HomeMy WebLinkAbout[06] Relief Association By-law change
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Council Agenda Item
MEETING DATE: October 4, 2012
AGENDA ITEM: Fire Relief Association, Amendment to By-laws
SUBMITTED BY: Administration
BOARD/COMMISSION/COMMITTEE RECOMMENDATION: The Fire Relief Board has requested that the City
Council approve the changes to the By-laws as required and set the interest rate for deferred members for 2013 at
0%
PREVIOUS COUNCIL ACTION:
BACKGROUND INFORMATION: The Fire Relief Association is a separate entity that provides for retirement for
the pay per response fire fighters. The Board of the Relief includes the Mayor and Administrator and officers of
the Relief Association. The State Auditors Office has recently released an opinion letter regarding the provisions
for allowing interest to be credited for deferred members. The regulation requires an established interest rate ( 0
– 5%) which must be approved by the governing body. The St. Joseph Fire By-laws currently include language that
upto 5% may be credited. It is this language that is not allowed.
The Relief Association is opting to utilize language that reviews the interest on an annual basis and include generic
language in the by-laws that allow for such review. Once the by-laws are amended, an interest rate must also be
established. The Relief Association is recommending that the City Council establish the interest rate at 0% as the
fund has had significant draws downs and is in the process of rebuilding. Also, since the City is required to
contribute annually to help alleviate the deficit, the Board did not feel it was appropriate to credit interest.
Members retiring and meeting the qualification for retirement have the option of withdrawing their funds upon
eligibility and the 0% interest would not affect them.
BUDGET/FISCAL IMPACT:
ATTACHMENTS: Request for Council Consideration
St. Joseph Fire Relief By-laws
Opinion Letter from State Auditors Office
REQUESTED COUNCIL ACTION: Authorize the Mayor and Administrator to execute the St. Joseph Fire Relief
Association By-laws, amending the section relating to accumulation of interest and establish the interest rate for
2013 at 0%.
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SM
TATEOFINNESOTA
OSA
FFICEOFTHETATEUDITOR
SUITE500
(651)296-2551(Voice)
525PARKSTREET
(651)296-4755(Fax)
SAINTPAUL,MN55103-2139
REBECCAOTTO
state.auditor@osa.state.mn.us(E-mail)
STATEAUDITOR
1-800-627-3529(RelayService)
StatementofPosition
InterestEarningsforDeferredMembersofVolunteerFireReliefAssociations
AbouthalfofthevolunteerfirereliefassociationsinMinnesotahaveadoptedbylaw
provisionsthatallowinterestorinvestmentearningstobecreditedtodeferredmembers
1
duringtheperiodofdeferral.Administeringinterestduringperiodsofdeferralcanbe
complicated.Deferredservicepensionsmustbecalculatedbasedonbothstatelawand
reliefassociationbylawprovisionsineffectonthedatethateachmemberseparatedfrom
activeserviceandmembership.Statelawhaschangedseveraltimesinlessthana
decade.Deferredmembersofthesamevolunteerfirereliefassociationcouldhave
interestthatiscalculateddifferentlydependingonwhentheyseparatedfromservice.
Volunteerfirereliefassociationsthatelectintheirbylawstopayinteresttodeferred
membersmustmakethreedecisions:1)theinteresttype;2)theinterestpaymentmethod;
and3)membershipeligibility.
InterestType
MinnesotaStatutesprovidevariouswaystodeterminehowinterestistobepaid.The
typesavailableforusebyvolunteerfirereliefassociations,herecalled“interesttypes,”
are1)settingupaseparateinvestmentaccount;2)settingupaseparateinvestment
vehicle;3)allowingtheboardtosetinterestuptofivepercent;and4)creditingfull
investmentgainsandlosses.
1.SettingupaSeparateInvestmentAccount:Underthisoption,thevolunteerfirerelief
associationestablishesaseparateinvestmentaccountfortheamountpayabletoa
deferredmember.Theseparateaccountismaintainedseparatelyfromtheotherassetsof
thereliefassociation,butisstillgovernedbythereliefassociationboardoftrusteesandis
stillreportedasanassociationasset.Amember’sdeferredbenefitamountistransferred
totheseparateinvestmentaccountwhenthememberseparatesfromactiveserviceand
membership.Thevolunteerfirereliefassociationboardoftrusteesdetermineshowthe
accountisinvested.Adeferredmemberwithassetspooledintheseparateinvestment
accountreceivesinterestattheinvestmentperformancerateactuallyearnedonthe
1
Adeferredmemberisamemberwhoisentitledtoadeferredservicepension.SeeMinn.Stat.§
424A.016,subd.6(definedcontributionplans);Minn.Stat.§424A.02,subd.7(definedbenefitplans).
Reviewed:June20122010-2001
Revised:June2012
ThisStatementofPositionisnotlegaladviceandissubjecttorevision.
AnEqualOpportunityEmployer
account.Thedeferredmemberbearsthefullinvestmentrisksubsequenttotransfer.
Whenthememberretires,thedeferredservicepensionisequaltothemember’sportion
oftheseparateinvestmentaccount.
Thisoptionisavailabletoallvolunteerfirereliefassociationplantypes.
