2007 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 permanently
cease to perform fire suppression duties with a particular volunteer fire department, to permanently
cease to perform fire prevention duties, to permanently cease to supervise fire suppression duties,
and to permanently cease to supervise fire prevention duties.
    Subd. 10. Volunteer firefighter. "Volunteer firefighter" means a person who:
(1) was a member of the applicable fire department or the firefighting corporation and a
member of the relief association on July 1, 2006; or
(2) became a member of the applicable fire department or the firefighting corporation and is
eligible for membership in the applicable relief association after June 30, 2006, and
(i) is engaged in providing emergency response services or delivering fire education or
prevention services as a member of a municipal fire department, a joint powers entity fire
department, or an independent nonprofit firefighting corporation;
(ii) is trained in or is qualified to provide fire suppression duties or to provide fire prevention
duties under subdivision 8; and
(iii) meets any other minimum firefighter and service standards established by the fire
department or firefighting corporation or specified in the articles of incorporation or bylaws of
the relief association.
History: 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; 2000 c 461 art 15 s 4; 2006 c 271 art 13 s 2
NOTE: Subdivision 10 as added by Laws 2006, chapter 271, article 13, section 2, is effective
January 1, 2008. Laws 2006, chapter 271, article 13, section 7.

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 363A.25, it shall be a good and valid defense to a complaint or action
brought under chapter 363A 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.
History: 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, unless:
(1) the person is employed subsequent to retirement by the municipality or the independent
nonprofit firefighting corporation, whichever applies, to perform duties within the municipal fire
department or corporation on a full-time basis;
(2) the governing body of the municipality or of the corporation has filed its determination
with the board of trustees of the relief association that the person's experience with and service to
the fire department in that person's full-time capacity would be difficult to replace; and
(3) the bylaws of the relief association were amended to provide for the payment of a service
pension or disability benefit for such full-time employees.
    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.
For a volunteer firefighter relief association that pays a lump-sum service pension, a monthly
benefit service pension, or a lump-sum service pension or a monthly benefit service pension as
alternative benefit forms, 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

For a volunteer firefighter relief association that pays a defined contribution service pension,
the nonforfeitable percentage of pension amounts are as follows:

	Completed Years of Service		Nonforfeitable Percentage of Pension Amount
	5		40 percent
	6		52 percent
	7		64 percent
	8		76 percent
	9		88 percent
	10	and thereafter	100 percent

    Subd. 3. Flexible service pension maximums. (a) Annually on or before August 1 as part
of the certification of the financial requirements and minimum municipal obligation determined
under section 69.772, subdivision 4, or 69.773, subdivision 5, as applicable, 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 under section 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 greater of the service
pension amount provided for in the bylaws on the date of the calculation of the average amount
of the available financing per active covered firefighter or the maximum service pension figure
corresponding to the average amount of available financing per active covered firefighter:

Minimum Average Amount of Available Financing per Firefighter		Maximum Service Pension Amount Payable per Month for Each Year of Service
$ ...		$ .25
41		.50
81		1.00
122		1.50
162		2.00
203		2.50
243		3.00
284		3.50
324		4.00
365		4.50
405		5.00
486		6.00
567		7.00
648		8.00
729		9.00
810		10.00
891		11.00
972		12.00
1053		13.00
1134		14.00
1215		15.00
1296		16.00
1377		17.00
1458		18.00
1539		19.00
1620		20.00
1701		21.00
1782		22.00
1823		22.50
1863		23.00
1944		24.00
2025		25.00
2106		26.00
2187		27.00
2268		28.00
2349		29.00
2430		30.00
2511		31.00
2592		32.00
2673		33.00
2754		34.00
2834		35.00
2916		36.00
2997		37.00
3078		38.00
3159		39.00
3240		40.00
3321		41.00
3402		42.00
3483		43.00
3564		44.00
3645		45.00
3726		46.00
3807		47.00
3888		48.00
3969		49.00
4050		50.00
4131		51.00
4212		52.00
4293		53.00
4374		54.00
4455		55.00
4536		56.00

(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 greater of the service pension
amount provided for in the bylaws on the date of the calculation of the average amount of
the available financing per active covered firefighter or 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 of Available Financing per Firefighter		Maximum Lump Sum Service Pension Amount Payable 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
3021		5600
3075		5700
3129		5800
3183		5900
3237		6000
3291		6100
3345		6200
3399		6300
3453		6400
3507		6500
3561		6600
3615		6700
3669		6800
3723		6900
3777		7000
3831		7100
3885		7200
3939		7300
3993		7400
4047		7500

