2016 North Dakota Century Code Title 18 Fires Chapter 18-11 Alternate Firefighters Relief Association Plan
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CHAPTER 18-11
ALTERNATE FIREFIGHTERS RELIEF ASSOCIATION PLAN
18-11-01. Alternate firefighters relief association plan.
An alternate firefighters retirement and disability plan may be implemented by a firefighters
relief association in lieu of the plan provided for in chapter 18-05. Before a relief association
may implement the plan provided for in this chapter, a vote must be taken among the members
of that relief association to determine whether the association will adopt the plan authorized by
this chapter or retain the plan established in chapter 18-05. If the members of the association
vote to adopt the plan authorized by this chapter, that plan does not become operative until the
city government of the community in which the fire department is located has approved the plan.
18-11-02. Operation of association.
The firefighters relief association must be organized, operated, and maintained in
accordance with its articles of incorporation and its bylaws by firefighters who are members of
the fire department. The relief association may regulate and manage its own affairs and for that
purpose has such corporate powers as are necessary and useful, subject to the regulations and
restrictions of the laws of this state pertaining to corporations.
18-11-03. Firefighter defined.
As used in this chapter, the term "firefighter" means any person who is regularly entered on
the payroll of the department serving on active duty and engaged in the hazards of firefighting.
The term includes a probationary firefighter but does not include a substitute firefighter or any
person employed irregularly by the fire department.
18-11-04. Accrued rights not destroyed by plan - Transfer of funds - Records.
Any firefighter who is a member of the relief association established under chapter 18-05
may continue as a member of the relief association created by this chapter if the department of
which the firefighter is a member has elected to come under the provisions of this chapter, and
any member of the relief association established under chapter 18-05 receiving pensions or
benefits or widow or children receiving pensions or benefits shall continue to receive such
pensions or benefits as are prescribed and being paid under existing association bylaws and
any firefighter who is a member of an association maintained under chapter 18-05, and who
becomes eligible for full pension under that association's bylaws, may not be penalized by any
conditions of this chapter. Whenever a department votes to come under the provisions of this
chapter, any and all funds or accounts and all other records and property maintained by any
relief association being discontinued must be transferred to the relief association being
established under this chapter.
18-11-05. Application for membership.
When any firefighter desires to become a member of the relief association provided by this
chapter, that firefighter may apply in writing for membership to the association. The application
must be made on a form supplied by the association and must be accompanied by the
certificate of a physician as required by the association's bylaws. The application and certificate
must be filed with the secretary of the association, with required fees, and thereafter the board
of examiners of the association shall make an investigation and file its report concerning the
application with the secretary.
18-11-06. Association may deny membership to mentally, physically unsound.
The association may deny any applicant membership who is not physically and mentally
sound. Additional requirements for entrance age, entrance fees, and annual dues may be
prescribed in the bylaws of the association.
Page No. 1
18-11-07. Officers.
The officers of the relief association include a president and a vice president, both of whom
must be elected from among members of the board of trustees, a secretary-treasurer, a board of
trustees, and a finance committee. These officers must be elected in the manner and for the
terms prescribed in the association's articles of incorporation and bylaws. The board of trustees
shall manage the affairs of the association. The secretary-treasurer shall furnish a corporate
bond to the association for the faithful performance of the secretary-treasurer's duties in an
amount to be determined by the association. The premium on the bond must be paid by the
association. The president and secretary-treasurer may be paid a fee in an amount as
determined by the association.
18-11-08. Report of receipts and expenditures regarding state funds to be filed with
state and city auditor.
Repealed by S.L. 1991, ch. 222, § 22.
18-11-09. Apportioning insurance tax.
The amount received under section 18-04-05 by the city auditor in a city that has a paid fire
department and a duly organized and incorporated firefighters relief association must be
apportioned so that one-half must be placed in a fund to be disbursed by the governing body of
the city in maintaining the fire department and one-half must be paid to the secretary-treasurer
of the firefighters relief association. However, the governing body of the city may pay all or any
portion of the amount normally disbursed in maintaining the fire department to the
secretary-treasurer of the firefighters relief association if its financial condition makes that
disposition necessary or advisable.
18-11-10. Additional city firefighters relief fund contributions.
A city that has adopted a plan under this chapter shall fund from revenues derived from its
general fund levy authority a sufficient amount for firefighters relief association contributions to
equal a minimum of eight percent of the current annual salary of a first-class firefighter as last
determined and approved by the governing body of the city, for each active member of the fire
department relief association.
18-11-11. Levy proceeds.
Each year in which the levy provided for in section 18-11-10 is made, immediately after April
first and September first the proceeds of the levy, together with any interest and penalties
collected thereon, must be forwarded by the county treasurer to the city auditor, and after
certification by the city auditor, the city auditor shall pay over those amounts to the
secretary-treasurer of the firefighters relief association.
