Over the years, we have fielded many questions that begin with "Can we" Most of the time, these "can we" questions are about awarding points for certain activities. We decided to create a Memorandum outlining four amendments to Section 217 of the General Municipal Law that would address the most frequent "can we" questions. In short, our proposed amendments would amend:

1. Department Responses: Allow for an alternative way to award points for department responses - up to 1/2 point per call rather than having to attend a minimum percentage for an all-or-nothing 25 points.
2. Tour of Duty: Allow points to be earned for signing up for shifts or on-call duty time at the firehouse. 
3. Vesting at Entitlement Age: Eliminate the language that allows a participant to become 100% vested at the entitlement age, regardless of how many years of service have been earned. This will require all participants to become vested (typically means to earn 5 years of service credit) before a benefit can be collected.
4. September 11 Illnesses: Allow certified 9/11 related illnesses suffered as a volunteer firefighter participating in the events during and after 9/11 to be classified as line-of-duty injuries and therefore eligible for line-of-duty points.

Each year the associations that support the fire service in New York gather to create the "Issues of United Concern". This document outlines a legislative agenda for the upcoming year. If you would like one or all of our proposals to be considered when this agenda is developed, please click on this link to complete a two-minute questionnaire:

With greater frequency we are handling questions about a fire department wanting to implement duty crews to ensure they have adequate staffing to respond to emergencies. This is a common practice with ambulance squads, but I'm sure anyone reading this blog doesn't need us to explain how operationally different an ambulance call is vs a fire call. That said, the types of calls that fire department are responding too are changing - they aren't always structure fires were the whole department is needed. And moreover, it isn't ideal for 20 members to respond to an automatic alarm or something that could be easily handled by much fewer volunteers. 

It makes sense for a department to adopt a duty-crew program. The question we get, of course, is how does this fit into the point system.

There are two things to address: (1) Can someone get a point (or points) just for serving on the duty-crew? (2) How does a person serving just for a specific time period reach the minimum call requirement to earn 25 points?

Ultimately, we believe the law should be amended. That is the best answer. Since ambulance squads already operate in this way, Articles 11-AA and 11-AAA have options for awarding points for "tours of duty" (1 point for a 6-hour shift) and also include an alternative way to award points for calls (up to 1/2 point per call). Since these options are already available in State Law, it would make sense to essentially "cut and paste" that authority into Article 11-A. Firefly has written proposed amendment to Article 11-A and have provided them to the State-wide associations for consideration. If you would like more details, please contact us! But ultimately, a proposed amendment to the law does not help a fire department today grappling with this issue. So what can be done?

To award points for someone serving on a duty-crew, the current statute would seem to allow two options:

1. Call these duty-crew periods a “stand-by” and therefore give the volunteers serving on the duty crew a point for a stand-by. The challenge with this approach is the definition of a stand-by, which is a "line of duty activity of the volunteer fire company, lasting for four hours, not falling under one of the other categories" Since a duty-crew would be a subset of the entire fire company, a sponsor would have to be comfortable making an interpretation that this language does not imply that the entire fire company/department must be on stand-by to meet this definition. 
2. Call the period that the duty-crew is on call to be a miscellaneous activity.

Perhaps more complicated is the department responses. Currently, a volunteer must to attend a minimum percentage of calls for the year to earn 25 points for each type of call. In a department with less than 500 calls, that percentage is 10%. If a volunteer signed up for a duty-crew every Sunday night, and only 5% of the total fire department calls happen on a Sunday night, that person would fall short of the 10% requirement unless he/she responded at other times as well. Or, if 15% of the calls happen on a Sunday night, those on the duty-crew might make the minimum percentage but other volunteers not on the duty-crew would have fewer number of total calls to respond to in order to reach their minimum (85% in this scenario). 

The facts and circumstances of the local department will go a long way in deciding what to do about the calls. One approach could just be that the requirement is 10% (or lower as call volume exceeds 500) and a volunteer who takes enough duty-crews, or responds when there is no duty-crew assigned, will attend enough calls to meet the minimum percentage. Ultimately, we would expect some calls cannot be handled by the duty-crew and the entire department will have to be activated. We assume the purpose of the duty-crew would be to handle routine emergencies where a smaller crew of 4-8 people can adequately handle the situation. But structure fires or some other larger-scale operation will happen where the entire membership will be needed. That will provide additional opportunities.

