1999 Minnesota Statutes

CHAPTER 424A. Volunteer firefighters' retirement

     424A.001 Definitions. 

    Subdivision 1.    Terms defined.  As used in this 
 chapter, the terms defined in this section have the meanings 
 given. 

    Subd. 2.    Fire department.  "Fire department" includes 
 municipal fire department and independent nonprofit firefighting 
 corporation.  

    Subd. 3.    Municipality.  "Municipality" means a 
 municipality which has a fire department with which the relief 
 association is directly associated, or the municipalities which 
 contract with the independent nonprofit firefighting corporation 
 of which the relief association is a subsidiary.  

    Subd. 4.    Relief association.  "Relief association" 
 means (a) a volunteer firefighters' relief association or 
 volunteer firefighters' division or account of a partially 
 salaried and partially volunteer firefighters' relief 
 association organized and incorporated under chapter 317A and 
 any laws of the state, governed by this chapter and chapter 69, 
 and directly associated with a fire department established by 
 municipal ordinance; or (b) any separate incorporated volunteer 
 firefighters' relief association subsidiary to and providing 
 service pension and retirement benefit coverage for members of 
 an independent nonprofit firefighting corporation organized 
 under the provisions of chapter 317A, governed by this chapter, 
 and operating exclusively for firefighting purposes.  A relief 
 association is a governmental entity that receives and manages 
 public money to provide retirement benefits for individuals 
 providing the governmental services of firefighting and 
 emergency first response.  

    Subd. 5.    Special fund.  "Special fund" means special 
 fund of a volunteer firefighters' relief association or the 
 account for volunteer firefighters within the special fund of a 
 partially salaried and partially volunteer firefighters' relief 
 association.  

    Subd. 6.    Surviving spouse.  For purposes of this 
 chapter, and the governing bylaws of any relief association to 
 which this chapter applies, the term "surviving spouse" means 
 any person who was the dependent spouse of a deceased active 
 member or retired former member living with the member at the 
 time of the death of the active member or retired former member 
 for at least one year prior to the date on which the member 
 terminated active service and membership.  

    Subd. 7.    Fiduciary responsibility.  In the discharge 
 of their respective duties, the officers and trustees shall be 
 held to the standard of care enumerated in section 11A.09.  In 
 addition, the trustees must act in accordance with chapter 356A. 

    Each member of the board is a fiduciary and shall undertake 
 all fiduciary activities in accordance with the standard of care 
 of section 11A.09, and in a manner consistent with chapter 356A. 
 No fiduciary of a relief association shall cause a relief 
 association to engage in a transaction if the fiduciary knows or 
 should know that a transaction constitutes one of the following 
 direct or indirect transactions: 

    (1) sale or exchange or leasing of any real property 
 between the relief association and a board member; 

    (2) lending of money or other extension of credit between 
 the relief association and a board member or member of the 
 relief association; 

    (3) furnishing of goods, services, or facilities between 
 the relief association and a board member; or 

    (4) transfer to a board member, or use by or for the 
 benefit of a board member, of any assets of the relief 
 association.  Transfer of assets does not mean the payment of 
 relief association benefits or administrative expenses permitted 
 by law. 

    Subd. 8.    Firefighting service.  "Firefighting 
 service," if the applicable municipality approves for a fire 
 department that is a municipal department, or if the contracting 
 municipality or municipalities approve for a fire department 
 that is an independent nonprofit firefighting corporation, 
 includes service rendered by fire prevention personnel. 

    Subd. 9.    Separate from active service.  "Separate 
 from active service" means to cease to perform fire suppression 
 duties, to cease to perform fire prevention duties, to cease to 
 supervise fire suppression duties, and to cease to supervise 
 fire prevention duties. 

    HIST: 1983 c 219 s 4; 1986 c 359 s 18,19; 1Sp1986 c 3 art 2 s 
 40; 1989 c 304 s 137; 1989 c 319 art 8 s 26; 1996 c 438 art 8 s 
 1,2 

     424A.01 Membership in a volunteer firefighters' relief 
  association. 

    Subdivision 1.    Minors.  It is unlawful for any 
 municipality or independent nonprofit firefighting corporation 
 to employ a minor as a volunteer firefighter or to permit a 
 minor to serve in any capacity performing any firefighting 
 duties with a volunteer fire department.  

    Subd. 2.    Status of substitute volunteer firefighters. 
  No person who is serving as a substitute volunteer 
 firefighter shall be deemed to be a firefighter for purposes of 
 chapter 69 or this chapter nor shall be authorized to be a 
 member of any volunteer firefighters' relief association 
 governed by chapter 69 or this chapter.  

    Subd. 3.    Status of nonmember volunteer firefighters.  
 No person who is serving as a firefighter in a fire department 
 but who is not a member of the applicable firefighters' relief 
 association shall be entitled to any service pension or 
 ancillary benefits from the relief association.  

    Subd. 3a. Repealed, 1989 c 319 art 10 s 8 

    Subd. 4.    Exclusion of persons constituting an 
 unwarranted health risk.  The board of trustees of every 
 relief association may exclude from membership in the relief 
 association all applicants who, due to some medically 
 determinable physical or mental impairment or condition, would 
 constitute a predictable and unwarranted risk of imposing 
 liability for an ancillary benefit at any age earlier than the 
 minimum age specified for receipt of a service pension.  
 Notwithstanding any provision of section 363.02, subdivision 5, 
 it shall be a good and valid defense to a complaint or action 
 brought under chapter 363 that the board of trustees of the 
 relief association made a good faith determination that the 
 applicant suffers from an impairment or condition constituting a 
 predictable and unwarranted risk for the relief association if 
 the determination was made following consideration of:  (a) the 
 person's medical history; and (b) the report of the physician 
 completing a physical examination of the applicant completed at 
 the expense of the relief association. 