18-11-12. Contribution by firefighters.
The officer in charge of the finances of the city shall deduct from the salary of each
firefighter participating in the plan provided in this chapter an amount to be determined by the
bylaws of the firefighters relief association but which may not be less than five percent of the
monthly salary of a first-class firefighter, until those firefighters have completed thirty years'
service with the department at which time the amount deducted may be decreased to a lesser
amount to be prescribed by the bylaws of the relief association, but which may not be less than
two and one-half percent of the monthly salary of a first-class firefighter. This amount must be
paid to the secretary-treasurer of the relief association monthly and must be credited by the
association to each firefighter individually in the state fund. All moneys paid into city pension
funds prior to July 1, 1959, by firefighters participating in the plan provided for in this chapter
must be paid to the secretary-treasurer of the association and credited by the association to the
individual member in the state fund.
Page No. 2
18-11-13. Association state fund - Expenditures - Investment.
The moneys received by the association must be kept in a trust fund known as the
association state fund. The assets of the fund must be held in trust. No part of the assets of the
fund may be used for or diverted to purposes other than for the exclusive benefit of the
members, their spouses, or the members' beneficiaries prior to the satisfaction of all liabilities of
the fund with respect to them, provided that the fund may be used to pay reasonable
administration expenses of the association. The moneys received from the state, city, or
employee's salary contribution must be deposited in the association state fund and may be
expended only for the purposes set forth in section 18-11-14. The relief association shall
manage and control all moneys that come into its possession. Moneys in the fund may be
invested in bonds of the United States, bonds of the state of North Dakota or any other state, in
certificates of indebtedness of the state of North Dakota, in any bonds or certificates of
indebtedness of any political subdivision of the state of North Dakota which constitute the
general obligations of the issuing tax authority, or the Bank of North Dakota or any other bank or
savings and loan association which is insured by the United States. The board may also invest
all or part of the moneys in the fund in other investments by selecting a funding agent or agents
and establish an investment agreement contract. The contract must authorize the funding agent
or agents to hold and invest those moneys for the board. The moneys invested must be placed
for investment only with a firm or firms whose primary endeavor is money management and only
after a trust agreement or contract has been executed.
18-11-14. Disbursement of moneys from association state fund.
The amounts paid into the relief association by the state, city, and employee's salary
contribution and set aside in the association state fund must be appropriated and disbursed only
for:
1. The payment of disability or service pensions to members of the association;
2. Pensions to widows and children or orphans of members or retired members;
3. The payment of the fees of the president and secretary-treasurer and the premiums on
the bond of the secretary-treasurer or any other officer;
4. Funeral payments;
5. Cost of the state audit;
6. Essential postage, office supplies, and equipment;
7. Actuarial study;
8. Return of contributions to those qualified under section 18-11-20;
9. Investment contract fees;
10. Legal and accounting fees;
11. The indemnification of members of the board of trustees pursuant to section 18-11-18;
and
12. Any other expenditures related to the general principles for which this chapter is
established.
18-11-15. Service pensions - Qualifications.
1. A monthly service pension must be paid to members of the association with the
following qualifications:
Percent of first-class
Years of
firefighter's monthly salary
Years of
age at
on January first during year
service
retirement
the pension is paid
20
50
40%
21
51
42%
22
52
44%
23
53
46%
24
54
48%
25
55
50%
26
56
52%
27
57
54%
Page No. 3
2.
3.
4.
28
58
56%
29
59
58%
30
60
60%
Except for members participating in a firefighters relief association paying a monthly
service pension to members of the association under subsection 4 or 5, all members
must serve twenty years before they are eligible for a service pension. Members
participating in a firefighters relief association paying a monthly service pension to
members of the association under subsection 4 or 5 must serve ten years before they
are eligible for a service pension. However, any member who has twenty years of
service or ten years of service with a firefighters relief association paying a monthly
service pension to members of the association under subsection 4 or 5, and who has
not attained retirement age may retire from the department without forfeiting the right
to a service pension. The association, in its bylaws, may establish a retirement age of
not less than fifty years, at which time the service pension becomes payable. This
retirement age may be established for all firefighters or classes of firefighters by birth
dates. A person who has served twenty years or ten years with a firefighters relief
association paying monthly service pensions to members of the association under
subsection 4 or 5 and who is separated from service must, upon application, be placed
on the deferred pension roll of the association, and after reaching retirement age, the
association shall, upon application therefor, pay the service pension from the date the
member attains eligibility at a rate of forty percent of the monthly salary of a first-class
firefighter as determined on January first of the year in which the pension is paid. Any
person making such application waives all other rights, claims, or demands against the
association for any cause, except those causes that may have arisen from, or that may
be attributable to, the person's service on the fire department.