(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
the largest applicable flexible service pension maximum amount even if the amount of available
financing per firefighter is greater than the financing amount associated with the largest applicable
flexible service pension maximum.
    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. (a) 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.
(b) An individual account for each firefighter who is a member of the relief association must
be established. To each individual active member account must be credited an equal share of:
(1) any amounts of fire state aid received by the relief association; (2) 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 (3) any amounts equal to the share of the assets
of the special fund to the credit of: (i) any former member who terminated active service with
the fire department to which the relief association is associated before 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 (ii) any retired member who retired
before obtaining a full nonforfeitable interest in the amounts credited to the individual member
account under subdivision 2 and any applicable provision of the bylaws of the relief association.
In addition, any investment return on the assets of the special fund must be credited in proportion
to the share of the assets of the special fund to the credit of each individual active member account
through the date on which the investment return is recognized by and credited to the special fund.
(c) At the time of retirement under subdivision 1 and any applicable provision of the bylaws
of the relief association, a retiring member is 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 under
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 518A.53. 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) A member of a relief association 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.
(b) The deferred service pension is payable 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.
(c) A relief association that provides a lump sum service pension governed by subdivision
3 may, when its governing bylaws so provide, pay interest on the deferred lump sum service
pension during the period of deferral. If provided for in the bylaws, interest must be paid in one
of the following manners:
(1) at the investment performance rate actually earned on that portion of the assets if the
deferred benefit amount is invested by the relief association in a separate account established and
maintained by the relief association or if the deferred benefit amount is invested in a separate
investment vehicle held by the relief association;
(2) at an interest rate of up to five percent, compounded annually, as set by the board of
directors and approved as provided in subdivision 10; or
(3) at a rate equal to the actual time weighted total rate of return investment performance of
the special fund as reported by the Office of the State Auditor under section 356.219, up to five
percent, compounded annually, and applied consistently for all deferred service pensioners.
A relief association may not use the method provided for in clause (3), until it has modified
its bylaws to be consistent with that clause.
(d) Interest under paragraph (c), clause (2) or (3), is payable from the first day of the
month next following the date on which the municipality has approved the deferred service
pension interest rate established by the board of trustees or from the first day of the month next
following the date on which the member separated from active fire department service and relief
association membership, whichever is later, to the last day of the month immediately before the
month in which the deferred member becomes eligible to begin receipt of the service pension
and applies for the deferred service pension.
(e) A relief association that provides a defined contribution service pension may, if its
governing bylaws so provide, credit interest or additional investment performance on the deferred
lump sum service pension during the period of deferral. If provided for in the bylaws, the interest
must be paid in one of the manners specified in paragraph (c) or alternatively the relief association
may credit any investment return on the assets of the special fund of the defined contribution
volunteer firefighter relief association in proportion to the share of the assets of the special fund to
the credit of each individual deferred member account through the date on which the investment
return is recognized by and credited to the special fund.
(f) For a deferred service pension that is transferred to a separate account established and
maintained by the relief association or separate investment vehicle held by the relief association,
the deferred member bears the full investment risk subsequent to transfer and in calculating the
accrued liability of the volunteer firefighters relief association that pays a lump sum service
pension, the accrued liability for deferred service pensions is equal to the separate relief
association account balance or the fair market value of the separate investment vehicle held by
the relief association.
(g) The deferred service pension is governed by and must be calculated under the general
statute, special law, relief association articles of incorporation, and 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 the applicable retiring member
or, following the death of the active member, at the written request of the deceased member's
surviving spouse, may directly transfer the eligible member's lump sum pension or the death,
funeral, or survivor benefit attributable to the member, whichever applies, to the requesting
person'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
requirements or limitations:
(1) 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 (i) terminates
active service with the fire department and active membership in the relief association; and (ii)
commences receipt of a service pension as authorized under this section; and
(2) 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 must 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 must be determined as of (i) the date the member or former member became entitled to
the ancillary benefit; or (ii) 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 must
be calculated (i) 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 (ii)
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. 9b. Repayment of service pension in certain instances. If a retired volunteer
firefighter does not permanently separate from active firefighting service as required by
subdivision 1 and section 424A.001, subdivision 9, by resuming active service as a firefighter in
the same volunteer fire department or as a person in charge of firefighters in the same volunteer fire
department, no additional service pension amount is payable to the person, no additional service
is creditable to the person, and the person shall repay any previously received service pension.
    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.[Repealed, 2000 c 461 art 16 s 13]
    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. (a) If the articles of incorporation or bylaws of the
associations so provide, a volunteer firefighter with credit for service as an active firefighter
in more than one volunteer firefighters relief association is entitled, when the applicable
requirements of paragraph (b) are met and when otherwise qualified, to a prorated service credit
from each relief association.
(b) A volunteer firefighter receiving a prorated service pension under this subdivision must
have 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 otherwise qualified. The member must have one year or more of service credit
in each relief association. The prorated service pension must be based on the service pension
amount in effect for the relief association on the date on which active 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 must give notice of membership to the prior association within two years of the date of
termination of active service with the prior association. The notice must be attested to by the
second or subsequent association secretary.
History: 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;
2000 c 461 art 15 s 5-9; 2002 c 392 art 13 s 1; 1Sp2003 c 12 art 12 s 1; 2004 c 267 art 14 s 1,2;
2005 c 164 s 29; 1Sp2005 c 7 s 28; 1Sp2005 c 8 art 9 s 10-12; 2006 c 271 art 13 s 3

