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contribution, the officers need to know the special fund's financial requirements for the <br />`-' following year. In July, the officers calculate the financial requirements for the following year <br />and the overall funding balance for the current calendar year. <br />If the special fund is not fully funded, the financial requirements for the following calendar <br />year are determined by taking into account 1) the total accrued liability for all active and <br />deferred members of the relief association, calculated for the following calendar year; 2) the <br />increase in the total accrued liability for the following calendar year over the present calendar <br />year; 3) the amount of anticipated future administrative expenses; and 4) one-tenth of the <br />deficit resulting from either an increase in the service pension or an investment loss occurring <br />over the last ten years. The deficit can be amortized over ten years. <br />If the special fund is fully funded, the financial requirements for the following calendar year <br />are the total of 1) the increase in the total accrued liability for all members for the following <br />calendar year over the present calendar year; and 2) the amount of anticipated future <br />administrative expenses. <br />Monthly Service Pension Plans <br />For monthly service pension plans, the financial requirements of the special fund are based on <br />the most recent actuarial valuation. Each fire relief association must determine the minimum <br />obligation of the municipality for the following calendar year "on or before August 1 of each <br />year.i5 The "most recent actuarial valuation" included in the calculation would generally be a <br />`-- valuation from January 1 of the same year or December 31 of the prior year. <br />For most plans, the Governmental Accounting Standards Board (GASB) requires an actuarial <br />valuation every two years.b In addition, a new actuarial valuation is required whenever there is <br />a benefit change. If the plan is in deficit, the statute pertnits amortization over a period of <br />years.7 <br />Defined Contribution Plans <br />For defined contribution plans, the individual volunteer firefighter experiences the gains and <br />the losses. The municipality has no obligation to make contributions to offset losses if they <br />occur, although it can make a voluntary contribution to the special fund if it chooses. <br />� Benefit Levels <br />The level of benefits paid by a volunteer firefighter pension plan is usually set by agreement <br />between the relief association and the municipality. Benefit level changes must first be <br />discussed and adopted by the relief association through a change in its bylaws. The changes <br />5 Minn. Stat. § 69.773, subd. 5(a). <br />6 See Minn. Stat. § 69.051, subd. 1(financial statements in conformance with generally accepted <br />� accounting principles); GASB Statement 25, para. 35 (biennial actuarial valuations required for financial <br />reporting purposes). <br />' Minn. Stat. § 69.773, subd 4(d). <br />Reviewed: December 2010 2 2009-2001 <br />Revised: December 2010 <br />