Towards the end of 2022, the IRS released Notice 2022-55, which made cost-of-living adjustments for the benefit limitations provided in certain sections of the Internal Revenue Code.
One of those limitations is the maximum benefit that can be accrued in a Length of Service Award Program. The maximum benefit was increased from $6,500 to $7,000 effective with calendar year 2023.
Long-time followers of this limitation provided for in Section 457(e)(11) recall that the initial benefit limitation was $3,000. Specifically in NY State, this created some challenges for certain defined benefit plans, as the NY State law allowed a sponsoring municipality to provide a benefit that was typically valued in excess of $3,000.
This situation was remedied when the Code was amended to increase the limitation from $3,000 to $6,000 beginning with calendar year 2018. The amending bill, HR 1, which was adopted during the 115th Congress (2017-2018), also included a cost-of-living adjustment provision (to be implemented in $500 increments).
As a result of the recent rise in interest rates, the $6,000 limit was increased to $6,500 in 2022. It was then increased from $6,500 to $7,000 beginning with calendar year 2023.
This change is merely a footnote for municipalities in New York State, as the maximum benefit allowed under State Law is less than $7,000. Specifically for defined contribution LOSAPs, the maximum contribution allowed into a participating volunteers account is $1,200, which is about 17% of the maximum allowed by the IRC. A more valuable benefit can be provided under defined benefit plans, with the actuarial value of those benefits that can approach $6,000 depending on the assumptions used.
For readers of this blog outside of New York State, it is possible that a LOSAP could provide for benefit of up to $7,000 to be accrued in calendar year 2023 and beyond. It is still our desire to see the NY State law amended to allow sponsors of defined contribution plans to contribute a larger amount than the current limit of $1,200 - something more in line with the benefits provided by a defined benefit plan.
In this post, we will provide some insight on awarding points for self-directed, online training. In other words, training that is not interactive with an instructor or moderator, but an e-learning course that can be taken at the pace of the individual. The online course may include intermittent quizzes to ensure the individual is learning the material, but it is not interactive in that there is a live presenter, or a moderator/facilitator such as in the case with the mandated sexual harassment training. There are many outlets for firefighters to access this type of training, including insurance companies that provide training platforms to their clients and subscription-based e-training solutions that departments can purchase for their membership.
The answers provided in this post are not legal advice, and we suggest forwarding this post to your attorney before implementing any changes locally in response to this post. We view the information provided as best practices and not necessarily a one-size-fits-all approach. There are usually specific facts and circumstances within each fire department that should be considered, which is why involving your local attorney is critical when addressing any LOSAP point system issue.
The LOSAP point system includes two categories that are similar, but not the same – Training Courses and Drills. We’ve covered both of these categories in previous posts, which can be read by clicking the provided links. For the purposes of this post, we are assuming two basic rules regarding a Training Course:
With this in mind, here are three questions that often arise regarding LOSAP points for self-directed online training:
What if the course is under one hour? The statute provides that a Training Course of under twenty hours in duration is one point per hour, up to a maximum of five points. A strict reading of the statute would seem to indicate that a Training Course that lasts less than one hour would not be eligible for a point. One suggestion could be to create a “training cocktail” to combine more than one shorter duration course into one package that lasts at least one hour. Say, combining three twenty-minute courses into one package, for which a firefighter would earn one point for completing all three.
Can a firefighter take every Training Course in the catalog to earn points? Based on the Comptroller’s legal opinion, all Training Courses must be approved by the chief or board of fire commissioners. Therefore, a list of approved courses should be maintained and made available so firefighters know which courses can be taken to earn points. Since we don’t have experience with all of the training platforms, we don’t know how access to classes can be controlled internally. We are aware of at least one provider that gives administrative control to a chief or training officer that can activate only certain courses that are applicable to the operations of the specific department. If that is not available, having a pre-approved list of Training Courses is a good control to ensure firefighters are taking training that is applicable to the fire department operations.
Can points be awarded for training taken with another agency or employer? Generally, only activities of the fire department are eligible to earn points. Notable exceptions would be points for periods of line of duty disability or military leave. Otherwise, points can only be earned by an individual for activities of the fire department which would be covered by VFBL. Therefore, it would seem the best practice is not to award points for training taken with another agency or employer, even if that other organization uses the same e-training platform as the fire department. If that is the case, a suggestion for that firefighter would be to check with the other employer or agency to see if they would accept the training taken with the fire department.
Do you have other questions about online self-directed Training Courses? Leave a comment or contact us with questions.