    Subd. 5.    Fire prevention personnel.  (a) If the fire 
 department is a municipal department and the applicable 
 municipality approves, or if the fire department is an 
 independent nonprofit firefighting corporation and the 
 contracting municipality or municipalities approve, the fire 
 department may employ or otherwise utilize the services of 
 persons as volunteer firefighters to perform fire prevention 
 duties and to supervise fire prevention activities. 

    (b) Personnel serving in fire prevention positions are 
 eligible to be members of the applicable volunteer firefighter 
 relief association and to qualify for service pension or other 
 benefit coverage of the relief association on the same basis as 
 fire department personnel who perform fire suppression duties. 

    (c) Personnel serving in fire prevention positions also are 
 eligible to receive any other benefits under the applicable law 
 or practice for services on the same basis as personnel employed 
 to perform fire suppression duties. 

    HIST: 1979 c 201 s 11; 1981 c 224 s 274; 1982 c 460 s 7; 1983 
 c 219 s 5; 1989 c 319 art 10 s 2; 1996 c 438 art 8 s 3 

     424A.02 Volunteer firefighters; service pensions. 

    Subdivision 1.    Authorization.  (a) A relief 
 association, when its articles of incorporation or bylaws so 
 provide, may pay out of the assets of its special fund a service 
 pension to each of its members who:  (1) separates from active 
 service with the fire department; (2) reaches age 50; (3) 
 completes at least five years of active service as an active 
 member of the municipal fire department to which the relief 
 association is associated; (4) completes at least five years of 
 active membership with the relief association before separation 
 from active service; and (5) complies with any additional 
 conditions as to age, service, and membership that are 
 prescribed by the bylaws of the relief association.  A service 
 pension computed under this section may be prorated monthly for 
 fractional years of service, if the bylaws or articles of 
 incorporation of the relief association so provide.  The service 
 pension may be paid whether or not the municipality or nonprofit 
 firefighting corporation to which the relief association is 
 associated qualifies for fire state aid under chapter 69.  

    (b) In the case of a member who has completed at least five 
 years of active service as an active member of the fire 
 department to which the relief association is associated on the 
 date that the relief association is established and 
 incorporated, the requirement that the member complete at least 
 five years of active membership with the relief association 
 before separation from active service may be waived by the board 
 of trustees of the relief association if the member completes at 
 least five years of inactive membership with the relief 
 association before the payment of the service pension.  During 
 the period of inactive membership, the member is not entitled to 
 receive disability benefit coverage, is not entitled to receive 
 additional service credit towards computation of a service 
 pension, and is considered to have the status of a person 
 entitled to a deferred service pension under subdivision 7. 

    (c) No municipality or nonprofit firefighting corporation 
 may delegate the power to take final action in setting a service 
 pension or ancillary benefit amount or level to the board of 
 trustees of the relief association or to approve in advance a 
 service pension or ancillary benefit amount or level equal to 
 the maximum amount or level that this chapter would allow rather 
 than a specific dollar amount or level.  

    (d) No relief association as defined in section 424A.001, 
 subdivision 4, may pay a service pension or disability benefit 
 to a former member of the relief association if that person has 
 not separated from active service with the fire department to 
 which the relief association is directly associated.  

    Subd. 2.    Nonforfeitable portion of service pension.  
 If the articles of incorporation or bylaws of a relief 
 association so provide, a relief association may pay a reduced 
 service pension to a retiring member who has completed fewer 
 than 20 years of service.  The reduced service pension may be 
 paid when the retiring member meets the minimum age and service 
 requirements of subdivision 1.  

    The amount of the reduced service pension may not exceed 
 the amount calculated by multiplying the service pension 
 appropriate for the completed years of service as specified in 
 the bylaws times the applicable nonforfeitable percentage of 
 pension.  The nonforfeitable percentage of pension amounts are 
 as follows:  

   Completed Years of Service   Nonforfeitable Percentage
                                    of Pension Amount
              5                          40 percent 
              6                          44 percent 
              7                          48 percent 
              8                          52 percent 
              9                          56 percent 
             10                          60 percent 
             11                          64 percent 
             12                          68 percent 
             13                          72 percent 
             14                          76 percent 
             15                          80 percent 
             16                          84 percent 
             17                          88 percent 
             18                          92 percent 
             19                          96 percent 
             20 and thereafter          100 percent 

    Subd. 3.    Flexible service pension maximums.  (a) On 
 or before August 1 of each year as part of the certification of 
 the financial requirements and minimum municipal obligation made 
 pursuant to section 69.772, subdivision 4, or 69.773, 
 subdivision 5, the secretary or some other official of the 
 relief association designated in the bylaws of each relief 
 association shall calculate and certify to the governing body of 
 the applicable qualified municipality the average amount of 
 available financing per active covered firefighter for the most 
 recent three-year period.  The amount of available financing 
 shall include any amounts of fire state aid received or 
 receivable by the relief association, any amounts of municipal 
 contributions to the relief association raised from levies on 
 real estate or from other available revenue sources exclusive of 
 fire state aid, and one-tenth of the amount of assets in excess 
 of the accrued liabilities of the relief association calculated 
 pursuant to sections 69.772, subdivision 2; 69.773, subdivisions 
 2 and 4; or 69.774, subdivision 2, if any.  

    (b) The maximum service pension which the relief 
 association has authority to provide for in its bylaws for 
 payment to a member retiring after the calculation date when the 
 minimum age and service requirements specified in subdivision 1 
 are met must be determined using the table in paragraph (c) or 
 (d), whichever applies. 