2.SettingupaSeparateInvestmentVehicle:Underthisoption,thevolunteerfirerelief
associationestablishesaseparateinvestmentvehiclefortheamountpayabletoeach
deferredmember.Theseparateinvestmentvehicleisheldseparatelyfromtheother
assetsofthereliefassociation,butisstillgovernedbythereliefassociationboardof
trusteesandisstillreportedasassociationassets.Amember’sdeferredbenefitamountis
investedintheseparateinvestmentvehiclewhenthememberseparatesfromactive
serviceandmembership.Thevolunteerfirereliefassociationboardoftrusteesselects
theseparateinvestmentvehicleforeachdeferredmember.Adeferredmemberreceives
interestattheinvestmentperformancerateactuallyearnedontheinvestmentvehicle.
Thedeferredmemberbearsthefullinvestmentrisksubsequenttotransfer.Whenthe
memberretires,thedeferredservicepensionisequaltothefairmarketvalueofthe
member’sseparateinvestmentvehicle.
Thisoptionisavailabletoallvolunteerfirereliefassociationplantypes.
3.AllowingtheBoardtoSetInterestupto5%:Underthisoption,thevolunteerfire
reliefassociationboardoftrusteesdeterminestherateofinterestfordeferredmembers,
betweenzeroandfivepercent,compoundedannually.Interestispayablefollowingthe
dateonwhichthemunicipalityhasapprovedthedeferredservicepensioninterestrate
establishedbytheboardoftrustees.Theboardoftrusteeshasflexibilitytochangethe
interestrateannually,forexample,basedonactualinvestmentperformance,oritcould
choosetoselectaninterestrateandleaveitunchangedforseveralyears.Dependingon
howthebylawsaredrafted,interestratesforadeferredmembercanfluctuateeachtime
theboardoftrusteesestablishesandthemunicipalityapprovesanewrateortheinterest
ratecanbefixedbasedontherateineffectwhenthememberseparatedfromactive
2
serviceandmembership.
Thisoptionisavailabletolump-sumplansandmonthly/lump-sumcombinationplans
only.
4.CreditingFullInvestmentGainsandLosses:Underthisoption,adeferredmemberof
adefinedcontributionplanreceivesinvestmentallocationsinthesamemannerasthe
activemembers.Eachdeferredmember’saccountbalanceiscreditedwithnet
investmentgainsorlossesattherateactuallyearnedbythereliefassociationonthe
investmentofspecialfundassets.
Thisoptionisavailabletodefinedcontributionplansonly.
2
Minn.Stat.§424A.02,subd.7(d).
Reviewed:June20122010-2001
2
Revised:June2012
Ifavolunteerfirereliefassociationhasadeferredinterestoptioninitsbylawsthatdoes
notcomplywithoneoftheoptionsdescribedabove,thereliefassociationmustamendits
bylawstocomplywithcurrentstatutoryrequirements.Bylawchangesaffectonly
memberswhoseparatefromactiveserviceandmembershipafterthebylawchange.
InterestPaymentMethod
Volunteerfirereliefassociationsthatelecttopayinteresttoadeferredmembermust
decideonaninterestpaymentmethod,includingtheinterestpaymentstartingdateand
endingdate,effectiveJanuary1,2013.Statelawestablishespaymentmethodsforeach
deferredinteresttype.Areliefassociationmaychoosetodefineadifferentpayment
methodinitsbylaws,butifamethodisnotdefinedinthebylaws,orifthebylaw
definitiondoesn’tincludethepaymentstartingdateandendingdate,thedefault
establishedinstatelawapplies.
Forreliefassociationsthatchooseinteresttype1(SettingupaSeparateInvestment
Account),type3(AllowingtheBoardtoSetInterestupto5%),ortype4(CreditingFull
InvestmentGainsandLosses),thedefaultpaymentmethodistopayinterestoradditional
investmentperformancebeginningonthedatethatthememberseparatesfromactive
serviceandmembershipandendingontheaccountingdateimmediatelybeforethe
deferredmembercommencesreceiptofthedeferredservicepension.
Forexample,alump-sumplanspecifiesinitsbylawsthatitsaccountingdateis
December31ofeachyear.Adeferredmemberofthisreliefassociationreceivesinterest
beginningonthedatethatthememberseparatesfromactiveserviceandmembership,
andcontinuestoreceiveinterestthroughtheDecember31immediatelybeforetheyearin
whichthemembercommencesreceiptofthedeferredservicepension.
Asanotherexample,adefinedcontributionplanspecifiesinitsbylawsthatithasa
quarterlyaccountingdate.Adeferredmemberofthisreliefassociationreceivesinterest
oradditionalinvestmentperformancebeginningonthemember’sseparationdate,and
continuestoreceiveinterestoradditionalinvestmentperformancethroughthelastdayof
thequarterimmediatelybeforethemembercommencesreceiptofthedeferredservice
pension.Themember’sdeferredservicepensionisequaltothemember’sindividual
accountbalanceonthelastdayofthequarterimmediatelybeforethedeferredservice
pensionispaid.
Forreliefassociationsthatchooseinteresttype2(SettingupaSeparateInvestment
Vehicle),thedefaultmethodistopayinterestoradditionalinvestmentperformance
beginningonthedatethatthememberseparatesfromactiveserviceandmembershipand
endingonthedatethattheseparateinvestmentvehicleisvaluedimmediatelybeforethe
dateonwhichthedeferredmembercommencesreceiptofthedeferredservicepension.
