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September 30, 2002 To: City Council From: Joel J3mnik Subject: Relief Association I?ligihility for Professional i�irc Pcrsonncl Issue Are professional (full-time) firefighters eligible far membership in �hc (Zclief Association? Background Minnesota still has the majority of its fire protection services providcti by volunteers. Whiic most departments provide only nominal consideration for the srrviccs of tliese individuals, state law authorizes the creation of nonprofit ie�1Cf associations that provide a pension bciic[it for volunteer firefighters. Firefighters who are not volunteers (or(en referred to as "p�•��CS51t)n8�", "paid", "salaricd", °[ll��-htltc" or various combinations thereo� are eligible far membership in the Public Employee's Retirement Association (PERA). GiVCiI the evolution of some fire departnlCnts to "combined" dcpar(ttients comprised of both volutttecrs and paid firefighters, a legal question has becn raised regarding the eligibility of paid firefighters to become members in relief associations. The Office of State Auditor (OSA) and PF,R/� generally �t�ve taken the position that dual inembership in two pension plans constitutes double credit for the same Service in contravention of state law. However, while the PERA laws generally prevent using volunteer compensation and benefits as part of the farmula for calculating state PERA pension benefits, no parallel prohibition exists far 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 bothPERA 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 �C�t 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 of local 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 Further complicating matters is that the Hastings case was not appealed, and so is not binding precedent.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 11�cir 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 jg 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.