With the consent of the governing body of the city involved, and in substitution for the
pension payment schedule provided in subsection 1, a firefighters relief association
shall pay a monthly service pension to members of the association with the following
qualifications, the following amounts:
Percent of first-class
firefighter's monthly salary
Years of
Years of
on January first during year
service
age
the pension is paid
20
50
40%
21
51
42%
22
52
44%
23
53
46%
24
54
48%
25
55
50%
26
56
52%
27
57
54%
28
58
56%
29
59
58%
30
60
60%
With the consent of the governing body of the city involved, and in substitution for the
pension payment schedule provided in subsection 1 or 3, a firefighters relief
association shall pay a monthly service pension to members of the association with
the following qualifications, the following amounts:
Percent of first-class
firefighter's monthly salary
Years of
Years of
on January first during year
service
age
the pension is paid
10
50
20%
11
50
22%
12
50
24%
13
50
26%
Page No. 4
5.
6.
14
50
28%
15
50
30%
16
50
32%
17
50
34%
18
50
36%
19
50
38%
20
50
40%
21
51
42%
22
52
44%
23
53
46%
24
54
48%
25
55
50%
26
56
52%
27
57
54%
28
58
56%
29
59
58%
30
60
60%
With the consent of the governing body of the city involved, upon the advice of its
actuary that the pension schedule can be implemented on an actuarially sound basis
and notification to the legislative management's employee benefits programs
committee, and in substitution for the pension payment schedule provided in
subsection 1, 3, or 4, a firefighters relief association shall pay a monthly service
pension to members of the association with the following qualifications, the following
amount:
Percent of first-class
firefighter's monthly salary
Years of
Years of
on January first during year
service
age
the pension is paid
10
50
20%
11
50
22%
12
50
24%
13
50
26%
14
50
28%
15
50
30%
16
50
32%
17
50
34%
18
50
36%
19
50
38%
20
50
40%
21
51
43%
22
52
46%
23
53
49%
24
54
52%
25
55
55%
26
56
58%
27
57
61%
28
58
64%
29
59
67%
30
60
70%
Benefits with respect to a member may not exceed the maximum benefits specified
under section 415 of the Internal Revenue Code; 26 U.S.C. 415 for governmental
plans. This section does not constitute an election under section 415(b)(10)(C) of the
Internal Revenue Code; 26 U.S.C. 415(b)(10)(C).
Page No. 5
18-11-15.1. Purchase of legislative service credit.
A member may, prior to retirement, purchase service credit for the time during each
legislative session spent serving as a member of the legislative assembly while employed as a
firefighter under this chapter. The member shall pay for this service credit an amount equal to
the required member assessments and the employer contributions for that period of time plus
interest as established by the board of trustees of the association. Service credit for legislative
sessions prior to July 1, 1985, must be purchased before January 1, 1986. Service credit for
each later legislative session must be purchased within one year after the adjournment of that
legislative session.
18-11-16. Disability pensions - Qualifications.
Any member of the relief association who is unable, because of physical or mental disability,
to perform the duties of a firefighter shall receive monthly a disability pension equal to fifty
percent of the monthly salary of a first-class firefighter on January first of the year that the
pension is being paid, unless that member is eligible for a larger service pension in which case
the member shall draw an amount equal to the member's service pension. No member shall
receive a disability pension unless the member is disabled for a period of at least seven
consecutive days, at which time the member must be paid from the time of disability. However, a
member may not receive a disability pension for the days the member was reimbursed by the
city for accumulated sick leave.
18-11-17. Pensions to surviving spouses and children of deceased members.
When a service pensioner, disability pensioner, deferred pensioner, or an active member of
a relief association dies leaving a surviving spouse to whom the deceased was married while an
active member of the association, a child who was or children who were living while the
deceased was on the payroll of the fire department or who were born within nine months after
the decedent was withdrawn from the payroll of that fire department, or both such surviving
spouse and such children, then such surviving spouse and children are entitled to a monthly
pension as follows:
1. If the deceased leaves only a surviving spouse, a pension in the sum of forty percent
of a first-class firefighter's monthly salary on January first during the year the pension
is paid to the surviving spouse, during such spouse's natural life or until such spouse
remarries.
2. If the deceased leaves both a surviving spouse and children, a monthly pension to the
surviving spouse in the sum of forty percent of a first-class firefighter's monthly salary
on January first during the year the pension is paid, for the rest of the surviving
spouse's natural life or until such spouse remarries, and to the parent or guardian of
any children under the age of eighteen years of age there must be paid monthly twenty
percent of a first-class firefighter's monthly salary to be divided equally among such
children.