NOTE: The deferred service pension interest crediting procedure of subdivision 7, paragraph
(c), clause (3), expires on December 31, 2008. Laws 2004, chapter 267, article 14, section 5,
paragraph (d).

424A.021 CREDIT FOR BREAK IN SERVICE TO PROVIDE UNIFORMED SERVICE.
    Subdivision 1. Authorization. Subject to restrictions stated in this section, a volunteer
firefighter who is absent from firefighting service due to service in the uniformed services,
as defined in United States Code, title 38, section 4303(13), may obtain service credit if the
relief association is a defined benefit plan or an allocation of any fire state aid, any municipal
contributions, and any investment return received by the relief association if the relief association
is a defined contribution plan for the period of the uniformed service, not to exceed five years,
unless a longer period is required under United States Code, title 38, section 4312.
    Subd. 2. Limitations. (a) To be eligible for service credit or an investment return allocation
under this section, the volunteer firefighter must return to firefighting service with coverage by
the same relief association or by the successor to that relief association upon discharge from
service in the uniformed service within the time frame required in United States Code, title
38, section 4312(e).
(b) Service credit or an investment return allocation is not authorized if the firefighter
separates from uniformed service with a dishonorable or bad conduct discharge or under other
than honorable conditions.
(c) Service credit or an investment return allocation is not authorized if the firefighter fails
to provide notice to the fire department that the individual is leaving to provide service in the
uniformed service, unless it is not feasible to provide that notice due to the emergency nature
of the situation.
History: 1Sp2005 c 8 art 9 s 13

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.
History: 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. (a) A relief association that is directly associated with a
municipal fire department must be managed by a board of trustees consisting of nine members.
Six trustees must be elected from the membership of the relief association and three trustees
must 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 which provides
a monthly benefit service pension may provide that one of the six trustees elected from the
relief association membership may be a retired member receiving a monthly pension who is
elected by the membership of the relief association. The three municipal trustees must be one
elected municipal official and one elected or appointed municipal official who are designated
as municipal representatives by the municipal governing board annually and the chief of the
municipal fire department.
(b) A relief association that is a subsidiary of an independent nonprofit firefighting
corporation must be managed by a board of trustees consisting of nine members. Six trustees must
be elected from the membership of the relief association, two trustees must 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 serving with the independent nonprofit
firefighting corporation. The bylaws of a relief association may provide that one of the six trustees
elected from the relief association membership may be a retired member receiving a monthly
pension who is elected by the membership of the relief association. The two municipal trustees
must be elected or appointed municipal officials, selected as follows:
(1) if only one municipality contracts with the independent nonprofit firefighting corporation,
the municipal trustees must be two officials of the contracting municipality who are designated
annually by the governing body of the municipality; or
(2) if two or more municipalities contract with the independent nonprofit corporation, the
municipal trustees must be one official from each of the two largest municipalities in population
who are designated annually by the governing bodies of the applicable municipalities.
(c) The municipal trustees for a relief association that is directly associated with a fire
department operated as or by a joint powers entity must be designated annually by the joint
powers board. The municipal trustees for a relief association that is directly associated with a fire
department service area township must be designated by the township board.
(d) If a relief association lacks the municipal board members provided for in paragraph
(a), (b), or (c) because the fire department is not located in or associated with an organized
municipality, joint powers entity, or township, the municipal board members must be appointed
from the fire department service area by the board of commissioners of the applicable county.
(e) The term of these appointed municipal board members is one year or until the person's
successor is qualified, whichever is later.
(f) A municipal trustee under paragraph (a), (b), (c), or (d) has all the rights and duties
accorded to any other trustee, except the right to be an officer of the relief association board
of trustees.
(g) A board must have at least three officers, who are a president, a secretary and a treasurer.
These officers must be elected from among the elected trustees by either the full board of trustees
or by the membership, as specified in the bylaws. In no event may 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
must be specified in the bylaws of the relief association, but may not exceed three years. If the
term of the elected trustees exceeds one year, the election of the various trustees elected from the
membership must 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.
    Subd. 3. Conditions on relief association consultants. (a) If a volunteer firefighter relief
association hires or contracts with a consultant to provide legal or financial advice, the association
shall obtain and the consultant shall provide a copy of the consultant's certificate of insurance.
(b) A consultant is any person who is employed under contract to provide legal or financial
advice and who is or who represents to the volunteer firefighter relief association that the person is:
(1) an actuary;
(2) a licensed public accountant or a certified public accountant;
(3) an attorney;
(4) an investment advisor or manager, or an investment counselor;
(5) an investment advisor or manager selection consultant;
(6) a pension benefit design advisor or consultant; or
(7) any other financial consultant.
History: 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; 2000 c 461 art 15 s 10; 1Sp2001 c 10 art 16 s 1; 1Sp2005 c 8 art 9 s 14