Forexample,areliefassociationsetsupaseparateinvestmentvehicleforadeferred
memberthatconsistsofseveralcertificatesofdeposit.Thedeferredmemberseparates
fromactiveserviceandmembership,andcommencesreceiptofthedeferredservice
Reviewed:June20122010-2001
3
Revised:June2012
pensionduringthefollowingyear.Theseparateinvestmentvehicleisvaluedattheend
ofeachmonth.Thememberreceivesinterestoradditionalinvestmentperformancefrom
thedateofseparationthroughthelastdayofthemonthimmediatelybeforethemonthin
whichthedeferredservicepensionispaid.Themember’sdeferredservicepensionis
equaltothevalueoftheseparateinvestmentvehicleonthemostrecentvaluationdate,
whichinthisexampleisattheendoftheprecedingmonth.
Areliefassociationmaychoosetodefineitsownpaymentmethodinitsbylaws.For
example,areliefassociationcouldspecifythatinterestispaidtodeferredmembersfor
eachcompletedcalendarmonththatamemberisdeferred,orforeachcompleted
calendaryearthatamemberisdeferred.Anydefinitionmustincludethepayment
startingdateandendingdateinorderforthebylawdefinitiontobecomeeffective.
MembershipEligibility
Volunteerfirereliefassociationsshoulddeterminewhethertheywanttoplaceany
limitationsoneligibilityfordeferredinterest.Similarly-situatedmembersmustbe
treatedthesame.Reliefassociationsdohavesomeability,however,todifferentiate
betweendifferenttypesofdeferredmembers.Forexample,volunteerfirerelief
associationscanchooseonlytopayinteresttofully-vesteddeferredmembers,ratherthan
tobothfully-vestedandpartially-vesteddeferredmembers.Volunteerfirerelief
associationschoosingtoplacelimitationsoneligibilityfordeferredinterestmustmake
surethatthelimitationsareclearlyreflectedinthereliefassociation’sbylaws.Any
changestothebylawswillaffectonlydeferredmemberswhoseparatefromactive
serviceandmembershipafterthebylawchange.
Reviewed:June20122010-2001
4
Revised:June2012
THE RESTATED BYLAWS OF THE ST. JOSEPH VOLUNTEER FIRE DEPARTMENT RELIEF ASSOCIATION
ARTICLE I - NAME
Section 1.1 Name
The name of this association is the St. Joseph Volunteer Fire Department Relief Association.
ARTICLE II - PURPOSE
Section 2.1 Purpose of Association
This instrument constitutes the Bylaws of the St. Joseph Volunteer Fire Department Relief Association,
hereinafter referred to as "Association," adopted for the purpose of regulating and managing the
internal affairs of the corporation and shall serve as the written pension plan for the relief association.
The Association is a governmental entity that receives and manages public money to provide retirement
benefits for individuals providing the governmental services of firefighting. The objectives of the plan
shall be to provide service pensions and ancillary benefits to members and dependants of the City of St.
Joseph Municipal Fire Department, hereinafter "Fire Department". All benefits issued by this association
shall be governed by these bylaws and federal and state laws.
ARTICLE III - GENERAL DEFINITIONS AND SERVICE PROVISIONS
Section 3.1 Surviving spouse
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.
Section 3.2 Fiduciary responsibility
In the discharge of their respective duties, the officers and trustees shall be held to the standard of care
and all other statutory requirements enumerated in Minn. Stat. §356A et. seq. No trustee of the
Association shall cause the 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.
a.sale or exchange or leasing of any real property between the relief association and a board
member;
b.lending of money or other extension of credit between the relief association and a board
member or member of the relief association;
c.furnishing of goods, services, or facilities between the relief association and a board member; or
d.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.
Section 3.3 Beneficiary
Pursuant to Minn. Stat. §424A.05, the beneficiary under this plan, that is entitled to receive a benefit
following the death of an active, disabled, deferred or early vested member. The benefit shall be paid to
the following persons, in the following succession:
a.The surviving spouse, if no surviving spouse,
b.The surviving child or children in equal shares, and if no surviving child or children,
c.Any ancillary survivor's benefit shall be paid to the beneficiary identified in writing, on forms
supplied by the Secretary, and if no beneficiary is identified,
d.To the estate, as a funeral benefit.
Section 3.4 Board of Trustees
The Board of Trustees of the Association as specified under Minn. Stat. §424A.04. There shall be three
ex-officio members. The three ex officio trustees shall be the mayor, the city finance director, and the
chief of the municipal fire department.
Section 3.5 Breaks in Service
A period of time in which the member does not comply with the active service requirements of this
association or the fire department. Any member returning from a break in service must remain in active
service equal in time to the break in service in order to qualify for any pension increases having occurred
during the time. If this requirement is not met prior to the individual's resignation, the retirement
benefits will revert to those in effect at such time the break in service began. A break in service does not
include an approved leave of absence, pursuant to these bylaws, the Fire Department's Standard
Operating Procedures or state/federal law.