    (c) For a relief association where the governing bylaws 
 provide for a monthly service pension to a retiring member, the 
 maximum monthly service pension amount per month for each year 
 of service credited that may be provided for in the bylaws is 
 the maximum service pension figure corresponding to the average 
 amount of available financing per active covered firefighter: 

   Minimum Average Amount of      Maximum Service Pension
   Available Financing per        Amount Payable per Month
        Firefighter               for Each Year of Service

          $...                             $ .25
            42                               .50
            84                              1.00
           126                              1.50
           168                              2.00
           209                              2.50
           252                              3.00
           294                              3.50
           335                              4.00
           378                              4.50
           420                              5.00
           503                              6.00
           587                              7.00
           672                              8.00
           755                              9.00
           839                             10.00
           923                             11.00
          1007                             12.00
          1090                             13.00
          1175                             14.00
          1259                             15.00
          1342                             16.00
          1427                             17.00
          1510                             18.00
          1594                             19.00
          1677                             20.00
          1762                             21.00
          1845                             22.00
          1888                             22.50
          1929                             23.00
          2014                             24.00
          2098                             25.00
          2183                             26.00
          2267                             27.00
          2351                             28.00
          2436                             29.00
          2520                             30.00

          2604                             31.00
          2689                             32.00
          2773                             33.00
          2857                             34.00
          2942                             35.00
          3026                             36.00
          3110                             37.00
          3963                             38.00
          4047                             39.00
          4137                             40.00
          any amount more than 4137        40.00

    (d) For a relief association in which the governing bylaws 
 provide for a lump sum service pension to a retiring member, the 
 maximum lump sum service pension amount for each year of service 
 credited that may be provided for in the bylaws is the maximum 
 service pension figure corresponding to the average amount of 
 available financing per active covered firefighter for the 
 applicable specified period: 

  Minimum Average Amount         Maximum Lump Sum Service
  of Available Financing         Pension Amount Payable
     per Firefighter             for Each Year of Service

         $..                              $10
          11                               20
          16                               30
          23                               40
          27                               50
          32                               60
          43                               80
          54                              100
          65                              120
          77                              140
          86                              160
          97                              180
         108                              200
         131                              240
         151                              280
         173                              320
         194                              360
         216                              400
         239                              440
         259                              480
         281                              520
         302                              560
         324                              600
         347                              640
         367                              680
         389                              720
         410                              760
         432                              800
         486                              900
         540                             1000
         594                             1100
         648                             1200
         702                             1300
         756                             1400
         810                             1500
         864                             1600
         918                             1700
         972                             1800
        1026                             1900
        1080                             2000
        1134                             2100
        1188                             2200
        1242                             2300
        1296                             2400
        1350                             2500
        1404                             2600
        1458                             2700
        1512                             2800
        1566                             2900
        1620                             3000
        1672                             3100
        1726                             3200
        1753                             3250
        1780                             3300
        1820                             3375

        1834                             3400
        1888                             3500

        1942                             3600
        1996                             3700
        2023                             3750

        2050                             3800
        2104                             3900
        2158                             4000

        2212                             4100
        2265                             4200
        2319                             4300
        2373                             4400
        2427                             4500
        2481                             4600
        2535                             4700
        2589                             4800
        2643                             4900
        2697                             5000
        2751                             5100
        2805                             5200
        2859                             5300
        2913                             5400
        2967                             5500
        any amount more than 2967        5500

    (e) For a relief association in which the governing bylaws 
 provide for a monthly benefit service pension as an alternative 
 form of service pension payment to a lump sum service pension, 
 the maximum service pension amount for each pension payment type 
 must be determined using the applicable table contained in this 
 subdivision. 

    (f) If a relief association establishes a service pension 
 in compliance with the applicable maximum contained in paragraph 
 (c) or (d) and the minimum average amount of available financing 
 per active covered firefighter is subsequently reduced because 
 of a reduction in fire state aid or because of an increase in 
 the number of active firefighters, the relief association may 
 continue to provide the prior service pension amount specified 
 in its bylaws, but may not increase the service pension amount 
 until the minimum average amount of available financing per 
 firefighter under the table in paragraph (c) or (d), whichever 
 applies, permits. 

    (g) No relief association is authorized to provide a 
 service pension in an amount greater than $40 per month per year 
 of service credit or in an amount greater than $5,500 lump sum 
 per year of service credit even if the minimum average amount of 
 available financing per firefighter for a relief association 
 providing a monthly benefit service pension is greater than 
 $4,137, or, for a relief association providing a lump sum 
 service pension, is greater than $2,967. 

    Subd. 3a.    Penalty for paying pension greater than 
 applicable maximum.  (a) If a relief association pays a 
 service pension greater than the maximum service pension 
 associated with the applicable average amount of available 
 financing per active covered firefighter under the table in 
 subdivision 3, paragraph (c) or (d), whichever applies, the 
 maximum service pension under subdivision 3, paragraph (f), or 
 the applicable maximum service pension amount specified in 
 subdivision 3, paragraph (g), whichever is less, the state 
 auditor shall: 

    (1) disqualify the municipality or the nonprofit 
 firefighting corporation associated with the relief association 
 from receiving fire state aid by making the appropriate 
 notification to the municipality and the commissioner of 
 revenue, with the disqualification applicable for the next 
 apportionment and payment of fire state aid; and 

    (2) recover the amount of the overpaid service pension or 
 pensions from any retired firefighter who received an 
 overpayment. 

    (b) Fire state aid amounts from disqualified municipalities 
 for the period of disqualifications under paragraph (a), clause 
 (1), must be credited to the amount of fire insurance premium 
 tax proceeds available for the next subsequent fire state aid 
 apportionment. 

    (c) The amount of any overpaid service pension recovered 
 under paragraph (a), clause (2), must be credited to the amount 
 of fire insurance premium tax proceeds available for the next 
 subsequent fire state aid apportionment. 