3. If the deceased leaves only children, a monthly pension must be paid to the guardian
of such child or children for such child or children in the sum of sixty percent of a
first-class firefighter's monthly salary on January first during the year the pension is
paid, to be divided equally among such children; provided, however, that if there is
only one surviving child, that child shall receive a sum equal to forty percent of a
first-class firefighter's monthly salary. All pensions to child or children shall terminate
when the child or children reach the age of eighteen years.
4. As used in this section, the term "child" means:
a. The natural or adopted child of a firefighter; or
b. The natural or adopted child of a firefighter's surviving spouse or former spouse
who is designated in writing by the firefighter as a child beneficiary under this
section on a form supplied by the relief association.
Page No. 6
18-11-18. Reduction in benefits if funds not sufficient.
If at any time the relief association's actuary certifies that the balance of the association's
fund, together with future contributions by active members and contributions by the state, or the
city, or both, and earnings thereon, will be inadequate to provide future prescribed benefits for
active and inactive members and their beneficiaries, the board of trustees of the association, by
majority vote, may decrease the benefits provided for in sections 18-11-15, 18-11-16, and
18-11-17 in accordance with actuarial recommendations to assure the solvency of the fund and
subject to the following conditions:
1. The benefit for existing and future retirees and pension recipients may not be less than
the benefit paid in the previous calendar year to an existing retiree of similar status.
2. The reduction must be based upon actuarial recommendations which take into
consideration pension benefit standards for similarly funded plans.
3. When the balance of the association's state fund, together with future contributions by
active members, and contributions by the state, or the city, or both, and earnings
thereon, are sufficient to provide future prescribed benefits for active and inactive
members and their beneficiaries, benefits shall again be paid as prescribed by
sections 18-11-15, 18-11-16, and 18-11-17 if such action is recommended after
actuarial study and the action is approved by a majority vote of the board of trustees of
the association.
Decisions of the board of trustees, made in good faith and based upon actuarial
recommendations with respect to benefit adjustments under this section, are final and
supersede any previous actions or bylaws of the association. The members of the board of
trustees must be indemnified from the funds of the association for any claims or expenses of
defending claims arising from decisions made in good faith and based upon actuarial
recommendations under this section.
18-11-19. Fund based upon actuarial tables - Treatment of forfeitures.
1. The pension fund must be based upon actuarial tables and the association is
authorized to engage an actuary for studies of the plan when deemed necessary by
the association.
2. As required by section 401(a)(8) of the Internal Revenue Code; 26 U.S.C. 401(a)(8),
no part of any benefit forfeitures of a member resulting from the application of any
provisions of this chapter may be applied to increase the benefits a member would
otherwise receive.
18-11-20. Members withdrawing from association - Members in military service.
Each association shall adopt bylaws and regulations providing that in the event any member
withdraws from employment in the department or ceases to be a member of the association,
whether by death or otherwise, the member is entitled to a return of an amount which is not less
than fifty percent nor more than one hundred percent of the member's contributions paid to the
association without interest. Any benefits already received by that member must be deducted
from the amount which would be returned to the member. Any applicant for a service pension
who, subsequent to entry into the service of such fire department, has served in the military
forces of the United States, may not have the period of that military service deducted in the
computation of the period of service herein provided for, but that military service must be
construed and counted as a part and portion of the member's active duty in that fire department.
However, that credit for military service may not exceed five years. Any such member, who was
a full-time regular firefighter at the time of the member's entry into the armed services and who
seeks credit for that military service, shall, upon return to employment in the fire department,
pay into the pension fund for each year of military service the same amount of money as the
member would have contributed from the member's salary had the member been in the
continuous employment of the department.
Page No. 7
18-11-21. Money received under pension not subject to legal process - Assignments.
Payments made or to be made by a firefighters relief association to any member of the
pension roll is not subject to judgment, garnishment, execution, or other legal process. Persons
entitled to such payments do not have the right to assign the same, and the association may not
recognize any assignment or pay over any sum which has been assigned.
18-11-22. Examination of relief association records - Report of unauthorized spending
to governor - Duty of governor.
The books and accounts of the secretary-treasurer of each firefighters relief association
receiving funds under the provisions of this chapter must be examined pursuant to section
54-10-14. If the audit report discloses that the money, or any part of it, has been or is being
expended for unauthorized purposes, the state auditor shall report the facts to the governor.
Thereupon, the governor shall direct the office of management and budget to refuse to issue
any warrants for the benefit of the fire department or relief association of the municipality in
which such association is organized until it appears to the state auditor, who shall report the fact
to the governor, that all moneys wrongfully expended have been replaced. The governor may
take such further action as the emergency may demand.