Section 3.6 Year of Active Service
For purposes of computing benefits, service pensions payable or calculating vesting requirements, a
year of service shall be defined as a period of 12 full months of active service in the Fire Department.
Service pensions will be prorated monthly for fractional years of service pursuant to Minn. Stat.
§424A.02, Subd. 1.
Section 3.7 Active service
The active performance of fire suppression duties or the supervision of fire suppression duties. The
performance of suppression or supervision of fire suppression duties includes meeting the requirements
of Fire Department's Standard Operating Procedures and Rules and Regulations. Annually, the fire chief
shall submit a written certification to the board of trustees that shall certify members' active service.
Such certification shall be required to be submitted for approval by the board of trustees, by January 30
of each year.
Section 3.8 Trustees
The individuals designated as such by Minn. Stat. §424A.04 and by virtue of elected office, those that
qualify as the ex-officio trustee.
Section 3.9 Domestic Relations Order
Any judgment, decree or order (including approval of a property settlement agreement) that complies
with the provisions of Minn. Stat. §§§518.58, 518.581, or 518.611.
ARTICLE IV – MEMBERSHIP
Section 4.1 Eligibility for Membership
Any regular active member of the St. Joseph Volunteer Fire Department are eligible for membership in
this Association. Members of the Fire Department shall not apply for active membership status until
they have completed their probationary period. Upon approval of the member's application, such
member shall accrue service credit for all active service while in probationary status.
Section 4.2 Emergency Response Attendance Eligibility
All members must respond to a minimum of 20 percent of paged calls assigned to their station. None-
paged calls will not be counted toward the 20 percent minimum. Attendance for calls will be taken after
appropriate time has been allowed for members to reach the fire station. Call percentages are reviewed
semi-annually. Any member who fails to meet the semi-annual attendance requirement will not qualify
or be eligible for benefits provided under the Fire Relief Association for that period.
Section 4.3 Application for Membership
Application for membership may be made at any regular or special meeting of the Board of Trustees,
and then laid over for one month for consideration. The application shall be reviewed for compliance
with state statutory and plan requirements. If approved, the applicant shall be entered on the
membership rolls.
Section 4.4 Resignation of Expulsion
Resignation or expulsion from the St. Joseph Volunteer Fire Department or moving from the vicinity of
St. Joseph to take up residence elsewhere, shall terminate membership of the member so resigning,
expelled, or removing; provided however that any member who has served for at least the minimum
number of years required by Article 9 of these bylaws for vesting of pension rights as an active member
of the St. Joseph Volunteer Fire Department shall retain his resignation, expulsion, or removal, subject
to regulations which may be imposed from time to time.
ARTICLE V - BOARD OF TRUSTEES
Section 5.1 Board Composition
The Board of Trustees shall be composed of the following: a President, a Vice President, a Secretary, a
Treasurer, and 2 general trustees, each of whom shall be elected and qualified, at the annual meeting of
the Association from its members, and in addition, the statutory ex-officio members; the Chief of the St.
Joseph Volunteer Fire Department, the Mayor, and the City Clerk/Administrator of the City of St. Joseph.
Section 5.2 Elections
At the annual election, two (2) general trustees shall be elected for terms of one (1) year. The president
and the treasurer shall be elected for two (2) year terms, in even numbered years. The Vice President
and Secretary shall be elected for two (2) year terms in odd numbered years. If a vacancy occurs during
the term of office of any officer or general trustee, the remaining members of the board of trustees shall
elect a member of the Association to serve for the unexpired term of the vacated position.
ARTICLE VI - DUTIES OF OFFICERS
Section 6.1 President's Duties.
It shall be the duty of the President to attend and preside at all meetings of the Association and the
Board of Trustees. The President shall enforce the due observance of the Articles of Incorporation and
the Bylaws and see that the officers properly perform the duties assigned to them. The President shall
sign all papers requiring signature. The President shall be a member of all committees and shall exercise
careful supervision over the affairs of the association. Additionally, the President shall receive such
salary as may be fixed from time to time by the Board of Trustees, subject to approval of the association,
and payable from the Special Fund of the association.
Section 6.2 Vice President's Duties
In the absence of the President, the Vice President shall perform the duties of the President. In the
absence of both the President and the Vice President it shall be the duty of the Association to elect a
President pro tern, who shall perform the duties incident to the office.
Section 6.3 Secretary's Duties
It shall be the duty of the Secretary to keep a true and accurate record of the proceedings of all
meetings of the association and of the Board of Trustees, the Secretary shall keep a correct record of all
amendments, alterations and additions to the Articles of Incorporation and Bylaws in a separate book
from the minute books of the association. The Secretary shall cause due notice of all special meetings of
the Association and of the Board of Trustees to be given. The Secretary shall keep a roll of membership
with the date of joining, resignation and discharge. The books shall be at all times open to inspection by
the Board of Trustees. The Secretary shall prepare and file all reports and statements required by law.
Also, the Secretary shall receive such a salary as may be fixed from time to time by the Board of
Trustees, subject to approval of the association, and payable from the Special Fund of the association.
