Bill
SF 5220
The bill standardizes how volunteer firefighters join and fund Minnesota’s statewide retirement plan, clarifying plan types, funding, and conversion rules for DB and DC options.
Statewide volunteer firefighting retirement plan provisions modification
Purpose and scope
- This bill, introduced in the Minnesota Senate, would modify provisions related to the statewide volunteer firefighting retirement plan administered by the Public Employees Retirement Association (PERA).
- It affects how volunteer firefighters may join the plan, how benefits are funded and administered, and the processes for converting between plan types (defined benefit vs. defined contribution) within the lump-sum or monthly divisions, as well as provisions for vesting, service credit, and termination.
Key concepts added or clarified
- Subdivisions define two employment bases for volunteers:
- On-call basis: Volunteer who is paid per call or per hour and has scheduling flexibility.
- Volunteer basis: Volunteer who may be reimbursed for expenses but is not paid per call/hour and has scheduling flexibility.
- Definitions for “volunteer basis” and “on-call basis” help distinguish compensation structures for eligibility and cost/funding considerations.
Main programmatic provisions
- Coverage and plan selection (Sec. 5–9):
- Eligible relief associations, municipalities, or firefighting corporations may elect to cover volunteer firefighters under the statewide retirement plan, with restrictions after December 31, 2026 for certain affiliations that provide a monthly pension.
- Entities pick a plan type: defined benefit (DB) or defined contribution (DC). If DB is chosen, entities choose either lump-sum division or monthly division (monthly division limited after 2026 for certain affiliated relief associations).
- If DC is chosen, affiliated relief associations with a defined benefit must convert as part of joining, and no DC-to-DB conversion is allowed for entities once chosen.
- If monthly division DB is selected, specifics apply to eligibility and timing, with a transition rule tied to relief associations.
- Cost analyses and funding (Sec. 9–10, Sec. 14):
- A cost analysis is required before transferring coverage to the DB monthly division (Sec. 9(a)).
- For monthly division DB transfers, the cost analysis is prepared by the association’s approved actuary and considers current benefit levels, proposed changes, and actuarial assumptions (6% investment return required).
- Biennial funding reports and valuations apply to lump-sum division accounts; these use six percent return with no decrement assumptions and are prepared by an approved actuary (Sec. 4, Sec. 14).
- Annual funding requirements and contributions to fire department accounts in the lump-sum division are calculated and adjusted based on actuarial valuations, state aid, and investment earnings (Sec. 14).
- Transfers to DC plans require reconciliation of accounts; for DB, funding decisions require board and governing body approval within set deadlines (Sec. 11).
- Benefit levels and changes (Sec. 11, Sec. 17–18):
- For lump-sum DB, minimum and maximum benefit levels are specified; DB monthly division benefit levels are tied to the retirement plan document (with a sunset rule for January 1, 2027, for some options).
- A process is established for adjusting benefit levels through cost estimates and approvals by governing bodies, with specific deadlines (e.g., December 1 for approval, otherwise disapproval).
- Vesting and service credit (Sec. 12–13, Sec. 21):
- Annual service credit certification by the fire chief by March 31; challenges to service credit can be heard at the local level, with final determinations not reviewable by PERA or the board.
- Vesting credits include years and months of service for benefit accrual and contributions; deployment of service credit for vesting purposes includes service prior to join dates if certain conditions are met.
- Military service is credited so long as it complies with federal USERRA rules, with the option to certify service credit, subject to limits.
- Departing entities and terminations (Sec. 20–21, Sec. 15, Sec. 22):
- Provisions for departing entities (terminations) to distribute account assets to departing firefighters, with vesting and present-value determinations.
- Termination procedures require orderly vesting, asset valuation, and distribution dates, with lump-sum or direct rollover options.
- Rules for converting away from a DB plan to a DC plan (and prohibition on reversing a conversion) are included.
Administrative and effective-date details
- Effective date: All sections (1–23) become effective the day after final enactment.
- The bill includes detailed procedural deadlines for requests, approvals, cost estimates, and funding actions (e.g., 120-day windows, December 1 filing, January 1 effective dates in various scenarios).
Who would be affected
- Volunteer firefighting entities (relief associations, municipalities, firefighting corporations) and their volunteer firefighters.
- Active versus retired members within the lump-sum and monthly DB divisions, as well as participants in the defined contribution plan.
- Fire chiefs, governing bodies, relief association boards, and the PERA executive director for administrative and funding actions.
Potential impact
- Creates clearer criteria for joining and funding the statewide volunteer firefighting retirement plan.
- Introduces more robust cost analyses and actuarial oversight for DB and DC transitions.
- Establishes explicit deadlines and processes for benefit level changes and for termination/conversion events.
- Aims to ensure funding sufficiency and predictability for participating fire departments while balancing benefits, costs, and employer contributions.
Note on status
- Referred to the State and Local Government committee on 4/27/2026. Status may evolve with future committee actions or amendments.
Compiled from official sources — confirm details with the bill’s official record.
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