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Attachment A State of Minnesota \\ LEGISLATIVE COMMISSION ON PENSIONS AND RETIREMENT TO: Senator John Marty Representative Alice Hausman Senator Bev Scalze Representative Jason Isaacson FROM: Lawrence A. Martin, Executive Director RE: Summary of Draft Proposed Special Legislation LCPR14-052 Modifying Roseville Volunteer Firefighters' Relief Association Governance and Administration DATE: October 2, 2014 Introduction As requested by Senator Marty and Representative Hausman, I have prepared a revised draft of potential special legislation, Document LCPR14-052, changing the governance and administration of the Roseville Volunteer Firefighters' Relief Association as the relief association phases out of existence. This memorandum summarizes the Roseville Volunteer Firefighters' Relief Association pension issue, summarizes the draft potential special legislation for Roseville, and identifies and discusses the policy issues arising in connection with the draft potential legislation. Roseville Volunteer Firefighters' Relief Association Pension Issue Roseville, akin to many Minnesota municipalities, has a wholly or primarily emergency on-call fire department and a volunteer firefighter relief association to provide pension coverage for those emergency on-call firefighters. In Roseville, the volunteer firefighter relief association is one of about two dozen in the state that provides a monthly benefit (i.e., annuity for life) rather than a lump sum benefit. As I understand the situation, Roseville has, with municipal action, begun phasing out its emergency on-call fire department, employing instead part-time firefighters, and its volunteer firefighter relief association, reportedly providing retirement coverage for those part-time firefighters a plan administered by the Public Employees Retirement Association (PERA). The part-time firefighters reportedly have begun organizing a union, represented by American Federation of State, County and Municipal Employees (AFSCME) currently, and are apparently collectively bargaining a contract. The current on-call emergency firefighters believe that they will be converted to part-time firefighters in the near future. If the active membership of the Roseville Volunteer Firefighters' Relief Association is diminished in number in the near term or eliminated, the general statutory provision specifying the governance of the volunteer firefighter relief association (with six members elected by the membership, of which one can be a retired member if the relief association is a monthly benefit plan, and with three municipal officials, of which one is the department fire chief) will no longer adequately function for the relief association. Summary of Draft Proposed Legislation LCPR14-052 Potential special proposed legislation LCPR14-052 permits the Roseville Volunteer Firefighters' Relief Association, if approved by the Roseville City Council, to utilize one or both of two options for maintaining appropriate governance of the relief association. One option is by increasing the number of retired members to be elected to serve on the relief association board of trustees to three immediately, to four when the relief association active membership drops below 26, to five when the relief association active membership drops below 11, and to six when there no longer is any association active membership. Another option is by permitting the Roseville Volunteer Firefighters' Relief Association board of trustees, with city council approval, to transfer the relief association administration to the board of directors and executive director of the Public Employees Retirement Association (PERA). Additionally, the disposition of the Roseville Volunteer Firefighters' Relief Association assets upon the death of the last retiree and the last beneficiary is specified as the deposit of the remaining assets in the Roseville city treasury. Discussion and Analysis Document LCPR14-052 provides the City of Roseville and the Roseville Volunteer Firefighters' Relief Association with two options in providing for the administration of pension coverage for the remaining active and retired members of the relief association, either by increasing the number of permitted retired board members as the active membership of the relief association declines or by permitting the transfer of LCPR14-052 Memo.docx Page 1