    (d) The determination of the state auditor that a relief 
 association has paid a service pension greater than the 
 applicable maximum must be made on the basis of the information 
 filed by the relief association and the municipality with the 
 state auditor under sections 69.011, subdivision 2, and 69.051, 
 subdivision 1 or 1a, whichever applies, and any other relevant 
 information that comes to the attention of the state auditor.  
 The determination of the state auditor is final.  An aggrieved 
 municipality, relief association, or person may appeal the 
 determination under section 480A.06.  

    Subd. 4.    Defined contribution lump sum service 
 pensions.  If the bylaws governing the relief association so 
 provide exclusively, the relief association may pay a defined 
 contribution lump sum service pension in lieu of any defined 
 benefit service pension governed by subdivision 2.  An 
 individual account for each firefighter who is a member of the 
 relief association shall be established.  To each individual 
 member account shall be credited a right to an equal share of:  
 (a) any amounts of fire state aid received by the relief 
 association; (b) any amounts of municipal contributions to the 
 relief association raised from levies on real estate or from 
 other available revenue sources exclusive of fire state aid; and 
 (c) any amounts equal to the share of the assets of the special 
 fund to the credit of:  (1) any former member who terminated 
 active service with the fire department to which the relief 
 association is associated prior to meeting the minimum service 
 requirement provided for in subdivision 1 and has not returned 
 to active service with the fire department for a period no 
 shorter than five years; or (2) any retired member who retired 
 prior to obtaining a full nonforfeitable interest in the amounts 
 credited to the individual member account pursuant to 
 subdivision 2 and any applicable provision of the bylaws of the 
 relief association.  In addition, any interest or investment 
 income earned on the assets of the special fund shall be 
 credited in proportion to the share of the assets of the special 
 fund to the credit of each individual member account.  At the 
 time of retirement pursuant to subdivision 1 and any applicable 
 provision of the bylaws of the relief association, a retiring 
 member shall be entitled to that portion of the assets of the 
 special fund to the credit of the member in the individual 
 member account which is nonforfeitable pursuant to subdivision 2 
 and any applicable provision of the bylaws of the relief 
 association based on the number of years of service to the 
 credit of the retiring member.  

    Subd. 5. Repealed, 1999 c 222 art 11 s 1 

    Subd. 6.    Payment of service pensions; nonassignability. 
  The method of calculating service pensions shall be applied 
 uniformly for all years of active service and credit shall be 
 given for all years of active service, except as otherwise 
 provided in this section.  No service pension shall be paid to 
 any person while the person remains an active member of the 
 respective fire department, and no person who is receiving a 
 service pension shall be entitled to receive any other benefits 
 from the special fund of the relief association.  No service 
 pension or ancillary benefits paid or payable from the special 
 fund of a relief association to any person receiving or entitled 
 to receive a service pension or ancillary benefits shall be 
 subject to garnishment, judgment, execution, or other legal 
 process, except as provided in section 518.58, 518.581, or 
 518.6111.  No person entitled to a service pension or ancillary 
 benefits from the special fund of a relief association may 
 assign any service pension or ancillary benefit payments, nor 
 shall the association have the authority to recognize any 
 assignment or pay over any sum which has been assigned. 

    Subd. 7.    Deferred service pensions.  A member of a 
 relief association to which this section applies is entitled to 
 a deferred service pension if the member:  

    (1) has completed the lesser of the minimum period of 
 active service with the fire department specified in the bylaws 
 or 20 years of active service with the fire department; 

    (2) has completed at least five years of active membership 
 in the relief association; and 

    (3) separates from active service and membership before 
 reaching age 50 or the minimum age for retirement and 
 commencement of a service pension specified in the bylaws 
 governing the relief association if that age is greater than age 
 50.  The deferred service pension starts when the former member 
 reaches age 50 or the minimum age specified in the bylaws 
 governing the relief association if that age is greater than age 
 50 and when the former member makes a valid written 
 application.  A relief association that provides a lump sum 
 service pension may, when its governing bylaws so provide, pay 
 interest on the deferred lump sum service pension during the 
 period of deferral.  If provided for, interest must be paid at 
 the rate actually earned by the relief association, but not to 
 exceed the interest rate specified in section 356.215, 
 subdivision 4d, and must be compounded annually based on 
 calendar year balances.  The deferred service pension is 
 governed by and must be calculated under the general statute, 
 special law, relief association articles of incorporation, or 
 relief association bylaw provisions applicable on the date on 
 which the member separated from active service with the fire 
 department and active membership in the relief association.  

    Subd. 8.    Lump sum service pensions; installment 
 payments.  Any relief association, if the governing bylaws so 
 provide, may pay, at the option of the retiring member and in 
 lieu of a single payment of a lump sum service pension, a lump 
 sum service pension in installments. 

    The election of installment payments shall be irrevocable 
 and shall be made by the retiring member in writing and filed 
 with the secretary of the relief association no later than 30 
 days prior to the commencement of payment of the service 
 pension.  The amount of the installment payments shall be 
 determined so that the present value of the aggregate 
 installment payments computed at an interest rate of five 
 percent, compounded annually, is equal to the amount of the 
 single lump sum payment which would have been made had the 
 installment payments option not been elected.  The payment of 
 each installment shall include interest at the rate of five 
 percent, compounded annually on the reserve supporting the 
 remaining installment payments as of the date on which the 
 previous installment payment was paid and computed from the date 
 on which the previous installment payment was paid to the date 
 of payment for the current installment payment. 

    To the extent that the commissioner of commerce deems it to 
 be necessary or practical, the commissioner may specify and 
 issue procedures, forms or mathematical tables for use in 
 performing the calculations required pursuant to this 
 subdivision.  