18-11-23. Funeral benefits.
The bylaws of the relief association shall provide for funeral benefits for its active or retired
members not to exceed for each funeral twice the monthly salary of a first-class firefighter on
January first of the year in which the member dies.
18-11-24. Commencement of benefits.
Notwithstanding any provision of this plan to the contrary, benefits payable under the plan
are subject to the following:
1. A member's benefit may not commence later than April first of the calendar year
following the latter of the calendar year in which the member attains age seventy and
one-half or the calendar year in which the member terminates employment. In any
case in which a lump sum death benefit is payable to a deceased member's
beneficiary, the benefit must be paid no later than sixty days following the member's
date of death.
2. The member's entire interest in the plan must be distributed over the life of the
member or the lives of the member and a designated beneficiary, over a period not
extending beyond the life expectancy of the member or the life expectancy of the
member and the designated beneficiary.
3. When a member dies after distribution of benefits has begun, the remaining portion of
the member's interest must be distributed at least as rapidly as under the method of
distribution prior to the member's death.
4. When a member dies before distribution of benefits has begun, the entire interest of
the member must be distributed within five years of the member's death. The five-year
payment rule does not apply to any portion of the member's interest that is payable to
a surviving spouse payable over the life or life expectancy of the spouse and which
begins no later than the date the member would have reached age seventy and
one-half.
5. The benefits payable must meet the minimum distribution incidental benefit
requirements of section 401(a)(9)(G) of the Internal Revenue Code; 26 U.S.C. 401(a)
(9)(G).
18-11-25. Vesting on plan termination.
If the retirement plan established under this chapter is terminated, the accrued benefits of
each member immediately become one hundred percent vested and nonforfeitable to the extent
funded.
Page No. 8
18-11-26. Service pensions - Formulation of optional plan.
With the consent of the governing body of the city involved, and in substitution for a pension
payment schedule provided in section 18-11-15, a firefighters relief association may adopt a
monthly service pension plan for members of the association as provided in this section.
1. Retirement date is the first day of the month next following the month in which the
member attains the age of fifty-five years.
2. Retirement benefits for members reaching the retirement date equal an annual
amount, payable monthly, comprised of a service benefit that equals two and fifty
hundredths percent of final salary at the time of the member's retirement multiplied by
the number of years of service employment up to a maximum of thirty years. For
purposes of this subsection, final salary for a first-class firefighter is the final salary at
the time of the member's retirement and for officers or members of higher rank is the
average salary for the last five years of employment. As used in this subsection, salary
does not include overtime or longevity payments.
3. Upon termination of employment after completing ten years of eligible employment but
before the retirement date, a member is eligible to receive deferred vested retirement
benefits payable commencing on the retirement date equal to one hundred percent of
the member's accrued benefits.
4. Members participating in a firefighters relief association paying a monthly service
pension to members of the association under this section must serve ten years before
they are eligible for a service pension.
5. Members participating in a firefighters relief association who have been active
members for at least one year, and who are not receiving salary or accumulated sick
leave from the city and who are unable, because of physical or mental disability, to
perform the duties of a firefighter, are eligible to receive a disability pension from the
association. Disability benefits are not payable for a disability that occurs in a
firefighter's first year of membership in the association. The disability pension amount
is equal to a percentage of the monthly salary of a first-class firefighter on January
thirty-first of the year that the pension is paid, unless the member is eligible for a larger
service pension, in which case the member is entitled to draw an annual pension
amount equal to the member's service pension. The percentage of the monthly salary
of a first-class firefighter which is payable as a disability pension is dependent upon
the member's years of service as follows:
Years of
Maximum
Completed Service
Percentage
0
0%
1
10%
2
20%
3
30%
4
40%
5
50%
Benefits may not be increased by reason of increases in salary of a first-class
firefighter occurring after the initial calculation of pension benefits. The payments must
remain fixed, except the benefit earned by years of service computation. If a member
is receiving workforce safety and insurance benefits or other similar benefits, the sum
of the member's disability pension payable from the association and amounts received
in workforce safety and insurance benefits or other similar benefits may not be greater
than one hundred percent of the monthly salary of the member at the time the
member's disability began. However, when a member is no longer receiving workforce
safety and insurance benefits or other similar benefits, the member's disability pension
is payable in the amount as determined under this subsection without regard to
workforce safety and insurance benefits or other similar benefits, including the greater
of the amount of the disability pension or the service pension, if applicable.
6. Upon the recommendation of the association's actuary, a firefighters relief association
may provide a thirteenth check to pensioners and beneficiaries under the plan.
Payment of the thirteenth check is contingent upon portfolio performance as
Page No. 9
determined by the association's actuary and may not be issued without approval of the
actuary.