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. (a) Disbursements from the
special fund are not permitted to 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 under 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, or if
none, to designated beneficiaries, of deceased members of the relief association, and if survivors
and if no designated beneficiary, for the payment of a death benefit to the estate of the deceased
active firefighter, 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, to the Minnesota Area Relief Association Coalition, and to the state Volunteer
Firefighters Benefit Association in order to entitle relief association members to membership in
and the benefits of these associations or organizations; and
(6) for the payment of administrative expenses of the relief association as authorized under
section 69.80.
(b) For purposes of this chapter, a designated beneficiary must be a natural person.
    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.
History: 1979 c 201 s 15; 1981 c 224 s 211; 1981 c 224 s 274; 1983 c 219 s 9; 2000 c 461
art 15 s 11; 2006 c 271 art 13 s 4

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.
History: 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.
History: 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.
History: 1979 c 201 s 18; 1983 c 219 s 10

424A.09 APPLICATION TO CERTAIN RELIEF ASSOCIATIONS.
This chapter supersedes 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 under 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.
History: 1979 c 201 s 19; 1981 c 224 s 274; 2002 c 392 art 1 s 6

424A.10 STATE SUPPLEMENTAL BENEFIT; VOLUNTEER FIREFIGHTERS.
    Subdivision 1. Definitions. For purposes of this section:
    (1) "qualified recipient" means an individual who receives a lump sum distribution of
pension or retirement benefits from a firefighters' relief association for service that the individual
has performed as a volunteer firefighter;
    (2) "survivor of a deceased active or deferred volunteer firefighter" means the legally married
spouse of a deceased volunteer firefighter, or, if none, the surviving minor child or minor children
of a deceased volunteer firefighter;
    (3) "active volunteer firefighter" means a person who regularly renders fire suppression
service for a municipal fire department or an independent nonprofit firefighting corporation, who
has met the statutory and other requirements for relief association membership, and who has been
a fully qualified member of the relief association for at least one month; and
    (4) "deferred volunteer firefighter" means a former active volunteer firefighter who terminated
active firefighting service, has sufficient service credit from the applicable relief association to be
entitled to a service pension, but has not applied for or has not received the service pension.
    Subd. 2. Payment of supplemental benefit. (a) 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 must 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 the recipient's
service as a volunteer firefighter. In no case may the amount of the supplemental benefit exceed
$1,000. A supplemental benefit under this paragraph may not be paid to a survivor of a deceased
active or deferred volunteer firefighter in that capacity.
    (b) Upon the payment by a relief association of a lump sum survivor benefit or funeral
benefit to a survivor of a deceased active volunteer firefighter or of a deceased deferred volunteer
firefighter, the association may pay a supplemental survivor benefit to the survivor of the deceased
active or deferred volunteer firefighter from the special fund of the relief association if its articles
of incorporation or bylaws so provide. The amount of the supplemental survivor benefit is 20
percent of the survivor benefit or funeral benefit, but not to exceed $2,000.
    (c) An individual may receive a supplemental benefit under paragraph (a) or under paragraph
(b), but not under both paragraphs with respect to one lump sum volunteer firefighter benefit.
    Subd. 3. State reimbursement. (a) By February 15 of each year, the treasurer of 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 and to survivors of deceased active or deferred volunteer firefighters.
    (b) The commissioner of revenue shall prescribe the form of and supporting information that
must be supplied as part of the application for state reimbursement.
    (c) The reimbursement payment must be deposited in the special fund of the relief
association.
    (d) 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. (a) 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.
(b) 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.
    Subd. 5. Retroactive reimbursement in certain instances. A supplemental survivor
or funeral benefit may be paid by a relief association for the death of an active volunteer
firefighter or of a deferred volunteer firefighter that occurred on or after August 1, 2005, if the
relief association articles of incorporation or bylaws so provide for a supplemental survivor
benefit and for retroactivity.
History: 1988 c 719 art 19 s 22; 1989 c 319 art 10 s 7; 1993 c 307 art 9 s 1; 2006 c 271
art 13 s 5; 2007 c 134 art 10 s 1-3