LOSAP & Junior Firefighters
In the latest issue of The Volunteer Firefighter, the official publication of the Firemen's Association of the State of New York, there was an article by FASNY General Counsel Timothy Hannigan about junior firefighters. You can read the article here: FASNY ARTICLE
Mr. Hannigan extensively covers the risks and rewards of having a restricted member firefighter program. We're looking forward to reading the second part of the two-part series.
In addition to topics raised in the article, there are some potential LOSAP-related issues that must also be considered if a LOSAP has been established for the benefit of a fire department that has instituted a junior firefighter program.
As a reminder, volunteer firefighter LOSAPs in New York State are governed by Article 11-A of the General Municipal Law (GML). GML § 217 (a) states the following:
Therefore, a volunteer firefighter must be eligible to participate in a LOSAP after turning age 18. Additionally, a LOSAP sponsor may allow a volunteer firefighter to be eligible to participate before age 18. The following are some points to consider when administering a LOSAP when there is a junior program in place.
Lowering the Entry Age
The sections of the GML that deal with the establishment of a LOSAP do not require a sponsoring municipality to specifically state the minimum participation age (or entry age as it is sometimes referred). It is generally assumed that if no age is stipulated, the entry age is 18 as provided in the previously referenced section of the statute. Since the statute indicates a sponsor may impose a younger age, it would seem clear that a formal election must be made by the sponsor to allow participation under age 18. If a LOSAP was originally established with an age 18 entry age and the sponsor would like to lower the age, it is generally understood that a referendum would be required to formally amend the LOSAP to allow a lower entry age. As usual, we strongly suggest reviewing such an amendment with your attorney.
Designating a Beneficiary
Since the benefits provided by a LOSAP are deferred (not paid) until the entitlement age we generally don't need to be concerned about the legal ramifications of paying a participant that is a minor. The main issue that must be considered when having a minor as a LOSAP participant is the designation of a beneficiary.
If the LOSAP does not allow participation until age 18, the firefighter should be asked to complete a Beneficiary Designation form after turning age 18, since once the firefighter reaches the age of majority, he/she can legally designate his/her own beneficiary.
If the LOSAP allows participation under the age of 18, the firefighter should complete a Beneficiary Designation form, but the form should be co-signed by the firefighter's legal guardian. Then, a new form could be completed at age 18 without a co-signature, though our understanding is the beneficiary designation would still remain valid until changed.
Paying a Benefit to a Minor
Paying a benefit to a minor is typically an issue only when a deceased LOSAP participant names a minor as a beneficiary. In this case, the plan documents would normally state that the death benefit will be paid to the minor's legal guardian for the benefit of the minor.
The only instance where a benefit could be paid to a LOSAP participant that is a minor would be if the minor suffered a total and permanent disability. Although the chances of a firefighter suffering a total and permanent disability before reaching age 18 is very small, if this did occur, we presume that any benefit payable would similarly have to be made to the minor's legal guardian. If the disability benefit is a monthly payment that would continue to be paid after the participant reaches age 18, then payment could be made directly to the participant after he/she reaches age 18. If this situation were ever to actually occur, we would likely work with our client's and our own legal council before processing the benefit.
Tracking Activities and Points
The tracking of activities and points earned can be another challenge. If a department has a restricted member program and the LOSAP entry age is 18, there can be a question about how to track points and activities, specifically for the year in which the firefighter turns age 18. For years prior to age 18, since the firefighter is not eligible to participate, the points "earned" during the year should, ideally, not be reported to the sponsoring municipality or the vendor that assists the sponsor with the administration. Furthermore, posting points earned by firefighters that have not yet attained the eligibility age should be avoided so as not to cause confusion or a false expectation of an earned benefit.
In the calendar year that the firefighter turns age 18, an argument could be made that only activities attended after age 18 should be considered when determining points earned. However, that could be challenging administratively. Unless the fire department has the ability to make that distinction, we typically suggest that the first year of eligibility is the complete calendar year in which the firefighter turns age 18. This eases the administrative complexity that could come with having to track activities only after the firefighter turns age 18, yet still honors the intent to limit participation until age 18. Generally, we find this to be a reasonable solution that most of our clients implement.
If your department operates a restricted member firefighter program, we suggest reviewing the FASNY article and this post with your attorney and/or the attorney for the sponsoring municipality to be sure you are meeting all of your statutory requirements. This article is not intended to be, nor should be taken as, legal advice.