    Subd. 8a.    Purchase of annuity contracts.  A relief 
 association providing a lump-sum service pension, if the 
 governing articles of incorporation or bylaws so provide, may 
 purchase an annuity contract on behalf of a retiring member in 
 an amount equal to the service pension otherwise payable at the 
 request of the person and in place of a direct payment to the 
 person.  The annuity contract must be purchased from an 
 insurance carrier licensed to do business in this state and 
 approved for this product by the commerce commissioner under 
 section 60A.40.  

    Subd. 8b.    Transfer to individual retirement account.  
 A relief association that is a qualified pension plan under 
 section 401(a) of the federal Internal Revenue Code, as amended, 
 and that provides a lump sum service pension, at the written 
 request of a retiring member, may directly transfer the eligible 
 member's lump sum pension to the member's individual retirement 
 account under section 408(a) of the federal Internal Revenue 
 Code, as amended. 

    Subd. 9.    Limitation on ancillary benefits.  Any 
 relief association, including any volunteer firefighters relief 
 association governed by section 69.77 or any volunteer 
 firefighters division of a relief association governed by 
 chapter 424, may only pay ancillary benefits which would 
 constitute an authorized disbursement as specified in section 
 424A.05 subject to the following limitations: 

    (a) With respect to a relief association in which governing 
 bylaws provide for a lump sum service pension to a retiring 
 member, no ancillary benefit may be paid to any former member or 
 paid to any person on behalf of any former member after the 
 former member (1) terminates active service with the fire 
 department and active membership in the relief association; and 
 (2) commences receipt of a service pension as authorized 
 pursuant to this section; and 

    (b) With respect to any relief association, no ancillary 
 benefit paid or payable to any member, to any former member, or 
 to any person on behalf of any member or former member, may 
 exceed in amount the total earned service pension of the member 
 or former member.  The total earned service pension shall be 
 calculated using the service pension amount specified in the 
 bylaws of the relief association and the years of service 
 credited to the member or former member.  The years of service 
 shall be determined as of (1) the date the member or former 
 member became entitled to the ancillary benefit; or (2) the date 
 the member or former member died entitling a survivor or the 
 estate of the member or former member to an ancillary benefit.  
 The ancillary benefit shall be calculated (1) without regard to 
 whether the member or former member had attained the minimum 
 amount of service and membership credit specified in the 
 governing bylaws; and (2) without regard to the percentage 
 amounts specified in subdivision 2; except that the bylaws of 
 any relief association may provide for the payment of a survivor 
 benefit in an amount not to exceed five times the yearly service 
 pension amount specified in the bylaws on behalf of any member 
 who dies before having performed five years of active service in 
 the fire department with which the relief association is 
 affiliated. 

    Subd. 9a.    Postretirement increases.  Notwithstanding 
 any provision of general or special law to the contrary, a 
 relief association paying a monthly service pension may provide 
 a postretirement increase to retired members and ancillary 
 benefit recipients of the relief association if (1) the relief 
 association adopts an appropriate bylaw amendment; and (2) the 
 bylaw amendment is approved by the municipality pursuant to 
 subdivision 10 and section 69.773, subdivision 6.  The 
 postretirement increase shall be applicable only to retired 
 members and ancillary benefit recipients receiving a service 
 pension or ancillary benefit as of the effective date of the 
 bylaw amendment.  The authority to provide a postretirement 
 increase to retired members and ancillary benefit recipients of 
 a relief association contained in this subdivision shall 
 supersede any prior special law authorization relating to the 
 provision of postretirement increases.  

    Subd. 10.    Local approval of bylaw amendments; filing 
 requirements.  (a) Each relief association to which this 
 section applies shall file a revised copy of its governing 
 bylaws with the state auditor upon the adoption of any amendment 
 to its governing bylaws by the relief association or upon the 
 approval of any amendment to its governing bylaws granted by the 
 governing body of each municipality served by the fire 
 department to which the relief association is directly 
 associated.  Failure of the relief association to file a copy of 
 the bylaws or any bylaw amendments with the state auditor shall 
 disqualify the municipality from the distribution of any future 
 fire state aid until this filing requirement has been completed. 

    (b) If the special fund of the relief association does not 
 have a surplus over full funding pursuant to section 69.772, 
 subdivision 3, clause (2), subclause (e), or 69.773, subdivision 
 4, and if the municipality is required to provide financial 
 support to the special fund of the relief association pursuant 
 to section 69.772 or 69.773, no bylaw amendment which would 
 affect the amount of, the manner of payment of, or the 
 conditions for qualification for service pensions or ancillary 
 benefits or disbursements other than administrative expenses 
 authorized pursuant to section 69.80 payable from the special 
 fund of the relief association shall be effective until it has 
 been ratified by the governing body or bodies of the appropriate 
 municipalities.  If the municipality is not required to provide 
 financial support to the special fund pursuant to this section, 
 the relief association may adopt or amend without municipal 
 ratification its articles of incorporation or bylaws which 
 increase or otherwise affect the service pensions or ancillary 
 benefits payable from the special fund so long as the changes do 
 not cause the amount of the resulting increase in the accrued 
 liability of the special fund to exceed 90 percent of the amount 
 of the prior surplus over full funding and the changes do not 
 result in the financial requirements of the special fund 
 exceeding the expected amount of the future fire state aid to be 
 received by the relief association.  

    (c) If the relief association pays only a lump sum pension, 
 the financial requirements are to be determined by the board of 
 trustees following the preparation of an estimate of the 
 expected increase in the accrued liability and annual accruing 
 liability of the relief association attributable to the change.  
 If the relief association pays a monthly benefit service 
 pension, the financial requirements are to be determined by the 
 board of trustees following either an updated actuarial 
 valuation including the proposed change or an estimate of the 
 expected actuarial impact of the proposed change prepared by the 
 actuary of the relief association.  If a relief association 
 adopts or amends its articles of incorporation or bylaws without 
 municipal ratification pursuant to this subdivision, and, 
 subsequent to the amendment or adoption, the financial 
 requirements of the special fund pursuant to this section are 
 such so as to require financial support from the municipality, 
 the provision which was implemented without municipal 
 ratification shall no longer be effective without municipal 
 ratification, and any service pensions or ancillary benefits 
 payable after that date shall be paid only in accordance with 
 the articles of incorporation or bylaws as amended or adopted 
 with municipal ratification.  

