www.firecouncil.com
The Firefighter's Pension System
The only open Contributory System. There is no required
employer contribution, only an employee contribution, thus Contributory.
The employer may contribute on the employee's behalf. The main reason
that there is no longer an employer contribution is because as changes
have been made to the Retirement System in the past, there have been
contribution increases to the employees that far exceeded the actual
costs of the changes. The law requires that reductions occur to the
employer's contribution rate. A second reason is that Firefighters
tend to pass away at much younger ages than retirees in other occupations.
Another reason that there have been reductions to contributions is
because our system also provides benefits for volunteer firefighters.
There is little or no compensation for volunteers, so one half the
tax on fire insurance premiums and some life insurance premiums has
been designated to help off set the benefit costs. Fortunately at
this time the tax exceeds the actual needs of the volunteers, although
one major incident could change this. Volunteers who are disabled
or killed in the line of duty qualify for the same benefit that the
least compensated Firefighters from major Utah Fire Departments have.
The other half of the tax is designated for Firefighter training.
In part due to the yearly review and possible changes to the Retirement
System, there is constant scrutiny and legislative action that affects
costs and benefits. Firefighters are constantly working to maintain
the current level of benefits. The main mechanism available to us
the Joint Council of Fire Service Organizations. This way we can have
a united and organized voice that is already recognized by the Legislature.
The Firefighters have a representative who is elected
to advise the Retirement Board on pension matters. To make sure that
this person (at this time it is Marty Peterson of Salt Lake City Fire)
actually best represents the interests of the entire Fire Service
and retirees, the person reports to the Fire Council. For more information
on the Pension Systems try www.urs.org.
The Utah Firefighter's Basic Guide to the Firefighters
Retirement System
By Marty Peterson, Firefighter Representative to the Pension Membership
Council and Vice Chair of the Joint Council of Fire Service Organizations
One of the most important benefits available to Utah's
professional firefighters is the retirement program. It can also be
one of the most misunderstood by those within and outside of the fire
service community.
Although the structure and workings of the system that
manages retirement benefits for firefighters can be complex, most
of it can be explained quite simply. The following is intended to
educate firefighters and those outside the system on some of the fundamentals
and to provide some resources for further information.
The FRS and URS
Except for a handful of cases, all professional firefighters
in Utah belong to the Firefighters Retirement System (FRS). The FRS
is one of six systems managed by the Utah Retirement System (URS).
In addition to the FRS, the other retirement systems in the URS are:
-
The Public Employees Contributory System (state
and public education employees)
-
The Public Employees Noncontributory System (same
as above)
-
The Public Safety Retirement System (police officers)
-
The Judges Retirement System
-
The Governors and Legislators Retirement System.
The URS is a state system empowered by Title 49 of the
Utah Code, the "Utah State Retirement and Insurance Benefit Act."
The mission statement of the URS reads: "…to provide financially
sound retirement and 401(k)/457 investment benefits, as well as comprehensive
health and dental, disability, and life insurance benefits to active
and retired Utah public employees and their beneficiaries in a courteous,
timely, and professional manner."
All retirement systems in the URS are defined benefit plans, meaning
that a set benefit is paid on retirement that is figured on factors
such as years of service and salary. Contribution amounts and benefits
in each system may be determined independently of the others.
URS Management
The URS is governed by the Utah State Retirement Board. The Pension
Membership Council (PMC) serves in an advisory capacity to the Retirement
Board and consists of representatives from all of the systems in the
URS. Marty Peterson of Salt Lake City Fire Department Local 1645 and
the Professional Firefighters of Utah is the PMC Representative for
Utah's firefighters.
Difference Between Contributory and Noncontributory
System
The URS includes two different types of systems, Contributory and Noncontributory.
In a Contributory System, covered employees pay the required contributions
for their retirement benefit out of their own paycheck. In a Non-Contributory
System, there is only an employer contribution.
Currently, the only Contributory System open to new employees is the
FRS. Other URS systems may cover certain incumbent employees under a
Contributory System, but will only accept new employees into a Noncontributory
System. This means that Utah's professional firefighters are some of
the few public employees in the state who contribute directly to their
retirement system rather than the employer paying their contributions.