18-11-27. Optional plan postretirement adjustments.
Expired pursuant to S.L. 1999, ch. 212, § 4.
18-11-28. Service, disability, and survivor pensions - Formulation of optional plan.
With the consent of the governing body of the city involved, and in substitution for a pension
payment schedule, disability pension provision, and survivor pension provision provided in
sections 18-11-15, 18-11-16, 18-11-17, and 18-11-26, a firefighters relief association may adopt
a monthly service pension plan, disability pension for members, and pensions for survivors of
deceased members of the association as provided in this section.
1. Normal retirement date. Normal retirement date for a service pension is the first day of
the month coincident with or next following the member's attainment of age fifty-five
and the completion of ten years of service.
2. Service pensions. A member retiring on or after the member's retirement date is
entitled to receive a monthly benefit beginning following the member's actual
retirement and continuing for the member's lifetime as specified in subsection 7. The
benefit amount is equal to two and fifty hundredths percent of average final
compensation, times years of service, up to a maximum of seventy-five percent.
3. Termination benefits. If a member terminates the member's employment as a
firefighter, either voluntarily or by discharge, and is not eligible for any other benefits,
the member is entitled to the following:
a. Nonvested termination. If the member has less than ten years of credited service
upon termination, the member is entitled to a refund of the member's
accumulated contributions, payable in a single lump sum payment. Any benefits
already received by the member from the association must be deducted from this
payment. Upon return of the member's accumulated contributions, all of the
member's rights and benefits under the plan are forfeited and terminated. Upon
any re-employment, a firefighter may not receive credit for years or completed
months of service for which the firefighter has withdrawn the firefighter's
accumulated contributions from the plan, unless the firefighter repays into the
plan the contributions the firefighter has withdrawn, with interest, as determined
by the board, within ninety days after the firefighter's re-employment. A member
may voluntarily leave the member's accumulated contributions in the plan for a
period of five years after leaving the employ of the department pending the
possibility of being re-employed as a firefighter, without losing credit for the time
that the member was a member of the plan. If a member who is not vested is not
re-employed as a firefighter with the department within five years, the member's
accumulated contributions must be returned. During this period, the member is
not entitled to any benefits under subsection 4 or 5.
b. Vested termination. If the member has ten or more years of service upon
termination, the member is entitled to a monthly retirement benefit, determined in
the same manner as a service pension, and based upon the member's service
and the applicable pay in effect at the time of termination. The monthly benefit
amount commences upon application by the member, at the member's normal
retirement age. Alternatively, upon the member's request, the member's
accumulated contributions must be returned to the member. Following payment
under such election, neither the member nor the member's beneficiaries or estate
is entitled to any future benefit payments from the fund.
4. Disability pensions.
a. Eligibility. An active member who becomes disabled before the member's normal
retirement date is eligible to receive a disability pension.
b. The disability benefit is determined as follows:
(1) Benefit amount. The monthly benefit under the disability pension equals ten
percent times the member's years of credited service, up to a maximum of
Page No. 10
c.
d.
e.
fifty percent times the monthly salary of a top paid firefighter for the year that
the first benefit is paid, reduced as described in this paragraph. When a
member eligible to receive a disability pension attains the member's normal
retirement date, the member's monthly benefit equals the greater of the
disability pension after adjustment for other income or the service pension. If
the service pension is greater, the disability benefit must cease and the
member must be treated in all respects as a service pensioner.
(2) Adjusted for other income before age sixty-five. The disability pension
amount must be reduced by one dollar for every "excess dollar". "Excess
dollar" is the sum of earned income plus payments by the association, plus
other insurance payments, less the salary of a top paid firefighter on
January thirty-first of the year that the excess dollar amount is determined.
This reduction must be redetermined each year. For purposes of this
provision, earned income is all income reported or reportable for federal
income tax purposes, excluding passive income, but including wages,
salary, commissions, and similar pay from any gainful work, including
partnership profits when applicable. For purposes of this provision, passive
income is interest, rent, receipts, inheritance payments, private disability
insurance, or other payments not related to wages. Other insurance
payments received by a disabled member of the association for disability
must be included in the excess dollar calculation without any reduction for
taxes or other miscellaneous payments. For purposes of this provision,
insurance includes disability benefits provided by the city or under workers'
compensation or similar legislation, as well as primary and dependent
disability benefits provided under social security. Any lump sum payment
attributable to wages or insurance payments received by the member will be
prorated over the period of time for which the payment is intended to provide
benefits.
(3) Adjustment for other income ceases after age sixty-five. The "excess dollar"
becomes zero and the association no longer has the right nor the
responsibility to determine the excess dollar calculation for that disabled
member of the association.