    Subd. 11.    Distribution of assets upon dissolution in 
 certain cases.  If the fire department which is associated 
 with a relief association is dissolved or eliminated by action 
 of the governing body of the municipality in which the fire 
 department is located, the relief association shall distribute 
 its assets and be dissolved in the following manner:  

    (1) Within six months after the dissolution of the fire 
 department, the board of trustees of the relief association 
 shall convert all of the assets of the relief association to 
 cash or negotiable instruments.  

    (2) The board shall then determine and pay all of the legal 
 obligations of the association, including the costs related to 
 dissolution of the corporate existence of the association, but 
 excluding pension obligations to members.  

    (3) After payment of the legal obligations of the 
 association, the board shall determine the pro rata share of 
 each member of the association.  The pro rata share shall be 
 that portion of the remaining assets of the association based on 
 the proportion which the months of active service performed in 
 the associated fire department bears to the total number of 
 months of active service which have been performed in the 
 associated fire department by all of the persons who are then 
 members of the relief association.  At the time of dissolution 
 of the corporation, each member shall be paid the member's pro 
 rata share.  

    Subd. 12.    Transfer of service credit to new district. 
  Notwithstanding the requirements of subdivision 1 or any 
 other law, a member of a fire department which is disbanded upon 
 formation of a fire district to serve substantially the same 
 geographic area, who serves as an active firefighter with the 
 new district fire department, and is a member of the district 
 firefighters' relief association shall be entitled to a 
 nonforfeitable service pension from the new relief association 
 upon completion of a combined total of 20 years active service 
 in the disbanded and the new departments.  The amount of the 
 service pension shall be based upon years of service in the new 
 department only, and shall be in an amount equal to the accrued 
 liability for the appropriate years of service calculated in 
 accordance with section 69.772, subdivision 2. 

    Subd. 13.    Combined service pensions.  If the articles 
 of incorporation or bylaws of the associations so provide, a 
 volunteer firefighter with total service credit of ten years or 
 more, if every affected relief association does not require only 
 a five-year service vesting requirement, or five years or more, 
 if every affected relief association requires only a five-year 
 service vesting requirement, as a member of two or more relief 
 associations is entitled, when otherwise qualified, to a 
 prorated service pension from each association in which the 
 member has one year or more of service credit.  The prorated 
 service pension must be based on the service pension amount in 
 effect for the relief association on the date volunteer 
 firefighting services covered by that relief association 
 terminate.  To receive a service pension under this subdivision, 
 the firefighter must become a member of the second or succeeding 
 association and give notice of membership to the prior 
 association within two years of termination of active service 
 with the prior association.  The notice must be attested to by 
 the association secretary. 

    HIST: 1979 c 201 s 12; 1980 c 607 art 15 s 11; 1981 c 224 s 
 208,209,274; 1982 c 421 s 3; 1982 c 460 s 8; 1982 c 465 s 7,8; 
 1983 c 219 s 6; 1983 c 286 s 21; 1983 c 289 s 114 subd 1; 1984 c 
 547 s 15; 1984 c 655 art 1 s 92; 1985 c 261 s 8-10; 1Sp1985 c 7 
 s 35; 1987 c 372 art 1 s 22; 1988 c 668 s 9; 1988 c 709 art 7 s 
 2,3; 1989 c 319 art 10 s 3-6; 1990 c 570 art 14 s 1; 1993 c 244 
 art 1 s 1-3; art 3 s 1; 1996 c 438 art 8 s 4; 1997 c 203 art 6 s 
 92; 1997 c 241 art 6 s 1; art 10 s 5 

     424A.03 Uniformity of volunteer firefighter service 
  pension and retirement benefits. 

    Subdivision 1.    Limitation on nonuniformity of pensions. 
  Every partially salaried and partially volunteer 
 firefighters' relief association shall provide service pensions 
 to volunteer firefighter members based on the years of service 
 of the members not on the compensation paid to the members for 
 firefighting services.  Each relief association shall provide 
 service pensions to salaried members as set forth in chapter 424 
 and applicable special laws. 

    Subd. 2.    Penalties for violations.  Any municipality 
 which has a fire department to which a relief association which 
 violates the provisions of subdivision 1 is directly associated 
 or which contracts with an independent nonprofit firefighting 
 corporation of which a relief association which violates the 
 provisions of subdivision 1 is a subsidiary shall not be 
 included in the apportionment of fire state aid by the 
 commissioner of commerce to the applicable county auditor 
 pursuant to section 69.021, subdivision 6, and shall not be 
 included in the apportionment of fire state aid by the county 
 auditor to the various municipalities pursuant to section 
 69.021, subdivision 7.  

    Subd. 3.    Exception to application of limitation and 
 penalty.  The limitation provided for in subdivision 1 shall 
 not apply to any relief association which prior to January 1, 
 1957, had established a definite service pension formula for 
 members of the partially salaried and partially volunteer 
 firefighters' relief association who are regularly employed 
 firefighters.  

    HIST: 1979 c 201 s 13; 1983 c 219 s 7; 1983 c 289 s 114 subd 
 1; 1984 c 655 art 1 s 92 

     424A.04 Volunteer relief associations; board of trustees.