Section 6.4 Treasurer's Duties
It shall be the duty of the Treasurer to receive all monies belonging to the Association and hold them
subject to the order of the President. The Treasurer shall keep separate and distinct accounts of the
General and Special funds, and shall prepare and present to the Board of Trustees a full and detailed
statement of the assets and liabilities of each fund annually. Failing in obligation the Treasurer may be
impeached and expelled from the Association. The Treasurer shall deliver to his/her successor in office,
or any committees appointed by the Board of Trustees to receive the same, all monies, books, papers,
etc., pertaining to said office immediately upon the expiration of said term of office. The Treasurer
Shall, prior to entering upon the duties of his office, give a bond equal to at least 10% of the assets of
the Association; however, the amount of the bond need not exceed $500,000. The bond shall be
payable from the special fund of the Association. Jointly with the Secretary, the Treasurer shall prepare
and file all reports and statements required by law. The Treasurer shall receive such salary as may be
fixed by the Board of Trustees from time to time, subject to approval of the association, and payable
from the Special Fund of the Association. In the absence of the Treasurer, the President shall be an
alternative signature for the purpose of issuing funds.
ARTICLE VII - MEETINGS
Section 7.1 Annual Meeting
The annual meeting of the Association for the election of officers and trustees, and other business shall
be held on the 2nd Tuesday of January in each year. If such day falls on a holiday, such meeting shall be
on the next following Tuesday.
Section 7.2 Board Meetings
The Board of Trustees shall meet at least four (4) times during the year.
Section 7.3 Special Meetings
Special meetings of the association or the Board of Trustees may be called by the President, or two
members of the Board of Trustees, and shall also be called upon written request of six (6) or more
members of the Association. Members or trustees shall be notified by the Secretary of such special
meetings, and the subject of the meeting shall be stated in such notice.
Section 7.4 Quorum
A majority of the Board of Trustees then in office and forty percent (40%) of the members of the
Association shall constitute quorum for the transaction of business at their respective meetings. Less
than a quorum may adjourn a meeting to a future time, which the Secretary shall make known to all
affected members.
Section 7.5 Parliamentary Procedure
All meetings shall be conducted in accordance with Robert's Rules of Order, as revised.
Section 7.6 Order of Business
1.Call to Order
2.Roll Call
3.Reading of minutes of previous meeting
4.Reading of Reports and Minutes of the Board of Trustees' Meeting.
5.Reports of Officers
6.Propositions for Membership
7.Reports of Special Committees
8.Balloting of Members
9.Unfinished Business
10.Election of Officers and Trustees (Annual Meeting)
11.New Business
12.Adjournment
Section 7.7 Location of Board Meetings
A meeting of the Board of Trustees shall be held at the registered office of the Association in the City of
St. Joseph unless noticed for another place within the state, as designated by the board.
Section 7.8 Meeting Notices
A notice of every board of trustees meeting shall be sent or delivered by the Secretary to each trustee
including ex-officio trustees, at least 5, but not more than 30 days, before the meeting, excluding the
date of the meeting. Such notice shall set forth the date, time, place, and in case of a special meeting,
the purpose.
Section 7.9 Closed Meetings
The Board, at its discretion, may, determine the necessity to close meetings to the membership and/or
general public for purposes of conducting business related to pending legal action, personnel matters or
such other issues as permitted by Minn. Stat. §13D.01.
ARTICLE VIII - DUES, DUTIES AND RIGHTS OF MEMBERSHIP
Section 8.1 Member Fraud
Any member who shall, in the opinion of a majority of the Board of Trustees, fraudulently claim benefits
from, or defraud or attempt to defraud the association in any way, shall be suspended from
membership by the Board and shall forfeit all further rights to benefits from the Association.
Section 8.2 Reinstatement Procedure
Any suspended member can only be reinstated upon their application therefore in writing, presented at
a regular or special meeting of the Association, accompanied by a sum of money equal to what they
would have been required to pay the Association during the period of suspension had they not been
suspended, plus a reinstatement fee of $5.00 upon the favorable vote of two-thirds (2/3) of the
members present and voting as such meeting. If the application for reinstatement is rejected, the
money accompanying the same shall be returned to the applicant.
Section 8.3 Voting
Each member shall be entitled to one vote on any matter voted upon by the membership. Voting by
proxy is not permitted. All votes, unless specific prior to the vote, shall be conducted by voice vote. If a
majority cannot be determined by voice vote, the Officer in charge of the vote shall ask for a show of
hands.
ARTICLE IX - INVESTMENTS
Section 9.1 Fiduciary Duties
Trustees shall discharge their duties in good faith and with that diligence and care which an ordinarily
prudent person would exercise under similar circumstances.
Section 9.2
It shall be the duty of the Board of Trustees to prepare modes and plans for the safe and profitable
investment of the unappropriated funds of the Association and whenever investments are made, to
investigate and pass upon the securities offered and to attend to the drawing and execution of
necessary papers. The Board shall order an audit of the books and accounts of the Secretary and the
Treasurer annually, according to law, and shall submit a written report of the condition of the
Association to the members at the annual meeting. The investment of the funds of the Association shall
be in the exclusive control of the Board of Trustees, in conformance with state statutes, the bylaws, and
the investment policy attached hereto. The Board of Trustees shall meet with the Investment
Committee. The members of the Board shall act as Trustees with a fiduciary obligation to the State of
Minnesota, to the City of St. Joseph and the members of the Association.