Determination of benefit amount by board. Every disabled member of the
association who disagrees with the findings of the association with regard to the
benefit calculation may have the calculation determined by an independent third
party in an arbitration process, the results of which are final. The association has
the right and responsibility to all active members to determine the excess dollar
calculation for each disabled member of the association. Any attempt to
fraudulently receive benefits under this section by misrepresenting a physical
condition or withholding information affecting benefit payments may be cause for
dismissal from the association and immediate suspension of all benefit payments,
current or future.
Application for benefit. All applications for pensions must be made on forms
furnished by the association. Applicants shall answer all questions under oath
and furnish such evidence as the board requests. Should any doubt arise in
regard to the existence of disability, the matter must be referred to three
physicians, one to be chosen by the applicant, one to be chosen by the board,
and the two physicians so selected shall choose a third physician. In such case,
the three physicians thus chosen shall examine the applicant and report to the
board.
Suspension of disability pension pending proof of income. A disabled member
shall provide proof of earned income to the association by April fifteenth each
year. The proof provided must be in the form of earned income reported to the
internal revenue service. If a disabled member is unable to provide proof of
earned income by April fifteenth each year, the excess dollar amount is presumed
sufficient to reduce the disability pension to zero dollars until the association
Page No. 11
5.
6.
receives adequate information to accurately determine the excess dollar amount.
The association shall pay a disabled member the disability pension amount that
was suspended, up to twelve months, in one lump sum once earned income
information is received and the association accurately determines the amount
owed to the disabled member.
Optional forms of payment.
a. Normal form of benefit. For a member married at retirement, the normal form of
payment of the service pension or deferred vested pension is a monthly payment
for the member's lifetime, with fifty percent of this amount payable to the
member's surviving spouse. For a member who is not married at retirement, the
normal form of payment is a monthly payment for the member's lifetime, with no
survivor payments, but actuarially adjusted as described in subdivision b as if the
member were married to a spouse of the same age.
b. Optional forms of benefits. In place of the normal form of benefit provided in
subdivision a, a member may elect to receive an actuarially equivalent benefit,
based on the factors provided in subsection 8, in one of the following optional
forms of payment:
(1) Life annuity. A monthly benefit payable for the member's lifetime only, with
no survivor benefits payable.
(2) Certain and life annuity. A monthly benefit payable for the member's lifetime,
but with one hundred twenty payments guaranteed. If the member dies
before receiving one hundred twenty payments, monthly payments will be
made to the member's designated beneficiary or estate until one hundred
twenty payments have been paid.
(3) Joint and survivor annuity. A monthly benefit payable for the member's life,
plus payments equal to seventy-five percent or one hundred percent of this
benefit amount to the member's spouse following the member's death.
Under this option, the surviving spouse is the member's spouse at the time
of retirement. If the spouse dies before the member, no benefits will be paid
to a survivor following the member's death.
c. Benefit selection. A member may select one of the optional forms of payment in
subdivision b during the ninety days prior to the member's actual retirement, or
upon attaining normal retirement age, on a form provided by the board. The
selection may be changed at any time before cashing or depositing the first
retirement payment. Consent of the member's spouse is not required to select or
change an optional benefit form. A member may change the beneficiary
designated under the certain and life payment form at any time prior to the
member's death by filing a new selection form with the board. The beneficiary's
consent is not required. If a member dies after having completed and filed a
selection form with the board, but before actually retiring, the board shall direct
that payments be made as if the member had retired on the member's date of
death and had selected the optional payment indicated in the member's form. If a
member dies after reaching normal retirement age without having completed a
selection form, the board shall direct that payments be made as if the member
had retired on the member's date of death, and had selected the joint and one
hundred percent survivor optional payment form if the member was married on
the member's date of death, or the certain and life form if the member was not
married. If the member's spouse dies after the member has filed forms with the
board selecting a joint and survivor benefit form, but before cashing or depositing
the first retirement payment, and if the member does not file a revised selection
form, the board shall direct that payments be made under subdivision a, providing
for payments to a member who is not married at retirement.