The only other available option is the new amendment that was just made to the statute. You can read more about it in one of our past blog posts HERE. There are many reasons why we are not a fan of this new law, which are outlined in the article. But it could have a benefit here.

This new statute says that if response protocols are adopted that set different response requirements for different units or groups of the fire department, that those units/groups only have to attend the minimum percentage of the calls assigned to those units/groups. Typically a duty-crew would not be a static, defined, unit. The personnel on call during any one tour of duty would likely change week-to-week. If they were a static crew, then the idea of a crew being assigned the calls during that period makes this option something worth considering. However, it would seem anyone on a duty-crew should, in theory, respond to 100% of the calls they were assigned during the period. Or at least it would be certainty that they would attend 10% of them! Therefore, 25 points for calls would basically be an automatic.

It would seem that ultimately using this approach would be an administrative challenge and an inequitable way to earn 25 points for calls. Trying to determine what calls each individual were assigned and what units or groups they are a part of at any one time would likely prove difficult. A lot depends on the individual department and how calls are handled. But this is the only solution, under the current law, that would allow a sponsor to try and address how points could be earned for department responses when duty-crews are implemented.

Given that we have no expertise in operating a volunteer fire department, we likely missed some things! We'd love your feedback and insight - contact us with your questions or additional feedback.

And as always, we suggest running all of this by your attorney, as this information is meant to be a general, theoretic discussion and we do not provide legal advice.

In a post from May 20, 2019, we discussed why a LOSAP benefit cannot be rolled over to a qualified plan. You can read that article HERE.

Additionally, since a LOSAP benefit is not earned income (for Firefly clients, the income is reported on a 1099-MISC in Box 3), it cannot be deposited into an IRA. 

So what alternatives exist? If you are receiving a LOSAP benefit and are still working and receiving W-2 income, or you are married and your spouse is still working and receiving W-2 income, here are some options:

• If  your employer offers a 401(k) (or similar deferred compensation plan if you work for a government, non-profit, or school), you can temporarily increase your contributions to the retirement plan to offset the LOSAP distribution. For example, if you receive a $10,000 LOSAP distribution, simply defer an extra $10,000 into your 401(k). This solution only works if you are not already maximizing your contributions to your 401(k), which for 2022 is $27,000 for anyone over age 50. 
  
  
• If you are married, your spouse still works, and you are already in the habit of co-mingling your combined income into joint accounts, you might obtain additional flexibility from a 401(k) (or similar) offered by your spouse's employer. You may have additional contributions you can now make (up to $27,000 per person for a total of $54,000 assuming your spouse is over age 50 also).  Or, if you are not working but your spouse is, a similar approach to the first bullet point could be followed but done by your spouse. You then use the LOSAP benefit to offset the contributions to the 401(k).
  
  
• You could also utilize a traditional IRA, though the contribution limits are much less and there are income restrictions. The maximum tax-deductible contribution to an IRA for 2022 is $6,000, provided you do not exceed the income restrictions. Similar to the previous two bullet points, you would contribute a tax-deductible amount into your IRA and then use the LOSAP distribution to supplement your income for that year. But again, this only works if you (or your spouse) are still working and has W-2 income to deposit into an IRA. Talk to a financial advisor for more details. 

In all three cases, you are simply deferring federal income tax to a later point in life. Unless the federal tax code is changed, you will ultimately pay federal income tax of some amount (the tax rate could be different) on this income when you receive a distribution from your 401(k) or IRA.

State tax is a little more tricky, in particular for those that live in NY State and plan on remaining here. Under current NY State tax law, a non-lump sum payment from a LOSAP to an individual over age 59 1/2 can be subtracted from your NY State taxable income in the year of distribution. Therefore, anyone who qualifies for this exemption will not pay NY State income tax on their LOSAP distribution. However, if you took one of the approaches above, once that income is deposited into the 401(k) or IRA the distribution you receive later will no longer be a LOSAP distribution. As such, you essentially lose the special tax exemption for a LOSAP distribution here in New York. There are other exemptions and tax-strategies that can be considered, so it is very important to review these possible strategies with your own tax and financial advisor. 

Firefly Admin Inc. does not provide income tax advice or legal advice. This article is general information, is not meant to be an authoritative or exhausted analysis of all possibilities, and is not legal or tax advice. You are strongly encouraged to seek the help of a qualified tax and legal professional before receiving a LOSAP distribution or implementing any strategies theorized in this article.