copy of the plan document, a summary of 27 the plan document, and relevant documents related to the funding 28 or investment of the assets of the plan and of contracts or 29 agreements with service providers to the plan shall be made 30 available for inspection or copying by a plan participant, a 19990S0121B0114 - 11 -
1 beneficiary or a member of the public at the office of the 2 relief association. 3 (3) Before July 1, the relief association or the designated 4 plan administrator under clause (4), whichever is applicable, 5 shall provide volunteer firefighters and their beneficiaries who 6 participate in a money purchase deferred benefit plan maintained 7 under this act with a statement indicating the balance in that 8 individual's account at the beginning of the previous calendar 9 year, increases and decreases in the account during the previous 10 calendar year aggregated by general sources and applications, 11 and the balance in the account at the end of the previous 12 calendar year. 13 (4) The governing body of the relief association shall be 14 permitted to contract with any insurance company that has 15 qualified and is authorized by the Insurance Department to 16 transact business in this Commonwealth, or with any bank, 17 savings and loan association or trust company approved by the 18 Department of Banking, or with an investment adviser registered 19 under the Investment Advisers Act of 1940 (54 Stat. 847, 15 20 U.S.C. § 80b-1 et seq.), which is registered as an investment 21 adviser by the Pennsylvania Securities Commission to be 22 designated as the money purchase deferred benefit plan 23 administrator. The governing body of the relief association may 24 delegate the power to administer the money purchase deferred 25 benefit plan in its entirety, including the power to receive and 26 invest all moneys deposited into the money purchase deferred 27 benefit fund and such other powers as are vested in the 28 governing body. The contract shall require the deferred benefit 29 plan administrator annually to disclose to the relief 30 association all expenses of operating and administering the 19990S0121B0114 - 12 -
1 money purchase deferred benefit plan. 2 (5) The assets of the money purchase deferred benefit plan 3 shall be held in trust by the relief association or by a 4 qualified third party under contract with the relief association 5 for the purpose of providing benefits to participants and their 6 beneficiaries in conformance with this act or for the purpose of 7 defraying the necessary and reasonable expenses of the operation 8 and administration of the plan. If the money purchase deferred 9 benefit plan and the related trust are not tax qualified within 10 the meaning of sections 401 and 501 of the Internal Revenue Code 11 of 1986 (Public Law 99-514, 26 U.S.C. §§ 401 and 501), the trust 12 referred to in this clause may provide that the assets held 13 thereunder may be subject to the claims of general creditors, if 14 any, of the relief association or may contain any other terms 15 and provisions that are necessary to insure that the 16 participation by a volunteer firefighter in the money purchase 17 deferred benefit plan does not result in taxable income under 18 the Internal Revenue Code of 1986 prior to the payment of 19 deferred benefits. 20 Section 5. This act shall take effect immediately. L11L53DMS/19990S0121B0114 - 13 -