Section 9.3 Investment Committee
The Board of Trustees may designate two or more Association members to sit on an investment
committee. The treasurer, the president and an ex-officio member shall sit on the committee. The
investment committee shall investigate and make recommendations to the board of suitable
investments for Association funds among those permitted by Statute, the bylaws and the investment
policy attached hereto.
Section 9.4 Broker's Certification
The board of trustees shall comply with Minn. Stat. §356A.06, Subd. 8b that requires the relief
association to provide annually to any brokers, a written statement of investment restrictions pursuant
to statute or the investment policy that apply to the special fund. Upon receipt of the written statement
of investment restrictions, each broker handling investments of the Association shall acknowledge, in
writing annually the receipt of the investment restrictions. The acknowledgment shall contain a
statement of the broker's agreement to handle the Association's investments pursuant to the written
restrictions.
Section 9.5 Continuing Education
The board of trustees shall develop and periodically revise a plan for continuing education for all
members and officers of the board of trustees in order to ensure that trustees keep abreast of their
fiduciary responsibilities. New trustees shall be required to complete twelve (12) hours of continuing
education in the trustee's first year of office. Thereafter, trustees shall comply with the board's plan for
continuing education.
Section 9.5 Consultant Certificate of Insurance
Before hiring or contracting with a consultant, a the Board of Trustees of the relief association must
obtain a copy of the consultant's certificate of insurance. A consultant is an individual or firm providing
legal or financial advice, including an actuary; attorney; accountant; investment advisor, manager,
counselor, or investment manager selection consultant; pension benefit design advisor or consultant; or
any other financial consultant.
ARTICLE X - FUNDS
Section 10.1 Funds
All money received from the Association shall be kept in two separate funds. Disbursements from the
funds shall be in accordance with Minnesota Statutes and thebylaws of the Relief Association.
Section 10.2 General Fund
The funds received by this Association from dues, fines, initiation fees, entertainment's, and other
miscellaneous sources shall be kept in the General Fund of the Association on the books of the Secretary
and Treasurer and may be disbursed for any purpose reasonably related to the welfare of the
Association or its members.
Section 10.3
Funds received by this Association qualifying as state aid received pursuant to law, all taxes levied by or
other revenues received from the city pursuant to law providing for municipal support for the relief
association, any moneys or property donated, given, granted or devised excluding fundraiser proceeds,
by any person which is specified for the use for the support of the Special Fund, and any interest earned
on the assets of the Special Fund, shall be accounted for, in the Special Fund. Any of the above
mentioned revenue sources which may be directly deposited, donated or transferred to said fund, shall
be kept in a separate account on the books of the Treasurer known as the Special Fund and shall be
disbursed only for the following purposes.
a.Payment of members' service pension benefits in accordance with these bylaws;
b.Payment of ancillary benefits in accordance with these bylaws;
c.Administrative expenses as limited by Minn. Stat. ~69.80.;
d.All other expenses of the Association shall be paid out of the General Fund.
Section 10.4
All money belonging to the Association shall be deposited to the credit of the Association in such banks,
trust companies, or other depositories as the Board of Trustees may designate. The board of trustees
shall make deposits in conformance with state statute and the investment policy, attached hereto.
Section 10.5 Limitation on Special Fund Disbursements
No money or funds of the Special Fund of the Association shall be disbursed except for those purposes
specifically authorized by state statutes.
Section 10.6 Limitation on General Fund Disbursements
No money or funds of the General Fund of the association shall be disbursed for any purpose not herein
provided for, unless authorized by the favorable vote of 2/3 of the members present at a regular or
special meeting of the association.
ARTICLE XI -APPLICATION FOR BENEFITS
Section 11.1 Applications for Service Pensions
All applications for pension benefits shall be made in writing on forms furnished by the Secretary.
Section 11.3 Process for Submitting All Applications
All applications for pensions shall be submitted to the Board of Trustees at a regular or special meeting
of the board. Applications shall be verified by an oath of the applicant and shall state the age of the
applicant, the period of service in, and the date of retirement from the Fire Department, the length of
time the applicant has been a member of the Association, and such other information as the Board of
Trustees may require.
Section 11.4 Approval by Board of Trustees
No ancillary benefits or pensions shall be paid until the application therefore has been approved by a
majority vote of the Board of Trustees. Decisions of the board shall be final as to the payment of such
benefits or pensions. Except that decisions of the board shall be appealble in accordance with Article
XVII - Procedure for Review. No person receiving a pension shall be paid any other benefits by the
association.
Section 11.5 Notice of intent to retire
It shall be the duty of each member who intends to retire and request a service pension from the
association, to file a notice of intent to retire. Such notice shall be in writing and shall be filed the
Secretary not less than 6 months (180 days) prior to the date of retirement and submission of
application for service pension. Upon receipt of a notice of intent to retire, the Secretary shall provide
any notices to the applicant as required by state or federal law with respect to pension or benefit
payments.
ARTICLE XII - SERVICE PENSIONS
Section 12.1 Lump Sum Service Pension
The exclusive pension benefit provided by the Association shall be a defined benefit lump sum service
pension that is paid based on the member’s year of active service. Upon meeting the requirements in
Section 2 of this article, the member shall be paid the base sum for each year that the member has
served as an active member of the fire department. The base sum for purposes of pension benefits or
other benefits as allowed by these bylaws, shall be as stated in Appendix A which is incorporated into
these bylaws by reference herein.
