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.
Today, August 20, 2021, Governor Cuomo signed bill S1091a / A2239a into law.
Chapter 400 of the Laws of 2021 extend the maximum years of service credit that can be earned in a volunteer firefighter LOSAP from 40 years to 50 years.
The bill amends both Section 218 (defined contribution plans) and Section 219 (defined benefit plans) to include the same language, which is as follows:
The governing board of a political subdivision may extend the maximum number of years of service for which a participant may receive a contribution for up to an additional ten years, to a maximum of fifty years, and such increases in the number of years may be added in multiple increments or in a single action, pursuant to the adoption of the required resolution or resolutions of the governing board, receiving the affirmative vote of at least sixty percent of the governing board of the political subdivision, and the approval of any mandatory referendum or referenda authorizing the extension of benefits under the program by eligible voters within such political subdivision.
Interestingly, the language states that a political subdivision can extend the maximum years of service for which a participant may receive a contribution an additional ten years. That wording is more applicable to a defined contribution plan, where a participant receives a contribution into an account for each year of 50 points earned, rather than a defined benefit plan where a participant earns a monthly benefit instead.
However, the intention seems clear - that a LOSAP can be amended to extend the maximum years of service credit from 40 to 50 years, and that such extension requires voter approval at a mandatory referendum.
Yesterday, Monday August 9th, bill A2239a was delivered to the Governor. This bill would extend the maximum years of service credit that can be earned in a volunteer firefighter service award program from 40 to 50 years. Therefore, this also extends the number of years in which a participating firefighter can accrue benefits by another 10 years.
The timetable for signature or veto by the Governor is different depending on when a bill is delivered. If a bill is delivered while the Legislature is in session, the Governor has 10 days (excluding Sundays) to sign the bill into law, or veto it. If no action is taken, then the bill automatically becomes law.
However, if the Legislature is not in session, which is the current situation, the Governor has 30 days in which to sign the bill into law. If no action is taken, then the bill is considered vetoed. This inaction is referred to as a "pocket veto".
In the recent past, it appears the Governor has taken action within the 10-day window, even when it isn't required. We will monitor the bill and update our blog when action is taken.
Obviously, the Governor's resignation will impact the timing of the actions taken in some way. Again, we will continue to monitor and update our blog when action is taken.
We were asked if a person on a leave of absence from the fire department can earn points for attending online meetings and trainings.
First, we cannot give legal advice, and this post is not intended to be legal advice. If you have a similar question and this blog post is helpful, we suggest sharing it with your attorney and getting his/her counsel before formalizing any course of action.
Before we address this particular question, we think it would be helpful to read a post we wrote about eligibility to participate in LOSAP. You can read that here: https://www.fireflyadmin.com/blog/eligibility-to-participate-in-losap
To summarize that post, it would appear that only active volunteer firefighters who are subject to a call to duty when the department is activated for an alarm are eligible to earn points. In our view, we also believe that matches the spirit and intent of the LOSAP – to recruit, retain, and reward individuals that are trained and responding to emergencies.
The next point to discuss is the purpose of a leave of absence. Being an active volunteer firefighter comes with certain responsibilities and requirements as stipulated in the by-laws or similar document. Simply put, we assume the purpose of requesting a leave of absence is to be temporarily relieved of those responsibilities and requirements. Therefore, someone requesting to be placed on a leave of absence is effectively requesting to remove him/herself from participating in any activities that an active volunteer firefighter is required to participate in.
Looking at it this way, this question then becomes a by-law enforcement issue rather than a LOSAP issue. Again, we are assuming someone applies for a leave of absence because they cannot fulfill all the duties required of an active volunteer firefighter, including training and meetings. So to us, this is an issue of properly enforcing by-laws. At a minimum, the by-laws should be reviewed to determine what a firefighter is permitted to do while on a leave of absence.
Another factor to consider is VFBL coverage, and how a leave of absence impacts coverage. Although many don’t like to think about the possibility of getting hurt, accidents happen and injuries can occur. We are not experts in VFBL coverage, but it is our understanding that individuals on a leave of absence from the fire department are no longer covered by VFBL. For that reason alone, these individuals should not be permitted to participate in any activities during the leave of absence.
With these two points in mind, a question about whether-or-not a volunteer can earn points while on a leave of absence seems almost moot. A volunteer on a leave of absence should not be participating in activities, so therefore points cannot be earned!
But with the advent of online training courses and online department meetings, an individual on leave could conceivably participate in those activities. We can think of a few legitimate scenarios, such as someone on a school leave or someone on an extended medical leave due to a non-line-of-duty injury. These individuals could easily participate in a meeting via zoom. We don't have the expertise in VFBL coverage to know if coverage extends to participating in an online meeting or training. While it would seem that an online meeting/training would have significantly less injury risk than a meeting/training held at the firehouse, the online activity is still a fire department event. You should confirm coverage for online meetings & trainings with your attorney or VFBL carrier.
Ignoring the VFBL issue for now, presumably an individual on a leave of absence as an active volunteer firefighter retains some rights and privileges associated with the social side of membership in a department; however, a social-only member is not eligible to earn points. Again, by extension, it would seem logical that an individual on a leave of absence would not be eligible to earn points for attending a meeting by zoom since the individual is temporarily not an active volunteer firefighter.
Although we would assume a social-only member would not be taking online training courses, it would stand to reason the same logic would apply to an individual on a leave of absence – that person should likely not be allowed to participate in the online training. But that is a policy that must be controlled locally.
If you or your attorney have any questions, comments, or disagreements with our thought process, please share in the comments below! Again, we suggest forwarding this to your legal counsel and VFBL carrier for additional guidance.
In researching an issue this week, we stumbled across an article titled, The Anatomy of a Lump-Sum Conversion, written by Corey Swarner, CPC, MBA of Milliman.
In various posts, we've attempted to provide readers with an understanding of actuarial math including the time-value of money, and actuarial concepts such as life expectancy. But we think Corey really nailed it, and wanted to share his article, which you can read here:
We think this article nicely describes how an actuary calculates an actuarial present value, which is used for lump-sum distributions as well as determining contributions and a defined benefit plan funded ratio. Enjoy!