The Minnesota Legislature created a Statewide Volunteer Firefighter Retirement Plan for volunteer firefighters who provide service to a municipal fire department or an independent nonprofit firefighting corporation.
This plan is administered by PERA and is optional for municipalities that either do not have a volunteer firefighter retirement plan or wish to provide an alternative to their existing plan. (While the retirement plan now has a division that is designed to pay monthly retirement benefits, it is only available to departments that already have that type of benefit structure. PERA would basically take over the administration of those existing plans, with the State Board of Investment administering the investment of assets. This page does not address those plans.)
Funding for the plan is through the current Fire State Aid that is issued to municipalities. However, lump-sum benefits are available in $100 increments between $500 and $7,500. So, if based on the level of benefits offered, the state funding isn’t sufficient to cover the cost of the benefits, additional contributions from the employer would be required. Each participating entity of the plan will have a separate account in which the assets necessary to fund the benefits will be maintained.
Employers who wish to participate in the SVFRP may contact PERA to request a cost analysis for the benefit level(s) requested. The governing body of the municipality must then approve coverage and PERA will begin administering the plan the following January. An online contribution calculator is provided for your use, but PERA must prepare a cost analysis before an entity may join the statewide plan.
The decision to participate in the Plan is made jointly by the entity operating the fire department and the volunteer firefighter relief association (if one exists). Individual firefighters can not join the Plan on their own.
The process for electing coverage of volunteer firefighters by the Plan is initiated by a request to PERA for a cost analysis of the prospective retirement coverage, as follows.
1. If the volunteer firefighters are covered by an existing relief association, the secretary of the relief association must ask the relief association board to approve a request for a cost analysis from PERA. Whether or not there is an existing relief association, the chief executive officer of the municipality or non-profit fire corporation that sponsors the fire department must seek approval from the city council or the non-profit’s board to request a cost analysis.
2. If the municipality’s council or the non-profit’s board (and the relief association board, if one exists) approve of a cost analysis, the secretary of the relief association (if one exists) and chief executive officer jointly submit a request to PERA’s executive director for estimates of costs of the potential retirement coverage. If the volunteer fire department is associated with more than one municipality or non-profit, the chief administrative officer of each sponsoring entity of the volunteer fire department must jointly execute the request.
3. PERA prepares estimated costs for the benefit level(s) requested.
4. The State Board of Investment (SBI) reviews the investment portfolio of the existing relief association (if one exists) and determines which assets could be transferred to SBI and which must be sold before December 31st should the entity elect to join the Plan.
5. Upon receipt of the cost analysis, the governing body of the municipality or municipalities, or independent nonprofit corporation associated with the fire department has 120 days to approve coverage in the Plan. If the retirement coverage change is not acted upon within 120 days, it is deemed to be disapproved. If the retirement coverage is approved by the applicable governing body, a copy of the approval is sent to PERA.
6. If coverage is approved, PERA begins administering the Plan for the entity effective the following January 1 and issues all future benefit payments.
7. On the date immediately prior to the effective date of the coverage change (December 31), the special fund of the applicable volunteer firefighters’ relief association, if one exists, ceases to exist as a pension fund of the association and legal title to the assets of the special fund transfers to the State Board of Investment. With some modifications, the relief association may continue as an organization and maintain its general fund.
8. If coverage is not approved, the Plan is not extended to firefighters and the firefighters continue as before with or without a relief association benefit plan, as applicable.
For additional information on the plan, including benefit levels, forms, state aid, and supplemental payments, please reference the Forms and Publications page. Also, the SVF is overseen by an Advisory Board, comprised of representatives of cities, townships, fire chiefs, firefighters and the state auditor’s office.
Finally, we also maintain a list of plan participants.