The law allows the pension contributions of Utah's professional firefighters
to be paid by their employers, which causes some confusion about the
contributory/noncontributory status of the FRS. These arrangements have
been made in lieu of negotiated pay raises and are, in actuality, contributions
paid on behalf of the employee. A firefighter pays taxes when the benefit
is received, either as a pension or if he/she leaves the system prior
to qualifying for a pension and receives a cash refund on contributions
to date.
FRS Membership
According to 2002 URS statistics, the FRS provides retirement benefits
to approximately 1,600 active professional Utah firefighters and nearly
900 retirees and surviving spouses. It also provides firefighting-related
death and disability benefits to approximately 5,000 volunteer Utah
firefighters. A volunteer who is disabled or killed in the line of duty
qualifies for the same benefit that the lowest paid firefighters from
major Utah fire departments would receive.
How the FRS is Funded
Currently, the FRS receives contributions from professional firefighters
and funding from a tax on fire insurance premiums and some life insurance
policies. Since volunteers receive little or no compensation for their
work, 50 percent of this fire/life insurance tax is designated to help
offset the costs of their death and disability benefits. (25 percent
of this tax is designated for statewide firefighter training and the
other 25 percent goes into the general fund.) No funding is provided
from the state's General Fund or any other state source. The staffing
and administrative costs of the system are supported by the contributions
to the system.
In past years, employers of Utah's professional firefighters made a
contribution to the FRS for each employed firefighter. The FRS no longer
requires contributions from employers because the FRS is in sound financial
shape. A few of the reasons for this financial soundness include:
- Past increases in employee contributions to fund changes made to
retirement benefits have far exceeded the actual costs of the changes
made. When the system becomes overfunded the law requires reductions
in the employer's contribution rate.
- Firefighters tend to spend less time in retirement and die at younger
ages than retirees in other ccupations, resulting in a shorter time
that benefits are paid.
- At this time the funding from the fire/life insurance tax exceeds
the actual needs of the system, although one incident involving a
few of the state's thousands of volunteers could change this.
The Work Never Stops
In part due to yearly reviews of the FRS, there is constant scrutiny
and a potential for legislative action each year that affects costs
and benefits. Utah firefighters must work year-round just to maintain
the status quo.
An important fire service organization that works at the legislative
level is the Joint Council of Fire Service Organizations, or Joint Council.
This organization provides a united and organized voice to a number
of diverse fire service organizations, and is already recognized by
the Legislature. The Joint Council holds regular meetings during the
year and meets more frequently during the legislative session. To make
sure PMC Representative Peterson represents the interests of Utah's
fire service, he reports regularly to the Joint Council. Organizations
such as the Joint Council and Professional Fire Fighters of Utah monitor
the legislature closely and, when necessary, act in the interests of
firefighters.
There is also potential on the national level for changes that can affect
the FRS, particularly as legislators and administrators search for alternate
funding sources for Social Security. In Washington D.C., the International
Association of Fire Fighters maintains a high profile in these issues
and other matters that affect Utah's firefighters.
How You Can Help
Nearly every Utah firefighter, professional or volunteer, is affected
by what happens with the Firefighters Retirement System, and the legislature
is where most major changes to the system happen. How can you help the
people who are at the legislature working for your future? Here are
a few suggestions.
- Support your union local and other organizations that participate
in the Joint Council.
- Communicate with your leadership. Let them know what you would like
to see happen or that you support what they are doing. Ask how you
can help.
- Find out which legislation affects firefighters, get educated on
the facts and follow the progress in the legislature.
- WRITE or CALL your senator or representative and express your opinion.
It takes very little time and effort, and the impact it can have is
surprising.
- If the time comes to stand up and be counted at the capitol, make
an effort to participate.
More Information
Information on the Utah Retirement System:
www.urs.org
Brochure on Firefighters Retirement System highlights:
www.urs.org/dbplans/highlight/firefighter.html
Professional Fire Fighters of Utah:
www.pffu.org
Utah Code, Title 49, Utah State Retirement and Insurance
Benefit Act:
www.le.state.ut.us/~code/TITLE49/TITLE49.htm
Utah Code, Title 49, Chapter 16, Firefighters' Retirement
Act:
www.le.state.ut.us/~code/TITLE49/49_06.htm
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