Preretirement death benefits.
a. Surviving spouse benefits. If a vested active or vested deferred member dies
before retirement, a pension in the sum of fifty percent of the amount of the
disability pension, or if greater, fifty percent of the deferred vested pension, the
Page No. 12
7.
member would have been entitled to on the date of death must be paid to the
surviving spouse for the period of the spouse's natural life.
b. Children's benefit. If a vested active or vested deferred member dies before
retirement, a monthly benefit must be paid to the member's surviving children
until age nineteen, or until completion of high school, whichever occurs first. The
benefit amount to be shared among the children is equal to a percentage of the
top paid firefighter's monthly salary on January thirty-first of the year the benefit is
paid. The percentage is determined based on the number of children at the time
of each benefit payment and whether the children's parent is alive. If the
children's surviving parent is alive, the percentage is twenty percent. If no parent
survives, and there is more than one child, the percentage is sixty percent. If
there is no parent and only one child, the percentage is forty percent. Children
who were living while the deceased was on the payroll of the department, or who
were born within nine months after the decedent was withdrawn from the payroll
of the department, are eligible for this benefit.
c. Minimum benefit. When an active member who is not yet vested dies, the
member's beneficiaries designated on forms provided by the pension association
or the member's estate, in case this form has not been filed with the association,
or in case the designated beneficiaries do not exist or cannot be found within six
months of the date of death, shall receive in addition to the funeral benefit, a sum
equal to what the member has contributed to the association, less the amount of
any benefits received by the active member or the member's beneficiaries or
estate.
Commencement of benefits.
a. Payment of benefits. Monthly benefit payments must be distributed on the last
day of each month. For service or deferred pensions, the first payment must be
prorated to equal the total monthly benefit earned, times the number of days in
the month following actual retirement, divided by the total number of days in the
month. Benefits payable to the surviving beneficiary of a retired member who had
been receiving payments commence in the month following the retired member's
death. Benefits payable to the surviving spouse or children of a member who dies
before retirement must be similarly prorated based on the date of death of the
active or deferred member. The final monthly benefit paid in the month a retired
member dies, a surviving beneficiary dies, or a surviving beneficiary ceases to be
eligible for benefits must be paid on the last day of the month of death or
termination of eligibility and must equal a full monthly payment with no reduction
or proration.
b. Mandatory commencement of benefits. Notwithstanding any provision in this
section to the contrary, benefits payable under the plan are subject to the
following:
(1) A member's benefits may not commence later than April first of the calendar
year following the later of the calendar year in which the member attains age
seventy and one-half and the calendar year in which the member terminates
employment. If a lump sum death benefit is payable to a deceased
member's beneficiary, the benefit must be paid no later than sixty days
following the member's date of death.
(2) The member's entire interest in the plan must be distributed over the life of
the member or the lives of the member and a designated beneficiary, over a
period not extending beyond the life expectancy of the member or the life
expectancy of the member and designated beneficiary.
(3) When a member dies after distribution of benefits has begun, the remaining
portion of the member's interest must be distributed at least as rapidly as
under the method of distribution prior to the member's death.
(4) When a member dies before distribution of benefits has begun, the entire
interest of the member must be distributed within five years of the member's
death. The five-year payment rules do not apply to any portion of the
Page No. 13
8.
member's interest which is payable to a surviving spouse payable over the
life or life expectancy of the spouse and which begins no later than the date
the member would have reached age seventy and one-half.
(5) The benefits payable must meet the minimum distribution incidental benefit
requirements of section 401(a)(9)(G) of the Internal Revenue Code.
Actuarial equivalence - optional forms of benefit. To determine the amount of the
monthly payment under the life-only and certain and life optional forms permitted
under subsection 5, multiply the normal monthly benefit amount by the following
factors:
Life-only benefit: 1.043
Certain and life benefit: 1.030
To determine the amount of the monthly payment under the alternative joint and
survivor optional forms permitted under subsection 5, multiply the normal monthly
benefit amount by the following factors based on the difference in age between the
member and the member's spouse, using the member's and spouse's ages as of the
member's and spouse's most recent birthdays.
If the member is the same age as the spouse, use the following factors:
Joint and seventy-five percent survivor: 0.980
Joint and one hundred percent survivor: 0.960
If the spouse is not the same age as the member, use the following factors:
If the
If the
Spouse Is
Spouse Is
Younger:
Joint and
Joint and
Older:
Joint and
Joint and
Age
Survivor
Survivor
Age
Survivor
Survivor
Difference
75%
100%
Difference
75%
100%
1
0.979
0.959
1
0.980
0.960
2
0.978
0.957
2
0.981
0.962
3
0.977
0.956
3
0.981
0.964
4
0.976
0.954
4
0.982
0.965
5
0.976
0.952
5
0.983
0.967
6
0.975
0.951
6
0.984
0.969
7
0.974
0.949
7
0.985
0.970
8
0.973
0.948
8
0.986
0.972
9
0.973
0.947
9
0.986
0.973
10
0.972
0.945
10
0.987
0.975
11
0.971
0.944
11
0.988
0.976
12
0.971
0.943
12
0.989
0.978
13
0.970
0.942
13
0.989
0.979
14
0.969
0.940
14
0.990
0.980
15
0.969
0.939
15
0.991
0.982
Page No. 14
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