When severe weather impacts a region, we know that is when communities step up to help neighbors in need. Sometimes these efforts reach the news, like recently when Buffalo Bills quarterback Josh Allen needed help clearing his driveway so he could catch a plane to Detroit for the game. But most times, it is what I experienced as a new, young, and inexperienced homeowner 20 years ago. We were having a significant snow event (18+ inches) and my “snowblower” was meant to handle 6 inches or so and kept overheating. I had about 200 feet of driveway to clear and it was past 9:00 PM. I didn’t know how I was going to dig out. My hero was a random person with a plow truck that saw me struggling, and in 15-20 minutes had completely cleared the snow. He didn’t ask for anything, just said he was glad to help and went on his way.
While my volunteer hero was not a volunteer firefighter, when severe weather is in the forecast, those of us who live in communities served by volunteer firefighters know they will be on stand-by, ready to assist when called.
This becomes evident when events like the most recent event in/around Orchard Park (home of the Bills and about 15 miles south of Buffalo) this past week, when the surrounding communities were hit with 4+ feet of lake-effect snow. This is eerily similar to another lake-effect snow storm in November 2014, which the locals call Snowvember. During that storm, the same general area was hit with 5 to 7 feet of snow! There have been other storms like Hurricane Sandy and Irene, as well as localized nor’easters or ice storms that create significant demand on volunteer fire departments.
When the proverbial dust settles from these storms, one of the issues that usually presents itself for those departments with a LOSAP is what to do, if anything, with the significant number of calls that occurred during a short period of time. Sometimes, dispatchers can’t even keep up with tracking the number of calls. In some cases, it is not unusual for a fire department to have 10% or more increase in the number of annual calls as a result of one significant storm. It would not be unusual to see a department that typically handles 150 fire calls a year to experience 30 calls over a two-day period, which represents a 20% increase in call volume.
Since the LOSAP points for department responses is based on attending a minimum percentage of the total calls for the year, a volunteer who misses out on responding to these calls could find that he/she is now short of the calls necessary to earn those points. It could be hard to make up those points when the event happens close to the end of the year. However, there also needs to be a recognition that there could be a few volunteers who were not on track to earn their 25 points for calls but were able to respond during the severe weather period, and now have enough calls to earn the 25 points.
The statute does not address this scenario, and so LOSAP sponsors will have to decide how best to navigate this locally. Using the example of a department that now has 180 calls compared to the more typical 150, one answer is to just recognize that the 30 extra total calls means 3 extra calls needed to earn 25 points. If a department normally averages 150 a year, it could expect at least 10 or so calls in December and any volunteer who could be short can just make sure he/she responds to more calls to meet the minimum.
If a sponsor would like to have a creative way to work around this situation, the following approach could be considered.
First, at the end of the year calculate the number of calls required to earn 25 points. In the example given, the number would be 18 (10% of 180) and determine the annual points as usual. Anyone who has 50+ points would receive credit for the year.
Second, if the sponsor is concerned that some volunteers were hurt by the event, the sponsor should determine the time period in which call volume was abnormally high. It will likely be a one- or two-day period, but like Snowvember or last week’s storm, could extend three or four days. This period is considered the “event window.” Take the calls that occurred during the event window and remove them from the calculation of the minimum number of calls required to earn 25 points. This means remove them from the total number of department calls, but also remove them from the volunteer’s responses as well. If the calls are removed from the total call volume, responses to those calls should not be counted in meeting the minimum required number. In the previous example, that would remove 30 department calls and bring the total down to 150. Then, re-run the annual points totals with those calls removed. If removing those calls results in someone earning the 25 call points and then the total 50 points for the year, award that person service credit for the year.
Again, using the example of 180 total calls for the year, and 150 outside the event window, someone who responded to 18+ calls during the year would receive 25 call points, and someone who responded to 15+ calls outside the event window would receive 25 call points. Someone who meets both would only receive the maximum of 25 points.
A point should also be made about a curious effect an unexpected call increase could create. When the total call volume crosses over the 500 threshold (as well as 1,000 and 1,500), the law stipulates that the response requirement drops from 10% to 7.5%. If a department had 470 calls outside the event window, a volunteer would have to respond to 47 to earn 25 points. But if call volume spiked to 505 as a result of the weather event, then the required number of calls to earn 25 points drops to only 38. In that event, it would likely be in all of the volunteers’ best interest to use the total calls during the year to determine the response requirement to earn the 25 call points.
Any sponsor considering this type of alternative should review it with their local attorney, as this is not provided for in the law and would be a creative solution to deal with an anomaly event. This article is not legal advice and should not be relied upon as such.
NOTE: the impact of these storms would be less if sponsors had another option for awarding points. Please read our prior post and please complete the very quick questionnaire if you support our proposal! Click HERE to read that post.