    Subdivision 1.    Membership.  Every relief association 
 directly associated with a municipal fire department shall be 
 managed by a board of trustees consisting of nine members.  Six 
 trustees shall be elected from the membership of the relief 
 association and three trustees shall be drawn from the officials 
 of the municipalities served by the fire department to which the 
 relief association is directly associated.  The bylaws of a 
 relief association may provide that one of the six trustees 
 elected from the relief association may be a retired member 
 receiving a monthly pension who is elected by the membership of 
 the relief association.  The three ex officio trustees shall be 
 the mayor, the clerk, clerk-treasurer or finance director, and 
 the chief of the municipal fire department.  

    Every relief association that is a subsidiary of an 
 independent nonprofit firefighting corporation shall be managed 
 by a board of trustees consisting of ten members.  Six trustees 
 shall be elected from the membership of the relief association, 
 three trustees shall be drawn from the officials of the 
 municipalities served by the fire department to which the relief 
 association is directly associated, and one trustee shall be the 
 fire chief.  The bylaws of a relief association may provide that 
 one of the six trustees elected from the relief association may 
 be a retired member receiving a monthly pension who is elected 
 by the membership of the relief association.  The three ex 
 officio trustees who are the elected officials shall be selected 
 as follows:  

    (1) if only one municipality contracts with the independent 
 nonprofit firefighting corporation, the ex officio trustees 
 shall be three elected officials of the contracting municipality 
 who are designated by the governing body of the municipality; 

    (2) if two municipalities contract with the independent 
 nonprofit firefighting corporation, the ex officio trustees 
 shall be two elected officials of the largest municipality in 
 population and one elected official of the next largest 
 municipality in population who are designated by the governing 
 bodies of the applicable municipalities; or 

    (3) if three or more municipalities contract with the 
 independent nonprofit corporation, the ex officio trustees shall 
 be one elected official of each of the three largest 
 municipalities in population who are designated by the governing 
 bodies of the applicable municipalities.  An ex officio trustee 
 shall have all the rights and duties accorded to any other 
 trustee except the right to be an officer of the board of 
 trustees.  A board shall have at least three officers, which 
 shall be a president, a secretary and a treasurer.  These 
 officers shall be elected from among the elected trustees by 
 either the full board of trustees or by the membership, as 
 specified in the bylaws, and in no event shall any trustee hold 
 more than one officer position at any one time.  The terms of 
 the elected trustees and of the officers of the board shall be 
 specified in the bylaws of the relief association, but shall not 
 exceed three years.  If the term of the elected trustees exceeds 
 one year, the election of the various trustees elected from the 
 membership shall initially and shall thereafter continue to be 
 staggered on as equal a basis as is practicable. 

    Subd. 2.    Fiduciary duty.  The board of trustees shall 
 undertake their activities consistent with chapter 356A.  

    HIST: 1979 c 201 s 14; 1980 c 607 art 15 s 12; 1981 c 224 s 
 210; 1983 c 219 s 8; 1989 c 319 art 8 s 27 

     424A.05 Relief association special fund. 

    Subdivision 1.    Establishment of special fund.  Every 
 relief association shall establish and maintain a special fund 
 within the relief association. 

    Subd. 2.    Special fund assets and revenues.  The 
 special fund shall be credited with all fire state aid moneys 
 received pursuant to sections 69.011 to 69.051, all taxes levied 
 by or other revenues received from the municipality pursuant to 
 sections 69.771 to 69.776 or any applicable special law 
 requiring municipal support for the relief association, any 
 moneys or property donated, given, granted or devised by any 
 person which is specified for use for the support of the special 
 fund and any interest earned upon the assets of the special 
 fund.  The treasurer of the relief association shall be the 
 custodian of the assets of the special fund and shall be the 
 recipient on behalf of the special fund of all revenues payable 
 to the special fund.  The treasurer shall maintain adequate 
 records documenting any transaction involving the assets or the 
 revenues of the special fund.  These records and the bylaws of 
 the relief association shall be public and shall be open for 
 inspection by any member of the relief association, any officer 
 or employee of the state or the municipality, or any member of 
 the public, at reasonable times and places.  

    Subd. 3.    Authorized disbursements from the special 
 fund.  Disbursements from the special fund shall not be made 
 for any purpose other than one of the following: 

    (1) For the payment of service pensions to retired members 
 of the relief association if authorized and paid pursuant to law 
 and the bylaws governing the relief association; 

    (2) For the payment of temporary or permanent disability 
 benefits to disabled members of the relief association if 
 authorized and paid pursuant to law and specified in amount in 
 the bylaws governing the relief association; 

    (3) For the payment of survivor benefits to surviving 
 spouses and surviving children of deceased members of the relief 
 association if authorized by and paid pursuant to law and 
 specified in amount in the bylaws governing the relief 
 association; 

    (4) For the payment of any funeral benefits to the 
 surviving spouse, or if no surviving spouse, the estate, of the 
 deceased member of the relief association if authorized by law 
 and specified in amount in the bylaws governing the relief 
 association; 

    (5) For the payment of the fees, dues and assessments to 
 the Minnesota state fire department association and to the state 
 volunteer firefighters' benefit association in order to entitle 
 relief association members to membership in and the benefits of 
 these state associations; and 

    (6) For the payment of administrative expenses of the 
 relief association as authorized pursuant to section 69.80. 

    Subd. 4.    Investments of assets of the special fund.  
 The assets of the special fund shall be invested only in 
 securities authorized by section 69.775.  

    HIST: 1979 c 201 s 15; 1981 c 224 s 211; 1981 c 224 s 274; 
 1983 c 219 s 9 

     424A.06 Relief association general fund. 

    Subdivision 1.    Establishment of general fund.  Any 
 volunteer firefighters' relief association may establish and 
 maintain a general fund within the relief association.  