Section 12.2 Service Pension Eligibility
To be eligible to receive a service pension a member must meet all of the following requirements.
a.Be at least 50 years of age;
b.Have retired from the Fire Department of the municipality;
c.Have completed at least 10 years of active service with such department before retirement; and
d.Have been a member of the Association in good standing at least 10 years prior to such
retirement.
ARTICLE XIII - ANCILLARY BENEFITS
Section 13.1 Survivor's Benefit
Following the receipt of a lump sum death benefit neither a member's surviving spouse or estate is
entitled to any other or further financial relief or benefits from the Association. A member's Beneficiary
shall be eligible to receive a benefit upon the death of a deferred, disabled, active, or retired Member
who has not yet received his or her full retirement benefit.
a.Upon the death of an active member or disabled member who has not yet received his or her
disability benefits, who is in good standing, the association shall pay to the member's benefit,
the base sum for each year of active service that the member served as an active member of the
fire department.
b.In the event that the death occurs after the member has terminated or retired from the Fire
Department, only the vested portion of the pension, as determined under Article XV, shall be
distributed.
c.In no circumstances, shall the member's survivor's benefit be less than the base sum multiplied
by five years.
Section 13.2 Permanent Disability Benefits
A member who is permanently disabled from being an active firefighter on the Fire Department may be
eligible for a disability benefit in lieu of retirement. Upon approval of the Board of Trustees pursuant to
this section, the following disability benefits will apply. A member who is permanently disabled with a
service-related disability shall be eligible to collect a disability benefit in an amount equal to the
member's full years of active service on the Fire Department multiplied by the base sum pension
benefit. The member shall be eligible to receive the disability benefit immediately upon approval of the
Board of Trustees.
a.Limits. Any such disability benefit paid in accordance with this section shall be in lieu of all rights
to further service pension and survivor's benefit.
b.Disability defined. Disability is defined as the inability to engage in performance of his\her duties
as a firefighter by reason of a medically determinable physical or psychological impairment that
is certified by a physician, surgeon or chiropractor acceptable to the board of trustees, which
can be expected to last for a continuous period of not less than twelve months or can be
expected to result in death.
c.Reports Required. No member shall be paid disability benefits except upon the written report of
a physician, surgeon or chiropractor of the member's choice. This report shall set forth the
diagnosis and prognosis of the disability, disease or injury of the member. Each such report shall
be filed with the association.
d.Procedure. All applications for disability benefits shall be made within six months after such
applicant has ceased to be an active member of the fire department. Written application shall
be made to the Board setting out the nature and cause of such disability. This application shall
be under oath by the member or his or her immediate family. The application shall be tabled
until the next meeting so that the applicant may be examined by a physician, surgeon or
chiropractor of the member's choice. The physician, surgeon or chiropractor shall submit a
written opinion concerning the diagnosis and prognosis of the applicant's disability and its
probable duration of permanence. The Board of Trustees has the discretion to request that
another doctor, selected by the board, examine the applicant. Final determination of disability
will be based on the reports of at least one doctor and by a 2/3 majority vote of a quorum of the
Board of Trustees present at the subsequent association meeting.
e.Proof of disability. An applicant shall not be considered under a disability unless the member
furnishes adequate proof of the existence thereof. An applicant's statement as to pain or other
symptoms will not alone be conclusive evidence of disability as defined in this section.
f.Deduction from pension. If the disabled member subsequently recovers and returns to active
service on the fire department, any amount paid to him as a disability pension shall be deducted
from his service pension.
g.Grievance Procedure. If the applicant for disability benefits feels the he/she has been aggrieved
by any action of Board, the member shall, within thirty (30) days from notice of such action of
the Board, file written objections and the reasons thereof with the Board and shall be allowed to
appeal the determination pursuant to the Procedure for Review in Article XVII of these bylaws.
ARTICLE XIV - TIMING AND MODES OF DISTRIBUTION
Section 14.1 Choices at Retirement
Because of the varying circumstances in each member's retirement planning, optional benefit payment
methods are offered. Selection should occur after consultation with a tax consultant, insurance and/or
estate planner, or an attorney. Alternate payment methods on the Application Form shall include.
a.A single Lump sum check payment payable to the eligible retiree.
b.Lump Sum payment by the Association to a recognized insurance carrier licensed to do business
in this state and approved for this product by the Commerce Commissioner under Minn. Stat.
§60A.40.
c.Rollover to an IRA account pursuant to Article XIV, Section 2.
Section 14.2 Rollover Option
Upon written request from the retiring member who has given proper notice of retirement, the
Secretary or Treasurer shall directly transfer the service pension amount into an Individual Retirement
Account under Section 408(a) of the Internal Revenue Code, as amended.
ARTICLE XV - EARLY VESTING PROVISION
Section 15.1
In the event a member with ten years or more but less than twenty years of active service on the Fire
Department resigns or otherwise becomes a nonmember, that person shall be entitled to the following
benefits that represents the nonforfeitable portion of.
