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
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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
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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
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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
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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
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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
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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
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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
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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,
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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
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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
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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.
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