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September 30, 2002 To: City Council From: Joel Janmik Subject: Relief Association Eligibility for Professional Fire Personnel Issue Are professional (full-time) firefighters eligible for membership in the Relief Association? Background Milmesota still has the majority of its fire protection services provided by volunteers. While most deparh11ents provide only nominal consideration for the services of these individuals, state law authorizes the creation of nonprofit relief associations that provide a pension benefit for volunteer firefighters. Firefighters who are not volunteers (often referred to as "professional", "paid", "salaried", "full-time" or various combinations thereof) are eligible for membership in the Public Employee's Retirement Association (PERA). Given the evolution of some fire deparh11ents to "combined" departments comprised of both volunteers and paid firefighters, a legal question has been raised regarding the eligibility of paid firefighters to become members in relief associations. The Office of State Auditor (OSA) and PERA generally have taken the position that dual membership in two pension plans constitutes double credit for the same service in conh'avention of state law. However, while the PERA laws generally prevent using volunteer compensation and benefits as part of the formula for calculating state PERA pension benefits, no parallel prohibition exists for most relief associations. Consequently, some paid or salaried firefighters have joined, or sought to join, local relief associations. The firefighters within the Edina Fire Department are members of both PERA and a local relief association. In addition, the City of Hastings was involved in litigation regarding salaried firefighters who sought service credit in the local relief association. While the court concluded that in these situations dual pension benefits present an opportunity for "double dipping", it left resolution of this potential problem to the legislature and to local relief associations. As of this date the legislature has not responded, leaving the matter primarily in the hands oflocal relief association officials. Further complicating matters is that the Hastings case was not appealed, and so is not binding precedent. Relief Associations face a tough task evaluating the problem and their unique local situations. Different questions and policies are raised if the full-time firefighter is hourly rate or salaried, since overtime compensation can affect PERA earnings reports. Questions of fairness and equity are raised when the Department has salaried firefighters of its own and volunteers who also serve as paid firefighters in other communities. Call-back, emergency response, and overtime policies of departments affect the analysis, as does the eligibility and service credit formulas of the relief associations. The OSA and PERA positions remain opposed to dual eligibility, and local relief association officials must consider potential state action (such as withholding state pension aid) in fashioning a response. There is also the possibility of additional lawsuits depending on what actions they take, or if they fail to act. At this time, there is no safe harbor.