Completed Years of Service Nonforfeitable Percentage of
Pension Amount
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
ARTICLE XVI - DEFERRED PENSION STATUS
Section 16.1 Deferred pension rolls
A member of the Association who has served as an active firefighter in the Fire Department for at least
ten (10) years, but has not reached the age of 50 years, may retire from said fire department and be
placed on the deferred pension roll. Upon reaching the age of 50 years, and provided that membership
in the Association has been maintained for at least ten (l0) years, upon approval of a valid written
application therefor, such member shall be paid the base sum for each year of active service in said fire
department as was payable at the time of retirement from active service in said fire department and
reduced pursuant to the early vesting schedule in Article XV. A member who is on the deferred pension
roll shall not be eligible to receive any of the ancillary benefits provided for in these By-laws except
those that are specified in section 3 of this article.
Section 16.2 Interest Paid on Deferred Accounts
The association shall annually establish what if any interest shall be added to the deferred members
account. At the last regular meeting of each calendar year, the Board shall review the interest earned
on the assets of the Association Funds and establish the interest rate for deferred members accounts for
the following calendar year. The Board shall have the authority to establish an interest rate up to, but
not exceeding 5%., add to the deferred member's account, such interest, compounded annually, at the
rate actually earned on the assets of the Association Funds, but not to exceed 5% per year. Interest will
be paid 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 service pension and applies for the deferred service pension.
Section 16.3 Ancillary Benefits
If the member dies while on the deferred pension roll and that benefit is yet unpaid, the total deferred
pension applicable at the time of death shall be paid to the member's beneficiary in accordance with
Article XIII - Ancillary benefits.
ARTICLE XVII - PROCEDURE FOR REVIEW
Section 17.1 Right to Appeal
In the event that the Board of Trustees denies an application for a service or ancillary pension benefit,
the member shall be entitled to the right to appeal the determination.
Section 17.2 Procedure for Requesting Appeal
If an application is not approved, the board shall return the application to the applicant within 30 days,
noting thereon, with particularity, which requirements the applicant does not meet. Thereafter, the
applicant shall be furnished with the opportunity to be heard by the full board, on the question of
whether the applicant meets all of the eligibility requirements. The member shall indicate that the
member intends to appeal by furnishing the board with a written intent to appeal that is filed with the
Secretary of the association within 30 days of receiving an adverse determination. The intent to appeal
shall be certified, in writing, by the member.
Section 17.3 Board Procedure for Review
Upon receipt of the written intent to appeal, the Board of Trustees shall hold a special meeting within
60 days of receipt of the written intent to appeal. Timely notice of the meeting shall be given to the
member at least 15 days prior to the special meeting. The member shall have the reasonable
opportunity to be heard by the Board of Trustees at the special meeting with regard to the negative
determination. The board reserves the right to engage the services of a mediator or arbitrator,
acceptable to both parties, at any time during the appeal. The mediator or arbitrator shall be selected
from the Rule 114 Supreme Court Roster. The cost of the mediator or arbitrator shall be split in half
among both parties.
ARTICLE XVIII - LIMITS ON BENEFITS
Section 18.1 Domestic Relations Order
A domestic relations order shall be accepted by the plan administrator if in compliance with state and
federal law. No benefits shall be paid under a domestic relations order which requires the plan to
provide any type or form of benefit, or any option, not otherwise provided under the Plan or under state
law.
Section 18.2 Garnishment, judgment or legal process
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 Minn. Stat. §§518.58,
518.581, or 518.611.
Section 18.3 Assignments
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.
Section 18.4 Limitations on Ancillary Benefits
Following the receipt of a lump sum death benefit neither a member's surviving spouse or estate is
entitled to any other or further financial relief or benefits from the Association.
Section 18.5 Benefit amount limitation
No provision, which places limits on benefits, as contained within Section 415 of the Internal Revenue
Code shall be exceeded. Plan participants cannot receive an annual benefit greater than the amount
specified in Section 415 of the code as may subsequently be amended.
ARTICLE XIX – AMENDMENTS
Section 19.1
The bylaws of the Association may be amended at any regular or special meeting thereof by a favorable
vote of 2/3 of the members present and voting, provided that a quorum is present; and provided further
that notice of any proposed amendment or amendments shall be given by reading the same at a regular
or special meeting not more than 31 days next preceding the date upon which such amendment or
amendments are to be acted upon, and that a notice be mailed to each member at the last known
address not less than 10 days prior to such meeting; and provided further, that if such amendment or
amendments shall change the amount of benefits or pensions, approval of the St. Joseph City Council
must be obtained if a municipal contribution is required to fund such change.
Appendix A - Base Sum
Effective January 25, 2006, the St. Joseph Fire Relief Association shall pay to each member of the St.
Joseph Volunteer Fire Department the base sum of$1,800 for each year that the member has served as
an active member of the St. Joseph Volunteer Fire Department.
Approved by the St. Joseph Volunteer Fire Department Relief Association this ____ day of
_____________, 200__.
Attest:
______________________________ ______________________________
Secretary President
Approved by the City of St. Joseph this ____ day of _____________, 200__.
Attest:
______________________________ ______________________________
Judy Weyrens, Administrator/Clerk Mayor
Approved by the City of St. Joseph this ____ day of _____________, 200__.
Attest:
______________________________ ______________________________
Anna Reischl, Clerk Township Chair
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