    Subd. 2.    General fund assets and revenues.  To the 
 general fund, if established, shall be credited all moneys 
 received from dues, fines, initiation fees, entertainment 
 revenues and any moneys or property donated, given, granted or 
 devised by any person, for unspecified uses.  The treasurer of 
 the relief association shall be the custodian of the assets of 
 the general fund and shall be the recipient on behalf of the 
 general fund of all revenues payable to the general fund.  The 
 treasurer shall maintain adequate records documenting any 
 transaction involving the assets or the revenues of the general 
 fund.  These records shall be open for inspection by any member 
 of the relief association at reasonable times and places. 

    Subd. 3.    Authorized disbursements from the general 
 fund.  Disbursements from the general fund may be made for any 
 purpose authorized by either the articles of incorporation or 
 bylaws of the relief association.  

    Subd. 4.    Investment of assets of the general fund.  
 The assets of the general fund may be invested in any securities 
 authorized by the bylaws of the relief association and may be 
 certified for investment by the state board of investment in 
 fixed income pools or in a separately managed account at the 
 discretion of the state board of investment as provided in 
 section 11A.14. 

    HIST: 1979 c 201 s 16; 1980 c 509 s 163; 1993 c 300 s 13 

     424A.07 Nonprofit firefighting corporations; 
  establishment of relief associations. 

    Prior to paying any service pensions or retirement benefits 
 pursuant to section 424A.02 or becoming entitled to receive any 
 amounts of fire state aid upon transmittal from a contracting 
 municipality pursuant to section 69.031, subdivision 5, a 
 nonprofit firefighting corporation shall establish a relief 
 association governed by this chapter.  

    HIST: 1979 c 201 s 17; 1981 c 224 s 274 

     424A.08 Municipality without relief association; 
  authorized disbursements. 

    Any qualified municipality which is entitled to receive 
 fire state aid but which has no volunteer firefighters' relief 
 association directly associated with its fire department shall 
 deposit the fire state aid in a special account in the municipal 
 treasury.  Disbursement from the special account shall not be 
 made for any purpose except:  

    (1) Payment of the fees, dues and assessments to the 
 Minnesota state fire department association and to the state 
 volunteer firefighters' benefit association in order to entitle 
 its firefighters to membership in and the benefits of these 
 state associations; 

    (2) Payment of the cost of purchasing and maintaining 
 needed equipment for the fire department; and 

    (3) Payment of the cost for construction, acquisition, 
 repair and maintenance of buildings or other premises to house 
 the fire department. 

    HIST: 1979 c 201 s 18; 1983 c 219 s 10 

     424A.09 Application to certain relief associations. 

    This chapter shall supersede any special law applicable to 
 any municipal volunteer firefighters' relief association or 
 independent nonprofit firefighting corporation specifically 
 authorizing the relief association or nonprofit firefighting 
 corporation to exceed the service pension limitations contained 
 in Minnesota Statutes 1978, sections 69.06 and 69.691.  Any 
 relief association which amended its bylaws to provide for a 
 full pro rata service pension amount at the specified retirement 
 age with 15 years service credit or 75 percent of the pro rata 
 service pension amount at the specified retirement age with ten 
 years of service pursuant to Minnesota Statutes 1978, section 
 69.06 may continue to provide the specified service pension 
 amounts at the applicable years of credited service to any 
 member who has credit for at least ten or 15 years, whichever is 
 the applicable minimum service period specified in the bylaws 
 governing the relief association, on or before December 31, 1979 
 notwithstanding section 424A.02.  

    HIST: 1979 c 201 s 19; 1981 c 224 s 274 

     424A.10 State supplemental benefit; volunteer 
  firefighters. 

    Subdivision 1.    Definition.  For purposes of this 
 section, "qualified recipient" means an individual who receives 
 a lump sum distribution of pension or retirement benefits from a 
 firefighters' relief association for service performed as a 
 volunteer firefighter. 

    Subd. 2.    Payment of supplemental benefit.  Upon the 
 payment by a firefighters' relief association of a lump sum 
 distribution to a qualified recipient, the association must pay 
 a supplemental benefit to the qualified recipient.  
 Notwithstanding any law to the contrary, the relief association 
 may pay the supplemental benefit out of its special fund.  The 
 amount of this benefit equals ten percent of the regular lump 
 sum distribution that is paid on the basis of service as a 
 volunteer firefighter.  In no case may the amount of the 
 supplemental benefit exceed $1,000. 

    Subd. 3.    State reimbursement.  By February 15 of each 
 year, the relief association shall apply to the commissioner of 
 revenue for state reimbursement of the amount of supplemental 
 benefits paid under subdivision 2 during the preceding calendar 
 year.  By March 15 the commissioner shall reimburse the relief 
 association for the amount of the supplemental benefits paid to 
 qualified recipients.  The commissioner of revenue shall 
 prescribe the form of and supporting information that must be 
 supplied as part of the application for state reimbursement.  
 The reimbursement payment must be deposited in the special fund 
 of the relief association.  A sum sufficient to make the 
 payments is appropriated from the general fund to the 
 commissioner of revenue. 

    Subd. 4.    In lieu of income tax exclusion.  The 
 supplemental benefit provided by this section is in lieu of the 
 state income tax exclusion for lump sum distributions of 
 retirement benefits paid to volunteer firefighters.  If the law 
 is modified to exclude or exempt volunteer firefighters' lump 
 sum distributions from state income taxation, the supplemental 
 benefits under this section may no longer be paid beginning with 
 the first calendar year in which the exclusion or exemption is 
 effective.  This subdivision does not apply to exemption of all 
 or part of a lump sum distribution under section 290.032 or 
 290.0802. 

    HIST: 1988 c 719 art 19 s 22; 1989 c 319 art 10 s 7; 1993 c 
 307 art 9 s 1